Freight Carriers Association / North American Transportation Council
December 1998
HOLIDAY OFFICE HOURS
THROUGH FCA-NATC MEMBER CARRIERS CAN REALIZE IMPORTANT SAVINGS ON THEIR TELEPHONE & FAX COMMUNICATIONS
We are pleased to announce an important new membership benefit that will allow our members to realize significant savings on their communications costs. As you know, the Canadian marketplace for long distance voice and data communications has become increasingly competitive over the past few years. Given the nature of our business, communications costs in the trucking industry are quite significant.
After extensive research by some of our members, as well as negotiations with Sprint Canada Inc., we have reached what we would consider to be an extremely cost effective agreement with Sprint Canada who offers large volume discount to members of our Associations by pooling the long distance activity of all members who wish to participate in this program. This arrangement will produce significant savings for our members whose long distance calling volume does not justify the higher discount levels.
We are pleased to offer this new benefit to our Canadian members and those US members who have facilities in Canada. Some of the costs, features and benefits are as follows:
(All amounts quoted are in Canadian currency.)
Carriers who have been using Sprint Canada report a high level of satisfaction with the service received.
If you are interested in participating in this plan, or have any questions, please feel free to contact Dave or me. We look forward to large membership participation in this program so our members can achieve maximum savings.
The ever-changing environment in which the LTL carriers operate requires that carriers continuously review and revise their rules to ensure they are properly setting forth the terms and conditions governing their contracts or rate agreements with their customers. Since 1980, the Motor Carrier Act of 1980 prohibits carriers operating in the U.S. domestic and Canada/U.S. markets from collectively considering the establishment of new rules or the amendment of existing rules tariffs. As a result, the Bureau's rules tariffs and most of the individual carriers' rules tariffs are in need of some revamping.
In 1991, the Freight Carriers Association of Canada (FCA), which is not bound by the same rules as US carriers and Rate Bureaus, updated the rules tariffs that apply to Canadian domestic traffic. As a matter of interest, the project was undertaken at the urging of the Canadian Industrial Transportation League (CITL), the Canadian arm of the NITL, who believed that in a completely deregulated environment and with no rate filing, shippers needed more than ever to know and understand the conditions of carriage applied by their carriers. In addition they felt the traditional wording of rules was often convoluted and ambiguous and they stressed the importance of stating the rules in plain language.
Over a period of a few months, a team of bureau staff members and two shipper representatives of the CITL reviewed and re-wrote every rule in the tariff in language that was acceptable to both shippers and carriers. The result was the FCA Tariff 100. The world has continued to change since then however, and this tariff also needs updating.
Member carriers of FCA or NATC have from time to time communicated their desire to modernize the rules tariffs and we recognize this would be beneficial to our membership, especially the small and medium sized carriers who have limited resources to undertake such a project. Since collective consideration is not possible for Canada/US or US Domestic rules, the only practical approach is to conduct this review strictly as an internal independent research project where the staff will review and re-write the rules and submit the revised tariffs to our members who, independent from any other member or other motor carrier, would decide which provisions they wish to adopt for their own account as well as what modifications, if any, they wish to make. The revised rules will be available in the traditional paper format as well as electronic format to give the subscribers maximum flexibility in selecting, modifying and printing their rules for submission to their customers.
Phase I of this project will be to gather existing individual carrier rules tariffs from as many carriers as possible so they can be reviewed and evaluated. Phase II will be the compilation of a first draft assembling different options and language for each rule. Phase III will be the consultative process with industry and transportation specialists. Phase IV will be the drafting and compilation various rules options. Phase V will be the process of inviting member carriers to indicate which provisions they wish to participate in.
We strongly urge you to send a copy of your current rules to Ken Leising at the FCA-NATC offices. If your rules are available in electronic format please submit them in that format.
NATC's annual meeting held in Daytona Beach Shores from November 19 - 22, 1998 was a huge success. A brief outline of the major topics discussed are as follows:
By joining forces, the four Regional Rate Bureaus will enhance efficiency through better resource utilization and by combining their research and new product & services development efforts. Through the partnership, they will also be able to market existing and future products and services in a more cost-effective way. The synergy derived from this strategic partnership will prove advantageous to the participating organizations and their customers, both shippers and carriers, as they have access to the vast expertise of these organizations in their respective territories.
During recent meetings the management of these regional bureaus began to develop plans to pool their expertise and resources and to start the integration of some of their products and services. They also began work on programs to enhance networking opportunities for their respective members. Watch for future announcements as new joint products and services are launched!
All carriers are invited to state their views on these issues and raise any other issues they may have regarding the NATC rates.
