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Feb 10, 2011

T & L COMMENT * Middle Eastern: Instability threatens more than Suez Canal

The impact of political instability on the oil price

(Video from YouTube, by direkirol -5 Dic 2008: Crosssing the Suez Canal with the Egyptian Army)

London,UK -Transport Intelligence, by Thomas Cullen -4 Feb 2011: -- With the Egyptian army now stationed on the Suez Canal the chances of a major interruption to shipping caused by the political instability in the Middle-East appear low, at least in the short term. What is more concerning for the logistics sector is the impact of political instability on the oil price... Both the OPEC nations and the International Energy Agency (IEA) have been hurriedly assuring the world that the supply routes for Middle Eastern oil are not in any danger. They point out that even if the canal and the pipeline running parallel to it were closed oil could be re-routed to Europe via the Cape. Nor would it have any effect on supplies to Asia Pacific or the rest of the world. The problem with such assurances is that they do not deal with the larger question of political instability spreading to major oil producers in the region... The implications of all this for the logistics market are two-fold. Although many logistics service providers now apply a fuel surcharge, the effects of higher oil prices will depress both demand and profit margins. It will affect both the types of transport that shippers select - with airfreight in particular very vulnerable - as well as how shippers move goods, with greater emphasis on slower movement of larger batch quantities... Even more concerning are the implications for economic growth in general and world trade in particular. As the economist Nouriel Roubini has pointed out, oil price spike are key triggers for recessions, exemplified by those of the early 1970s, early 1980s and early 1990s. More concerning still is the tendency for 'stagflation', with oil price increases combining with tight conditions in other areas of commodities and the overheating economies of China and India... Therefore the possibility exists that there may be a sharp reversal in the good conditions seen in the logistics markets over the past 12 months - indeed the reversal might even be as sharp as that seen during the recession of 2009...

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posted by Unknown @ 6:42 AM  0 comments

Jul 19, 2008

MARKETS * China - The Continuing Challenge of Doing Business in China

Hong Kong,China -Outsourced Logistics/cincomblogs -18 July 2008: -- ... “China's economic growth has made a major impact on the global logistics and transportation industries,” Yansheng Zhang, director of the Chinese Mainland's Institute of International Economic Research, told a meeting of the Chartered Institute of Logistics and Transport (CILT). Of the top 30 ports in the world in 2007, 10 were on the Chinese Mainland, he added... The challenges of doing business in China are formidable, said Vincent Wong, former joint managing director with Kerry Logistics Network Limited (Hong Kong). Mainland firms prefer to keep their logistics operations in-house and regard logistics as a way of reducing direct costs rather than improving supply chain efficiencies, he pointed out. Competition is ferocious, with over one million registered logistics services providers in the People's Republic of China of which 90% are small- and medium-sized companies... There are 850,000 trucking companies on the Mainland with an average of 1.4 vehicles per company, continued Wong. The international express deliveries sector is dominated by a few providers: DHL and Sinotrans (38% of the market), EMS (30%), FedEx and Datian (16%) and TNT-Marchplus (6%)... “The market remains extremely fragmented with no real pan-China player yet,” said Wong. Firms are still competing on price rather than quality of service... Road transport accounts for 76% of total transport and since 75% of all main highways in China are toll roads, tolls account for 30% to 40% of costs. In addition, 70% of all accidents and 50% of all road injuries and deaths are related to overloaded trucks... (Picture: Hong Kong Bay view)

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Jan 25, 2008

TRUCKS' P. ORDERS * COMMENTS - Great Works of Fiction Part 3: Long Lead Times.

London,UK -The World Trucks Blog -24 Jan 2008: -- If UBS is correct, and somewhere between 10 and 20 per cent of all European truck orders are double bookings, then what does that say about lead times stretching out over the horizons? ... 63 per cent of European fleets with between 101 and 501 vehicles claim to have double booked new trucks as a hedge against increasing lead times. So what happens when they cancel?... This is a case of micturition ‘twixt scapulae masquerading as precipitation, and it is high time, we opine, for such nonsense to be unmasked as the fiction that it is...


