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Nov 21, 2017

Robotic cars may ignite a political revolt

Online Edition

WASHINGTON — In its race to embrace driverless vehicles, Washington has cleared away regulatory hurdles for auto companies and brushed aside consumer warnings about the risk of crashes and hacking.

But at a recent hearing, lawmakers absorbed an economic argument that illustrated how the driverless revolution they are encouraging could backfire politically, particularly in Trump country.

It was the tale of a successful, long-distance beer run.

A robotic truck coasted driverless 120 miles down Interstate 25 in Colorado on its way to deliver 51,744 cans of Budweiser. Not everyone at the hearing was impressed by the milestone, particularly the secretary-treasurer of the Teamsters, whose nearly 600,000 unionized drivers played no small role in President Trump’s victory last year.

Driverless vehicles threaten to dramatically reduce America’s 1.7 million trucking jobs. It is the front end of a wave of automation that technologists and economists have been warning for years will come crashing down on America’s political order. Some predict it could rival the impact of the economic globalization and the resulting offshoring of jobs that helped propel Trump’s presidential win.

“This is one of the biggest policy changes of our generation,” said Sam Loesche, head of government affairs for the Teamsters. “This is not just about looking after the health and welfare of America’s workers, but also their livelihoods.”

Washington isn’t ready for it. The Trump White House already has indicated it sees it as some future administration’s problem. Silicon Valley remains in shock over Treasury Secretary Steven T. Mnuchin’s remark in the spring that economic fallout from this type of automation is 50 to 100 years off and “not even on my radar screen.”

“I don’t think anybody there is thinking about this seriously,” said Martin Ford, author of “Rise of the Robots: Technology and the Threat of a Jobless Future.” “They are still looking at this as futuristic and not having an impact and not politically toxic.… Once people start seeing the vehicles on the roads and jobs disappearing because of them, things will quickly become very different.”

The arrival of that reckoning is getting accelerated by Washington’s bipartisan excitement for self-driving technology, one of the few policy issues advancing. New Trump administration regulations don’t require industry to submit certain safety assessments, leaving it voluntary. And legislation — already approved in the House and expected to pass in the Senate — strips authority from states to set many of their own safety guidelines.

Objections raised by the National Governors Assn. and the National Conference of State Legislatures don’t seem to be slowing things down. Consumer groups are dismayed.

“We understand how beneficial this technology can be, but we also understand that if we screw this up, human lives will be lost,” said Jackie Gillan, head of Advocates for Highway and Auto Safety. “We are at a time when there are already record recalls of vehicles because of safety defects. Why are we trusting these companies to do the right thing?”

Lobbying from the Teamsters succeeded in stripping commercial vehicles from the rapidly advancing congressional action. Automated commercial trucks would not get the exemptions to state and many federal rules as robot cars would in the legislation.

The concession — heralded as a big victory by the Teamsters — was met with a shrug by many in the automation world. They don’t expect it to slow the arrival of fleets of self-driving trucks on the road. The momentum is already there, they say, and agency regulators are working with the companies to get their prototypes highway-ready.

“It was a political sign that there is fear” about the impact of the trucks, said Bryant Walker Smith, a law professor at the University of South Carolina who researches vehicle automation. “But it is not in the long term going to hamper their deployment.”

How soon the potential for economic disruption spills over into politics is a matter of debate among technologists and futurists. But they agree it will be much sooner than Mnuchin predicts, and possibly as soon as 2020, when Trump would be up for reelection.

Trump claimed a bigger share of the labor vote than any Republican since Ronald Reagan, winning 43% of it nationwide, exit polls show. In Ohio, he beat Hillary Clinton commandingly in union households.

Hanging onto those votes is not as simple as tapping the brakes on driverless technology. Such a move would have its own economic fallout, as companies developing the vehicles could merely move abroad.

But if the White House and Congress don’t start addressing the disruption that self-driving vehicles and related automation will cause, economists and political scientists warn Washington may one day face the kind of voter backlash seen in the 2016 election. So far, the government is showing itself just as disconnected as it was to the troubles created for the same voters by globalization.

“Regardless of whether this creates a world where everyone has jobs or few people do, those jobs will be different,” Smith said. “Congress is not effectively discussing this. We don’t sufficiently understand this disruption.”

At a California start-up called Embark, there already are indications of how trucking jobs are about to change. The company has in recent weeks started test runs in which it is using self-driving trucks to ship smart refrigerators from a warehouse in Texas to a distribution center in Palm Springs. There is a driver in the cab, but for the bulk of the ride, when the truck is on Interstate 10, that person is not doing the driving. Eventually, there could be nobody in the cab for legs of the trip.

Embark’s head of public policy, Jonny Morris, joins the American Trucking Assns. in offering an optimistic vision — one in which truck drivers still will have jobs and their quality of life will be much improved. Instead of making long hauls thousands of miles, Morris said, they could stay in their communities and handle the more complicated short hops at the beginning and end of trips, along with loading and unloading.

“We believe automation can help improve the number and quality of jobs,” he said.

Teamsters executives are skeptical, particularly as many pilot programs exhibit a diminished role for blue-collar workers. Volvo, for example, boasts how the autonomous garbage truck it developed doesn’t need a driver in the cab to navigate the route, freeing up that person to load the trash bins. Two jobs appear to become one.

Many of the new positions created by such technology look nothing like the stable trucking jobs that are a staple of blue-collar America.

They involve coding, data analysis and operation of complicated computer systems. The training is sophisticated and costly. A college degree could become a prerequisite.

Ford, the author, says the White House and Congress better start paying closer attention to what self-driving technology means for truckers and others displaced by the new industry.

