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transportation

Kelly announces Transportation Secretary Lorenz’s departure

TOPEKA, Kan. – Today, Governor Laura Kelly announced the resignation of Kansas Department of Transportation Secretary Julie Lorenz.카지노사이트

Lorenz has served as Transportation Secretary since her confirmation in March 2019 and as Chair of the Kansas Infrastructure Hub, which coordinates federal Bipartisan Infrastructure Law funding, since June 2022. Her final day in both positions is Friday, December 23.

She will be returning to the private sector.

“Julie has been a visionary transportation secretary, seeing infrastructure not simply as roads and bridges but as a powerful way to bring people together for the betterment of future generations,” Governor Laura Kelly said. “Her ability to envision what could be and her determination to build strong coalitions have been essential to our success in closing the Bank of KDOT, passing a bipartisan 10-year infrastructure program, and coordinating billions of dollars in infrastructure funding. I am thankful for her service to my administration and to all Kansans, and I wish her the very best.”

In addition to leading the launch of the Kansas Infrastructure Hub, Secretary Lorenz oversaw the creation of the Eisenhower Legacy Transportation Program; modernized the highway system’s infrastructure for electrification; and created a Division of Safety, resulting in a decrease of workplace accidents by 46%. Today, KDOT has over 1,000 infrastructure projects in the works across Kansas.

In October, Secretary Lorenz received the prestigious national 2022 George S. Bartlett Award for her outstanding leadership and extensive service in transportation.
“I want to thank Governor Kelly for the opportunity to serve Kansas,” Secretary Lorenz said. “I’m most proud that during my tenure, we were able to craft and implement our new state transportation program, IKE. Thanks to the bipartisan support for IKE, we have rebuilt our infrastructure and modernized how we deliver transportation allowing Kansas to better seize opportunities and meet challenges now and in the future.”바카라사이트

Calvin Reed, Director of the Division of Engineering and Design, will serve as Interim Secretary of Transportation until a Secretary of Transportation is nominated and confirmed.

“Kansas transportation has benefited greatly from the leadership of Secretary Lorenz,” Calvin Reed said. “Kansans can rest assured that our team is well prepared to keep construction projects moving and will continue to make transportation improvements across the state. I’m honored to be entrusted with leading the agency during this transition.”

Burt Morey, KDOT Deputy Secretary and State Transportation Engineer, also submitted his resignation. He is retiring after a 30-year career in the field.

“It’s been my honor to serve KDOT in multiple capacities throughout my career,” Deputy Secretary Morey said. “Thanks to our team, we’ve been able to increase highway construction and improve worker safety at the same time, and Kansas is better off because of it.

Greg Schieber, the current Director of Project Delivery, will fill the role of Interim Deputy Secretary until a permanent replacement is selected.온라인카지노

New post-pandemic challenges facing transportation

KANSAS CITY, MISSOURI, US — Arguably the biggest news in transportation in 2022 may be what doesn’t happen: a nationwide strike by railroad workers that many think will push the teetering US economy into a recession sooner than later. Otherwise, logistics remain a major concern for grains and other agricultural shippers, even if conditions are considerably different than they were six months or a year ago. Globally, the grain markets have focused uneasily on an agreement providing a humanitarian corridor for exports from Ukraine’s Black Sea ports as the war with Russia again escalates.카지노사이트

Freight rates across nearly all modes of transportation except barges have weakened from historic highs reached during or because of the COVID pandemic, but the lack of labor continues to be a challenge to logistics at most levels. Dockworkers along the West Coast continue to work without a new contract after the latest agreement expired earlier this year. But a potential strike by railroad workers looms larger.

