Guest post by Mark J. Perry
The Port of Los Angeles released data  April 14th on March shipping volume, and the number of loaded outbound export containers in March surged to a new, all-time record high of 192,849 TEUs (20-foot-long cargo containers), far surpassing the previous record of 175,262 TEUs set back in August of 2008 (see chart above). 
 Total shipping volume at the Port of Los Angeles in March was 600,796 TEUs, which was the highest shipping activity for the month of March in four years, since the 629,000 TEUs in March of 2007 before the recession started. 

Hopefully, these shipments include manufactured items, too, not just waste paper and scrap metals.

The export surge in March could be attributed to: a) the falling value of the U.S. dollar making American products more competitive in world markets, and b) the general economic worldwide recovery leading to increased demand for U.S. products overseas.  In either case, the BEA trade report for March should reflect a huge increase in U.S. exports, which would have a positive impact on first quarter GDP.  
Speaking Of Precision: We are encouraged by this news, but wonder just what is in all those containers, as the US’s top ten container exports tend to be waste paper and other scrap and raw materials.
Not a lot of value added.

Perry Link       
 Waste Paper

The products of the shops that belong to the Precision Machined Products Association are incorporated in nearly every technology. Automotive, Medical, Aerospace, Home technologies like HVAC,  Gas and Electric Appliances, Plumbing, Electrical, Electronic, and a host of others you might not think of like Food and Beverage Equipment, Munitions, Off Road and Construction Equipment.

A record high for our industry sales index!

PMPA’s Index of Sales of Precision Machined Products in March 2011 jumped to 129, a newrecord high. The previous high value for our Sales Index was 128, achieved and reported only twice before- in March of 2007 and in March 2006. This was a 15% increase over February’s index of 112 (adjusted to 112, originally reported as 110); it reflects a 42% increase in sales from December 2010 levels.

Over 80 shops participated. Sixty-four percent of respondents reported double digit sales increases.

Given the ubiquity of the applications for precision machined components in manufactured goods of all types, the PMPA’s latest Business Trends Sales Index provides compelling evidence of the recovery of manufacturing.

 Media Contact: Miles Free or Mike Duffin at PMPA

Machinability of carbon and alloy steels is a shear process. Working the metal (Shearing to create chip) provides heat. The subsequent sliding of the produced chip on the face of the cutting tool provides heat as well.

Three ways to improve machinability include

  1. Optimizing the chemistry to provide for a minimum shear strength
  2. Adding internally contained lubricants
  3. Adjusting cold work

The steels that we are talking about are in large part composed of the ferrite phase. This is advantageous to us as machinists, because it has a relatively low shear strength.

Because ferrite is also ductile, it does not cut cleanly and tends to tear. Grade 1008 or 1010 are prime examples of  how pure ferrite machines. Long stringy, unbroken chips, torn surface finishes and lots of machine down time to clear “birds nests” are typical results.

Adding carbon up to a point improves machinability by adding a second harder phase (pearlite) into the ferrite. The good news is that up to a point, the chip formation is greatly improved, and surface finish improves somewhat. The bad news is that the shear strength of the steel is also increased. This requires more work to be done by the machine tool.

Addition of Nitrogen and Phosphorous can not only increase the shear strength of the ferrite, but also reduce the ductility (embrittle it).This ferrite embrittlement promotes the formation of short chips, very smooth surface finishes, and the ability to hold high dimensional accuracy on the part being produced. The downside is that these additions can make the parts prone to cracking if subsequebnt cold work operations are performed.

The graph below shows how cold work (cold drawing reduction) works in combination to reduce chip toughness, resulting in controlled chip length, improved surface finish, and improved dimensional accuracy of the part. To read the graphs, the Nitrogen content is shown in one of two ranges, and Phosphorous content is varied as is  the amount (%) cold work. You can see how the synergistic effects of these two chemical elements  when appropriately augmented by cold work, can drop the materials toughness  by as much as 80-90%.


Phosphorous and Nitrogen affect ductility; Cold work further activates their effect.

Add to that internal lubrication by a separate manganese sulfide phase or a lead addition, and now you can see how these factors can make grade 1215 or 12L14 machinable at speeds far, far, faster than their carbon equivalent 1008-1010. With greater uptime and tool life.

Internal Lubricant- Manganese Sulfides

And you thought that cold drawing just made the bar surface prettier and held closer in size…

I went to judge the F1 In Schools State Championships in Pennsylvania.  I was delighted to see the skills and talent in so many of todays students.

Best Engineered, Fastest Car, 2nd Place High School

The Formula One Technology Challenge involves a five-step process that meets the standards for technological literacy, the National Council of Teachers of Mathematics ( and the National Science Teachers Association ( The five steps are design, analyze, make, test, and race.  The Formula One Technology Challenge was to create and build a balsa racer that meets demanding specifications using CAD software, CAM software, CNC milling, testing for aerodynamics (virtual or actual). Competitors had to create documentation, make a verbal presentation, and of course, race their cars. Each group was also evaluated on their marketing, branding and sponsorship efforts as well.
Design, Test , Manufacture PA State Champs Predator Pine Richland H.S.

