1 NORTH DAKOTA TRADE OFFICE NORTH DAKOTA INTERMODAL INITIATIVE (NDII) March 15, 2017 Gene Griffin Global Innovative Solutions 701-793-1081 [email protected]2017 Progress Report & Related Information Topics 1. Progress Report 2. Rationale for NDII 3. Primary Current Strategic Goals a. Restore Intermodal Service – Minot b. Improve Trucking Productivity c. Transportation/Logistics Training Program 4. Future Activities/Challenges a. Assessment of Potential Outbound b. Assessment of Inbound c. Developing and Attracting Inbound Industries d. Education and Outreach e. Create Transportation/Logistics Associate Degree 5. Ocean Liner Industry Trends
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NORTH DAKOTA INTERMODAL INITIATIVE (NDII)...1 NORTH DAKOTA TRADE OFFICE NORTH DAKOTA INTERMODAL INITIATIVE (NDII) March 15, 2017 Gene Griffin Global Innovative Solutions 701-793-1081
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Objective 1: Congressional Approval to Increase LCV Weights on North Dakota’s Interstate
System
1. Senator Hoeven will attempt to attach language to the 2018 Transportation Appropriations Bill
a. Other Senators will be asked to support; e.g.; Senators Thune and Testor
b. Senator Heitkamp is supportive
c. Example of legislative language
SEC. _____. Section 127 of title 23, United States Code, is amended by inserting at the end the following:
‘‘(u) VEHICLES I N NORTH DAKOTA. —A vehicle
limited or prohibited under this section from operating on a segment of the Interstate System in the State of North Dakota may operate on such a segment if such vehicle–
‘‘(1) h a s a g r o s s v e h i c l e w e i g h t o f 1 2 9 , 0 0 0 pounds or less;
‘‘(2) other than gross vehicle weight, complies with the single axle, tandem axle, and bridge formula limits set forth in subsection (a); and
‘‘(3) is authorized to operate on such segment under North Dakota State law.’’
2. Congressman Cramer is considering introducing separate legislation on the House side
3. There is opposition
a. Shortline railroads
b. Large truck lobby
Objective 2: Establish a 129,000 Lb. Network in North Dakota
1. HB 1255
2. Passed the House 92 to 0
3. Currently before the Senate
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Rationale/Talking Points
North Dakota’s road and highway system has continually evolved since Dakota Territory was first
settled. Initially the roads were the responsibility of counties and townships. The state legislature
created a State Highway Commission in 1913 with limited authority. In 1927 the Department of State
Highways was created which authorized it to create a “State Highway System”. An integrated part of
this system were designated Farm-to-Market county roads that served as conduits for farm production
to country elevators which were ubiquitously located throughout the state. Since then the highway
system has rapidly developed including the ND Highway Network, U.S. Highways and the Interstate
System that are the arteries for North Dakota Commerce, especially agriculture, in a changing
transportation environment and a globally competitive economy. The evolution of the highway and road
system must continue for North Dakota agriculture to participate in domestic and international markets
on a competitive basis.
1. Production agriculture continues to be a fundamental and primary sector of North Dakota’s
economy.
2. The volume of production has increased steadily increasing by 405% over the last 60 years – for
example, wheat production has increased 235% since the 1950’s to 379,023,000 bu in 2015;
corn production has increased from12,625,000 bu in 1955 to 327,300,000 in 2015, a 2,600%
increase; and soybean production has increased to185,900,000 bu in 2015 from 1,364,000 bu in
1955, a 14,360% increase.
3. All agricultural production must move by truck at some time, and usually more than once. Given
the large amount of farm storage available most grain is moved to farm storage before being
marketed.
4. Much of this production will move over the Interstate system at one time or another as it moves
from field to farm and market by truck.
5. The freeze on LCV weights on the Interstate system (imposed by Congress in 1991) severely
restricts improvements in truck productivity that is sorely needed in a competitive environment.
This is especially true in times of low commodity prices and aggressive competition at both the
domestic and international level.
6. The surrounding states of SD, MT, ID and the Prairie Provinces of Canada all have higher LCV
weight limits - thus restricting regional interstate commerce and putting North Dakota at a
competitive disadvantage.
7. North Dakota is a geographically large and sparsely populated state - resulting in unusually long
trips to move commodities compared to many other states across the country.
8. A changing marketing system utilizing shuttle trains requires grains to move much farther
distances to the origin market compared to 30 years ago, when smaller country elevators were
ubiquitously located throughout the state.
9. Development of IP, specialized marketing, and processing of agricultural commodities requires
improvements in trucking efficiency to reduce drayage costs.