“If we don’t figure out a way to solve this,” he said, “there is going to be a backlash.”

Online Edition

WASHINGTON — In its race to embrace driverless vehicles, Washington has cleared away regulatory hurdles for auto companies and brushed aside consumer warnings about the risk of crashes and hacking.

But at a recent hearing, lawmakers absorbed an economic argument that illustrated how the driverless revolution they are encouraging could backfire politically, particularly in Trump country.

It was the tale of a successful, long-distance beer run.

Jun 01, 2018

SCE gets OK to jump into electrification of trucks, buses and ports, joins 2 other California utilities in race to replace diesel fuel

Online Edition

Three of the state’s largest electric utilities late Thursday breached the monopoly on transportation fuels held for decades by oil companies by investing $738 million in new electric vehicle charging stations, with an emphasis on replacing diesel-powered trucks, buses, forklifts and heavy equipment with vehicles running on cleaner electric power.

The big three: San Diego Gas & Electric, Pacific Gas & Electric and Southern California Edison received the green light from the California Public Utilities Commission, signaling a new alliance between the state and utility companies never before seen in California that proponents say is the single largest utility investment in transportation electrification ever.

“A trend is sweeping across California,” said Rachel Boyer, spokesperson for the Sierra Club in an email. “Every day we see more and more examples of our state moving away from investing in outdated fossil fuel technology. And this decision is no different.”

The California Independent Oil Marketers Association, however, called the decision: “California’s largest utility companies’ $500 million money grab from the CPUC.”

The CPUC decision comes on the heels of the California Air Resources Board vote to use the $423 million from the Volkswagen diesel case settlement to put more electric vehicles on the road and shortly after the California Energy Commission in early May voted to require all new homes to have solar power in two years.

Also in May, the South Coast Air Quality Management District board approved a plan to regulate truck diesel emissions from warehouses and railyards.

“As the network of residential, workplace, and public electric vehicle charging stations expands, more communities will be able to enjoy the pleasures of driving plug-in electric vehicles,” said CARB chairwoman Mary Nichols.

Environmental impact

By investing in electric power infrastructure, the regions with the most bad air days, namely Riverside, San Bernardino and Los Angeles counties, will begin to notice less smog, in particular oxides of nitrogen, which take the form of tiny aerosol particles that can lodge deep into the lungs and cause respiratory and heart disease, according to the SCAQMD and numerous air pollution studies.

Cleaner trucks and heavy equipment also reduce carbon dioxide emissions, which contribute to global climate change.

California has a goal of reducing greenhouse gases to 40 percent below 1990 levels by 2030 and 80 percent by 2050. Scientists say in the West, global climate changes have increased temperatures and prolonged droughts and fire seasons.

Transportation is responsible for 83 percent of the oxides of nitrogen and 95 percent of diesel emissions in the state. In Southern California, trucks produce more than 50 percent of the oxides of nitrogen and make up 2 percent of the vehicles on the road.

Targeting this source of air and climate pollution makes sense for the region, said Carlo De La Cruz, with the My Generation campaign for cleaner energy from the Sierra Club in Los Angeles.

“(Thursday’s) decision by the PUC was strategic and a smart one,” he said. “It prioritizes vehicles that have the most impact on our air quality and on our local health.”

Ports to Inland Empire

By helping trucks and cargo-moving equipment change from diesel to battery power, the investment will address air pollution from the twin ports of Los Angeles and Long Beach, where 40 percent of the goods entering the nation come through and moves to and from warehouses in the Inland Empire by truck.

However, even with the boost in incentives and more chargers installed, warehouse owners and trucking companies must be persuaded to buy electric trucks, which are more expensive.

“It is an issue when it comes to business owners, warehouse owners being willing to make that investment,” said De La Cruz.

Specifically, here’s what each utility plans to do:

• SCE will spend $343 million over five years to expand electric charging infrastructure in industrial sites, trucking companies and warehouses. The Rosemead-based investor-owned utility will install charging equipment in 870 sites by 2024.

These will support 8,500 medium- and heavy-duty trucks, buses and forklifts. Of the total budget, 25 percent will go toward vehicles operating at ports and warehouses.

Each recipient is required to buy at least two EVs, or convert two from fossil-fuel to electric.

• PG&E will spend $236 million over five years investing in infrastructure for about 6,500 medium- and heavy-duty electric vehicles at commercial and industrial sites. And $22 million will be used for building 234 fast-charging stations for passenger cars.

• San Diego Gas & Electric will spend $137 million for rebates to up to 60,000 customers who install at-home chargers.

Online Edition

Three of the state’s largest electric utilities late Thursday breached the monopoly on transportation fuels held for decades by oil companies by investing $738 million in new electric vehicle charging stations, with an emphasis on replacing diesel-powered trucks, buses, forklifts and heavy equipment with vehicles running on cleaner electric power.

Nov 16, 2017

Some swoon, others dismissive as Elon Musk unveils new electric big-rig

Online Edition

A day after Tesla CEO Elon Musk unveiled a $250,000 Roadster billed as the fastest car ever on the market and a futuristic, zero-emissions big rig at Hawthorne airport, Wal-Mart signed up for at least 15 of the trucks.

But others weren’t as impressed.

Critics rushed Friday to point out the company’s pattern of missing its own delivery deadlines, and Musk’s penchant for hyperbole and theatrical presentations. (For example, he said the electric big rig, simply named Semi, “will blow your mind clear out of your skull and into an alternate dimension.”)

“Elon’s showmanship remains intact, even as his customers’ patience for Model 3 delivery wanes,” Karl Brauer, executive publisher of Kelley Blue Book and Autotrader, said of Tesla’s entry-level sedan now in production.

