Investors who are looking for early clues to the performance of retail stocks have been encouraged by recent growth in the amount of goods being transported in the US by road and rail. Based on marked increases in the volume of freight, investors see this as an important metric for gauging retail sales for the coming holiday season, as the major stores across the country stock their inventories for the end-of-year sales that they are forecasting.According to figures released by the Association of American Railroads, intermodal freight volumes spiked by 4% during the first two weeks of August this year. This amounts to 260,000 units, an increase of 6.1% on the same time last year. Overall, rail traffic was up by 2.7% during this period, with a 0.5% fall in bulk cargo and a significant dip of 11.4% in grain shipments. This underscores the importance of intermodal freight to the viability of the rail networks as more containerized freight is being transported across continental America, due to the increased efficiency resulting from upgrades to the network in recent years. Investors are looking to the increases in containerized freight as an indication of increased consumer demand with 72% of the cargo…
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German rail operator, Deutsche Bahn AG, has extended its reach into an area that is currently being dominated by the giants of shipping like A.P. and Moeller-Maersk, with the inaugural freight train trip on its newly opened Hamburg to Zhengzhou line. The train delivered 51 containers after crossing two continents, traveling through China, Kazakhstan, Russia, Belarus, Poland and finally, Germany on its 10,214 km journey. Most significantly, the trip covered the distance in only 15 days, around half of the time that the same trip from Zhengzhou to Hamburg takes by sea.This first trip was organized by the Zhengzhou International Land Port Development and Construction Co. in conjunction with DB Schenker and is intended to take advantage in the recent shift of production intensive industries to the Chinese hinterland where they are more accessible to Western connected transport networks. This latest freight route builds upon those that have already been established to transport goods for the automotive and electronics industries. DB Shenker is an Eastern branch of Deutsche Bahn with 45 offices and 5,000 employees that is focused specifically on the German-Chinese trade route. Currently there is $87 billion in exports from Germany to China annually, with $77 billion going…
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Cordele Intermodal Services (CIS) has entered into a deal with the State of Georgia to ensure a 200-mile rail link between the Port of Cordele and the Garden City Terminal that is operated by the Georgia Port Authority (GPA). Georgia Governor Nathan Deal signed off on the agreement early in July, and was upbeat about the prospects for local growth that would result from the plan. At the signing, he defined the benefits of the deal, saying, “By more efficiently connecting businesses in this region to the global marketplace through our deep-water ports, the Cordele Inland Port is now part of that broader effort, supporting jobs and future development”. The new partnership provides 38 weekly shipping services that will connect Cordele with the world market. This is expected to significantly expand the exposure that Georgia businesses can expect, with the increased freight efficiency that will result from the development of the rail link. The CIS facility is located conveniently close to several main arteries including Interstate Highway 75, as well as Georgia Highways 280 and 300 which makes it an excellent location for the creation of a rail-to-road terminus that could potentially give the Southern states greater access to the…
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One of the biggest players in the rail freight game in America, CSX has its eye firmly fixed on taking advantage of the contemporary shift from truck to rail. Increasing fuel prices and governmental pressure to significantly reduce carbon emissions has seen many logistics handlers looking for more cost effective ways to move their goods around the country. At the moment the lion’s share of freight is still transported on American roads, but recent redevelopments of the intermodal rail networks are beginning to challenge that supremacy. Looking to the future, CSX understands that as fuel costs continue to rise, there will be a point at which truck transport is no longer cost effective for many types of cargo, and will naturally shift to the less expensive, environmentally-friendlier rail networks. At the same time, CSX understands that trucks aren’t going to disappear overnight like the dinosaurs, and they have implemented plans to better integrate the use of rail in conjunction with trucks, by investing in the highway to rail infrastructure that makes train transport a viable option for moving freight quickly and efficiently. They have also made moves to increase the capacity of their terminals, to enable them to handle larger…
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President Obama’s ambitious Climate Action Plan has focused on increasing the efficiency and reducing the carbon emissions of heavy duty vehicles (HDV,) and while this is a laudable goal, it has many in the logistics industry wondering whether it is achievable. It has also been criticized by the intermodal freight industry for overlooking an obvious solution to the fuel efficiency of transporting cargo across the United States- the intermodal rail networks. Currently, the vast majority of freight in America travels by truck, and although there have been significant strides towards improving the fuel efficiency of that transport sector, these measures are already producing almost the maximum amount of improvement in the energy consumption of transporting cargo across the country. A recent study by the American Council for an Energy Efficient Economy found that the strategies that have been employed by trucking companies to date, like optimizing load weights, reducing speeds and improvements in freight system efficiency, have contributed significantly to the more efficient trucking of cargo, but still fall well short of the 50% improvement in fuel efficiency that has been targeted by the Presidential Climate Action Plan. While the improvements to the fuel efficiency of HDV are approaching the…
