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The cost of operating a truck averaged $1.69 per mile, a 6% increase in 2017 according to a report released Oct. 2 by the American Transportation Research Institute.

ATRI said with economic activity improving in 2017, the cost of running a truck jumped in all of the major line-item areas, including driver wages and benefits, fuel, vehicle leasing or purchase payments, permits, licenses and tolls, repair and maintenance, and insurance premiums.

The per-mile figure is up 10 cents from $1.59 in 2016. When ATRI began analyzing operational expenses in 2009, the cost was $1.45 per mile. Broken down hourly, the report said it cost $66.65 per hour to operate a truck in 2017, compared with $63.66 in 2016 and $58 in 2009.

On a percentage basis, driver salaries, benefits and bonuses account for 43% of the cost of operating a truck, fuel is 22%, lease and truck payments make up 16%, and repairs and maintenance are 10%. Other costs including vehicle insurance, permits, tolls and tires make up the remaining 9%.

The report said fuel prices rebounded in 2017 from decade lows, and the growing sophistication of newer truck models continues to push up costs for purchasing as well as repair and maintenance.

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An effort to put a tax on carbon dioxide emissions just won an unlikely underwriter: a top producer of oil and gas.

Exxon Mobil Corp. is putting $1 million into a political campaign that, if successful, would effectively spawn a tax tied to the company’s core products.

The move is consistent with Exxon’s long-standing support for a price on carbon dioxide, imposed instead of an array of environmental regulations that already elevate the cost of fossil fuels. But it marks the first such contribution by a major oil company to the effort, known as Americans for Carbon Dividends.

With Exxon’s donation, the biggest U.S. oil company is joining the nation’s largest nuclear power generator and major renewable energy boosters in bankrolling the political campaign to put a tax on emissions, with revenue the levy raises redistributed to U.S. households.

“This is the first time a U.S. oil and gas super major is putting real money behind a carbon pricing effort; it’s just never been done before,” said Ted Halstead, CEO of the Climate Leadership Council, which developed the underlying plan. “A million-dollar gift is not small money for this type of thing.”

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Intermodal carriers are seeing the best volumes in years, thanks to tight supply in over-the-road trucking. But the rate of growth will ebb as the truck market returns to more normal levels, says an industry expert.

In a a conference call hosted by Stifel, Gross Transportation Consulting principal Larry Gross said North America is past the peak of the trucking shortage, with the upshot being that the growth in truck rates will moderate.

“Going forward the industry is in the process of correcting and adding the people and adding drivers, Gross said.

“The industry is going to get their driver cohort right sized, which is not to say that it’s going to be easy to recruit drivers, but it won’t continue to be as difficult and and wages will continue to have to go up but not to the extent that we’ve seen recently,” he added.

As reported in FreightWaves earlier today, employment in truck transportation rose for the fifth consecutive month, adding 4,900 to the payrolls in September, with the rate of change accelerating from a year ago.

Trucking rates peaked at 20% year-on-year growth earlier this year, Gross said. But thanks to the addition of more drivers, the rate of that growth will moderate next year with rates showing growth of 5% or below next year.

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MIAMI — Residents of Florida’s Panhandle frantically filled sandbags, boarded up homes and secured boats Oct. 8 as they anxiously awaited Hurricane Michael, which forecasters warned could smash into the state’s Gulf Coast as a dangerous major hurricane within days.

Fueled by warm tropical waters, Michael gained new strength by nightfall and could reach major hurricane status with winds topping 111 mph before its anticipated landfall Oct. 10 on the Panhandle or Big Bend area of Florida, forecasters warn.

Florida Gov. Rick Scott called Michael a “monstrous hurricane” with a devastating potential from high winds, storm surge and heavy rains.

Scott declared a state of emergency for 35 Florida counties from the Panhandle to Tampa Bay, activated hundreds of Florida National Guard members and waived tolls to encourage those near the coast to evacuate inland. Scott also said Oct. 8 that state health officials are reaching out to hospitals and nursing homes to be prepared. After Hurricane Irma last year, 14 people died when a South Florida nursing home lost power and air conditioning.

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Liquefied natural gas shipping costs will increase, driven by rising charter rates, higher fuel costs and the growth in interbasin trade flows, according to estimations by Fitch Solutions Macro Research.

“From 2019, the increase in tanker capacity looks set to lag the growth in demand. Industry projections show a mounting capacity deficit over the next five years, with a global deficit in LNG carriers in the range of 50 to 60 vessels forecast for 2022,” the report obtained by Trend said.

The shipping sector is highly cyclical, and a structural deficit and accompanying rise in charter rates will incentivize investment in newbuild capacity, according to the company.

“Due to the relatively long lead times involved [typically ranging from two to five years ], this capacity will not hit the market until the early to mid-2020s. In the interim, charter rates will roam higher as demand increasingly outstrips supply,” the report said.