NATC will be filing for an extension of our 5a Agreement with the Surface Transportation Board on December 10, 1998.
NATC will be gathering performance statistics for border crossing and customs clearance and for all major gateways. The information gathered through this project will be extremely valuable for carriers to use in their individual shipment costing programs as well as for NATC to evaluate the rate relationships in its' tariff publications. Member carriers and others who have an interest will be asked for input and assistance as we embark on this project.
QuickLanes - Dave Jupp of Concord Transportation gave a brief overview of how Concord as been utilizing the system in doing beta testing. Ken Leising then demonstrated some recently added features of the program. Quick Lanes is a program designed to store lane rates and develop through rate quotations based on the combination of up to three of the lanes. Each lane or segment of the combination can be increased or reduced when developing a specific quote.
QUICK RATE DLL - Mr. Ken Manning of TCG brought the Committee up to date on the status of a DLL, which TCG is developing, for NATC/FCA. Completion of the DLL is scheduled for early December. The DLL can be imbedded in your in-house applications by your MIS department. This will allow for easier interface of rating information with all other applications. The DLL is designed to work with the ACII data files available from FCA/NATC.
Statistics Canada recently released 2nd quarter 1998 operating results for the top 74 for-hire motor carriers domiciled in Canada. This group of carriers had 2nd Quarter operating revenues of $1.35 billion v. operating expenses of $1.28 billion. This resulted in an operating ratio of 94.8.
The general freight carriers in the group fared slightly better in the 2nd quarter of 1998 with an operating ratio of 94.2 v. 95.7 for the specialized carrier group.
The Age of Assets Survey conducted by FCA/NATC has been completed. Canadian trucking companies with 25 tractors or more were surveyed. The survey results indicate that the average of equipment for the survey participants was as follows: Straight trucks - 7.3 years Tractors - 4.5 years Trailers - 6.7 years
Over 75% of the trailers were 48" or 53" trailers. About a quarter of the respondents had recently accelerated their company's replacement policy in response to a greater emphasis on safety. Two thirds of the respondents indicated that the devaluation of the Canadian dollar had significantly increased their cost of purchasing equipment.
Survey participants received a more detailed and informative analysis of the survey results.
The results of the Marketplace Survey have been sent to the survey participants. One of the more interesting aspects of the survey were the general comments made by carriers regarding the marketplace. A sampling of these comments follows: Weak Canadian dollar is having an impact on northbound traffic, however exports to the US are strong. Marketplace is more competitive than ever. Price cutting is reducing profit margins. More penalties for service failures. Most affected by currency crisis. Rates have not gone up as a result of less capacity. Appointments and early AM delivery for general LTL rates. Revenue margins continue to be marginal. Added value services expected with no increase in rates. The industry must address this perception. Depressed margins are the creation of the carriers themselves; there is always a carrier willing to provide service for a lower rate. Not all carriers spend money required to meet more stringent safety standards. Shippers only concerned with price.
Survey participants received a more detailed analysis of the survey results.
Mr. William W. Pugh, General Counsel for the National Motor Freight Traffic Association has advised of the following court decision regarding the limitation of liability in the US.
In its recent decision in Hollingsworth & Vose Co. v. A-P-A Transportation Corp., the United States Court of Appeals for the First Circuit reversed its own long-standing precedent and upheld a carrier's "automatic release." Specifically declining to follow the Sixth Circuit's ill-considered decision in Toledo Ticket v. Roadway Express, Inc., the Court enforced a motor carrier's limitation of liability in circumstances where a calendar roll (a large metal cylinder used to produce fabric) was damaged during its 1993 movement from Floyd, Virginia to Orange Massachusetts. The shipment was subject to a tariff item that authorized the use of an automatic liability limitation of ten cents per pound (an inadvertence clause). In its 1993 version (which is similar to the present language), the Carmack Amendment provided that the carrier's liability can be limited to a value that is established by: (1) "a written declaration of the shipper" or; (2) "a written agreement between the shipper and the carrier." The preprinted section on the bill of lading that provided for the shipper's declaration of value had been left blank. Consequently, there was nothing on the bill if lading to meet the Carmack Amendment's that the carrier's bill of lading, together with the involved tariff provision (the inadvertence clause), did meet the second of the Carmack Amendment's alternative requirements, i.e., for "a written agreement between the shipper and the carrier."
