Shippers sailed rough seas in 2008 economic storm

They carry laptops and toys, cars and coal, but they're not Santa's elves, and they weren't very jolly this holiday season.

It's been a devastating year for the nation's railroads, trucking companies and package shippers - the companies on the "front lines" of the economic recession. Shipments have plunged as retailers pulled back on orders and consumers tied their purse strings tight in preparation for more hard times. Swiftly accelerating oil prices through the first seven months of the year crippled companies even more.

The Dow Jones Transportation Average, which incorporates railroads, shippers, airlines and logistics companies, lost a quarter of its value in 2008 and fell more drastically - by about a third - in the last three months of the year. That compares with a 40 percent decline for the Dow Jones Total Market index and a drop of 39 percent for the Standard & Poor's 500 index in 2008. Full Story......

UPS Freight Accelerates Service to and from Central Illinois

UPS Freight, the heavy freight arm of UPS, today announced faster transit times between central Illinois and points throughout the United States.

The new, enhanced direct service places all of Illinois under a next-day blanket and draws major markets, including Dallas, Atlanta, Pittsburgh and Minneapolis, to within two days of central Illinois.

In all, some 250 lanes to and from central Illinois will see faster transit times. Over the past 18 months, UPS Freight has accelerated transit times on more than 12,000 lanes, including 4,200 just in 2008.

"We intend to aggressively grow our business," said Jack Holmes, president of UPS Freight. "These enhancements are part of a long-term strategy to combine speed, technology and reliability to create an unmatched offering for our customers."

The new offering includes time-definite guaranteed service for all shipments when moving under UPS Freight's current 560 Tariff, plus improved visibility since all UPS Freight shipments will be handled by company drivers equipped with handheld computers. The handheld devices allow immediate input into UPS's information data network, making it easy to manage inbound and outbound freight shipments.

UPS Freight, one of the largest less-than-truckload carriers in the United States and a leading truckload service provider, serves customers throughout North America, Puerto Rico, Guam and the U.S. Virgin Island.

Fuel prices fall but fuel surcharges remain

Flexible fees applied by shippers and airlines are less expensive—and less risky—than purchasing fuel hedges, and most companies have no plans to give them up.

Corporate managers hoping for some relief from fuel surcharges now that oil prices have collapsed can forget it.

The added fees have become standard operating procedure in a number of industries and are here to stay.

Indeed, Morningstar equity analyst Keith Schoonmaker said that the implementation of fuel surcharges, which allow corporations to pass energy costs on to customers, has worked well for airlines, trucking and distribution companies over the past three to four years.

Analysts say the surcharges played a vital role in keeping these businesses alive as oil prices soared to record levels this summer. In fact, Mr. Schoonmaker said in the case of the trucking industry, “It’s really the difference between the relative health of these firms and catastrophe.”

Take FedEx for example. Despite paying an average jet fuel price that was 77% higher than in the previous year, the company managed to post an 8% gain in revenue for its fiscal first quarter in 2009. That’s an 8% increase from last year. Net income, however, did drop to $384 million from $494 million.

By implementing an effective fuel surcharge program, FedEx was able to remain profitable. Fuel surcharges can help produce “a benefit once the fuel prices have leveled off or even decline,” Mr. Schoonmaker said, “so FedEx, UPS and DHL will all have a benefit during these days of declining fuel prices.”

Full Story...........