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FTR’s March Shippers Condition Index reflects continuing tough environment for shippers

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BLOOMINGTON, Ind. — The March Shippers Conditions Index reading from FTR released Thursday remained in double digit negative territory at -10.5 reflecting the continued tough environment facing shippers.

Conditions remain highly unfavorable with tight capacity and rising rates in both truckload and intermodal sectors, FTR said, adding that shippers may see some relief after the second quarter and conditions may improve further during the fourth quarter.

One bright spot for shippers is that the hard enforcement of the ELD regulation, based on spot-market data, does not appear to have had a major impact, FTR said.

“Economic indicators look solid, freight demand continues to rise, and FTR sees no significant slowdown through 2019 for these conditions,” said Jonathan Starks, chief intelligence officer at FTR. “Indeed, spot market rates are setting new record highs as the peak shipping season comes into full swing.”

“Although negative conditions persist for shippers, the latest month saw some stabilization,” said

Todd Tranausky, senior research analyst at FTR. “However, the combination of tight truck capacity and challenging rail service is unlikely to abate in the near term. Shippers need to plan on coping with these difficult conditions for a sustained period.”

The Shippers Conditions Index tracks the changes representing four major conditions in the U.S. full-load freight market. These conditions are: freight demand, freight rates, fleet capacity, and fuel price. The individual metrics are combined into a single index that tracks the market conditions that influence the shippers’ freight transport environment. A positive score represents good, optimistic conditions. A negative score represents bad, pessimistic conditions. The index tells you the industry’s health at a glance. In life, running a fever is an indication of a health problem. It may not tell you exactly what’s wrong, but it alerts you to look deeper. Similarly, a reading well below zero on the FTR Shippers Conditions Index warns you of a problem…and readings high above zero spell opportunity. Readings near zero are consistent with a neutral operating environment. Double digit readings (both up or down) are warning signs for significant operating changes.

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ATA truck tonnage index rose 0.1% in January, 0.8% higher than January 2019

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Ata truck tonnage index rose 0.1% in january, 0.8% higher than january 2019
Trucking serves as a barometer of the U.S. economy, representing 71.4% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. (iStock photo)

ARLINGTON, Va. – American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index rose 0.1% in January after rising 0.5% in December. In January the index equaled 117.4 (2015=100), compared with 117.3 in December.

ATA recently revised the seasonally adjusted index back five years as part of its annual revision.

“Over the last two months the tonnage index has increased 0.6%, which is obviously good news,” said Bob Costello, ATA chief economist.

“However, after our annual revision, it is clear that tonnage peaked in July 2019 and, even with the recent gains, is down 1.8% since then,” he continued. “Softness in manufacturing and elevated inventories continue to weigh in on the truck-freight tonnage.”

Compared with January 2019, the SA index rose 0.8%, which was preceded by a 3.1% year-over-year gain in December. In 2019 the index was 3.3% above 2018.

The not-seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 114.6 in January, 1.1% above the December level (113.3). In calculating the index, 100 represents 2015. (Note: ATA’s tonnage data is dominated by contract freight.)

Trucking serves as a barometer of the U.S. economy, representing 71.4% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 11.49 billion tons of freight in 2018. Motor carriers collected $796.7 billion, or 80.3%, of total revenue earned by all transport modes.

ATA calculates the tonnage index based on surveys from its membership, and has been doing so since the 1970s. This is a preliminary figure and is subject to change in the final report issued around the fifth day of each month. The report includes month-to-month and year-over-year results, relevant economic comparisons and key financial indicators.

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The Trucker Newspaper – February 15, 2020 – Digital Edition

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Fleet Focus: ELDs push drivers to find ways to remain ‘productive’

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trucks and cars in traffic
Prior to ELDs, two hours stuck in traffic went down as a half-hour driving and an hour-and-a-half break at the truck stop, or the start time was simply adjusted to show beginning the trip much later. (The Trucker File Photo)

The crescendo has passed, but the symphony of protest against electronic logging devices (ELDs) is far from over. Despite the objections and barring a legislative turnaround of epic proportions, ELDs are here to stay.

Whether the claims of enhanced safety provided by ELDs prove true, and so far they have not, carriers have a vital interest in protection against the “nuclear” verdicts being handed down in courtrooms. With paper logs, they had less control over the driver’s actions. Hours of Service infractions and falsifications that could potentially seal a verdict against the carrier might not be discovered until weeks afterward, when the logs were sent in. And, if the driver was good enough at “creative” logging, those infractions might not be discovered at all.

Full disclosure: during a driving career, the writer may or may not be responsible for years of near-perfect duty status records that may or may not have been routinely (and beautifully) falsified.

For most drivers, and especially owner-operators, it was important to “preserve” as many driving hours as possible in order to be productive (and profitable). So, two hours stuck in traffic went down as a half-hour driving and an hour-and-a-half break at the truck stop, or, the start time was simply adjusted to show beginning the trip much later. Recorded driving hours were calculated by dividing miles traveled by a reasonable “average” speed, usually five or so miles below the posted speed limit — but only when the result was fewer hours than actually spent driving that distance. Daily hours didn’t start until the truck was nearly loaded, foregoing the short drive from the truck stop and hours of waiting.

ELDs have greatly reduced infractions and falsifications, and made it easier for
carriers to identify those that still occur much sooner. Some will say that ELDs can still be falsified, but it’s also easier for both carriers and law enforcement to monitor.

What has happened is that ELDs have brought to the surface something that drivers have known for decades — industry abuse of the driver’s working time has been rampant and mostly ignored. It’s amazing how many carriers suddenly became concerned about driver “productivity” when ELDs made it more difficult for drivers to “hide” non-productive hours. Dispatchers are no longer able to give wink-and-nod direction to “just do the best you can,” trusting
the driver to make the paper logs look right.

With ELDs in place, drivers and owner-operators need to find other ways to remain productive. That action might include becoming much more assertive when it comes to control of those available hours.

Refusing dispatch, for example, is a legal descriptor of being an independent owner or contractor. Drivers should consider more than just miles and compensation rates when a load is offered. For example, loads traveling shorter distances are often less productive, especially when there’s a pickup and a delivery on the same day. The rate per mile offered should be greater than for longer loads.

Potential traffic should be considered, too. A pickup scheduled for 8 a.m. in the center of a large metropolitan area virtually guarantees waiting in traffic congestion, whereas a pickup in a suburb, or in a smaller city, might get the driver in and out much faster.

Customers who routinely take excessive amounts of time to load or unload can and should be avoided. Even if the customer or carrier pays for detention time, the amount is often far less than the driver earns during hours spent driving down the highway.

In a world where compensation is usually calculated by the mile, drivers are often unaware of how their settlements equate to hourly pay. They shouldn’t be. Owners should keep a record of the total time spent on a load as well as compensation received. A load with 10 hours of driving that is loaded in an hour and unloaded in an hour means 12 hours invested. Make it four hours to load and four more to unload, and the time investment becomes 20 hours. Divide the revenue received by the time spent (12 hours or 20) and the resulting earnings per hour may differ greatly. The answer may be good to know the next time that load is offered.

Managing a trucking business, even a one-truck outfit, is often a series of trade-offs. Owners must sometimes accept a not-so-good load to get in position for a better one or to get to needed maintenance (or a visit home). Even so, every load offered should be examined for its productivity potential.

The impact of ELDs on productivity is real. Owners of small trucking businesses can minimize that impact by considering potential productivity on every load offered and by exercising the power of NO when necessary.

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