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The BNSF Railway announced earlier this month a $6 billion capital spending plan that includes about $1.5 billion in engineering maintenance and line expansion products along its routes eight northern US states.

The railroad — which is a subsidiary of Berkshire Hathaway, the Nebraska-based holding company of billionaire investor Warren Buffett — is targeting its northern routes in support of anticipated growth in the oil industry, as well as agriculture and coal products.

Problems in the region have plagued BNSF since 2013 due to bad weather, surging crude oil production, and a bumper crop in grain that substantialy increased demand for rail cars to carry agricultural products to ports in the Pacific Northwest where they could be transported to overseas markets.

The recent drop in oil prices will not affect the railroad’s capital investment plans, according to BNSF spokeswoman Amy Casas.

“We fully expect to execute on our 2015 capital expenditure plan regardless of what happens in the short term to certain commodities,” Casas told DC Velocity. “Our capital programs are about investing in our railroad and continuing to position ourselves to meet anticipated future demand.”

The railroad will invest $800 million for engineering maintenance along its southern routes, which includes its high-speed transcontinental route that links West Coast ports to Chicago. In its central region, which are primarily used to transport coal within six states, the BNSF wil invest about $650 million this year.

 

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For the sixth year in a row, Toyota remains the top provider of forklift in Australia.

The Japanese manufacturer of heavy machinery also retained its title as the number one provider or internal combustion counter balance forklifts, a record it has held for 28 years.

Toyota forklifts accounted for 32.4% of the market share in 2014, a 3.8% increase over the previous year. The company sold more than 4,450 forklifts in Australia last year, just over half of which were electric battery-operated vehicles.

Steve Takacs, executive vice president and chief operating officer of Toyota Material Handling Australia, said 2014 was a very good year for the company.

“The strong sales are pleasing to see, particularly as we start the new year in a strong financial position,” Takacs said in a company news release. “Our extensive national TMHA branch is growing. We recently opened five new branches, with more to follow in response to business growth. And we are recruiting additional technical and management staff.”

In 2015, the company will introduce a new line of Toyota 8-Series battery-electric sit down reach trucks, along with other new types of forklifts, according to Takacs.

 

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File:Cuba schoolbus.jpg

A horse pulls a cart full of children down a Havana street. (Photo courtesy of Wikimedia Commons and in the public domain)

President Barack Obama’s surprise announcement last month that he was reestablishing diplomatic relations with Cuba could mean a boost for many industries, especially tourism. But the materials handling industry may also benefit from apparent thaw between the US and its island neighbor to the south.

Benefits to Material Handling Firms

One materials handling firm — Hytrol Conveyor Company, of Jonesboro, Arkansas — is already chomping at the bit at the thought of selling its products to Cuban manufacturers. Last week, the company issued a news release hailing the president’s decision and predicting a huge positive impact for the materials handling industry.

“Material handling organizations poised to serve this new market located just 90 miles off the coast of South Florida are going to see significant financial gains,” the company news release stated. “Proximity matters. Flying in a variety of conveyor systems and dozens of strategic integration partners means that companies like Hytrol are uniquely poised to fulfill the market demand of the Cuban economy.”

‘Not So Fast’

But other observers are saying “Hold your horses.” Its too early to start making plans to set up shop in Cuba.

Jorge Salazar-Carrillo, a professor of economics at Florida International University’s School of International and Public Affairs, warned that just because the president has opened the door a crack, it doesn’t mean that trade will flow freely through it anytime soon.

“This is not the end of the story,” Salazar-Carrillo said. “It’ going to be a tough go with Congress., I see it playing out slowly in coming months.”

The president’s action authorizes trade with a private companies in Cuba that work in a handful of industries, including building materials for private homes, goods for entrepreneurs, and farm equipment for small farmers.

Meanwhile, other businesses that could benefit should the US resume full trade with Cuba include the automobile, health care, and educational supplies industries.

A 50+ Year Chill 

Cuba has been a Communist country since the 1959, when Fidel Castro and his allies toppled the government of longtime Cuban dictator Fulgencio Batista. Since then, the island nation has been relatively cloistered from the outside world, largely due to the trade embargo implemented by US President John F. Kennedy.

For the past 55 years, time has effectively stood still for many Cubans who have not been able to buy US goods or travel outside their home country freely. Many of the cars still operating on the streets of Havana, Cuba’s capitol city, were manufactured during the Eisenhower administration.

But a combination of the disintegration of the Soviet Union in the 1991 — which had been one of  Cuba’s strongest supporters — and Fidel Castro’s failing health has caused the attitudes of many people in Cuba to once again warm towards a renewed relationship with the US, its leading trading partner for more than a century.

With the assistance of Pope Francis — an Argentinean who is the first pope to come from a Latin American country — President Obama announced December 17 his decision to reopen diplomatic relations with Cuba.

