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Congestion resulting in avoided highway auto trips, survey shows

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An U.S. Travel Association survey shows Americans are willing to pay more as long as their money is explicitly used to improve transportation in their region. (©2019 FOTOSEARCH)

WASHINGTON — The U.S. Travel Association released a survey last month that it said shows Americans avoided an estimated 47.5 million auto trips in 2018 because of highway congestion, equivalent to the loss of $30 billion in travel spending and 248,000 jobs, according to the organization’s economists.

According to an article in the American Association of State Highway and Transportation Officials Journal, the survey also found that comfortable majorities of American auto travelers would prefer to pay more in user fees to fund system improvements rather than sit in traffic, noted Roger Dow, the group’s president and CEO.

“The infrastructure discussion tends to grind to a political halt when it turns to resources,” he said in a statement. “So, we tested the funding question with polling. The interesting thing we found is that Americans are willing to pay more as long as their money is explicitly used to improve transportation in their region.”

Key findings from the survey include:

  • For each additional hour traffic adds to a weekend car trip, travel demand drops by an average of about 18 percent.
  • Two-thirds (66.1 percent) of auto travelers said they would rather pay an additional $2 to $3 each way to fund transportation projects than sit for an additional 1.5 to two hours in traffic each way.
  • More respondents (60 percent) said traffic congestion would be a greater deterrent to car travel than a 25-cent increase in gas taxes (40 percent).
  • Overall, most auto travelers (80 percent) said that additional gas taxes will not negatively impact the frequency of their travel by car. Among these travelers, nearly 89 percent said up to a 25-cent gas tax increase would not negatively impact their car travel.

When told Congress is considering proposals to increase other taxes and fees on drivers that would result in transportation improvements, 64.8 percent of auto travelers said they are “willing” to support such proposals.

Yet 23 percent said they are “unwilling” to support such proposals because there is no assurance that the funding would go to projects in their region.

“Our survey gave travelers a choice: would you rather pay more, or continue to sit in traffic? And two-thirds said they would rather pay a little more,” Dow said. “We hope that gives Congress some encouragement to make difficult decisions, because data shows us that inaction is putting the brakes on connectivity and prosperity.”

 

 

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The Nation

U.S. economy could shrug off oil prices if disruption is brief

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A gallon of regular in the U.S. stood at $2.59 on Tuesday, up 3 cents from the previous day, according to the AAA auto club. Analysts warned that pump prices could rise as much as 25 cents in the coming weeks, but it all depends on how quickly Saudi Arabia returns to normal production. (©2019 FOTOSEARCH)

DALLAS  — The price of gasoline crept higher after a weekend attack devastated Saudi Arabian oil output, but if the disruption to global supplies is short-lived, the impact on the U.S. economy will probably be modest.

Prices spiked Monday by more than 14%, their biggest single-day jump in years, but retreated Tuesday, reversing some of the increase. U.S. oil fell nearly 5% to $59.96 a barrel, while Brent, the international benchmark, dropped 5.3% to $65.34.

A gallon of regular in the U.S. stood at $2.59 on Tuesday, up 3 cents from the previous day, according to the AAA auto club. Analysts warned that pump prices could rise as much as 25 cents in the coming weeks, but it all depends on how quickly Saudi Arabia returns to normal production.

Tuesday’s reversal in prices came as Saudi Arabia’s energy minister reported that 50% of the production cut by the attack had been restored. Prince Abdulaziz bin Salman said full production would resume by the end of the month.

Even before Tuesday’s reversal in prices, economists downplayed the prospect that the price spike could send the economy reeling. After all, Monday’s surge only put prices back where they had been in May.

The attack knocked about 5% of the world crude supply offline. Oil prices have been trending mostly lower since spring because of concern about weak demand due to slowing economic growth.

Analysts say oil prices did not fully account for the risk posed by tension in the Middle East, but they will now. Iranian-backed Houthi rebels in Yemen claimed credit for the strike on Saudi oil facilities, but the Trump administration blamed Iran itself. The attack exposed the vulnerability of Saudi Arabia’s oil infrastructure.

