The Logistics Blog ~ Supply Chain and Freight

Summer Slowdown Shows on Canadian Spot Market Index - Source Today's Trucking

2012-08-22T08:58:00.001-04:00

Summer Slowdown Shows on Canadian Spot Market Index

Posted: Aug 16, 2012 04:31 PM | Last Updated: Aug 16, 2012 04:31 PM

TORONTO — TransCore's Canadian Freight Index for the spot market declined 21 percent in July.
The decrease is due to the traditional summer slowdown, TransCore said, noting summer construction, vacations and company shut-down periods.
July also marked the third lowest volumes of any month this year, however, TransCore noted, it was the fourth most active July on record.
Cross-border postings dropped two points and accounted for 73 percent of overall load postings.
Intra-Canada postings made up 23 percent of total load volumes, and increased one percent from June.
Equipment postings rose nine percent over June, and were up significantly year-over-year with a 21 percent increase. Equipment-to-loads ratio also increased, marking the highest levels of 2012 so far.

Here's the breakdown:

Top Destinations for Loads Imported into Canada were:
Ontario 54 percent
Western 23 percent
Quebec 20 percent
Atlantic 3 percent
Western Canada increased three percent, while Quebec decreased three percent.
The remaining regions remained unchanged.
Top Regions for Import Equipment into Canada were:
Ontario 53 percent
Western 23 percent
Quebec 21 percent
Atlantic 3 percent
Western Canada decreased one percent, while Quebec increased one percent.
The remaining regions remained unchanged.
Regions of Origins for Loads within Canada were:
Western 44 percent
Ontario 26 percent
Quebec 22 percent
Atlantic 8 percent
The regions remained unchanged from last month.
Top States of Origin for Loads Destined for Canada:

Pennsylvania
Ohio
California
Illinois
Texas

Top U.S. Destinations for Freight Originating in Canada:

New York
Texas
Pennsylvania
California
Michigan

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US-Canada Border Delays, Rules Cost $19 billion a Year - Source HDT

2012-08-22T08:54:00.002-04:00

US-Canada Border Delays, Rules Cost $19 billion a Year

VANCOUVER —The Canada-US border is costing Canadians over $19 billion a year, according to a new study by the Fraser Institute.
Researchers added up the lowest values from the estimated ranges for all three types of costs: trade, tourism, and government programs, equaling the $19.1 billion. For its part, trade was $16.2 billion of that number.
Pointing to post-Sept 11 security regulations, traffic bottlenecks, and administrative costs for various programs, the report's authors are calling on both the U.S. and Canadian governments to provide detailed descriptions of costs and expenditures for specific border programs.
One of those programs is the Beyond the Border Action Plan, announced last December.
"While the vision provides specific benchmarks and timelines for measuring progress, it does not tie these guidelines to government expenditures or reductions in border crossing costs," the authors write in the report. "The Canadian and American governments need to tie specific border infrastructure improvements and other expenditures to specific gains, as manifest in lower border crossing costs for Canadian and American businesses engaged in cross border trade, as well as individual travellers."
For the most part, the authors praise the Border Action Plan, but "there is room for improvement." Once both governments provide detailed descriptions of costs and expenditures for specific border programs and security measures, they also must be evaluated in terms of performance, namely, whether the expenditures made by the public sector are producing savings for individual travellers and traders." The costs and results evaluations should be done on a year-to-year basis and made public, advises the report.
Either we're going to continue "with incremental and uncoordinated programs as we have often done since 9/11" or we're going to create "a new border regime" the report stresses. "In order to do the latter we need to hold governments accountable in terms of costs and savings."
The report also noted the recent announcement of a new Detroit-Windsor crossing, that, they say, should have a "very positive impact on the future costs of crossing the border in this industrial hub."

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Verizon Enhances Fleet Management Tools - Source Trucking Info

2012-08-22T08:49:00.000-04:00

Verizon Enhances Fleet Management Tools

Verizon is enhancing its Field Force Manager and Fleet Control. The enhanced offerings combine location management, cloud services and tablet-based solutions.

The offerings feature:

- A new version of Verizon's Field Force Manager, the company's flagship workforce management application, to help companies manage and empower employees in the field with mobile work tools and applications and new enhancements for use on 3G and 4G LTE smartphones, tablets across various mobile operating systems as well as enterprise-grade barcode-scanning devices.

- An enhanced Verizon Fleet Control application, which can now be combined with a secure enterprise tablet pre-loaded with transportation and company-specific applications to help manage fleets and operations in the field.

Field Force Manager Empowers Employees in the Field

Working with Xora, which makes mobile workforce management solutions, and mobile solutions provider DecisionPoint Systems, Verizon is rolling out an advanced version of its workforce management solution that uses smartphones and tablets to give employees more work tools and mobile applications in the field, including electronic forms, location-based services, mobile timecards and job dispatch.

The enhancements includes design, functionality and feature enhancements that make the software even easier to use and provide faster and easier ways to access and share critical data about the business, including giving managers near-real-time visibility into operations through a cloud-based management application.

Workers in the field can now clock into shifts, accept jobs and update status when completed, and submit electronic forms with barcodes, pictures and signatures for proof-of-service. At the same time, their managers - using cloud-computing technology - can keep tabs on business activities in the field and make quicker decisions, such as rerouting the nearest worker to a new job when a customer needs service.

Verizon is working with DecisionPoint Systems to offer Field Force Manager as a turnkey mobile business solution.

Fleet Control Keeps Fleet Operations Rolling

Working with mobile fleet optimization provider XRS (formerly Xata) and DecisionPoint Systems, Verizon is making its Fleet Control solution available on the secure enterprise blank tablet - a "blank slate" that can be tailored for individual customer needs.

By combining Verizon's wireless network with XRS Turnpike fleet management software, mobile workers and fleet managers can benefit from a mobile work tool designed for use in and out of the truck.

With Fleet Control, which is a build-to-order solution for both private and for-hire fleets, transportation and distribution businesses can use technology to monitor vehicles and drivers, optimize routes, simplify driver inspections, manage speed and fuel consumption, and stay compliant with regulatory reporting requirements.

Fleet Control also comes with a series of optional applications that can improve business operations and can integrate with new or currently used proof-of-delivery applications.

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Diesel Prices Still on the Rise - Source HDT

2012-08-22T08:45:00.000-04:00

Diesel Prices Still on the Rise

Truckers are continuing to dig a little deeper into their wallets as diesel prices continue to climb, according to the U.S. Department of Energy.

According to the Energy Information Administration's weekly report, the national average for a gallon of diesel fuel jumped 6 cents this week, which is a 22-cent increase over last year's prices. The average price for a gallon of diesel reached $4.03.

Gasoline prices continued to increase as well, up nationally an average 2 cents per gallon to $3.74. This is an increase of 16 cents over last year's national average.