“The specs on the new semi truck and sports car would put both vehicles at the top of their segments — assuming they can be produced and sold as part of a sustainable business plan. So far that final element has eluded Tesla Motors, which makes it difficult to see these vehicles as more than ‘what if’ concept cars.”

One thing is clear: Customer deposits on the new vehicles will blunt the company’s ongoing losses.

During Tesla’s most recent earnings report, Musk acknowledged that production of Tesla’s low-cost Model 3 had been delayed three months, and that the company had suffered a $619 million quarterly loss. The Model S sedan and Model X SUV also were plagued by delays.

What’s more, Tesla is fighting three lawsuits brought by former workers who allege the company allowed racist behavior at work.

Nonetheless, there was no uncertainty in Musk’s carefully produced presentation Thursday night, adjacent to the Hawthorne Municipal Airport runway at the site of aviation pioneer Jack Northrop’s former headquarters.

The fully electric trucks “are designed like a bullet,” Musk said. They can go zero to 60 in five seconds (or 20 seconds if fully loaded), climb a steep hill at 65 mph, and carefully pull off the road to call for help if the driver’s hands leave the wheel, he said.

The driver’s seat is in the center like a race car, and there are two touch-screen displays.

“It’s not like any truck that you’ve ever driven,” said Musk, wearing dark jeans, a black T-shirt and olive-colored jacket. “We are guaranteeing this truck will not break down for a million miles because it has four independent motors. Even if you only have two motors active, it’ll still beat a diesel trucks.”

Musk’s announcements, livestreamed on Tesla’s website, were greeted with enthusiastic cheers and applause. At one point, a  man shouted “Elon for president” while the billionaire entrepreneur and SpaceX founder spoke.

“That’s the most miserable job,” Musk replied.

The truck can go 500 miles on a single charge, or nearly twice as far as other zero-emissions heavy-duty trucks. And it rides as smooth as a Model S sedan, with a low center of gravity and a drag coefficient of .36, he said.

The brake pads regenerate and never need to be replaced, there’s no transmission to maintain, and the windshield won’t ever crack because it’s made of “thermo-nuclear explosion-proof glass,” Musk said, adding: “It survives a nuclear explosion or you get a full refund.”

The Semi’s cost? He didn’t disclose a sticker price.

“A diesel truck would be 20 percent more expensive than a Tesla semi per mile,” Musk said. “From Day One, a Tesla Semi will beat a diesel truck. We’re guaranteeing a 7 cent kilowatt wholesale price.”

The truck also “beats rail” in its efficiency and affordability, he said.

Orders are now being taken with $5,000 deposits, though production won’t begin for two years.

Production on the $250,000 four-door, convertible Roadster will begin in 2020. It’s the fastest production car ever made, he said, reaching 60 mph in less than 2 seconds.

It can travel up to 620 miles, or nearly round-trip from Los Angeles to San Francisco, on one charge, and reach speeds beyond 250 mph.

“The point of doing this is to just give a hardcore smack-down to gasoline cars,” Musk said. “Driving a gasoline sports-car is going to feel like a steam engine with a side of quiche.”

Kelley Blue Book analyst Rebecca Lindland described the Roadster as “fabulous” and Musk’s ambition “admirable.”

“But,” Lindland said, “as a Model 3 depositor looking at an 18-month wait, I do wish he was a little bit further along in the delivery process before embarking on yet another new vehicle, let alone a semi truck.”

A thousand “Founders Series” Roadsters can be reserved for the full $250,000 price, bringing in a nice influx of cash.

“This is a funding strategy,” said CFRA investment-research analyst Efraim Levy, noting that the 1,000 Founders Series cars alone would bring in $250 million in prepayments, with every standard Roadster order adding $50,000.

The standard Roadster requires $5,000 down, then $45,000 within 10 days, plus another $150,000 upon delivery.

Still, Levy said, Musk’s projects have been “brilliant and disruptive in so many industries,” and he considered the new Semi an “impressive and well-thought-out likely disruptor to trucking.”

The truck is the latest addition to clean-energy trucking technologies being considered for use at the twin ports of Los Angeles and Long Beach, which are the single largest stationary source of air pollution in Southern California.

In addition to California’s self-imposed mandate of reducing greenhouse gas emissions to 1990 levels by 2020, officials at the ports vowed earlier this month to transition to all zero-emissions transport and cargo-handling equipment by 2035.

But since there are no affordable zero-emissions trucks on the market, air-quality regulators are now working to transition port-based diesel fleets to low-emissions trucks that burn methane gas.

Toyota began testing its first zero-emissions, heavy-duty truck powered by hydrogen fuel-cell technology over the summer at the ports. The 670-horsepower, class 8 truck can travel up to 200 miles on a 20-minute charge.

It was tested with progressively heavy loads of cargo for several months, and started real-world work in late October hauling loads from the ports to nearby rail yards. Such short hauls are expected to be the first to use zero-emissions technology at the ports,

Musk has called fuel-cell technology “incredibly dumb,” but Toyota has invested heavily in it for decades.

Another zero-emissions, short-haul technology called eHighway is now being tested on Alameda Street in Carson, across from Andeavor’s neighboring oil refineries and Kinder Morgan’s oil-storage tank yard. It transports electric and hybrid-electric trucks via overhead wires like a trolley.

Carnegie Mellon University engineering professor Costa Samaras, who studies electric vehicles, called the possibility that Tesla could shake up the trucking business “exciting,” but noted the firm’s challenges with getting vehicles to customers. “If it stays a concept car until 2030, then we have a problem,” Samaras said.

Trucking produces a quarter of U.S. transportation-related greenhouse gas emissions, Samaras said. “If we can take that quarter and cut it in half with an all-electric fleet, that’s big news,” Samaras said.

