Economic Blast
The Institute for Supply Management,a trade group of purchasing managers, said Monday that its manufacturing index slipped to 52.9 in February from 53.5 in January. It was the fourth straight drop and the lowest reading since January 2014. Still, any reading above 50 signals expansion.
The Commerce Department said that the U.S. economy grew at an annual rate of 2.2 percent in the October-December quarter, weaker than the 2.6 percent first estimated last month. The latest estimate marks a major slowdown from the third quarter, which had the strongest growth in 11 years. For all of 2014, the economy expanded 2.4 percent, up slightly from 2.2 percent growth in 2013.
Quotable
"The firmest friendships have been formed in mutual adversity, as iron is most strongly united by the fiercest flame."- Charles Caleb Colton
Ramp/Dock Report: March 2015
With the contract settled between the ILWU and the PMA, West Coast ports are ready to returnto more normal conditions! However, there are many constraints at work to hobble the return to normalcy. The most notable are the availability of dockworkers, harbor truck drivers, chassis and available space at each terminal site. With the larger vessels hauling more containers, more dock space is needed and currently there are 27 vessels at anchor in the LA/LGB harbor awaiting berth space! This has caused most vessels to be 1-3 weeks off schedule.
An artificial driver shortage is actually created by the inability to turn a driver in the more normal rate of under 1 hour. For the last 6 months, the rate has increased to nearly 3 hours which requires dray companies to have at least 3 times the trucks to maintain the same container volume as before the port congestion!
Many of the importers, exporters, brokers and logistic planners are looking to divert their cargos from West Coast ports to Southern and Eastern ports over the next few years to avoid the next contract issues five years from now! Since 1980, container traffic through the West Coast ports has grown more than six fold.
Both western railroads, BNSF and Union Pacific are adding power and crews to increase the amount of train service from the ports to points east. The volume of international intermodal containers is expected to increase causing an increase in rates asincreased demand and capacity tightens, according to a recent BB&T report.The Transpacific Stabilization Agreement, consisting of 15 ship lines operating in the trans-Pacific trade, recently reaffirmed already-announced general rate increases. Hikes of $600 per 40-foot equivalent unit container will take effect March 9 and April 9.
Lessons from the Past
One of the most amazing 'rags to riches' stories is the life of R.G. LeTourneau as told in his biography "Mover of Mountains and Men". LeTourneau began his career in obscurity in Stockton, California, where his first job was transporting earth to level out farmland. His frustrations with moving dirt drove him to find a better, more efficient way. In 1922 he constructed the first all-welded scraper that was lighter, stronger and less expensive than any other machines.
The most significant invention was the electric generated power wheel used in the earth-moving machines and ultimately the same power generations used by today's diesel powered locomotives and earth moving scrapers!
As a millionaire several times over, LeTourneau gave 90% of his wealth to his Christian faith while living on 10% (the reversal of normal tithing). He was a close friend of Billy Graham and founded LeTourneau University in Longview Texas which is still thriving today!