U.S. To End All Waivers on Imports of Iranian Oil
Last Monday it was announced that the Trump administration would not be renewing waivers granted last November to buyers of Iranian oil, an unexpected decision that caught several key importers off guard. Following his decision to pull out of the 2015 accord between Iran and six world powers aiming to curb Tehran’s nuclear program, President Trump initially granted these waivers to eight world economies, including China and India, for six months.
Following the announcement, oil prices surged, even as several dynamics came into play to both fan and mitigate supply fears. Though OPEC leader Saudi Arabia stated on Wednesday that it would take a wait-and-see approach before increasing output to account for the drop in Iranian exports, reports of a gain in U.S. crude inventories offered optimism for global supply figures.
Representatives from several countries most impacted by the end of the waivers have also spoken out. China, Iran’s largest crude oil customer, strongly opposes the move, citing the possible instability this could cause in the region, in the oil market, and in the global economy. Turkey echoed these sentiments, adding that it “rejects unilateral sanctions and impositions on how to conduct relations with neighbors.” It remains likely that oil prices will continue to experience volatility in the coming weeks as the effects of this decision unfold.
Tesla Delays Production of Semi Truck Until 2020
On a quarterly earnings call this week, Tesla has indicated that they will begin building their new semi in 2020. Tesla began accepting orders for the semi in November of 2017, and said previously that production would begin in 2019. The production location for the trucks, which come with a $150,000 base price for a 300-mile range and a $180,000 price for a 500-mile range, is also yet to be confirmed. According to Jerome Guillen, Tesla’s President of Automotive and the head of the Tesla Semi program, batteries and drivetrains are to be constructed in Tesla’s Gigafactory 1, located somewhere in Nevada. This announcement extends the timeline for shippers who are eager to add Tesla semis to their fleets.
In Other News
Union Pacific is through the first of three stages laid out in its “Unified 2020 Plan” — the railroad’s plan to transition to precision scheduled railroading (PSR), which began in October.
Washington’s decision to scrap waivers on Iranian oil exports could indirectly blunt its offensive toward Venezuela, where US hints at imposing a secondary component to existing sanctions now look less likely to materialize.
For US trucking companies, 2018 was a record-breaking, historic “annus mirabilis,” or miracle, year. Its high-water mark was high indeed, as the strongest freight market since the 2009 recession and constrained capacity combined to push the collective revenue of the 50 largest US trucking companies up 12.2 percent to $157.5 billion, a $17.2 billion increase from a revised $140.4 billion in combined revenue in 2017.
The Trump administration moved to broaden Iran’s economic isolation on Monday by announcing it would fully enforce sanctions that were imposed last fall and stop allowing five large nations to buy Iranian oil. Global oil prices rose even before the announcement in Washington, increasing the specter of a surge in oil and gasoline prices.
Shippers could see further deterioration of schedule reliability in the coming months as container lines remove vessels from service to retrofit them with scrubbers to meet a mandate requiring the reduction of sulfur content in marine fuel from 3.5 percent to 0.5 percent starting Jan. 1.
Specialized freight is often unique, high-value and critical to the shipper or consignee operation, unlike many other commodities. Carriers with a history and reputation of safe, on-time and claim-free deliveries are the carriers a shipper should consider using to move their freight. A shipper’s evaluation should include people, processes and performance.
In an effort to further reduce emissions and highlight the benefits of hydrogen fuel cell technology, Kenworth announced that it will develop 10 zero-emissions Kenworth T680s powered by Toyota hydrogen fuel cell electric powertrains to be used at the Ports of Los Angeles, throughout the Southern California and Central Coast areas, and in Merced County.
Oil prices hit their highest point since November 2018 on Tuesday after Washington announced all waivers on imports of sanctions-hit Iranian oil would end next week, pressuring importers to stop buying from Tehran.
Pressure is on OPEC to ensure adequate supplies to global oil markets following the US announcement to end waivers for Iranian oil exports as of 2 May, but Riyadh appears to be taking a more measured position.
Kenworth Trucks joined forces with several allies April 22 in the battle against greenhouse gases, unveiling three of 10 Class 8 trucks that will run using hydrogen fuel cells developed by Toyota. The trucks were displayed at the Port of Los Angeles on Earth Day in front of about 200 government, port, business and trucking officials.
China’s Foreign Ministry said on Tuesday it has formally complained to the United States over its decision to end waivers on sanctions on Iranian oil imports, adding another fault line to already complicated Beijing-Washington ties.
Toyota, Kenworth, UPS, the California Air Resources Board, the Port of Los Angeles and Shell…some of the biggest names in the transportation industry met at the Port of Los Angeles Monday for the unveiling of Toyota and Kenworth’s first jointly developed fuel cell electric truck.
Freight processing capacity at the US-Mexico border has been slashed 30-40 percent in a week by the transfer of US Customs and Border Protection (CBP) customs officers to immigration duties, according to C.H. Robinson Worldwide. That shift in resources, combined with rising volumes, has snared supply chains in a worsening border freight backup.
