newsworthy
As transport bill becomes
law, freight interests see
Asian air export
rates fall
a new day dawning
IT’S NOT PERFECT. IT COULD HAVE BEEN BETTER. IT COULD HAVE
been worse.
That’s the consensus among stakeholders of the nation’s infrastructure
after President Obama on July 6 signed into law a 27-month $105 billion
bill that, for the first time since 2005, provides long-term funding for U.S.
surface transportation projects.
The bill, which ends nearly three years of interim stopgap measures to
fund the nation’s transport system, is
seen as a good start toward putting
the network on a solid footing. But
industry experts say there is still
work to be done, and freight interests
will be disappointed if the new law
becomes the end of the story and not
a means to a more satisfactory end.
In the here and now, however,
there is finally a multiyear transport
funding law on the books. And for
freight advocates who have struggled
for years to get Congress’s attention,
it ended up being a productive
process.
The Coalition for America’s
Gateways and Trade Corridors
(CAGTC), a group of 60 public and
private organizations dedicated to
promoting intermodal transporta-
tion, said the law places “unprece-
dented emphasis on freight move-
ment and its importance to the
United States economy.”
“[The bill] shows that Congress
has been listening when we’ve made our case for supporting the systems
that move our nation’s goods,” said Coalition Chairman Mort Downey.
“We see this as a good platform upon which future steps can be taken to
further improve this critical network and its infrastructure.”
Janet F. Kavinoky, executive director, transportation and infrastruc-
ture, at the U.S. Chamber of Commerce, said the law is a milestone for
advancing the role of freight in the national infrastructure discussion.
Kavinoky said that while the bill isn’t a cure-all, the “increased freight
focus is welcome progress” given budgetary constraints and the election-
year overhang. p. 18
Airfreight rates on shipments moving from Asia to North America and
Europe fell in June to their lowest
levels since August 2009, according
to a monthly index from a U.K.-based supply chain consultancy.
The index, published by Drewry
Supply Chain Advisors, hit 90.1 in
June, nearly 20 points below March
levels and well below the 115
reached last October. In June, the
average rate on high-volume lanes
was slightly under $3.70 a kilo. In
October, the average rate exceeded
$4.60 a kilo, according to the index.
Airfreight rates, which have
been volatile month over month
since November, actually held
their own into the late winter and
early spring even though demand
out of Asia had been steadily
declining since the end of 2011.
Rates began plummeting in May
as demand in Europe continued
to weaken and the U.S. economy
began to slow from a relatively
robust first quarter.
The rapid plunge in rates is a
scary reminder to market participants—especially air carriers—of
the dark days of late 2008 and early
2009, when airfreight volumes collapsed along with the global economy in a manner so brutal that it
boggled the minds of even the
most grizzled industry veterans.
Martin Dixon, a research manager at Drewry, said rates are likely to remain weak for the rest of
the year. Dixon added, however,
that there may be a firming in the
fourth quarter depending on the
strength of the peak pre-holiday
shipping season and the level of
available capacity to meet whatever demand arises. ;