Two corporate giants quickly gave Tesla votes of confidence, with trucking behemoth J.B. Hunt pre-ordering “multiple” semis and retail titan Wal-Mart preordering 15 — five for the U.S. and 10 for Canada.

“We have a long history of testing new technology — including alternative-fuel trucks — and we are excited to be among the first to pilot this new heavy-duty electric vehicle,” Wal-Mart spokesman Ryan Curell said Friday.

“We believe we can learn how this technology performs within our supply chain, as well as how it could help us meet some of our long-term sustainability goals, such as lowering emissions.”

J.B. Hunt said it believed electric trucks with “this new, sustainable technology” will be most useful for short-haul trips.

Carnegie Mellon’s Samaras said the fact that people across the country were glued to Tesla’s livestreamed event Thursday night “said something really special about this moment in technology.”

“We need lots of Tesla-type companies in the transportation space,” Samaras said, “if we’re going to make big improvements in the energy and environmental performance of the transportation sector.”

Online Edition

A day after Tesla CEO Elon Musk unveiled a $250,000 Roadster billed as the fastest car ever on the market and a futuristic, zero-emissions big rig at Hawthorne airport, Wal-Mart signed up for at least 15 of the trucks.

But others weren’t as impressed.

May 14, 2018

South Coast AQMD board votes to look into regulating diesel emissions from large trucks traveling inland

Online Edition

DIAMOND BAR — Concerned Inland Valley residents and environmental activists heaved a collective sigh of relief after the South Coast Air Quality Management board voted Friday morning to look into passing rules to regulate diesel emissions from large trucks traveling to and from the region’s sea of warehouses.

Board members discussed the issue for more than two hours before casting a tight 7-6 vote.

Environmental activists and residents, however, said they are paying the price for those jobs with community members suffering the health effects of the air pollution. Among the issues, they say, are children with asthma, people of all ages with cancer and several suffering from breathing issues.

First step

While Friday’s board vote is a preliminary step and it could take at least two years for the agency to develop rules and regulations, it is still a huge step in the right direction, said Anthony Victoria, spokesman for the Riverside-based Center for Community Action and Environmental Justice.

“There is much more that needs to be done and the community is still suffering,” he said. “But, we want to make sure we are all included in the process and that the process ends with the industry being held accountable.”

Victoria said the threat of businesses and jobs leaving the area is not real.

“They are deeply embedded in the region,” he said. “These jobs are here to stay.”

But several board members, all of whom voted against regulation, strongly disagreed.

“If we kill the warehouses, the trucks aren’t going to go away,” Rutherford said, adding that families in the region depend heavily on these jobs. “They will continue to drive through our region continuing to pollute our neighborhoods. We’ll get all the pollution, but none of the benefits.”

She said the solution is to support and provide incentives for new technology that can help drastically reduce air pollution. But Rutherford’s comments were met with loud booing from activists and community members.

Board member Judith Mitchell from Rolling Hills Estates said the South Coast region should follow the example of the San Joaquin Valley, which passed a similar emissions rule about 12 years ago.

“The rule is not designed to kill (warehouses) or intrude into local land use decisions, but to develop collaborative processes between different agencies,” she said. “We have a lot of flexibility when we develop a rule. We can decide how we want it to look and what it should accomplish.”

In addition to warehouses, the board also voted to approve looking into similar rules for new developments and redevelopment projects, and rail yards. For ports and airports in the region, the agency will work with voluntary measures, but won’t push for mandatory rules.

Health and jobs

Friday’s vote gives residents hope that their air quality will improve, said Lorena Rodarte, 51, of San Bernardino. Rodarte says she suffers breathing issues so severe that she had to be hospitalized twice, and that her husband was recently diagnosed with stomach cancer.

Rodarte understands the importance of retaining these jobs in the area because her husband has worked in warehouses for the last 30 years, she said. That, she said, doesn’t mean these industries don’t need to be regulated or required to protect workers and the communities in which they operate.

“The children in my neighborhood suffer from asthma,” she said. “Kids are our future. We need jobs, but without healthy kids, there’s no healthy future for our communities.”

Online Edition

DIAMOND BAR — Concerned Inland Valley residents and environmental activists heaved a collective sigh of relief after the South Coast Air Quality Management board voted Friday morning to look into passing rules to regulate diesel emissions from large trucks traveling to and from the region’s sea of warehouses.

Board members discussed the issue for more than two hours before casting a tight 7-6 vote.

Sep 07, 2016

Stranded Hanjin ships to unload in Long Beach this week, South Korea says

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South Korea's top economic policymaker said Wednesday that he expected Hanjin Shipping vessels marooned off Long Beach will be able to offload cargo this week.

Finance Minister Yoo Il-ho said at a government meeting that he expects the cargo crisis caused by Hanjin's slide toward bankruptcy will begin to ease this week, according to a ministry statement.

South Korea's biggest ocean shipping line says it is seeking protection from its creditors in dozens of countries. A U.S. federal judge has temporarily granted Hanjin's request for protection from its creditors and scheduled a hearing for Friday. South Korea's government expects a ruling in Hanjin's favor, said Kim Hyun-jung, an official at the foreign affairs ministry.

Hanjin's creditors rejected a rescue plan for the shipping company and refused to provide more funds. The move sent retailers and other companies worldwide scrambling to get at cargo on Hanjin vessels that have been stranded outside ports.

Although Hanjin Shipping has more than $5.5 billion in debt, it also needs to pay mounting fees to resolve the cargo crisis that sent shock waves through the global economy ahead of the fall shopping season. Hanjin Group, the parent of the cash-strapped ship liner, has promised $90 million to help relieve the cargo crisis by covering some of those costs.

