A rise in the price of crude oil has made gasoline prices soar up during the last few weeks. About 7000 gas stations were surveyed and mid grade gasoline was $2.46 per gallon, while premium was $2.56. The diesel price went up 8 cents more than the same week last year, while gas was 12.9 cents higher than a year ago, according to Department Of Energy.

According to the US Energy Information Administration drivers paid $2.83 last week for a gallon of regular gasoline, which was 8.7 cents more than the previous week. Compared to the same period last year, prices at the pump have gone up by 13 cents.

Retail price of gasoline also went up drastically costing 10 cents more in New England and 10.3 cents more on the Gulf Coast, compared to last week. New England gasoline prices were about $2.358 a gallon last week, while Gulf Coast prices were $2.234. But in spite of the increase, gasoline prices in the Gulf Coast were still the cheapest in the nation. West Coast service stations had the costliest gasoline at $2.60 a gallon. San Francisco’s pump price was the highest at $2.81 a gallon.

Oil prices appeared to go down at the beginning of the year, but began to rise quickly. Prices go up when the demand goes up. According to the EIA, Americans are using about 3.6% more gasoline than they were the previous year.

Will we touch the $ 3 mark in 2007?

FedEx’s OptiFleet E700, the environmentally superior delivery truck was actually first introduced in 2004. This truck decreases particulate emissions by 96 %, reduces smog-causing emissions by 65 percent, and travels 57 percent farther on a gallon of fuel, bringing down FedEx’s fuels costs by over a third.

This environmentally friendly low emission hybrid electric-powered truck brings in great benefits without affecting utility and performance to the driver. Imagine, if 10,000 hybrid trucks were on the road in place of the standard vehicles, here’s what you can expect in just ONE year:

• Smog-causing emissions of nitrogen oxides would be reduced by 1,700 tons annually – which in plain language means taking off passenger cars off New York City roads for 25 days.
• Carbon dioxide emissions would be reduced by 83,000 tons annually – the same effect as planting 2 million trees.
• Save 7.2 million gallons of Diesel fuel – equal to saving 1 million barrels of crude oil to produce.

Innovative Technology used in making these hybrid trucks combines a diesel engine with an electric motor to drive the truck. A computer determines the best combination taking into account current operating conditions and driver demand. Instead of the present six-cylinder engine, a four-cylinder engine is used. Engine size is smaller thanks to the power from the electric motor. A particulate trap further brings down emissions. Batteries capture and stores electrical energy every time the vehicle brakes, which is useful for acceleration and also charges the battery, making it a perfect balance between conventional and electrical technology. (Source: www.fedex.com)

And it is not just the Mexican drivers who will undergo stringent tests to see if they measure up. The American Trucking Association is also considering training standards that are tougher for its drivers to support its efforts to enhance safety limits when new drivers come into the industry.

The American Trucking Association’s board of directors mooted a new safety policy when they met at their Winter Leadership meeting. The industry was encouraged to adopt training standards based on competency. They also set the benchmark for acceptable qualifications for drivers, instructors, and make the new drivers work harder to get their commercial driver’s license.  The idea is to equip drivers with the ability and competency to deal with the sort of driving conditions they face on a daily basis safely when they are out on the highways. Only drivers that are highly trained will travel on the highways.

Thanks to the American Trucking Association’s safety initiative, the crash rate on the highways has come down significantly. The ATA has also appealed to the Federal Motor Carrier Safety Administration to introduce devices that can limit the speeds of large trucks to a maximum of 68 miles per hour, (refer earlier post ‘Speed limiters – can they work’) as well as being stricter about enforcing traffic laws when motorists drive around large trucks. Another point raised by the ATA is the universal primary safety belt laws, so that police offers can stop and issue tickets to motorists who violate the safety belt rule.

In a landmark decision by the DOT, US, Mexican trucks will now have access to US highways, allowing Mexican carriers into the US. This is a pilot program and for a year, 100 Mexican trucking companies will be permitted to deliver their goods into the US. As part of the agreement, the same number of US trucking companies will be able to go into Mexico and make their presence felt in the Mexican market.