The largest increases for diesel were again seen on the West Coast, with an average increase of more than 10 cents per gallon this week. Gas prices have reached an average of $4.25 per gallon in the region.

In related news, crude oil futures dipped lower on Monday. Brent crude oil dropped to $113.70 a barrel, a decrease of 1 cent over last week's update. Meanwhile on the New York Mercantile Exchange, light, sweet crude fell to $95.97 a barrel.

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Minnesota Uses New Bridge-Building Tech to Slash Road-Closure Time - Source Trucking Info

2012-08-22T08:37:00.003-04:00

Minnesota Uses New Bridge-Building Tech to Slash Road-Closure Time

The Minnesota Department of Transportation used a giant automated machine called a Self-Propelled Modular Transporter to move a finished bridge into position over the weekend, and reduced the overall road closure time by two months.

A first for MnDOT, the move took place Aug. 18 over Interstate 35E in St. Paul at the Maryland Avenue Bridge site, where crews have been working all summer long building the bridge deck and structure on the west side of the roadway.

The two 105-foot spans that were built about 1,000 feet south of the crossing. The SPMT, with 352 wheels, took about two hours to move each span into place. Traffic was diverted beginning a few hours earlier.

Saturday's event was a pilot demonstration of SPMT technology that has cut the duration of highway construction-related road closures in Utah and Arizona nearly in half. As a result, MnDOT shaved about two months from road closures in St. Paul.

"With traditional construction methods, the Maryland Bridge would have been closed for twice as long, nearly four months," said MnDOT Commissioner Tom Sorel. "Instead, the closure will be reduced to about 60 days."

Crews have additional work to finish before the bridge is open to traffic in mid-September.

Watch a time-lapse video compressing the 12-hour process into just over a minute:

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http://www.logisticsmgmt.com/article/second_quarter_intermodal_volumes_are_on_the_right_track_says_iana/

2012-08-13T22:26:00.001-04:00

Second quarter intermodal volumes are on the right track, says IANA
Read What's Related
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By Jeff Berman, Group News Editor
August 07, 2012
Much like the first quarter, intermodal volumes in the second quarter remained on a steady growth path, according to the most recent edition of the Intermodal Market Trends & Statistics report from the Intermodal Association of North America (IANA).
Second quarter intermodal loadings—at 3,716,321—were up 5.2 percent annually and IANA officials said it marks the best quarterly result in a year, with the annual growth rate topping the first quarter’s 2.9 percent gain.
In the second quarter, three of the four major intermodal equipment categories tracked by IANA also showed growth on an annual basis. Domestic containers—at 1,383,599—were up 12.5 percent, while trailers fell 10.2 percent to 381,151. All Domestic Equipment—at 1,764,750—was up 6.7 percent.
But the real intermodal star for the second quarter was international containers, which was up 3.9 percent at 1,951,571. Despite an ordinary annual growth rate, IANA said that this output represents international’s highest second quarter volume in absolute terms since 2008.
IANA said that quarterly international growth was “roughly in line” with overall container imports, noting that port-released figures suggest that U.S. container imports were up almost 4 percent in the second quarter, with gains on the West Coast and East Coast at about 3 percent and 5 percent, respectively. And up North, the Ports of Prince Rupert and Vancouver posted nearly 20 percent year-over-year gains in the quarter, said IANA.
Addressing the 12.5 percent gain for Domestic Containers, IANA noted that it is less than the 14.9 percent annual uptick in the first quarter but said it is still “remarkable,” when taking the softening economic climate into consideration. As an example, it observed how first quarter job growth at nearly 700,000 dwarfed the second quarter’s 328,000.
Other factors contributing to continued gains on the domestic side include improving rail service, with average intermodal train speeds of 32 mph in the first half of 2011 topping the first half of 2011 at 31 mph, as well as lower terminal dwell times which are now near recession lows when volume declines lessened congestion. Another factor highlighted by IANA is tight trucking capacity, with many truckers not willing to invest in new equipment and is playing a role in shippers turning to intermodal.
“The growth in domestic intermodal traffic is expected to continue for the remainder of this year and into 2013 without interruption,” said IANA President and CEO Joni Casey in an interview. “Factors influencing this trend are: consistent service metrics, increased terminal velocity, tight over-the-road trucking capacity, fluctuating fuel prices, and regulatory burdens on motor carriers (i.e. HOS and CSA regulations).”
Casey added that on the domestic side railroadsanticipate continued growth of intermodal moves, noting that shorter haul markets offer additional potential. And as imports pick up, albeit it marginally, she said there will be more opportunities for transloads from the West Coast that will move by rail.
Intermodal Marketing Companies had a strong second quarter performance, with intermodal loads—at 323,485—up 9.7 percent and highway loads down 7.0 percent at 128,486, and total loads up 4.4 percent at 451,971.
Intermodal Marketing Company (IMC) intermodal and highway revenue for the second quarter—at $840,753,508 and $187,797,696—were up 9.6 percent and down 9.6 percent, respectively. Total revenue—at $1,028,551,204—was up 5.5 percent. Average revenue per intermodal load—at $2,599—was down 0.1 percent and average revenue per highway load—at $1,462—was down 2.9 percent.
IANA said that the second quarter marked the second time ever that IMC intermodal volume topped 100,000 loads in all three months of the quarter, with annual growth in May the strongest month, up 14 percent annually. It added that IMC highway volumes continued to decline even as stress on trucking capacity abated somewhat due to a sluggish economy.
Many analysts have told LM that even with a flattish economy and flattening trucking volumes, coupled with no real indications pointing to motor carriers adding capacity any time soon, it stands to reason that intermodal is in a pretty good spot when it comes to its future performance prospects.
“Although intermodal has always offered shippers the opportunity to reduce cost versus over-the-road, it formerly came with an associated price tag of unreliable service that made the cost/service package unpalatable to many shippers,” said Larry Gross, senior consultant at FTR Associates. “What has changed in recent years is that although intermodal service is still slower than truck, the all-important reliability of the service has achieved an acceptable level. This is fueling an increasing proportion of shippers who now seek to take advantage of the potential savings intermodal has to offer. And intermodal has been gaining share versus truck.”
Gross added that intermodal is less sensitive to many of the factors that are working to increase trucking costs, including lower reliance on the driver pool and greater fuel efficiency. And as truck capacity continues to tighten over the next few years, he said intermodal will provide an important alternative, with substantial investments being made in new terminals, particularly in the eastern region, which will serve to open up new territories and shorter lanes to intermodal service.

Truck Tonnage Index Points to Moderate Growth - Source Trucking Today

2012-07-11T13:09:00.000-04:00

Truck Tonnage Index Points to Moderate Growth

ARLINGTON, VA — ATA's Truck Tonnage Index rises 0.2 percent in March.

