Logistics Group International, Inc.

Join LGI at Breakbulk Americas 2016 in Houston, TX September 26-29

2016-09-16T12:10:00.002-07:00

Come and visit our Booth #839 At Breakbulk this year!! September 26-29 in Houston, TX.
#bbam2016

2016-09-08T13:02:00.003-07:00

Check out our new website!! www.lgiinc.com

Average Diesel Prices Fall to $2.35 Per Gallon - TopNews - Fuel Smarts - TopNews - TruckingInfo.com

2016-08-04T12:53:00.001-07:00

Average Diesel Prices Fall to $2.35 Per Gallon - TopNews - Fuel Smarts - TopNews - TruckingInfo.com

Volvo is First to Reveal Plans for DME-Powered Trucks

2013-06-10T12:51:00.004-07:00

Photo by www.todaystrucking.com

Volvo became the first manufacturer to announce plans for commercializing dimethyl ether (DME)-powered, heavy-duty commercial vehicles in North America on Thursday.

According to Volvo's press release, this is their "latest step towards a comprehensive 'Blue Power' alternative fuel strategy, Volvo revealed ongoing U.S. customer field testing of trucks powered by DME, and demonstrated the technology after an announcement at the California State Capitol."

Volvo plans to begin manufacturing Class 8, over-the-road trucks powered by dimethyl ether beginning in 2015. DME is an exceptional alternative fuel, due to it's ability to burn clean without producing any soot.

The fuel can be made from a variety of sustainable domestic sources, including natural gas, and when produced from biomass, provides a 95% reduction in carbon dioxide when compared to diesel.

DME is "Cost-effective, regional fuel production addresses the distribution issue, and offers the potential to bypass the need for a national fueling infrastructure, while reducing the carbon footprint associated with transporting the feedstock and fuel produced," said Rebecca Boudreax, P.H.D., president of Oberon Fuels.

References:
Volvo Group Global; Volvo Trucks to Commercialize DME-Powered Vehicles for North America, Press Release 07/06/2013.

Transport Topics: Volvo Unveils Plans to Use DME as Trucking Fuel, www.ttnews.com 06/07/2013- TT Editorial Director Howard S Abramson contributed to this story from Sacramento.

Oversized Tractor Trailer Hits Busy Bridge, Causing Collapse

2013-05-28T14:28:00.002-07:00

Mount. Vernon, WA- At 7 p.m. Thursday evening, a tractor trailer carrying an over-sized load crashed into a busy bridge, causing collapse and sending two other vehicles below water. The three civilians drivers in those vehicles, walked away with minor injuries, and the damaged portion of the bridge still lies under water.
The four-lane Interstate-5 overhead bridge crosses the Skagit River, and is about 60 miles north of Seattle and 40 miles south of the Canada border.

The crowded bridge is used by an average of 71,000 vehicles a day, and will cost around $15 million to repair.

The trucking company, Mullen Trucking - Alberta, said it received a state permit before carrying the over sized load across the bridge, they also hired a local escort during navigation, and the driver was well-experienced.

At first, it was hard to tell if there was an actual hit, or if the bridge just gave way on its own, but Washington State Patrol Chief John Batiste blames it on the height of the load, the vertical clearance is 14.6 feet, but Dave Chesson, a state DOT spokesman said there were no signs leading up to the bridge warning about clearance height.

"We're still trying to figure our why it hit the bridge," sales Mike Allende, DOT spokesperson, "It's ultimately up to the trucking company to figure out whether or not it can get through. It's their responsibility to make sure they can travel on that route."

Washington Governor Jay Islee said on Friday, at a conference, they have begun searching the country for a temporary fix to replace the 160-foot hole in the bridge, a pre-fabricated structure, as seen in the photo to the left.

Unfortunately, there is no guarantee this structure exists, and if one can't be found, it could take months before something can be built and installed.

This bridge was inspected twice last year, and repairs were made, according to Transportation Secretary Lynn Peterson.

"It's an older bridge that needs a lot of work, just like a good number of bridges around the state," she said.

A Federal Highway Administration database also lists this bridge under "functionally obsolete", or with an outdated design, such as, low clearance and narrow shoulders.

Have an opinion? Please leave your comment below.

Diesel Rises for Second Week, Up 2.4¢ to $3.89; Gasoline Jumps 7¢ to $3.673

2013-05-21T09:56:00.001-07:00

Diesel rose for a second consecutive week, rising 2.4 cents to $3.89 a gallon, while gasoline jumped 7 cents to $3.673, the Department of Energy reported.

Diesel had declined for 10 weeks prior to the current gains, dropping 31.4 cents in that string of downturns.
Despite the increases, trucking’s main fuel is now 6.6 cents below the same week last year, while gasoline is 4.2 cents under a year ago, DOE said late Monday following its weekly survey of filling stations.
Gasoline, which had declined 26.4 cents in nine previous straight declines, has increased 15.3 cents in the past three weeks of increases, DOE records showed.
The gasoline increase was the biggest in three months, since the motor fuel rose 13.6 cents on Feb. 18.
Diesel rose in all regions, declining only in the East Coast region’s New England subregion, where it dipped 0.4 cent to $3.991.
It took its biggest gain in the West Coast region, where it rose 3.9 cents to $4.088 a gallon.
Crude oil, meanwhile, rose 69 cents to finish the trading day at $96.71 a barrel, a seven-week high, Bloomberg News reported.
It was the fourth straight day of increases on the New York Mercantile Exchange, Bloomberg reported.

By Transport Topics

Mexico Automobile Plants On Rise, Calling For More Rail and Ocean Transport Modes

2013-05-21T09:36:00.002-07:00

With a well-established car manufacturing sector, competitively priced labor and a growing supplier base, Mexico is quickly becoming THE place for car-makers to build their automobile plants. The location itself is nothing less than ideal, what being sandwiched between the recovering US market and the steadily growing Latin American economies. It's no wonder why car manufacturers, such as, Honda, Mazda, Audi and Nissan are joining their existing competitors, including Fiat-Chrysler, Ford and General Motors, by investing in Mexico-based plants.

