|
BULLETIN 1107
NOVEMBER 30, 2007
NMFTA MEETINGS ANNOUNCED
The NMFTA has announced its upcoming meetings February 3-6, 2008 at the Lago Mar Resort, Ft. Lauderdale FL. The meeting will begin on Sunday February 3 with a golf tournament and superbowl party followed by the business meetings on February 4-6. This is an important meeting and will be the first meeting under the new procedures and a heavy attendance is expected. For more information please contact Bill Pugh at
pugh@nmfta.org or Amanda Sisk at sisk@nmfta.org.
NEW NMFC (National Motor Freight Classification)
READY TO ORDER.
The new NMFC 100-AH is ready for order from the NMFTA. For an electronic version in ClassIT2.0 online please visit
www.nmfta.org or contact NMFTA Sales at 800.539.5720. The hardcopy version will be printed and shipped in January. Cost is $145.50 for participants and $184.50 for non-participants. Call 800.539-5720 or email
customerservice@nmfta.org. Payment can be made with check or credit card.
Charleston
Photos
Requires Adobe Reader
TOLLS STILL HOT TOPIC
While tolls in NC are still in the “talking and planning stage”, they will eventually come in some form or the other. There is a strong move in South Carolina to partially toll I-95 and maybe other interstates with so called “hot lanes” or “express lanes”. Federal approval would be necessary but officials think they can get it. The League is opposed to the tolling of existing highways and bridges. Many officials and politicians are in favor of outsourcing toll roads and bridges. In NC state officials have estimated a $65 billion gap over the next two decades between transportation revenues and the state’s highway and public transportation needs. Brad Wilson, chairman of the 21st Century Transportation Committee, said that unless the state meets its transportation needs, traffic will worsen enough to hamper economic development. NC Secretary of Transportation Lyndo Tippett has said, “we’re going to try to spend the transportation dollar more efficiently. In the past, we’ve been all things to all people”. One way to help meet our needs would be to discontinue raiding the Highway Trust Fund but they just keep on doing it. Hopefully revenue from the 50,000 plus speeding tickets issued in the recent Operation Slow Down will help out!
NEW TRANSIT CHIEF
Keith Parker is the new chief executive officer of the Charlotte Area Transit System, replaced the retiring Ron Tober. Mr. Parker is the former assistant city manager and has prior transit experience in Washington State. The light rail line proponents claim that the new service will cut down on congestion along the I-77 corridor in southern Charlotte. Let’s hope so. I-77 can’t handle the rush traffic as it is. One change on the I-77 north of Charlotte that would really offer some relief would be the elimination of the HOV lane. The HOV lane is lightly used and penalties of misuse are severe. Another expensive idea that just isn’t working. Agreed?
HOURS OF SERVICE RULE
Clifton Parker, President of G&P Trucking is heavily involved on the Hours of Service Rule and says that the next step will probably be an interim rule that should leave things as is. Then most likely another lawsuit. Then it would take a year for the agency to publish a final rule. Clifton is the Vice Chair on the HOS sub committee under the new ATA Chairman. The League is proud to have Clifton, VP Richard Whitmire and G&P as a member.
FUEL INCREASE
The emergency fuel surcharge is added by carriers effective December 17 from Shanghai to the US: as follows:
20 foot $160 per container
40 foot $200 per container
40 foot HC $225 per container
45 foot $255 per container
AVERAGE MILES ON $100 WORTH OF DIESEL FUEL
Thanks to Kevin Perry of Lowe’s for sending us a neat but eye opening graph on how far the average truck can travel on $100 of diesel fuel.
In 2002 it could travel 455 miles
In 2003 it could travel 400 miles
In 2004 it could travel 303 miles
In 2005 it could travel 233 miles
In 2006 it could travel 213 miles
In 2007 it is averaging 175 miles
In 2008 it will travel ??? miles
That is a 260% decrease in 6 years! Hurts doesn’t it!
LOWE'S EARNS AWARD
Lowe’s has earned its first Environmental Excellence Award form the US Environmental Protection Agency SmartWay Transport Partnership. The company was recognized for its leadership in conserving energy and lowering greenhouse gas emissions from its transportation and freight delivery system. Lowe’s had to implement stringent initiatives that resulted in reduced carbon dioxide emissions and less overall highway congestion: increased shipping via rail; instituting a more efficient process for inbound and outbound freight deliveries, increasing efficiency of truckload shipments allowing more products to be shipped on fewer trailers and to continue using a higher percentage of SmartWay carriers. Steve Palmer, Lowe’s VP and longtime League member and former League President stated, “by 2010 we plan to transport 90 percent of our shipments by SmartWay Transport Partners.” “By utilizing SmartWay carriers we are able to encourage increased energy efficiency of our freight delivery system and help lessen the impact of vehicle emissions on the environment.” Lowe’s was one of 34 companies among over 600 Partners to receive the distinction. The partners based on their 3-year commitment are conserving more than 600 million gallons of diesel fuel per year, saving the trucking industry nearly $2 billion in annual fuel costs and eliminating nearly 7 million metric tons of carbon dioxide emissions.