ARLINGTON, VA — The American Trucking Associations’ (ATA) advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index rose 0.2 percent in March, and rose 2.7 percent year-over-year — the smallest year-over-year increase since December 2009.
The not seasonally adjusted index was 9.1 percent above the previous month, ATA reported.
“March tonnage, and the first quarter overall, was reflective of an economy that is growing, but growing moderately,” ATA Chief Economist Bob Costello said. “The pace of freight definitely slowed from the torrid pace in late 2011.
“Most economic indicators still look good, which will continue to support tonnage going forward,” he continued. Costello repeated the message that industry shouldn't be expecting the rate of growth to mirror the last couple of years, when tonnage grew 5.8 percent in both 2010 and 2011. “Expect tonnage overall this year to be up at a more moderate rate, perhaps less than 3 percent, which is more in-line with normal growth.”

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Canadian Freight Index Sees Rate Drop, First Time Since 2011 - Source Trucking Today

2012-07-11T13:03:00.000-04:00

Canadian Freight Index Sees Rate Drop, First Time Since 2011

TORONTO — While March marked first drop in over a year, costs are still up.

TORONTO — The cost of ground transportation for Canadian shippers dropped 1.7 percent in March from February, according to the Canadian General Freight Index (CGFI).
While it is the first decline since February 2011, costs are still up 8.1 percent year-over-year.
“The results in this month’s index were driven by a downward trend in the Domestic Truckload & Transborder LTL, while Domestic LTL saw a marginal increase, ” explained Doug Payne, president and COO, Nulogx.
The Base Rate Index — which excludes accessorial charges — decreased by 1.77 percent when compared to February 2012.
And Average Fuel Surcharges assessed by carriers have seen an increase from 20.42 percent of Base Rates in February 2012 to 21.9 percent in March 2012.

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Volvo Trucks Bringing LNG Engine, But Looking at Other Fuels -Source Trucking Today

2012-07-11T12:59:00.001-04:00

Volvo Trucks Bringing LNG Engine, But Looking at Other Fuels

(L to R): Ron Huibers and Olof Persson sit down to talk fuel.

MIAMI BEACH, FL. — Volvo Group President and CEO Olof Persson joined Ron Huibers, president of Volvo Trucks North American sales and marketing, in Miami on Friday to announce Volvo's plans to launch a 13-litre liquefied natural gas engine for North America in 2014.
It was one of handful of press conferences and announcements the company held this past weekend.
The LNG engine is just one part of Volvo's new "Blue Power" strategy, and is aimed to compliment their compressed natural gas (CNG)-powered Volvo VNM and VNL model daycabs. The Swedes are also testing another fuel: DME (dimethyl ether). That fuel, they say, has the potential to become an attractive option for North American fleets.
The Engine
Trace amounts of diesel will ignite the the natural gas in the new 13-liter engine, delivering a 30 percent fuel efficiency improvement over spark-ignition engines, Volvo said, adding that the engine will reduce greenhouse gas emissions by 20 percent compared with diesel products. Volvo is aiming the engine at long-haul applications and says that they can meet the above numbers without cutting into power, torque or fuel efficiency.
The I-Shift engine will be available for customers to spec, Volvo noted. And while the engine will be a certified Volvo engine, the company is working with Westport in its development.
"We're not putting all our eggs in one basket," Persson said during a roundtable discussion with trucking journalists. "We don't know where it will go," Persson stated bluntly on the topic of new fuel alternatives. Volvo still has some questions regarding CNG and LNG as viable long-term fuel options.
While Persson stressed that they want to bring the tech that Volvo customers are asking for — like the CNG and LNG engines — an immature infrastructure, as well as the fact that natural gas is not a renewable fuel has, among other things, given them pause in diving headfirst into CNG and LNG. "None of these fuels is a slam dunk," Huibers said.
The Other, Other Fuel: DME
It's why they are looking into DME as a long-term solution that, reportedly, can be derived from natural gas as well as coal, and, more importantly, biomass.
"Tests are very positive in Europe," Persson said. "We have vehicles running on it."
Volvo also said they like the DME option as the tanks are more akin to a propane tank, cheaper and lighter than CNG and LNG tanks. No DEF is needed, and possibly no SCR. DME, the company said, mirrors the the performance and energy efficiency of diesel while significantly cuts GHG emissions. And like diesel, it needs no separate ignition mechanism. While LNG requires cryogenic temperatures, DME needs a tank pressure of 75 psi versus CNG's 300 psi. Non-toxic, DME burns with a blue flame (hence "Blue Power"). But time, research and money will tell more.
Huibers, who made the trek down to Miami in a Volvo truck, stopping to talk to customers along the way, stressed the fact that at the end of the day, it came down to whether a solid business case could be made. "The customer will make the choice," he said.
Harmonization of regulations is something that Volvo would like to see, and they are currently talking with various associations and governments on the issue. Persson noted that there are many barriers to entry from a policy point of view.
"We must be prepared for everything," Persson said in regards to new fuels. And while it may be more expensive to follow three separate fuel rabbits down three different holes, "The money we spend gives us increased knowledge and experience," he said.

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Navistar Will Add Urea-Based Aftertreatment to Meet Emissions Regulations - Source Trucking Info

2012-07-11T00:49:00.001-04:00

Navistar Will Add Urea-Based Aftertreatment to Meet Emissions Regulations

UPDATED -- Navistar International announced this morning that it will add urea-based aftertreatment to its engines with In-Cylinder Technology Plus (ICT+) to meet 2010 Environmental Protection Agency emissions regulations and position the company to meet greenhouse gas rules in advance of 2014 and 2017 requirements.

To be used for diesels in the United States and Canada, ICT+ combines the company's current Advanced Exhaust-Gas Recirculation with liquid urea (diesel exhaust fluid) injection aftreatment similar to that used by competitors. ICT+ will be initially introduced on Navistar's MaxxForce 13 engine in early 2013, with the MaxxForce 15 to follow, said Daniel Ustian, Navistar's chairman, president and CEO.

A midrange engine for Brazil will also use ICT+, and is being introduced now, Ustian said. He and two other executives spoke briefly in a webcast two hours after the announcement this morning.

They said current products will continue for the rest of the year using a combination of previously earned emissions credits and non-conformance penalties for trucks sold in some states. They took no questions about how each of Navistar's midrange and heavy duty engine families will be affected or anything else regarding ICT+.

Navistar originally tried to meet 2010 emissions standards without the use of urea-based aftertreatment, which the rest of the industry has used through selective catalytic reduction to meet the regulations. However, it has struggled to get to the 0.2 NOx level using only its in-cylnder, advanced exhaust gas recirculation solution.

