Price War Reassurance & Rail Automation | Weekly News Update

Share:

EmailFacebookLinkedInTwitter
instagram social media icon

Russia Says Oil Price War with US Would be too Costly

The largest oil producer in the world and a vast contributor to the Organization of Petroleum Exporting Countries and supporting nations (OPEC+) production cuts will not enter a price war with the US, according to one of the Russian representatives apart of the production agreements.  As the OPEC+ production cuts continue and the US booming production surges, Russia is losing market share to the US.  Recently, OPEC+ agreed to collectively cut 1.2 million barrels per day (mmbd), with Russia agreeing to cut .23 mmbd.  On the other hand, US production continues to boost as production is nearing 12 mmbd making them the second largest oil producer in the world.  In order to take back market share from the US, the price for crude oil would need to drop below $40 per barrel (bbl).  Despite Russia not needing significantly high oil prices like Saudi Arabia and other oil dependent countries, if prices were to fall below $40/bbl it would not be healthy for their economy.  This indicates that Russia will remain apart of OPEC agreements, however the future is still uncertain.

American Railways Chug Toward Automation

As autonomous vehicles continue to make waves in over the road transportation, the rail automation is starting to immerge.  US rail companies are calling a fully autonomous train in Australia the future.  The autonomous train, called AutoHaul, travels on roughly 1,000 miles of track through the Australian Outback.  It manages 200 locomotives that moves iron ore from inland miles to the ports.  AutoHaul went live last month.  US rail companies said they do not want to remove the human operators completely, but to assist them, making processes more efficient and safer.

For any articles with a paywall, please refer to the Shared Drive for a PDF of the article.

In Other News

1/21

WSJ: American Railways Chug Toward Automation

Mining giant Rio Tinto RIO PLC calls it the world’s largest robot: mile-long driverless trains traversing the sparsely populated Australian Outback on roughly 1,000 miles of track. American railroad companies, seeking to boost network efficiencies, call it the future.

JOC: US Regulators Weigh Truck HOS Changes

As the era of the electronic logging device (ELD) enters its second year, US regulators are focusing their attention on the hours of service (HOS) those ELDs are designed to monitor. For shippers, truck drivers, and motor carriers, the proposals may be the most significant federal trucking rules this year – if the rulemaking is completed in 2019.

Platts: IMF Cuts 2019, 2020 Oil Price Forecasts on Global Demand Concerns

The International Monetary Fund Monday cut its forecast for average oil prices to just below $60/b in 2019 from close to $70/b in its last World Economic Outlook in October on concerns about global economic growth.   IMF again cuts global economic growth forecast

Reuters: Missteps in Mexican Pipeline Blast Trigger New Scrutiny of Fuel Plan

Mexico’s new government knew a pipeline was leaking but did not act for hours before a blast killed at least 85 people, a minister said on Sunday, increasing scrutiny of a push to stop fuel theft seen as the president’s first crackdown on crime.  Also see, Pipeline Theft in Mexico and its Consequences for Diesel and Death Toll Rises to 85 From Mexican Pipeline Explosion

Reuters: Canadian railways ration space as commodity congestion problems worsen

Canada’s two major railways are rationing space on trains traveling to the country’s biggest port and recently prioritized some commodities over others to deal with congestion, the latest indication of their struggle to meet demand from new trade deals.

Reuters: Japanese Refiners Load First Iran Oil Cargo Since US Sanctions

Japanese refiners have loaded Iranian oil onto a tanker, resuming imports after halting purchases because of sanctions by the United States. Japan is the last of the four biggest Iranian oil buyers in Asia to resume imports after receiving a waiver to the sanctions that started in November.

WSJ: Oil Prices Pause as Chinese Data Signals Slowdown

Slowing growth in China, the world’s second largest economy, weighed on oil prices Monday.  China’s economy grew at its slowest pace in nearly three decades last year, as a bruising trade fight with the U.S. exacerbated weakness.