10. An increase in Interstate LCV weights will enhance ND competitiveness in these new markets by
reducing bulk transport cost as well as a reduction in drayage of containers.
11. A lifting of weight restrictions for LCV’s on the Interstate system in North Dakota will allow
North Dakota to develop a network of roads and bridges suited for 129,000 lbs - making the
state more competitive in the agricultural and commodity sectors.
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Goal 3: Transportation/Logistics Training Program
1. Rationale for the program
a. Most of what North Dakota produces must exported out of the state or country
b. This requires expertise in transportation and logistics
c. There are many small companies, by national and international standards that cannot
afford to pay salaries and benefits for personnel with advanced degrees in this area of
expertise
2. Anecdotal evidence supports the need for a training program for North Dakota agricultural
processors, specialized marketing of agricultural commodities, firms that rely on identity
preservation as a marketing strategy, and manufacturers of all types.
3. The ND Trade Office is acting as a catalyst to address this need
a. Hosting a meeting of Impact Dakota, NDSU College of Business and the Trade Office to
explore the development of the program
b. Expected outcome is a collaborative effort of stakeholders
Future Activities/Challenges
1. Assessment of potential outbound – current estimates based on two surveys and industry
knowledge
a. Pulses – Peas and Lentils: 17,381 TEU’s/yr. at 20 MT/container
b. Food Grade Soybeans: 8,395 TEU’s/yr.
c. Commodity Grain & Soybeans, and DDGS: 51,120 TEU’s/yr.
i. Assumes liners and railroads will allow shipment out of Minot
d. Need to refine and expand assessment
i. Include Dry Beans and Flax
2. Assessment of inbound: In the planning stage
a. Manufacturing - Working with Impact Dakota
b. Oil Industry
i. Segregate various aspects of well development
1. Drilling
2. Fracking
3. Well development
c. Evaluate impact of better service and rates
3. Developing and attracting inbound industries to provide empties
a. Needs agricultural industry support
4. Continue to educate shippers, potential industry users and the public of the importance of
container transportation to North Dakota’s future
5. Development of transportation/logistics training program
a. Processors, specialized marketing firms, manufacturers
b. Initial collaborators include Impact Dakota, ND Trade Office and NDSU
6. Evaluate the need for and path for development of an associate degree in
transportation/logistics
a. Work with ND State School of Science
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Ocean Liner Industry Trends
Top waves hitting ocean shippers in 2017
JOC Staff | Jan 09, 2017 1:13PM EST
2016 was one of the wildest years in container shipping history. Within one year, the industry
witnessed the largest bankruptcy in liner history with Hanjin Shipping, historically low spot
rates, the narrowing of the Top 20 global container lines to 14, and the dramatic reorganization
of global shipping lines into new, larger vessel-sharing agreements. With the industry in such a
dynamic state, 2017 will likely hold its own surprises. Here are some key issues to watch.
Pricing gets shakier
One of the biggest questions of 2017 is: how will pricing and capacity develop? Since 2008, the
global container trade has slowed significantly, but growth of the global fleet did not slow in line
with that reduced demand. Global container ship capacity since 2008 has grown 8 percent on
average while traffic has increased 3 percent on average, according to IHS Markit data. This
created the enormous supply-demand imbalance that has stoked industry consolidation over the
last two years and forced Hanjin Shipping into bankruptcy. The global container ship fleet grew
1.1 percent in 2016, ship-owner association Bimco estimates, which would be the first time fleet
growth was lower than demand growth since 2010. If container lines are to bring rates to
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sustainable levels in the coming year, they will have to repeat that feat, but initial projections and
the aspirations of smaller liners suggest this may not happen.
Container lines are seeking higher rates in 2017.
As the industry consolidated, spot rates strengthened, but some doubt those signs of strength will
persist through 2017. The Asia-Europe spot rates ended 2016 at a high for the year, and the
trans-Pacific rate to the East Coast also reached a high, while that to the West Coast was the
second-highest of 2016.
Contract rates on both trades are also expected to be higher in 2017, although those increases
come from punishingly low levels. A majority of nearly 150 shippers surveyed by JOC.com in
December expect their trans-Pacific contract rates to increase this year, with most, 46 percent,
preparing for increases of 1 percent to 10 percent. More than 20 percent of respondents expect
rate increases of 10 percent to 20 percent.
On Asia-Europe, shippers have said they anticipate paying between 10 percent and 20 percent
more for their contracts this year. One shipper said the contract rates he had been offered were up
roughly $500 per 20-foot-equivalent unit compared with last year. After the brutally low trans-
Pacific contract rates of 2016, container lines are seeking eastbound rates of at least $1,500 per
40-foot-equivalent unit to the West Coast and $2,800 per forty-foot-equivalent unit to the East