Navistar has fielded 2010-certified diesels that don't quite meet the regulation's absolute limit for NOx, but had thus far been able to meet the regs with the use of emissions credits. Early this year, the agency said it would allow continued sales of heavy-duty engines by means of the company paying non-conformance penalties of about $1,900 per engine. But a federal judge recently threw out that arrangement in a suit brought by competitors, and Navistar has had trouble trying to certify a 13-liter engine that meets the absolute NOx limit of 0.2 gram, compared to 0.5 gram it's producing now.

"Our distinctive solution will leverage the investment and advancement we've made in clean engine technology while providing immediate certainty for our customers, dealers, employees and investors," Ustian said. "We have made tremendous progress with in-cylinder technology and with the introduction of ICT+ our goal is to offer the world's cleanest and most fuel efficient diesel engine, benefiting both our customers and the environment for years to come."

The solution will include "an already proven and certified aftertreatment system," allowing the company to offer production-ready vehicles early next year. The company also says this approach is expected to provide a clear path to quickly achieving 2017 GHG standards.

The company intends to continue to build and ship current model EPA-compliant trucks in all vehicle classes using appropriate combinations of earned emissions credits and/or non-compliance penalties (NCPs) during the transition to ICT+.

"We've shared our new technology path with the EPA and California Air Resources Board (CARB), and both agencies are encouraged by our plans," Ustian said. "We will continue to work with the agencies to ensure that our customers receive uninterrupted deliveries in all 50 states during this transition."

We will provide more details as they become available.

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President Signs Highway Bill - Source Trucking Info

2012-07-11T00:43:00.003-04:00

President Signs Highway Bill
By Truckinginfo Staff

President Obama signed the long-awaited highway bill into law at the White House this afternoon. The bill, Moving Ahead for Progress in the 21st Century, or MAP-21, funds transportation programs through September 2014.

The bill holds transportation spending at current levels, authorizing $101.3 billion for highways and transit over the next 27 months.

"This measure includes historic reforms - cutting red tape and consolidating or eliminating nearly 70 federal programs," said Transportation and Infrastructure Committee Chairman John Mica, R-Fla., in a statement.

"This bill will provide a major boost to our economy by putting Americans back to work building our nation's bridges and highways," he said.

"It has been a very long and winding road to get to this place," said Sen. Barbara Boxer, D-Calif., chairman of the Environment and Public Works Committee. "This sends a message to the people of America, and that is that we can work together."

The agreement lays the groundwork for the first national freight policy. It includes a number of trucking provisions, including mandator electronic onboard recorders to track driver logs, a study of the 34-hour restart provision, a study of size and weight limits. It gives FMCSA legal authority for a range of initiatives, many of which already are under way.

Although an agreement was reached and the legislation passed last week, Obama had to sign a one-week measure last Friday to extend the two programs until the new legislation reached his desk. The previous transportation funding extension expired on June 30.

Reactions

American Trucking Associations President and CEO Bill Graves noted in a statement that "it has been 30 months since we have had a true, long-term highway funding bill, so today's bill signing is a good thing for trucking and for our national economy."

"It is not perfect, but this law advances the cause of highway safety and, I believe, will ultimately be seen as a springboard to even more robust transportation funding in the future," Graves said. He did say he was disappointed that it fails to deliver adequate funding to improve our nation's infrastructure network.

"If America is to maintain its place as the world's preeminent economy, then we must do more to maintain and improve our nation's system of roads and bridges to ensure that goods can move freely and efficiently from factories to ports and from farms to markets," Graves said. "While this bill takes steps in that direction, much more must be done in the future."

The Commercial Vehicle Safety Alliance emphasized that it provides a steady level of funding for state safety and enforcement programs and advanced key safety initiatives supported by the group, such as stronger requirements to help address the chameleon carrier threat, an industry-wide requirement that CMVs be equipped with electronic logging devices for HOS compliance, and tighter CDL and driver training requirements.

For more details on the bill, see 6/29/2012 Agreement Sets New Course for Highway Program

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A Quick Guide to Alternative Fuels - Source HDT

2012-07-11T00:41:00.000-04:00

A Quick Guide to Alternative Fuels
By Deborah Lockridge, Editor in Chief

The world no longer seems concerned about "peak oil" (the idea that oil reserves are going to run out), and today's clean-diesel engines have addressed many environmental concerns about truck exhaust. Most industry experts believe conventional diesel fuel will remain the dominant fuel for commercial vehicles for decades to come.

There is, nevertheless, growing interest in alternative fuels for a number of reasons:

1. Although new technology has made it possible to get to previously untapped oil reserves, it's also harder to get to that oil. That, along with growing global demand, means oil will continue to be expensive.

2. There is still concern about U.S. dependency on foreign oil.

3. Alternative fuels can make sense for some trucking operations and for some shippers as a way to address concerns about price volatility, the environment and a "green" image.

Natural gas has grabbed most of the headlines lately, thanks to the domestic boom in production and corresponding low prices, and we'll look at it in depth in our August issue.

In addition to the alternative fuels summarized on these two pages, there are a couple of alternatives not quite ready for prime time:

- Dimethyl ether (DME): A colorless gas transformed into liquid under low pressure, made from biomass or natural gas, sometimes called synthetic LPG (propane). It's biodegradable, noncorrosive, produces no soot and can run in a diesel engine with only minor modifications. Efficiency is as high as ordinary diesel. Volvo has had trucks running on DME in Sweden since 2010 and is looking into the fuel for North America.

- Hydrogen/fuel cells: A fuel cell converts hydrogen and oxygen into water, in the process producing electricity. Ingredients are abundant; oxygen is in the atmosphere, but hydrogen must first be extracted from other compounds, such as water or natural gas (at special installations) or diesel fuel (in the cell). A fuel cell is low maintenance and emits nothing but water vapor.

The technology is expensive and still far away in mainstream terms. Critics say it costs more to produce hydrogen than is earned by using hydrogen in fuel cells. Daimler, however, believes it's the fuel of the future, and Vision Motor Corp. of El Segundo, Calif., is offering its Tyrano fuel-cell model for drayage use.

Natural gas

What: Actually a mixture of gases formed from the fossil remains of ancient plants and animals buried deep in the earth. Main ingredient is methane. Stored and handled as compressed (CNG), OK for local and regional operations, or cryogenically liquefied (LNG), better suited for long-haul operations because it's denser.

Pros: Vast U.S. resources, current low fuel prices, simple aftertreatment. Even without government incentives, many fleets find solid ROI.

Cons: Production by "fracking" is controversial because of environmental concerns. Range is an issue, but fueling infrastructure is growing. Bulky, heavy onboard tanks. Stiff up-front costs for vehicle equipment and fueling stations. As demand climbs and drillers cut back on production, gas prices could rise.

