National News

UPS and FedEx increase fuel surcharge – because they can

Marketplace - American Public Media - Tue, 2015-02-03 10:07

UPS handed investors mixed news when it announced 2014 earnings. Shipping volumes were way up, but profits were down. The company made big investments to meet the 2014 holiday rush – including about 100,000 temporary hires— but didn’t get quite as much revenue out as it had wanted.

Still, don’t feel too bad for UPS. CEO David Abney said the company would start tacking on extra holiday charges. And these are in addition to fee increases by both UPS and rival FedEx that include hikes in fuel surcharges, even though the price of fuel is down. 

FedEx has actually raised its fuel charge, from 5.5 percent to 6 percent. The UPS formula is more complicated: The company has changed how it calculates the fee for ground shipments, so the surcharge doesn't reflect a drop in fuel prices.  

"The price of a gallon of fuel is down a buck," says Jerry Hempstead, a consultant who works with shipping customers to help them get better rates. "You would think: "Oh, the fuel surcharge could even go away.' Well, no."

He thinks it’s the opposite of a price war. First UPS had higher rates. FedEx bumped. Now it’s UPS’ turn.

"They did it because they could," he says.

The price of sending a package includes a bundle of smaller charges, many of which have gone up. The “base rate” just saw annual increases of about 5 percent from both carriers. There are also bumps in “accessorial charges"— like extra fees for delivering to remote locations.

The biggest increase comes from a new way of charging for smaller packages. Instead of charging by weight, shippers now also count the size. That change alone raised shipping prices by an average of 17 percent, according to an analysis by Shipware LLC, another company that helps shipping customers negotiate with carriers.

Not all companies will feel that cost the same way, says Rob Martinez, Shipware's president and CEO. A company that makes microwaves and refrigerators, for instance, wouldn't necessarily take a hit. 

"Other shippers, it is literally doubling some of their costs," he says, meaning companies that ship lightweight items in bigger boxes. 

Martinez thinks FedEx and UPS can impose these fees because they’re the only two national companies in the business.

"It’s great for UPS and FedEx investors," he says. "But lack of competition is bad for shippers."

Some of his customers are giving the U.S. Postal Service another look. "Their 'Priority Mail' product is actually a pretty good product," Martinez says.

The what-ifs of net neutrality

Marketplace - American Public Media - Tue, 2015-02-03 10:06

This week, the Federal Communications Commission is expected to propose reclassifying how Internet service providers are regulated, treating them treated like utilities. The idea is to foster net neutrality, so all data flowing across the Internet is treated equally.

What would the new regulation mean for consumers?  

Internet service providers don’t like the idea of being regulated like a phone company. They say that would pave the way for more taxes on consumers, like those that appear on phone bills. But Congress has prohibited state and local governments from collecting new Internet taxes. So what about federal taxes?

“We don’t know which way the FCC is going to go on any particular provision,” says Jodie Griffin, a senior staff attorney for the consumer group Public Knowledge. The FCC could add a universal service fee to your Internet bill, she says. The fee already appears on phone bills and is used in part to extend phone service to high-cost areas at reasonable rates. But Griffin says the total amount collected might not change. 

“So there will be some people who are not paying now who would be paying something, and there will be other people who are paying now who will be paying less,” she says. 

Other consumer advocates say the FCC could delve into the issue of Internet privacy.

“We’ll have a lot more privacy tomorrow than we do today,” says Jamie Court, president of Consumer Watchdog.  The FCC could use its new authority to prevent tracking on the Internet, he says, but the key word is "could."

Jonathan Zittrain, a professor of law and computer science at Harvard University, says: “Everybody can keep powder dry.  I don’t think there are any immediate changes."

FCC officials seem to be just focusing on net neutrality, Zittrain says. “These are not wild-eyed radicals somehow wanting to blow up the system,” he says.

Zittrain says these are all things the FCC could do, if it wanted to – and that’s a big if.

Curious about what net neutrality means?

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What's changed in the credit ratings business?

Marketplace - American Public Media - Tue, 2015-02-03 10:05

Quick refresher: When mortgage-backed securities and derivatives suddenly collapsed into a black hole of toxic assets in 2008, people immediately asked why credit ratings agencies had listed them as good investments.

And then people sued the credit agencies.

Standard and Poor's, one of country’s top ratings agencies, just settled $1.38 billion in lawsuits with 19 states and the District of Columbia, the Department of Justice and the California Public Employee Retirement System. Last month, the agency paid $86 million to settle charges with the Securities and Exchanges Commission and several State Attorneys General. And now, it’s Moody’s turn to be probed by the Department of Justice.