Local media reports said Wednesday that a South Korean court has asked Hanjin Shipping's main creditor, the state-owned Korea Development Bank, for emergency funding.

Port workers in the South Korean port city of Busan and Hanjin Shipping labor union officials held rallies Wednesday, urging the government, creditors and Hanjin Group to save the shipping company. 

 

Online Edition

 

South Korea's top economic policymaker said Wednesday that he expected Hanjin Shipping vessels marooned off Long Beach will be able to offload cargo this week.

Finance Minister Yoo Il-ho said at a government meeting that he expects the cargo crisis caused by Hanjin's slide toward bankruptcy will begin to ease this week, according to a ministry statement.

May 14, 2018

Surging US flatbed demand delays service

Online Edition

Whether you are fracking in the Permian Basin or a construction company in the Midwest, overwhelming flatbed demand is forcing trucking companies to warn shippers about delays and slower service. There are a host of reasons behind the imbalance between freight levels and available trucks.

West Texas Intermediate Crude (WTIC) has been trading near $70 per barrel — oil traded up 30 cents to $71.00 per barrel Monday morning — much higher than in February 2016 when WTIC cost $30 per barrel. With those bullish prices, oil companies are fracking to capitalize on the stronger market, which has substantially increased their margins — requiring materials to be transported on trucks. Further, Florida and southeastern Texas are also rebuilding from devastating hurricanes in August and September 2017. Also, in the Midwest, winter weather eliminated more than a month off the usual construction calendar and compressed shipping schedules. Trucking companies are urging shippers to be patient and flexible on delivery requirements as a result.

"Flatbed capacity is exceedingly tight and will likely tighten further as milder weather finally arrives in northern regions. There seems to be very large imbalances regionally; creating ‘panic’ freight buying,” one anonymous shipper said in the biweekly Morgan Stanley Truckload Index.

Flatbed spot market rates moved in concert with contract rates between January and April, rising from $2.00 to $2.20 per mile, excluding fuel surcharges, based on data from Morgan Stanley and DAT Solutions. Since then, the spot market has continued to rise above $2.30 per mile while contract rates have settled down. Fleet executives told JOC.com that contract prices are about 5 percent higher than last year.

Spot market rates, including fuel surcharges, rose 7 cents to $2.72 per mile for the week ending May 5 — a record — and is higher than contract rates for the first time in a decade, according to Morgan Stanley. Flatbed spot rates rose 29.4 percent overall last month, according to DAT.

Rates per mile were up 10 percent for flatbed carrier Daseke Inc., according to its first-quarter earnings report. Universal Logistics Holdings reported revenue per mile, excluding fuel surcharges, rose 12.7 percent year-over-year.

“We have not seen a rate environment like this for a long, long time, if ever,” said Robert Ragan, chief financial officer with Melton Truck Lines.

CEO: shippers waiting 10 to 14 days for an available truck

“I’ve never seen anything like this in more than 30 years in business,” added Joyce Brenny, CEO of Brenny Transportation. “Volume was at least manageable a year ago. We were doing well and rates were good. But now it’s out of control, and we can’t keep up.”

She said new shippers are waiting 10 to 14 days to get an available truck. Last year, the wait was about three days, and during leaner times it was as little as 24 hours.

Owens Corning Chief Financial Officer Michael McMurray said that flatbed shipping costs “have driven a 15 percent increase in outbound shipping costs and are expected to persist for the balance of the year,” speaking on an earnings call.

Anixter International, a distributor of communication and security products, said rate increases “in the mid-teens” translated into a 20-basis-point increase in operating expenses in the first quarter.

Economic data shows the industries shipping freight on flatbed will continue to grow.

The Institute for Supply Chain Management’s manufacturing index was 57.3 in April and hovered around 60 between December 2017 and March 2018. A number greater than 50 indicates economic expansion and economists generally agree 60 is a marker of robust conditions.

The US Census Bureau reported building permits jumped 7.5 percent and construction spending rose 3.6 percent year-over-year in March.

“These numbers give us an early indication of what’s to come because once the permits are approved, there is usually a 90- to 180-day period before construction actually starts,” said Dan Taylor, senior vice president of sales of Melton Truck Lines. “We see permit activity as fairly strong and consistent, so we believe it’s going to be a strong summer. That correlates with what our major shippers of construction products are telling us.”

IHS Markit data shows auto production is expected to decline from 17.8 million to 17.3 million vehicles this year, but industry analysts believe the sector remains strong and figures will rebound in 2019.

“The second, third, and fourth quarters this year should be very, very strong for the open deck carriers,” said Jay Folladori, president of Bennett Motor Express. “There is a heck of a lot more freight available than there are trucks in many, many markets.”

Fracking taking flatbed capacity from other industries

Exploration in the Permian Basin is siphoning trucks from other industries. With crude oil prices now double the price from two years ago, expect more investments in the future.

Trip Rodgers, a financial analyst with energy investment firm BP Capital Fund Advisors, wrote in a recent report that an average well site requires at least 10,000 tons of frac sand, equating to about 400 truckloads.

“Assuming 10 to 15 days for the completion stage of an average well, this implies 27 to 40 sand truckloads per day to each individual well,” Rodgers wrote. “We estimate this amounts to over 2,000 trucking round trips per day in the region, a figure that is expected to grow substantially in upcoming years.”

Much of that material is moved on a tank truck, but energy producer Encana Corp. recently said it’s using more sandbox systems to place frac sand onto flatbeds. These well sites also require bits, piping, casings, tubing, blowout preventers, motors, drilling equipment, and steel coils and bars.

