It's the most volume-filled time of the year

Sometime this week, UPS, FedEx and the United States Postal Service will likely reach an all-time high for the most packages shipped in one day. FedEx is predicting that 16 million packages will ship today alone (it is Monday, December 12 as I write this).

In an interview with CNN, Chuck Vookies, a senior station manager at the FedEx facility in Marietta, Ga. said that today’s volumes is higher than last year and about 30 percent more than a normal day’s volume. He attributed the increase to more online shopping.

During the last holiday season, higher volumes led to many packages shipped by the three services not reaching their destinations in the time promised. This led them to take steps to assure that their systems can now handle added capacities. Few employees are allowed vacation time between now and Christmas. More trucks were added to their networks and extra workers brought in to sorting centers as well.

We will see yet if these steps fix the volume crunch. All three services are confident they will shine this year.

Another step that both FedEx and UPS have taken to address their capacities is a plan to begin dimensional-weight pricing on small parcels. That won’t affect this year’s volume, but it is still essential to understand if you are a shipper. I wrote an extensive explanation of dim-weight pricing in a story in DC Velocity that appears in this month’s issue:

http://www.dcvelocity.com/articles/20141117-how-to-avoid-a-dim-future/

The article explains how you might be able to keep from seeing huge boosts in small package shipment costs that will now fall under dim weight pricing.

The reason for the change is that a lot of the volume that UPS and FedEx ships is air – packages that are much too big for their contents. These packages, which contain a lot of empty space, have until now taken a lot of the cube capacity from airplanes and trucks. Starting in January, customers will now pay a premium for not right-sizing their shipments with the correct amount of packaging.

By the way, if you are doing some last minute shipping and still want your packages to arrive by Christmas Eve, FedEx recommends you ship ground packages by this Friday, December 17. The company will accept next day packages by December 23 and still get them there by December 24. At least that is the plan.

I wish you all a very happy holiday season.

Truck Driver Shortage: 100+ Years War

The driver shortage has been a topic of seemingly endless discussion and debate in the logistics industry for at least 100 years, as evidence by the citation below.

The question, then: Should we stop talking about solving it and recognize the reality of its ever-presence and instead focus on how to best cope with it?

Consider this: "Practically all truck manufacturers and nearly all employers complain of the great difficulty of securing driver who are competent and who will work handling freight."   -- Source: Traffic World, December 12, 1914

AWOL on Infrastructure

A couple of Sundays ago, the “60 Minutes” news program devoted its lead segment to the problems confronting the nation’s transportation infrastructure. For those in the field, the segment didn’t break much new ground (no pun intended). But it was interesting that not only was there no on-air interview of Transport Secretary Anthony Foxx, but the reporter, Steve Kroft, didn’t even mention if Foxx was asked to comment.

Perhaps it was a good thing for the Obama Administration that no current official spoke on the subject. It’s unlikely they would have much to boast about. Nearly six years into its tenure, the Administration deserves a solid “F” for the way it has led (or not led) in the effort to fund improvements to the nation’s transportation infrastructure. The failing grade is amplified by the amount of rhetoric President Obama has spilled in touting infrastructure spending as a vehicle for job creation and for boosting the nation’s economic competitiveness.

Congress, of course, has played an important role in this mess. Yet transport funding is traditionally one area both parties can agree upon, especially when so much has been at stake since the Great Recession. It takes Presidential leadership to manage the process. However, it has not been delivered. The $787 billion stimulus bill signed in 2009 allocated a mere $48 billion to transport funding. For the next five years, the Administration effectively sat on its hands as Congress enacted stopgap bill after stopgap bill to keep road projects alive. In early 2012, efforts by Rep. John Mica (R-Fla.) to craft a long-term spending measure were criticized by then-Transport Secretary Ray LaHood as the worst bill he’d ever seen in all his years in public life. Yet the White House failed to come up with legislation of its own. When Congress, against all odds, sent a multi-year bill to President Obama’s desk in July, it was legislation fashioned with no executive branch input.

Finally in early 2014, the White House proposed funding legislation. It has, to this point, gone nowhere. This fall, the can was kicked down the road again, this time until May when the current short-term funding law expires. It what might mark a new low in legislative legerdemain, the stopgap funding was financed in part by the financial “smoothing” of corporate pension contributions, allowing companies to forego pension contributions on the front end so more taxable revenue would be available to capture and funnel into the Highway Trust Fund.

The Administration wrings its hands about how to pay for transport projects. The answer is in front of its face: Raising the federal fuel tax for the first time since 1993. Shippers and truckers support it. Big and small businesses support it. Road builders support it. Even the AFL-CIO supports it. But Congress is too scared to act, and the Administration shows no courage to lead because it is just as scared.

The clock will inexorably tick towards May. Facing no more election cycles, President Obama should put the hammer down and persuade Congress to pass at a minimum a four-year spending bill that includes a sizable increase in the federal fuels tax that has been a long time in coming. With a Presidential election cycle set to start in earnest in late 2015, the spring and summer may be as far as the window will remain open.

If the President needs inspiration, he should harken back to 1956. Then, President Dwight D. Eisenhower, in the face of predictions that in a Presidential election year a Democratic Congress would never approve a plan sought by a GOP president to create an interstate highway system, continued to urge approval and worked with Congress to reach compromises that made it work. The President signed the “Federal-Aid Highway Act of 1956” into law on June 29.

If President Obama can follow in Ike’s footsteps, then the sorry neglect of the previous six years will largely be forgotten.