Higher oil prices mean more costly gasoline, and that will sap consumers’ ability to spend on clothes, travel and restaurant meals. It will hit people who drive for a living.

Brian Alectine, a New York-based driver for the ride-hailing apps Lyft and Juno, said a 5- or 10-cent bump in the price of gasoline wouldn’t be too bad, but an increase of 25 cents a gallon would make it hard to earn a profit after expenses, including the monthly rent on the car he drives for work.

“The more you drive, the more gas you use,” Alectine said. “It will have a big impact.”

AAA said the nationwide average price of gasoline could rise 25 cents this month. Patrick DeHaan, an analyst for price-tracking app GasBuddy, predicted an increase of 10 to 20 cents a gallon. He saw reports of price spikes and people rushing to top off their tanks.

“I’m not sure where this panic is coming from,” DeHaan said. “There will be an increase, but prices will still remain over a dollar cheaper than they were earlier this decade.”

Any drag on the economy from lower consumer spending would be at least partially offset by increased investment in oil and gas production, according to several leading economists.

Gregory Daco, chief economist at Oxford Economics, estimated that the net effect could be a decline of about one-tenth of a percentage point in U.S. economic growth, which was 2.0% in the second quarter.

“An oil price shock will weigh on consumer spending and will add a further strain on the global economy, but we’re not talking about a major price shock at this level,” he said, while acknowledging that the situation could escalate if tension increases between the U.S. and Iran — a major producer whose output has been greatly squeezed by Trump administration sanctions.

U.S. crude poked above $100 a barrel in stretches between 2011 and mid-2014, yet the economy did not fall into recession. Brent peaked above $140 a barrel in July 2008, which some economists believe was an overlooked contributor to the Great Recession, which is more often linked to a financial crisis and, in the U.S., a housing-market bubble. Brent more than doubled in a few months after Iraq invaded Kuwait, another large oil producer, in 1990.

The United States was far more dependent on imported oil in 1990. Saudi Arabia remains the world’s biggest oil exporter, but the United States recently eclipsed both Saudi Arabia and Russia to become the world’s largest producer.

That makes the impact of higher oil prices on the U.S. economy much more mixed. Even as consumers and certain industries pay more for fuel, higher oil prices will be good for the U.S. energy industry and states where oil is produced, including Texas, New Mexico and North Dakota.

The stock market has highlighted which sectors will be helped or hurt by higher oil prices. On Monday, shares of oil producers surged, naturally, while stocks in airline, cruise and retail companies generally fell. Delivery giants UPS and FedEx dipped. They consume lots of fuel, and their business will suffer if higher energy prices cause consumers to reduce their online shopping.

For airlines, fuel is their second biggest cost behind only labor. Airlines were surprisingly adept at adapting to the last big run-up in fuel prices, but it takes them time to raise fares high enough to cover the extra cost.

American Airlines burned more than 4.4 billion gallons of fuel last year at a cost of nearly $10 billion, including taxes. On Monday, its shares fell 7.3%, more sharply than other carriers. Unlike most others, American doesn’t buy derivative investments as a hedge against fuel spikes, and its relatively heavy debt load leaves it vulnerable if the economy slows for any reason, including a jump in energy prices.

American estimates that over a full year, each penny increase in the price of fuel costs it $45 million. The price went up about 15 cents a gallon over the weekend.

If the fuel price increase persists for even a few weeks, analysts said, it could cause airlines to rethink their aggressive growth plans for 2020.

Ryan Sweet, an economist at Moody’s Analytics, said U.S. consumers are in good shape to handle a temporary increase in gasoline prices — with some savings, a tight job market and accelerating wage growth. Consumer psychology, however, can be difficult to predict.

“I don’t think this increase in oil prices … would be enough to single-handedly tip us into a recession,” he said. “The one cause for concern is that the consumer is carrying the economy. If the consumer starts to pack it in, the recession odds increase quite significantly.”