The Sixth Circuit's decision in Toledo Ticket (see July 1998 newsletter, pg.2) is often cited by shipper representatives for its holding that a carrier's liability can be limited only as the result of the shipper's "absolute, deliberate and well-informed choice." The First Circuit was sharply critical of this decision, pointing out that "it undercuts the general principles that make the shipper (like any other contracting party) responsible for what the bill of lading says; and it reflects a reading of Nothnagle's 'fair opportunity' language [from the U.S. Supreme Court's decision in New York, New Haven & Hartford R.R. v. Nothnagle] that is miles away from the actual facts of that case (where the 'shipper' made no written agreement or declaration of any kind)." (emphasis mine). In contrast to Toledo Ticket, the Hollingsworth court found that the shipper had been provided a "fair opportunity to opt for more coverage in exchange for a higher rate." And that "the shipper was a substantial commercial enterprise capable of understanding the agreement it signed." Finally, it should be recognized that both Hollingsworth & Vose and Toledo Ticket were issued prior to the changes in the liability limiting provisions of the Carmack Amendment that were brought about by the ICC Termination Act of 1995.
TAX BREAK: Computer Write-Offs for Year 2000 Computer Bug Fix
Canada's Department of Finance has released amendments to the Income Tax Regulations to help small and medium-sized businesses address the Year 2000 computer compliance problem. These amendments will allow accelerated capital cost allowance (CCA) deductions of up to $50,000 for small and medium-sized firms for computer hardware and software they acquire between January 1, 1998 and June 30, 1999 to replace similar property they acquired before 1998 that is not Year 2000 compliant.
Under proposed amendments to the Regulations, eligible taxpayers will be entitled to a maximum of $50,000 of accelerated CCA, so the eligible expenditures that are made to replace property that is not Year 2000 compliant may be subject to a full write-off for tax purposes in the year the property is acquired. The accelerated CCA can be claimed in any tax year in which eligible expenditures are made. In cases where the eligible taxpayer is part of an associated group, the $50,000 limit has to be shared between members of the group.
To claim the accelerated CCA, an eligible taxpayer has to file a letter with their return for the year in which the eligible property is acquired. The letter with their return for the year in which the eligible property is acquired. The letter should include a description of the property acquired, its cost, the date it was acquired, a description of the non-compliant property it replaces, and the date that the non-compliant property was required. The taxpayer must be able to substantiate the basis for the material risk of malfunctioning because of the change to the calendar year 2000.
The accelerated CCA can be claimed by any eligible taxpayer that provides the letter described above. However, the accelerated CCA cannot be claimed by: a large corporation [as defined in subsection 225.1 (8) of the Act].
TRANSPORTATION SAFETY SYSTEMS, INC. INTRODUCES UNIQUE, PATENTED ELECTRICALLY HEATED WINDSHIELD WIPER BLADE
A unique, patented electrically-heated windshield wiper blade has been introduced by Transportation Safety Systems, Inc. of Cherry Hill, NJ. The product makes winter driving safer by dramatically improving visibility. It quickly melts ice and snow from the blade and holder and prevents further ice-buildup. Ice and snow accumulation on the wiper reduces wiper system performance and impairs overall driver visibility.
Called ThermoBlade, this advanced wiper blade fits on almost any vehicle's windshield wiper system. It easily installs on the wiper arm in place of the standard wiper assembly and is easily connected to the vehicle's electrical system. The ThermoBlade system is currently offered as a complete installation kit. Replacement blades are also offered.
Unique Triple Heater System ThermoBlade features a unique, triple heater design and high technology blade. Both the rubber blade and holder are electrically heated. The holder has heaters built in at both ends, while the blade has a heater element throughout its entire length. During operation, the unit's holder reaches 213oF while the blade itself maintains temperatures up to 283oF. Both of these temperature levels are more than adequate for melting any accumulated ice and snow, regardless of the weather conditions and temperature extremes.
All Weather, All Season Performance Although ThermoBlade is primarily intended for winter weather use, it is designed to perform in all seasons and all weather conditions. The blade holder is made from General Electric's Valox 420 high temperature, high impact thermoplastic resin. The holder also features a 30% fiberglass composition for exceptional durability and resilience. The ThermoBlade holder assembly is aesthetically configured and has a matte black finish that complements current automotive styling trends and details.
ThermoBlade's blade assembly is composed of a Dupont Nordel (EPDM) extrusion, supported by a Dupont Arylon backer. The blade offers an extended service life of at least one year - well beyond the limited performance life of ordinary wiper blades.
Easy Installation, Application ThermoBlade easily fits on most standard wiper arms. All attaching parts, adapters, electrical connections and wiring are included. The unit is also supplied with a convenient lighted dash mounted switch. When the system is working, the switch's rocker is illuminated to indicate operation. Complete installation instructions and diagrams are included.
For more information, please contact Elliott Meltzer, Transportation Safety Systems, Inc. 420 West Fireside Court, Cherry Hill, NJ 08003. Telephone (609) 429-8237.