Today’s Pickup: U.S. ports predict volume reduction from tariff impact

Good day,

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.

“It’s not that we’re pushing the panic button, but we’re watching this very closely because it does have an impact on a number of things, from consumer prices to jobs,” Seroka said.

“In a global supply chain, it’s not just trade in finished products, but components and materials make up part of what’s traded,” said Paul Bingham, an economist with Economic Development Research Group. “If you continue to purchase those imports, you’re going to pay higher tariffs. That’s a higher cost of production.”

“From air transport to marine, trucking and rail, they’ll all be losers,” Bingham said.

Did you know?

For small fleets and owner-operators, the easiest way to save fuel costs is to slow down, something the larger fleets have been doing for years. What is the optimal speed? According to data touted by the American Trucking Association a few years ago, at 75 mph, a truck uses 27% more fuel than one traveling 65 mph.

Quotable:

“Train your drivers on driving safely, have technology in the truck, gain as much data as possible, and train the driver again based on the data collected–because knowledge is power.”

—John Seidl, VP of Risk Service for Reliance Partners

In other news:

Amazon Plans Start-Up Delivery Services for Its Own Packages

Now, in another effort to help get its millions of packages to shoppers faster, it wants to build an army of delivery people, too. (The New York Times)

As Mexico’s oil sector sputters, crime and violence rattle industry towns

Lower oil prices, a troubled energy reform and worsening gang violence are crippling the state of Tabasco. Exmployees of Pemex, Mexico’s state-owned oil company, are swept up in a surge of kidnappings, extortion, murder, and other crimes. (Reuters)

Clouds may be gathering to darken the heady days of air freight growth

Forwarders, scarred by 2017’s heady demand, may be block-booking air freight space for the second half of the year, but the pace of growth is slowing. (The Loadstar)

The emerging role for drones in the supply chain

Drones are finding their niche in the supply chain, says Matt Yearling. It just might not be where you expected to find them. (SupplyChain247)

Washington’s Latest Plan To Waste Your Tax Dollars

Tucked into the legislation is a provision intended to revive a wasteful program to ship coal to Germany to fuel particular U.S. facilities there. (Forbes)

Final Thoughts:

Since the ELD mandate went fully into effect April 1 with the Commercial Vehicle Safety Alliance’s Out-of-Service criteria for ELDs, less than 1% (4,720) of all driver inspections (559,940) have resulted in the driver being cited for operating without a required ELD or grandfathered AOBRD, the agency reported.

According to the infographic, only 0.64% of driver inspections in May had at least one HOS violation. Compared to year-over-year from May 2017, that’s an improvement from 1.31% of driver inspections had at least one HOS violation.

The rate dropped significantly after December 18, 2017, when the first soft enforcement phase went into effect, dropping from 1.19% in December to .83% in January. The rate stayed right around that mark for the first quarter of the year, then dropped again once the hard deadline hit in April, to .69%.

Hammer down everyone!

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