Piper's Pipeline: July 11 - July 15, 2011

Piper's Pipeline: July 11 - July 15, 2011

by Don Piper
20. July 2011 12:28

Trucking

    the road less traveled
  • Tire manufactures have increased the price of truck tires. At the same time, retread operations have reported a shortage of casings, as they are referred to in the retread business, which is a tire with tread worn past use, and free of breaks. 
    • Bridgestone increase announced is an average of 11%. Toyo Tire is adding an average of 9%, Yokohama 8%, Continental Tire 11% and Michelin 12%. A shortage of recappable tires is the most concern, as some carriers use retreads on all axles except the steering axle.
  • For the 8th consecutive month, Class 8 truck orders for new units totaled over 20,000. This is 33.5% higher than in June of 2010, reported two market research firms.
  • Greatwide Logistics has named former United Airlines president John P. Tague to succeed retiring CEO Leo Suggs. Suggs will remain Chairman. Mr. Suggs ran Overnite Transportation, bringing it from just a truck line to where it was when UPS purchased it. He successfully resisted the Teamsters Union for years while operating terminals in Chicago, Detroit, New York, and St. Louis. When UPS bought Overnite, Mr. Suggs departed. He is a veteran of the trucking industry dating back to the late 50's.

Energy

  • The Browns Ferry Nuclear Plant near Chattanooga, TN had more problems than TVA told the public. Downed power lines resulted in 3 reactors automatically shutting down. A number of problems were reported to the Nuclear Regulatory Commission, including cooling water boiling off faster than it could be replaced. TVA officials maintain that the plant and public were never at risk.

Shipping and trade

    Panamax
  • The Panama Canal and the Port of Charleston have renewed their memorandum of understanding, first signed in 2003, for an additional 3 years. The signing furthers and strengthens the ties enabling the pursuit of beneficial joint activities.
    • Charleston is one of few ports on the Atlantic and Gulf side that will be able to accommodate the larger Panamax ships. Others are working to be in position to accommodate the larger ships.
  • The US Commerce Department reported that US exports dropped 0.5% in May from April at $174.9 billion. At the same time imports increased 2.6% to $225.1 billion. This resulted in an increase in the trade deficit to increase 15.1% since April, a total of $50.2 billion in May.
  • A report by Moody's Investors Service has reduced the outlook for global shipping from neutral to negative. Dry bulk is reported to be the most at risk followed by tanker lines. Container lines could deteriorate in 2012.

Legislation and litigation

  • A bill to combat fraud in the freight brokerage industry has been introduced and assigned H.R. 2357. Included in the provisions of the bill include that a broker maintain a $100,000 bond. Also, there would be strict regulation of broker surety companies insure that their obligations to brokers and forwarders are fulfilled. There would be more transparency of applications for authority, and significant penalties for operating without authority having been obtained also provides that a motor carrier or broker must physically transport the cargo at some point.
  • The Containership Company (TCC), now bankrupt, has announced through the trustee that it will seek $25 million for failure to meet contract obligations. The actions are against a total of 83 shippers, some of them NVOCCs faced with claims that represent most of the claims. Shippers who had contracts with TCC have for the most part agreed to settle claims against them. This leaves the NVOCCs to be part of the action unless they settle.
    • The shortage in providing loads range as from 300 TEUs to 10,000 TEUs.
    • It is not too often that a bankrupt ocean carrier seeks compensation for loads not tendered, according to a former executive with Maersk Line, but the fact remains "a contract is a contract."

Images by jasleen_kaur and Velo Steve

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