 

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Here is a special sneak preview at some of the stories you will find this week on the Bahrns blog:

  • The US is reconsidering its relationship with Cuba. So what kind of changes could this mean for the materials handling industry? We’ll take a look …
  • Gas prices are at their lowest point in years. So does that mean the federal fuel tax should be increased? We’ll examine both sides …
  • Package delivery services are breathing a sigh of relief that the problems experienced during the 2013 holiday season weren’t repeated this time around. We’ll look at what was different …

All that plus: Why Warren Buffett is investing $6 billion in railroad improvements, a new tool that looks like a two-wheel hand truck on steroids, and the answer to the question: “Who is the biggest forklift company in Australia?” (Here’s a hint: It rhymes with “Shmoyota”).

All this and much, much more can be found this week on the Bahrns blog … so stay tuned!

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mobile crane

A reach stacker in use at a intermodal yard (Photo courtesy of Wikimedia Commons and in the public domain)

As negotiations between the owners of West Coast ports and the longshoreman’s union enter into their second calendar year, port operations are experiencing from delays from San Diego to Seattle.

And now that mega-cargo container ships are beginning to appear for the first time along some US docks, wait times are lengthening and tensions are being ratcheted up even higher.

Federal Mediators Step In

The contract between the Pacific Maritime Association — which represents the operators of West Coast ports — and the International Longshore and  Warehouse Union expired July 1. And even though talks between the two sides have been ongoing since May 12, little progress has been made as neither side has been willing to budge.

Now the US Federal Mediation and Conciliation Service has stepped in with the hopes of finding a way to untangle the stalled contract negotiations.

Last week, the PMA released a statement charging that worker slowdowns at West Coast facilities is resulting in “gridlock”.

“It appears the union’s motivation is to continue slowdowns in an attempt to gain leverage in the bargaining,” the PMA stated. “The ILWU slowdowns and the resulting operational environment are no longer sustainable.”

Labor Blames Management for Delays

Union officials counter-charged that the owners were responsible for the productivity problems. ILWU president Bob McEllrath blasted the PMA’s “illogical plan to eliminate night shifts at many ports.”

“Longshore workers are ready, willing and able to clear the backlog created by the industry’s poor decisions,” McEllrath said in a news release. “The employer is making nonsensical moves like cutting back on shifts at a critical time, creating gridlock in a cynical attempt to turn public opinion against the workers. This creates an incendiary atmosphere during negotiations and does nothing to get us closer to an agreement.”

‘Add Three Weeks’

Meanwhile, cargo owners are being advised to add three weeks to trans-Pacific import lead times in order to compensate for delays at the port facilities.

Dan Gardner, president of Trade Facilitators, a transportation industry consulting firm, said the gridlock caused by labor conflict and by the arrival of super-sized cargo container ships in West Coast ports for the first time are causing delays that aren’t going away anytime soon. He added that operators have no choice but to “recognize port delays for what they are: A permanent part of the ocean transport landscape that will not go away.”

“Simply stated, it takes a lot longer to off load a 14,000 TEU vessel than it does an 8,000 TEU ship,” Gardner said. “And they consume a lot more space, cranes, chassis, trucks, drivers and on-dock/near-dock rail capacity when they finally do get a berth.”

In recent years, many Asian shippers have begun using the mega-sized cargo container carriers because they can carry more goods at a lower cost than traditional cargo container ships. But Gardner contends that West Coast ports aren’t ready to accept them — especially with the lingering labor problems.

“One doesn’t need a PhD in Queuing Theory to know that when logs of big ships show at the same time, delays will ensue,” he said.

 

 

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Despite the steepest decline in fuel prices in nearly six years,  FedEx announced last week that it would be increasing the diesel and jet fuel surcharges for its customers effective Feb. 2.

Most shippers who use FedEx’s air and ground services will be facing fuel charges that are between 3.5% and 5% higher next month, according to Shipware, an industry consulting firm. Shippers with contracts that contain specific language governing surcharges may not be required to pay more.

As of Jan. 5, the national average for a gallon of gasoline stood at $3.13. Diesel prices were between $3.07 and $3.19 per gallon. And jet fuel was selling for an average of $2.30 per gallon, according to date from the US Department of Energy’s Energy Information Administration (EIA).

So if gas prices are so low, why is FedEx increasing its gas surcharge?

Alan B. Graf Jr., FedEx’s chief financial officer, explained that although FedEx has benefitted from the decline in fuel prices, the gains have been mostly neutralized by revenue reductions from lower fuel surcharges, according to a transcript of his remarks during a company conference call with analysts in mid-December.

Graff stated that there is a six-to eight-week lag time between FedEx’s fuel payments and the surcharges imposed to recoup those costs. So the company was stuck paying higher fuel prices in September before it could adjust its surcharges accordingly in November.

FedEx’s announcement comes just weeks after it changed the way it calculated shipping rates for many of the packages it handles. Both FedEx and UPS now use dim pricing, which is based on three-dimensional scanners that measure the size and shape of a package. This data is then used to calculate how much the shipper should charge based on how much space the package will take up in the vehicle. That allows shippers to charge more and still be able to maximize the space in cargo holds.

 

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“Materials Handled!”

That’s the new slogan Akron, Ohio, based organization and storage products maker Akro-Mils has chosen as its new motto. The new slogan was unveiled in the company’s new 2015 products catalog that was released earlier this month.