JOC: Challenges Mount for US Intermodal Rail

As a new year for US transportation begins, the question of what’s to come inevitably comes to the fore. For intermodal, 2018 was a good year, the best in some time. But it also was a year of missed opportunities. Rather than a springboard for future gains, the industry’s performance may have created new challenges that will need to be overcome in the coming months.

WSJ: Russia Flexes Its Muscle in the Middle East

Russia is strengthening ties with the U.S.’s traditional Arab allies, scrambling the Middle East’s political landscape and demonstrating how Moscow could cement its role as a regional power broker.

WSJ: Truckers See Momentum Slowing Heading Into 2019

Trucking companies face an uphill climb in 2019 as a freight boom that delivered record profit for carriers over the past year begins to soften.

1/22

FreightWaves: Are Fleets Implementing Electric Trucks Soon?

During 2018, those in the Class 8 heavy-duty truck and fleet business continue to speculate about the prospects of electric vehicles and where they stack up against their diesel counterparts. While electrification may become a reality down the road, for the foreseeable future many in the industry remain loyal to the improving output of quality returns found in diesel.

JOC: E-Commerce Pushing US Trucking to Up its Game

Transportation in 2018 was a year of continued upheaval. To those who feel the trucking market is a living and breathing entity, it validated that, and we’re beginning to be able to identify some of the predictable, recurring conditions.

Transport Topics: Seven Ways the Ocean Cargo Industry is Pursuing Green Shipping

Big changes start next January, when long-debated standards from the International Maritime Organization mandate steep cuts of sulfur emissions associated with respiratory disease and acid rain. Much tougher rules are supposed to take effect in 2050, when the IMO will require ships also reduce carbon dioxide emissions by at least half.

JOC: Software Offers Fast Route to Digitized Freight Data

On the journey from paper shipping documents to digitized data, new software is emerging that can sift through multiple formats, offering an accelerant to adoption by shippers and forwarders. The challenge is that shipping documents have, and likely always will, come in multiple formats, and that makes it a data normalization challenge.

Supply Chain Dive: Trucking shipments fall year-over-year for first time in 2 years

Shipment volume in U.S. trucking in December 2018 went south compared to December 2017 — marking the first negative year-over-year change in two years.  Analysts from the Cass Freight Index insist the dip is not cause for alarm and simply suggests the U.S. economy “may have reached its short-term expansion limit.”

WSJ: Developers Woo Retail Tenants with Tallest-Ever Warehouses

The race for urban U.S. warehouse space is going vertical. Developers hoping to capitalize on the push for faster e-commerce delivery are building multi-story warehouses with features aimed at maximizing capacity in tight urban footprints.

1/23

FreightWaves: Shipping Innovation is Moving Faster than Regulation

Innovation in the field of autonomous shipping is moving at a far greater pace than the international rules that will regulate the industry can be established.

Transport Topics: Autonomous Technology Promises Safety Benefits

While the debut of automated vehicles in the marketplace remains years away, the technology already available has the potential of improving safety for commercial drivers, officials and experts at the annual meeting of the Transportation Research Board here said Jan. 14.

FreightWaves: International Shipping to Lead in Greenhouse Gas Emissions

Shipping is rapidly changing – regulations are driving innovation and new technologies offer new ways of moving cargo. What has not been as widely reported is that the IMO has called for another major change for shipping that is perhaps even more far-reaching. The agency has mandated that total annual marine greenhouse gas (GHG) emissions be cut by at least 50 percent by 2050 (compared to 2008 emissions).

Transport Topics: ATA Truck Tonnage Index Has Best Year in 20 Years

Truck tonnage closed out 2018 on a 20-year high with an annual increase of 6.6%, American Trucking Associations announced. The result was the highest for the federation’s seasonally adjusted for-hire truck tonnage index since 1998, when truck tonnage rose 10.1%, ATA said.