Mexico has quickly transformed into a global vehicle hub, not just a US one, with the share of non-US destinations for Mexican-produced vehicles rapidly growing. From 2010 to 2011 alone, the non-US destined vehicle exportation grew 6% to 36%. According to the Mexican's Car-Maker's Association (AMIA), this growth was especially driven by demand from Latin America whom now represents 15.5% of exports.

US still hold the number one spot for Mexico's exports though, which rose 10.5% in 2012 alone. The US and Mexico borders share about 3,000km of land, so it's clear that land modes, specifically rail, dominate logistics heading North. Cross-border flows to the US are expected to increase 10% more by 2015, implying a dramatic increase in need for alternative and much more advanced modes of transportation.


Mexico's Rail and Road Map

Road transport can be a nightmare, and is generally avoided, due to vehicle-to-road congestion rates, and out-dated restrictions on Mexican trucks and drivers in the US. Chrysler, on the other hand, is predicting a shift to a new van option of shipment. Ocean shipping providers are most likely planning to introduce new and more affordable services as Mexican production rates continue to rise. Some manufacturers have already planned to expand transport modes beyond rail to sea, and short-sea shipping.

Rail players are starting to prepare for the growth potential in place, "With capacity enhancements in border facility infrastructure, track improvements and multi-level investments, we do not anticipate operating constraints now or in the near future. We are also preparing for longer term growth in Mexico," says Union Pacific Railroad Vice President and GM of Automotive Business, Linda Brandl.

Ford, which has two plants in Mexico sends most of it's exports by rail, but Ford's manager of North American vehicle logistics expresses his opinion that all modes of transportation are going to need to step-up to accommodate. "Like all OEMs that ship in North America, Ford is concerned that the pace of rail-car capacity and rail network velocity improvements are lagging behind the SAAR volume recovery," he says. "At times of capacity constraints and rail network performance issues, remote locations, such as Mexico and Canada, realize the greatest shortage of equipment. As OEM production increases in Mexico in the near term, all modes- rail, car haul, and short sea - will need to accommodate [it]."

BNSF Railway seem to be doing just that, and have made significant investments to gain revenue from expected future growing automotive shipment business. BNSF has added improvements to El Paso to Belen, New Mexico's track infrastructure and interchange capability. BNSF has put together plans with the Mexican federal government to increase hours of operation beyond the now 9-hour limit and have also made great strides towards increasing their fleet. They already have orders in-place to raise their number of rail wagons by 20% by the end of 2013. Nate Asplund, BNSF's assistant vice president for Mexico logistics says, "The private and public sector in Mexico came together to start a project to put in grade separations between rail line and principal roadways, with the first year completed last year and two more under way this year. By the end of 2013 we [will be] on track to double the hours at the interchange and take a lot of congestion away from motorists on both sides of the border."

Are you shipping to or from Mexico? Do you Have cargo insurance? Well, if not, you better give us a call! (713) 957-4812

Lautenberg's Bill to Expand Truck Weight Limitations and "Keep Dangerous, Super-Sized Trucks Off Highways"

2013-05-15T14:05:00.000-07:00

Last Tuesday, May 7th, New Jersey Senator Frank Lautenberg, also known as the Senate's leader in transportation safety, re-introduced legislation his "Safe Highways and Infrastructure Preservation Act of 2013" (SHIPA).

The act is designed to keep trucks heavier than 80,000 pounds and longer than 53 feet off the entire National Highway System (NHS), not just the currently restricted interstate highways.

Applying size and weight limits across the 220,000 mile-long NHS is thought to effectively prevent excess strain on national bridges, tunnels and roads.

"When super-sized tractor trailers are on the road, they are a threat to drivers and the integrity of our highways and bridges...Closing the loophole that keeps these long, overweight trucks on our National Highway System will protect families and preserve our nation's infrastructure." Lautenberg said.

Many advocates for citizens safety organizations, such as, Parents Against Tired Truckers and Citizens for Reliable and Safe highways (CRASH), support Lautenberg's efforts.

"The Senator's introduction of the Safe Highways and Infrastructure Preservation Act, which will freeze current truck size and weight limits, will lead toward saving countless lives and preventing lifelong debilitating injuries for many. Senator Lautenbery continues to 'fight the good fight' to improve our nation's truck safety policies, and the American public will be spared from paying with their lives and their wallets because of his efforts." said Joan Claybrook, former Administrator of the National Highway Traffic Safety Administration and Chair, Citizens for Reliable and Save Highways (CRASH).

Research has proven 100,000-pound trucks with unadjusted brakes will travel 25% further after braking than an 80,000-pound truck. Not only this, but large trucks disproportionally account for a large chunck of deaths based on miles traveled compared to standard vehicles. In 2011 alone, 3,757 people died and 88,000 were injured in accidents involving large trucks.

The bill is co-sponsored by New Jersey Senator Menendez, California Senator Feinstein, and Missouri Senator Claire McCaskill; companion legislation is sponsored in the House of Representatives by Massachusetts Representative McGovern.

Natural Gas Impacts on the U.S.

2013-05-06T08:40:00.001-07:00

Could the United States turn into the Saudi Arabia of natural gas in the near future? The answer is yes.

And this could potentially mean a drastic change in an extremely positive direction for US citizens, and the logistics industry.

The apparent threat of natural gas coming to the market, is probably going to force traditional oil companies to lower prices to compete with oil-poor but potentially gas-rich countries, such as the United States. Analysts are predicting this ocean of US natural gas to slash global oil prices in half, to around $50 a barrel.

The cycle is not new, ups-and-downs of oil prices are predictable these days, but with this new paradigm, this round of falling fuel prices may be the first permanent drop and the face of a new reality for the oil industry.

"That vast reservoir of fuel is sure to have some wondrous effects on our lives. As long as we can extract, process and transport the rivers of natural gas safely and without seriously harming the environment, the clean-burning, affordable and readily available supply could help reshape our economy." - According to Transport Topics Magazine

The benefits of natural gas to Americans are obvious, it not only provides us with clean, reliable and abundant energy, but the more we use Made-in-America resources, the more economic growth we can expect.

Natural gas companies reportedly employed about 622,000 Americans directly and 2.2 million indirectly in 2008 alone, according to an extensive study performed by the IHS Global Insight.

