Primary Feature Archives

HEROES FOR HIRE: Military veterans bring valuable skills to jobs in the civilian sector

Kris Rutherford - July 5, 2024

Since the Class B Standardized Military Truck, also known as the “Liberty Truck,” debuted at the start of World War I, skilled operators have been needed for military operations. As trucks improved during and after the war, they became vehicles society relied on for the rapid advent of new technologies and transportation systems. In fact, at the time, the military offered some of the best training available for operators of heavy vehicles. It’s likely no surprise that, as the war came to an end and soldiers returned home to their families and civilian life, many veterans found employment as drivers, navigating delivery trucks through city streets and along the nation’s highways. Today, the various branches of the U.S. military operate more than 170,000 non-combat trucks in dozens of models. Each of these trucks has one thing in common: There is a skilled driver behind the wheel. It is for this reason that many commercial motor carriers so highly prize drivers who have served in the military. When reviewing applications from military veterans, carrier recruiters should consider the valuable skills, characteristics and personality traits that are typical of service members and carefully evaluate each candidate. At the same time, it is also important that human resources professionals set aside any preconceived stereotypes surrounding the term “veteran.” The fact is, despite veterans’ service to their country, it is commonly believed that most carry “baggage” because of their experiences, especially those who have seen active combat. However, the truth is that every potential driver, whether civilian or military, has challenges and issues to overcome. Post-traumatic stress disorder (PTSD) is not limited to soldiers and law enforcement officers. See beyond the surface. It’s the HR professional’s job to see through those challenges and find the quality employee within. Earlier this year, the Truckload Carriers Association (TCA) presented a webinar on the topic, “The Veteran Among Us.” In the webinar, panelists discussed the challenges and opportunities veterans have when leaving the military and finding jobs in the civilian sector. One staggering statistic noted is that, upon discharge, 86% of those leaving the military service do not know what they want to do career-wise. That’s a huge pool of talent just waiting to be guided along the best path. When employers learn the intangible and transferable skills the typical veteran possesses, they often realize those qualities make former service members ideal job candidates for motor carriers and other transportation-oriented businesses. In the end, it is up to trucking industry recruiters to recognize those skills and help transitioning soldiers embark on successful careers. Change is never easy. This is a truth for the workforce in general, but it can be especially true when recruiting veterans. Many veterans emerge from the military with unique challenges. Some walk out the gate into civilian life with no home to go to. Some face daunting financial issues. And some are dealing with substance abuse. Whether a former service member is struggling with such challenges or not, an employer can play an important role in helping a veteran conquer what can be a difficult transition to a civilian career. One of the best ways to take advantage of a veteran’s unique skillset is by placing them in a recruiting role, working to help other service members step into a successful career. Veterans know veterans best, and they know what motivates them. One in four veterans is currently employed in the transportation and logistics industry. Why do former military personnel often find trucking so appealing? First, the industry is an excellent example of civilian employers taking advantage of transferable skills. Just as the periods following World Wars I and II were marked by a stream of motor pool operators entering civilian life, the same holds true with the military today. Intangible, transferable, skills possessed in abundance by veterans are just waiting to be retargeted in the trucking industry. It’s up to HR leaders to be prepared — to have programs already in place that attract veterans and to offer attractive benefits. Look for transferable skills. The transferable skills possessed by former service members are varied, and they are attractive to employers in all sectors. First, consider the intangibles. Veterans typically possess empathy and critical thinking skills, and they are adept at decision making, even under pressure. When it comes to work ethic, teamwork, leadership, mental toughness and ability to adapt to various situations, it’s can be hard to find job candidates as well-qualified as veterans. In fact, studies show that more than 75% of veterans exhibit each of these traits upon exiting the military. One of the issues facing recruiters when reviewing veteran’s resumes is the way the skills are listed and how they transfer to the civilian job description. Typically, recruiters find that veteran’s resumes focus on teamwork, how they fit into a team environment, their role within a team, and their importance to team success. What veterans don’t realize is that in the civilian workforce, while being able to work within a team is important, it is not the same as the military. Recruiters are looking at resumes of specific candidates who will fill specific roles. They want to know the candidates on an individual level. It is important that veterans realize the employer is interested in the skills that represent the individual. Look at the individual. Viewing a veteran as an individual rather than a stereotype is especially important in the transportation sector. Consider truck drivers. They most often work alone, sometimes in the overnight hours when the world around them is asleep. It can be a lonely career. It is important that motor carriers implement ways to interact with truck drivers aside from just seeing them in the office once a week. They must monitor the mental health of all employees who are living and working alone — whether they are military veterans or lifelong civilians. Leading companies implement mental health services into their HR departments. This has been especially important since the COVID-19 pandemic, and employers have heeded the call. Coming out of the pandemic, only 30% to 40% of companies in any sector offered mental health services. Today that number has increased to 90%, a testament to the ability of corporate America to react to changing times and worker needs. Create a set of best practices. The overriding need in the transportation industry is a set of best practices for recruiting military veterans. Such practices should include guidelines and expectations, personal and professional development opportunities, and mentoring programs (preferably with a veteran-veteran relationship). The Federal Motor Carrier Safety Administration (FMCSA) recognizes the value of bringing skilled veterans into the trucking industry. To help streamline the transition from the military to trucking, FMCSA is implementing programs allowing veterans to skip the written and/or skills tests to earn a CDL — provided a set of specific requirements is met. Likewise, the agency continues to experiment with allowing veterans under age 21 to drive interstate routes. Ultimately, the success or failure of a carrier’s veteran recruitment effort is based on support from company leadership. When CEOs prioritize recruiting and retaining military veterans, they hire HR employees with dedication and determination to implement veteran recruitment programs. Working together, the industry can pave the way for a new wave of veterans to drive a new breed of “Liberty Truck” across North America.

