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Latest News — Jan 24, 2013

Truck Tonnage Sees 2.8% Jump in December

The American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 2.8 percent in December after surging 3.9 percent in November. (The 3.9 percent gain in November was revised from a 3.7 percent increase ATA reported on December 18, 2012.)

The back-to-back increases in November and December were by far the best of gains of 2012. As a result, the SA index equaled 121.6 (2000=100) in December versus 118.3 in November.

Despite the solid monthly increase, compared with December 2011, the SA index was off 2.3 percent, the worst year-over-year result since November 2009. For all of 2012, tonnage was up 2.3 percent. In 2011, the index increased 5.8 percent.

TODAY IN ENERGY: Tuesday, January 22, 2013


Political risks focus attention on supply of Venezuelan oil to the United States

Uncertainty about the health of Hugo Chávez, Venezuela’s president, has raised interest in understanding Venezuela’s contribution to U.S. oil supply. Venezuela, a member of the Organization of the Petroleum Exporting Countries (OPEC), ranks among the 15 largest global oil producers and is the United States’ fourth-largest source of imported oil, behind Canada, Saudi Arabia, and Mexico.

On Average Diesel Fuel Prices Continue to Remain Stable

Suppliers Confident, But Survey Finds Manufacturers Cautious After Being Burned

ASQ | January 04, 2013

While more than 75 percent of suppliers are confident in their ability to meet their customers’ needs in 2013, one-third of respondents to ASQ’s 2013 Manufacturing Outlook Survey say they anticipate a problem with a supplier next year, resulting in a shortage of parts or services.

Of the respondents who anticipate a problem with a supplier, 42.1 percent say they are working with partners on process improvements to mitigate volume capacity, while more than 26 percent are working with their suppliers’ competitors. Other manufacturers said they are stockpiling parts in advance of the issue and expanding facilities to make necessary parts themselves.

Transport Funding 2: Gridlock on the Congressional Gridiron

Robert J. Bowman, Supply Chain Brain | January 02, 2013

The holidays are supposed to be a time of joy, but given the state of the economy and other recent events, it’s hard to feel positive about much of anything right now – least of all the outlook for transportation policy reform. So why is Joshua Schank, president and chief executive officer of the Eno Center for Transportation, “more optimistic than I have been in a long time” about the prospects for funding critical infrastructure improvements?

Maybe it’s because people function best in a crisis. “The opportunity for government to make a deal of some kind around the deficit is greater than it has been in the last two years by far,” says Schank. “Both parties agree that this is the priority issue that needs to be tackled.” And in the course of that tackling, he adds, transportation policy will definitely be on the field.

Granted, the political posturing that brought us to the edge of the “fiscal cliff” is hardly a sign of best intentions. And Schank believes that some of the biggest decisions on spending cuts will be put off until this year. Apparently congressional coaches favor punting over tackling.

Still, rhetoric and ideology seem to be slowly giving way to reality – specifically, the need for some kind of tax increase, coupled with serious spending cuts, to clean up the budget mess. President Obama’s reelection means that a solution based partly on higher taxes will be part of any deal. “If that happens,” says Schank, “then transportation stands to gain – most likely with bipartisan support.”

Just how soon that sector gets Congress and the Administration’s full attention is another question. Lawmakers can’t deal with every aspect of the massive federal budget deficit at once. And transportation, tied as it is to the federal gas tax and the Highway Trust Fund (HTF), is a painfully complex issue that wins legislators few political points for solving. (Unless, of course, it leads to massive construction projects in their home states.) Finally, with the passage in 2012 of the two-year funding measure known as MAP-21, Congress might feel that it’s done enough in that area for the time being. “You’ve got to figure out that transportation is later on the list,” Schank says.

U.S. Transportation Infrastructure Greatly Underfunded, Civil Engineering Group Says

Bloomberg | January 21, 2013

Increasing annual infrastructure spending in the U.S. by $157bn over the next eight years would save $3.1tr in gross domestic product, $1.1tr in trade and 3.5 million jobs, according to a report from the American Society of Civil Engineers. Current U.S. policies will underfund surface transportation, aviation, waterways, the electrical grid and sewers by about $1.1tr through 2020, according to the association. The $157bn would be on top of expected U.S. spending of about $207bn a year, the group said.