Jobs aren't the only benefit of natural gas, the economy benefited in 2008 with over $385 billion added to the nations income.

Graph by ANGA (America's Natural Gas Alliance)

Obama to Nominate Charlotte Mayor Anthony Foxx as Transportation Secretary

2013-04-29T12:19:00.005-07:00

President Obama plans to nominate Charlotte, N.C., Mayor Anthony Foxx to be the next transportation secretary, replacing Ray LaHood, news services reported.
Foxx, a Democrat, has expanded public transportation systems in his city, developed a facility connecting freight to global ports and added a third runway at Charlotte/Douglas International Airport, the Washington Post reported Monday.
Foxx, who will turn 42 on Tuesday, has been Charlotte’s mayor for nearly four years, the New York Times reported. Once formally nominated, he must be confirmed by the Senate.
LaHood, a former Republican congressman who represented the Peoria, Ill., area, said earlier this year he would step down and not continue to lead DOT in Obama’s second term.

Copyright acknowledgement, all rights and attribution goes to Transport Topics.

How to Avoid Border Delays Between Canada & USA

2013-04-29T09:37:00.000-07:00

As a logistics broker, it's necessary to predict and avoid delays during a shipment. International transportation can be a challenge, but if you know what to expect and prepare the right documents beforehand, you will avoid issues with ease, and leave your clients with a smile.

When sending a shipment to the Canadian border, there are three documents required: a Bill of Lading, a Commercial Invoice and a NAFTA Certificate. If any of these are missing at the border, or aren't completely filled-out, you can expect costly delays. That being said, the parties involved are: the client, the shipper, the carrier, the consignor, the consignee, and last but definitely not least, the customs broker.

Customs brokers play a vital role to international shipments. They are usually selected by the consignee, but as the transportation broker, LGI is responsible for verifying the chosen customs broker to confirm they hold an account with the receiver, if not, the load will not clear.

The Commercial Invoice requires the most detailed information and coordination to complete, so it's typically the problem document when shipping to Canada. To be completed properly, the paperwork must include: the consignor, consignee, currency, country of origin, description of goods, quantity, weight and value. If something is missing, a result could be to bring the load into the country in "bond," and then having it cleared later. The downside, added cost, delays and unhappy clients. Attention to detail is a vital part of shipping across the border.

Sometimes, the driver won't receive all the paperwork from their shipper, so LGI will confirm that the right customs broker has been given, faxed or emailed, all of the needed documents ahead of time. One if these documents, is the carrier's Pre-Arrival Review System number, or the PARS number. This is recorded on the Bill of Lading statement along with the border crossing, date and time faxed to the customs broker by the carrier. This also occurs with "blind" shipments, in which the shipper and the seller are different companies. In this instance, the client faxes these papers to the customs broker directly, but never count on this. Always double-check, by calling and verifying to avoid delays, before 5 p.m., as most brokers work from 8 a.m. - 5 p.m., so if the clearance has not been set-up before 5 p.m., the truck could have to wait over night, or get a bond just to come into the country.

Always keep in mind that as the transportation broker, clients expect you to be the expert planner. So, plan ahead and avoid issues.

As we say here at LGI: "The Power is in the Planning!"

Source: TIA, The Logistics Journal

Diesel Falls 5.5¢ to $3.887; Lowest Since Last August

2013-04-23T07:52:00.002-07:00

Diesel fell 5.5 cents to $3.887 a gallon, its lowest price since early August, the Department of Energy said Monday.

The eighth straight decline was the biggest since an 8.6-cent drop on Oct. 29 and left trucking’s main fuel 19.8 cents below the same week last year. It was the lowest price since $3.85 on Aug. 6.

Diesel has plunged 27.2 cents in the past two months of downturns, after topping out at $4.159 in late February, the highest price since August 2008.

Gasoline, meanwhile, dipped 0.6 cent to $3.536, also its eighth straight decline, DOE said following its weekly survey of filling stations.

Gas is now 33.4 cents under a year ago, and Monday’s price is the lowest since late January. It has slid almost 25 cents in eight weeks of declines.

Crude oil, meanwhile, rose to a one-week high, gaining 75 cents to finish the trading day at $88.76 a barrel on the New York Mercantile Exchange, Bloomberg News reported.

Oil fell last week to its lowest level this year, finishing below $86 a barrel last Wednesday for the first time since mid-December.

Each week, DOE surveys about 400 diesel filling stations and about 800 gasoline stations to compile national average prices.
By Transport Topics

Imports from Mexico Rising Faster than from China

2013-04-15T12:44:00.001-07:00

A recent study by the Bank of America, finds that rises in Chinese wages now mean 20% lower labor costs in Mexico. Over the last decade wages have remained stagnant in Mexico, but continued to increase in China. In fact, ten years ago, the Mexican labor rates were 188% higher than in China, but rates have dramatically decreased to about 20% less, according to Bank of America's chief Mexican economist, Carlos Capistran.

So, how have things changed so quickly? It's not hard to foresee when you consider the facts. Fact one: China's "one child" policies have created an aged population, therefore the availability of younger workers is increasingly stagnant. Combined with fact number two: the growing demand for labor in China, and policies designed to increase wages which are working, proven by the several minimum wage rises over the last ten years. The results aren't surprising, average wages have continuously increased, especially in China's coastal regions. On the other hand, Mexico has experienced a rising population and a high percentage of young workers.

Until a few years ago, Mexican manufacturing work decreased as China stole share within certain industries, such as retail. When China entered the World Trade Organization in 2001, they began to increasingly offer Mexico an advantage in terms of stagnated wages, supply of workers and of course, the obvious proximity to North, Central and South American businesses. Not to mention, the time zone, allowing speedy delivery and same day operations for US imports.

Mexican imports to the US are up 32% since 2010, while those from China are only up about 20%. US exports far more to Mexico than to China, so much so, that the trade deficit in goods with Mexico is just $61.4 billion, and China's was a whopping $325 billion. Altogether, Mexico accounted for 12.4% of US imports, China accounted for 17.5%.

There has already been a large amount of foreign investment to Mexico by the USA and other countries. Despite obvious drug cartel and gang violence worries, the US auto industry has been based in Mexico for years, and now other industries are following their lead. And the US isn't alone in the move, manufacturers from South and Latin America, as well as European and Asian, are beginning to see the country's value as a sourcing point for factorization.