Sixteen teams amounting to almost 100 students were on site in this competition. Five teams qualified to go to the National Championships- Pine Richland High School, Predator Racing,  earned the State Champion title. Elizabethtown Middle school (2nd) Ninja’s and Donegal Middle School (3rd)  Twisters also earned their trip to the Nationals. Manheim High School (2nd) PA Hardcore and North Lebanon High School (3rd) (AeroBreakerz) also qualified for the U.S. National competition.
3rd Place North Lebanon H.S. AeroBreakerz

2nd Place Elizabethtown Middle School Ninjas

3rd place Donegal Middle School Twisters Learned About Teamwork

Major industry support included Denford Products (—cadcamcnc.html); 484 Consulting, LLC, whose CEO, Paul Koontz, actually chaired the Pennsylvania State Championships.  HITechinc ( sponsored the state event  for Pennsylvania and their president, Brian Haskell coordinated the event. Synergis (, the Autodesk software distributor  provided $1500 in award monies. Their Tim Varner lead the engineering evaluations of the submissions.
Synergis: Financial and judging support plus gave awards

Looking for skills and talent?  What can you do to help your local schools cultivate your local talent? These companies and schools are working together through F1  in Schools Challenge to make a difference for their communities.

“More firms report upturn in sales, profits, and hiring despite rising costs” is  the title of the latest NABE survey conducted in March.
The April 2011 NABE Industry Survey report presents the responses of 72 NABE members to a survey conducted between March 16, 2011, and March 31, 2011, on business conditions in their firm or industry and reflects first-quarter 2011 results and the near-term outlook.
“NABE’s April 2011 Industry Survey makes clear that despite geopolitical concerns, higher oil prices, and uncertainties created by the disasters in Japan, the economy continues to recover,” said Shawn DuBravac, Consumer Electronics Association.
“Job creation in the quarter, as well as the outlook for the next six months as measured by the number of firms increasing headcount, is stronger than we’ve seen in the entire survey history dating back to 1982. Supporting this growth, both recent results and the outlook for sales and profit margins continue to improve. Companies appear to be positioning themselves for a firming economic environment by increasing capital expenditures. At the same time, risks remain present. NABE survey respondents view the Japanese disasters as a net negative. The survey findings reflect early signs of inflationary pressure as more firms raised prices last quarter and also expect to raise them in the coming quarter.”
These findings agree with the recent trends in PMPA’s own Business Trends Report. And make us optimistic that sales of technology and processes to make precision machining shops more competitive will be brisk at PMTS this week in Columbus,Ohio.
But caveats exist-the April 2011 NABE Industry Survey results reflect building inflationary pressure in the U.S. economy.

  • The survey recorded the highest percentage of respondents (35%) reporting an increase in pricing since the October 2008 survey.
  • Price increases were especially prevalent in the goods-producing sector.
  • Materials costs also continued to rise, with more respondents in all four sectors reporting that costs rose last quarter.
  • The percentage of respondents reporting rising labor costs has jumped from 16% in the January 2011 survey to 35% in this survey.
  • Expectations for future selling-price hikes and non-labor input costs also increased.

Public version NABE Survey

Problems with the hole often get machinists to blame the material. In my experience checking the drill and machine run-out will  almost always  show the root cause.
There are many ways that a drill can cause problems for a machinist. Many times we look for evidence on the drill itself- chipped corners, edges, or margins. Sometimes the evidence is on the workpiece. And often that means a call to the material supplier.
 But just because the clues appear on the material doesn’t mean that the material is the cause of the problem. In drilling, there are four clues that say “check drill run-out and toolholder alignment and rigidity.”
Four Clues

  • Vibration
  • Tapered Holes
  • Oversize Holes
  • Eccentric Holes

Drill run-out will cause excess vibration when drilling. Run-out can also affect the concentricity and roundness of the hole.  Run-out can result in the hole becoming elliptical, tapered, and affect tolerances needed. A savvy operator checks drills for run-out before putting them in the machine. And a savvy set up technician always checks for run-out in the toolholder or chuck when starting a job.

Well, it is indicating the drill...

 Toolholder or machine caused
However, the cause of the run-out may not just be a bent drill- the tool holder, chuck or spindle may also be to blame. In addition to indicating the drill bits outside the machine, check that the drill chuck and machine spindle is running true.
Length can be an issue
Finally, make sure that the drill is inserted to the proper depth in the chuck, and that the chuck is not overextended. I went on a claim for steel that would not “drill straight” to find a 3/16” drill held in the biggest Jacobs style chuck I had ever seen being held on a # 4 Morse taper. The entire assembly was nearly the length of my forearm, and swinging around on a short cycle time Acme job, the drill never hit the next part on center due to the vibration and lack of rigidity. A more appropriate chuck installed at a shorter length solved this “material problem.”
When the workpiece shows the evidence of the problem, I humbly suggest checking the drill run-out.
 Photo credit

Sometimes, you just have to leave it in the good hands of your trusted colleagues.

If I was there this year, my smile would be even wider.