Ocean freight routes have been disrupted from the Black Sea region since Russia invaded Ukraine on Feb. 24. While grain export volume from Russia, the world’s largest wheat exporter, was minimally affected, exports by sea from Ukraine were effectively shut down until Turkey and the United Nations brokered a deal for safe transport in late July. The disruption sent shock waves through the grain markets while sending prices for imported wheat and other grains and oilseeds up as much as 40% to countries in the Middle East and Africa, including some poor nations that had the least ability to pay, raising concerns about sharply higher rates of world hunger. Grain has been flowing from Ukraine since the humanitarian corridor was opened, and prices for grain delivered in the Middle East and elsewhere have dropped, but year-to-date shipments from Ukraine remain far below year-ago levels, and the current escalation in Russia’s bombardment of Ukraine has many wondering about how long the shipments will continue.

In the United States, high fuel prices have been an added cost for both carriers and shippers, with higher fuel surcharges in many cases partially offsetting lower freight rates. On-highway diesel prices reported by the Energy Information Administration of the US Department of Transportation averaged $4.84 per gallon as of Oct. 3, down nearly $1 per gallon, or 17%, from the June high of $5.81 per gallon but up $1.43, or 42%, from $3.41 per gallon a year ago. Prices were likely to start moving higher after cuts in global crude oil production. The on-highway diesel price is used by most railroads to calculate per car fuel surcharges that averaged 68¢per mile per car in September, down 6¢ from August but up 43¢from September 2021.

“Barge freight and rail car costs, and union negotiations, are the big current topics in the transportation markets,” said Jay O’Neil, HJ O’Neil Commodity Consulting, Eagle Point, Oregon, US.

Potential strike outshines rail improvements

Shipping agricultural commodities and food ingredients by rail has proven a mostly affordable, relatively timely freight option in the early weeks of the fourth quarter, but a looming next chapter in the rail labor saga could shift that outlook.

In early September, the question facing shippers nationwide was whether railroads and employee unions would find common ground and ink contracts before a mid-month deadline triggering an employee strike. The Association of American Railroads (AAR) estimated halting America’s 7,000 long-distance freight trains would cost $2 billion per day in lost economic activity.

Negotiations were prolonged between US railroads and 12 labor unions that comprise the bulk of employees who keep the trains moving. Some unions had worked without a contract since 2019. COVID complicated everything. Railroads furloughed thousands in 2020 amid lockdowns and wild shifts in consumer demand. When demand settled into new-normal patterns, many rail workers never felt enough incentive to return to those jobs for a variety of reasons. One was economic stimulus programs that simultaneously helped to uncork a burst of consumer demand, which promptly overwhelmed supply chains, including railroads.

A President’s Emergency Board (PEB) laid out a plan for wage increases and set a Sept. 15 deadline. As it drew near without agreement, some unions were set to strike and members of other unions were expected to take part in a work stoppage of solidarity, halting the flow of materials into a broad range of industries and creating a bottleneck of imported products at ports. Wages were the top factor, but railroads also said the labor shortages behind chronic performance shortfalls in service were partly due to absenteeism. Unions fought against points system attendance policies railroads put in place over the past year and sought gains in paid time off for medical appointments. In the eleventh hour, union officials gave their tentative approval to a handshake deal similar to the one suggested by the PEB, including an approximate 24% in wage increases over five years retroactive to 2019.

“The rail system literally is the backbone of the nation,” President Joe Biden said Sept. 15. “It’s just critical in keeping the economy moving.”

US railroads quickly undid pre-strike preparations within a week. For shippers loading hard red winter wheat in the central and southern Plains, placement of cars at elevators quickly caught back up and resumed a late summer trend of improved overall performance. Union Pacific refurbished and returned to service 200 rail cars, a wheat trader told Milling & Baking News, a sister publication of World Grain, in late September. So improved were rail car placements at origins, another broker caught up on contractual obligations for the first time in eight months and was able to sell unused rail cars in the secondary market when millers, flush with supplies and cognizant of potential demurrage charges, were not amenable to accepting October wheat early. Wheat shipments by rail remained timely into the early fall even as corn and other row crop harvests expanded.

