Piper's Pipeline: December 31, 2011 - January 6, 2012

Piper's Pipeline: December 31, 2011 - January 6, 2012

by Don Piper
10. January 2012 09:01

Ocean shipping

Air carriers

  • Jade Cargo has temporarily suspended operations, citing weak demand. Six 747-400s will be grounded. Jade Cargo is a joint venture with Lufthansa Cargo at 25% and Shanghai Airlines at 51%.
  • China airlines have announced that they will not participate in the EU carbon tax. Other Asian cities say that they will impose surcharges or increase airfares.
  • Global air cargo fell 3.8% in November from a year ago. This represents a decline for the 8th straight month. Weakening demand in the APAC region is partially responsible, reported the International Air Transport Association (IATA).

Intermodal, rail and motor carriers

Manufacturing and labor

  • The production advantage held by China is eroding because of production gains in both the US and Mexico. The location of Mexico over China makes its production more to the US's advantage.
    • The advantage is expected because of freight rates, and an annual increase of 5% is expected. Additional factors include exchange rates and wage increases. The lowest landed costs are held by Mexico.
  • US manufacturing increased to a 6-month high. Purchasing Managers Index reported 52.7 reading in November. The benchmark is 50.
    • Improvement was also reported by China, India, the UK, Australia and Switzerland.
  • Further labor actions are expected at the opening of the EGT facility in Longview, WA. The action is not expected to be as widespread as the previous one was.

Memphis news

  • US Airways has announced the addition of routes between Memphis and Washington, D.C. The service will be at Reagan National Airport. Service will be handled by 50-seat CRJ 200 planes. It is expected that this service will result in reducing fares now charged by Delta.
    • US will also focus services on Philadelphia, Phoenix and Charlotte in competition with Delta.
  • In Memphis suburbs, 2/3 of workers have commute times of less than 30 minutes. Among local communities, Hernando had the highest percentage (14.3%) of workers with commutes of at least 45 minutes. This is lower than the national average, where 15.5% of workers have commutes of 45 minutes or longer.

Sundry

  • A relief fund of $64,695,620 has been announced for the Department of Transportation Emergency Relief program for repairs and construction of roadways in New Jersey, to repair damages by the two tropical storms of 2010.
  • China is accused of dumping wind towers in the US. The charges were filed as a result of a group of US manufacturers in conjunction with the federal government.

Don Piper is VP of Traffic Services at CTSI-Global. He has over 60 years of experience navigating the logistics and transportation industries.


What logistics news was important to you this week? Please share your thoughts!

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