Steelworkers Union Attacks ITC’s Handling of Chinese Tire Tariffs

Photo: Jim Park

Attorneys for the United Steelworkers have laid out their case with the ways they believe the International Trade Commission erred in February when it didn't order tariffs on truck and bus tires from China.

In its 52-page memo filed Sept. 1 in the U.S. Court of International Trade, the USW insists the vote not to impose tariffs is in contrast to the evidence presented to the commission. There are four broad issues:

In all four categories, the USW says the commission's decision wasn't based on the evidence presented.

The substitutability of tires: The union went back to questionnaire responses filed in the case to show how purchasers, importers and domestic producers measured Chinese tires against their domestically produced counterparts. About three out of four of these respondents said the tires “were always or frequently interchangeable.”

Tire prices: Tire buyers said price was an important factor in their purchasing decisions: 80% said it was “very important,” while the others said it was at least “somewhat important.” Fourteen purchasers, of 70% of those responding, said price was one of their top three factors to consider, second only to quality, which was cited by 15 purchasers.

“Despite this high degree of substitutability and the importance of price in purchasing decisions, the commission majority determined that purchasers would choose to buy higher-priced tires due to alleged differences in branding, quality, tiers and other factors.”

The USW also says even though the commission recognized that underselling by imports was “pervasive and significant,” the ITC says it was mitigated by other factors. The USW says the evidence of dropping raw material costs wasn't enough to offset the price depression, which is what the ITC had concluded.

“It was not correct that raw material prices declined faster than (tire) prices ...Read the rest of this story

Vehicles in Floodwater? Bendix Offers Servicing Tips

Depending on water depth and time submerged, a truck or trailer might or might not be fit for service again.  Affected components must be dried out and inspected. Image: Screen capture from ABC News

Floodwaters from Hurricanes Harvey and Irma inundated hundreds of thousands of cars and trucks, ruining many of them, news reports say. Modern motor vehicles incorporate so much electrical and electronic circuitry that is not sealed against water, and are so complex, that the vehicles cannot be salvaged. Experts warn that some will be dried out, cleaned up, made to run again, and sent north to be sold to unwary consumers. So, beware!

But heavy trucks and trailers sit higher than cars, and if they've been in relatively shallow water and circuitry and onboard computers are not damaged, they might still be serviceable. Not right away, though, emphasizes Bendix Heavy Vehicle systems, which has issued guidelines for repairing air brake and wheel-end components exposed to flood waters.

“At the top of the list is the question of whether the floodwater was salt water,” said Jim Szudy, Bendix's engineering manager for advanced systems engineering, in a press release. “If the answer is yes, then you should immediately begin replacing parts."

"Pneumatic air brake valves that have been submerged have likely lost their lubrication, for example. Couple that with the extremely corrosive nature of salt water, and these valves would be at much higher risk for sudden and premature malfunction," he continued. "Any brake system valve that's been submerged in sea water should be replaced, along with air compressors, air reservoirs, antilock brake system (ABS) relay modulators, and brake actuators.”

Salt water also makes corrosion of wheel-end parts more likely, leading to increased chances of rust-jacking and damage to other components. Again, Bendix recommends a complete replacement to prevent future failure.

It's best to do all ...Read the rest of this story

Senate told of safety, efficiency benefits of autonomous trucks

Truckers are playing a critical role as Florida and the southeastern United States begin the recovery process from Hurricane Irma.

Utility crews from around the country were converging on Florida to help restore electrical power to the millions of customers who face days - or even weeks - in the dark.

As several ports began to reopen for limited operations, there was a major emphasis on getting trucks hauling fuel loaded to alleviate shortages throughout the region.

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Analysis: Analysis: Why GDP Numbers Are Better Than You Think

When I started covering trucking in the early 1990s, it was common to hear economists define a healthy economy as one with gross domestic product growth of around 3% annually.

These days, however, when growth gets close to that “magic number,” it's greeted with a collective yawn — and it shouldn't, at least for trucking.

Despite oft-cited disappointment with the rate of recovery since the Great Recession, the fact is, an overheated economy can suddenly slow and can even turn negative after blistering performances such as the much larger spikes in the late 1990s and the first decade of the 2000s – you know, the period that led up to that recession.