Meanwhile, traders and analysts in the northern Plains/Upper Midwest spring wheat area said train movement was merely adequate.

“We’re not hearing complaints about not getting cars,” a veteran analyst said. “A shipper said this morning (Oct. 11) BNSF performance was at a 7 on a 1-to-10 scale. What we are hearing is complaints about spiking freight costs.”

Rail prices in the fourth quarter have ranged widely. Plains shippers in the first week of October found single cars offered around $200 a car over tariff drew no bids, but below-tariff offers did. In the case of shuttle trains, the situation was reversed. Shippers hoped to take advantage of the 110-plus-car trains to help transport grain while barges in the low-water Mississippi River faced loading limitations necessary to avoid grounding. But BNSF and Union Pacific shuttle trains were being bid up to $2,000 per car over tariff with no offers or were offered as high as $2,300 per car with no bids for last-half November.

“At those prices, sellers out in the country aren’t buying any freight they don’t have to,” the analyst said.

Prices could shoot higher in the event a strike was delayed rather than forestalled. By Oct. 10, four labor organizations had ratified agreements to resolve the national bargaining round and seven other labor organizations had tentative agreements subject to ratification, the National Railway Labor Conference (NRLC) said. The third-largest union representing rail workers, the Brotherhood of Maintenance of Way Employees Division, rejected the tentative deal with only 43% of the 12,000 members who voted approving it. But for now, that union and railroads have agreed to maintain the status quo, so the failed ratification “does not present risk of an immediate service disruption,” the NRLC said.

US rail traffic in 2022 through Oct. 1 totaled 19,278,856 carloads and intermodal units, down 2.7% from the same period in 2021, including 10,259,554 intermodal units, down 5.1%, and 9,019,302 carloads, up 0.1%, according to the AAR. Of the carload total, grain accounted for 851,497 cars, down 4.6%. In comparison, grain carloads on Canadian railroads totaled 276,976 units year to date, down 19%, and Mexican grain carloads were 65,661 units, also down 19%.

AAR data also indicated there were 633,085 carloads of farm and food products (including milled products but excluding grain) originated in the Jan. 1-Oct. 1 period, up 3.7%. Coal (2,575,059 units, up 3.5%), chemicals (1,301,031 units, up 3.1%) and non-metallic minerals (1,224,869 units, up 4.1%) continued as the top three carload user segments of the year to date. Motor vehicles and parts carloads also increased carloads compared with the first nine months of last year, while forest products, metallic ores and metals, petroleum and products, and “other” joined grain in the segments losing carloads from the like period in 2021.바카라사이트

Barge rates soar; ocean freight falls

Barge freight rates on the Mississippi River soared to record highs in late September.

“The barge industry has had to balance a tight supply with increased demand throughout the year,” the US Department of Agriculture said. “During the winter, severe storms and icy conditions limited barge traffic on the Upper Mississippi River. In the spring, rising coal exports to replace reduced Russian coal and gas from the war in Ukraine — along with high water levels — reduced barge capacity and increased demand for the use of barges. In the summer, hot temperatures throughout the Midwest and low river levels in the lower Mississippi River led to draft and tow reductions. At the same time, the barge industry, like the rail industry, has struggled to hire and maintain workers.”

Barge freight rates have increased since early August. As of Sept. 27, the barge rate for export grain at St. Louis was a record high 1,250% of tariff at $49.88 per ton, up 58% from a year earlier and 95% above the five-year average, according to the USDA. The surge comes just as the corn and soybean harvests in the Midwest were gaining momentum, and grain movement to terminals for shipping down river typically increases. More than half of US corn and soybean exports move down the Mississippi River, while the artery also is critical for barge shipments of fertilizer upriver. One barge holds the equivalent of about 16 rail cars or 70 semi-trailers.