Has anything changed since 2008 in how credit ratings agencies do business?

“The whole industry and certainly Standard and Poor’s has been transformed over recent years,” says Adam Schuman, chief legal officer of S&P Ratings Services. The SEC has expanded regulatory oversight, with an entire department focused just on ratings agencies. 

Standard and Poor’s says it now has a governance board that includes SEC-certified independent board members to oversee how the firm manages conflict of interest risk, and that S&P conducts investigations into the quality of its ratings and compliance by its employees. Schuman also says those employees are evaluated for their adherence to company rules designed to protect the quality of ratings. 

But critics are still strident, arguing that no matter how conflicts are managed, the incentives to inflate ratings still exist. "The fundamental conflict of interest that has led to this litigation and massive settlements still exists," says Daniel Drosman, an attorney with Robbins Geller Rudman & Dowd who has successfully sued ratings agencies. "You have ratings agencies being paid by the institutions whose bonds they are grading."

Bill Harrington, an independent researcher and former Moody’s employee, goes further. He says the problems don't stop with ratings agencies but extend among the many other parties to any complex financial instrument. “It’s the credit rating agencies, the bank underwriters and the counsel looking at a deal’s merits, and the auditors ... none of them gets paid unless the deal closes with a triple-A rating.”

How Fish Could Change What It Means For Food To Be Organic

NPR News - Tue, 2015-02-03 09:37

The USDA is considering a set of rules for certifying farmed fish as organic. But some consumer groups say the recommendations don't go far enough to meet the strict standards of other organic foods.

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Life In The 'New' Washington: In Your Face! No, In YOUR Face!

NPR News - Tue, 2015-02-03 09:35

The 114th Congress so far has displayed all the dominant traits inherited from its parents – the 113th and 112th congresses. It's all about honoring past promises and settling old scores.

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Pope Declares Salvadoran Archbishop Óscar Romero A Martyr

NPR News - Tue, 2015-02-03 09:02

The Archbishop was an outspoken voice against human rights abuses during the Salvadoran Civil war. He was killed while giving mass in 1980. The Pope's decree sets the stage for beatification.

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Not Just Monopoly Money: Some Games Ship With Real Cash In France

NPR News - Tue, 2015-02-03 08:50

While one Monopoly box will include the equivalent of about $23,500, Hasbro says 79 others will include hundreds of euros mixed in with the game's colorful money.

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ISIS Video Appears To Show Jordanian Pilot Being Burned Alive

NPR News - Tue, 2015-02-03 08:31

Lt. Muath al-Kaseasbeh has been held by the group since his capture in December. Jordan had said it was prepared to trade Kaseasbeh for an Iraqi militant.

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Justice Dept. Settles S&P Lawsuit

NPR News - Tue, 2015-02-03 08:26

Standard and Poor's is expected to settle a lawsuit brought by the Justice Department over the quality of the firm's ratings during the years before the financial crisis.

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In First Photos Since August, Cuba's Fidel Castro Meets With Student Leader

NPR News - Tue, 2015-02-03 08:07

They came just weeks after rumors surfaced yet again that the former Cuban president, now 88, had died.

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Quiz: Saving college savings from taxes

Marketplace - American Public Media - Tue, 2015-02-03 08:06

President Obama backed away from a proposal to tax 529 college savings accounts, which 3 percent of Americans use.

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Harper Lee Plans To Publish A New Novel Featuring 'Mockingbird' Hero

NPR News - Tue, 2015-02-03 07:50

More than 50 years after the release of her classic — and only — novel, To Kill a Mockingbird, Lee plans to publish a second. The newly unearthed book, Go Set a Watchman, will be published in July.

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New York State Clamps Down On Herbal Supplements

NPR News - Tue, 2015-02-03 07:38

State's attorney general asks four major retailers to pull pills because they don't contain what they claim. Tests show supplements are often filled with cheap ingredients, including houseplants.

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A Rise In The Civilian Death Toll As Ukraine Fighting Increases

NPR News - Tue, 2015-02-03 07:34

At least eight civilians have been killed in the past 24 hours and 22 wounded in fighting between pro-Russian rebels and Ukrainian troops in the separatist stronghold of Donetsk.

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You May Think You Can't Dance But Nepalis Will Make You Try

NPR News - Tue, 2015-02-03 07:20

Our Peace Corps correspondent discovers that Nepal is a country where everyone dances all the time. And you have no choice but to bust a move.

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Medicare Offers Relief To 400,000 Caught In Drug Plan Mix-Ups

NPR News - Tue, 2015-02-03 07:19

Aetna beneficiaries can reconsider their Part D choices after the insurer incorrectly identified some pharmacies as being in-network, dropped others and removed some from the preferred network.

