Secondary Venezuelan Oil Sanctions Expected from US
A second round of sanctions on Venezuela are expected from the US due to Maduro still holding power. The additional sanctions would extend to prohibit trade between PDVSA and any non-US companies. The sanctions will target exports to India of over 0.430 million barrels per day (mmbd). As a result, Venezuelan crude oil output would fall to under 0.500 mmbd by the end of the year and fall to 0.375 mmbd by the end of 2020.
The Trump Administration announced that the waivers on Iranian sanctions will end in attempt to reduce Iranian oil output to zero. Oil prices surged on Monday, April 22 in-light of the announcement. Despite the news, it is still expected that China and India will continue to purchase crude from Iran. As events play out, oil prices will experience uncertainty and volatility in the coming weeks.
Nikola Unveils Hydrogen-Electric Hybrid Truck
The Nikola World event brought big news to the alternative energy market for class 8 heavy duty trucks. Nikola Motor unveiled two hydrogen electric trucks, which consists of the Nikola Two for North American markets and the Nikola Tre which is designed for European markets. The trucks will offer hydrogen-electric hybrid versions for long-haul and a fully-battery electric version for short-haul and regional movements. The trucks, depending on the version, will be able to reach 500 to 1,200 miles on range and can be recharged in 20 minutes. Both models can be preordered and will go into production in 2022. Nikola’s plan is to lease or sell the trucks, maintenance, and fuel for about $900,000 for a million-mile package, which is less than what it would cost to operate a diesel truck for the same million miles, according to Nikola. The company is also planning to invest in the charging infrastructure to support these vehicles. The Nikola is currently building out a network of 100 hydrogen stations per year until 2028.
In Other News
California would allow for the testing of light-duty autonomous trucks on public roads under a proposed rule announced Friday. The state’s Department of Motor Vehicles announced the proposal today, which outlines a permitting process for companies wishing to test or deploy driverless trucks for testing.
EVgo said April 11 it has completed or has in construction 14 battery storage systems at 11 fast charging stations. The company calls it the largest deployment of battery storage systems at public fast charging stations in the nation.
One of the most effective ways to boost a truck’s fuel efficiency is to decrease the amount of friction created by its forward motion. Various aerodynamic devices help move air out of the way and reduce resistance, but there are fewer options for reducing drag created by tires as they travel across the road.
The United States is open to facing “repercussions” if it doesn’t live up to its commitments in a potential trade deal with China, Treasury Secretary Steven Mnuchin said, in a sign that the two sides are edging closer to an accord.
When the Organization of the Petroleum Exporting Countries met in Vienna in December, it was in danger of imploding. Oil prices had plunged. Member states Iran, Venezuela and Libya were refusing to cut production. Qatar had quit. And U.S. President Donald Trump was pressuring Saudi Arabia to keep prices low.
The Port of Houston says its decision to limit the calls of 9,000-TEU-plus ships to one a week won’t hamper the port’s volumes, but transportation providers and packagers supporting resin exporters, expecting a surge in shipments, aren’t convinced.
In China, the country most aggressively pursuing the adoption of EVs and home to the world’s largest auto market, some of the industry’s biggest names believe pure battery electric cars will be as cheap as gasoline counterparts by 2025.
Microsoft Corp. is joining a climate advocacy group backed by big energy corporations and high-profile Republicans, an effort by the software giant to find middle ground on environmental issues that have polarized U.S. politics.
Swapping diesel trucks and buses for electric models is a critical strategy for both reducing greenhouse gas emissions to mitigate climate change and reducing local air pollution to improve public health.
A.P. Moller – Maersk, Hapag-Lloyd, MSC and Ocean Network Express (ONE) have formed the Digital Container Shipping Association after receiving regulatory approval from the Federal Maritime Commission, according to a press release.
Precision scheduled railroading (PSR) promised scheduled rail freight operations resulting in more than a financial gain for a railroad and its investors. The business theory is that operating efficiencies reduce costs and that improved rail discipline improves shipper service. Where is the evidence of shipper gains? Is customer service actually improving under PSR? Is the service delivered to freight customers actually improving?
The European Commission and European Union (EU) member states, including the United Kingdom, have submitted a proposal to modify shipping’s existing reporting mechanisms to enable the enforcement of the International Maritime Organization’s (IMO) 2020 Sulfur Regulation.
