Fuel Surcharge on the Rise

Here we go again…a majority of airlines have just announced an increase of the fuel surcharge from $.50 per kilo to $.55 per kilo. Look for the official notification from your favorite forwarder in your email box soon.

Air Cargo World announcement.

Southern California Port Shutdown???

According to a report by CalTrade, local drayage companies in the Southern California area might stage a strike beginning May 1. Reasons for the stoppage are unclear at this time, however according to the article drivers might be striking in support of immigrant rights.

The action “is not an organized event but an accumulation of collective effort” on the part of the “troqueros” – the largely Hispanic independent truckers who dray cargo moving through both ports – who, according to a correspondent on the LAIMC website “are organizing themselves,” mostly over via two-way and CB radio.

“If you happened to tune into one of their conversations these days, the radio is filled with talk, in Spanish and English, of the “Huegla General,” or General Strike, on May 1, the correspondent said, adding that “the planned strike is part of a larger general strike called for in support of immigrant rights.”

But, the correspondent said, “the truckers are also calling for their own demands including a 25% wage increase,” and will remain on strike “until they [the troqueros] win collective bargaining rights,” adding, without elaborating, that “troqueros in Oakland and Houston are pledging solidarity.”

The work stoppage would affect both the Los Angeles and Long Beach ports. Let’s hope it doesn’t happen, but you may want to check with your forwarder for further information.

Background Checks for Port Workers

According to an article by the AP, U.S. port workers will now be required to undergo background checks for links to terrorism and to ensure they are legal U.S. citizens.

The heightened scrutiny — which will begin immediately — drew praise from some lawmakers and port associations that said the checks were long overdue. Others jeered the security measures as either too weak or too invasive of workers’ privacy rights.

Names of an estimated 400,000 employees who work in the most sensitive areas of ports will be matched against government terror watch lists and immigration databases,
Homeland Security Secretary
Michael Chertoff said. They will be among roughly 750,000 workers — including truckers and rail employees — who have unrestricted access to ports and will be required to carry tamper-resistant identification cards by next year.

“What this will do is it will elevate security at our ports themselves so that we can be sure that those who enter our ports to do business come for legitimate reasons and not in order to do us harm,” Chertoff said. He called the safeguards part of a “ring of security” around U.S. ports.

The background checks will not examine workers’ criminal history, although Chertoff left open that possibility for the future. source – AP via Yahoo News

Of course there are some drawbacks to the program, for instance port workers will not be checked for criminal history, however I think it is a step in the right direction and long overdue.

Honest, hard truth about gas/fuel prices.

Pat Cleary over at ShopFloor.org: The Manufacturer’s Blog explains the real reasons behind fuel price increases and summarizes the facts nicely into 3 easy to understand bullet points:

1.) Supply and demand – This is an issue we’ve written about frequently in this space. It is one of nature’s immutable laws. There are two sides to this coin: first and foremost, global demand has soared with the explosive growth in China and India, among other places. However, global supply has not kept up. Here at home, we remain the only country in the world that limits access to its own natural resources. We could tap oil reserves in ANWR and in the Outer Continental Shelf if Members of Congress were really that concerned about gas prices. But apparently they’d rather make speeches.
2.) Uncertainty – In a meeting with NAM officials last year (on an unrelated topic) Treasury Secretary Snow — a PhD economist — made the observation that “the market builds in a premium for uncertainty.” Think about that in the context of the world oil market. One of the biggest sources of oil is the unstable Middle East. Another is Venezuela, with Castro-centric leader Hugo Chavez at the controls. His recent moves have made the already-jittery markets even moreso. This uncertainty is reflected in the world price per barrel of oil. And, however bad it is here, European drivers are still paying more for gasoline than we are.
3.) Refinery capacity – If oil can’t be refined, gasoline can’t be manufactured. Supply shrinks, demand grows, price rises. According to the EIA report, there were three refineries shut down by Hurricane Katrina, and they are only now coming on line. Others deferred maintenance in order to stay operational post-hurricane, but they are now closing in order to perform the necessary maintenance. Most important, we also have not built a refinery in this country in 28 years.

For those of you confused as to why oil and fuel prices continue to fluctuate upwards, here’s why.

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