On the ground: Infrastructure is expanding; Freightliner Trucks and Westport Innovations ran cross-country trips in CNG-powered trucks last month to prove the availability of the fuel on the road. Cummins builds 8.9-liter and (soon) 11.9-liter spark-ignited engines, which some truck makers offer with CNG equipment, and is working on a 15-liter that can run CNG or LNG. Some truck makers also offer Westport's dual-fuel (gas and diesel) 15-liter engine with LNG equipment. Volvo and Mack will have a dual-fuel LNG 13-liter engine in 2014. Ford, General Motors and Ram will offer bi-fuel setups (CNG and gasoline are burned separately) in certain pickups by fall.

Biomethane

What: Chemically identical to conventional natural gas but produced locally from organic waste such as animal manure or sewage.

Pros: Low greenhouse gas emissions. Renewable resource that makes use of what otherwise would be waste.

Cons: High capital cost for facilities to refine biogas to quality needed to run in engines. Potential water pollution concerns.

On the ground: Waste Management runs a number of trucks on liquefied biomethane from decomposing waste at landfills. Dairies are turning cow manure into biomethane to run their trucks.

Propane

What: Tri-carbon alkane that's a gas at atmospheric pressure but liquefies under low pressure. Produced from natural gas processing and crude oil refining. Nontoxic, colorless, virtually odorless. Also called LPG (liquefied petroleum gas).

Pros: Currently inexpensive like natural gas but contains more energy. Filling facilities are less expensive. Fewer emissions than gasoline. Suitable for lighter-duty vehicles. Popular as a vehicle fuel overseas, where it's called "autogas."

Cons: Up-front cost for conversion. Better-known in the U.S. for barbeques and rural heating than for vehicle power.

On the ground: Several companies (Roush CleanTech and CleanFuel USA among them) offer propane conversion packages for Ford, GM and Ram trucks and some buses.

Biodiesel

What: Made from plant or animal fats such as soy, canola, even used fryer oil. Usually blended 5% or 20% with conventional diesel (B5 and B20, respectively).

Pros: Renewable fuel, domestically available.

Cons: Prices slightly higher, lower fuel mileage than diesel. Quality concerns; may cause problems in extremely cold weather. Concern about competing for food sources.

On the ground: The next generation of biofuels may be made from algae.

All-electric

What: Runs on batteries charged by plugging in to the electrical grid.

Pros: Lower cost per mile, less maintenance, quiet ride, no emissions.

Cons: Higher up-front costs, range anxiety, infrastructure/power grid concerns, battery costs.

On the ground: Companies running battery-electric delivery trucks include FedEx and Frito-Lay.

Diesel-electric hybrid

What: An electric motor provides additional power to launch the vehicle and improves fuel economy in stop-and-go operations.

Pros: Doesn't require separate fueling infrastructure, greatly improves fuel mileage. Optional electronic PTO can mean even more savings for high-idling applications such as utility fleets.

Cons: Use currently is largely limited to operations with lots of stop-and-go operations, such as refuse trucks or package delivery. Higher up-front costs than diesel.

On the ground: Most medium-duty truck makers offer Eaton's hybrid system, and BAE Systems now has one for heavy- and medium-duty trucks.

Hydraulic hybrid

What: Uses pressurized fluid, instead of electric power, as an additional or alternative power source along with an engine. Recovers the vehicle's kinetic energy during braking and decelerating, aka regenerative braking.

Pros: Better fuel economy, decreased brake wear.

Cons: Only makes sense for stop-and-go operations such as refuse trucks and city buses; weight concerns.

On the ground:  Available as retrofit or as a factory option from some OEs using Eaton or Parker Hannifin systems.

From the June 2012 issue of HDT

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Trucking Adds 2,000 Jobs in June - Source Trucking Info

2012-07-11T00:37:00.000-04:00

Trucking Adds 2,000 Jobs in June

Trucking added 2,000 for-hire jobs in June after adding 7,300 jobs in May. June numbers are up 3.1% from one year ago, according to data from the U.S. Bureau of Labor Statistics.

Nonfarm payroll employment for the country continued to edge up in June (+80,000), but the
unemployment rate was unchanged at 8.2%.

In June, average hourly earnings for all employees on private nonfarm payrolls increased by 6 cents to $23.50. Over the year, average hourly earnings have increased by 2%. In June, average hourly earnings of private-sector production and nonsupervisory employees increased by 5 cents to $19.74.

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June Trucks Sales Weak - Source Trucking Today

2012-07-11T00:35:00.000-04:00

June Trucks Sales Weak

NASHVILLE, IN. — Class 8 truck orders for all major North American OEMs in June — at 16,195 units — is the lowest month for orders since September 2010.
That's the latest from FTR Associates.
June orders were 8 percent lower than May, dropping to 23 percent lower than the same month last year. 2012 orders for Class 8 trucks continue to disappoint with annualized rates coming in well below 2011 levels month after month. For the three-month period including June orders annualize to 202,700 units.

Jonathan Starks, FTR’s Director of Transportation Analysis, commented that, “truckers are operating in a modestly positive environment, but not strong enough to elicit higher demand for expensive new vehicles. Growth in freight volumes and rates slowed noticeably during late 2011 and into 2012. Despite expectations that both will improve as we finish 2012, equipment markets will have to contend with the effects of last year’s slowdown. Additionally, truck manufacturers continue to build at rates well above incoming orders. This will eventually lead to a significant reduction in new truck output.”

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Diesel and Gas Prices Down, Oil Hits 2012 Low

2012-05-18T09:18:00.001-04:00

Diesel and Gas Prices Down, Oil Hits 2012 Low

Gasoline and diesel fuel prices dropped for the fourth straight week, and the price of oil hit its lowest point this year due to more concerns over the state of Europe's economy.

This week, the average price of U.S. diesel price dropped 1.6 cents to $4.057 per gallon. A year ago this week, diesel fuel was 4.7 cents less than what it is now. Ten years ago this week, the price of diesel at the pump was $1.305 per gallon.

The average price of gasoline also dropped this week, by 4 cents to $3.79 a gallon. The West Coast was the only region to see an increase in price, by 1.4 cents. With sumer driving season almost upon us, it's unclear how long these fuel price decreases will last.

Oil prices have reached a a low for 2012 this week after elections in Europe sparked uncertainty. Benchmark U.S. crude lost $1.10 to $97.39 per barrel in New York. It fell as low as $95.34 per barrel earlier in the day, 10 cents below the previous low, set on Feb. 2.

Oil prices took a dive after French and Greek voters rejected incumbent leaders who supported austerity measures to mend the region's weakening economy. French voters elected a new president, socialist Francois Hollande, who is committed to increasing spending. Greek voters removed a number of pro-austerity candidates after the parties suffered a sharp decline in support.

