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September 3 2018

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40 The Journal of Commerce | September 3 2018 www.joc.com Roll-On, Roll-Off Shipping: North America Outlook Special Report also boosted volume. The incentive is available to manufacturers in the first year they come to the port. Q-checks and ro-ro rodeos Baltimore runs a monthly "Q-check" quality control program, Powers said, for OEMs, processors, truckers, rail, and port staff in the supply chain to find issues before they become problems. As vehicle models change, questions such as where keys should be left, whether cars are ignition or push button, and if drivers can change seat placement are settled proactively. Wearing belts, rings, and watches can scrape cars, so no jewelry or belts are allowed, and drivers must wear uni- forms; there is no eating or drinking on or near the cars to avoid spills. Driving high and heavy rolling stock on and off ro-ro vessels, or preparing it for transport, can be far more challenging than loading and discharging cars. To address that, every year the port blocks off a large area on port property and holds a "ro-ro rodeo," where they bring in affected stakeholders and refresh the driving teams on the rolling stock. High and heavy volumes are a relatively small part of the mix, and this cargo is often delivered to distribution or processing centers and held until sold to dealers or end-user customers. Owners tend to hold little stock at dealerships, unlike with cars, because moving it can be very costly. "It's the unique nature; every machine is different. They require securement and blocking and brac- ing. The larger the machine, the more unique the securement required," said Chris Easter, president of Keen Transport. Open flatbed rates are high, and machines may also require specialized, multi-axle transport. Keen Transport, wholly owned by Wallenius Wilhelmsen since Decem- ber 2017, specializes in the transport of high and heavy cargo with a focus on construction, mining, and agricul- tural machinery. Easter has observed an increase in high and heavy imports after a downturn from 2012 through 2017. "The OEMs are struggling to keep up with demand. We have a fairly optimistic outlook for the next few years," he said. However, the US truck driver shortage is amplified in the high and heavy specialty, as a newly licensed commercial driver is not at all ready to operate an open deck or multi-axle trailer. Processing and the car-haul Normally, in the automotive supply chain, "everyone's desire is to give that car to the next person in the chain exactly as it was received. We are the only ones who actually add value to the car. We can make it safer, make it prettier, or improve the ve- hicles' performance. One of the most profitable things we do for our cus- tomer's bottom line is accessorize the car," said Gary Salvador, vice president of sales and marketing with Amports, a vehicle processor with eight US port facilities, three of them owned. OEMs provide arrival notices, so the processor knows what to expect and by which mode. The first step is inspection, said Salvador, who is based in Jacksonville. Using a given car's VIN number, Amport's paint shop is able to repair dings by matching the paint of any new car from any OEM in the world. "An ounce of this, a teaspoon of that, and we have an exact match." Processors typically individualize cars for their export destinations. This can include adding an under- coating material, wrapping the car, putting on a car cover, taking out English manuals and putting in Arabic (or the appropriate language), changing out mirrors so they are in the destination language, adding first aid kits and fire extinguishers, upgrading the vehicle's factory software, upgrading the tires, or adding accessories such as stickers and spoiler kits, Salvador said. Jack Cooper Logistics handles the truck transport of between 3.7 million and 4.1 million vehicles annually in the United States. Of these, roughly 10 percent are imports or exports. They typically move cars from assembly plants to dealers, said Sarah Amico, executive chairman and head of planning, merger and acquisi- tions with Jack Cooper Holdings, "but we are all so interdependent that we all get effects when there are supply chain delays. That's what can happen with emerging trade wars, with any- thing that could affect the volumes coming into the ports, or with how efficiently freight moves through the car-haul footprint." "A decade ago, most foreign vehicles came into the US through ports, and that changed the network design of finished vehicle logistics. Will this political moment change that reality again? How do we plan? [...] In trucking, turnaround time for an investment in a new truck is 10 to 15 years. Railcars last three to six decades. Ports: They invest for a cen- tury." The current tit-for-tat trade war atmosphere creates uncertainty, and perhaps a disincentive to invest. "Will we be in a capacity crunch in a future boom market because the present moment discouraged invest- ment?" Amico said. Ro-ro continues to move, and Bal- timore, Jaxport, and Hueneme are not delaying investment, but trade threats and North American Free Trade Agreement (NAFTA) negotiations are far from settled; the long-term effects of threatened or imposed tariffs on global trade and extended supply chains have yet to play out. JOC email: janet.nodar@ihsmarkit.com twitter: @janet_nodar Sarah Amico "Will we be in a capacity crunch in a future boom market because the present moment discouraged investment?" "The larger the machine, the more unique the securement required." Chris Easter

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