 282 N.Ridge Rd. Brooklyn, Mi 49230 |
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517-467-9355 Fax 517-467-9056 |
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OFFICE FURNITURE LOGISTICS NEWSLETTER
A bi-monthly publication provided to members of the Office Furniture Distribution Association -
Tel: 517-467-9355 or Fax 517-467-9056. Write to 282 N. Ridge Rd., Brooklyn Mi. 49230.
Our email address is Russ111@comcast.net and website is www.theofda.org.
Please note our new email address is Russ111@comcast.net. Do not hit “reply” when contacting us. This Newsletter is forwarded from our Computer assistant’s address.
Decemeber 2011, January 2012
Association News
Board Members Elected
Your Board of Directors recently held a meeting to elect officers and board members to serve the OFDA in the coming year. We want to welcome these people in their new positions and thank them for volunteering to help in the association.
Officers; terms expire in 2013
Chairman- Domenic Russo, Teknion
Vice-Chairman- Sue Collitz, Western Logistics
Secretary-Treasurer –Reed Cullum, American West Worldwide Express
Board Members, terms expire in 2012
Board of Directors-Karen Burleson, Knoll
Board of Directors-John Manca, Aspen
Board of Directors-Marty Goor, CFT-IOS
Members Needed
Your association is looking for computer savvy members that would like to be part of a committee we are forming that will look into giving a much needed update and renovation to the association’s website.
It you would like to be part of this effort please contact Russ Matthews at russ111@comcast.net
Industry News
Cass Freight Index
Overall North American freight expenditures rose in December, however mostly due to increased freight rates not volume.
December Shipments at 1.056 were flat as compared to November and up 0.7% year to year. Shipments exceeded the 1.0 mark for the 19th straight month since May 2010 when shipments moved above the 1.0 mark for the first time since November 2008.
November was the only month in 2011 that year over year shipment comparisons were lower.
December Expenditures at 2.272 were up .18% over November and up 18.8% compared to December 2010.
Overall Q4 2011 was very weak, with freight volumes falling 12% from Q3- a much larger decrease than is seasonally normal.
Listed below is the Cass Freight Index comparison of expenditures and shipments for the past four years
Source Cass Freight Information Systems
BIFMA’s Prediction for 2012
According to an updated outlook from the Business Institutional Furniture Manufacturers Association the sales rebound experienced by the office furniture industry in the last few quarters will likely grind to a halt in 2012.
The outlook report prepared for BIFMA by IHS Global Insight quarterly, now predicts a 1.7% decline in industry wide shipments next year.
The report stated that, “office furniture consumption continued to grow rapidly in the second quarter of 2011, up 18% from levels a year ago. U.S. manufacturers are reaping more of the benefit from the improving demand because growth in consumption exceeds growth in imports; shipments are up 19.8% from levels the previous year. With GDP growth expected to remain weak, the impacts of soft consumer spending and higher unemployment on the economy have reduced the outlook for 2012, an effect that can be seen in the somewhat slower growth in orders last quarter. Nevertheless, orders growth remained strong, up 15.8% from the previous year. The bottoming out of investment in nonresidential structures back in January combined with higher pricing has partially offset the problems elsewhere in the outlook for the rest of 2011. The forecast calls for consumption growth of 15.9% and growth in orders of 14.1% in 2011, before leveling off to 9.0% and 7.5% growth in 2012, respectively.”
CURRENT |
||||
Year |
Production |
% Change |
Consumption |
% Change |
2011 |
$ 9.5 billion |
+ 14.6 % |
$ 11.3 billion |
+ 14.3 % |
Air/Small Parcel
Fedex Hikes Rates
Following in the footsteps of UPS, FedEx Corporation announced it would raise rates for FedEx Ground and FedEx Home Delivery by 4.9% beginning January 2, 2012.
The company said the FedEx Ground and FedEx Home Delivery full average rate increase of 5.9% will be partially offset by adjusting the fuel surcharge threshold at which the fuel surcharge begins, reducing the fuel surcharge by 1 percent. FedEx SmartPost rates also will change.