Minimum wage is only about 60 cents an hour in Mexico, just $2.50 a day according to the Bank of America, the US Bureau of Labor Statistics says it's actually around $4.50, though. The low rates aren't healthy for Mexico's economy, and millions of Mexicans have watched their standards of living disappear over the years.

"We need to increase wages to become a true modern country," says Luis De La Calle, former Mexican government official who helped to negotiate the North American FreeTrade Agreement. Unforunately, The Bank of America does not predi changes for Mexicans any time soon, and actually expects things to continue the way they are going until 2020, at least.

Rail Carriers Rise to Top in USA Logistics

2013-04-15T07:57:00.000-07:00

Before the automobile and diesel truck were the main vehicle for trade and logistics needs, many would argue the 1800s were highest point of the U.S.A. rail system. But, over the last decade many factors have forced transportation methods back to their roots.

The growing share of freight transport moved the rails has been fueled by many factors, from rising diesel fuels costs that tend to push shippers towards cheaper rail transport to significant improvements in rail efficiency to the surge in China's imports that are often moved Eastward from the West coast via rail.

Even traditional truckload carriers such as JB Hunt and to a somewhat lesser extent Schneider National have transformed their businesses to increasingly focus on intermodal carriage, in which the truck carriers sell a full move to shippers that is mostly rail but with truck pick-up and delivery on either end.

And rail carriers are feeling it. Rates have been rising 4-5% year over year in general starting in 2010, according to quarterly earnings calls by the remaining four public class I carriers (Union Pacific, CSX, Norfolk Southern, and Kansas City Southern).

And the rail carriers have left those low returns on investments far behind - or at least must really believe that they have. According to a recent article in the Wall Street Journal, the rail carriers will spend more than $14 billion in capital investments in 2013, up from about $13 billion in 2012 and more than twice the $6 billion or so a decade ago.

For most of the rail carriers' industry history, such capital investments were focused on laying down track to expand coverage.

Now, according to the Wall Street Journal piece, "it is about a race to make existing rail lines more efficient and able to haul more and different types of freight. Some of the railroads are building massive new terminals that resemble inland ports. They are turning their networks into double-lane steel freeways to capture as much as they can get of US freight demand that is projected to grow by half, to $27.5 billion by 2040."

Rail's gain is not surprisingly coming at the expense of trucking, which, the Wall Street Journal notes, "is waylaid by high fuel prices, overloaded highways, driver shortages and regulations that are pushing up costs."
Despite recent years of significant rate increases, rail transport costs per ton today are only about half what they were in the 1980s. Not only does that reduce logistics costs for US companies, that decline is part of the multiple factors that continue to make US manufacturing more globally competitive - US logistics costs are often lower than the rest of the world.

"We wouldn't have as many companies considering moving back to the U.S. or near-shoring," if not for rail, says Dr. Yossi Sheffi of MIT. "Some of it is the cheaper energy. But we could not be moving the oil around without rail. We could not have the huge amount of imports without the rail."

Not everyone sees the logistics landscape the same way, however. The American Trucking Associations (ATA), for example, forecast last year that by 2023, the percentage of US freight moved by truck will increase by 2 percentage points to 69.6%, with trucking's share of freight revenue heading up to 81.7% from 80.9%.
The ATA report, prepared in conjunction with transportation analysts from IHS, forecasts rail's overall share of tonnage to decline from 15.7 percent in 2011 to 15 percent in 2023, while intermodal is expected to increase 6.2% annually between 2012-2017 and then at a 5.4% annual clip through 2023.

But continuous service improvements at US railroads have clearly changed the competitive landscape. The variability of rail deliveries was simply too much for many shippers and intermediaries. UPS, for example, put lots of pressure on the rail carriers to tighten up performance to be more dependable like truck service is, with a goal of 99.5% on time delivery.

UPS "trained us in what it means to perform to their very high standards," says Mathew Rose, CEO at BNSF. "I'm sure there were many times they were very frustrated."

Those improvements in reliability are key to mode switching by shippers.

Rail Carrier Service Does Indeed Continue to Improve, CSX Data Shows

Source: CSX Q4 2012 Earnings Call Presentation

Retailer The Container Store is among those companies moving more freight to rail. According to Tom Sangalli, director of logistics and transportation for the retailer, has moved more and more freight to rail. Rail, he told Wall Street Journal, have cut his transportation costs by 20% on average. On problem routes, the reduction in costs was about 40%. Rail has reduced the average 46-cent a mile fuel surcharge the company pays truckers in half, and the carbon emissions from logistics by 40%.

"I know as soon as I hand it off to BNSF, it'll arrive in three days," Sangalli says. Now, when the retailer opens a new store, "the first thing we look at is can we get to it on rail?" he added.

The US energy production boom is also helping several of the US rail carriers, which are being used to get oil out of where it is being produced, such as North Dakota, to refineries across the country. Burlington Northern, for example, says it will increase it transport of oil from about 500,000 barrels per day currently to 700,000 sometime this year.

That is helping to offset some of huge drop all of the rail carriers have seen in coal volumes, traditionally a large source of tonnage but in the last two years they have been dropping rapidly as the US shifts away from coal as a fuel for utilities.

Article by SCDigest, can be found at their website: www.scdigest.com

Transportation Management is Going Global

2013-04-15T06:56:00.000-07:00

By definition, a company selling and/or buying internationally, is managing global transportation in some respect. That doesn't mean companies are truly viewing business globally in terms of processes, strategy and division of responsibility. So, we find ourselves asking, how are they becoming more global?

SCDigest explored this question earlier this year with a "Benchmarking Global Transportation Management Strategies and Practices 2013" research survey. This survey was based on responses from more than 300 global transportation professionals.

