Piper's Pipeline: October 1 - October 7, 2011

Piper's Pipeline: October 1 - October 7, 2011

by Don Piper
10. October 2011 14:45

Jobs and labor

    Truck Row
  • Of the 103,000 jobs added in September, 2,600 of them were trucking jobs. Intermodal traffic increased 4.4%, while wholesale inventories increased 0.4%. The overall unemployment rate was 9.1%.
  • Over the next 5 years, more factory work is expected to be returned to US factories and plants. A big shift from China to the US and other locations in North America is predicted. Labor costs in China are rising, lowering the incentive for US manufacturers to maintain facilities in China. US productivity also adds to the incentive to relocate, since it has increased.
    • When all factors are considered, including transportation, labor, cost of raw materials, and others, the tendency to maintain Chinese facilities is reduced.
  • Ace Hardware will invest $14 million for an import redistribution center to be located on the East Coast near the port at Norfolk, VA.
  • The Teamster general elections have begun. There are 3 candidates for the presidency. This could be the most competitive election in years. One of the candidates has stated the need to start enforcing contracts. However, 2 Teamsters are on the YRC Board of Directors. This was part of the enticement to the union to grant concessions to the companies that before were unheard of.
  • The Port of Virginia will not appeal the court ruling in its failed attempt to restrict truckers at the port to use union labor only.

Trucking and highways

  • North Carolina has joined Virginia in seeking to toll I-95. Virginia has been granted permission to add tolls to its portion of I-95.
  • Diesel was at the lowest price in 30 weeks for the week ending October 5, at $3.749. The local prices may vary, depending on the locations of the stations.
  • The driver turnover rate for large truckload carriers has reached 79%. Smaller competitors are able to retain more of their drivers.

Safety

  • Volkswagen has joined the recall parade, recalling 168,275 diesel-engine cars because of a defect in the fuel injection system that could cause fuel leaks and fires. Cracks can develop, causing fires.
  • Cyber-attacks are up by 65% in the past 5 years. This should be a major concern for business.

Sundry

  • The Canadian government has said that it will take a vigorous stand in the FMC study looking into the diversion of import traffic from US West Coast ports to Canadian ports. Carriers and some officials blame the claim for the diversion on the Harbor Maintenance Tax (HMT) imposed on US ports.
    • The tax is assessed on the value of cargo aboard each ship each time the ship calls at a US port. Cargo that is destined to a Canadian or Mexican port is not assessed the tax. There are other taxes, fees and higher labor costs at US ports.
    • The allegations that Canada is subsidizing cargo diversion are unfounded / have not been confirmed by the FMC. It appears that the Canadian and Mexican ports are able to do the same service, cheaper.
  • Toyota has told its suppliers in Japan to reduce prices or be replaced by overseas suppliers.
  • Norfolk Southern plans to add a double-stack container train from Hampton Roads to the Piedmont Triad in NC. Included in the Triad are Greensboro, Winston-Salem and High Point. The train will operate 6 days a week to the area.

Image by TKrueger

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