WSJ: Green Politics and Global Instability

Every so often the Pentagon comes up with a thumb sucker about how climate change is going to alter the geopolitical landscape. The intriguing Norwegian TV show “Okkupert” (“Occupied”) might be a better guide to understanding how such instability could already be brewing on our own northern border.

Reuters: Russia says oil price war with U.S. would be too costly

Russia should not unleash an oil price war against the United States but rather stick with output cuts even at the cost of losing market share in the medium term, one of the main Russian architects of a production pact with OPEC said.

JOC: Value-Add Services in Shipping Take Shape

The global container shipping fleet will grow 2.5 and 2.6 percent this year and next, respectively, while volume will grow 5.5 and 5.3 percent in the same period, according to an analysis of IHS Markit demand forecasts and the orderbook. As that capacity chapter closes, another one opens that will be less about the scale of capacity and more about how to use it more effectively.

WSJ: U.S. Recognizes Venezuelan Opposition Leader as Interim President

President Trump took on Venezuela’s leftist authoritarian president and his regime’s Russian and Chinese backers on Wednesday by recognizing the opposition leader of the oil-rich country’s congress as its legitimate head of state.

1/24

FreightWaves: The Permian Basin’s Demand for Crude Oil Tanker Trucks Could Quadruple in Q2

The Permian Basin’s daily requirements for tanker trucks to take crude out of the oilfield could quadruple in the second quarter of this year, Rystad Energy warned in its January newsletter. The slide in West Texas Intermediate crude prices have caused oilfield operators to guide down expected activity in 2019, which Rystad believes will slow down pipeline construction. That means that not only will the bottleneck on pipeline takeaway capacity not be relieved, but it will be exacerbated.

JOC: US Truckload Capacity Pressure Eases Slowly

On US highways, the mother of all trucking capacity crises reached its peak in 2018. That doesn’t mean trucks and trailers will magically fall on shippers this year, but the chaos of 2018 may be replaced by a more typical, seasonal calm in early 2019, especially if imports from China drop sharply in January following a rush to beat the imposition of tariffs on $200 billion in Chinese goods that have now been postponed.

Transport Topics: CARB Aggressively Pursues Tougher NOx and PM Emissions Reductions

California environmental regulators are aggressively moving forward with plans to require significant reductions in nitrogen oxides and particulate matter emissions for heavy trucks, improvements in “real time” on-board diagnostics, and lengthening the “useful life,” durability and warranty periods for heavy trucks.

JOC: Low-Sulfur Costs Hamper Trans-Pacific Contracting

Major container lines are telling North American importers they won’t sign service contracts that don’t account for their higher costs from the low-sulfur global mandate, while shippers and non-vessel operating common carriers (NVOs) complain that carriers won’t know the true cost till the fourth quarter when carriers will begin actually using low-sulfur cost to run their ships.

1/25

JOC: Faster Supply Chains Creating US Truck Capacity

For US shippers struggling to secure truck capacity, now is the time to act, and the first thing they should think about is time, especially how much time is lost in their supply chains. Capacity most often is measured in drivers, tractors, trailers, containers — all physical assets, human or otherwise — and space, as in the amount of space available in a trailer or on a pallet. But the fourth dimension is capacity’s hidden dimension.

Transport Topics: Appeals Court Rejects Challenge to California’s Low-Carbon Fuel Standard

An appeals court has rejected a challenge by a group of trade and energy organizations to block California’s low-carbon fuel standard aimed at reducing the rate of greenhouse gas emissions in the state’s transportation sector.

Transport Topics: Experts Discuss Autonomous Tech’s Effect on Freight

As they become more prevalent, autonomous technologies will bear a bigger impact on freight transportation, according to panelists assembled at the U.S. Conference of Mayors’ winter meeting. Clement Bezold, chairman of the Institute for Alternative Futures, said autonomous technology in trucks eventually may play a role in the longhaul portion of journeys, meaning the part of the trip that takes place on interstates rather than inner-city streets.

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.