DAT industry analyst Mark Montague said the top two flatbed lanes in April were intra-Houston and Houston to Midland, Texas. Rates between Houston and Midland were up 30 percent last month.

“A few years ago, four pipelines were built in just one year and the latest I have heard is they are out of capacity already,” Montague said. “What we’ve done is double down in that sector. And all the tax cuts have done is accelerate the investment in these sites in the basin.”

According to a S&P Global Platts analysis, “Permian production growth could soon be the victim of its own success.”

Even flatbed carriers that are not involved in the energy sector benefit when crude oil prices are higher, and conversely, shippers in unrelated industries take a financial blow.

“When there is more freight activity in the oil markets, capacity tightens in our primary markets and drives up rates,” Ragan said.

Flatbed trucks also serving hurricane rebuilding

Much of the Houston flatbed activity is tied to the energy sector, but Montague acknowledges rebuilding efforts from Hurricane Harvey are also driving business. Home Depot leased a 300,000-square-foot warehouse in Jersey Village, Texas, and Lowe’s Companies leased on a 244,000-square foot warehouse near Bush International Airport. Both companies opened the new facilities to handle the new demand to buy building supplies in 2018.

DAT’s top 10 flatbed lanes in April also included Dallas to Houston. Montague explained that Dallas is used as a staging ground to aggregate and distribute building materials and supplies elsewhere in the region.

Freight lanes in Florida also appeared on the list, even though the Sunshine State is not usually a hotbed of flatbed activity, according to Montague. Jacksonville to Miami ended the month at No. 15, and Lakeland to Jacksonville was No. 17. Hurricane Irma caused $155 million in damages in Jacksonville and brought record-breaking flooding, according to the Federal Emergency Management Agency and the National Weather Service.

Melton’s Taylor said he is monitoring rebuilding efforts because it could exacerbate the existing supply imbalance. Flatbed drivers relocating into Florida and Texas will reduce truck supply in other states.

“If there are any major rebuilding projects in either state, it probably should be starting right about now,” Taylor said.

Dry van and refrigerated spot rates rose exponentially in Florida and Texas last autumn and nervous shippers began to pay more on contractual freight to ensure guaranteed capacity.

Winter mess in Midwest straps flatbed carriers

The snowstorms and frigid temperatures in the Midwest wreaked havoc on railroad shippers this winter, but now there is a spillover into the flatbed market.

“We had a lingering winter in places like northern Ohio and Illinois. And so we did not cancel spring, it was just being postponed for several weeks,” Montague said.

The No. 9 busiest flatbed lane last month was Cleveland to Detroit and No. 16 was Cleveland to Chicago.

In Minnesota, frost was still on the ground as of the early May. Brenny, whose company is based in St. Cloud, Minnesota, said that building season typically begins on April, requiring flatbeds to move materials to construction sites. Everything is compressed into a tighter window this year, however, because of the season beginning four to six weeks later owing to weather.

“The brick, the steel, the lumber, the building products are just starting to move because of delayed spring. We were busy in January just hauling our normal, everyday loads, now add this extra demand on top and my goodness,” Brenny told JOC.com. “We lost at least one month on construction season so people are rushing to begin their projects, but there might be some delays because we can only haul so much.”

For shippers, patience will be key to navigating this flatbed market. Although if you have been playing the spot market in recent years because the per-mile rates were cheaper than under a contract, there may not be any good answers.

“If you worked with us in the lean times and listened to our early warnings about capacity, we will work with you. The shippers who played the market and kicked trucking to the back burner, it’s a little too late. The only thing they can do now is pay the rates. Moving forward, what you should do is be a shipper of choice because the current market is going to last for a while,” Brenny said.

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Whether you are fracking in the Permian Basin or a construction company in the Midwest, overwhelming flatbed demand is forcing trucking companies to warn shippers about delays and slower service. There are a host of reasons behind the imbalance between freight levels and available trucks.

Apr 13, 2017

Tesla plan puts clean-truck race into high gear

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Tesla Inc. plans to unveil an electric cargo truck in September, Chief Executive Elon Musk said Thursday, heating up the race to get a zero-emissions semi-truck on the road.

“Tesla Semi truck unveil set for September,” Musk said on Twitter. “Team has done an amazing job. Seriously next level.” He did not provide any details, including when the truck would be available for purchase.

The truck would add to the ambitious production schedule underway at the Palo Alto automaker, which also is gearing up to build its widely anticipated Model 3 mid-market sedan.

Musk previously had indicated that the truck was coming and that it probably would have some autonomous-driving features.

Musk also tweeted Thursday that Tesla expects to unveil a pickup truck in 18 to 24 months.

In outlining the company’s “master plan” last July, Musk said heavy-duty trucks were among the other types of electric vehicles needed in the marketplace and that Tesla expected to unveil its truck this year.

“We believe the Tesla Semi will deliver a substantial reduction in the cost of cargo transport, while increasing safety and making it really fun to operate,” he said then.

Others also are working on bringing a zero-emissions cargo truck to market, such as Mercedes-Benz and its Urban eTruck, and Nikola Motor Co.’s hydrogen fuel cell truck, which the company showcased in December.

Tesla’s stock closed Thursday at $304 a share, up $7.16.

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Tesla Inc. plans to unveil an electric cargo truck in September, Chief Executive Elon Musk said Thursday, heating up the race to get a zero-emissions semi-truck on the road.

“Tesla Semi truck unveil set for September,” Musk said on Twitter. “Team has done an amazing job. Seriously next level.” He did not provide any details, including when the truck would be available for purchase.

Nov 23, 2017

Tesla’s Semi already making waves at LA, Long Beach port complex — 2 years before its release

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Tesla’s flashy unveiling last week of a futuristic, electric heavy-duty truck was an eye-opener for industry experts, who are hopeful but still wonder if its game-changing features could truly be mass-produced affordably.

