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Libyan Unrest & Trucking Payroll Cuts | Weekly News Update

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Battle Rages for Libya’s Capital, Airport Bombed

Libya, one of the most volatile nations apart of the Organization of Petroleum Exporting Countries (OPEC), is experiencing continuous civil unrest.  This past week there have been attacks on Tripoli, Libya’s capitol, including bombing of their only functioning airport.  The attacks are led by General Khalifa Haftar, who currently is the head of the country’s self-proclaimed eastern parliament and the Eastern Libya National Army (LNA).  Haftar plans to take control of Tripoli and the entire western part of Libya, including the oil ports of Es Sider and Ras Lanuf.  US has even pulled troops out of the country due to the intensified fighting.  Currently there is no immediate threat to Libyan oil fields or ports, but if these plans are successful and attacks escalate, major disruptions could occur.  According to the OPEC monthly report, Libya produced nearly 1.1 million barrels per day (mmbd) in March, which is .196 mmbd higher than February and the country is currently exempt from the OPEC+ production cut agreement.

Truckers Cut Payrolls as Freight Demand Softens

According to the Labor Department, trucking companies cut payrolls by 1,200 jobs in March, which ends a near yearlong expansion.  Despite the US adding roughly 196,000 jobs in March and holding unemployment at 3.8 percent, trucking jobs slowed indicating a softening freight market.  Other indicators supporting this claim include warehouse and storage companies adding 1,700 jobs in March, which is the slowest rate of growth since December.  Also, North American heavy-duty truck orders fell significantly, along with shipment volumes reported by the CASS Information Systems Freight Index.

In Other News

4/8

Reuters: United States sets sights on China in new electric vehicle push

U.S. government officials plan to meet with executives from automakers and lithium miners in early May as part of a first-of-its-kind effort to launch a national electric vehicle supply chain strategy, according to three sources familiar with the matter.

Reuters: Saudi Arabia threatens to ditch dollar oil trades to stop ‘NOPEC’

Saudi Arabia is threatening to sell its oil in currencies other than the dollar if Washington passes a bill exposing OPEC members to U.S. antitrust lawsuits, three sources familiar with Saudi energy policy said.

WSJ: Truckers Cut Payrolls as Freight Demand Softens

Trucking companies pulled back from hiring in March as freight demand softened and job growth across the logistics sector slowed.  Carriers cut payrolls by 1,200 jobs last month, according to preliminary figures the Labor Department reported Friday, halting a nearly yearlong expansion amid signs a hot streak that boosted transportation companies’ profits in 2018 is cooling.  Also see, Trucking employment dips for the first time in a year, spot rates flat

NY Times: Blamed for Climate Change, Oil Companies Invest in Carbon Removal

Chevron, Occidental Petroleum and the Australian mining giant BHP this year have invested in Carbon Engineering, a small Canadian company that claims to be on the verge of a breakthrough in solving a critical climate change puzzle: removing carbon already in the atmosphere.

Transport Topics: How Consolidation and Freight Networks are Disrupting the Logistics Landscape

When financier Brad Jacobs launched his bid to consolidate the logistics industry in 2011, he set into motion a process that continues to reshape the industry today. But now there are other business strategies in play with the potential to disrupt the business and spur a new era of growth for companies that can offer a broad range of services and have the capability to adapt quickly to changing market conditions.

JOC: Pending US Truck Regulations to Curb Capacity

After experiencing the disruption caused by the electronic logging device (ELD) mandate in 2018, US shippers and trucks could be forgiven if they are looking for a respite from regulatory changes. The trucking industry has successfully worked through the productivity challenge posed by stricter enforcement of federal hours-of-service (HOS) rules under the ELD mandate, and supply has generally caught up with demand, but there are a handful of other still-pending developments that could have a major impact on domestic capacity.

CCJ: Truck, Engine Manufacturers Urge Trump to Skip New Tariffs

Trade organizations representing Class 8 truck and engine manufacturers, among others, have sent a letter to President Trump warning that new tariffs on imports of automobiles and parts could harm the U.S. economy, jeopardize jobs and hurt the manufacturing sector.

WSJ: Frackers, Chasing Fast Oil Output, Are on a Treadmill

Shale companies from Texas to North Dakota have been managing their wells to maximize short-term oil production. That has long-term consequences for the future of the American energy boom.

Reuters: Battle rages for Libya’s capital, airport bombed

A warplane attacked Tripoli’s only functioning airport on Monday as eastern forces advancing on the Libyan capital disregarded international appeals for a truce in the latest of a cycle of warfare since Muammar Gaddafi’s fall in 2011.  Also see, U.S. Removes Troops from Libya Amid Fighting in Capital

4/9

Reuters: India delays May order for Iran oil, awaits clarity on sanctions waiver: sources

Indian refiners are holding back from ordering Iranian oil for loading in May pending clarity on whether Washington will extend a waiver from U.S. sanctions against the OPEC-member, four sources said.

Supply Chain Dive: Maersk Completes Spin-Off of Oil Drilling Business

A.P. Moller – Maersk’s oil and gas drilling business was listed separately on the Copenhagen stock exchange Thursday, according to multiple media reports. The new company is called The Drilling Company of 1972. This move is part of a 2016 plan to focus on logistics and supply chain services and move away from oil and gas in search of healthier and more stable profit margins. The company sold its oil production and exploration business to Total in 2017.