Their responses are recorded in the chart graphic below:

As you can see, about 42% report a truly global transportation management mindset, which still leaves the majority of professionals in the early steps of going global. Increases in global trade is rising everyday though. For more information and a full report of this study, click here: http://www.scdigest.com/login.php?cid=6883&ctype=content

New SuperTruck May Improve Diesel Mileage by More Than 50%

2013-04-08T06:34:00.002-07:00

From SCDigest's On-Target E-Magazine

Logistics News: New SuperTruck May Improve Diesel Mileage by More than 50%, Make Big Dent in Logistics Costs

Cummins, Peterbilt, Says Initial Tests Show Mileage Climbs to 9.9 Miles Per Gallon, Freight Efficiency by 61%

SCDigest Editorial Staff

In 2010, the United States Energy Department awarded $187 million of grants to companies for research on more efficient and clean transportation-related technologies. That included $53 million to engine maker Cummins as the prime contractor for development of a so-called "SuperTruck" that would be significantly more fuel efficient than current designs. Navistar and Daimler Trucks North America also received millions for work on the Super Truck concept.

Cummins, Peterbilt (a division of PACCAR) and a few other partners have spent $39 million on the super truck project over the past four years, investments matched by the Department of Energy under the program.

It looks like that public investment may be paying off, as Cummins announced with Peterbil that testing of the new concept truck is initially delivering mileage gains of more than 50%, as Cummins announced last week that the new truck averaged 9.9 miles a gallon in road tests last fall in Texas. The test involved eleven 312-mile runs on US Route 287 between Fort Worth and Vernon, Texas. The tractor-trailer used in the test had a combined gross weight of 65,000 pounds, 15,000 pounds lower than the national limit of 80,000 pounds.

"Today's long-haul trucks typically achieve between 5.5 and 6.5 miles per gallon, when loaded. The 54% increase in fuel economy would save about $25,000 annually based on today's diesel fuel prices for a long-haul truck traveling 120,000 miles per year," Cummins said. "The potential savings in fuel and greenhouse gases are enormous, with about 2 million registered tractor-trailers on US roads today."

The improved mileage in turn would translate into a 35% reduction in annual greenhouse gas emissions per truck.

The company did not estimate what the impact on mileage would be for a fully weighed-out truck. However, Cummins did say that the test showed that "freight efficiency," measured as ton-miles per gallon, improved by 61%, well above the 50% improvement target initially set by the Dept. of Energy.

Cummins said its researchers have been focused on the engine and its integration with the powertrain. It said it has developed numerous changes in the engine's combustion processes. It has also made improvements that reduce internal engine friction and the need for so-called "parasitic power" - excess power the engine needs to run such things as lube and coolant pumps and air compressors.

In addition to the truck's exterior, Peterbilt and its partners have been working on improvements in the drivetrain, the idle management system, weight reduction and vehicle climate control. An advanced transmission from Eaton facilitates further engine downspeeding for additional fuel economy benefits.
"Aerodynamics has been a significant contributor to the efficiency gains," said Scott Newhouse, senior assistant chief engineer of product development at Peterbilt. "We are very pleased with what our team has been able to accomplish using a comprehensive tractor-trailer approach."

Testing will continue in 2013, and include analyzing the truck's performance over a 24-hour period, including when drivers are at rest but still need power to run the air conditioning and small appliances in the cab. While still in development mode, the fact that this announcement was made at this time certainly suggests a level of confidence in the prospects for this version of the Super Truck. Cummins and Peterbilt said they are both "confident we will take what has been achieved so far to even higher levels."Assuming that confidence is justified, the dramatically improved mileage would have a significant impact on the industry. A reduction in annual fuel costs of $25,000 and assuming 120,000 miles driven per year would lower fuel costs about 20 cents per mile.

The National FairTran truckload rate index currently shows average longhaul rates, including fuel, at $1.71 per mile. A 20 cent reduction in theory could lead to a reduction in rates (including fuel surcharge) of some 12%, based on those numbers.Improved mileage at this level could also change the equation between natural gas trucks and traditional diesel vehicles, which at the current status quo gives a strong advantage to natural gas in terms of operating costs and CO emissions. All things being equal, if the mileage improvements from the Super Truck are realized on the road, it would change that equation tremendously.

However, it is likely that many of the improvements in the SuperTruck design - such as the improved aerodynamics, improved transmission integration with the drivetrain, and others should be applicable regardless of which fuel technology is used.

What about the improved combustion technology? We're not sure about that one - but we are going to find out. SCDigest will note Cummins is also very active in the development of natural gas engines, both independently and in its partnership in Cummins Westport.

Manufacturers Say "Adios" to Chinese Factories

2013-03-27T13:36:00.001-07:00

With the Chinese currency, the yuan, rising in value, cost of doing business in is China also rising quickly, forcing many companies to relocate manufacturing back to Mexico. Shipping costs have also risen, making the move to Mexico more appealing, especially to companies with primary markets located in the Western Hemisphere.

This week, the Mexican peso rose hope for the their economic prospects after an unexpected rate cut last week, overall the peso has risen 2.8% so far in 2013. Enrique Pena Nieto, the recently installed president has promised the Mexican population many changes, especially for their tax system. Most notable, is his plan to reform its government-run energy sector to attract outside investment and business from other countries, predominantly the USA.

According to the International Monetary Fund, a decade ago, wages in Mexico were six times higher, yet only 40% higher than pay in China in 2011. "Mexico is a stable country, close by, but unfortunately with cheap wages," says Eduardo Garcia, publisher of online business journal Sentido Comm.

The current rise in manufacturing, about 20% of Mexico's GDP, is what drives their economy, they expect to see it expand by 3.5% in 2013 alone. On the other hand, and other side of the world, Chinese factories have increasing value and manufacturers are showing less interest in handling smaller orders, says Mike Rosales, owner of Marvel, a Los Angeles-based company which manufactures small toys and trinkets in China and Mexico.

Rosales also adds, shipping costs jumped for Marvel when oil prices reached $100 a barrel, and the lack of protection for intellectual and industrial property in China became a huge problem. "The would ship your product out the front and your product with someone else's name out the back," he says.

There are many arguable reasons to move manufacturing to Mexico. First of all, Mexico is part of more than 40 trade agreements, which tends to reduce costs even further. Doing business in China means dealing with the time change, and very distant location. These factors can cause many midnight telephone conferences and extremely long and expensive flights across the world. Some also say, increased numbers of manufacturers in Mexico benefits U.S. businesses by offering suppliers on both sides of the border. "Mexican business has increased from 1% to 10% of total sales over the past ten years," says Jim Raptes, custom sales manager at Deco Products, who make zinc castings in Iowa. He goes on to say, "security remains a concern in Mexico, but the violence due to the drug wars, has given few companies pause about coming south, executives won't travel to Mexico, but the Americans who do come down here secretly love it."

