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June 10 2019

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30 The Journal of Commerce | June 10 2019 Government US PORT AND intermodal proponents worry newly threatened tariffs from the Trump administration on ship-to- shore (STS) cranes and containers will dampen investment and productivity, as the recent escalation of tariffs raises costs to produce chassis. Port officials worry placing a 25 percent tariff on cranes, which cost $10 million to $15 million each, will slow investments in terminal upgrades. These capital projects are critical to handling an increasing number of 14,000-TEU vessels trav- eling through the Panama Canal to ports on the US Gulf and East coasts. Beneficial cargo owners (BCOs) also will be more likely to see higher daily rental rates on chassis used for merchant haulage after the Trump ad- ministration raised tariffs on chassis from 10 percent to 25 percent on May 10. A basic chassis now will cost about $12,500 — $10,000 for the equipment, plus a $2,500 duty. If a chassis provider has a capital budget of $50 million, for example, it can only purchase 4,000 units, as op- posed to 5,000 before the tariff battle began a year ago. Domestic intermodal providers are concerned about tariffs on 53-foot containers, which cost about $15,000 each. The extra $3,000 to $4,000 would be passed onto rail shippers, according to trucking and intermodal operators J.B. Hunt Transport Ser- vices and Schneider National. If all of this seems familiar, you're right. This exact case was debated on July 25 and Aug. 24, 2018. The American Association of Port Authorities (AAPA) lobbied against duties on STS cranes. J.B. Hunt and Schneider testified on containers, and the Institute of International Con- tainer Lessors (IICL) fought against tariffs on containers and chassis. They were successful in getting containers and cranes removed from the list, but lost on chassis. US REGULATORS ASKING for comments on whether 18-year-olds should be allowed to drive tractor-trailers in interstate commerce should expect their inboxes to overflow. The prospect of 18- to 20-year-olds driving 80,000-pound combination vehicles across state borders, even in a limited pilot project, attracts intense opposi- tion as well as ardent supporters. The US Federal Motor Carrier Safety Administration (FMCSA) in May asked for comments on a potential pilot program that would allow civilians between 18 and 20 years of age to drive heavy trucks across state borders. US law currently requires interstate truckers to be at least 21 years old, unless they are in a federal pilot program for US military veterans. "Commercial trucks and buses are essential to a thriving national Now it's back to square one, with hearings scheduled to begin June 17 in Washington. Last summer, the debate over tariffs on STS cranes and containers primarily revolved around whether importers could replace Chinese sourc- es with domestic manufacturers. Only two major companies currently manufacture STS cranes — Shanghai Zhenhua Heavy Indus- tries Co. (ZPMC) and Konecranes. Although the latter is a Finnish company, it has said it manufactures many of the cranes in Shanghai. economy, and the department wants to ensure the public has an opportunity to comment on this important potential change," US Transportation Secretary Elaine L. Chao said in a statement. Even if the age limit falls for entry-level drivers, it's not clear that trucking companies would attract large numbers of working-age teenagers, nor whether those companies would be able to afford the higher insurance rates that likely would accompany them. The debate over the potential pilot program accentuates the difficulty motor carriers face hiring truck drivers of any age in an economy that is now closer to full employment than at any time since the 1960s. The trucking industry shed a small number of jobs in April, ac- cording to employment statistics released by the US Bureau of Labor Statistics (BLS). Sequentially, trucking employment has plateaued in 2019, with BLS payroll numbers fluctuating between 1,516,000 and 1,516,800 employees in the first four months of 2019. Still, seasonally adjusted trucking employment numbers were up 2.4 percent year over year, while total non-farm employment rose 1.8 percent, pushing the US unemployment rate down to 3.6 percent. The JOC For-Hire Trucking Employment Index dropped to 104.78, its first decline in 12 months, indicating US trucking em- ployment is 4.8 percent higher than in 2006. The push to get younger drivers behind the wheel has been under way for several years, as trucking industry demographics get older and grayer. Depending on who you ask, the average US truck driver is International | Washington | Customs | Security | Regulation A tariff waiting game US ports say a tariff hike on cranes and boxes will impede investments By Ari Ashe Teens in the seats? FMCSA seeks comments on pilot program allowing teenagers to drive heavy trucks By William B. Cassidy

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