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Latest News Feb 19, 2013

Diesel prices head up 8.2 cents to $4.104 per gallon, reports EIA

Feb 12, 2013

Following a 9.5 cent gain a week ago, the average price per gallon for diesel fuel increased 8.2 cents to $4.104 per gallon this week, according to the Department of Energy’s Energy Information Administration (EIA). This represents the highest level for diesel prices since it hit $4.116 per gallon the week of October 22. And over the last two weeks, prices have risen a cumulative 17.7 cents, and over the last four weeks, they have gone up 22 cents, according to EIA data.

Prior to last week, diesel prices had been below the $4 per gallon mark for eight consecutive weeks. The average price per gallon is up 16.1 cents compared to a year ago at this time. In its recently updated short-term energy outlook, the EIA is calling for diesel prices to average $3.84 in 2013, with WTI crude oil is expected to average $88.38 in 2013.

Survey: ‘Positive Signs’ for Truck, Trailer Purchases

Journal of Commerce | Feb 05, 2013

CK Commercial Vehicle Research’s first quarter of 2013 Fleet Sentiment Report , which surveyed 64 U.S. fleet operators, showed “positive signs” for medium and heavy duty commercial truck and trailer purchases. The FSR Buying Index, which captures overall planned buying activity for the next three months, has risen above the 100 benchmark for the first time since the inception of the index in the first quarter of 2008. The survey found that the majority of fleets have sufficient demand to meet their capacity, but 43 percent are affected by a shortage of drivers for current equipment.

January U.S. Imports Up 6.9 Percent from December

Zepol Corporation | Feb 15, 2013

U.S. vessel imports are up from December by 6.9% and just above January of 2012 by 0.1%. The total TEU count for January was 1,518,851 and shipments were over 750,000. January imports have not been this high since 2007, which signals some steady rebounding growth for 2013.

“This year may be a repeat of 2012 in terms of import growth,” says U.S. trade expert and CEO of Zepol Paul Rasmussen, “We didn’t see a dramatic move from 2011 to 2012, and so far in January, the numbers aren’t surprising. I think modest increases can be expected this year as we continue the slow bounce-back from the recession. Quick Stats for U.S. Imports in January of 2013:

Exporting Countries – U.S. imports from Asia increased this month by 11.5%, but actually decreased from Europe by almost 11%. China and South Korea contributed to the majority of this increase, both rising by nearly 13%. Germany and Italy, the top exporting countries to the United States from Europe, can be attributed to much of the continent’s decrease in January. Both countries dropped from December TEUs by 17.7% and 16.9%, respectively.

U.S. Ports – Due to the increase in Asian exports, the nation’s busiest ports, Los Angeles and Long Beach, both posted high increases in TEUs from last month by over 11%. The Port of Newark/New York, the third largest port, only had a slight increase in traffic by 0.7%. Other notable increases were seen from the Port of Savannah by 10.7% and the Port of Seattle by 20.6%.

Carriers – As for cargo vessels, nine of the top ten carriers increased in traffic in January. Maersk Line rose in TEUs by 11.4% and similarly APL Co. increased by 11.7%. Other increases were seen from Mediterranean Shipping Company and Hanjin Shipping Company, which both rose 9.3% and 6.7%. Evergreen line was the only top-ten carrier to decrease from December by a slight 2%.

Zepol’s data is derived from bills of lading entered into U.S. Customs and Border Protection’s Automated Commercial Environment.

Less Is More: Office Depot Cuts Supply-Chain Waste

SupplyChainBrain | Feb 15, 2013

Brent Beabout, senior vice president of supply chain with Office Depot, describes how the company slashed packaging waste by switching from corrugated cardboard to paper bags for deliveries to consumers and business. A finalist in the Supply Chain Innovation of the Year competition.

Most corporate customers were accustomed to receiving Office Depot product in boxes made of corrugated cardboard, Beabout says. But the practice was resulting in large amounts of packaging waste, and needed to be revised. So Office Depot came up with the idea of placing smaller items in paper bags, which would then be delivered in plastic, reusable totes. The bags themselves are made of recycled waste materials.

In addition to pioneering a green solution for door-to-door delivery, Office Depot found itself saving money on corrugated materials and the air pillows that previously protected goods from damage in transit.

Port Tracker report calls for 8.5 percent annual volume gains in February

By Jeff Berman, Group News Editor | Logistics Management Editorial | Feb 11, 2013

Total 2012 volume of 15.8 million TEU was up 2.9 percent over 2011. Citing a tentative labor contract deal recently reached at East Coast and Gulf Coast ports and uncertainty regarding West Coast ports labor negotiations, the most recent edition of the Port Tracker report from the National Retail Federation (NRF) and Hackett Associates is calling for February import cargo volume at major United States-based retail container ports to increase 8.5 percent annually. According to the report, 1.32 million TEU (Twenty-foot Equivalent Units) were handled in December for the ports followed by Port Tracker, which represented a 2.8 percent gain from November and an 8 percent gain from December 2011. With December’s tally, 2012 had a total of 15.8 million TEU for a 2.9 percent increase over 2011.

