DC Velocity - February 2013

and now head of an Orlando, Fla.-based consultancy bearing his name.

go figure …

AN ART FORM

The application of surcharges is one part science, two parts art form. As a rule, the shipper is responsible for determining if a delivery is bound for a residential or commercial address. However, many shippers enter incorrect information or are confused as to whether a destination is residential or commercial. Parcel consultants say many high-volume shippers tender everything as a commercial delivery, knowing some shipments will ultimately be rerated to a residential classification.

The driver makes deliveries based on the addresses shown on the package labels. If the delivery is to a residence, the driver checks a box marked “residential” on a handheld device. That action effectively overrides any commercial designation made at the time of manifesting and triggers a rerate to a residential classification.

By checking the “residential” box on their devices, drivers are allowed to leave the package without a signature unless one was already required. Shipments delivered to a commercial address require a signature. FedEx and UPS often leave the ultimate application of delivery surcharges to the driver’s discretion.

Both parcel giants receive customer complaints about overcharges relating to delivery misclassifications. However, a long-time parcel executive said there are fewer complaints directed at UPS because it is more proactive in adjusting the rate from residential to commercial when the situation warrants. UPS will reverse the charges on about eight out of 10 complaints, according to the executive. At FedEx, the ratio is one or two reversals for every 10 complaints, the executive said.

Hempstead of Hempstead Consulting believes that FedEx prizes its hard-won reputation for quality and integrity too highly to let this issue go unresolved.

“In the end, I believe this suit will result in a more
accurate billing process,” Hempstead said. “FedEx will
get focused, put a Six Sigma team together, and do root-
cause analysis, and they will quickly put this issue
behind them.”
For those inside FedEx who sensed the coming storm
long before it hit, the issue can’t be in the rearview mir-
ror fast enough. In one of the August 2011 e-mails, the
FedEx Services sales executive complained that he
repeatedly raised the issue to those as high up as the
managing director level but received little or no
response.

The frustrated executive also made a comment that today seems eerily portentous: “My prediction is this practice is going to come back to haunt us in a very expensive way.” ;

—Mark Solomon

66%

The percentage of truck drivers responding to a recent survey who said they worried about losing their jobs as a result of CSA 2010, the federal government’s program to remove purportedly unsafe drivers from the road.

SOURCE: AMERICAN TRANSPORTATION RESEARCH INSTITUTE

Canadian Pacific (CP) has named Keith Creel president and chief operating officer, reuniting him with CP’s chief executive officer, E. Hunter Harrison, and signaling that Creel is in line to succeed Harrison when he eventually steps down.

Creel, 45, comes from CP’s archrival Canadian National Railway Co. (CN), where he had been executive vice president and chief operating officer since 2010. Harrison was CN’s president and chief operating officer until he retired in December 2009. He was brought out of retirement in mid-2012 to become CP’s president, CEO, and COO.

Under the new management structure, Harrison will remain as CP’s CEO, the company said.

“I have worked with many talented operating people in this industry over the last four decades, and Keith is by far one of the best young operating talents that I have ever seen,” Harrison said in a statement. Creel has been in railroading for more than 20 years.

John Larkin, transport analyst at Stifel, Nicolaus & Co., said that Creel is the “ideal person” to ultimately succeed Harrison, noting that the two have worked together for many years. ;

—M.S.

CP names Keith Creel president
and COO

PHOTO COURTES Y OF CANADIAN PACIFIC

oversight

An item on Murata Machinery USA’s Premex SLX automated guided vehicle in our January issue misstated the vehicle’s speed. The correct speed of the vehicle is 295 feet per minute (90 meters per minute). DC VELOCITY regrets the error. ;