Despite the high freight rates, a total 220,300 tons of grain were moved by barge during the week ended Sept. 24, up 5% from a week earlier and up 17% from the same period a year ago, the USDA said. In the same week, 136 grain barges moved down river, six more than a week earlier, and 489 barges unloaded grain in the New Orleans region, down 16% from the prior week. Year-to-date (through Sept. 24) downbound grain volume on the Mississippi River was 23.9 million tons, down 10% from a year earlier and 4% below the five-year average, according to USDA data. The number of barges unloaded in New Orleans since the first of September was down 39% from the five-year average.

There were mixed signals for barge freight during the fall harvest and into 2023.

“The tight barge supply is problematic for grain shippers heading into harvest,” the USDA said. “Unless barge supply improves, the increased demand for barges from grain shippers during harvest will likely put even more upward pressure on barge rates.”

At the same time, the USDA noted 2022 corn and soybean production forecasts were lowered by the USDA in September, and 2022-23 export forecasts are down 8% for corn and 3% for soybeans from 2021-22.

“Lower production and reduced exports will both translate into lower grain demand for rail and barge, which should make harvest transportation demand more manageable, despite ongoing (transportation) supply issues,” the USDA said.

Higher freight rates (whether rail or barge), typically mean lower prices paid to farmers for their grain, while potentially boosting export prices paid by foreign buyers.

Ocean freight rates moved in the opposite direction than barge rates as lower demand and excess capacity sent prices plummeting.

“Dry bulk has been fairly boring lately,” O’Neil said. “There was a considerable drop off in the index and physical rates in the June-to-September 2022 period. In October 2021, Panamax grain vessel rates from the US Gulf to Japan/China reached up to $91 per tonne. In June 2022, the rate for this move dropped to $79 per tonne and on Sept. 1, 2022, it hit a bottom of $57 per tonne. We are now back up to the $61- to $62-per-tonne level. The past two weeks produced a little bounce off bottom, and markets are looking for new direction, and elusive reasons to move back up.

“The second half of 2022 has not turned out as vessel owners had hoped. Much has hinged on the Chinese economy and their imports of bulk commodities, especially iron ore and coal. But the Chinese economy has sputtered, and annual growth is now projected to be just 3.2 %; a far cry from the 6.5% growth predicted at the beginning of the year. COVID lockdowns have played a part, but mostly it has been the excess in domestic building projects of the past and the resulting general economic slowdown. As such, dry bulk freight growth has been restricted. We will certainly see some volatility in rates over the next six months due to the Black Sea situation and concerns over global economic growth. A global recession will not help if it occurs.

“I expect rates to move back and forth a little but end up rather flat for the balance of the year. I think dry bulk vessel owners will be fortunate to just hang on to current market values as we exit 2022. Of course, vessel owners remain optimistic about their prospects for 2023. They are hoping that global economic growth over the next two years exceeds the current new-build order book of just 2.3% per year of the global fleet. We’ll have to see what happens with global economic growth.”

Current spot rates for containers have plunged more than 80% from over $20,000 per 20-foot equivalent a year ago, O’Neil said, largely due to overly aggressive new vessel orders and a decline from last year’s peaks in consumer demand and container rates. Containers now are in oversupply and new vessels are being delivered every month, he noted.

O’Neil said that shipping lines “were very clever with their contract negotiations” earlier this year with some refusing to issue single-year contracts that forced some large carriers into new two- to three-year contracts at prevailing high rates.

“So we now have a very divided market of those with high rate contracts and those who can book on the spot market at very cheap rates,” O’Neil said. “I fear that despite the huge drop-off in spot container rates, the cost of importing goods from Asia will not fall back much until the current two-year contracts expire. The availability of empty containers for grain exports, however, should gradually improve, and rates for such should get cheaper as we move into 2023.”

Trucking rates moving lower

Shippers using trucks, meanwhile, have seen falling rates that are expected to remain under pressure into 2023 due to declining demand amid recession fears and increased availability of capacity and drivers. Obtaining trucks for specific agricultural needs has continued to be problematic, with many drivers still resisting longer hauls to move products such as millfeed from surplus to deficit regions. The problem worsens during the fall row crop harvests as drivers either focus on those commodities or are farmers themselves who just drive trucks during certain times of the year. But overall, the trucking industry has seen lower rates and increased availability.

