Hurricane Harvey & US, Mexico Rail Processing | Weekly News Update

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Aftermath of Hurricane Harvey

The Houston area plays a pivotal role in the US energy market, as it is a major hub for oil & refined product marine movements, houses a large portion of Gulf Coast refining capacity, and is a key location for pipeline infrastructure.

As Texas recovers from Hurricane Harvey, how will national fuel prices respond? Read about it in our Advisor Pulse: Fuel Market Impact of Hurricane Harvey.

US, Mexican Customs Improve Rail Processing at Laredo

U.S. Customs and Border Protection (CBP) and Mexican Customs (Servicio de Administracion Tributaria/Aduana Mexico or SAT) formally dedicated a new center in Laredo, TX to allow both agencies to more efficiently work together to process freight trains crossing the border. The agencies were joined by the Kansas City Southern railway, which invested in the construction of the new rail processing facility.

The new facility will allow Mexican and U.S. customs agencies to complete their inspection processes simultaneously, eliminating delays and redundant checks. “This project, and others to follow, are essential to facilitate the goal of expanding trade and particularly increasing exports of goods such as refined petroleum products. And petro-chemicals from the U.S. to Mexico,” said KCS president and CEO Patrick J. Ottensmeyer.

The goal behind this new facility is ultimately to create a seamless and timely transition across the border which is in the best interest for all parties involved.

In Other News

8/22

CCJ – Fleets in NACFE Study Show Uptick in Fuel Economy

More than 71,000 tractors and 234,000 trailers across 19 fleets earned a 1 percent increase in fuel economy last year through the adoption of various fuel efficiency technologies as part of the North American Council for  Freight Efficiency (NACFE) Annual Fleet Study, the organization announced Tuesday. NACFE says its study participants combined to reach an average fuel economy of 7.11 mpg compared to the U.S. fleet average of 5.89, an edge of 20.7 percent. While 7.11 is an average fuel economy number of all trucks owned by these carriers, NACFE adds that 2017 model trucks operated by those fleets achieved 7.8 to 9.2 mpg with some even approaching 10mpg.

8/23

JOC – CSX Risks Losing Volume, Pricing Power on Service Woes

Shippers, and even some CSX employees, blame ongoing CSX service disruptions on CEO Hunter Harrison’s “precision railroading” strategy, in which a railway’s fleet, workforce, and yards are thinned to cut costs, streamline operations, improve train schedules, and ultimately improve the company’s operating ratio, an indicator of profitability. According to a recent Cowen & Co. survey, 80 percent of CSX customers have experienced difficulties with the railway. Of those, roughly 40 percent have switched some freight to NS, and 6 percent have transferred freight to truck.

8/24

FreightWaves – ELD Update: 15% of Industry Not Expected to be Fully Compliant at Deadline

Nearly 30% of carriers are not yet in full compliance with the upcoming electronic logging device mandate and 8% have equipped less than 33% of their fleets to date, according to the latest Morgan Stanley ELD survey. The survey also found that 15% of carriers do not expect to be fully compliant when December 18 rolls around, affirming pushback from carriers earlier this summer.

FreightWaves – As Hurricane Harvey Bears Down on Texas, Fuel, Rate Impacts Come into Play

Hurricane Harvey will strike the Texas coast with major hurricane intensity and will have a significant impact on refined products infrastructure. Experts at Breakthrough®Fuel commented that the storm has only spiked gasoline demand and prices thus far, and has not yet affected diesel fuel markets. Hurricane Harvey will have far more significant consequences for fuel markets as it leads to extensive flooding and damage in Houston.

8/25

Reuters – Trump Sanctions Seek to Halt Financing for Venezuela ‘Dictatorship’

President Trump signed an executive order that prohibits dealings in new debt from the Venezuelan government or its state oil company. Venezuela’s state-run oil company, PDVSA, will no longer benefit from American bond trading and Venezuela’s US refiner, Citgo Petroleum, can no longer send dividends to the South American nation. The order stops short of a US ban on Venezuelan oil.

This weekly publication is designed to highlight relevant industry news to provide professionals in the transportation, supply chain, and energy sectors with up-to-date information in a rapidly changing marketplace. This update is purely a compilation of industry news and as such, does not necessarily reflect the opinion of Breakthrough®Fuel. We do not warrant or guarantee accuracy or completeness of information. For additional information, please contact us at info@breakthroughfuel.com.

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