I was on the schedule for this year’s PMPA National Technical Conference and Precision Machining Technology Show being held in Columbus now through Thursday. I had prepared a couple of presentations and was really looking forward to reconnecting with the people who make things– You!
Sometimes however, Life has other plans.
I’m happy to know that Bob Drab, a colleague of many years and THE product specialist on stainless at Schmolz + Bickenbach will be presenting my program on Material Sensemaking- Understanding Foreign Grade Designations. And that one of my fellow staff directors will be giving my presentation giving you a behind the scenes look at the TOOLS YOU CAN USE on PMPA’s website.
Precision Machining companies belong to the PMPA because they know the benefits of collaborating to solve problems. To share resources that perhaps each one needs but cannot afford on their own. To know that they have a network of knowledgeable industry professionals available to back them up when they run into a problem they haven’t seen before.
Just as companies in the PMPA back each other up by sharing resources, knowledge and solutions to solved problems, I have learned that staff and colleagues do the same for each other when the need arises.
I’d have given anything to be there with my ‘INDUSTRY’ in Columbus this week.  To see you. To listen to your ideas, answer your questions, hear your concerns, see new processes, meet old friends.
But it wasn’t in the cards.
Why, I’d rather  chauffeur Bob Drab around on a bicycle… than miss this event.
Id do about anything to be at PMTS

Sorry I’m not able to be there. While you’re there, say”Hi” for me to Bob Drab,  and my staff colleagues Monte, Rob, Mike, and Carla.
And please, somebody take some photos!

While the price increases for the raw materials that we need in our precision machining shops continue to climb (March ISM Data), the policy makers tell us it is not inflationary.
Here’s the graph and an explanation from Mark J Perry, economist at the University of Michigan that tells them to tell us not to panic.
 Unfortunately, it doesn’t tell us how to deal with the squeeze between our large OEM suppliers ‘This is the price- pay it !” and our large OEM customers-“We aren’t accepting any price increase. We’re not paying.”
I have found Mark Perry to be a pretty clear thinker, so here is his post:
by Mark J. Perry

Not much APPARENT effect...

We hear a lot of talk about how rising prices for copper, cotton, oil, and other commodities are signaling that inflationary pressures are building up in the general U.S. economy, implying a direct and tight connection between commodity prices and consumer prices.  For example, Atlanta Fed President Dennis Lockhart said recently that rising commodity prices are creating “inflation anxiety.” But what exactly are the implications of rising commodity prices for core inflation, and how closely are those two variables related?  

That’s the question posed in a new Chicago Federal Reserve Bank research paper by Charles Evans and Jonas Fisher. As the chart above of annual PPI inflation rates for industrial commodities and the annual core CPI inflation rates shows, the answer to the question is “not very much.”  From the introduction of the paper:
“The recent run-ups in oil and other commodity prices and their implications for inflation and monetary policy have grabbed the attention of many commentators in the media. Clearly, higher prices of food and energy end up in the broadest measures of consumer price inflation, such as the Consumer Price Index. Since the mid-1980s, however, sharp increases and decreases in commodity prices have had little, if any, impact on core inflation, the measure that excludes food and energy prices.
Some economists argue that rising commodity prices are inflationary and, therefore, require a tightening of monetary policy.  Others say rising commodity prices have sometimes led to inflation and sometimes not. Therefore, a monetary policy response may not be required. In this Chicago Fed Letter, we empirically assess these views by conducting a statistical analysis of quarterly data on commodity prices, inflation, and monetary policy since 1959. We find that since the mid-1980s, after the big oil shocks and the tenure of Paul Volcker as chairman of the Federal Open Market Committee (FOMC), the reactions of both core inflation and the federal funds rate (the monetary policy instrument) to shocks in oil and other commodity prices have been extremely modest.”
SOP: We’ll come back another time to discuss whether or not Core CPI is an honest measure of inflation or another one of those indicators hijacked by the functionaries inside the city. In the meantime,the cost of the commodities we buy, and their surcharges and transportation, continue to rise.
You can follow Mark J Perry on his Carpe Diem Blog

Our National Technical Conference and our Precision Machining TechnologyShow are soon to be here!

We'll be on the road again ourselves...

While PMPA staff are working on preparing handout materials, loading presentations and testing them on laptop computers, and some of us are still creating those powerpoints that WON’T put you to sleep, we are also tackling some other projects too.
I’ve just completed a program that takes a look at the tools you can use  on the PMPA’s website.
And I’m finalizing a technical session on understanding and interpreting foreign material grade designations.

  • For Steels, Stainless Steels, Aluminums, and Copper and Brass materials.
  • US, German, Japanese, some Chinese formats explained.

Maybe not as exciting as say, a  police stop and search of Mr. Nelson’s tour bus, but hey. 
This will be some critical information to your shop  as we see more and more foreign specification material.
Thursday I’ll be off to Seven Springs PA to judge an F-1 skills competition.
So if you get passed by a siver sedan  and you think that it looked like me, well, this week, you might be right.
It probably won’t be Mr. Nelson.
He usually travels by bus.