EIA Retail On-Highway Diesel Prices Prices in Dollars Per Gallon

2012-05-18T09:17:00.002-04:00

EIA Retail On-Highway Diesel Prices
Prices in Dollars Per Gallon



	National	East	New	Central	Lower		Gulf	Rocky	West
	U.S.	Coast	England	Atlantic	Atlantic	Midwest	Coast	Mountain	Coast
DATE	Average	PADD 1	PADD 1A	PADD 1B	PADD 1C	PADD 2	PADD 3	PADD 4	PADD 5	California
5/7/12	$4.057	$4.108	$4.232	$4.194	$4.021	$3.962	$3.962	$4.047	$4.312	$4.385

4/30/12	$4.073	$4.130	$4.255	$4.220	$4.039	$3.971	$3.980	$4.072	$4.330	$4.396
4/23/12	$4.085	$4.146	$4.269	$4.245	$4.050	$3.974	$3.993	$4.090	$4.345	$4.384
4/16/12	$4.127	$4.181	$4.269	$4.280	$4.091	$4.021	$4.038	$4.129	$4.389	$4.418
4/9/12	$4.148	$4.190	$4.278	$4.282	$4.106	$4.055	$4.063	$4.129	$4.411	$4.440
4/2/12	$4.142	$4.190	$4.262	$4.280	$4.109	$4.042	$4.049	$4.125	$4.420	$4.456

3/26/12	$4.147	$4.190	$4.263	$4.279	$4.110	$4.046	$4.055	$4.136	$4.433	$4.476
3/19/12	$4.142	$4.184	$4.259	$4.269	$4.106	$4.040	$4.053	$4.119	$4.431	$4.481
3/12/12	$4.123	$4.169	$4.250	$4.247	$4.096	$4.016	$4.036	$4.069	$4.421	$4.483
3/5/12	$4.094	$4.167	$4.253	$4.243	$4.094	$3.974	$4.020	$3.986	$4.372	$4.454

2/27/12	$4.051	$4.134	$4.221	$4.208	$4.063	$3.914	$3.992	$3.919	$4.326	$4.410
2/20/12	$3.960	$4.053	$4.161	$4.142	$3.966	$3.848	$3.886	$3.857	$4.164	$4.258
2/13/12	$3.943	$4.028	$4.150	$4.128	$3.930	$3.857	$3.860	$3.841	$4.121	$4.209
2/6/12	$3.856	$3.948	$4.101	$4.046	$3.846	$3.751	$3.775	$3.817	$4.036	$4.128

1/30/12	$3.850	$3.945	$4.088	$4.040	$3.848	$3.734	$3.776	$3.816	$4.033	$4.120
1/23/12	$3.848	$3.938	$4.077	$4.030	$3.843	$3.736	$3.774	$3.817	$4.037	$4.121
1/16/12	$3.854	$3.943	$4.076	$4.031	$3.853	$3.746	$3.777	$3.823	$4.037	$4.116
1/9/12	$3.828	$3.908	$4.029	$3.996	$3.820	$3.717	$3.750	$3.843	$4.026	$4.111
1/2/12	$3.783	$3.844	$3.973	$3.932	$3.754	$3.683	$3.709	$3.836	$3.979	$4.046

Natural Gas Support a Mixed Bag, Study Says

2012-05-18T09:16:00.001-04:00

Natural Gas Support a Mixed Bag, Study Says

Natural gas in the trucking industry has a high level of awareness, but carriers still recognize obstacles, says a new study from PLS Logistics Services.

"The survey results appear to be a mixed bag for natural gas supporters," says PLS Chairman and CEO Greg Burns. "On the one hand, LNG (liquified natural gas) is clearly on the radar and is being actively evaluated by some of the largest trucking companies in the industrial sector. On the other hand, less than 10% of senior executives currently believe LNG will be widely adopted of over-the-road trucking."

To determine the potential of LNG vehicle use for industrial freight (any type of heavy load for the industrial manufacturing sector, including industries such as metals, oil and gas, mining, building/construction materials and automotive), PLS Logistics surveyed senior executives at 100 industrial freight carriers. Most carriers surveyed had a fleet size over 50 power units.

Although respondents were generally aware of LNG-powered vehicles, 72% felt that the technology had limited adoption potential for industrial freight.

Survey results also indicated that carriers are under no pressure from customers to move toward cleaner LNG vehicles. Just 3% of carriers say that their customers are actively promoting adoption by their carrier base.

With predicted adoption rates low, survey respondents were asked about the primary barriers to adoption. Topping the list, at 53.6%, was the inadequacy of the LNG refueling infrastructure. As of February 2012, there were just 46 public LNG stations across the U.S., according to the U.S. Department of Energy.

Clean Energy Fuels has raised $450 million and plans to build 150 LNG stations along what it calls "America's natural gas highway" - a pre-defined corridor of heavy volume freight traffic. The goal of the project, done in partnership with Pilot Flying J travel centers, is to establish stations 250-300 miles apart.

The next biggest barrier to adoption (23.2%) was the higher cost of LNG vehicles, currently $30,000-$50,000 more than diesel.

Incentives are being discussed to mitigate this increased capital expense. In January, Clean Energy and Navistar announced a partnership to provide leases that effectively eliminate the equipment cost differential if the carrier signs a long-term fuel agreement with Clean Energy. The fuel would be purchased at a guaranteed minimum discount to diesel.

Currently, there are bills in both the House and Senate that promote tax incentives for the purchase of LNG vehicles, and President Obama has announced his support for the legislation.

The U.S. is producing natural gas at record rates. Production from shale alone is expected to increase 41% by 2020. This supply increase, combined with lower demand due to the warm winter in 2012, has driven natural gas prices to a 10-year low.

Freight Volumes Show Slow But Continued Growth

2012-05-18T09:14:00.001-04:00

Freight Volumes Show Slow But Continued Growth

The freight market continued to grow in April at the slow pace we have experienced for most of the recovery, with North American freight volumes rising 1.9% from March to April, according to the Cass Freight Index. Spending on freight transportation grew at a faster rate and was up 3.4%.

Shipment volume has been rising steadily since January of this year, although not at a very robust pace. April's 1.9% increase is lower than the increases in March and February, 2.1% and 2.5% respectively. Although still positive, the rate of growth declined in both March and April. April's sequential growth is a scant 0.2% higher than April a year ago.

Cass analysts point out that Truck tonnage has been trending upward in the American Trucking Associations' Truck Tonnage Index, but length of haul has been declining; therefore on a ton‐mile basis, truck freight has actually been flat or even contracting slightly. The boom in shale oil and gas drilling, or fracking, caused a significant portion of the rise in truck tonnage. Thousands of trucks of sand, pipe and water are being moved by truck to the wells throughout the shale plays in the U.S.