Second person in Idaho crash dies

Bruce Guthrie - July 4, 2024

Another victim from a crash last week has reportedly died. The Idaho State Police are continuing to investigate the three-vehicle fatality collision which occurred on US 95 near milepost 497 on June 29, 2024, in Boundary County, There are a few developments in the investigation, according to a news release issued recently including that the ISP has located the dark-colored pick-up in question, which the ISP came from the assistance from the public. The 71-year-old Boundary County female passenger of the white 2019 Toyota SUV has succumbed to injuries from the crash. The three-vehicle fatal crash occurred just before 4:57 p.m. on June 29 in Boundary County on US Highway 95 near mile post 497, near Naples, according to the release. Authorities say a commercial motor vehicle driven by a 24-year-old male, from Surrey BC, Canada was driving a 2023 red Freightliner with a reefer trailer and was northbound on US Highway 95. The driver of the semi lost control when he had to brake suddenly to avoid stopped vehicles. Police say the semi skidded into the southbound lane striking two passenger vehicles head on. The first vehicle impacted was a white 2019 Toyota SUV, driven by a 73-year-old male with a 71-year-old female passenger. Both are Boundary County residents. The male succumbed to his injuries at the scene; the female passenger was life flighted to Kootenai Medical in Coeur d Alene where she died. The second passenger vehicle struck was a white 2011 Kia Sorento driven by a 33-year-old man of Athol, Idaho. He sustained minor injuries and was released at the scene; the commercial driver was uninjured. The highway was fully blocked for nearly five hours. Investigators are encouraging anyone else who may have witnessed the collision, or have any other additional information about the vehicles involved, to please contact ISP at (208) 209-8620.

Group frustrated by FMCSA’s reluctance to allow hair testing results in Clearinghouse

