FFE to levy reefer surcharge

user-gravatar Headshot

Trade using surface transportation between the United States and its North American Free Trade Agreement partners Canada and Mexico was a record $74.3 billion in April, according to the Department of Transportation’s Bureau of Transportation Statistics. The April level was slightly higher than the previous record set in October 2007 and 14.3 percent higher than April 2007.

The Colorado Motor Carriers Association met with representatives from the state Department of Revenue regarding the definition of special mobile machinery, which require a SMM plate. The issue has arisen due to the introduction of a variety of different types of trucks and trailers that not only travel over the highway but also perform other functions off the highway system, particularly in the oil and gas industry.

GE Capital Solutions Fleet Services (www.gefleet.com) says it has enhanced its remarketing online management system for all vehicle types to save fleet managers time, ensure sales documentation accuracy and initiate payment of resale proceeds.

Fleet One (www.fleetone.com) said the Fleet One Local fuel card will be accepted at all 720 Kroger-owned grocery stores with fuel islands and at Kroger-owned convenience stores.

Fairmont Specialty (www.fairmontspecialty.com) formed the Fairmont Specialty Transportation Division, to serve the insurance needs of small transportation accounts through specialty retail agents nationwide.

Frozen Food Express Industries, parent of FFE Transportation Services, said it will implement a charge to its shippers for the rapidly rising cost of refrigeration necessary in the transportation of temperature-controlled products. The Dallas-based company plans to fully implement the charge at all FFEX brands by the middle of this year’s third quarter.

“Our customers count on us to keep their products pristine in a temperature-controlled environment,” says John Hickerson, senior vice president and chief marketing officer. “Our ability to do that depends on the use of diesel-powered refrigeration units. The cost to operate those units is tied directly to the ever-increasing price of fuel.” Despite the price of diesel soaring more than 40 percent this year, FFE has not yet passed on this cost to customers, Hickerson said. “That has been quite a struggle, and we have reached the point where it is not financially feasible to continue to bear the brunt of this brutal fuel environment without some relief.”

Partner Insights
Information to advance your business from industry suppliers

Russell Stubbs, senior vice president and chief operating officer, noted that the company has taken various steps to hold down overall fuel costs, including slowing trucks down, reducing idling and buying more fuel-efficient tractors and better-insulated trailers.

New York group fights longer routing
New York Gov. David Paterson’s proposal to divert truck traffic throughout the state to significantly longer routes will waste fuel, add to the cost of consumer goods and increase carbon dioxide emissions, the New York State Motor Truck Association says.

NYSMTA Acting President Kendra Adams says the association “has serious concerns regarding the impact this regulation would have on the New York economy. If enacted, the regulation would force trucks to drive more miles to reach their destinations. This will result in increased fuel consumption at a time when trucking companies are doing everything they can to conserve fuel for both budgetary and environmental reasons.”

The New York group provided the example of a truck delivering materials from Syracuse to Corning Glass in Corning. Today, that truck travels 200 miles to make one round trip. If enacted, the draft regulation would require the same truck to travel 292 miles. Assuming one truck can make two round trips a day, five days per week, the increased mileage would result in an additional cost of $127,254 per year.

In addition, when diesel fuel burns, it releases 22.2 pounds of carbon dioxide into the atmosphere, NYSMTA says. In a single Syracuse-to-Corning round trip, the 92 extra miles would burn another 18.4 gallons of fuel and release 408 more pounds of carbon dioxide.

Under the New York State Department of Transportation’s proposal, there would be a hierarchy for how tractor-trailer combinations with trailers of 45 feet or longer should travel the entire state, requiring that large trucks use interstate highways when possible, designated state highways if interstate access is not reasonably available and other state highways only when reasonably necessary. The state DOT would make the reasonability determination based on such factors as the proximity to residential areas, schools, environmentally sensitive areas and pedestrian and bicycle traffic. The proposed regulation must go through the formal rulemaking process, which could take six months or more.

NAFC meeting to address green issues
The National Accounting & Finance Council of the American Trucking Associations will be addressing the financial impacts of the greening of the supply chain, among other issues, at its annual Executive Education Forum, set for Sept. 7-9 in Indianapolis.

Customers and shippers are beginning to demand environmental assurances when shopping for transportation services. Clean air initiatives are coming from federal and state governments, including the Environmental Protection Agency’s SmartWay and San Pedro Bay Ports Clean Air Action Plan. These and other factors are quickly influencing financial decisions and impacting the emerging field of environmental accounting.

Entitled “Managing Costs, Emissions and Profits: A New Paradigm,” this forum will help educate trucking industry chief financial officers and other financial professionals on the relevance of environmental accounting to the industry, according to NAFC.

Other topics to be discussed include: Fuel Markets and Costs, Risk Management, Credit Markets, and economic and regulatory updates. Economist Noel Perry will discuss the economic outlook of the trucking industry.

Complete conference information and registration forms are available online at http://nafc.truckline.com.