April Freight Expenditures

Overall freight spending in April was 5.1% higher than a year ago, Cass reports. The 3.4% month-to-month increase shows continued strength in rates as capacity closely matches demand, especially in the trucking sector. Much of the strength in rates comes from contract rates that were negotiated early last year anticipating a faster economic growth rate and capacity issues, which were expected to cause a spike in rates.

Comparing the increase in freight costs to the growth in freight shipments shows that payments are again rising faster than volume, Cass notes. Since operating costs for truck carriers have been steady, this translates to a better bottom line.

"This tenuous balance in the trucking sector between demand and supply will be easily undone if freight volumes pick up," the report notes. "The 20% loss of capacity and the productivity losses due to new regulations will be felt quickly. Many in the sector have turned to an asset‐light model, and capacity will not be able to be added quickly. Indeed few carriers have indicated that they intend to expand their fleets."

Domestic Intermodal Container Volume Surges 14.9% in First Quarter

2012-05-18T09:13:00.001-04:00

Domestic Intermodal Container Volume Surges 14.9% in First Quarter

Domestic container volume gained a "remarkable" 14.9% in the first quarter compared to a year ago, according to the Intermodal Association of North America's Intermodal Market Trends & Statistics report.

Although a rebounding economy helped boost volume, much of Q1's domestic intermodal gains can be attributed to market share growth, as trucking capacity was tight during the quarter and diesel prices resumed their rise after softening in Q4 2011. Domestic container gains were biggest in the East, where intermodal faces more competition from trucking.

International volume increased 2.9%, a gain that on the surface pales in comparison to the strength of domestic containers. Yet a closer look at the numbers suggests that international intermodal's Q1 performance was actually much stronger than the year-over year growth rate would suggest, according to IAA analysts. International intermodal shipments advanced 9.6% in Q1 2011. This strong performance was driven by the need for retailers to replenish inventories after a better-than-expected holiday sales season. The booming growth in the first quarter of 2011 has made comparisons more challenging for Q1 2012.

Trailer-on-flatcar shipments fell 6.9% year-over-year in the quarter, and again, part of the decline is due to stronger comparisons - in Q1 2011, trailers gained a robust 7.4%. However, with containers close to 90% of the market, overall intermodal volume gained an impressive 5.8% during this quarter. Domestic container gains may slow in coming months as comparisons to the previous year become more competitive, but international growth will likely accelerate. Overall, container shipments should maintain their strong growth rate through the year.

Safety Board Highlights Dangers of Hose-Chemical Incompatibility

2012-05-18T09:12:00.000-04:00

Safety Board Highlights Dangers of Hose-Chemical Incompatibility

The National Transportation Safety Board has asked the Department of Transportation to warn trucking companies about the dangers of not using the right hoses for the right chemicals, after determining that the use of a cargo hose assembly that was not chemically compatible with anhydrous ammonia caused a fatal 2009 accident.

On July 15, 2009, a cargo transfer hose ruptured shortly after transfer of anhydrous ammonia began from a Werner Transportation cargo tank truck to a storage tank at the Tanner Industries facility in Swansea, S.C.

A white cloud of anhydrous ammonia, which is toxic when inhaled, moved from the parking lot across U.S. Highway 321 to a largely wooded area. A motorist drove into the ammonia cloud, apparently tried to get away from the cloud, then got out of her car and died of ammonia poisoning.

Fourteen people experienced minor respiratory problems or dizziness; seven were taken to the hospital and treated and released the same day.

NTSB investigators determined that the probable cause of the accident was Werner's use of a cargo hose assembly that was designed for liquefied petroleum gas (LPG) transfer only and was not chemically compatible with anhydrous ammonia.

Laboratory testing showed the rupture in the hose started from the inside of the hose, and some of the reinforcing braid fibers were degraded to the point where they were brittle and would crumble when gently probed.

Investigators discovered that the hose was not assigned to the trailer in the incident. It appears that somehow the anhydrous-ammonia hose originally on the trailer was exchanged with the LPG hose from another trailer while both trailers were stored on the same secure lot in Tampa, Fla., for several hours on May 17.

As a result of the investigation, NTSB issued a joint recommendation to the DOT's Federal Motor Carrier Safety Administration and Pipeline and Hazardous Materials Safety Administration to "jointly issue a safety advisory bulletin to inform cargo tank motor vehicle owners and operators, registered inspectors of these vehicles, and transfer facility operators about the circumstances of this accident and actions needed to prevent the occurrence of a similar accident."

Crude Oil Pricing

2012-05-18T09:09:00.001-04:00

Crude Oil and Commodity Prices
May, Wednesday 16 2012 - 14:12:26

WTI Crude Oil
$92.50	▼1.48	1.57%
14:19 PM EDT - 2012.05.16

Brent Crude Oil
$111.68	▼0.05	0.04%
14:12 PM EDT - 2012.05.16

Crude Oil Price by OIL-PRICE.NET ©

Price		Change	Trades	Volume
14:19 - $ 92.50		1.48 1.57%	147,803	231,438
Range	Open	52 Wk Range	1 Year Forecast
91.81 - 94.16	93.16	75.92 - 109.95	$106 / Barrel

Logistics: Michelin Offers Retread Tires for On-/Off-Highway - Source HDT

2012-05-16T11:43:00.003-04:00

Logistics:

Michelin Offers Retread Tires for On-/Off-Highway

Michelin Retread Technologies is enabling mixed-use fleets and owner-operators to take on the challenges of on- and off-road applications with the new Michelin XZY3 Pre-Mold retread.

The all-position tread is designed to deliver exceptional wear and durability in on- and off-road use, offering a retread that extends the performance of the popular new tire tread design throughout the casing life, according to the company.

"Retreading is an excellent way for fleets to lower their cost of operation," says Ted Becker, vice president of marketing for Michelin Americas Truck Tires. "The mixed-use application can make retreading challenging to incorporate, because not every retread can perform in a difficult on/off-road environment. The XZY3 retread answers that call to provide application-specific features that promote long casing and tread life."

The XZY3 retread's compound protects against aggression, chipping and cutting, while a center groove bottom protector guards the center channel from any stone drilling and also assists in ejecting any stones or debris from the groove. The tread's four-rib design delivers the traction needed for the tire to operate in soft soil and mud, a regular challenge for tires in the mixed-use environment.

The retread is available in eight sizes - 210, 220, 230, 240, 250, 270, 280 and 290/345. The 290/345 size incorporates a winged tread design into the tread blocks for additional shoulder adhesion in high-scrub applications.

FocusAsia BR downtrend to persist on weak demand, plunging BD prices - Source ICIS NEWS

2012-05-16T11:42:00.002-04:00

FocusAsia BR downtrend to persist on weak demand, plunging BD prices

[Source: ICIS news]

By Helen Yan

SINGAPORE (ICIS)--Asia butadiene rubber (BR) prices look set to fall further, tracking steep declines in values of feedstock butadiene (BD), given continued weakness in demand, industry sources said on Friday.

