U.S. Will Tap SPR; Some Wholesale Fuel Rationing Begins
Future economic historians may look back on Hurricane Katrina as the start of the 2006-07 recession.
This hurricane may prove to be so disruptive that it tips the US economy over into a major correction of equity markets and regional housing bubbles.
10% of US refinery capacity is in areas affected by the storm. Ports have been damaged. Oil rigs have been damaged. Highways have been damaged.
That means that farmers may have to spend more getting their crops to market, i.e., sending them by more expensive rail links rather than barge. That puts more upward pressure on fuel prices.
Granted, there will be a rebuilding boom in construction, but for right now, there will be a lot of people without jobs.
My guess is that the net effect of this will be higher fuel prices, regional shortages. At least one major airline will go out of business permanently or be purchased by asset strippers. Domestic car manufacturers will see an absolutely dismal fourth quarter, the result of "Employee Pricing" flushing the fall buyers out early as well as the results of having put most of their eggs in the truck/SUV basket. The new hybrid pickups that generate their own 110V power should sell like hotcakes as the reconstruction of the South takes off.
Expect layoffs in the airline industry, auto manufacturing (and those who supply them). As the regional real estate bubbles collapse, expect layoffs in this industry, as well as sharply increased foreclosure as speculators get caught having bought at the top of the bubble.
As people's paper wealth deflates, they will be more conservative regarding their spending, and Christmas 2005 should be disappointing for retailers. Watch for Wal-Mart to significantly miss earnings forecasts.
As earnings decline, watch for the equity market to turn bearish. Money may start flowing into bonds as the Treasury Department has to unload increasing quantities of debt to finance the ever-increasing budget deficit. That means a lot of people with variable rate mortgages are in for some painful surprises. Watch for gold to go up, up, up.
What does this mean for our industry? Well, if you're a manufacturer, be prepared for canceled orders. If you're an owner operator, look for that fuel cost to gobble a bigger chunk of your gross. In general, however, people are still going to need to move cars around. There may just be fewer cars to move around for a little while. It's not really the end of the world, but it could be the beginning of the next recession.
Ratchet Wheel Straps
If recent sales of ratchet wheel straps to VW overflow carriers is any indication, it could be that the days of the cluster chain are numbered. How long before Toyota logistics goes this direction? I don't think the Cottrell lawsuit had anything to do with it, but the movement of the industry away from 1/4 diameter grade 70 cluster chains to 5/16" grade 70 cluster chains may fuel still further sales of the ratchet wheel straps. (Who wants that extra weight?)
Boydstun trailers now come with strap, at least the Boydstun trailer with screw actuator. With less weight from hydraulic line and chains, they estimate between 1000-2000 lbs of saved weight, depending on configuration. Don't know if the Cottrell screw trailer has the same weight savings or not.
Looks like the foreign car makers got complaints from their dealers about damage, which caused them to go to the soft ties. (Porsche, Land Rover, Mercedes Benz, Volkswagen and BMW are among the few that come to mind, and I'm sure I'm missing some.)
Word is that General Motors is contemplating switching somewhere around 2007 if the rumor mill is accurate, which it rarely is.
Seems like the planets are getting lined up to make this a strap-on world before too long.
Here's a few places that sell ratchet wheel straps:
CF Bender Stocks for immediate delivery. Midwest US
Autohauler Supply New online catalog. Ships direct from manufacturer in Michigan.
Cottrell Many parts available for online ordering. Georgia.
Delavan Quicker delivery time and less shipping if you're in NY area
Allied Bankruptcy: If you need to collect money from them, you need to read this.
Somebody sent me a link to this document. I didn't know if he wanted me to publicize his name in association, otherwise I'd give him credit for it.
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