There are many different opinions on how involved the government should become in the freight shipping industry and transportation in the United States. First, there are tax issues. In its most recent report, The National Surface Transportation Policy and Revenue Student Commission, comprised of logistics industry figureheads, proposed a fuel tax increase to help support funding for interstate infrastructure.  The Bush administration is very much against any sort of tax hike.

Current administration officials explain that freight haulers need to use the current infrastructure more wisely; for example, spacing out volume by providing incentives for hauling freight during the night. The bottom line, the jury is out on tax increases, and any potential electoral candidate who supports them is risking quite a bit.

Government agencies are also focusing on truck safety. In doing so, they are paying attention to using new technologies to make sure truckers comply with rules. This regulation could further lessen the supply of freight which could come back to haunt us as we pull out of the recession and find lots of demand and a shrunken freight supply.

FedEx plans to launch next-business day domestic delivery services in China from June this year even though it has been in the Chinese market  for more than twenty years. Earlier, FedEx only had international express services in China. Its competitors DHL and UPS already offer domestic services. DHL launched its domestic services in China in 2004 and UPS in 2005.

FedEx’s President feels that they are in the ideal position to take advantage of China’s transition to a consumer economy through its rapidly growing middle class.  The business in China is being viewed more as a long term investment and the company is confident about the market because about 90% of its customers in China and abroad had been feeling the need for domestic services.

The regional hub in HangZhou, East China’s Zhejiang Province has already been set up by FedEx to make its domestic service operational. Hangzhou is ideally located in terms of air traffic capacity, reasonable operating costs, centrally located, good weather conditions, and a potential customer base. These are critical factors when it comes to setting up a logistics center.

The regional hub at the Xiaoshan International Airport has the capacity to initially sort up to 9,000 packages per hour.

An airport official says that FedEx and Xiaoshan International Airport have a three year agreement contract. There will be two night circular routes from Hangzhou. Roughly 200 cities will be covered by trucks throughout the country. The transport will be taken care of by domestic carrier Okay Airways with their three Boeing 737 freighters. 

Panther Expedited Services Inc., Seville has acquired Integres Global Logistics, a California based freight forwarding and logistics company. Integres offers shippers access to air and deferred air ground transportation networks. This acquisition will make Panther the largest full service premium logistics provider. Integres will also bring with it all its blue chip clients, giving Panther a much wider reach than before, especially on the West Coast. Seventy new people will join the 300-strong workforce at Panther. So in addition to ground expedite, Panther will now provide real time freight quoting, booking and shipment-tracking information from the time the shipment is picked up to delivery on all-important freight. The acquisition came about with Panther’s customers requesting Panther to handle more freight.

Panther is a portfolio company of Fenway Partners, New York, which is a middle market private equity firm. Fenway has extensive transportation and logistics experience and practice. In June last year, Panther filed documents with the Securities and Exchange Commission to make the company public.

Elsewhere, the Apollo Management Group, in its bid to buy transport company EGL Inc. has filed a suit against EGL. This is to stop the sale of EGL to a group of investors headed by its chief executive officer. Also, Apollo has upped its offer to $41 per share to buy EGL – this is a $1.9 billion offer. Last week, Apollo made a $ 40 per share offer to buy EGL. EGL CEO James Crane offered $ 38 per share at the same time. Now the problem is – the EGL board okayed the lower bid from Crane, which is why Apollo filed a suit against EGL.