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Trucks are carrying the majority of the cargo on American roads at the moment, with estimates that it accounts for 60% of all of the freight that travels across the country. With the current focus on reducing carbon emissions around the world, one of the key areas being examined is the way that we move this cargo around the country, to find ways to reduce the impact that it has on the environment. In recent years, the improvements to the intermodal freight networks in the US and across the globe have continued to put pressure on trucking companies to reduce their emissions. There have been many strategies implemented to try and do this, including the introduction of cleaner truck engines, altering driving styles to reduce idling time and speed, to cut down on the fuel expended. Even with these advances in the efficiency of truck freight, it will still take a fundamental rethinking of how freight is managed across the intermodal networks to make really significant reductions in the carbon emissions that are connected with logistics. One solution that is gaining a lot of momentum right now is to use the nation’s railway networks for more intermodal cargo, and there…
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With Barack Obama’s recent visit to Africa the focus of the world’s media was on the President’s initiatives to encourage the economic growth of the region. The visit was largely in support of the ongoing programs of support for many African countries initiated by the African Growth and Opportunity Act (AGOA). This legislation, passed in 2000, is designed to assist the economies of Sub-Saharan African nations and to improve US foreign relations in the region. The AGOA bill also apportions responsibility for deciding on eligibility every year to the President. In simple terms, AGOA provides trade preferences for quota and duty-free entry of some goods into the US, mostly textiles and apparel. Changes in local political climates have seen eligibility fluctuate for several countries with both Guinea and Niger being removed from the list in 2009 only to be reinstated again in 2011. These simple initiatives have proven to be remarkably successful and have stimulated the growth of the textile industry in Southern Africa. This has brought them into direct competition with China, which has since become the largest investor in Africa (the US is currently the second largest). For clothing importers this presents an opportunity to take advantage of…
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In spite of the G-20’s stated objective of increasing international cooperation through stopping the practice of trade and investment protectionism the trend towards restrictive measures is continuing. Restrictions aimed at antidumping protections account for over half of these and their increasing number means that they are interrupting the supply chain of many different industries within the US. While it is true that there have been many restrictions which have been dropped as well as many trade liberalization plans put in place, there remains a steady increase in the number of restrictive trade practices overall. While generally, the impact is still low, at around 3.5% of total world trade, the indication that so many of the G-20 members are willing to break agreements and continue to place trade restrictions on imports to protect their domestic markets has many questioning the reliability of the plan. The WTO points out that the low level of impact on the world economy is an indication that most member nations are generally complying with the G-20 agreement. At the same time this doesn’t address the issue of the mounting number of restrictive actions that will have to be resolved at future summits. This situation is seen…
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In a constantly evolving global economy it can be profitable to keep up with changes in the foreign trade arrangements in order to be able to take advantage of new opportunities as they arise. This is especially the case in businesses like the clothing industry which rely so heavily on import and export for their revenue. In a constantly changing global trade environment, opportunities that weren’t there in the past may be economically viable today. With new free trade agreements coming online in the coming months, the establishment of Foreign Trade Zones (FTZ) and the use of clever tariff engineering strategies, there is potential to boost your profit margin on already existing product lines and to create new, low duty ones. In the apparel industry the opportunities provided by US free trade agreements (FTAs) with many of the world’s nations are significant. The US has implemented 14 FTAs already, largely in Central and South America, with plans for expanding into Asia and Europe in the immediate future. There are also a range of bilateral agreements between the US and nations in the Middle East, Asia and Australasia which offer substantial savings on import or export duties. The cost of establishing…
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Every month the FDA issues dozens of import alerts to flag imported products that are either unfit for the US domestic market or are illegal. The flow of unapproved drugs into the country is potentially a huge problem and, in order to ensure the integrity of the drug supply chain in America the FDA is planning to perform a major overhaul of the current import protocols. Legislation passed in 2012 gave the FDA greater powers to collect and analyze data about drug imports in an effort to make risk evaluation-based decisions about the supply of drugs from foreign facilities. There are also resources allocated to allow closer partnership with foreign authorities in order to share information and to establish recognition of foreign inspection procedures. It is hoped that, in the rapidly changing global economic environment, these measures can keep up with the demands for continually updated regulations to manage the foreign supply of medicinal drugs and to set standards of safety and quality throughout the US drug supply chain. The import alerts already routinely issued by the FDA have wide-ranging economic impacts in many countries. These places often have hundreds of millions of dollars in revenue tied up in drugs…
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