Back in 1995, the trucking provision of the North American Free Trade Agreement had been put on hold. Even in September/October last year when the issue was up for hearing, there were no plans to grant entry to the Mexican trucks into the US.

Mexican carriers entering the US from Mexico will undergo a stringent inspection program and this will include the truck as well as the driver. Safety audits will be conducted on trucking companies that wish to move cargo to and from the US by inspectors from the Federal Motor Carrier Safety Administration. They will check to see if Mexican drivers have a valid commercial driver’s license, a current medical certificate, and can comply with U.S. hours-of-service rules. The driving history of each driver will be checked. Also it will be ensured that Mexican carrier drivers being sent to the US are insured by a US licensed firm.

So the Mexican trucks will begin their entry into the US in about two months. The American Trucking Association is happy with the decision. They see it as healthy competition.

The third largest regional cargo airline and transportation logistics company in the US, Alpine Air Express, Inc. has locked up its fuel prices for the rest of 2007. Alpine operates a fleet of 27 and provides competitively priced scheduled air cargo flights throughout the western and southwestern United States. They report an annual sales in excess of $ 20 million.

Fixing fuel costs yields a lot of benefits. It will increase the company’s profits by a million dollars, taking into account costs incurred last year. More importantly, fixing the cost of fuel brings down the risk when viewed from the point of unrest and other natural disasters in the Middle East which leads to disrupted fuel supply, forcing fuel costs to increase. Price is prone to fluctuate frequently, and so, by locking the price, company investors feel more confident since there is minimized risk of bearing the consequences of price fluctuation. Alpine There are significant increases in the cost of oil per barrel from the time Air Express locked its fuel cost, when oil costs were lesser.

With fuel being the biggest ingredient in the business’ operating costs, every penny saved goes towards the increase of profits, amounting to almost $12000 a year. Sometimes the price of oil can go up by as much as a dollar per gallon, so being able to lock up the fuel rate when it is low for all their fuel, makes it possible for the company shareholders to enjoy more earnings than they anticipated.

FedEx Express is considered the world’s largest express transportation company, and now, they have pioneered the introduction of hybrid vehicles for commercial use. Environmentally conscious, they have launched four hybrid medium duty electric delivery trucks in Denver. These hybrid trucks have cleaner operation and save fuel. These trucks were developed in cooperation with Environmental Defense and Eaton Corp. and will deliver purer and healthier air that will reduce climate change impacts. This will cut pollution by 90% compared to the conventional trucks. It will decrease soot by 96% and smog-causing emissions by 65%. Fuel costs will come down by over a third, since its fuel efficiency will be 57% more on one gallon of fuel. The operation and performance of these hybrid trucks will be similar to the regular FedEx Express medium duty vehicle.

FedEx Express began introducing these hybrid trucks in 2000 as part of an innovative alliance with Environmental Defense so that it would result in cleaner, and more fuel-efficient delivery trucks. FedEx has now become the first to convert its medium duty truck fleet to hybrid vehicles to that they can be used commercially. They have taken the crucial step in the goal towards improving air quality, at the same time bringing down dependence on foreign oil. Efforts are being made by the government to provide incentives for American automobile manufacturers and businesses to increase the production and use of more hybrid and flex-fuel vehicles.

This makes a total of 93 hybrid vehicles operated by FedEx in Denver, New York, Tampa, Sacramento and Washington, D.C.

It’s begun. Canada-based Imperial Oil’s fuel supply problems are affecting trucking companies in the area. This fuel shortage has already seen price hikes of up to 20% and truckers are reporting that fuel outlets prefer cash, not plastic when they do decide to supply the fuel.

Imperial Oil is informing trucking companies in the area that they’ve had to reserve diesel and home heating oil (gasoline) to Ontario customers because of operational and transport constraints. Just imagine this prominent fuel supplier not being available – a lot of wheels are going to suffer. Smaller fuel companies might continue to supply for a while thanks to their storage tanks…but when these are dry, what then?

Imperial Oil is silent about when it will resume normal production – only saying that they hope to resolve matters ‘at the earliest’. Their Nanticoke refinery was shut down due to a fire and they hope to return to normal by the end of the month. At the moment, the trucking companies are desperately trying to find fuel and really have no option but to pass on the price hike to their customers – so shippers, beware. Your carrier’s fuel surcharges are on the rise.

