Piper's Pipeline: August 6 - August 12, 2011

Piper's Pipeline: August 6 - August 12, 2011

by Don Piper
15. August 2011 15:44

Price projections

Diesel Fuel No. 2

  • The Department of Energy has lowered the diesel price forecast to $3.83 per gallon, a 3-cent reduction. This forecast is for the next year and is 1 cent higher than last month's projection. The average last year was $2.99 for diesel and $2.78 for gasoline. The average for gasoline was $3.647, down for the first time in 6 weeks.
  • The New York / New Jersey Port Authority has proposed increasing tolls on the bridges and tunnels over the Hudson River to pay for capital expenses such as raising the Bayonne Bridge ($1 billion) and reconstructing the World Trade Center ($11 billion). The proposed increase would raise tolls from $8 to $15 for use of bridges and tunnels.

Information technology

  • The US Government has announced that 373 government data centers will be closed down by 2012. In the past two years, the number of data centers has quadrupled, currently running at about 27% capacity. There is none amounted for the cost of operating, which includes backup power supplies, air conditioning, fire suppression and special security devices, all causing power usage to use 200% more power than a typical office.
  • It is said that the best hackers can often beat the tools meant to stop them, and potential victims don't know it. The people writing attack codes have evolved their technology. The methods that once prevented hacking are from the mid- to late 1990s. Some of the information is used to cause embarrassment, especially to law enforcement, and to discredit law enforcement.

Ocean shipping

    Chennai Port.
  • Hapag-Lloyd and other carriers have set congestion fees at the two terminals of the Port of Chennai. According to Hapag-Lloyd, the congestion is limiting productivity and affecting shipping schedules. Effective Sept. 5, there will be a $50 fee per 20-foot export container and $65 on import consignments.
  • Panama docks are scheduled for shutdown in August. Eastbound lanes will be closed for two 26-hour periods of scheduled maintenance, including removal and reinstallation of miter gates. In July, the Panama Canal handled between 25 and 38 oceangoing vessels a day. Reservations are required and are being taken.
  • Losses by the ocean carriers continue to be reported. Hanjin Container Unit reported losses of $159 million. NOL reported losses of $57 million for the 2nd quarter and warns of loss for the entire year.
  • In July, imports were down 4.1% year-over-year. However, imports showed a 2.5% increase from June to July. Maersk was the leading carrier in US imports in July.

Trucking and intermodal

  • Truckload spot rates increased for the 7th consecutive month in July, by 22%.
  • Transportation stocks have taken a beating in the Wall Street shortfall. Tanker carrier Quality Distribution was down 10.5%, Con-way 12.4%, ABF just under 10%. Truckload carriers and ocean carriers also took losses. Rail carriers UPRR, Norfolk Southern and CSX were down some 6%.
  • During 2Q, July and early August, the shift from truckload shipments to intermodal was the most in years. This shift is expected to increase in the months ahead. The shift, together with the truckload carriers reporting higher earnings, indicates that the carriers have become more selective, taking the higher paying loads and leaving shippers no alternative but intermodal shipping.

Images by vichu90 and respres

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