Saudi Arabia’s energy minister said on Wednesday he saw no need to raise oil output immediately after the United States ends waivers granted to buyers of Iranian crude, but added that his country will respond to customers’ needs if asked for more oil.
South Carolina, Georgia and Florida lawmakers are renewing a push to stop President Donald Trump’s administration from allowing drilling off their shorelines. The pushback comes as the administration nears the release of an updated version of its offshore drilling plan.
Alphabet’s Wing Aviation has been cleared as the first drone company granted an Air Carrier Certification from the Federal Aviation Administration (FAA). This will allow it to begin drone delivery from commercial businesses to personal residences.
The new chief of South Korea’s container shipping company, Hyundai Merchant Marine (HMM), is looking to get in good stead with the world’s largest container shipping alliance, 2M, after HMM reported a $728 million loss for 2018, its fourth money-losing year.
The fuel oil was produced in the 45,000 b/d Isaac Sabba refinery in Manaus, Brazil. It has 0.34pc sulfur content, viscosity of 323cst at 50°C, and density of 932.7 kg/m3 at 15°C. A batch of 618t was supplied on 21 April to a vessel chartered by Petrobras.
Unipec has bought two cargoes of US crude oil for delivery to China this week and in early May, the first such imports for Chinese state-owned Sinopec’s trading arm since September, because of the trade war between China and the US.
Canadian Pacific demonstrated positive sentiment towards precision-scheduled railroading (PSR) this week, citing that the work of several U.S. railroads to convert to PSR is already showing marginal improvement to overall flow.
Norfolk Southern Corporation (NYSE: NSC) reported record first quarter diluted earnings per share (EPS) for 1Q 2019. The company’s diluted EPS came in at $2.51, a 30 percent increase year-over-year, outpacing analyst estimates of $2.18.
After a three-year slide in 2015-18, U.S.-listed tanker stocks have rallied sharply off their lows during the first four months of 2019. At least some investors are betting that the recovery in charter rates is just around the corner, despite repeated false starts over the past half-decade.
The US believes the world has enough oil to keep the market stable, and Washington will step up efforts to work with producers and Asian importers to ensure a smooth energy transition away from Iranian oil, US government officials said Thursday.
After posting first quarter financials on Wednesday, the company says it now plans to kickstart production of its Class 8 in 2020 to meet the demand of several large carriers with semis on reserve.
A “less robust” market awash with storms and flooding siphoned first-quarter revenue from the largest US truckload operator, Knight-Swift Transportation Holdings. However, Knight-Swift boosted its profits by controlling costs, pulling its adjusted operating ratio down to 86.7 percent from 88.9 percent a year ago, the Phoenix-based company said Wednesday.
US refiners who have invested early and heavily to prepare for tighter international marine fuel regulations in 2020 hope that the US administration stays the course on its commitment.
The Trump administration on Thursday confirmed that it will likely delay the release of a long-awaited plan that had been expected to open most of the nation’s coastline for offshore oil drilling, pending the final outcome of a recent court decision that blocks drilling off the Alaskan coast.
Shipowners caught exceeding the International Maritime Organization (IMO) 2020 sulphur limits, which start 1 January, could face a $25,000 fine for each violation, said Briton Sparkman, an attorney with Chalos & Co who specializes in maritime law.
The largest US truckload carriers are boosting profitability and gaining freight despite an overall downward trend in shipping volumes, according to data from corporate earnings reports and research firm SJ Consulting Group. Some of those carriers are also lowering earnings expectations, however, as 2019 shapes up to be a slower, softer year than the “annus mirabilis” seen 2018.
Dealerships and fleets are changing stocking patterns for replacement parts and adding inventory as they work to minimize truck downtime amid widespread shortages of some truck parts.
Two Trump administration officials said on Friday that neither a wind-down period nor a short-term waiver on China’s oil purchases from Iran are being contemplated after Washington surprised Iran’s customers on Monday by demanding they halt the purchases by May 1 or face sanctions.
Canadian National Railway’s launch this week of a mobile application aimed at improving terminal fluidity by allowing truck drivers to complete paperwork ahead of time is part of a larger effort by US and Canadian Class I railroads to inject fluidity to rail ramps amid space and rising volume pressures.
Russia identified the source of chemical contamination that shut down a major oil pipeline to Europe, blaming a private storage terminal in the center of the country for the problem.
The Port of Los Angeles is enlisting the support of shipping lines, terminal operators, railroads, truckers, and labor unions in a collaborative effort to address cyber security threats, a strategy port stakeholders agree should be a natural outgrowth from data-sharing efforts.
Meritor announced at the Advanced Clean Transportation Expo that it will be supplying electric drivetrain systems for 38 terminal trucks in a partnership build with TransPower which is being funded by one of the largest grants ever awarded for port tractors.