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Posts During the Month

October 2014
« Sep    

Finding Common Ground: UPS Announces Rate Hikes that Could Complicate Shippers’ Plans


By Brandon Staton

Remember college? Specifically, do you remember getting those assignments that you just looked at and thought, “Huh?”
We’ve all been there.
And after reminding you that Happy Hour was not a major, your parents may have added: “This isn’t rocket science!” Well, not technically, no. But after UPS announced its customary price hikes Tuesday, which will send Ground, Air and International rates 4.9 percent higher, on average, effective December 29, you might be hard pressed to…

US edges closer to energy independence


by John Timmer

Demand outstripped supply by the lowest level in 30 years.

The net energy consumption of the US has held fairly steady for nearly 20 years. Over the past decade, however, there’s been a large increase in production of energy within the US. As a result, the US government’s energy figures for the first half of this year show that the differences between production and consumption have dropped to the lowest level in 29 years. This represents a net drop in energy imports by 17 percent compared to the same period a year earlier.
According to the Energy Information Agency, the boost in energy production came from a variety of…

Texas power grid has first rotating outages since 2011


by Ryan Holeywell

HOUSTON — The state’s power grid experienced rotating outages for the first time since 2011 late Wednesday afternoon after a pair of power plants went offline.
The outages affected the Rio Grande Valley for about two hours, said Robbie Searcy, a spokeswoman for Electric Reliability Council of Texas, which operates most of the state’s grid.
Searcy said the Rio Grande Valley has been a particularly challenging area for ERCOT to manage because it has a limited number of transmission lines serving the region. As a result, it’s difficult for the region to pull power from other…

Lower fuel costs, energy transfers keep MISO power prices flat in August

Houston (Platts)

Falling fuel prices and increased energy transfers among Midcontinent Independent System Operator regions kept average real-time power prices virtually flat in August compared with July, stakeholders learned in a conference call Tuesday.
The real-time average price in August was $32.12/MWh, compared with $32.15/MWh in July and $31.65/MWh in August 2013, according to material used in Tuesday’s informational forum, a conference call that included…

Competition Is Key


By Mark Magill

If you’re not convinced there are dangers posed by the lack of competition in the US small parcel market, please read the transcript from FedEx’s earnings call on March 19, 2014. Near the end of the call FedEx stated that the 2013 peak season debacle was caused more by its customers’ behavior than by the severe winter storms and lack of preparation by the national carriers. And despite the repeated pummeling UPS received in the media, it stated right after peak season that it would not be increasing its capacity for 2014. UPS actually bragged how it decided not to have its drivers work on Christmas. (UPS wisely changed its tune and in July declared 2014 “the year of investing for the customer.”)
FedEx and UPS are both world class companies offering first class service, yet only in an atmosphere lacking in competition could they make public statements like the ones above. I could not imagine a regional parcel carrier criticizing its own customers or crowing how they favored their…

USPS Slashes Rates, But Can it Handle the Surge?

Spend Matters

Spend Matters welcomes another guest post from Jim Haller, program director of transportation services at NPI, a spend management consultancy, focused on eliminating overspending on IT, telecom and shipping.
It’s no secret that the United States Postal Service has been on a mission to grow its parcel business. But the rate cuts that went into effect on Sept. 7 may be one of its most aggressive moves yet. The pricing changes affect two Priority Mail offerings – Commercial Base and Commercial Plus – and spotlight USPS’s increasing focus on attracting large e-commerce customers. For customers shipping at least 50,000 parcels a year, price cuts could be more than 50 percent.
As one would expect, UPS and FedEx are none too happy, especially after they’ve just announced they will charge shippers by dimensional weight for all package sizes come 2015. Documents filed by UPS and FedEx with the Postal Regulatory Commission claim the USPS is using its…