New US Trucking Companies Outpace Bankruptcies | Weekly News Update

Share:

EmailFacebookLinkedInTwitter
instagram social media icon

US Threatens Additional Tariffs on Chinese Imports

After China retaliated with more tariffs ranging from 5 to 10 percent on $75 billion worth of goods, US President Trump reacted with more tariffs.  He threatened to add an additional 5 percent on all the current and future tariffs set to take effect.  This means the US will raise tariffs on $250 billion worth of Chinese goods from 25 percent to 30 percent on October 1.  The tariffs that went into effect on September 1 and tariffs that will take effect on December 15 will also raise from 10 percent to 15 percent.  President Trump also ordered US companies to find an alternative to China.

Despite the negative sentiment on global demand, oil and diesel prices failed to react to this news.  This is because President Trump tweeted Monday morning saying he has “great respect” for Chinese President Xi and “talks are continuing.”  Trump even went on to say that China called him and he stated, “I think they want to make a deal,” although China claimed they never called Trump.

Despite Bankruptcies, More US Truckers Rolling

A recent article by the Journal of Commerce (JOC) shows more new trucking companies are hitting US highways than going out of business.  According to the Federal Motor Carrier Safety Administration (FMCSA), more than 21,000 new trucking companies were added to the market in the past 12 months.  Of these 21,000 companies, approximately 78 percent were companies with one to six trucks.  Roughly 168 carriers were added with 101 to 500 trucks.  In the first half of 2019, we have seen just 640 carriers go out of business, which alludes to bankruptcies doing little to reduce trucking capacity.

In Other News:

8/26

WSJ: U.S. Companies on China: Breaking Up Is Hard

American businesses, from technology startups to large corporations, say they cannot quickly upend their supply chains and stop doing business in China.

WSJ: Iran’s Foreign Minister Makes Unexpected Visit on Sidelines of G-7 Meeting

Iran’s top diplomat made a surprise visit Sunday to the city hosting the Group of Seven summit, meeting with a delegation including President Emmanuel Macron as leaders grappled with how to defuse tensions and salvage a multination landmark nuclear deal after a U.S. pullout.

Supply Chain Dive: US to up all China tariffs 5 percentage points

The U.S. will increase the tariff rate on the remaining $300 billion worth of imports from China to 15%.  However, President Trump struck a more optimistic tone Monday morning after spending the weekend at the G7 Summit in Biarritz, France, making conflicting statements regarding the state of the U.S. trade war with China.

WSJ: Trump Seeks to Ease Tensions with China, G-7

President Trump sought to ease trade tensions with China and struck a more conciliatory note on the final day of the Group of Seven summit, where world leaders have pressured him to de-escalate the trade war.

JOC: Despite bankruptcies, more US truckers rolling

Amid a series of trucking bankruptcies, the overall number of trucking companies and drivers in the United States continues to rise. More than 21,000 new trucking companies hit US highways between June 2018 and this June, according to Federal Motor Carrier Safety Administration (FMCSA) data analyzed by logistics company Tucker Company Worldwide and QualifiedCarriers.com.

FreightWaves: Bernie Sanders’ green deal – $216 billion for electric trucks

Bernie Sanders wants to spend $216 billion to replace all long-haul diesel trucks with fast-charging electric trucks if he is elected president in 2020.

JOC: New tariffs threaten to reverse US inventory decline

US manufacturers and retailers continue to hold onto goods, boosting inventories and depressing demand for freight transportation within the United States, according to the latest US data and anecdotal reports from shippers. But there are signs the inventory reduction or “correction” trucking and intermodal companies have been anticipating for months is coming.

8/27

Reuters: Iran’s Rouhani rules out talks with U.S. until sanctions lifted

Iran will not talk to the United States until all sanctions imposed on Tehran are lifted, President Hassan Rouhani said on Tuesday, a day after President Donald Trump said he would meet his Iranian counterpart to try to end a nuclear standoff.

WSJ: Trump-Backed U.S.-British Trade Deal Faces Hurdles

President Trump and U.K. Prime Minister Boris Johnson want to quickly strike a free-trade pact after Britain leaves the European Union. Resistance is already rising on both sides of the Atlantic.

Reuters: BP to quit Alaska after 60 years with $5.6 billion sale to Hilcorp

British oil major BP on Tuesday agreed to sell all its Alaskan properties for $5.6 billion to privately held Hilcorp Energy Co, exiting a region where it operated for 60 years.

WSJ: U.S. Glut in Natural-Gas Supply Goes Global

Natural-gas prices in Europe and Asia have plummeted this year to historic lows in the midst of reduced demand, the trade dispute with China and brimming storage facilities in Europe. The biggest driver of falling prices, though, has been the U.S. gas that is spilling into global markets.

8/28

Reuters: U.S. weekly crude production hits record 12.5 million bpd

U.S. weekly crude production rose by 200,000 barrels per day (bpd) to a record 12.5 million bpd in the week to Aug. 23, data from the U.S. Energy Information Administration showed on Wednesday.

ACT: Volvo Drives Electric Truck Innovation

An ACT News Executive Interview with Peter Voorhoeve, president, Volvo Trucks North America, on how the transportation leader is accelerating electromobility to transform freight movement.

8/29

WSJ: Energy Companies Set to Get Reprieve on Methane Rules

The Trump administration is moving to erase Obama-era rules on methane emissions from the oil-and-gas business, saying the federal government overstepped its authority when it set limits on what scientists say is a significant contributor to climate change.

Reuters: Oil falls ahead of hurricane but posts weekly gain as U.S.-China trade war eases

Oil futures fell on Friday, with U.S. crude down nearly 3% ahead of a hurricane near the Florida coast that could dampen demand, but prices were still headed for the biggest weekly increase since early July, boosted by an easing of U.S.-China trade rhetoric.

WSJ: Aramco Proposes Two-Stage IPO, Shunning London, Hong Kong

Saudi Arabian Oil Co. is considering a plan to split the world’s largest IPO into two stages, debuting a portion of its shares on the Saudi stock exchange later this year, and following up with an international offering in 2020 or 2021, according to people familiar with the plans.

WSJ: Trucking Company Shutdowns Grow as Shipping Market Cools

Trucking company failures are rising as faltering freight demand exposes operators unprepared for a downturn after last year’s red-hot shipping market.  Approximately 640 carriers went out of business in the first half of 2019, up from 175 for the same period last year and more than double the total number of trucker failures in 2018.

8/30

WSJ: Oil and Gas Bankruptcies Grow as Investors Lose Appetite for Shale

Twenty-six U.S. oil-and-gas producers have filed for bankruptcy this year, nearly matching the 28 producer bankruptcies in all of 2018. The number is expected to rise as companies face mounting debt maturities.

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.

Sign up for the Breakthrough Advisor Brief and additional market insights.