* Europe - The market has peaked, and is now looking at a 7.5 per cent fall during 2008
London,UK -Bloomberg /The World Trucks Blog -23 Jan 2008: -- ... Citing UBS analyst Fredric Stahl, who reckons that the European market has peaked, and is now looking at a 7.5 per cent fall during 2008... At last, someone who shares our cloudy view. And, more pertinently, who regards the nonsense of long lead times as being just that – a nonsense... "We believe that 10 percent to 20 percent of the trucks in the order books are double bookings that will be canceled when the `real order' is delivered,'' Stahl said. Slowing economic growth "leads us to take an outright negative view on order development in 2008.'' ...

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posted by Unknown @ 3:13 PM  0 comments

Jan 17, 2008

COMMENTS * Europe - Truck manufacturers take the slow road east

London,UK -Automotive World -16 Jan 2008: -- The rapid growth in demand from Eastern Europe seems to have taken many of the European truck manufacturers by surprise, but events in 2007, such as the opening of MAN's new factory in Poland, suggest that the region's potential has at last been well and truly recognised...

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Nov 15, 2007

MARKETS' PROGNOSIS * USA - Is It Impossible to Predict What's Ahead for the U.S. Economy?

What's Hot Good, Bad or Ugly?

PENN,USA -Knowledge at Wharton/The Wharton College/U Penn -Nov 15, 2007: -- At the end of October, the Federal Reserve gave the financial markets just what they had been asking for: a 0.25% cut in the federal funds rate. But in early November, stocks plunged and the dollar hit a new low. Applause turned into hand-wringing -- then back to applause as the markets rebounded in the middle of the month... Why can't the experts make up their minds? Is the outlook good or bad? According to Wharton faculty, forecasting is particularly hard now because some of the key factors -- such as the credit crunch arising from the subprime mortgage mess, spiking oil prices and the plunging dollar -- have little historical precedent. The result: Finance experts, including the Fed, may not be able to see too far down the road...

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Nov 2, 2007

PROGNOSIS * USA - FedEx forecasts holiday freight boost; raises rates

A banner holiday shipping season is in the cards, according to FedEx Corp., which is also planning to increase rates for 2008

USA -Fleet Owner -Nov 1, 2007: -- ... The company expects to break its own volume records by moving 11.3-million packages through its FedEx Express and FedEx Ground networks on Dec. 17 this year. On an average day, FedEx typically moves 7-million packages... Frederick Smith, FedEx’s chairman, president & CEO, pointed to several market analyses to back up those predictions. One, from consulting firm TNS Retail Forward, said online sales are projected to approach $42 billion in the fourth quarter of 2007, an 18.5% increase over the last holiday season. The National Retail Federation said that overall holiday sales would continue to rise, although they are projected to be the slowest since 2002... Holiday spending is projected to increase 4% to $474.5 billion over last year...

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posted by Unknown @ 11:40 AM  0 comments

Oct 4, 2007

MARKET COMMENT * USA - Truckers are stockpiling dirty diesel engines

In 2007, new EPA regulations that mandate cleaner diesel engines took effect

Nashville, TN,USA -Management R&D -October 3, 2007: -- ... The new engines will reduce particle emissions by up to 98% over the previous generation and cut Nitrogen-oxide emissions in half... But the new engines increase the cost of trucks by $12,000, or about 10%... In addition, truckers (consumers of the new engines) anticipate higher maintenance costs and worse fuel mileage.Predictably, the new regulations have caused a big increase in demand for 2006 engines and trucks... For policy makers, this points out yet another disadvantage of a command-and-control approach to clean air. Mandates from Washington have to be phased in, and this gives consumers an incentive to stockpile old, cheap, but dirty engines so they can use them in the future. Instead of telling producers what to produce, or consumers what to consume (by picking technologies, like ethanol, to subsidize), tax what you don't want (pollution) and let the market decide how best to reduce it...

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