The ports surveyed in the report include: Los Angeles/Long Beach, Oakland, Tacoma, Seattle, Houston, New York/New Jersey, Hampton Roads, Charleston, and Savannah, Miami, and Fort Lauderdale, Fla.-based Port Everglades. The report estimates January volumes at 1.34 million TEU for a 4.6 percent annual gain, with February forecasted at 1.18 million TEU for an 8.5 percent bump. March is expected to increase by 3.6 percent at 1.29 million TEU, and April is expected to head up 4.4 percent at 1.36 million TEU. May and June are pegged at 1.45 million TEU each, respectively, for 4.4 percent and 4.9 percent annual increases

Report says Port of Los Angeles and Port of Long Beach clerical workers nix contract agreement

Logistics Management | Feb 15, 2013

Roughly six weeks after teams representing employers at the ports of Los Angeles (POLA) and Long Beach POLB) and the International Longshore and Warehouse Union Local 63 Office Clerical Unit (“OCU”) ended an eight-day strike in the form of a tentative agreement. Even though the contract proposal was rejected the report said business remained open at the ports, with officials at both ports urging the Harbor Employees Association and the ILWU Local 63 OCU Clerical Unit to return to the table and hammer out an agreement.

Supply Chain Managers Must Continue to Deal With Modest Gains in Productivity

Patrick Burnson, Executive Editor | Feb 11, 2013 – SCMR Editorial

Despite all the fears over the fiscal cliff, employers added an average of 201,000 jobs per month, compared with 152,000 in the third quarter. Real GDP contracted, however, in part due to massive but temporary corrections in defense spending and inventories. In its preliminary fourth quarter “Report on Productivity and Labor Costs,” IHS Global Insight U.S. economists suggest that both hiring and productivity will move upward…but at a snail’s pace. “The expiry of the payroll tax cut and other headwinds have left further acceleration in employment growth over the next few months unlikely,” said economist, Erik Johnson. “But the underlying fundamentals in the economy are trending upward, and 2013’s employment growth should at least match 2012’s.

Deloitte Survey: Executives Face Growing Threats to Their Supply Chains

Patrick Burnson, Executive Editor | Feb 11, 2013 – SCMR Editorial

As they operate in this environment of escalating risk, an alarming 45 percent of surveyed executives say their supply chain risk management programs are only somewhat effective or not effective at all.

“Supply chains are increasingly complex, and their interlinked, global nature makes them vulnerable to a range of risks,” said Kelly Marchese, principal, Deloitte Consulting LLP, who specializes in manufacturing operations and supply chain strategy. “This increased complexity, coupled with a greater frequency of disruptive events such as geopolitical events and natural disasters, presents a precarious situation for companies without solid risk management programs in place.” According to the global survey of 600 executives, supply chain disruptions are not only more frequent, they are also having a larger negative impact. Among the findings:

More than half (53 percent) of executives said that supply chain disruptions have become more costly over the last three years.

Executives from the technology, industrial products and diversified manufacturing sectors were most likely to report that supply chain disruptions have become more costly.

Nearly half (48 percent) of executives said the frequency of risk events that had negative outcomes – such as sudden demand change or margin erosion—has increased over the last three years.

Margin erosion is considered the most costly outcome of supply chain disruptions, with 53 percent citing it as one of their top two issues. Consumer products, diversified manufacturing and energy companies were especially likely to report margin erosion as one of their most costly issues. Executives surveyed recognize the strategic importance of supply chain risk, with 71 percent responding that supply chain risk is an important factor in their strategic decision-making. Nearly two-thirds (64 percent) claim to have in place a risk management program specific to the supply chain.

However, only 55 percent of surveyed executives think their risk management programs are extremely or very effective. The top two challenges according to executives surveyed were “lack of acceptable cross-functional collaboration” (32 percent), followed by “cost of implementing risk management strategies” (26 percent). There are also organizational factors making effective supply chain risk more difficult: Three-quarters (75 percent) of executives said their supply chain risk management model is organized around silos, which can lead to a lack of supply chain visibility and collaboration, and make it difficult to assess and manage risk on a holistic basis.

CSX scratches speed increase through Indiana city

Monday, Febr 18, 2013

CSX Transportation has reversed its decision to double train speeds to 60 mph through downtown Muncie, Ind. , after the city’s mayor complained about the risk of more accidents at street crossings, according to a recent article in The Star-Press newspaper.