Monthly Archives: May 2013

China Shipping Commodities at Below Cost Attracts Extra Duties for American Importers

The practice of dumping cheap products on the US market has brought Chinese imports into the spotlight in recent years. The US government has been aware of these dumping practices and associated duty subsidization since at least 2008 and has been moving slowly towards a solution. The strict antidumping duties which have been set by the US Department of Commerce were put in place to curtail the import of goods at below cost, particularly those that have been flagged by the Department as coming from Chinese government subsidized factories. The first of these cases will go before the US International Trade Commission when it next meets in September. The action was set in motion over a year ago by The Coalition for Fair Trade of Hardwood Plywood and they have been pivotal in ensuring that the countervailing duties that are being imposed on Chinese plywood products are being collected. This requires US importers to make a cash deposit on these goods when they import them from China to ensure that any adverse impacts that are determined by the Trade Commission will be fully funded. Presently duties on such imports from China attract cash deposits of between 22% and 67% and… read more »

Truck Cargo Pre-Inspection to Increase Security and Reduce Border Congestion

In an effort to improve the integration of North American infrastructure and transport networks, the United States and Canada have initiated the Beyond the Border action plan. First launched in 2011, it is intended to improve the coordination of transport facilities on both sides of the border, and the first step has been to begin processing south-bound trucks on the Canadian side of the border before they enter the US. This is the initial stage of a wider reaching cooperation and common approach to border management by the two countries. Critics of the plan point out that by integrating their information sharing systems, Canada has allowed itself to be absorbed into the US-dominated security perimeter. The main focus of the new scheme is to address any potential security threats at the earliest possible point and to ensure that the movement of people and freight between the US and Canada complies with all of the local laws. At the same time it is aimed at increasing the speed and efficiency of transport across the border for legitimate trade and travel. Phase one of the program was launched in mid June 2013 and has the set objective of determining the viability of,… read more »

Shippers May Face Increased Penalties for Overweight Vehicles

In a move that is seen as a leveling of the playing field in the trucking industry across Texas, legislation has been passed by the state that dramatically increases the penalties for overweight vehicles. Previous to this, the law on overweight trucks was barely a deterrent and many companies worked on the premise that it was cheaper to pay the penalties than to comply with the law and pay for a permit. Before the introduction of the new vehicle licensing bill, the average fine incurred by an overloaded truck was around $150, less than the average speeding ticket. The new legislation introduces a sliding scale of penalties, with first offenders liable for fines of up to $10,000 and fines for third-time offenders being doubled. The new law also includes heavy fines for trucking companies that have a history of repeatedly offending, and even shippers can be held liable, if they demand that heavy loads be carried without obtaining the proper permits. Truckers will be able to utilize the shipper’s certificate of weight as a defense against prosecution for carrying overweight loads that have been loaded by the shippers. Because of this potential liability, shippers are being advised to ensure that… read more »

Growth in Intermodal Volumes Contributes to Economic Recovery

One of the strongest indicators of a return to economic stability has been the growth of intermodal volumes during the past year. Across the board increases of 5% in Q2 of 20121 have encouraged new investment in developing intermodal infrastructure. These in turn have contributed significantly to the general national economy. The increased volumes have also added to the bottom line for companies like J.B. Hunt who experienced significant growth in income for Q1 20132 as the effects of the increased volumes have filtered into the industry. Part of the success of the railways at the moment is due to the influence of decreased transit times for rail freight as the development of intermodal infrastructure begins to impact on freight handling efficiency. The transition of the railways from bulk carriers to container cars has also contributed to their increased volumes. The most significant factor in their good returns has been driven by the cost of fuel which has seen a great deal of freight moving from trucks to trains as consumers take advantage of the renewed rail networks. At the same time some major transport companies are being cautious about making projections while trying to maintain their optimism for 2013.… read more »

Increased Ship Sizes in the Panama Canal Boost Intermodal Transport in the US

Since the Panama Canal opened to traffic in 1914 it has been a focal point of world trade. One hundred years later it remains a vital part of the sea lanes and sees 5% of the world’s total shipping pass through its locks every year. The US is especially reliant on the flow of traffic through the Panama Canal with 70% of all cargo into and out of the country passing through the canal1. Since the canal was first designed in 1903 the shape of the freight transport industry has changed considerably. The widespread introduction of intermodal shipping systems after the 1950s saw ship sizes increase in an effort to be a more cost effective mode of cargo transport. As the size of these ships increased fewer of them were able to use the Panama Canal and it became clear that there was a need for its redevelopment. The influence of the Panama Canal on the shipping industry has been profound and vessels are even rated by whether they are able to use the canal or not. Ships that are oversize for the short passage are referred to as post-panamax ships. As the world’s container fleet grew in size and… read more »