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Pain And Suffering At Life's End Are Getting Worse, Not Better

NPR News - Tue, 2015-02-03 07:03

Despite considerable effort to improve care for people who are dying, more people are reporting pain and depression, a study finds. Medical treatments that lengthen the process may be one reason.

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Reviving The Lost Art Of Logrolling

NPR News - Tue, 2015-02-03 07:01

Contemporary logrollers believe that the historical practice provides today's athletes a good, balanced workout. And that it's as easy as, well, as falling off a log.

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Waukesha: A spa town that took its water for granted

Marketplace - American Public Media - Tue, 2015-02-03 06:47

My hometown of Waukesha, Wisconsin, is surrounded by water. There are creeks and rivers. The fourth biggest lake in the world, Lake Michigan, lies 17 miles to the east. Every year the city gets an average 34 inches of rain and 40 inches of snow. Yet Waukesha has a big water problem. Its deepwater wells are contaminated with radium and salts, and now the city needs to figure out a new source of drinking water. How did a city in such a water-rich state get into such a pickle?

Waukesha’s water story started out well enough. In the late 1800s the town was known as the “Saratoga of the West.” People flocked there in summer, 25 trainloads a day, to drink cold, pure water from dozens of mineral springs around town.They thought the water could cure such ailments as diabetes and depression. John Schoenknecht, author of “The Great Waukesha Springs Era: 1868-1918,” says Waukesha water was so prized that when a savvy entrepreneur tried to pipe it down to Chicago for its world’s fair in 1893,  townspeople nearly rioted, fending off his work crews with pistols and rifles.

Eventually the springs and fancy summer resorts there fell out of fashion. Most of the springs were paved over or dried up as the city developed. But Waukesha’s reputation for good water survived, even when grittier industries moved in, including many foundries. All the factories needed water. To meet the demand the city drilled new wells, some nearly 2,000 feet deep, into the sandstone aquifer.   

When my family moved there in 1969, Waukesha was a suburb with almost 40,000 people. Dairy farmers just outside the city’s borders were selling their land to developers who wanted to build new subdivisions. “They were just coming into City Hall like crazy wanting to annex,” says Paul Vrakas, 87. He was Waukesha’s mayor during much of the city’s growth spurt. “It was like having a tiger by the tail, and I think we did a great job,” he says.

If the city hadn’t annexed all the new subdivisions that wanted city water, developers would have built them anyway, Vrakas says. But on oversized lots with private wells and septic systems that eventually would fail. “We, of course, had the treatment plant, state-of-the-art treatment plant and municipal water,” he says. “So it made sense for the city to accept the growth and do it properly.”

City officials weren’t worried about the water supply. Waukesha water customers paid some of the lowest rates in the state. The more a customer used, the lower the rate. Peter Annin, author of “The Great Lakes Water Wars,” says the city’s policies actually encouraged lawn watering. “Because you got a credit on your water bill if you had water that was used but didn’t end up back in the sewer system,” Annin says.

But in 1987 Waukesha’s water officially became a problem. The state put the city on notice. Its drinking water was contaminated. Radium levels were over twice the legal limit. The aquifer beneath the city recharges slowly, and years of overpumping had lowered the water table hundreds of feet. “As you use this water over time, over the last 100 years when we’ve developed groundwater and used it, we’ve drawn down the aquifer to the point where we’re pulling up the water that’s contaminated," says Dan Duchniak, general manager of the Waukesha Water Utility.

Radium is a naturally occurring metal that’s common in groundwater pumped from sandstone aquifers. But the deeper you go, the higher the concentrations. Lifetime exposure increases the risk of cancer.

The state ordered Waukesha to fix its radium problem. But the city resisted. It fought regulators and ultimately sued the Environmental Protection Agency. Fixing the problem was going to be expensive, and city leaders believed the government was overreaching. “In fact, the Argonne Laboratory said that amount of radium was no hazard,” Vrakas says. “And many local doctors told me the same thing as well.”

Nearly two decades later, after a federal appeals court ruled against the city, Waukesha finally decided to stand down. By then, the city’s population had grown another 20 percent.  And its water quality had grown worse. “Waukesha is this poster child of what can happen when you assume that water will just always be there,” Peter Annin says. "And what surprises a lot of people is that here we are in one of the richest water areas of the globe, and yet, we are still fighting over water here in the Great Lakes region.”