“Spot market rates (a more accurate view of the truckload market) started to push down contract rates (contract rates always are slower to react than spot) with no end in sight,” said Jim Ritchie, president and chief executive officer, Logistics Resource Group, RedStone Logistics. “Normally we would see an end-of-quarter surge, but that didn’t happen in Q3. This could have a significant impact in Q4, but we’re going to have to wait and see. For many, the holiday season is already over, so I expect we’ll see continued downward pressure in both the spot and contract categories. It’s not often we have spot rates below contract, but as shippers renegotiate longer-term contracts, we should expect to see carriers get aggressive to keep their utilization high.”

Ritchie said contracted rates for truck freight averaged about $2.71 per mile at the beginning of October, compared with spot rates at $2.64 per mile. Spot and contract rates have declined sharply since July.

“I believe we will continue to see pricing pressure in the transportation markets as shippers are selling through their inventory, keeping demand low,” he said. “Assuming we start to follow normal trends and cycles in the freight industry we would expect pricing to remain depressed through the third quarter of 2023. This creates an opportunity for many shippers to take a hard look at their supply chain and to try and lock carriers into longer-term rate structures in Q2 of 2023.

“The industry experienced a significant increase in capacity over the past 12 months in equipment as well as drivers who have come back post-pandemic to higher paying jobs. It now appears with the softening in demand that many carriers are looking for the opportunity to jettison older equipment and take their fleet levels down.”

He noted that smaller carriers have not reduced capacity, but larger carriers (with more than 100 units) “appear to be the most passionate about managing their asset levels with the market demand.”

“From a demand perspective it appears that new orders are contracting for the past three months, which signals that manufacturing is easing and will continue to do so in the coming months as backlogs of orders continue to be drawn down,” he said.

Overall, freight demand has declined nearly 19% year over year.

“I expect we will continue to see softening in demand,” Ritchie explained. “We experienced a significant drop in tender reject rates with truckload carriers in April, and it has continued a steady decline through October, signaling the carriers are looking for any freight to keep their assets rolling. Not only are they taking every tender, but they are lowering their prices. Average base rates per mile have dropped approximately 10% from June to October on the contract side, and the spot market has seen some markets drop even further.

“Tender rejection rates are approaching zero, and spot rates seem to have already taken it on the chin. Volumes, however, still have plenty of room to fall, along with contract rates. This will be critical to keep a watchful eye on over the next several months. We believe we’ll see continued slowing across all modes, and economic trends supported by fiscal policy set on curbing inflation and spending. This will translate into lower freight volumes until inflationary pressures have eased and fiscal policy becomes more favorable for spending.”온라인카지노

Transportation

Transportation secretary on averting rail strike that threatened major disruptions

SARAH MCCAMMON, HOST: A massive rail strike that threatened major disruptions has been avoided for now. Rail carriers and unions representing thousands of workers have reached a tentative deal, which President Biden celebrated this morning.카지노사이트

(SOUNDBITE OF ARCHIVED RECORDING)

PRESIDENT JOE BIDEN: This agreement allows us to continue to rebuild a better America with an economy that truly works for working people and their families. Today is a win – and I mean it sincerely – a win for America.

MCCAMMON: Transportation Secretary Pete Buttigieg helped negotiate the deal, and he joins us now. Welcome to the program.

PETE BUTTIGIEG: Thank you. Good to be with you.

MCCAMMON: How confident are you, first of all, that union members will ratify this deal?

BUTTIGIEG: I believe this is a deal that was reached in good faith that the parties came to after very intense conversations and a lot of clear thought into what they needed. So, of course, now it has to go up for ratification. But everybody is invested in that process being successful.