Diesel Falls 4.1¢ to $4.006 a Gallon

2013-03-25T14:22:00.003-07:00

Diesel Falls 4.1¢ to $4.006 a Gallon

Decline Matches Last Week’s Downturn; Gas Dips Again

Diesel fell for a fourth consecutive week, matching its 4.1-cent decline of a week ago in falling to $4.006 a gallon, while gasoline dipped, the Department of Energy said Monday.
Gasoline fell 1.6 cents to $3.68 a gallon, also the fourth straight decline, DOE said following its weekly survey of filling stations.

Trucking’s main fuel has dropped 15.3 cents in the past month, after rising 26.5 cents in six prior gains. Diesel is now 14.1 cents below the same week last year, while gas is 23.8 cents less than a year ago, DOE records showed.

Diesel dropped 6.1 cents on the West Coast — the biggest regional decline — although that area posted the highest regional price, at $4.101 per gallon. The East Coast’s New England sub-region had the highest price overall, at $4.171, while the Rocky Mountain and Gulf Coast regions tied for the lowest, at $3.935.

Each week, DOE surveys about 350 diesel filling stations to compile a national snapshot average price.

By Transport Topics

Obama Proposes New Tax Credits to Promote Natural-Gas Trucks

2013-03-25T14:02:00.003-07:00

On March 15th, President Obama announced his newest energy initiative, including a second proposal for federal tax cuts for natural-gas truck buyers. The proposal states that natural-gas truck purchasers can earn a tax equal to up to 50% of the price difference between natural-gas and deisel-powered truck models, which can easily amount up to $40,000.

Obama also endorsed a trucking tax credit energy plan he unveiled earlier this month, called: "Blueprint for a Clean and Secure Energy Future," which commits to the pursuit of adopting natural gas and other alternative fuels for trucks in the supply chain.

"The natural-gas vehicle market is already growing, but the vehicle incentives the president calls for would help accelerate that growth and help displace foreign oil use even faster," said Richard Kolodzeiej, president of NGVA America, an advocacy group for greater natural gas use in transportation.

The tax credit program will be affective for at least five years, applying to medium-and-heavy duty natural-gas trucks. If the plan passes, Congress will then have to create a new "Energy Secure Trust" of $2 billion financed with revenue from federal oil and gas royalties to support research of fuel alternatives and technologies over the next ten years.

American Trucking Association is seeking the 50% tax credit for trucks powered by natural gas, said Glen Kenzie, assistant general counsel whom oversees environmental affairs for ATA. "We're not saying a permanent tax credit, we just need a jump-start to get this ball rolling a little faster that what it currently is," said Kenzie. This is because, the high cost of natural gas trucks paired with the higher excise tax are "barriers" to fleets considering conversion to natural gas, as well as the definite need of funding to research alternative fuels.

According to Kenzie, trucking would benefit from research similar to that of barriers for cars because those findings could eventually be "scaled up" for trucks. Last year, incentive bills were introduced to provide tax credits for truck drivers, but the House vote never occurred, and the Senate rejected it. "Now if we can get the same push from the members in Congress, we'll be set to go," he added.

"The president has offered this proposal in the past, but I'm skeptical about it," says Representative Tom Petri. The Wisconsin native went on to say, "there are already natural-gas trucks in use without federal involvement and it's continuing to grow, so i really don't see the need for a tax credit," he said. Many big fleets are converting to natural-gas trucks, and infastructure is already being built, especially in his home state, Petri said.

--END

Article written by Sarah Goedeke, Tweet @LGIinc ; Source Attribute: Transport Topics

U.S. and Canada border delays could effect trade and economic problems; An opinion culumn

2013-03-25T09:40:00.002-07:00

The world's largest bilateral border between the United States and Canada was not too long ago, viewed as an obstacle to maintaining efficient, timely transportation trade for the two countries. Every day, about $1.6 billion worth of trade passes through the border, with about two-thirds of which being shipped by truck, this includes more than 80% of U.S. to Canada total imports. Although these numbers are a great reflection of the two countries trade integration, the massive amount of trade has had it's share in a negative impact on the trucking and logistics industry.

Especially when, about a decade ago, the 9-11 period hit truckers with increased spikes in security measures. At many of the busiest land border crossings, drivers had been known to expect waits of several hours, effecting the predictability and reliability of North American supply chain. Many frustrated truck drivers began searching for domestic-only work, ultimately harming North American competitiveness.

Today, improvements have definitely been made, but much can be blamed on the recession, slowly recovering, but without a doubt, reducing border delays. Infrastructure improvements have been made in several spots, and the growing pains of excessive border security initiatives are starting to become a thing of the past.

Last year, President Obama and Prime Minister Stephen Harper raised hope for improvements by signing the Perimeter Vision Action Plan, which is intended to streamline trucks cross-border movements. However, threats of expenditure cuts stemming from sequestration could undo the progess that has been recognized over the past years, as well as, the anticipated improvements under the PVAP.

In a recent testimony before the Senate Appropriations Committee, the U.S. Secretary of Homeland Security, Janet Napolitano, warned a return to delays of four to five hours for truckers at land borders. Many are worried Frontline U.S. Customs and Border Protection staff members who process trucks will be discharged, and over-time budgets will peak with unplanned demands cut.

Warnings of the bigger picture loom, seeing signs of growth which recently appear to be taking hold in the U.S. and cutting off, predicting an economic tip back into a recession. Unless the Obama Administration and Congress can come to an agreement in the very new future, before cuts really start happening, all we can do is prepare for the worst and hope for the best.