Nevertheless, officials at the twin ports of Los Angeles and Long Beach are going along for the ride. They have met with Tesla engineers about the new Semi to offer tips and learn about its unique features.

“Tesla has been recognized as a leader in the development of battery technology and battery-manufacturing processes,” said Chris Cannon, director of environmental management for the Port of Los Angeles. “We’re anxious to see when they’re actually able to deliver a truck. Our goal is reaching zero-emissions technology for all on-road equipment by 2035.”

But few have seen the truck in person, let alone tested and gauged its possibilities. Even so, the company’s reputation and marketing strategy, a mix of Hollywoodesque hype and limited access, has helped draw curious interest from potential industry customers.

The company’s celebrity billionaire CEO, Elon Musk, claimed at its public unveiling at Hawthorne airport that it can drive for 500 miles on a single charge — double what existing electric truck technology offers.

The truck also carries autonomous-driving technology capable of taking over and driving itself if the driver’s hands leave the wheel during a route, and it comes with a 1-million-mile warranty, he said.

But the Semi won’t begin production for two years and there isn’t even a manufacturing facility for it yet. What’s more, Tesla has repeatedly failed to meet production deadlines on its low-cost Model 3 sedan, and the company abruptly fired 700 employees without notice last month.

Those facts didn’t dissuade the largest cargo hauler at the ports, NFI Industries, from reserving 10 Tesla Semis.

“Supposedly, they’re going to build a truck plant at the Gigafactory,” Tesla’s lithium-ion battery production facility in Nevada, said Ike Brown, president of NFI Industries. “I think the fact that they advertise the power train has a 1-million-mile warranty is huge. We operate our trucks over 100,000 miles a year and that would mean the whole power train is warrantied for almost 10 years.”

NFI Industries purchased California Cartage Co. in October and now has a fleet of about 2,500 trucks that do mostly local routes. Like other operators working at the ports, they are considering a range of emerging market options so it can transition to all zero-emissions trucks by 2035, a requirement in the newly approved Clean Air Action Plan.

Brown said he’s impressed with Tesla’s sedans and that, if the trucks operate similarly, he will be eager to buy them — if they are competitively priced.

“I kinda think the future of short-haul trucking is moving toward all-electric,” Brown said. “Tesla seems to have an advantage with its experience and knowledge on batteries. I hope they’re successful because I think (Musk) is a real visionary and they do build a good product.”

Nationwide, other large haulers, including Wal-Mart, Loblaws supermarket chain and JK Moving Services, reserved Tesla Semis as well. They have nothing to lose since the $5,000 reservation fee will be refunded if the company doesn’t deliver on its promises.

On Wednesday, Tesla increased the “base reservation” fee to $20,000 and announced that the trucks would cost $150,000 to $200,000 — a price range Brown said would likely motivate him to invest heavily in the vehicles.

But Tesla has a lot of competition. Daimler, Volvo, BYD Auto Co., U.S. Hybrid, Toyota, Transpower New Zealand and others are developing zero- and near-zero-emissions heavy-duty trucks. And diesel truck engines are cleaner than ever, as producers fit them with strong filters to meet government clean-air mandates.

“Tesla is entering a crowded field, as many major truck and truck engine manufacturers are developing electric trucks,” said Genevieve Giuliano, director of USC’s METRANS Transportation Center, which works to study and solve the region’s transportation problems. “We haven’t seen any demos, and there are no prototypes in service (in contrast to the other manufacturers). We have no information on the size of the batteries or the weight of the truck. Thus, at this point, we simply have a claim from Tesla.”

The Harbor Trucking Association, a coalition of cargo haulers in and around the ports, also has sought a demonstration of the new truck.

“There’s a tremendous amount of interest in the industry,” said Weston LaBar, executive director of the trucking association. “I think everybody would like to get a better understanding of what the price tag is going to be, and they would like to know that the 2019 date is going to be a solid launch time frame.”

Officials from the Port of Long Beach met with Tesla engineers recently to learn how the truck’s technology compares to hybrid, natural gas and other low-emissions vehicles on the market.

“I think the product that they have released, with the type of range they’re talking about and the capabilities, really highlights what’s possible with these type of trucks,” said Heather Tomley, environmental planning director for the Port of Long Beach.

“The program we laid out in the Clean Air Action Plan provides timelines and structure to introduce cleaner trucks and technologies as they become feasible. By 2023, the goal is to get as many near-zero emissions trucks to meet regional air-quality attainment needs.”

Cannon, of the Port of Los Angeles, said Tesla’s entrance to the electric-truck market is a good sign for the ports’ efforts to reduce pollution. The twin ports are the largest fixed source of emissions in Southern California.

“We’re excited to hear when large manufacturers commit to developing this kind of technology because we believe it has a greater likelihood of success when big companies get involved,” Cannon said. “We’re especially excited by Tesla.”

Online Edition

Tesla’s flashy unveiling last week of a futuristic, electric heavy-duty truck was an eye-opener for industry experts, who are hopeful but still wonder if its game-changing features could truly be mass-produced affordably.

Nevertheless, officials at the twin ports of Los Angeles and Long Beach are going along for the ride. They have met with Tesla engineers about the new Semi to offer tips and learn about its unique features.

Aug 13, 2018

Toyota’s green terminal gets go-ahead from Port of Long Beach

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Port of Long Beach officials on Monday moved forward on a green terminal plan being proposed by Toyota to better serve its hydrogen-powered clean vehicle line.

The renewable energy power plant would power the private terminal that imports Toyota vehicles at the port and be designed to reduce air pollution.