MCCAMMON: And assuming that it is, how soon should we expect to see the trains moving again?

BUTTIGIEG: Well, right away. But there are some impacts that came just even from the preparations for the possibility of a shutdown that started at the beginning of this week. So our Federal Rail Administration is going to continue coordinating with Amtrak and the rail carriers just to make sure that those ripple effects are smooth as they work their way through the system over the next two or three days.

MCCAMMON: Now, workers made clear during these negotiations that they don’t just care about wages. The quality of life is also important – for instance, being able to take time off when they’re sick and not face punishment for that. What kind of a message do you think this sends to other employers?

BUTTIGIEG: Well, this is something that we see a lot, in particular when it comes to essential transportation workers because of the nature of their work. Similarly with truck drivers, you know, some of the issues that have really impacted the availability of truck drivers are not just things relating to their dollars and cents compensation but the ability to have places – safe places to park and rest. In their case, even something like access to bathrooms – these basic quality-of-life issues that stand alongside compensation as a very important matter. That’s what you saw here, too, clearly a very important issue for the workers in terms of how their sick time was addressed, especially for workers who are on call for long periods of time. And because of the nature of this transportation business often requires very unusual things that most 9-to-5 workers don’t deal with, I think that will continue to be something that is expressed as a real priority for workers in negotiations and the public dialogue about what it means to treat essential workers as essential.바카라사이트

MCCAMMON: What do you think it does mean?

BUTTIGIEG: Well, what it means is that it’s important to have competitive pay and a high quality of life. For the unions, it means, of course, pay increases and improvements in quality of life for the railroads. It means a way to attract and retain great workers who are the key to making rail operation work. And for the country, it means avoiding the disruptions that could have accompanied any kind of shutdown or slowdown.

MCCAMMON: Now, a rail strike does appear to be averted for the moment, but West Coast dockworkers are still in negotiations about their new contract. That, of course, is another key piece of the supply chain. How hopeful are you, Secretary, that those issues can also be resolved?

BUTTIGIEG: Very hopeful but also continuing to monitor closely. You know, our supply chains are only as strong as our most congested link. And we’ve seen that throughout the pandemic period and recovery from the worst days of it, whether it’s ships, trucks, warehouses or trains. All of these things need to be working well in order for our economy to thrive.

MCCAMMON: Yeah, maybe on that note, President Biden said in response to the news of the tentative deal that he’s hopeful that similar agreements can be struck in other fields as well. What else might be in the works?

BUTTIGIEG: Well, when you look at the things that are important to the transportation workers, it does, of course, vary by sector. But compensation will always be important. Quality of life matters, and that means different things to a rail worker than it might mean to a flight attendant or to a longshore worker. But what it all adds up to is making sure that people can build a career, support their families, be satisfied with their career choices. And all of that adds up into a functioning supply chain who, you know, no matter how much infrastructure we build – and even today we’re announcing 26 places where we’re deploying $1.5 billion – that’s just a piece of the puzzle in helping build our physical infrastructure, supporting supply chain. But for all of that, at the end of the day, the most important element of our supply chain is people.

MCCAMMON: My last question for you, Secretary Buttigieg, is just does this deal go far enough? I mean, if it’s successful, it will make conditions better for these workers in some ways. But as you’ve alluded to, we’ve seen other labor shortages in other pieces of the supply chain. What is the administration doing to push the railroads and other critical industries to just do what needs to be done to attract and retain these workers and avoid these kinds of disruptions in the future.

BUTTIGIEG: This is exactly what falls to the parties to come to agreement on, a solution that makes sense for the workers and for the railroads. Again, every industry, every sector is a little bit different. But what they all have common is it’s people make it all possible. And we need to do right by the people who we count on for transportation and for goods movement, whether we realize it or not.

MCCAMMON: Secretary of Transportation Pete Buttigieg, thank you so much for your time.

BUTTIGIEG: Thank you. Good being with you.온라인카지노