Distribution & Transportation: Planes, Trains, Trucks & Y2K

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Planes, trains, trucks ready as ever for Y2K Erica Stephens Contributing Writer As we enter the 11th hour of Y2K preparation, transportation companies and independent industry watchers claim the nation's major transportation conduits are as ready as they can be for Y2K.

If that sounds like a less than rock-solid reassurance that the U.S. distribution and transportation infrastructure is Y2K prepared, it is the best we can hope for, according to transportation experts.

For example, a recent Federal Railroad Administration Year 2000 readiness report states, "... no organizations whose operations depend as heavily on computers and software as the railroad industry can be absolutely sure there will be no date-related glitches that escaped remediation."

That said, the report also cites an independent study of America's four largest railroads: Burlington Northern Santa Fe, CSX Corp., Norfolk Southern Corp. and Union Pacific Corp., which gave each a readiness score of 97.1 to 97.9 on a 100-point scale, well within the very low risk category.

Norfolk Southern, which estimates it will spend $25 million to $30 million on Y2K preparations, began working on mainframe Y2K issues in 1995. In 1998, Norfolk Southern established the Y2K Project Management Office (PMO) which works with individual departments to inventory and prioritize approximately 40,000 items into business-critical, department-critical and not-critical items.

Business-critical items included any item that could adversely affect safe operations of the railroad, the ability to collect freight or move freight, the ability to pay employees or could violate local, state or federal law or regulations. About 3,700 items were classified as business critical.

Norfolk Southern went on to attach the "show stopper" label to items which would have a significant adverse impact on the company within the first five business days of the year 2000.

"As you know, when people have a lot on their plate, they tend to do the easy jobs first. So we just reversed it and said we want to do the hard jobs first," said Gene Carter, assistant vice president at Norfolk Southern.

The fact that Y2K falls in the holiday season provides a cushion for most transportation companies.

"We won't be running that many trains. It will give us an opportunity to get out and look at our system and make sure there are no surprises," Carter said.

Trucking industry ready for rollover According to the American Trucking Association (ATA), "If a blizzard hits Dec. 31, it will likely have a greater impact on public services and business operations than the much-hyped rollover to the year 2000."

During a recent ATA survey, 95 percent of its 198 members reported that their operations and embedded systems were either Y2K-ready or in the remediation stage.

Georgia Motor Trucking Association President Ed Crowell said relatively low-level contingency plans such as maintaining staffing on Dec. 31 will be implemented by most of its members.

"Most of those contingency plans are geared around someone else creating a problem for us," Crowell said.

Larry Sellers, president of Volume Transportation Inc. in Lithonia, has been focusing on the readiness of his computer systems, global positioning satellite (GPS) systems and suppliers.

"It is critically important that we have the ability to track and communicate with each unit," Sellers said.

"And we have to make sure that our suppliers of fuel are ready," he added. "We've also talked a lot to our shippers, because they are the lifeblood to our revenue source."

Since much of their equipment is newly acquired, Y2K preparation costs have been minimal compared to other trucking companies, according to Sellers.

Peak season and Y2K Consumer shippers like United Parcel Service Inc. won't have the luxury of a seasonal slowdown prior to Y2K. In the final days leading up to Y2K, UPS is coming off of its busiest shipping season. The shipper's daily delivery volume average is 12.5 million packages compared with 18 million on its peak day, usually around Dec. 17.

"Currently all of our business-critical IT and non-IT assets are year-2000 ready," said Pat Steffen, UPS Y2K communications manager. "So going into our peak season, our focus is contingency planning."

UPS began companywide and global preparations for Y2K in 1995 with the formation of a year 2000 readiness committee. The company has three separate command and communication centers dedicated to Y2K issues.

As of September 1999, UPS had spent approximately $89 million on implementation of its Y2K initiative. It will take an estimated additional $12 million to complete the transition. Those costs do not include the approximately $7 million to $10 million that will go directly toward contingency planning.

In addition to receiving Y2K readiness assurances from substantially all of its suppliers and vendors, UPS will monitor airport function on a global basis, including customs and traffic control, and will be in direct contact with international airlines.

"What each international entity does is beyond our control. We are working with them so we can monitor and pass on information. That is why we put a heavy emphasis on...

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http://www.amcity.com/atlanta/stories/1999/12/20/focus6.html

-- LOON (blooney10@aol.com), December 20, 1999


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