The GDP, a total measure of the country's output of goods and services, increased at an annual rate of 2.6% in the second quarter of this year from the same time last year. This is sharply up from a paltry 1.2% increase in the first quarter. It's only the first of three monthly estimates for the quarterly GDP figures; typically the expectation is it will be revised slightly higher as Uncle Sam goes through more data.

For trucking, the second quarter GDP figures are a positive sign, according to American Trucking Associations Chief Economist Bob Costello.

“The good news is that consumer spending is decent and business investment is improving again, which will help trucking,” he told me. He believes the second half of this year looks even better, after the first six months of the year resulted in a 1.9% improvement in the GDP, compared to the 2.3% pace during the same time in 2016.

“I think the second half of 2017 should grow 2.8% on average, due to consumers, business investment, and residential investment,” Costello said. “Plus, the drawdown in inventories is getting closer to ending, which means it won't be a ...Read the rest of this story

Trucking Helps Push For-Hire Freight Movements to New High

Freight Transportation Services Index, July 2012 - July 2017. Graphic: U.S. DOT

The level of for-hire freight shipments in the U.S during July hit another record high, according to new Transportation Department figures, eclipsing two previous records set just earlier this year.

The Freight Transportation Services Index (TSI) increased 1.4% from the month before to a reading of 128.2, which 0.7% above the previous all-time high in May. This latest reading is up 2.7% from July 2016.

The June index was revised to 126.4 from 126.2 in last month's release. Monthly numbers for April and May were revised up slightly.

During the first seven months of 2017, the freight index averaged 2.9% higher than the first seven months of 2016.

The Freight TSI measures the month-to-month changes in for-hire freight shipments by mode of transportation in tons and ton-miles, which are combined into one index. It measures the output of the for-hire freight transportation industry with data from trucking, rail, inland waterways, pipelines and air freight.

The July increase in the Freight TSI was driven by gains in trucking, pipeline and water, while rail carloads decreased and air freight and rail intermodal were stable, according to the department.

The increase took place against a background of growth in several other indicators in July. Employment and personal income both increased, while the Federal Reserve Board Industrial Production index grew by 0.4%, with gains in mining and utilities even as the manufacturing index was down. The Institute for Supply Management's Purchasing Managers' Index showed positive but slowing growth. However, housing starts declined in July.

July was the third month in a row in which the Freight TSI exceeded the level of all months prior to 2017, and the fourth month in 2017 when it did. Since July 2016, the Freight TSI has reached or exceeded the level of 124.3, ...Read the rest of this story

Perry: Hurricanes will reduce U.S. GDP 0.5%

Although it's too early to collect data regarding the economic impact from Hurricane Irma, which hit Florida this week, using the fallout from Hurricane Harvey's impact on Texas, Noël Perry, a partner at research firm FTR Transportation Intelligence and senior economist for Truckstop.com, sees significant impact on truck freight volumes ahead.

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FTR Conference: Expect ‘Sauntering’ Economy to Continue

"Sometimes growing stronger is also the next thing that leads to the next recession," said Dr. Larry Davidson, professor emeritus of business economics and public policy at Indiana University's Kelley School of Business. Photo: Evan Lockridge

Both an optimistic and a slightly pessimistic view of the economy kicked off the annual FTR Transportation Conference in Indianapolis Wednesday morning.

“We seem to have taken on – lock, stock and barrel – a new story called secular stagnation,” said Dr. Larry Davidson, professor emeritus of business economics and public policy at Indiana University's Kelley School of Business. “The story is this is the new economy, that we are going to have to put up with growth that's like we've had recently.”

In other words, don't expect the U.S. economy to pick up much steam over the annual growth that has been around 1.8% the past few years. Conversely, you shouldn't have to worry much about it slamming on the brakes hard anytime soon, according to Davidson.

He presented a number of economic yardsticks, both positive and negative, including showing how gross domestic product growth in the U.S. has slowed compared to historically higher levels, for a pace Davidson described as “sauntering.”

While this may seem bad, it's not, Davidson said. He pointed out that this slower pace of economic growth causes many to believe that a recession may be on the horizon. Yet the opposite is more likely true, he emphasized.

“One reason an economic recession happens is they come from shocks that no one anticipated,” he said. “It's the economic environment conditions that are going to determine when the next recession comes.”

Such shocks can come from anywhere, he said, pointing as an example to the 1970s when the price of oil quadrupled in a very short time. For something more recent, think of the U.S. financial crisis, ...Read the rest of this story