 

 

 

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The Nation

EPA set to end California’s ability to regulate fuel economy

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California's authority to set its own, tougher emissions standards goes back to a waiver issued by Congress during passage of the Clean Air Act in 1970. The state has long pushed automakers to adopt more fuel-efficient passenger vehicles that emit less pollution. A dozen states and the District of Columbia also follow California's fuel economy standards. (©2019 FOTOSEARCH)

WASHINGTON — The Trump administration is poised to revoke California’s authority to set auto mileage standards, asserting that only the federal government has the power to regulate greenhouse gas emissions and fuel economy.

Conservative and free-market groups have been asked to attend a formal announcement of the rollback set for Wednesday afternoon at Environmental Protection Agency headquarters in Washington.

Gloria Bergquist, spokeswoman for the Alliance of Automobile Manufacturers, said Tuesday that her group was among those invited to the event featuring EPA Administrator Andrew Wheeler and Transportation Secretary Elaine Chao.

The move comes after the Justice Department recently opened an antitrust investigation into a deal between California and four automakers for tougher pollution and related mileage requirements than those sought by President Donald Trump. Trump also has sought to relax Obama-era federal mileage standards nationwide, weakening a key effort by his Democratic predecessor to slow climate change.

Top California officials and environmental groups pledged legal action to stop the rollback.

The White House declined to comment Tuesday, referring questions to EPA. EPA’s press office did not respond to a phone message and email seeking comment.

But EPA Administrator Andrew Wheeler told the National Automobile Dealers Association on Tuesday that the Trump administration would move “in the very near future” to take steps toward establishing one nationwide set of fuel-economy standards.

“We embrace federalism and the role of the states, but federalism does not mean that one state can dictate standards for the nation,” he said, adding that higher fuel economy standards would hurt consumers by increasing the average sticker price of new cars and requiring automakers to produce more electric vehicles.

Word of the pending announcement came as Trump traveled to California on Tuesday for an overnight trip that includes GOP fundraising events near San Francisco, Los Angeles and San Diego.

California’s authority to set its own, tougher emissions standards goes back to a waiver issued by Congress during passage of the Clean Air Act in 1970. The state has long pushed automakers to adopt more fuel-efficient passenger vehicles that emit less pollution. A dozen states and the District of Columbia also follow California’s fuel economy standards.

California Attorney General Xavier Becerra said Tuesday that the Trump administration’s action will hurt both U.S. automakers and American families. He said California would fight the administration in federal court.

“You have no basis and no authority to pull this waiver,” Becerra, a Democrat, said in a statement, referring to Trump. “We’re ready to fight for a future that you seem unable to comprehend.”

California Gov. Gavin Newsom said the White House “has abdicated its responsibility to the rest of the world on cutting emissions and fighting global warming.”

“California won’t ever wait for permission from Washington to protect the health and safety of children and families,” said Newsom, a Democrat.

The deal struck in July between California and four of the world’s largest automakers — Ford, Honda, BMW and Volkswagen — bypassed the Trump administration’s plan to freeze emissions and fuel economy standards adopted under Obama at 2021 levels.

The four automakers agreed with California to reduce emissions by 3.7% per year starting with the 2022 model year, through 2026. That compares with 4.7% yearly reductions through 2025 under the Obama standards. Emissions standards are closely linked with fuel economy requirements because vehicles pollute less if they burn fewer gallons of fuel.

The U.S. transportation sector is the nation’s biggest single source of planet-warming greenhouse gasses.

Wheeler said Tuesday: “California will be able to keep in place and enforce programs to address smog and other forms of air pollution caused by motor vehicles.” But fuel economy has been one of the key regulatory tools the state has used to reduce harmful emissions.

Environmentalists condemned the Trump administration’s expected announcement.

“Everyone wins when we adopt strong clean car standards as our public policy,” said Fred Krupp, president of Environmental Defense Fund. “Strong clean car standards give us healthier air to breathe, help protect us from the urgent threat of climate change and save Americans hundreds of dollars a year in gas expenses.”