Lowe’s had sales of $46.9 billion in 2006. They serve over 13 million customers a week at more than 1,450 home improvement stores in 49 states. Founded in 1946 Lowe’s is the second-largest home improvement retailer in the world. Congratulations to Steve and Kevin and all the hardworking Lowe’s team.
TSA SHIPPERS ADD FUEL SURCHARGES
The TSA container carrier group, which represents 14 shipping firms that sail from Asia to US Ports have implemented fuel surcharges to offset surging oil prices:
New contracts starting from 2008 will also be subjected to the floating surcharge, which for the month of November ranged from $545 per TEU to $860 per 45-foot container. Quoting TSA Chairman and Neptune Orient Lines CEO Ronald Widdows: “We’re in a global market of nearly $100 per barrel for crude oil and over $500 a ton for bunker fuel-up from $295 at the beginning of 2007.”
53-FOOT OCEAN BOXES AT APL
The first 53-foot ocean-capable containers from the shipping line APL rolled off the assembly line and were loaded onto the vessel APA Philippines November 12, new product name Ocean53. Retailers are taking advantage of the high cube boxes on the trans-Pacific trade from Asia to the US. Bob Sappio, SR VP of the trans-Pacific trade at APL: We took the first order of the 53-foot containers from our manufacturer in China and immediately put them to work, there’s a long list of shippers waiting for these boxes”.
SOME PREDICTIONS FROM KIPLINGER
Firms will keep paying through the nose to ship dry bulk cargo. Ocean carrier rate hikes of 25% a year are likely until 2011, at least. That’s on top of a 150% jump this year. Blame companies in China and India that sewed up long-term dry bulk shipping contracts to feed their demand for chemicals, coal, ore, steel, paper, wood and agricultural commodities. A shortage of ships also drives up costs. New cargo ships are on the way, but no time soon. It will be 2012 before they start steaming into parts in big numbers. Ship construction is being stretched out by the growing global competition for steel. Truck and rail freight rates won’t budge much next year, though the reason for that isn’t so cheery: the slowdown in the US economy spells less demand for truck and rail shipping. Truck rates will edge up 2%. Rail-about 1%. Fuel surcharges will average around 10% (wish it were so) in 2008, roughly on par with this year, even though truckers will pay about 15% more for diesel fuel. Now (and is always) a good time to negotiate favorable long-term freight deals.
TRADE WANTS CUSTOMS TO ANSWER 10+2 QUESTIONS
The trade community is prepared to comply with Customs and Border Protections “10 2” security program, but wants the agency to answer some troubling questions as it prepares to release the final draft of the advance filing initiative. Customs brokers attending Wesccon (Western Cargo Conference) said Customs must clearly define which parties in an import transaction can file sensitive cargo information. The trade community also wants to know what the agency intends to do to protect the confidentiality of the data that will be filed. The 10 2 program is the latest addition to Customs’ approach to prevent weapons of mass destruction from entering the country. The agency will require that importers or their agents file 10 data elements about the foreign and domestic companies involved in an import situation, with ocean carriers providing two additional pieces of information. The documents must be filed at least 24 hours before a shipment in a foreign country is loaded on to a US bound ship. If the 12 data elements are not filed, Customs will issue a no-load order to the ocean carrier. Brokers say that some of the information required can be difficult to obtain. The trade community believes Customs’ notice of proposed rule-making does not protect the confidentiality of sensitive information that may have to be shared between buyers and sellers, such as the IRS number of the US consignee and some believe that the furnishing of the importers tax number could lead to identity theft. Article quoted from the Journal of Commerce.
MORE COMMENTS FROM RON WIDDOWS
Ron Widdows, APL CEO, made some very sobering comments to the 19th Annual Textile and Apparel Importers Trade and Transportation Conference. He stated that bunker fuel prices have risen so high and so fast that many liner companies are losing money on many trade routes, including those to the US. He also said that although 2007 has been a good year for the liner shipping industry, a large part of the industry is still operating in the red. Widdows said that carriers are re-routing capacity from the trans-Pacific to other trade routes that are growing faster, especially the Asia-Europe trade. The growth of that trade and port congestion in Asia and Europe are sopping up the record amount of new ship capacity that is coming to market. There is no reason for carriers to add capacity with fuel at $500 a ton, he said. He further stated that the high cost of fuel is forcing carriers to cut capacity on trade lanes to the US. “Not many people understand the significance of fuel costs”. “It makes the whole supply/demand balance a less significant issue”. Carriers have been unable to recover soaring fuel costs in their freight rates on many trade lanes. “The cost of fuel goes up very quickly, but rates move up very slowly”.