“This new slogan, which demonstrates that the toughest jobs are made easy with Akro-Mils’ industry-leading selection of products, will be visible in the company’s marketing efforts, including web, print advertising, company literature and more,” the company stated in a news release announcing the new slogan.

The catalog features all of the company’s organization and storage products, including shelves, bins, totes and containers.

 

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Photo via Wikimedia Commons (in the public domain)

For the first time in two decades, the US Department of Transportation plans to accept applications from Mexican long-haul trucking companies for authority to operate in the US.

The announcement comes in the wake of a three year pilot program in which small amount of Mexican truck fleets were allowed to cross over the border and use US highways freely.

While the 1993 North American Free Trade Agreement (NAFTA) allowed trucks from both Mexico and Canada to travel freely in  the US, under pressure from organized labor and law enforcement groups up until last week the transportation department effectively banned Mexican trucks from freely crossing the border.

Mexicans Respond with Tariff

Mexican authorities retaliated by placing a $2 billion tariff on US lumber and other products that are sold in Mexico.

Now US Transportation Secretary Anthony Foxx announced the reversal of the long-standing policy, offering the three-year pilot program as proof that allowing Mexican trucks to travel freely in the US was completely safe.

“Opening the door to a safe cross-border trucking system with Mexico is a major step forward in strengthening our relationship with the nation’s third largest trading partner and in meeting our obligations under NAFTA,” Foxx said in a news release. “Data from the three year pilot program and additional analysis on almost 1,000 other Mexican long-haul trucking companies that transport goods in the United States proved that Mexican carriers demonstrate a level of safety at least as high as their American and Canadian counterparts.”

Teamsters Cry Foul

The transportation department’s decision was immediately criticized by the Teamsters Union and other labor groups that complained that the reversal in policy was short-sighted and irresponsible.

Teamsters president James P. Hoffa charged that the DOT’s own inspector general has not been able to vouch for the safety of Mexican trucks allowed into the US during the trial period.

“I am outraged that the Department of Transportation has chosen to ignore the findings of the DOT Inspector General and is moving forward with a plan to open the border to Mexican trucks in the coming months,” Hoffa said in a news release released within hours of the transportation department’s announcement. “The policy change by the DOT flies in the face of common sense and ignores the statutory and regulatory requirements of a pilot program. Allowing untested Mexican trucks to travel our highways is a mistake of the highest order and it’s the driving pubic that will put at risk by the DOT’s rash action.”

Cites DOT’s Own Report

According to the Teamsters, the DOT’s Inspector General’s report concluded that the pilot program constituted too small a sample to make such sweeping regulatory changes.

“One thing was made clear in the IG’s report: The pilot program was a failure,” Hoffa said.

Despite complaints from labor, the transportation department will begin accepting applications for US operating authority this year. Once Mexican trucks are on US highways, Mexico is expected to lift its retaliatory tariff on US imports.

The Teamsters represent about 70,000 long-haul truckers and about 260,0000 UPS employees.

 

 

 

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Castleford Engineering — a British excavating company based in Liverton — has added two new Volvo crawler excavators to its fleet of vehicles, as well as a pair of mini Volvo excavators, the company announced recently in a news release.

But these crawler excavators are unique because they are the first 30-ton excavators to be used in the UK that come equipped with a specialized two-piece boom attachment.

Steve Rule, Castleford’s managing director, said the custom crawlers were needed for specialized operations.

“Because much of our work is focused on maintaining major water courses for river authorities, we needed the combination of a sizeable excavator coupled to the maximum flexibility of the boom and arm geometry, especially for sheet piling in very confined spaces,” Rule said. “Volvo’s EC300D with the two piece boom arrangement ticks our particular box in this regard.”

The 30-ton vehicles are powered by a Volvo six-cylinder D8H Stage III 228 horsepower engine. The vehicles’ “integrated work mode control” provides high efficiency, rapid dig cycles, and lower fuel consumption while ensuring the maximum possible hydraulic horsepower available.

Hose rupture valves are fitted as standard to the boom and dipper cylinders, as well as quick-fit hydraulics and a hammering/shear device. The vehicles also have optional slop and rotator pipework.

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It used to take the British industrial grain dryer manufacturer Alvan Blanch five workers, four forklifts and three hours to move just one of its pieces of equipment onto low loaders for transport.

But thanks the recent purchase of a Combilift Straddle Carrier, the procedure can now be completed in just 10 minutes by a single operator.

Grain driers are big, bulky pieces of industrial equipment that resemble long boxes, except they are tapered and their weight can vary at the front and back, making them difficult to move.

Engineers from Combilift customized the carrier used by the company so that it can lift various sizes of the units with stability.

“The inside of the 35-ton capacity  Combi-SC’s fram measures five meters, as opposed to the standard 4.3 meters,” the company stated in a news release.  ”This gives ample space for the larger driers, and the front and rear spreader beams enable the position and also the length of the chain slings to be adjusted according to the size of the units being lifted, which also caters for the differing sizes at the end. A choice of lifting points also ensures that the chains do not come into contact with the units, avoiding the risk of any damage to the paintwork of the panels.”

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