A hearing held before the unanimous vote to accept and approve permitting for the plans by the Toyota Logistics Services facility drew no comments from the public.

The major renovation on the terminal would add a self-contained fuel-cell power plant and a fueling station to the Toyota Logistics Services facility at Pier B. Each would help reduce air pollution by using renewable energy and eliminating the emissions of harmful gases that could potentially drift over neighboring areas.

The project would reconfigure the facility to streamline operations and reduce on-site vehicle movement and enhance and modernize the facility for safety, seismic and environmental purposes.

Heather Tomley, director of environmental planning, gave commissioners an overview of the project and said that mitigation measures were sufficient to send the terminal plans forward.

“Fugitive dust” was among the potential impacts but studies determined that could be mitigated with increased watering on the premises, Tomley said.

There also will be safeguards in place in the event of archaeological finds on the property.

“All potentially significant impacts will be mitigated to less than significant,” she told commissioners.

The property is located in the northeast part of the Long Beach Harbor and most of the area is within the city of Long Beach. A small northwest corner of the property is located within the city of Los Angeles.

Cars are delivered by ship to the site and are then processed to be shipped via truck and train to car dealerships in the western United States.

Toyota has been producing the fuel cell cars, banking on hydrogen power automobiles becoming a bigger share of the electric vehicle market in the future.

Nearly all of the terminal’s existing facilities on 223,000 square feet would be demolished to make way for the new elements and terminal makeover.

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Port of Long Beach officials on Monday moved forward on a green terminal plan being proposed by Toyota to better serve its hydrogen-powered clean vehicle line.

The renewable energy power plant would power the private terminal that imports Toyota vehicles at the port and be designed to reduce air pollution.

A hearing held before the unanimous vote to accept and approve permitting for the plans by the Toyota Logistics Services facility drew no comments from the public.

Nov 08, 2017

Trolly-like system for heavy-duty trucks tested near the ports of LA, Long Beach

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A new zero-emissions technology designed for freight-transport trucks is making its U.S. debut along an industrial strip in Carson, where testing is underway for future use at the ports.

The $13.5 million test system, called eHighway, connects trucks that have electric motors with an overhead system of electrified wires that guide them independently — reminiscent of a streetcar.

Unlike a trolley, however, it moves heavy-duty trucks on public roads without tracks.

It’s one of several initiatives that environmental advocates and regulators believe show promise in lowering the extensive air pollution in the dense communities around the ports of Los Angeles and Long Beach, which together emit 100 tons of smog daily.

The 1-mile-long test track was financed by the Port of Long Beach, LA Metro, the California Energy Commission, the South Coast Air Quality Management District, the U.S. Environmental Protection Agency and a nonprofit group of local environmental advocates who won a legal settlement against China Shipping for pollution in the ports area.

“We saw the potential to extend the zero-emissions range in drayage (container or freight) trucks in communities that need it the most,” said Morgan Wyenn, an attorney with the Natural Resources Defense Council, which helped distribute the legal settlement over China Shipping. “We’re very proud to have given $4 million toward this project. We want the ports and the city to get on a real path to zero-emissions trucks.”

The developer of eHighway, Siemens Industry Inc., provided a public demonstration of the system on Wednesday along Alameda Street, from East Lomita Boulevard to the Dominguez Channel.

The test trucks —  an all-electric, a natural-gas hybrid-electric, and a diesel-hybrid  — glided silently along the track, surrounded by the roar of combustion-engine trucks moving cargo from the ports, rail yards, and among the many nearby industrial operations.

The track faces Andeavor’s massive refinery complex, Kinder Morgan’s oil pipeline and storage facility, and heavy diesel-truck traffic. It will remain there for about six months, while company officials test for kinks and its most efficient uses.

Besides the track, technology is connected to the trucks via large rectangular boxes behind the cabs. Sensors can detect when the overhead wires are above, and extend automated arms to connect with them. The sensors also can trigger disconnection from the wires, and reliance on the truck’s motor.

“(The technology) detects the contact lines, so it knows when the lines are above it,” said Siemens Vice President Andreas Thon. “This system is, in my opinion, the ideal solution for these heavy duty trucks.

“Americans rely on the goods and services that are carried by freight. But with that mode of transport predicted to double by 2050, only one-third of this additional travel can be handled by trains.”

The German company has already built the system in Germany and Sweden. But the U.S. poses special challenges, particularly in industrial urban areas with complex underground power lines that have to be negotiated to install the electrified overhead lines. In fact, this test was cut short from a year to six months because of a conflict with underground energy lines.

What’s more, government funding would be needed to install extensive eHighway infrastructure.

Last week, the Los Angeles and Long Beach ports approved a Clean Air Action Plan to eliminate emissions entirely by 2035.

But the technologies that will be adopted to accomplish that goal aren’t yet clear. Now, low-emission natural gas-powered freight trucks provide the best solution because they are more affordable and can be used on long-haul trips, officials said.

Trucks with electric engines likely will be first rolled out on short trips from the ports to rail yards, said Matt Miyasato, chief scientist at the South Coast Air Quality Management District, the region’s air quality watchdog.

“We’re interested in (eHighway) because it has the potential to haul containers with no emissions. We think that, in the future, we’re going to have to be very selective in the way we deploy technologies.”

Online Edition

A new zero-emissions technology designed for freight-transport trucks is making its U.S. debut along an industrial strip in Carson, where testing is underway for future use at the ports.

The $13.5 million test system, called eHighway, connects trucks that have electric motors with an overhead system of electrified wires that guide them independently — reminiscent of a streetcar.

Unlike a trolley, however, it moves heavy-duty trucks on public roads without tracks.