FedEx had announced in September it would increase shipping rates for Fed Ex Express by an average of 3.9% for U.S. domestic, U.S. export and U.S. export services effective January 2, 2012
USPS Wants to Slow Service
In an attempt to reduce steep losses the United States Postal Service plans to stop next day air delivery of First Class mail.
Faced with $3 billion in annual losses and with no help from Congress on the horizon the USPS plans to slow down First Class delivery, their most profitable business.
The USPS said slowing delivery down to second or third day will allow the Postal Service to cut numerous facilities and make other cutbacks amounting to $2.1 billion in savings.
The USPS said it is requesting an advisory position from the Postal Regulatory Commission but is not waiting for approval from the commission.
Green News
Clean Trucks
In a little over three years the Port of Long Beach’s “Clean Trucks” program has helped clean up the busiest drayage truck fleet in the country and cut related air pollution by 90%.
On January 1, 2012 the program will ban permanently the last remaining older, more polluting trucks from the port terminals. This final ban will take 280 of the oldest container trucks off port roads, and all remaining 11,000 drayage trucks servicing the port will be 2007 or newer models.
Much to the dismay of organized labor, the achievement was done with the full participation of independent owner-operators.
Government
Tariff Cuts
Canadian Finance Minister Jim Flaherty recently announced the Canadian government will eliminate import tariffs on 70 items which could save manufactures in the country including furniture manufacturers around $32 million a year. Although a full list of the tariffs to be cut was not available at the time of this article, the furniture industry was cited among those to benefit from the cuts.
“This builds on our government’s commitment in Budget 2010 to make Canada a tariff free zone for industrial manufacturers,” Flaherty said. “By lowering costs for these businesses we are enhancing their ability to compete in domestic and foreign markets and helping them invest and create jobs here at home.”
The initiative eliminates customs duties on certain products used by Canadian businesses
operating in a variety of manufacturing sectors. In addition to furniture food processing and transportation equipment will also benefit
More Mexican Carriers Prepare
The Federal Motor Carrier Safety Administration recently announced that 16 Mexican carriers are in various stages of the application and auditing process to participate in the cross-border trucking pilot program.
As we reported last month, only one of the 16 carriers, Mexico based Transportes Olympic has been granted operating authority for one truck so far. Last month Transportes Olympic sent the first Mexican truck into the United States in more than two years as part of the cross border trucking agreement between the two countries.
According to FMCSA officials the 16 carriers are only about half the number of carriers needed to evaluate the program properly.
Three additional carriers have undergone safety audits with results pending, three more are scheduled for audits in the near future and seven others have completed applications to participate in the program but as of now have not been audited.
By comparison only three U.S. carriers have been approved to operate in Mexico
U.S. and Canada to Speed Crossings
President Obama and Prime Minister Stephen Harper signed agreements to speed border crossings and enhance trade between the United States and Canada.
The countries agreed to implement joint cargo inspection and clearance of goods that arrive by land, rail or sea, by December 2012
Some companies could also be granted a “trusted status” in which goods could be screened at the factory instead of the border.
The plan also includes funding to develop ways to expedite the crossings of goods and people as well as push to allow more Canadians to obtain the NEXUS frequent traveler card.
“This is a great day for the trucking industry and the trade community in both countries,” said David Bradley, president of the Canadian Trucking Alliance. “The leaders and the governments of both great nations are to be commended.”
Cell Phone Ban
The Federal Motor Carrier Safety Administration announced an amendment to the safety regulations to restrict the use of hand held mobile phones by drivers of commercial motor vehicles.
Drivers face penalties of up to $2,750 for each offense and disqualification from commercial driving for multiple offences
Companies that allow their drivers to use hand held cell phones while operating a commercial vehicle also face fines of up to $11,000 per offense.
The rule is an extension of the FMCSA’s 2010 ban on texting while driving.
Rail/Intermodal
Railroad Volumes are Up
According to data released by the Associations of American Railroads, rail traffic showed gains for both carload and intermodal for the week ending December 10
Carload volume was up 3.7% year over year. Eastern carloads were up 6.2% and out west carloads were up 2.2%. On a year to date basis carloads are up 1.9%
Intermodal volumes are up 3% year over year and on a year to date basis intermodal is up 5.1%
Shippers continue to turn to intermodal as an alternative to trucking due to tight capacity and rising rates.
