🚢 Shipping Green with a Double Scoop!
Good morning! Get ready to indulge in a celebration that will leave your taste buds dancing with joy! July 14th marks National Mac and Cheese Day, a special occasion that brings together the love for this comforting, cheesy delight with our passion for logistics and supply chain management. In the world of logistics, we often find ourselves immersed in discussions about efficiency, optimization, and seamless operations. While these topics remain vital, it's equally important to appreciate the small joys that inspire us, remind us of our shared humanity, and foster a sense of camaraderie among professionals in our industry.
National Mac and Cheese Day presents a unique opportunity to combine our professional interests with the simple pleasure of savoring a delicious meal. This cherished dish, featuring tender macaroni and a rich, velvety cheese sauce, has captured the hearts and taste buds of people worldwide. 🥣🧀
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Pasha Hawaii, in collaboration with AmFELS, has announced the successful delivery of the MV Janet Marie, the second of two LNG-powered 'Ohana' class containerships with a capacity of 2,525 TEUs. The vessels were constructed by AmFELS in compliance with the Jones Act, specifically for Pasha Hawaii's Hawaii/Mainland trade lane. The first vessel of this class, the MV George III, was delivered in July 2022 and began its service in August of the same year.
AmFELS, based in Texas, is a part of the Singapore-based Seatrium Group, which was formed through the merger of Sembcorp Marine and Keppel Offshore & Marine. The partnership between AmFELS and The Pasha Group has been strong, and both parties look forward to continuing their collaboration in future endeavors.
Check out today’s featured article from GCaptain to learn more about the second containership that is powered entirely by liquified natural gas. Will there be more ships in the Pasha Hawaii fleet? Are all ships going to go with the LNG-Powered approach?
Featured Article:
Pasha Hawaii Delivered Second LNG-Powered Containership for Jones Act Trade | G Captain
“Pasha Hawaii and AmFELS have announced the delivery of the MV Janet Marie, the second of two new 2,525 TEU-capacity ‘Ohana’ class containerships powered by liquified natural gas.”
Fuel & Energy
Energy Information Administration Report Predicts Oil Price Increase and Growth in Renewable Diesel Production
According to the latest Short-Term Energy Outlook Report by the Energy Information Administration (EIA), diesel fuel prices in the United States are expected to remain below $4 per gallon for most of 2024. The report outlines various trends, including predictions for the economy, oil prices, renewable diesel production, and natural gas prices. The EIA forecasts that the national average for on-highway diesel prices will be $3.88 per gallon by the end of 2023, gradually increasing to $3.92 by the fourth quarter of 2024. Regarding the U.S. economy, the EIA expects GDP growth of 1.5% in 2023 and 1.3% in 2024, revised upward from previous forecasts. This revision is attributed to increased consumer spending and aggregate investment, resulting in an improved estimate of real GDP growth in the first quarter of 2023.
In terms of crude oil prices, the EIA predicts that the Brent crude oil spot price will average $78 per barrel in July. Prices are projected to rise gradually, reaching approximately $80 per barrel in the fourth quarter of 2023 and averaging around $84 per barrel in 2024. The anticipated increase is based on the expectation of declining global oil inventories over the next several quarters. The report also addresses U.S. renewable diesel production. Due to the revised Renewable Fuel Standard rule issued by the U.S. Environmental Protection Agency, the EIA has adjusted its forecast for growth in renewable diesel production. Nevertheless, they still anticipate growth in the sector, with renewable diesel production projected to reach 219,000 barrels per day in 2024.
Manufacturing & Supply Chain
UAW President Takes Aggressive Approach in Contract Talks with Detroit Automakers
Negotiations between the United Auto Workers (UAW) and Detroit automakers, including General Motors, Ford Motor, and Stellantis, have officially commenced, setting the stage for potentially contentious contract discussions. UAW President Shawn Fain has pledged to take an aggressive approach in bargaining for new worker contracts, aiming to combat "corporate greed" and secure fair treatment for union members. This year's negotiations are expected to be different, confrontational, costly, critical, and unprecedented, according to industry experts and past experiences. Key concerns revolve around the industry's transition to electric vehicles (EVs), potential job losses, and declining wages. With contract talks also taking place with the Canadian Union Unifor, complexities and competition for investments and jobs are anticipated.