Fitch Solutions says that besides rising charter rates, higher fuel prices and interbasin trade growth will combine to drive shipping costs higher over the coming years.

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The U.S. average retail price of diesel spiked 4.2 cents to $3.313 a gallon as oil prices climbed to levels not seen in four years.

It was the sixth consecutive weekly increase, and trucking’s primary fuel has risen 10.6 cents since Aug. 20.

Diesel costs 52.1 cents a gallon more than it did a year ago, when the price was $2.792, the Department of Energy said Oct. 1.

The average price was up in all regions, and highest in California, where it pushed past $4 a gallon to $4.038.

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CSX (NASDAQ: CSX) has taken steps to significantly upgrade its intermodal offerings out of its terminal in northwest Ohio.

Both CSX and BNSF announced Tuesday that they had reached agreement that would allow intermodal service on BNSF out of the ports of Los Angeles & Long Beach to be hauled directly into the CSX terminal in North Baltimore, Ohio. The service will be five days a week and run both eastbound and westbound.

A BNSF spokeswoman said the service would continue to run through Chicago, which is the easternmost point of the BNSF intermodal system. But there won’t need to move containers from the BNSF terminal in Chicago to that of CSX. Intermodal consultant Brian Bowers (who is on the Board of Advisors of FreightWaves) said that transfer now needed to be undertaken by truck.

“The beauty of this is that the one train stays intact as it goes railroad to railroad and it won’t get grounded in Chicago,” Bowers said. “It won’t get delayed and all this handling doesn’t need to occur.”

The service commences October 29.

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Elon Musk will give up the role of Tesla Inc. chairman and pay a $20 million penalty to settle fraud charges brought by the U.S. over his claims about taking the company private.

Musk will get to keep his job as chief executive officer and remain on the company’s board, but must resign as chairman within 45 days and can’t be re-elected to the role for three years as part of the accord reached Sept. 29 with the Securities and Exchange Commission. Tesla also will pay a $20 million fine.

Neither Tesla nor Musk admitted wrongdoing under the settlement, which was reached two days after the regulator sued the billionaire over his tweeted claims to have had the funding and investor support to buy out stockholders at $420 a share.

The deal eases uncertainty over Tesla’s future while removing Musk from a key role at the automaker he’s led to become one of the most valuable in the world. The SEC’s lawsuit had sought to bar Musk from serving as an officer or director of a public company, a prospect that rattled investors. Tesla shares plummeted 14% Sept. 28, the biggest drop in almost five years.

“This is a good resolution for Tesla stakeholders,” Ben Kallo, an analyst at Robert W. Baird & Co. with the equivalent of a buy rating on the shares, said in an e-mail. “I expect the stock to trade materially higher on this and into the quarter where we can focus on the fundamentals.”

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A campaign bankrolled by the oil industry has raised $20.46 million to defeat a carbon-pollution fee on the ballot in Washington state aiming at tackling climate change.

The money raised so far by the “No on 1631” campaign sponsored by the Western States Petroleum Association, an oil industry trade group, puts it near the top in fundraising efforts by a statewide initiative campaign in Washington, according to a review of state campaign finance data by the Associated Press.

The state record of $22.45 million was set in 2013 by the “No on 522” committee, which successfully defeated a ballot measure requiring labels on food with genetically engineered ingredients.

If approved by voters Nov. 6, Initiative 1631 would make Washington the first state in the United States to impose a direct carbon fee or tax by voter initiative.

The initiative would charge large carbon emitters fees on fossil fuels used or sold in the state or electricity generated within the state. The fees would raise an estimated $2.3 billion in the first five years to fund a wide range of programs intended at cutting greenhouse gas emissions.

Oil companies have given the bulk of opposition money, with Phillips 66 the top donor at $7.2 million.

“This costly and flawed initiative would create damaging policies for our state and unfairly hurt Washington’s families, small businesses and our economy,” said Dennis Nuss, a spokesman with Phillips 66, which operates an oil refinery in Ferndale.

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LONG BEACH, Calif. — The intermodal and third-party logistics industries are experiencing growth that is running parallel to the strength of the economy.

Joni Casey, executive director of the Intermodal Association of North America, said intermodal volumes were at 12.6 million loads through August, up about 7% year-to-date over last year.

Casey made the remarks here at IANA’s Intermodal Expo 2018, before more than 2,000 representatives of the transportation and intermodal communities.

“We’re meeting at a time of economic growth. GDP and consumer spending are up. This translates into more freight and bodes well for intermodal volumes,” Casey said.

Bill Strauss, senior economist and economic adviser with the Federal Reserve Bank of Chicago, told attendees the economy is in its 10th year of expansion and has been growing at a rate of 2.3% since 2009. If growth continues through July 2019, “it will get us to a new record level of expansion,” he said.

The third-party logistics sector is also experiencing growth, and Evan Armstrong, president of Armstrong & Associates, estimates the global 3PL market will grow to $968 billion this year. That compares with $869 billion last year.

 

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