Unions Reach Agreement
Three unions representing railroad workers ratified contracts with major U.S. railroads, leaving only one union that has not finalized an agreement over a dispute that nearly resulted in a national labor action in December.
The pacts reached by the Brotherhood of Locomotive Engineers & Trainmen, the National Conference of Firemen and Oilers and the International Brotherhood of Electrical Workers brings the number of ratified contracts to seven. Five other unions have reached tentative agreements that their members must ratify.
“The month long ratification process has finally come to an end, and our members have made a wise decision,” said IBEW President Ed Hill.
Trucking News
FMCSA Issues Final HOS Rules
As expected the final rule for truck driver’s hours-of service was issued December 22 by the U.S. Department of Transportation's Federal Motor Carrier Safety Administration (FMCSA). The new rule revises the hours-of-service (HOS) safety requirements for commercial truck drivers.
“Trucking is a difficult job, and a big rig can be deadly when a driver is tired and overworked,” said Transportation Secretary Ray LaHood. “This final rule will help prevent fatigue-related truck crashes and save lives. Truck drivers deserve a work environment that allows them to perform their jobs safely.”
As part of the HOS rulemaking process, FMCSA held six public listening sessions across the country and encouraged safety advocates, drivers, truck company owners, law enforcement and the public to share their input on HOS requirements. The listening sessions were live webcast on the FMCSA Web site, allowing a broad cross-section of individuals to participate in the development of this safety-critical rule.
“This final rule is the culmination of the most extensive and transparent public outreach effort in our agency’s history,” said FMCSA Administrator Anne S. Ferro. “With robust input from all areas of the trucking community, coupled with the latest scientific research, we carefully crafted a rule acknowledging that when truckers are rested, alert and focused on safety, it makes our roadways safer.”
FMCSA’s new HOS final rule reduces by 12 hours the maximum number of hours a truck driver can work within a week. Under the old rule, truck drivers could work on average up to 82 hours within a seven-day period. The new HOS final rule limits a driver’s work week to 70 hours.
In addition, truck drivers cannot drive after working eight hours without first taking a break of at least 30 minutes. Drivers can take the 30-minute break whenever they need rest during the eight-hour window.
The final rule retains the current 11-hour daily driving limit. FMCSA will continue to conduct data analysis and research to further examine any risks associated with the 11 hours of driving time.
The rule requires truck drivers who maximize their weekly work hours to take at least two nights’ rest when their 24-hour body clock demands sleep the most – from 1:00 a.m. to 5:00 a.m. This rest requirement is part of the rule’s “34-hour restart” provision that allows drivers to restart the clock on their work week by taking at least 34 consecutive hours off-duty. The final rule allows drivers to use the restart provision only once during a seven-day period
Companies and drivers that commit egregious violations of the rule could face the maximum penalties for each offense. Trucking companies that allow drivers to exceed the 11-hour driving limit by 3 or more hours could be fined $11,000 per offense, and the drivers themselves could face civil penalties of up to $2,750 for each offense.
Commercial truck drivers and companies must comply with the HOS final rule by July 1, 2013. The rule is available on FMCSA's Web site at http://www.fmcsa.dot.gov/HOSFinalRule.
