How Cost Effective is Road Transport: The Cost per Mile of Trucking

Rising fuel and labor costs have made it increasingly difficult to squeeze a profit out of road transport in recent years, but the cost per mile of trucking has always been more complex than just paying the driver and the fuel bill. Figures released by The Truckers’ Report puts the operational cost per mile of truck transport at $1.38 but anecdotal evidence indicates that it is closer to $1.50 per mile. With the trend in recent years for this cost to increase by as much as 10c per mile every year, it can often be profitable to re-evaluate the use of road transport to be sure that it is still cost effective. If the basic transport rate for a truckload of products adds $1,500 per 1,000 miles then the sale price of those products potentially has to be high enough to cover that cost and more. For some products, especially primary products, this expense makes road transport less cost effective than other options like rail or sea. At the other end of the spectrum are the high end products that have profit margins which merit more expensive transport, like air freight, because of the savings that can be made from… read more »

How Regulating Truckers’ Driving Time is Affecting Logistics

At the end of 2011 the Federal Government passed legislation that required the regulation of the number of hours a truck driver can spend on the road. Strict rules determining rest breaks, night driving and time off from driving have reduced the number of hours that truck drivers can be on the road and the changes have put new pressures on the industry to find ways to remain cost effective while adhering to the new laws. Truck owners, especially owner operators, know that their vehicle isn’t making money for them if it is off the road. The rising cost of both fuel and labor makes it vital for trucks to be operating for the maximum possible number of hours per week. As a result, many in the trucking industry think that the new legislation will impact on their income. The decreased number of hours that existing drivers can work before having to take a legislated break means that companies must find new drivers to keep their trucks rolling. All of this has the road transport industry worrying about the future viability of their business. On the other side of the issue, the government’s latest studies of the social and fiscal impact… read more »

Commitment to Local Economies Through International Trade Vital to Business

All economists agree that trade is a vital component in any economy, but the value of international trade to local economies is often overlooked because the benefits are often hidden. The dollar value of imports and exports are difficult to keep track of when the distribution system runs through so many stages. It can be hard to tell exactly what constitutes an import or an export when a product contains portions of both. Automobiles are an excellent example of this. In the United States, General Motors is generally viewed as an American automaker, but G.M. makes many of its cars overseas, and many of the components of the cars it assembles in the United States are fabricated in foreign countries. Honda, on the other hand, is seen as a Japanese automaker, but Honda assembles many of its cars in the United States, and even the cars it manufactures in Japan and brings into the United States contain many American-made components. The disruption caused by the Japanese earthquake and tsunami stopped production for many Japanese parts makers, but its effects were also felt by many local economies in the United States that were dependent on these materials. The supply chains of… read more »

Port Construction Projects Enhance Global Trading

Increases in global trade have prompted both new port development projects as well as expansion of existing harbors. While these trends are occurring worldwide, several specific areas have recently announced major new developments. These include new construction efforts in the Middle East, North America, Eastern Europe, and East Asia. In the Middle East, Iraq is building new facilities for its recently reconstituted navy at the Umm Qasr Naval Base. This facility is positioned along the southern edge of that country astride an estuary that empties into the Persian Gulf. The U.S. Army Corps of Engineers is assisting in the project. The facilities are designed to offer berths for warships that will provide protection for the nation’s vital oil exports. Securing the myriad components of the oil industry is considered critical for the country’s recovery from recent wars. In North America, expansion of the Port of Anchorage, Alaska faces special challenges due to the region’s high tides and seismic activity. Extensive numbers of berms are required to channel the currents that can otherwise surge along any pier that might be created. Altogether 135 acres of land are being developed to handle the expansion meant to serve tanker and cargo vessels. In… read more »

Ocean Shipping in the Twenty-First Century, a Growing Concern

Ocean shipping in the 21st century is able to move record-breaking amounts of cargo with increasing speed and efficiency. Cargo vessels have been built to accommodate ever-increasing numbers of containers, and bulk carriers are growing in size as well. While the size of tankers for oil and other petroleum products appears to have peaked, that peak is at a very large level. The restraints on capacity for bulk carriers are not mainly a matter of difficulty in design and construction for a larger fleet, but more a matter of where such vessels can operate. For instance, bulk carriers for grain are built to be able to navigate the locks of the St. Lawrence Seaway since so many of these of ships use this route to move grain from the interior of North America out into international waters. Smaller ships must be used on other inland waterways, which is why all the really large ships are used mainly for ocean transit. The Panama Canal also exerts a size limitation on ships. That country is currently working on a multi-billion dollar, multi-year expansion of the locks and channels in the system in order to allow such large ships to pass through. Currently,… read more »