Argus Media: IMF Cuts 2019 Global Growth Forecast

The IMF projects slower growth in advanced economies will create a drag on the global economy, which could affect demand forecasts for oil and other commodities.

Reuters: Trump to seek to stop states from delaying energy projects

President Donald Trump will issue two executive orders in the heart of the Texas energy hub on Wednesday seeking to speed gas, coal and oil projects delayed by coastal states as he looks to build support ahead of next year’s election.

JOC: Retailers project low double-digit US import growth

Merchandise imports are projected to show year-over-year monthly increases at least through August as trade tensions with China ease somewhat, but growth will be slower than last year, only about 1.8-3.7 percent, according to three estimates.

4/10

Reuters: U.S. bill to boost electric car tax credits could rev GM, Tesla

A bipartisan group of U.S. lawmakers introduced legislation on Wednesday to expand the electric vehicle tax credit by 400,000 vehicles per manufacturer, a provision that would give a boost to Tesla Inc and General Motors Co before the existing credit comes to an end for them.  Also see, Georgia Republicans propose $2,500 state tax credit for electric vehicles

JOC: Small Shippers Targeted for New Mexico Rail Services

Smaller shippers looking for alternative services in Mexico amid rising cargo volumes and tightening capacity will soon have the option to send cargo on two independent intermodal services along the country’s main rail lines.

4/11

AP: EU, UK agree to delay Brexit until Halloween

British Prime Minister Theresa May says the European Union has granted her “key request” to add an early exit clause to its agreement to a six-month Brexit extension.  The U.K. and the EU agreed early Thursday to delay Brexit until Oct. 31 but May says she wants to leave “as soon as possible.”

Argus Media: IEA Sees Tightening Oil Market in 2Q

The oil market is showing “signs of tightening” in the second quarter, but there are mixed signals on the outlook for demand and whether stock levels are yet “normal”, the IEA said in its latest Oil Market Report (OMR).

CCJ: With State Trucking Association Support, Ohio to Hike Diesel Tax in July

The per-gallon tax on diesel fuel in Ohio will climb 19 cents in July, after the state’s legislature recently finalized a bill to increase the gasoline and diesel taxes and Ohio Gov. Mike DeWine signed the bill into law.

Transport Topics: Retailers, Logistics Firms Expand Final-Mile Delivery to Meet Rising E-Commerce Expectations

Retailers and transportation providers are embracing a blend of final-mile delivery strategies to keep pace with rapidly shifting online shopping habits. As e-commerce continues to expand, companies increasingly are offering options such as home delivery and installation of heavy appliances and in-store pickup of fresh groceries ordered online, industry leaders said at the Home Delivery World trade show here April 4-5.

Transport Topics: Ports, Shipping Industry Responsible for 26% of US GDP, Study Says

The bustling activity at America’s seaports added $5.4 trillion to the economy in 2018 by way of revenue to businesses, personal income and economic output by exporters and importers.

WSJ: U.S. Natural-Gas Market Is Taking Cues from China

The rise of the U.S. as a major exporter of liquefied natural gas has helped balance the domestic market amid surging production. It has also connected the price of gas in Louisiana to the weather in China—a development that is adding pressure on already low U.S. prices.

JOC: Intermodal falters in Q1, service wanes

North American intermodal volume for the first quarter receded for the first time since 2016, while service for international and domestic containers leaving California deteriorated, a combination that means more delays and costs.

4/12

Transport Topics: Speaker Nancy Pelosi Eyes as Much as $2 Trillion for Infrastructure

On April 4, House Speaker Nancy Pelosi dialed up the president and requested a meeting. She talked to Donald Trump about working together on an infrastructure package. It was the first phone call between the two since the testy days of the government shutdown earlier this year, and it seemed productive. They are planning to meet, she told the Associated Press in an April 10 interview.

Argus Media: US Weighs Iran Oil Waivers Amid Other Crises

Washington must consider ever tighter global crude supplies as the deadline for its next round of Iran sanctions exemptions looms Washington has to confront a new set of challenges facing global oil markets as it considers again how strictly to enforce sanctions against Iranian crude exports.

Transport Topics: Uber’s Investment in Autonomous Tech Tops $1 Billion Since 2015

Uber Technologies Inc. has spent more than $1 billion on autonomous vehicle technology to compete with giants such as Alphabet Inc., Apple Inc. and General Motors Co.

Reuters: Mexico, US Discuss NAFTA Replacement, Border Delays

Mexican government and business leaders met with U.S. counterparts for a second straight day on Friday, seeking to resolve border delays hurting commerce, hasten ratification of a trade deal, and address metals tariffs.  USMCA No Closer to Ratification as Opposition Digs In

WSJ: Sliding Freight Rates Send More Big Bulk Ships to Scrapyards

A sharp decline in dry cargo ship freight rates in the first quarter sent more giant ships to scrapyards in Southeast Asia in the first three months of the year.

WSJ: Chevron to Buy Anadarko Petroleum in $33 Billion Cash-and-Stock Deal

Chevron Corp. has agreed to buy Anadarko Petroleum Corp. in a $33 billion deal that expands its shale-drilling ambitions and places it just behind Exxon Mobil Corp. as one of the world’s largest publicly traded producers of oil and gas.

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. 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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