As President Biden unveiled his infrastructure plan in Pittsburgh yesterday, it kicked off the first step in what is estimated to be a months-long negotiation with Congress. The American Society of Civil Engineers estimates that approximately $2.6 trillion dollars is needed to restore America’s infrastructure over the next decade. Biden’s plan, called the “American Jobs Plan,” is estimated to be around $2 trillion. The plan is said to be funded by raising corporate taxes from 21% to 28%.
There have been consistent whispers during the Trump Campaign of a national infrastructure deal just around the corner. While the whispers persist, there has not been any strong progression towards improving the national infrastructure. Multiple attempts have been made, but they have all fallen apart due to disagreement on the cost associated, where the cash will come from, and what sectors to prioritize. Typically, the first few years of a presidency are difficult to get alignment on topics. Infrastructure improvement seems to be an agreement on both sides. With the senate now split 50/50, Vice President elect, Kamala Harris’ vote could be the sway necessary to nudge the US infrastructure deal into action. With the American Society of Civil Engineers grading out the United states as a D+ on the current infrastructure, we certainly could use some renovations.
After unprecedented gains in 2020, which were overshadowed by COVID-19, many in the trucking industry are excited about the outlook for 2021. The trucking industry expects to see an increase in sectors such as final-mile delivery, contracting, home improvement, and overall E-commerce. The American Trucking Associations, Chief Economist Bob Costello says, “I think freight will remain decent in 2021. On the good side, the vaccine will help return to ‘normal,’ which means sectors that are currently hurting like services and manufacturing can bounce back”. This is great news for an industry that at the start of this pandemic in 2020 saw sales of Class 8 trucks fall by 24.3% in the first quarter, and 51.2% in the second quarter.
Tis the season for winter weather and this week we are experiencing the full effects of winter storm Gail, marching up the east coast. Many from Washington D.C., Maryland, Virginia, West Virginia and Pennsylvania have all felt these effects which includes slick road conditions and delayed travel.
Canada has an emphasis on minimizing their carbon footprint. Recently they committed to $20 million for the construction and distribution of small modular nuclear power plants. These single, small, modular power plants would be able to produce up to 300MWe (megawatt of electric capacity). For reference, that would be enough to power 150K to 200K homes. The benefit of these units would certainly be the transportation flexibility for more isolated communities with minimal waste.
President Trump announced last week that he will be issuing a Presidential Permit for a freight railway project that will run from Alberta, Canada to Alaska, called A2A Railway. The project will cost $22 billion and will transport a variety of commodities such as oil and iron ore, as well as other container goods. The rail line will run close to 1,600 miles (2,570 kilometers) from Anchorage, Alaska through Yukon and Northwest Territories into northern Alberta.
As the world looks to become greener, the travel industry continues to look for alternative fuel sources. This week, Airbus unveiled their new concept for hydrogen powered commercial airliners, which would be the world’s first zero emission commercial aircraft. They released three visual concepts that they hope to have in use by 2035. The three concepts that were released are the; turbofan design, turboprop design and a blended-wing body. Guillaume Faury, the CEO of Airbus, said “This is a historic moment for the commercial aviation sector as a whole, and we intend to play a leading role in the most important transition this industry has ever seen. The concepts we unveil today offer the world a glimpse of our ambition to drive a bold vision for the future of zero-emission flight”. He went on to discuss how the use of hydrogen has the potential to drastically reduce the industries impact on the environment.
Nearly one month ago, U.S. oil futures hit a historic moment, dropping below zero for the first time. At that time traders were scrambling to pay buyers to take off crude futures, while month end rolls were looming. This morning, U.S. oil futures climbed roughly 9% to $32 a barrel, a price that would allow some of the lowest cost oil wells in the United States to break even. Oil prices are roughly half of what they were to start the year, but the slight uptick in driving across America, has helped rally the oil prices. Currently, 87E10 gasoline pump prices are at an average of $1.88 a gallon in the U.S., about $0.98 less than last year.
During the holiday season millions of gifts are purchased and exchanged among family and friends however, the amount of merchandise that gets returned has increased exponentially over the last several years. According to CBRE and Optoro, Americans are projected to return $41.6 billion in online holiday merchandise this year, up from $37 billion returned last year. With the uptick in online shopping, consumers have more purchasing power than ever before. They can purchase any number of items from the comfort of their home while knowing they can return anything at no cost. This leaves retailers wondering how they can make up for lost profits on returned goods, as well as putting immense pressure on the distribution centers in charge of handling.
After many scattered rumors, today brought the official news of yet another major trucking outfit closing their doors. Celadon Group, the owners of about 3,300 tractors and 10,000 trailers announced that they would be filing for Chapter 11 Bankruptcy Protection. This brings an immediate end to the 34 year run of the Indianapolis, Indiana trucking firm. More importantly, the news of Celadon’s closure will put nearly 4,000 employees out of work.
