Piper's Pipeline: June 6 - June 10, 2011

Piper's Pipeline: June 6 - June 10, 2011

by Don Piper
10. June 2011 16:20
  • Brazil, South America's largest country, has rebounded from the global recession in a big way.
    • In 2010 the Port of Virginia alone handled a total of 74,568 TEUs to/from Brazil. The Port has the second largest East Coast market share of containers in trade with Brazil.
    • Total value of US-Brazil trade amounted to $3.39 billion.
  • A survey by the Journal of Commerce has found that shippers are bracing for higher rates and surcharges.
    • The average expected increases are 9% overall. Tighter capacity is the reason for such increase.
    • The biggest increases are expected to be in intermodal and rail rates. Truckload rates increases are projected at 3.5%, LTL at 2.5%.
  • DHS is looking at making changes in airport security, letting most airline passengers go through airport security, leaving their shoes on and laptops in their cases.  The changes are predicted to take place in the next year or two. Titled "Trusted Travelers Program," it is expected to cover most travellers.
  • Floods along the Missouri River in Montana, Nebraska, North Dakota, Iowa and Mississippi have caused detours, delays and the possibility of cancellation of service.
    • The US Corps of Engineers has released upstream water from dams. The Corps has warned that the flooding may reach record highs by mid-June. Some tracks are flooded, and in some cases temporary levees across tracks have been built.
  • Chrysler has been fined $200,000 by state regulators for the death of a 62-year-old employee who fell from a conveyor system at the Kokomo Casting Plant. $140,000 of the fines was for not using equipment to prevent falls and not properly training employees.
  • A substance that ignited in a chemical storage area at the Intel plant in Chandler, AZ injured 7 employees. The injured were taken to a hospital, but most of the injuries appeared to be minor. The fire was contained to one room; however, the building was evacuated.
  • Oxbow Corp., a coal shipper, alleges that the UP and BNSF Railroads violated antitrust laws in a suit filed in federal district court in Washington. Monopoly behavior and antitrust laws are the basis of the suit.
    • The basis of the suit is the setting up of fuel surcharges that exceed costs. Collusion between CSX and Norfolk Southern Railroads is charged. Both railroads have vowed to vigorously fight the suit.
    • In a separate suit, various shippers are seeking class action status. 
  • Heavy Load semi-submersible Dockwise has threatened to leave the Dutch flag and move to another because the Netherlands does not allow anti-piracy activity aboard the vessels while other countries do.
    • The vessels operated by Dockwise are designed to provide service to oil and gas operations. In such operations, the vessels are vulnerable to attacks. Their operations take place in pirate-affected areas. 
  • Japan has reported a record trade deficit due to the earthquake and tsunami.
    • Primary figures released by the Finance Ministry claim a deficit of $13.2 billion between May 1 and May 20, up 224.3% form the same 20-day period in 2010. Their overall export fell 9.3% during this timeframe. Imports increased 13.4% to $47.3 billion led by the higher crude oil prices.
  • Hapag-Lloyd is bypassing the Port of New Orleans because of high water reducing clearance at bridges. Three vessels between the Gulf Coast and the East Coast of South America are involved. 
  • Silt in the lower Mississippi River has reduced the draft preventing some vessels from operating.
    • The Corp of Engineers has appropriation for 1 dredge. They need 3 to maintain the necessary depth.
    • This has been described as the worst anyone has ever seen it, and that the channel could be reduced to 35 feet. The only time it has ever approached 35 feet was after Hurricane Katrina. Two Congressmen from Louisiana have urged the White House for an emergency appropriation of $95 million to keep the river open.
  • TransCore load boards reported an increase of 5.1% nationwide in the final week of May. All types of equipment were represented in the loads.
  • Some carriers serving the Ports at Los Angeles may be forced to repay the subsidies they received to buy clean trucks. The requirement for carriers to make 150 visits per vehicle per year for 5 years has not been met.
    • Six carriers failed to make the required calls for the first year ending June 30, 2010.
    • Four carriers could owe between $3,000 and $10,000 each, another trucker $80,000, with Swift owing $1.46 million. There was no comment from a VP at Swift.

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