How will the Minister of Energy ensure that the province has enough fuel supply to keep things going and to prevent tremendous price hikes?  That remains to be seen. Because, if the truckers don’t get fuel – and don’t pass the price hike to their customers, they will have to close shop. And if they close shop, Ontario’s economy will definitely suffer. Not a good situation to look forward to.

There’s a proposal where truckers must use speed-limiting devices, so that they don’t travel beyond 68 mph. Opinions, however, are divided. Several trucking companies have requested the government agencies to make it mandatory for all commercial tractors/trailers to use these speed limiters. Petitions were filed with the National Highway Traffic Safety Administration and the Federal Motor Carrier Safety Administration, which have invited public opinion on this before they make a decision.

Interestingly, all trucks that were manufactured since 1990 had speed limiters built in – these are basically computer chips that can be set to limit the maximum speed limit of the trucks, but unfortunately, are not used.

The idea of these speed limiters is to enhance highways safety and improve fuel efficiency.  But there are those who disagree with this rationale because they feel that highways will be less safe since driver maneuverability will be restricted. They feel that drivers should be able to speed around another vehicle if they can do it.

Those supporting the speed limiters (68 mph) feel there may be lesser accidents since 68 mph is an accepted industry standard. The public may feel safer if there are fewer crashes since slower trucks will be able to stop faster. Another thing is the economic benefit – when accidents are minimized, there’s smoother flow of traffic and cargo is safer; fuel is also saved.

It is felt that the supporters are doing this to prevent their drivers from quitting and joining companies that may not have these restrictions.

But limiting the speed of only a few vehicles may not solve the problem. Can you imagine other vehicles speeding at 75/80 mph and trucks moving at 65? Risky, to say the least. Incidentally during the last three years, 22.9 percent of truck accidents happened because they were traveling too fast!

Truckers and motorists in America are uniting as “Americans for a Strong National Highway Network’ to oppose the move towards increasing the number of private highways and toll interstates in the US. Why? Because they don’t want taxpayers and the trucking industry to bear the brunt of negative consequences that will result from the sale and lease of the existing toll facilities to private companies. They feel that the government’s job is to make sure that any financing must benefit the public and the transportation industry. The truckers feel that by walking into the hands of private investors, the safety and security of both the motoring highway and road users will be at stake.

The American truckers would rather have the financing come in from highway user fees like the fuel tax to bring in the money for highway improvements. The trucking industry is all for a toll-free national highway system.

The truckers’ objective is to support the American motorist’s right to travel on safe and dependable public roads, in addition to have a strong national highway network to carry goods and the military. They feel that it is the government that should be responsible and accountable for the well being of the truckers.  They feel that only if the government retains ownership can there be progress and private investors are only after business profit and will not hesitate to compromise pubic good.  The truckers are sure that traffic congestion will reach a peak and the private investors will make their money out of it!

What do you think?

National Shipping and Freight Summit in New Zealand

In the mean time, elsewhere in the world, preparations are on for a shipping summit – New Zealand’s getting ready to hold the National Shipping and Freight Summit in April 2007 which is being sponsored by Saha International. Eminent speakers will be present to present their views and insights on different crucial aspects of the freight industry.

How will this summit help? It will cover relevant issues that the freight shipping and transport industry is faced with right now – and issues likely to crop up in the future.  NZ’ s freight infrastructure and the people who use it will be affected by what has been happening in the freight world.

Topics related to the international perspective on container terminals and shipping, attracting investments to transport infrastructure, issues facing ports in NZ, trucking in NZ, customs broking and freight forwarding and how to move forward in shipping and freight, etc. are likely to be discussed.

The summit will consider ways to increase investment in the transport infrastructure; discuss current global trends in the logistics and supply chain management; challenges ahead; SWOT analysis vis-à-vis relevant international mergers in the shipping industry; ways to enhance surface transport options; role of air cargo; needs of service providers and how to meet them.

The National Shipping and Freight Summit in New Zealand is poised to become the logistics event of 2007 with its aim of bringing together the New Zealand transport, shipping and logistics industries. Stay tuned for an update.