Industry News

Released: August 17, 2010

NASSTRAC Executive Committee Meets in Philadelphia
NASSTRAC's leadership team met in Philadelphia last week to discuss priorities for the association in the remainder of 2010 and to identify goals and objectives for 2011. The focus for NASSTRAC remains to be growing more membership with beneficial owners of freight, particularly in the manufacturing and retail sectors, as well as with carriers of all modes. In addition, leadership identified some of the top issues and challenges that shippers currently face to be: global/international challenges, practices in air cargo, spot market challenges and rate increases, security and risk in the supply chain, cold chain issues, the anti-truck rhetoric that currently is coming out of Washington, CSA 2010 and hours of service, congestion and infrastructure, and service level failures. One shipper put it succinctly: "We may need to learn how to deal with a new reality and that is, in transportation, we may very well be forced to pay more and get less."

Diesel Drops 1.2 Cents to $2.979 in First Decline in Recent Weeks
Diesel declined for the first time in four weeks, dipping 1.2 cents to $2.979 a gallon, the Department of Energy reported to NASSTRAC on Monday. Meanwhile, gasoline fell 3.8 cents to $2.745 a gallon, marking its biggest decline since a 5.8-cent drop on May 31. Gas had jumped 4.8 cents last week — its biggest gain since May — while diesel had leaped 6.3 cents, its largest increase since early April. The diesel downturn, its 10th in 14 weeks, put the brakes on its 9.2-cent increase in the previous three weeks and left trucking's main fuel 32.7 cents higher than the same week last year. Gas is now 10.8 cents over the same week a year ago. The declines in both fuels followed last week's decline in oil prices to below $80 a barrel.
> View NASSTRAC's Regional Chart of Fuel Prices

Air Freight Forwarding Growth Outpaces Ocean
Air freight forwarding grew at nearly triple the rate of ocean forwarding in the first six months of 2010, a sign of volatile swings in capacity following last year's contraction in shipping volume. According to a new report on global freight trends by London-based Transport Intelligence, the air freight forwarding market grew 38 percent in the first six months of the year over the same period a year ago. Ocean forwarding expanded 13 percent from last year's depressed levels. The research group said the sharp shift in international shipping trends followed "drastic steps by air and sea carriers" to reduce capacity, pressuring shippers and their logistics providers to seek more expensive space.

The increase in volume this year followed a 23 percent year-over-year decline in the overall global forwarding market in 2009 and a slim 2.4 percent increase in 2008, said Transport Intelligence in its report on the forwarding market. This year, "forwarders who only six months earlier had been contending with a crisis in volumes now faced a high demand/low capacity environment in which their gross profits were being undermined." The group expects the market to settle into a period of lower growth, however, and less volatility.

Mexico Expands Tariffs in Truck Dispute
Mexico has stepped up pressure on the U.S. in the dispute over cross-border trucking, expanding the list of targeted American products that will be hit with punitive tariffs. This action comes nearly a year after Mexico hit U.S. goods with some $2.4 billion in tariffs in 2009 after Congress killed a program giving Mexican trucking companies access to U.S. highways. U.S. transportation officials say they're working on a new cross-border program to meet congressional concerns about safety and the impact on American trucking jobs, but the new truck plan has not yet been completed. Mexico now plans to add 10 new products to its list of punitive tariffs, including pork, oranges and chewing gum. The tariffs already affect products ranging from grapes to frozen potatoes.

The announcement came as President Obama signed a $600 million bill to increase security on the U.S.-Mexican border and add customs officers at ports of entry. U.S. manufacturers and food growers, some of whom are NASSTRAC members, are pressing Congress and the Obama administration to act on a long-delayed replacement cross-border trucking plan. The U.S. and Canada are required to open their highways to Mexican trucks by the North American Free Trade Agreement. Canadian trucks operate freely on U.S. highways, but under restrictions cannot haul intra-U.S. freight. Mexican trucks are allowed to operate only within a 20-mile border commercial zone. The cross-border trucking program started under the Bush administration allowed a limited number of Mexican carriers access to the U.S. similar to that enjoyed by Canadian carriers. Transportation Secretary Ray LaHood has stated several times a new cross-border trucking plan would be ready "soon" for review by Congress, but the administration must overcome strong opposition from many Democrats and the Teamsters. Industry groups such as the U.S. Chamber of Commerce and the American Trucking Associations favor reinstating a cross-border trucking program.