INTERMODAL SLOWS
The Association of American Railroads reported US Intermodal traffic fell 3.2% in the first two weeks of October from the same period a year ago. The slide grew to 4.4% in the first week and 4.3 % in the week ending October 27. There are new signs of hope for the economy, but Thomas Finkbiner, chairman of the University of Denver’s Intermodal Transportation Institute, predicted during September that intermodal trends would not improve until late 2008 or early 2009 and further stated that the “situation hasn’t changed, it’s worse”. He said that the intermodal traffic had been hard-hit by slowing automobile output and residential construction. The Intermodal Association of North America said third-quarter box traffic fell 2.2%, as shrinking import container volume more than offset a 10% gain in domestic container moves. Inbound volume at the Port of Los Angeles fell for four of the five months from July to September, and was down 6.1% in the third quarter.
US RAILROADS HAVE LOWER 3Q PROFITS
Reduced demand and high fuel costs, along with concerns about the larger economy are likely to weigh heavily on the railroads as they begin to report third-quarter profits. Traffic on US railroads climbed 2.8% in the week ending Nov. 17, according to the Association of American Roads. The AAR estimated overall ton-miles at 35.8 billion, up from 34.9 billion ton-miles in the year-ago week and so far this year ton-miles have declined 1.2% to 1.5559 trillion. A total of 244,829 trailers and containers were loaded during the week, down 2.4% form the comparable week a year ago. Bear Stearns analyst Edward Wofe said total carload volumes slipped 2.4% during the quarter, and have fallen 2.7% this year. Shipments of coal, the second largest rail segment, rose 4.2% in the last week of the quarter, while grain carloads rose 3.2% for the week. Chemical carloads rose 9.1% driven by strong demand for ethanol and fertilizer.
FMC TO CONSIDER LA TRUCK PLAN
The Federal Maritime Commission had a closed-door meeting on Nov. 28 to discuss the clean air program adopted by the ports of Los Angeles and Long Beach to reduce vehicle emissions by 80% in five years. Earlier this month, the ports agreed to plan to retire older trucks and replace them with low-emission units by 2012. The plan is opposed by the Pacific Maritime Shipping Association and the National Industrial Transportation League. In September, the two groups asked the FMC to intervene, claiming the plan violated the Shipping Act by discriminating against carriers and shippers. They also alleged that the plan eliminated competition by small trucking companies that may not have the means to buy new trucks. The ports’ plan is being supported by a coalition of environmental and public health groups, and by organized labor. According to an FMC spokesman, the commission is authorized by the federal Sunshine Act to hold a closed meeting because it is concerned with matters that may result in the issuance of subpoenas, or the agency’s participation in arbitration or adjunction. Article taken from the Shipping Digest.
TRANS-PACIFIC LINES PLAN WASTEPAPER FUEL CHARGE
Container lines in Westbound Transpacific Stabilization Agreement has announced new plans to fully recover the cost of soaring fuel prices. Effective January 1, the Oakland-based group of 10 carriers intends to assess bunker fuel surcharges separately from base freight rates for wastepaper, and allow those surcharges to float, adjusted on a regular basis to reflect fluctuations in world bunker fuel prices. Wastepaper contracts have typically included provisions mitigating the bunker surcharge and folding in into an all-inclusive rate, owing partly to the low shipment value and unique price structure of US wastepaper shipments to Asia. “WTSA lines are taking a first step with respect to the leading commodity in the trade in terms of volume,” said WTSA Executive Administrator Brian Conrad. “Wastepaper rates are low from the outset, and downward pressure on rates over time has eroded fuel cost recovery buried within the rates. At the volumes wastepaper moves, it is nowhere near making an adequate revenue contribution as fuel costs have risen 55% since the beginning of 2007 alone.” The group said that more than 233,000 FEUs of wastepaper moved from the US to Asia in the first half of 2007, or 18.3% of the total westbound market. The group further added that setting bunker surcharges separately from base rates does not mean lines intend to offset the new surcharges with base rate concessions, nor do the new surcharges preclude separate actions on rates during 2007 as market conditions dictate.
|