“Infrastructure is the lifeblood of our economy and provides the foundation for assuring a high quality of life for all Americans,” said Gregory E. DiLoreto, president of ASCE, said in a news conference. “If we don’t invest now, all Americans will pay more in the long run.”

Without the added investment, business costs will increase by $1.2tr and household costs by $611bn, the group said.

Is US Slipping Even in Advanced Manufacturing? We are Barely Covered with US Made Apparel!

Supply Chain Digest | January 17, 2013

98% ! The amount of clothing worn in the US that is made offshore. That this week from the American Apparel and Footwear Association after the news this week at the NRF show that Walmart was going to increase its level of sourcing from US manufacturers, with apparel cited as one sector of specific focus (the others were furniture and appliances). In sectors such as apparel, however, there are questions as to whether there is enough infrastructure and knowledge left in the US to support a rebirth.

89 Billion lost US manufacturing output across 106 “advanced” manufacturing sectors due to a 1.3% increase in imports in those product areas in 2011. That according to a just released study from the US Business and Industry Council, which found imports’ share of the 106 sectors rose to 37.57% in 2011, up from 37.07% in 2010. The news threw a bit of cold water on those – including SCDigest – predicting something of a US manufacturing renaissance, as it is in these advanced areas where the most promise for growth was generally seen.

Container Freight Rates Climb in Hong Kong-Los Angeles Trade

Drewry | January 21, 2013

The Drewry Hong Kong-Los Angeles container rate benchmark, published in the latest Container Freight Rate Insight report, jumped 14 percent to $2,524 per 40-foot container last week, as the January peak season surcharge (PSS) took effect. The $311 per 40-foot increase in the benchmark rate shows that Transpacific Stabilization Agreement (TSA) member carriers achieved around 50 percent of their intended $600 PSS price increase target.

“Cargo demand and carrier load factors have strengthened in the run-up to Chinese New Year,” says Martin Dixon, Drewry’s research manager for freight rate benchmarking. “The wild card remains the threat of strike action at U.S. East Coast and Gulf Coast ports, which is also serving to strengthen rates.” The latest price increase brought Drewry’s Hong Kong-Los Angeles container rate benchmark back to the same level it was at in October, but the index remains 12 percent off last year’s peak reached in August.

The trans-Pacific has proved more resilient than the Asia-Europe trade to the overcapacity plaguing the industry. Drewry’s Transpacific Eastbound Freight Rate Index, a weighted average of freight rates across multiple trades between Far East Asia and North America, climbed 8 percent in December compared with the previous month, to reach $3,357 per 40-foot container. It now stands just 2 percent off last year’s high reached in September 2012.However, given the increase in capacity on the trade compared with a year ago, the stability in spot rates may not prove sustainable.“

Walmart Chief Vows to Increase U.S. Sourcing, Promote On-shoring Appliance Manufacturing

Appliance | January 22, 2013

Walmart U.S. President and CEO Bill Simon made the announcement while speaking at the National Retail Federation’s annual BIG Show. Walmart and Sam’s Club will buy an additional $50 billion in U.S. products over the next 10 years. He says the retailer will help grow U.S. manufacturing on two fronts:

  • By increasing what it already buys in the United States.
  • By helping to onshore U.S. production in high potential product areas, such as higher-end appliances.

“At the heart of our national political conversation today is one issue: creating jobs to grow the economy,” said Simon. “We are meeting with our suppliers on domestic manufacturing and are making a strong commitment to move this forward.”

Landed Cost Update

Amber Road, GTM Newsletter | Jan 21, 2013

1. There has been an update to 2012 Panama Tariff. This update adds Preferential duties for the United States based on the Trade Promotion Agreement with Panama, affecting the entire tariff schedule.
Authority: Ministry of Economy and Finance, Ministry of Commerce and Industry

2. There has been a Landed Cost update for Panama. This update provides the latest Preferential duties for the United States based on the Trade Promotion Agreement with Panama, affecting the entire tariff schedule.

Authority: Ministry of Economy and Finance, Ministry of Commerce and Industry

3. There has been a United States Duty update. This update also deletes HS number, changes duty rates and MPF taxes, affecting the entire tariff

Authority: United States International Trade Commission