The war began when the United States imposed tariffs on solar panels and washing maches. The United States then put tariffs on steel and aluminium ageing that unfair trade practices threatened American manufacturers
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Cosco Shipping to Sell $947 Million of Orient Overseas Shares
Cosco Shipping Holding Co. plans to sell as much as HK$7.43 billion ($947 million) of shares in Orient Overseas International as part of efforts by China’s biggest container-shipping line to maintain the listing status of the rival it is acquiring.
Three investors agreed to buy each share at HK$78.67 — the same price as the takeover offer for Orient Overseas — and will hold a combined 15.1% of the Hong Kong-based company after the transaction, Cosco Shipping said in a statement July 6. The investors are CK Hutchison Holdings unit Crest Apex Ltd., Chinese state-backed Rongshi International Holding Co., and PSD Investco Inc., a subsidiary of Silk Road Fund.
Cosco Shipping offered $6.3 billion last year to buy Orient Overseas in a deal that would elevate the Chinese group to become the world’s third-biggest container-shipping company.
Global container lines have been consolidating since an excess of capacity and depressed freight rates caused many to rack up losses and also led to the collapse of South Korea’s Hanjin Shipping Co. in 2016.
Port Authorities of Georgia, South Carolina Partner to Tackle Chassis Shortage
The Georgia and South Carolina port authorities are teaming up to ensure that cargo continues to move in the region.
Facing a chassis shortage for trucks, the port authorities have entered an agreement for a Southern States chassis pool.
In the past, ocean carriers provided chassis for their cargo.
“Now all ocean carriers are divested and sold their chassis to private chassis companies,” Griff Lynch said.
Private companies, known as intermodal equipment providers (IEPs), however, aren’t keeping up with port demand, Lynch said.
“The companies say there is no return (on their investment),” Lynch said.
The southern region — from basically Wilmington, N.C., to Savannah, Jacksonville, Fla., and Atlanta and Huntsville, Ala. — currently has about 53,000 chassis.
Soaring Cost of Trucking Threatens to Stoke US Inflation
The tightest trucking market in years is testing the limits of an otherwise well-conditioned U.S. economic expansion. It also is tinder for accelerating inflation should the capacity constraints spark moves by companies to pass on those higher delivery costs.
A shortage of drivers, new regulations and solid demand are driving up rates charged by trucking companies to haul loads over the country’s more than 46,000 miles of interstate highways. Combined with higher materials prices, partly due to the Trump administration’s tariffs, rising transportation costs are putting pressure on goods producers.
“Demand is exceeding capacity in most modes of transportation by a significant amount,” Donald Broughton, managing partner of Broughton Capital, wrote in the Cass Freight Index Report for May. “In turn, pricing power has erupted in those modes to levels that continue to spark overall inflationary concerns in the broader economy.”
Producer-price figures from the Labor Department on Wednesday showed that inflation continued to build in the sector last month, with general long-distance freight trucking costs advancing 9.4% in June from a year earlier. That was the largest year-over-year increase in nearly a decade. The broader producer-price index was up 3.4%, the most since November 2011.
USDOT announces pilot program to allow under-21 drivers with military CDL
Following through on a mandated requirement as part of the FAST Act, the U.S. Department of Transportation will formerly announce a pilot program designed to transition military members into truck driving careers in interstate commerce.
The program, to be published in the Federal Register on Thursday, will allow 18- to 20-year olds who possess the U.S. Military equivalent of a commercial driver’s license (CDL) to operate large trucks in interstate commerce, USDOT said.
“This program will allow our Veterans and Reservists, to translate their extensive training into good-paying jobs operating commercial vehicles safely across the country, while also addressing the nationwide driver shortage,” said Elaine Chao, U.S. Secretary of Transportation.
The program was manded by Section 5404 of the Fixing America’s Surface Transportation (FAST) Act.
Under the pilot, candidates must be sponsored by a participating trucking company. The program pushes the industry one step closer to its goal of opening the doors to those under 21 to legally transport goods across state lines. Currently, CDL holders must be over 21 to cross state lines, but those under 21 can move goods within state borders, creating an odd situation for trucking companies. It’s possible under the current rules for a 19-year-old to drive an 80,000-pound truck 500 miles within a state’s border, but theoretically drive that same truck 4 miles in the opposite direction and break the law.