For your convenience we had added a table below that summarizes the differences between the current HOS Rule and the new HOS Fina
PROVISION |
CURRENT RULE |
FINAL RULE – COMPLIANCE DATE JULY 1, 2013 |
Limitations on minimum "34-hour restarts" |
None |
(1) Must include two periods between 1 a.m.- 5 a.m. home terminal time. |
Rest breaks |
None except as limited by other rule provisions |
May drive only if 8 hours or less have passed since end of driver's last off-duty period of at least 30 minutes. [HM 397.5 mandatory "in attendance" time may be included in break if no other duties performed] |
PROVISION |
CURRENT RULE |
FINAL RULE – COMPLIANCE DATE FEBRUARY 27, 2012 |
On-duty time |
Includes any time in CMV except sleeper berth |
Does not include any time resting in a parked CMV. In a moving property-carrying CMV, does not include up to 2 hours in passenger seat immediately before or after 8 consecutive hours in sleeper-berth. Also applies to passenger-carrying drivers. |
Penalties |
“Egregious” hours of service violations not specifically defined |
Driving (or allowing a driver to drive) 3 or more hours beyond the driving-time limit may be considered an egregious violation and subject to the maximum civil penalties. Also applies to passenger-carrying drivers. |
Oilfield exemption |
"Waiting time" for certain drivers at oilfields (which is off-duty but does extend 14-hour duty period) must be recorded and available to FMCSA, but no method or details are specified for the recordkeeping. |
"Waiting time" for certain drivers at oilfields must be shown on logbook or electronic equivalent as off duty and identified by annotations in "remarks" or a separate line added to "grid." |
Shippers Say HOS Changes Hurt Supply Chain
According to Jay Timmons president and CEO of the National Association of Manufacturers, the final HOS trucking rule will have a negative impact on manufacturers’ supply chains, distribution operations and productivity.
Although the final rule retained the 11-hour daily driving limit, the 34 hour restart provision is being limited to once every week and will require anyone using the provision to include within it two night periods between 1:00am-5:00am of rest.
NAM and other shipping groups say the restart change could trigger a costly overhaul of supply chains.
“Rather than encouraging greater efficiency, the new hours of service regulations will increase transportation costs, congestion and pollution by funneling more trucks onto the roads at peak driving times,” said Kelly Kolb, vice president for government regulations at the Retail Industry Leaders Association.
Shippers Stage Fly-in
Shippers led by the National Shippers Strategic Transportation Council or NASSTRAC and supported by a dozen other shipper and carrier organizations are planning a February 1st “fly-in” to lobby Washington policy makers and legislators on the importance of maintaining and improving productivity in the trucking industry.
The event called “Stand Up For Trucking” will bring scores of shipping and trucking to the Capitol to voice opposition to regulations they say will burden the trucking industry and raise shipping costs as much as 10 percent.
“Never before have the advocacy interests of both motor carriers and shippers dependent upon over-the-road trucking been more closely aligned,” said Mike Regan, chairman of shippers group NASSTRAC’s advocacy committee.
Regan said he expects more than 100 representatives from shippers, carriers, trade associations and alliances to attend the event
“ATA hopes NASSTRAC‘s event will be a success and we look forward to working with all these groups to shine a spotlight on the importance of transportation,” said Sean McNally, vice president of communications and press secretary for ATA
Packaging
CCSB Proposes Reclassifying Revolving Chairs
On January 23rd the Commodity Classification Standards Board (CCSB) will hold a public meeting to consider proposals for amending the NMFC, as listed in CCSB Docket 2012-1
The docket and all facts, data and evidence of records relating to the proposal are available at www.nmfta.org go to CCSB on the “navi” bar then click on Public Docket Files then click on 2012-1
The CCSB invites you to submit information relating to the transportation characteristics – density, stowability, handling, and liability of the products involved.
The information you furnish should include any studies, supporting data and other facts that may prove relevant.
Written submissions will be included in the public docket file and posted the CCSB’S website. The final decision will be based on information in the public docket file.
Note
This proposal involves canceling NMFC item 79260 Chairs or Settees sub1 class 250, sub2 class 125 and reclassifying these items under NMFC item 80580 Chairs or Stools which is a density based item with classes ranging from sub 1 class 400 to sub 11 class 60 based the on density in pounds per cubic foot of your product.
If after reviewing the proposal, you feel this change will adversely affect your product we urge you to contact the CCSB immediately and let your voice be heard.
If you have any questions please contact me at russ111@comcast.net
Dates to Remember
January 25-26, 2012- BIFMA International’s Leadership Conference www.bifma.org
June 11-13, 2012 -NeoCon 2012 www.neocon.com
September 19-20, 2012 0FDA’S Annual Meeting and Conference www.theofda.org
The Staff and Board Members of the Office Furniture Distribution Association would like to wish you and your family a healthy and prosperous new year.