The negotiations have already witnessed public disagreements between the UAW and automakers, with both sides expressing their positions through local Detroit newspaper editorials. Fain's strategy involves changing the union's culture to become more aggressive and offensive-minded, with an emphasis on organizing elected officials instead of being organized by them. The possibility of a strike is a significant risk this year, with potential billion-dollar costs for automakers. A work stoppage in 2019 against General Motors lasted for 40 days and resulted in approximately $3.6 billion in losses for the company. Formal negotiations will begin with Stellantis on Thursday, followed by Ford on Friday, and General Motors on July 18. The UAW's priorities include addressing the issue of cost-of-living adjustments (COLA), wage increases, healthcare, and the elimination of the tiered pay system. The union also seeks a "just transition" for workers amidst the EV industry's growth and urges government support for worker protection in the transition.
Let’s Get Global 🌎
Checking out the scoop outside of the United States…
🌳 Supply Chains on High Alert as EU Deforestation Law Takes Center Stage. Moody's, the risk assessment specialist, highlights the significant risk introduced to European supply chains by the European Union's new Deforestation Regulation. The regulation, which aims to minimize the EU's contribution to global deforestation, greenhouse gas emissions, and biodiversity loss, came into effect on June 29th, with its main provisions taking effect from December 30th, 2024. The Deforestation Regulation covers seven key commodities: palm oil, soya, wood, cocoa, coffee, cattle, and rubber. It applies to exporters of these products from the EU and supply chain operators involved in making them available in the EU market. Non-compliance penalties are set at fines amounting to 4% of the operator's or trader's total annual EU-wide turnover from the preceding financial year.
🇨🇳 China's Chip Metal Export Restrictions Serve as a Wake-Up Call for Diversifying Global Supply Chains. China's recent export restrictions on key metals, gallium, and germanium, are prompting countries to reconsider their heavy reliance on China for critical supplies. The move has raised concerns and served as a wake-up call for the need to diversify global supply chains. China's dominance in the production of germanium (60%) and gallium (80%), according to the Critical Raw Materials Alliance, has led to apprehension among European and U.S. officials. The export restrictions on these metals, which are vital for semiconductor manufacturing, have been interpreted as a warning in the ongoing tech war over advanced chips. Luisa Moreno, President of Defense Metals Corp, anticipates that China may further curtail metal exports, potentially including rare earths. China currently controls over 85% of global rare earth production. Such restrictions could have significant implications for high-tech consumer products and military equipment.
🚢 China's Worse-Than-Expected Exports Deliver a Fresh Blow to the Economy. China is grappling with trade pressures as both foreign shipments decline and domestic demand remains weak, further exacerbated by a gloomy global growth outlook and geopolitical tensions. The country experienced a worse-than-expected 12.4% drop in exports in June compared to the previous year, marking the second consecutive month of decline and the sharpest decrease since the onset of the pandemic. Imports also slumped by 6.8% during the same period. The weakening export performance adds to concerns about China's economic rebound, especially as global growth slows and central banks consider raising interest rates to combat inflation. Economists predict a challenging second half for China's exports, given the likelihood of a mild recession in the United States and continued weakness in the Eurozone economy. There are also apprehensions of an escalating technology trade war with the US, highlighted by Beijing's upcoming export restrictions on gallium and germanium, which are vital for the semiconductor and electric vehicle industries.
iLevel With You 🏡
More topics for the average American household to consider…
📉 US Wholesale Prices Show Further Deceleration, Indicating Easing Inflationary Pressures. Wholesale prices in the United States continued to decelerate last month, indicating a further easing of inflationary pressures and aligning with the Federal Reserve's series of interest rate hikes. The government's producer price index, which measures inflation before it reaches consumers, rose by just 0.1% in June compared to the same period last year. This marks the smallest increase since August 2020. Additionally, prices remained stable from May to June, with a 0.1% increase following a 0.4% decline from April to May. The index, which includes prices charged by manufacturers, farmers, and wholesalers, serves as an early indicator of consumer inflation trends.