At the Nikola World event in Scottsdale Arizona, Nikola Motor showed off two new vehicles, the Nikola Two hydrogen electric Class 8 truck and the Nikola Tre, designed for the European market. Also see, Nikola Two, Nikola Tre Unveiled.
CSX Corp. is finding precision railroading to be very profitable. The freight railroad reported a 20% jump in profit in the first quarter, sharply ahead of a 5% gain in merchandise volume and a 3% year-over-year improvement.
Shippers dealing with trucking delays and congestion at the US-Mexico border must make changes to their supply chains if they want to minimize the cost of disruption from the shifting of customs personnel from cargo inspection to immigration duties early this month, according to Gene Sevilla, vice president of international supply chain solutions at Ryder System.
O2, the second-largest mobile network operator in the United Kingdom, has teamed up with the Millbrook Proving Ground, McLaren Applied Technologies and Britain’s Department for Digital, Culture, Media and Sport (DCMS) to test a 5G network that will support what they call connected and autonomous vehicles, as the maritime sector also stakes a claim for its own autonomous vessels.
Virginia’s General Assembly has approved Gov. Ralph Northam’s fundraising suggestions for Interstate 81 improvements. In late March, Northam proposed an increase in truck registration fees, a hike to the road and diesel tax rates and a regional fuel tax as means of generating funds for Virginia’s interstates, including $150 million for I-81. The state Legislature approved the measures April 3, shortly after reconvening.
During calendar year 2018, 32% of all on-road fuel used in natural gas vehicles was renewable natural gas (RNG), according to a new report from Natural Gas Vehicles for America (NGVAmerica) and the Coalition for Renewable Natural Gas (RNG Coalition).
Intermodal volume will be down for many of the Class I railroads and trucking companies providing intermodal service, and although weather is an excuse, larger questions remain about the sector in the short and long term.
The U.S. warehouse market is coming closer into balance after a long stretch when strong demand, driven by economic expansion and a push to build up e-commerce distribution networks, far outpaced available storage space.
Trump administration officials, frustrated that nearly three months of sanctions on PDVSA have yet to force Venezuelan President Nicolas Maduro from power, are now giving serious consideration to secondary sanctions. Also see, US Risks Roiling Oil Markets in Trying to Tighten Sanctions.
U.S. retail sales jumped by the most since September 2017 as gains in motor vehicles and gasoline stations boosted sales, signaling consumers are giving the economy greater support. Also see, Retail Activity Surges In March As Temporary Factors Subside.
Nikola Motor is working with Nel Hydrogen Fueling, to build initial hydrogen stations for deployment of Nikola’s hydrogen-electric trucks. With the two companies working together, they have created a path forward that depends on the trucks and the stations coming online at the same time, starting at locations on the West Coast. Also see, Nikola discusses hydrogen infrastructure, its Class 8 and total cost of ownership.
The lead up to the International Maritime Organization’s low-sulfur fuel mandate has revealed a stark and unfamiliar reality to the industry: Emission reductions take a financial cost that carriers can’t bear alone without risking further consolidation and bankruptcies.
Small US trucking companies are feeling the sting from falling prices and heightened competition for freight, but those carriers remain optimistic about their ability to grow in 2019, according to a motor carrier survey by Bibby Financial Services.
The footprint of U.S. freight transportation has been contracting for nearly four decades. In the 1980s and 1990s, it was mostly due to supply concerns as producers and their partners sought to compress order cycle times by pushing goods out the door more frequently and over shorter distances. Today, it is demand-driven as digital commerce shifts control to buyers, many of whom want deliveries the next day or sooner, forcing retailers and providers to position their goods even closer to the consumer.
A provincial election in Canada isn’t usually big news, but Tuesday’s victory by the conservatives in the western province of Alberta is an exception. Voters elected as premier Jason Kenney, who had promised that his government’s first act would be to repeal the carbon tax imposed by incumbent Rachel Notley.
Truckload pricing power has swung back to US shippers, and it’s difficult to see when that might change as the US economy expands more modestly in 2019 than last year. The addition of fresh truck capacity is pulling spot and contract rates lower.
President Donald Trump spoke this week with the leader of the Libyan National Army, a signal that the US support of the Government of National Accord may be weakening in an attempt to prevent the loss of roughly 1.2 million b/d of Libyan output from the global market.