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Latest News – May 20, 2013

Energy & Diesel Fuel & Other Commodities

Diesel prices head up after ten straight weeks of declines EIA

The average price per gallon of diesel gasoline snapped a ten-week stretch of declines, rising 2.1 cents to $3.866 per gallon this week, according to the Department of Energy’s Energy Information Administration (EIA).

TODAY IN ENERGY: Monday, May 13, 2013

Mexico Week: U.S. is Mexico’s primary energy trade partner amid shifting trade dynamics Energy trade between Mexico and the United States in 2012 topped $65 billion and accounted for 13% of the $494 billion in overall trade between the countries. Crude oil and petroleum products account for most of the energy trade; in 2012, Mexico was the third-largest crude oil exporter to the United States, behind only Canada and Saudi Arabia,

Commerce – Regulatory & Compliance

Study: Imports Support 16 Million US Jobs

JOC Staff | May 06, 2013>/h4>

More than 16 million U.S. jobs depend on imports, according to a new study commissioned by the Consumer Electronics Association, the U.S. Chamber of Commerce, the National Retail Federation, and the American Apparel & Footwear Association. Findings are:

  • More than half the firms that import directly are small businesses, employing fewer than 50 workers.
  • Imports improve American families’ standard of living by ensuring a wide selection of budget-friendly goods from clothing and footwear to electronics and fresh fruits and vegetables.
  • A large number of these import-related jobs are union jobs, and many are held by minorities and women.
  • American manufacturers and farmers rely on imports of raw materials and intermediate goods to lower their production costs and stay competitive in domestic and international markets. Factories and farms purchase more than 60 percent of U.S. imports.
  • Imports generate exports. The United States is integrated into international supply chains so that even U.S. imports contain U.S. exports, particularly those generated in high-skilled and capital-intensive stages of production such as R&D and design.
  • The study employed a widely used computable general equilibrium economic model known as the Global Trade Analysis Project, which is maintained by a consortium of more than 30 international organizations and government agencies, including the U.S. International Trade Commission, World Trade Organization, the Organization for Economic Co-operation and Development, World Bank, and several U.S. government agencies.

Labor, Staffing & Issues

New Foxconn report finds some progress

The New York Times | May 17 2013

A new audit of Chinese Apple producer Foxconn found that the company has not reduced the average workweek to be within Chinese law. The workweek is supposed to be capped at 49 hours a week but the audit said it was still too high. The report also found that unions at the company are still dominated by management. Foxconn said that they had made progress, and were still looking to do more. Critics say that the group doing the auditing, which was paid for by Apple, is too lenient, and that they are missing problems that have been found by other investigators.

Logistics: Carriers, All Transportation Modes & International

Capacity Pinch Seen as Truck Fleets Continue to Shrink and Demand Rises

Fleet Owner | May 20, 2013

Although fleet bankruptcies get most of the attention, the slow, steady and largely unnoticed downsizing of fleets will have a major impact on freight capacity as tonnage picks up, according to Derek Leathers, president and COO of Werner Enterprises.

While Werner’s average tractor age stands at 2.3 years, the company has invested over $650m in new equipment over the last three years. As a whole the truckload industry average tractor age is now 6.6 or 6.7 years, up from 5.5 years less than a decade ago, Leathers reported.

“To claw back from 6.6 years to get to 5.5 years, the industry would have to spend $24bn within a 24-month window,” he said. “I don’t know where that money comes from. Banks are not lined up to lend money to an industry whose return on assets at this point is still very unimpressive.”

Saddled with aging trucks, significantly higher prices for new replacement vehicles and banks unwilling to fund fleet capital requirements, “fleets are slowly shrinking,” he said during the keynote address at the ALK Technology Summit. “They’re trading two or three old trucks for one new one. And because they can’t afford new trucks, the cost of maintenance [for the older trucks] puts them in a death spiral.”

Truckload capacity has dropped 17.6 percent since the end of 2006, according to Leathers. “That is a huge, huge amount of trucks taken off the road, but it’s happened quietly,” he said.

The 3PL & 4PL World

With recapitalization efforts complete, CEVA CEO is confident about the future

Logistics Management | May 10, 2013

In recent weeks, global third-party logistics (3PL) services provider CEVA Logistics has made considerable strides in regaining its financial footing and setting a course for future growth in the 3PL marketplace.

Earlier this month, CEVA Logistics reached an agreement with its major note holders to recapitalize its balance sheet and raise new capital. CEVA said that through these efforts it will reduce its consolidated net debt by more than $1.7 billion ($1.3 billion euros) and its annual cash interest expense by more than $170 million ($130 million euros) and also receive a capital infusion of a minimum of $301 million ($230 million euros) for investment in its business plan.

CEVA CEO Marv Schlanger that these efforts will make for a stronger balance sheet for CEVA, which will enable the company to grow faster and better compete in the logistics and supply chain marketplace, as well as give CEVA the flexibility of making additional capex investments, which will allow it to better serve its customers as they grow globally and build and sell new supply chain products.