Even Amazon’s Feeling the Strain From Insatiable Delivery Demand
Amazon.com Inc.’s call for entrepreneurs to help expand its package-delivery network is a cry for help.
The online retailer’s Prime service, offering free two-day shipping on many goods for $119 a year, is spurring annual growth of 25% on product sales. As other retailers also fuel the surge of e-commerce, UPS Inc., FedEx Corp. and the U.S. Postal Service are straining under the load.
UPS ranks No. 1 and FedEx No. 2 on the Transport Topics Top 100 list of the largest North American for-hire carriers.
Enter Amazon’s new effort to expand its capacity to drop off packages at customers’ homes. The company envisions hundreds of small contractors employing thousands of drivers across the U.S. What remains to be seen is whether such would-be delivery impresarios can fill the seats of vans emblazoned with Amazon’s logo — especially in a tight labor market.
“The Amazon business model of delivering to your doorstep is under pressure,’’ said Marc Wulfraat, president of MWPVL International, a logistics consulting firm. “This is a signal that they’re actually very starved for resources to get this type of work done.’’
Trump to OPEC: ‘Reduce pricing now!’
WASHINGTON (Reuters) – U.S. President Donald Trump again accused the Organization of the Petroleum Exporting Countries of driving gasoline prices higher on Wednesday and urged the oil producer group to do more.
“The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $’s. This must be a two way street. REDUCE PRICING NOW!” Trump wrote on Twitter.
Drone Deliveries Become Reality as China Races to Take the Lead
The day after Chinese e-commerce giant JD.com Inc.’s midyear sale, a company drone took off from a playground in the city of Xi’an to deliver one of the orders in a football-sized box to a village in the mountains to the south.
The six-rotor craft is one of about 40 JD.com designed to cut delivery times for items such as smartphones and food to remote areas where land transport is too expensive or slow.
JD.com is racing companies from across the world to develop unmanned aerial vehicles with the strength, range and reliability to deliver goods on a large scale and solve the expensive “last-mile” problem for couriers. What sets China’s efforts apart is its ability to assemble all the other parts needed for drone deliveries, including the regulations, infrastructure and the world’s biggest e-commerce market.
And to make all those work together, it needs data.
So last year, the Civil Aviation Administration of China (CAAC) gave the go-ahead for JD.com and SF Holding Co., the country’s biggest express-delivery company, to start sending packages by drone in certain rural areas.
Why is Chicago overheated on Outbound and Inbound Turndowns?
They don’t call it the Windy City for nothing. The stuff that is blowing in right now is expensive—and strangely, rates going out are elevated as well. The aberration is that both are high. The question is why?
Chicago is the top U.S. freight hub. Usually, it’s a beautiful spot. Long haulers love going to Chicago because they know they can always find freight to bring out after they’ve brought a load in. There should be plenty of capacity in Chicago generally at all times, especially as it’s a hub from so many directions. It has a lot of points of consolidation, and it often also flows out of Chicago in a lot of directions. When you have a lot of turndowns in Chicago, it’s basically because you don’t have the trucks there.
SONAR’s Outbound Tender Rejection Index (OTRI) has gone up to 20.88% in the past 9 days. The fact that Chicago is outpacing the market is significant. In the wintertime this would make sense. In the summertime, however, there’s a lot of activity. The bottom line is that truckers don’t turn down freight when it’s scarce. And as you’ve probably heard the entire year of 2018, there is a lot of freight. So why, when capacity is so tight, is Chicago of all places overheated?
U.S. ports predict volume reduction from tariff impact
Leaders at big U.S. seaports report escalating global trade tensions could drive down cargo volumes at the gateways and hit jobs and businesses that depend on the flow of goods across supply chains, according to the Wall Street Journal. Economists say the impact could spread beyond the specific categories of imports and exports that may be subject to tariffs.
Gene Seroka, executive director of the Port of Los Angeles, said the tariffs recently enacted or proposed by the U.S. and its trading partners would affect 15% of all cargo that moves through Los Angeles, the nation’s largest container port.
Last year, Chinese trading partners accounted for $145 billion in import and export trade at the port, more than half of the port’s total of $284 billion. Based on a staff analysis, Seroka said 59% of that trade could be subject to new tariffs.