Unitrans Newsletter | Edition 19 | April 03, 2015
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In Edition 19:
West Coast Update
Airfreight Demand Increase
First LNG-Powered Container Ship to Launch This Month
Port of Virginia Update
Truck Driver Shortage
Suez Canal Expansion

Links of the Week

January 2015 North American Freight Numbers

February 2015 Trade Deficit Decreases

 

West Coast Update

On Monday, March 30, ninety International Longshore and Warehouse Union (ILWU) delegates began the highly anticipated ILWU caucus in San Francisco to review the tentative five-year labor contract agreement. The delegates, consisting of elected members of the rank and file, will decide whether to recommend or reject the proposal to the full ILWU membership. If the majority of delegates vote to recommend the tentative contract, the 20,000 ILWU members at 29 West Coast ports will vote by secret ballot later this month.

The Marine Exchange of Southern California reported a decrease in the number of vessels at anchor in the San Pedro Bay this week. The Marine Exchange announced that only nine container ships were at anchor on Tuesday and Wednesday, the lowest number in two and a half months. Additionally, the Port of Long Beach has added a daily vessel report to its website in an effort to alleviate congestion, increase transparency and improve supply chain efficiency at the nation's largest port complex. The report shows all vessels at berth and anchor within the port, as well as their arrival and departure dates and length of stay in Long Beach.

TRAC Intermodal is forming its own chassis pool in Southern California, joining the "pool of pools", which commenced on March 1. "Effective May 1, TRAC Intermodal is transferring its chassis currently contributed to the GACP (Grand Alliance Chassis Pool) and LABP (Los Angeles Basin Pool) chassis pools into our TPSP (Trans-Pacific Southwest Pool). The TPSP will then be added to the pool of pools," the company stated in a release. "Chassis will be available at all the same locations as they are today, and can be returned to all the same locations they are today."

Early 2015 Airfreight Demand Increase

On Wednesday, April 1, the International Air Transport Association (IATA) released February data for global air freight markets showing a sharp increase in year-on-year air freight volumes. Growth measured by freight ton kilometers (FTK) was up 11.7% in February 2015, compared to the same period in 2014. The cause of the spike was linked to an earlier Lunar New Year shipment rush, with a boost of freight activity in the weeks leading up to the holiday. In addition, air freight volumes were enhanced by the consequences of congestion at US West Coast ports.

First LNG-Powered Container Ship to Launch This Month

TOTE Inc. has announced an April 18 launch date for its first LNG (liquefied natural gas) fueled container ship, which will be operated by Sea Star Line between Jacksonville, Florida, and San Juan, Puerto Rico. The construction of the 3,100 TEU vessel is currently taking place in San Diego. TOTE says the new vessel will emit 97 percent less sulfur dioxide, 98 percent less particulate matter, 60 percent less nitrogen oxide and 72 percent less carbon dioxide than its existing Puerto Rico ships. Other ocean carriers, such as United Arab Shipping Co and Crowley Liner Services, have also recently begun construction of LNG-powered ships. The shift in construction to LNG-powered vessels is in response to new emission control standards under the International Maritime Organization's MARPOL Annex VI. The global sulfur cap will be reduced from the current rate of 3.50% to 0.50%, scheduled to take effect on January 1, 2020.

Port of Virginia Update

On Tuesday, March 31, the Virginia Port Authority broke ground on a new rail cargo yard at Virginia International Gateway (VIG) which is expected to be completed in June. The new rail cargo yard will separate rail and truck containers at the facility. The added capacity is expected to improve the efficiency of semi-automated stacking cranes in the main yard and help improve dwell times for rail traffic because less sorting of containers will be required. The port has also moved three rubber-tire gantry cranes from Norfolk International Terminals (NIT) across the Elizabeth River to Portsmouth Marine Terminal (PMT). Additionally, as of Tuesday, the port received 95 additional chassis, with 15 already inserted into the Hampton Roads Chassis II pool. Officials plan to increase the size of the chassis fleet by 400 units before the end of April.

Truck Driver Shortage

According to data released by the American Trucking Association (ATA) this week, the U.S. truck driver shortage is getting worse, despite increases in driver pay and retention efforts. "The driver shortage - which we now estimate to be between 35,000 to 40,000 drivers - is getting more pervasive in the truckload sector," ATA Chief Economist Bob Costello said. "Due to growing freight volumes, regulatory pressures and normal attrition, we expect the problem to get worse in the near term as the industry works to find solutions to the shortage."

The driver turnover rate is a measure of how many truck drivers a carrier must replace on an annual basis to maintain a constant driver pool. A 100 percent turnover rate means a trucking company is replacing the equivalent of its entire driver pool each year. The driver turnover rate at large truckload companies has remained at 90 percent or higher since 2012. The turnover rate weighed in at 96 percent at the end of 2014, reflecting a 5 percent year-over-year increase. Watch Bob Costello discuss the driver shortage here.

Suez Canal Expansion

On Monday, the Egyptian Prime Minister, Ibrahim Mahlab, confirmed the government will meet its goal of completing the $4 billion widening of the Suez Canal within a year. The project will allow vessels to travel in both directions of the waterway instead of having to convoy one way at a time as they currently do. The Egyptian government stated that the widening of the canal will reduce delays and equip the canal for future growth in vessel traffic.


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