Spot BR prices shed about 5% or $150-200/tonne (€114-152/tonne) in the week ended 3 May to $3,450-3,500/tonne CFR (cost and freight) northeast (NE) Asia, according to ICIS.

BD values, on the other hand, declined $14% or by $450/tonne in the week ended 27 April to $2,750-2,800/tonne CFR NE Asia, ICIS data showed.

“If the feedstock BD price falls further to below $2,500/tonne, this means that the BR price will follow suit and are likely to drop further to around $3,200/tonne,” a downstream tyre producer said.

BD is a raw material for the production of BR, which, in turn, is used in the manufacture of tyres for the automotive sector.

At current prices, the average BR-BD spread is computed at $700/tonne – at the upper end of the $600-700/tonne range that allows BR producers to generate marginal production margins.

BR may not find support on the demand front because of a general weakness in the global economy – with Europe still mired in a sovereign debt crisis, the US economy still showing weakness and China slowing down.

Consumers across all geographies tend to cut back on car purchases given a weak job market, thereby affecting BR consumption.

“We expect the second quarter to remain soft and do not expect demand to pick up in view of the uncertain global market outlook,” a China-based tyre producer said.

Tyre makers in China, which is a key importer of synthetic rubber in Asia, are mostly running their plants at reduced capacities of 50-60% amid declines in sales in the domestic and export markets.

China ranks as the largest car market in the world, but the country’s first-quarter 2012 auto sales fell 3.4% year on year. For the whole of 2011, car sales recorded a minimal growth of 2.5%, official data showed

“The market is very weak and even though we quote very competitive offers, the Chinese traders and tyre makers are not buying. We have so much stocks to clear and there are no buyers,” a BR trader said.

($1 = €0.76)

Europe BD hit by soft export demand but supported by LPG cracking - Source ICIS News

2012-05-16T11:41:00.001-04:00

Europe BD hit by soft export demand but supported by LPG cracking

[Source: ICIS news]

LONDON (ICIS)—The European butadiene (BD) market is under downward pressure primarily because of soft demand for export tonnes, but this is expected to ease with the start of the liquefied petroluem gas (LPG) cracking season and potential cutbacks in cracker production rates, market sources said on Friday.

The European butadiene market is structurally long and usually relies on demand from both Asia and the US for support.

Plunging spot prices in Asia caused by reduced derivative demand, which in turn has been due to macroeconomic concerns, has left European volumes out in the cold.

Although export prices have mirrored the drop to a certain extent, falling $400/tonne (€304/tonne) in the week ending 27 April to $2,500-2,600/tonne FOB (free on board) ARA (Amsterdam, Rotterdam, Antwerp), European producers have baulked at matching current Asian prices.

The Asian bid-offer range is $2,000-2,500/tonne CFR (cost and freight), according to European sources.

Sources said that US demand has been covered by Brazilian and Korean tonnes, as well as by tonnes contracted from Europe.

“[Its] impossible to sell to Asia at their currrent CFR (cost and freight) prices, [and] challenging to find markets in the USA” a producer said.

Traders said the main issue was trying to find any buying commitments.

“Its not a matter of price, just a matter of finding people to take it” a trader said, adding “commitment first, product second”.

European players have adopted a wait and see attitude, but at this stage no one is predicting any extreme supply BD length which would ensure European spot prices fall further.

Cracker economics favour LPG cracking which produces less of the crude C4 BD feedstock molecule, so where possible, operators are already shifting into a light feedslate.

“I will keep my [tonnes] as we expect more propane cracking” the producer said.

In addition, everyone is well aware of the speculation surrounding cracker operating rates. Many have the view that operators will be forced to cutback in May because of the bearish pressure on key ethylene derivatives, notably polyethylene (PE).

“I have the impression that there is not much length in the market, due to cracker trims and light feed cracking” a second producer said.

“Customers were realistic about this [potential production constraints]” the second producer added, refering to the recent May monthly contract price settlement at €2,250/tonne FD (free delivered) NWE (northwest Europe), a decrease of €25/tonne from April.

The price settlement was described by some as “technically a rollover”, as there had been expectations for a bigger drop.

($1 = €0.76)

DHS: Cyber Attackers Target US Gas Pipelines - Source Global Insight

2012-05-16T11:40:00.001-04:00

DHS: Cyber Attackers Target US Gas Pipelines

by Claudia Mahn Global Insight

May 09, 2012

The United States' natural gas pipelines have been the target of sophisticated "cyber intrusions" since December last year, and the government is working with affected companies to determine if their computer systems have been compromised, remove any infections and harden their networks against re-infection, the Department of Homeland Security has said in a statement.

The attacks were disclosed by the department's Industrial Control Systems Cyber Emergency Response Team (ICS-CERT) in its "monthly monitor" newsletter for April, which described a co-ordinated and tightly focused "spear-phishing" campaign involving e-mails designed to look like internal company communications from trusted sources. ICS-CERT did not disclose whether any pipeline computer systems had been affected by the cyber attacks, but said it had been working since March with "multiple organisations to provide remote and onsite analytic assistance to confirm the compromise, extent of infection, and assist in removing it from networks".

Significance: "Spear-phishing" schemes are selective, generally targeting key individuals in companies or organisations by using e-mails purportedly from those individuals' bosses and including enough specific organisational information to appear authentic. Cyber experts say such schemes are more likely to come from hackers intent on getting specific business secrets or security information.

While it is not clear why gas pipelines would be targeted for cyber attacks, natural gas and electricity lines are increasingly being monitored and operated through interconnected wireless and electronic devices generally known as "supervisory control and data acquisition", or SCADA, systems, some of which are enabled by the internet.

The cyber attacks were disclosed by DHS at a politically sensitive time due to an ongoing partisan fight in Congress over cyber-security legislation. The Republican-controlled House passed legislation on 26 April that emphasises information-sharing and co-operation between the government and operators of key infrastructure to develop appropriate cyber-security measures.

President Barack Obama's administration favours legislation pending in the Democratic-controlled Senate, however, under which the government would set cyber-security standards to be met by the energy industry and other critical infrastructure sectors. Democrats say the cyber-security threat is too serious to let industry decide what expenditures are needed to protect systems critical to national defence. In the meantime, it remains unclear who the hackers are that are targeting US gas transportation infrastructure.

While no allegations of state-backed interruptions have been made so far, the US has threatened military intervention in the past, if a particular state would be found to support cyber-attacks in order to secure trade secrets and other sensitive information from US businesses. Electronic attacks are an example of an asymmetrical warfare techniques designed to offset the conventional superiority of one party to a conflict. Given that the US possesses easily the world's most powerful conventional military force, it is an obvious target for such tactics.