But water-challenged cities like Waukesha know they need a secure water supply to keep and attract economic investment. Right now, the city is pinning its hopes on an expensive proposal to pipe water in from Lake Michigan. That’s something those pistol-packing Waukeshans who didn’t want their water piped out to Chicago probably never could have imagined. 

For more on the story of Waukesha's changing water situation, watch the slideshow below:

Photo credit: Jeffrey Phelps
Historical photos courtesy of: Waukesha County Historical Society and Museum

Waukesha: a spa town that took its water for granted

Marketplace - American Public Media - Tue, 2015-02-03 06:47

My hometown of Waukesha, Wisconsin, is surrounded by water. There are creeks and rivers. The fourth biggest lake in the world, Lake Michigan, lies 17 miles to the east. Every year the city gets an average 34 inches of rain and 40 inches of snow. Yet Waukesha has a big water problem. Its deepwater wells are contaminated with radium and salts and now the city needs to figure out a new source of drinking water. How did a city in such a water-rich state get into such a pickle?

Waukesha’s water story started out well enough. In fact, in the late 1800’s the town was known as the “Saratoga of the West.” People flocked there in summer, 25 trainloads a day, to drink cold, pure water from dozens of mineral springs around town.They thought the water could cure everything from diabetes to depression. John Schoenknecht, author of “The Great Waukesha Springs Era: 1868-1918,” says Waukesha water was so prized that when a savvy entrepreneur tried to pipe it down to Chicago for its world’s fair in 1893,  townspeople nearly rioted, fending off his work crews with pistols and rifles.

Eventually, the springs and fancy summer resorts here fell out of fashion. Most of the springs got paved over or dried up as the city developed. But Waukesha’s reputation for good water survived, even when grittier industries moved in, including many foundries. All the factories needed water. To meet the demand the city drilled new wells, some of them nearly 2,000 feet deep into the sandstone aquifer.   

By 1969 when my family moved there, Waukesha was a suburb with almost 40,000 people. Dairy farmers just outside the city’s borders were selling their land to developers who wanted to build new subdivisions. “They were just coming into City Hall like crazy wanting to annex,” says Paul Vrakas, 87. Vrakas was Waukesha’s mayor during much of the city’s growth spurt. “It was like having a tiger by the tail and I think we did a great job,” he says.

If the city hadn’t annexed all the new subdivisions that wanted city water, Vrakas says, developers would have built them anyway. But on oversized lots with private wells and septic systems that eventually would fail. “We, of course, had the treatment plant, state-of-the-art treatment plant and municipal water,” he says. “So it made sense for the city to accept the growth and do it properly.”

City officials weren’t worried about the water supply. Waukesha water customers paid some of the lowest rates in the state. In fact, the more a customer used, the lower the rate. Peter Annin, author of “The Great Lakes Water Wars,” says the city’s policies actually encouraged lawn watering. “Because you got a credit on your water bill if you had water that was used but didn’t end up back in the sewer system,” Annin says.

But in 1987 Waukesha’s water officially became a problem. The state put the city on notice. Its drinking water was contaminated. Radium levels were over twice the legal limit. The aquifer beneath the city recharges slowly, and years of overpumping had lowered the water table hundreds of feet. “As you use this water over time, over the last 100 years when we’ve developed groundwater and used it, we’ve drawn down the aquifer to the point where we’re pulling up the water that’s contaminated," says Dan Duchniak, general manager of the Waukesha Water Utility.

Radium is a naturally occurring metal that’s common in groundwater pumped from sandstone aquifers. But the deeper you go, the higher the concentrations. Lifetime exposure increases the risk of cancer.

The state ordered Waukesha to fix its radium problem. But the city resisted. It fought regulators and ultimately sued the Environmental Protection Agency. Fixing the problem was going to be expensive, and city leaders believed the government was overreaching. “In fact, the Argonne Laboratory said that amount of radium was no hazard,” Vrakas says. “And many local doctors told me the same thing as well.”

Nearly two decades later, after a federal appeals court ruled against the city, Waukesha finally decided to stand down. By then, the city’s population had grown another 20 percent.  And its water quality had grown worse. “Waukesha is this poster child of what can happen when you assume that water will just always be there,” Peter Annin says. And what surprises a lot of people is that here we are in one of the richest water areas of the globe, and yet, we are still fighting over water here in the Great Lakes region.”

But water-challenged cities like Waukesha know they need a secure water supply to keep and attract economic investment. Right now, the city is pinning its hopes on an expensive proposal to pipe water in from Lake Michigan. That’s something those pistol-packing Waukeshans who didn’t want their water piped out to Chicago probably never could have imagined. 

For more on the story of Waukesha's changing water situation, watch the slideshow below:

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