🚛 Over 100 Groups Call on President Biden to Reverse Proposed Tailpipe Emissions Regulations. Over 100 groups representing transportation interests, including truckers from Florida and Pennsylvania, have sent a letter to President Joe Biden urging him to reverse the federal tailpipe emissions regulations for light-, medium-, and heavy-duty vehicles. They expressed concerns about the U.S. Environmental Protection Agency's proposed Greenhouse Gas Emissions Standards, stating that the regulations inhibit the marketplace, restrict consumer choice, and fail to consider future emission reductions through advanced diesel technology and renewable fuels. The letter emphasized the importance of pursuing a broader range of emissions-reducing transportation pathways and guarding against over-reliance on foreign adversaries for critical minerals necessary for electric vehicle expansion. The signatories included state and national agricultural groups, petroleum marketers, refiners, convenience store and truck stop operators, as well as trucking associations from Florida and Pennsylvania.
👨🏽💼 U.S. DOT Launches Task Force to Address Predatory Truck Lease-Purchase Agreements. Transportation Secretary Pete Buttigieg has expressed his commitment to addressing predatory practices in the trucking industry. These practices, particularly lease-purchase agreements, have left many truck drivers in a worse position, despite making payments to carriers. The Federal Motor Carrier Safety Administration has established a Truck Leasing Task Force to evaluate the impact of commercial motor vehicle lease agreements and develop best practices for future agreements. Buttigieg emphasized the need for transparency and the establishment of rules and parameters to protect drivers from unfair leasing agreements. The task force will provide recommendations to the U.S. Department of Transportation, which aims to prioritize driver well-being and retention.
Get Smart 🧠
Ramp up that brain power for these advanced topics…
🚚 Trucking Operational Costs Reach Record High in 2022, Affecting Carriers' Financial Stability. The American Transportation Research Institute (ATRI) has found that running a trucking business has become increasingly expensive due to rising fuel, wage, and equipment costs. According to their 2023 operational costs analysis, for-hire carriers experienced a 53.7% increase in fuel costs, an 18.6% rise in truck and trailer lease payments, and a 15.5% increase in wages last year. With fuel included, the total average costs grew by 23.1%, surpassing $2 per mile across all sectors for the first time since ATRI began its annual survey in 2008. Carriers are now facing the challenge of closely monitoring and prioritizing costs to maintain financial stability in a difficult economic climate. Despite these challenges, the trucking industry has made progress in areas such as newer equipment, competitive driver compensation, and improved operations over the past two years, positioning it well to tackle these obstacles.
🙌 West Coast's Increasing Use of Biofuels to Drive Down Diesel Consumption to Decade Low. West Coast states in the U.S. are experiencing a decline in diesel consumption as the demand for renewable diesel and biodiesel fuels continues to grow. According to the U.S. Energy Information Administration, diesel consumption in California, Washington, and Oregon dropped to about 400,000 barrels per day from January to April 2023, marking an 18% decrease compared to the previous year. This decline can be attributed to the increasing use of biofuels as alternatives to diesel, driven by emission requirements set by the states. Renewable diesel, in particular, has gained popularity due to its ability to be blended in any concentration and better performance in cold temperatures. The West Coast's shift towards biofuels is seen as a success in displacing petroleum with cleaner fuels. However, concerns have been raised regarding the Environmental Protection Agency's Renewable Fuel Standard rule for 2023, 2024, and 2025, which some argue fails to account for the growth and impact of biofuels in the market.
🇨🇦 West Coast Ports Strike Causes Steep Decline in Rail Trade from Canada. A recent strike at West Coast ports, including Vancouver, has resulted in a significant decline of almost 50% in freight rail traffic entering the United States from Canada. Sectors such as chemicals, forest products, oil, and non-metallic minerals have been particularly impacted. The strike has raised concerns about supply chain disruptions, potential congestion at East and West Coast ports, and delays in cargo processing. The drop in trade highlights the need for a resolution to the labor dispute to restore the smooth flow of goods and maintain the stability of cross-border trade.
The Workday Dash is an aggregation of articles regarding the transportation logistics, trucking, and supply chain industries for November 27, 2024, from iLevel Logistics Inc.