 

 

 

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Study finds hair test 14.2 times more likely to spot drugs than urinalysis

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After the Department of Health and Human Services failed to develop guidelines for hair testing as mandated in the 2015 FAST Act, in October 2018 President Donald Trump signed a bill that required HHS to report progress on hair testing within 30 days of passage and laid out a schedule, including benchmarks, for completion of hair testing guidelines. In neither case did the HHS respond, but now guidelines have been sent to the Office of Management and Budget. (©2019 FOTOSEARCH)

WASHINGTON — A University of Central Arkansas (UCA) study has concluded that a recent survey of 151,662 truck drivers’ paired urine and hair drug screenings, in which 12,824 failed the hair test, “can be generalized across the national driver population.”

Based on this study, 310,250 truck drivers would fail a hair test for illicit drug and opioid use.

That number is based on the U.S. Bureau of Labor Statistics figure that there are 3.3 million employed truck drivers and the Owner-Operator Independent Driver Association estimate that there are 350,000 owner-operators.

Broken down by segment, the Labor Department says there are 915,320 light truck or delivery services drivers, 1,800,320 heavy and tractor-trailer truck drivers and 604,100 industrial truck and tractor operators.

The Trucking Alliance, an industry-based safety coalition of freight transportation, logistics and supporting businesses that adopt specific operating standards, recently conducted a survey of 15 trucking companies that utilize a pre-employment hair test when hiring commercial truck drivers, along with the federally required urine test.

To compare the results, the companies submitted paired drug and urine test results of 151,662 truck driver applicants.

The test results indicated a major discrepancy between the number of drivers who failed a urinalysis drug screen and those who failed a hair test.

While 949 (0.6%) applicants failed the urine test, 12,824 (8.5%) either failed or refused to submit to a hair test.

The U.S. Department of Transportation classifies refusals to submit to a drug or alcohol screening as a failure.

This yielded a hair test failure rate 14.2 times greater than with the urine test.

Cocaine was the most prevalent drug, followed by opioids, including heroin.

Marijuana was the third-most widely detected drug.

All of these drugs are prohibited by federal law and automatically disqualify persons with a commercial driver license from operating a commercial truck.

Proponents of hair testing have been pushing for several years to have the Department of Transportation recognize hair testing as a viable tool in screening out substance abusers who might seek a job driving a big rig.

The FAST Act highway bill of 2015 had required the Department of Health and Human Services to issue scientific and technical guidelines for hair testing by December 2016, but that deadline was missed.

Then in October 2018, President Donald Trump signed a bill that required HHS to report progress on hair testing within 30 days of passage and laid out a schedule, including benchmarks, for completion of hair testing guidelines.

The guidelines would be applicable to all federal agencies, not just the DOT.

Sources told The Trucker that a draft of guidelines has been written and sent to the Office of Management and Budget (in essence, the White House) for review.

Feedback from OMB said the guidelines were too broad and unenforceable, the source said.

As for its study, the Trucking Alliance asked the UCA College of Business to analyze the survey and determine if the test results could be applied, with accuracy, to the national U.S. truck driver population.

The UCA study, titled, “An Examination of the Geographical Correlation Between Commercial Motor Vehicle Drivers,” concluded:

  • The Trucking Alliance sample is large enough to draw inferences to the national driver population, with a 99% confidence level and a margin of error of less than 1%.
  • The Trucking Alliance sample is representative of the national truck driver population.
  • The Trucking Alliance urine vs. hair test results can be generalized across the national driver population.

“We now have clear evidence that hundreds of thousands of drug-impaired truck drivers are skirting the current drug test system and creating a dangerous public safety risk,” said Lane Kidd, managing director of the Trucking Alliance.

The Trucking Alliance says it supports reforms that can improve the safety and security of commercial drivers, reduce large-truck accidents, and eventually eliminate all large-truck crash fatalities.

Member companies collectively employ 82,000 professional drivers, logistics and management personnel, and contract with thousands of independent owner-operators to serve their respective supply chain networks. These companies operate approximately 70,000 large tractors, and more than 220,000 semitrailers and intermodal containers.

Members of the Trucking Alliance include Cargo Transporters, Dupré Logistics, J.B. Hunt Transport, KLLM Transport Services, Knight-Swift Transportation, Maverick USA, May Trucking Company and US Xpress.

UCA is located in Conway, Arkansas.

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