Article Written by Sarah Goedeke @ Logistics Group International ; Source attribute: Transport Topics

U.S. to Mexico Commercial Cargo-Crossing practice could change

2013-03-22T08:16:00.001-07:00

Global Logistics News: Diminishing the Mexican Broker Control of the Border

New and Innovative Pre-Screening Pilot could Improve Efficiency, Effectiveness, and Security of the Supply Chain on Mexican Border

U.S.-Mexico commercial cargo-crossing practices may soon change. That change would remove the entrenched Mexican Customs Brokers' control of 75% of the cross-border commercial traffic revenue, amounting to a hidden tariff estimated to be $2-3 billion each year. This unofficial tariff is the direct result of current Mexican Customs Brokers' control.

Current System

Normally, the Custom Broker practices of trading nations involve two fundamental types of activities, the outbound Broker functions and the inbound Broker functions, with each trading nation's brokers performing 50% of the clearing process. However with Mexico, the Mexican outbound processes and in-bound process, and the outbound U.S. broker processes are controlled by Mexican Customs Brokers. That means that the outbound process of U.S. goods being exported to Mexico by land conveyance, normally a U.S. function, is in the exclusive hands of unlicensed Mexican Forwarding Agents as opposed to federally-licensed U.S. Brokers and Forwarders.

When a Mexican Customs Broker initiated the electronic Single Window Entry to export goods from the United States into Mexico, he had to comply with Mexican regulations that require the use of the Mexican inward manifest (Relacion de Entrada) now electronic and similar to the U.S. e-manifest be submitted at the time of entry along with the relevant commercial invoice. This Relacion de Entrada and another entry summary document (Pedimento de Importacion) must be prepared and processed by a licensed Mexican Customs Broker (Agente Aduanal). This process involves a series of functions including appraisement, classification, inspection, inventory, and others. This practice has traditionally taken place in the United States prior to the cargo's crossing into Mexico.

Additionally, Mexico allows only Mexican citizens who were born in Mexico to be licensed Customs Brokers. U.S. Customs Brokers and Freight Forwarders who are citizens of the United States are, therefore, not allowed to be licensed in Mexico to provide these fundamentally U.S. forwarding services, although they must be performed in the United States. Only Mexican citizens can facilitate cargo crossing into Mexico by land. (Air and Vessel carriage are not controlled in the same fashion.) The exact reason for the requirement that a Mexican Customs Broker's wholly owned U.S. subsidiary is required to arrange to forward exports to Mexico is actually contained in the "Reservations Section" of NAFTA.

These Mexican Customs Brokers are essentially a cartel of business enterprises that influences costs, speed of movement, integrity of the cargo and ultimately the security of our border as it relates to commercial land conveyance. Even Mexico's Aduana is not happy with the control of these Brokers. However, things are about to change.

A New System Cracking Mexican Broker Control

The Otay Mesa Chamber of Commerce at the end of October announced that as a spinoff of the Security Bilateral Agreement between the U.S. and Mexico, there will be an innovative pilot program utilizing pre-clearance process which both U.S. Customs and Border Protection (CBP) and Mexican Customs will inspect trucks and process their entry into the U.S in a facility located in Otay, Tijuana, Mexico. "Shipments that are cleared within this facility would directly access the commercial "FAST" lane into the US and by-pass an inspection at the U.S. import facility. In other words, it is a one stop shopping clearing house that will save trade stakeholders time and money." Mexico's Ambassador to the United States, Arturo Sarukhan, said the countries are just days away from unveiling this initiative, which he said would be a "giant step toward eliminating hours' long waits for cargo companies approved for the program."

However, the Ambassador stated that the start date for the initiative isn't certain although acknowledging that there would be initially three inspection sites on the U.S.-Mexico border, and said U.S. Customs and Border Inspection officers will be in Mexican territory conducting the inspections. According to accounts in the Texas Tribune on November 16th, the Ambassador when asked specifically where, and if those sites included the border cities of Nuevo Laredo or Ciudad Juarez, which border Texas at Laredo and El Paso, respectively, declined to identify the ports-of-entry (POE).

Through my contacts in Mexico, I have discovered that, in fact, Laredo Texas will be a site where Mexican Customs will have their personnel work at the Laredo International Airport in January 2013. They will initially pre-screen electronics exported from the United States into Mexico. The potential significance of this pilot program is immeasurable at this time, but portends significant cost savings by eliminating the Mexican Customs Brokers' control established through the use of his exclusive unregulated forwarding agent in the United States. It would also mean more certainty for U.S. Customs Brokers filing in-bound documentation.

Of course, a program like this when fully developed and covering more than agricultural and electronic products can also diminish the use and need for warehousing on the U.S. side. By removing the Mexican Customs Brokers' control on the U.S. side, it will also improve the security of in-bond shipments since all in-bond shipments can, if made part of the new system, be inspected by CBP in Mexico and by Aduana in the United States. It will also have an impact on potential drug cartel involvement within the Mexican Customs Brokers' network, especially when new breach-detecting container security devices are used to monitor shipments from origin to destination, in another innovative potential pilot currently being discussed to begin on the Mexican-U.S. border.

Summing It Up

While only the initial crack in breaking apart the current Mexican Broker control system, this new and innovative pre-screening pilot could improve efficiency, effectiveness, and security of the supply chain operating across our Southern border, literally saving billions of dollars in hidden, unnecessary costs within the current system.

Coupled with container security device technologies that identify and verify content at stuffing, monitor container and trailer movement, their internal environment, breaches into them, and off-course notifications can and will dramatically facilitate trade, reduce costs, and improve security.

Source: Supply Chain Digest

Eagle Ford Shale boost growth at Texas Ports

2013-03-19T08:07:00.000-07:00

SAN ANTONIO – Laredo’s land port, Corpus Christi’s sea port and Port San Antonio – all already in expansion mode – have a chance to snare additional business and partner up in a regional marketing effort, thanks to production in the Eagle Ford Shale oil and gas fields.
Speakers at the Eagle Ford Consortium’s annual conference, which wrapped up Friday, said taking a regional approach to everything from transportation planning to logistics could benefit each city.
“We think we have tremendous opportunity to have marketing and trade development,” said John LaRue, CEO of Port Corpus Christi.

South Texas
The ports have formed the South Texas Alliance for Regional Trade to highlight sectors such as energy, manufacturing, energy and international trade.
Around 10,000 to 12,000 trucks cross the border daily in Laredo, the nation’s busiest inland port, said Carlos Villarreal, Laredo’s city manager, so the problems of increased truck traffic and oil field-related road damage throughout South Texas are issues Laredo has long faced. “It’s something that’s not new to the city of Laredo,” he said.