Changing Truck Design to Improve Efficiency and Safety

In the US trucks carry as much as 70% of the freight that is transported each year. There are 26 million trucks on American roads hauling an estimated 10 billion tons of cargo annually1. The reliance on road transport, coupled with the historically high prices of fuel in the US, has made the industry re-evaluate how it operates its fleets. Efficiency is seen as the solution to combating rising fuel costs and this has put the focus on the efficiency of the trucks themselves. European Union transport operators are examining the potential of redesigning heavy trucks to be more aerodynamic. Recent studies in Belgium have indicated that there may be significant savings for transport companies that invest in more aero-efficient vehicles. Mercedes-Benz has released a new aerodynamic truck and trailer that it claims will reduce running costs by as much as 18%. Shaped more like a bullet train than a prime mover, these new transport vehicles are still in the development stages. Mercedes-Benz is also looking at ways of incorporating modern digital technology to improve their all round efficiency. At the same time, the new style of long haul vehicles will take many years to become common on our highways… read more »

Container Vessel Values in Sharp Decline as Smaller Ships Become Obsolete

The world’s container ship fleet has been going through a period of development that has seen the launch of new vessels by carriers such as Maersk Lines with immense carrying capacity. While this will certainly have a positive impact on the efficiency and cost effectiveness of international freight handling, it is also having an influence on the shipping industry in other ways. Since April 2011 the value of post-panamax vessels, that is, ships that are too large to navigate the Panama Canal, has been declining. A large part of the reason for this loss in value has been the oversupply of containerized freight services in conjunction with uncertainty over the global economy. Between 2009 and 2011 the overall value of the world’s container fleet fell by 31% and these declines in value were again matched between April and November 2011 alone1. Currently, as the world’s economy begins to recover from the global financial crisis, the outlook for the freight transport industry appears bright. At the same time the container fleet is about to have several new ships added to it which will have a significant impact on the supply of freight services. As a consequence the decline in the supply… read more »

The New Fleet of Super Cargo Ships are Preparing for Launch

A new fleet of super ships is being launched over the coming year that will have a huge impact on the handling of container cargo. The E Class container transports1 which have been commissioned by Maersk are immense carriers that are designed to ship at least 16,000 containers at a time. These cutting edge vessels have been designed to be the most cost effective, eco-friendly container ships ever built and they are expected to open up new opportunities across the world as they add significantly to the freight capacity of the world’s container fleets. Currently only a handful of ports can handle the huge craft and so they are restricted to the Asia-Europe routes. They only just squeeze through the Suez Canal so they are probably the largest ships that will be suitable for this job. This does mean, however, that they will reduce transport costs for Asian goods in the West. Because these ships are too large for the Panama Canal, even after it is widened, they are going to have less immediate impact on American ports, especially as there are no US ports that have developed the facilities to handle them. Outside the US, there are more port… read more »

Can the Rust Belt Infrastructure Cope with the Future Demand for Freight Handling?

As the interchange point between eastern and western rail systems, Chicago is a pivotal part of the national intermodal network. The volume of freight that arrives in the city from shipping on the Great Lakes compounds the pressure on port facilities and bottlenecks here can add significantly to the costs of companies which are relying on these deliveries. The projections for the future of freight are that demand is sure to increase across the American networks with an expected boom in container handling after the Panama Canal project is completed in 2015. This raises questions about the ability of facilities in the rust belt to deal with the expected influx of traffic effectively. While there have been large new developments underway in other port centers, especially along the Gulf Coast and Eastern Seaboard as well as in the Mid-West at Kansas City, the intermodal hub at Chicago has struggled to keep up with the continual growth in demand over the past decade. There have been suggestions that a part of the solution to potential bottlenecks in the freight transport network in Chicago would be to develop alternative hubs in Wisconsin or Michigan1. Other Midwestern states have begun to look at… read more »