This poll has been running on our website since early March.  It continues to fluctuate but as of this morning (4/2/08), readers are voting 53% yes and 47% no.

 

 

Click here www.cornerstone-systems.com and scroll to the bottom of our home page to find the poll.  Vote now!

The Panama Canal made news recently when routine maintenance caused a backlog of vessels awaiting transit.  These recent developments made us wonder..what is the latest news on the Panama Canal Expansion Project and how will the improvements affect cargo flow?  Here is what we've learned...

 

Prior to the completion of the Panama Canal in 1914, vessels traveling between the Atlantic and Pacific Oceans were routed 8000 nautical miles around the tip of South America.  Nowadays, vessels take a shortcut through the Panama Canal.  The 50 mile-long canal consists of two shipping lanes, each containing three sets of locks.   Expansion of the waterway, which currently serves more than 144 transportation routes, will add a third lane doubling capacity and opening up access to longer, wider vessels with capacities up to 12,000 TEUs.

 

The two biggest competitors of the canal are the U.S. intermodal system and the Suez Canal.  Historically, canal cargo consisted mainly of bulk commodities but that has changed dramatically with todays containerized goods becoming the backbone of canal trade growth.  The project, forecast to cost $5.25 billion, is scheduled to be complete by the end of 2014.  Panamanian President Martin Torrijos feels that the expansion will strengthen Panama's "strategic position" for trade between Asian manufacturers and U.S. & European consumers.

 

How will your freight be routed by the year 2014?  

 

Will doubled capacity and larger vessels having access to the canal benefit you?

 

 

The ATA (American Trucking Association) is forecasting that the trucking industry as a whole will drop a whopping $135 billion for diesel fuel this year.  This is a $22 billion increase over the $112.6 billion spent by the trucking industry in 2007.  The ATA states that historically fuel represented the 2nd highest operating expense for motor carriers, accounting for as much as 25% of their total operating costs.  But now some motor carriers are reporting that fuel is beginning to surpass labor as their largest expense.  The ATA has now asked the federal government to take the following steps: release oil from the Strategic Petroleum Reserve, establish a national diesel fuel standard, require speed limiters to be set at 68 mph or lower on all new trucks and set a national speed limit of 65 mph, suspend collection of the 12% federal excise tax on motor carriers' purchase of auxiliary power units and require states to grant a weight exemption for APU's, allow exploration of oil-rich areas now off limits, work with states to combat any fuel price gouging, and eliminate the "splash and dash" tax benefit for imported biodiesel that is subsequently exported.  We are already seeing loosely organized strike efforts this week from a sprinkling of independent truckers protesting high prices.  Some truckers have temporarily parked their rigs or refused to buy fuel.     

   

On March 20, Port Commissioners for the Port of Los Angeles approved the last piece of their Clean Truck Program which requires that by the year 2012 only employees of licensed motor carriers will be permitted to perform drayage functions in the port.  The ATA (American Trucking Association) plans to file a lawsuit to block the plan because of its ban on independent/owner-operator truckers.  On the other hand the Port of Long Beach plan currently allows for both motor carrier employees and independent operators to perform drayage in their port.  Presidents of the two harbor commissions feel that the two ports can operate just fine under two separate clean-truck programs.     

 

Negotiations are underway in San Francisco between the ILWA and PMA. The current contract expires on July 1 leaving 3 months to finalize the new deal.  Early indications from both sides are that they wish to avoid national attention and quietly reach a settlement.