LaRue noted that Kelly Field at Port San Antonio has the region’s largest industrial airport, as well as rail access.
And Port Corpus Christi is the fifth largest port in the United States in total tonnage, and is building up its infrastructure to handle the influx of crude oil into its port.

From imports to exports
The port used to be a crude importer but is transforming into an exporter thanks to the Eagle Ford Shale activity, with companies taking crude by barge from Corpus Christi to refineries in Louisiana and other states.
Port Corpus Christi also is planning an export terminal for liquefied natural gas, which could eventually export natural gas from the Eagle Ford to foreign markets.
Although the Eagle Ford has a large “window” where drillers predominantly find natural gas, those areas aren’t being tapped now thanks to low natural gas prices.
Ken Morgan, of Texas Christian University’s Energy Institute, said the U.S. has an enormous supply of natural gas in shale fields, and that trucking fleets and other vehicles should switch to running on natural gas instead of diesel or gasoline.

“It’s a continent filled with shales,” he said. “We are covered up in a potential energy source.”
If the U.S. doesn’t use its natural gas supply, Japan and other countries are willing to buy “every molecule we can send them.”
“What you have is the tip of the iceberg in South Texas,” Morgan said.
Natural gas prices have been near historic lows thanks to an irony of supply and demand.
In the wake of shale drilling across the country – resulting in a huge increase in natural gas production – prices fell so low that drillers no longer seemed to have an incentive to go after natural gas.
But Morgan said that new markets will develop for the natural gas one way or another.
“Cheap energy wins,” he said.

Original article can be found on Fuel Fix: Fuel Fix Blog

Diesel Prices Decline for Second Consecutive Week

2013-03-18T12:35:00.000-07:00

Diesel price may not stay over $4 much longer, retail diesel costs have declined for the second consecutive week -- from $4.13 to $4.088 a gallon.

Gasoline prices have had a similar fall, also declining for the second consecutive week to a new low of $3.71 a gallon, compared to $3.759 the week before and $3.829 this time last year.

The U.S. Energy Information Administration (EIA) says diesel prices are expected to continue falling over the next two years. According to a decade-long study, technological strategies are predicted to save fleets up to $5,700 annually per truck.

For more information about the EIA, follow this link: http://www.eia.gov/

Gas Prices Drop First Time This Year!

2013-03-06T07:38:00.000-08:00

Diesel prices have finally fallen for the first time in seven weeks, dropping 2.9 cents to $4.13 a gallon. Gasoline also fell for the first time all year, according to Department of Energy (DOE) records. To be exact, gas prices fell 2.3 cents to $3.759 a gallon, the first decline since December 24th. Diesel's first decline since January 14th has left prices 3.6 cents more than it was the same week last year, yet gasoline is currently 3.4 cents less than it was a year ago.

So what does this mean for the trucking industry?
Trucking's main fuel gained 26.5 cents during its last six increases, including a 23.2 cent rise last week which reached the highest February level ever recorded, $4.159 per gallon. According to DOE records, this was the highest price recorded since a more reasonably timed, mid-summer high in August 2008. Gasoline had been on-the-rise for 11 straight gains, jumping a total of 53 cents.

The dramatic declines were the affects of last weeks lowered oil prices which dropped to nearly $90 a barrel on the New York Mercantile Exchange for the first time since December. On Monday, crude fell 56 cents, finishing the trading day at the lowest Nymex closing price since December 24th at $90.12 a barrel, according to Bloomberg News reports.

DOE surveys roughly 350 diesel filling stations every week to compile these national averages.

FMCSA Refuses Multiple HOS Delay Requests

2013-03-04T09:25:00.001-08:00

Despite requests for delay by The American Trucking Association (ATA), The Commercial Vehicle Safety Alliance (CVSA) and The Owner-Operated Independent Drivers Association(OOIDA), the Federal Motor Carrier Safety Administration (FMCSA) announced it won't be delaying the July 1st start date which enforces the latest changes to its hours-of-service rule for truck drivers.

According to the ATA, preparing for the FMCSA July 1st implementation date will cost the trucking industry about $320 million in driver training, software updates and other preparations. This amount doesn't even include costs to state enforcement agencies that must sped taxpayer moneys to adapt the changes, or to shippers and supply chain participants.

"At a time of rising diesel prices, increased equipment and labor costs, the decision by the head of FMCSA to reject a reasonable request for a brief delay in enforcing this rule is unbelievable," said Bill Graves, ATA President.

The new rules will state, truck drivers will now be allowed to reset their weekly driving limit to 60 hours in seven days, or 70 hours in eight days, if they rest for 34 hours. Truck drivers will now only be able to use the restart once every seven days, and the restart will have to include two periods from 1 a.m. to 5 a.m. Drivers will also now have to take 30-minute breaks prior to driving more than eight hours at a time, a provision that ATA is also trying to see overturned.

"The agency is using the wrong standard to judge whether it should delay the rule... instead of determining whether ATA showed good cause for the delay, FMCSA made its conclusion based on whether or not it believed the court would delay it," said ATA General Counsel Prasad Sharma.

The Commercial Vehicle Safety Alliance requested the same delay as the ATA, stating law enforcement agencies would rather avoid "potentially duplicative and unnecessary training." Similarly, the OOIDA was also, "disappointed" to learn FMCSA refused to delay enforcement, spokeswoman Norita Taylor said.

"We're disappointed about it... we think the potential of having to train and retrain people is problematic and it's a potential big impact on the use of resources," said Steve Keppler, Executive Director of CVSA

The current court challenge is the fourth lawsuit against the hours-of-service rule in the last decade alone. After FMCSA added the 11th driving hour, Public Citizen and its allies convinced the D.C. court in 2004 and 2007 to overturn the changes. Both times, hoever, the agency issued a similar new rule after the courts decision. Public Citizen settle another lawsuit in 2009 after FMCSA agreed to reconsider the rule again. The agency published its most recent changes in December 2011.

Article information gained from Transport Topics at www.ttnews.com