Cliff Abbott - July 3, 2024

As pretty much anyone in the trucking industry would agree, it’s important to ensure commercial drivers are alert and prepared to react quickly to changing conditions. Keeping drivers with a record of operating under the influence of alcohol or controlled substances off the road is a logical precaution. The creation and implementation of the Federal Motor Carrier Safety Administration’s (FMCSA) Drug and Alcohol Clearinghouse marked a major step forward in ensuring positive tests for controlled substances are recorded and available to carriers as a part of the background check on potential company drivers and independent contractors. In addition, the Clearinghouse provides regular updates that include nationwide statistics on drug and alcohol testing. As of March 2024, Clearinghouse statistics show that 239,929 drivers have at least one violation on their record. Out of those drivers, only 74,060 (30.9%) have completed the return-to-duty (RTD) process. In fact, the majority of those nearly 240,000 drivers — 126,000, or 52.5% — never even began the RTD process. Whether drivers placed out of service for substance violations complete the RTD process or choose to leave the industry, there’s little doubt that the Clearinghouse rules are helping get drug users out from behind the wheel of commercial vehicles. The statistics show the program is having an impact. Because of this proven success, members of the Trucking Alliance, a group of some of the largest and safest carriers in North America, say they’re frustrated with the government’s apparent unwillingness to consider a set of significant statistics submitted in a request to change the rules for controlled substance testing to allow testing of hair samples. The group, which represents carriers running more than 70,000 trucks, is pushing for the inclusion of hair testing as an approved method of FMCSA controlled substance testing and asking that results be included in the Clearinghouse. Trucking Alliance members have been utilizing hair testing, in addition to the approved urine testing, for pre-employment and random drug tests for years. In June 2023, the Alliance released a statement outlining statistics supporting the use of hair testing, as revealed by a study conducted at the University of Central Arkansas (UCA). The study, which analyzed both urine and hair testing results from nearly 1 million commercial drivers taken between 2017 and 2022, showed that hair testing produced nine times as many positive results as urine testing. “I don’t see how anyone can reasonably argue with these drug test results, given the large disparity in positivity rates between hair and urine testing for every drug and a sample of almost 1 million drug tests,” said Dr. Doug Voss, one of the UCA researchers, in the release. “At some point it’s like arguing whether the sun will rise tomorrow.” The Alliance had used similar statistics in an application for an exemption to FMCSA regulations requiring urine testing, asking that they be allowed to use hair testing instead of urine for 50% of the tests, pointing to a higher accuracy rate and increased public safety. The FMCSA denied the group’s petition in December 2022. Among the reasons FMCSA cited for the rejection was that the agency had not received guidance from the Department of Health and Human Services (HHS) on a process for conducting hair testing. That guidance from HHS was mandated in the Fix America’s Surface Transportation (FAST) Act passed in December 2015. So, what’s the holdup? “The hair drug testing HHS guidelines were sent to the White House April 3, 2023. So, we’re a year, a year and a month with nothing,” said Rob Moseley, attorney for the Moseley Marcinak Law Group, which represents the Alliance. The group recently filed a petition to the HHS demanding that the agency issue long-overdue guidelines. “Every day we don’t do this is another day that we’re sticking our head in the sand while habitual lifestyle drug users are using drugs and driving trucks,” Moseley said. He points to the current administration’s support for unions as one possible reason the HHS hair testing guidelines have stalled. “I think it’s politics,” he said — but he’s not optimistic a change of White House occupants would make a difference. “Trump was anti-regulation, so I’m not sure that makes a (difference),” he said. Part of Moseley’s frustration is that hair testing is already making a positive difference for the carriers that are using the method. “They’re still doing the hair testing and using that data in their hiring decisions, but of course, there are roadblocks to sharing that information with other carriers or with anybody else for that matter,” he explained. Moseley notes that carriers don’t need regulatory approval to use hair testing — but it must be used in addition to Department of Transportation-controlled substance testing, not as a replacement. Alliance members “have to go through the double expense of doing both tests now,” he said. “They’ve made that decision that they’re gonna spend the money because of the safety benefits. But what’s going on is that (drivers with a positive hair-testing result are) just going down the road to get another job somewhere else, and nobody will ever know they failed a drug screen.” The latest petition, sent to HHS on April 22, 2024, points out that hair testing is more reliable than urinalysis because it captures a larger window of time for drug use. Generally, hair testing detects drug use within the past 90 days, where urinalysis can detect only a few days (or, for marijuana, weeks). The petition also points out that urine testing is often unobserved, making it easier for subjects to adulterate or substitute the sample submitted. Included in the petition was mention of a 2007 publication by the Government Accounting Office that studied 24 collection sites under DOT protocols and found that, at all 24 locations, undercover investigators were able to use false identification to be tested under another person’s name. The flip side, the petition states, is that 100% of hair specimen collections are observed, minimizing the potential for deception. Carriers may recall that oral fluid testing was approved by both HHS and DOT for controlled substance testing but was put on hold until two approved laboratories for specimen testing were identified. That hasn’t happened yet, either. In the meantime, thousands of positive hair sample drug tests are being ignored by FMCSA — while thousands more drug users remain behind the wheel due to an inefficient testing system, according to the Alliance. Moseley is waiting for the petition to be published in the Federal Register, opening up the possibility of public comment. “Those guidelines can be finalized,” he said. “That should clear the way for allowing the carriers to be able to do this to increase safety on the roads.”

Body found inside semi truck parked in Walmart parking lot

Bruce Guthrie - July 2, 2024

PINE BLUFF, Ark — Walmart customers reported a suspicious smell in the parking lot. The reason for the smell was tragic. KATV news station in Little Rock, Ark. reported that a man was found dead in a semi truck on the north side of the Walmart parking lot in Pine Bluff, Ark. according to the Pine Bluff Police Department. Shoppers in the parking lot who walked towards the shopping center reported an aroma after passing by a semi-tractor trailer located off to the side of the parking lot, according to the news report. Authorities say a call for a welfare check came into the police department at 4:56 pm. The driver of the semi-tractor trailer was then found deceased. Police say there is no suspicion of foul play at this time, and the body has been taken to be autopsied. Officials with the Pine Bluff Police Department say the man was a retired driver and was the owner of the truck. He was also well-known among the employees at Walmart, as they all reportedly got along well with him. Officials also say the 18-wheeler had been at the location since December.

Independent contractor classification still murky under new DOL rule

Cliff Abbott - July 2, 2024

When California Gov. Gavin Newsom signed the state’s Assembly Bill 5 (AB5) into law September 18, 2019, the trucking industry was quick to voice its objections to the legislation’s criteria for classifying workers as employees versus independent contractors (ICs). The conversation quickly moved to the question of what such guidelines might mean if applied on a national level. An industry that depends on IC relationships, with some carriers using ICs for their entire driver base, is certain to be wary when the government attempts to force costly and confusing changes. That’s why the final rule on the Employee or Independent Contractor Classification Under the Fair Labor Standards Act, issued by the U.S. Department of Labor (DOL) in January 2024, brought a sigh of relief to many. The ruling instituted an “Economic Reality Test” similar to one outlined in a 2021 Trump administration rule rather than following California’s “ABC” test to determine whether a worker should be classified as an employee or an IC. That relief, however, may be temporary. Bill Webb, executive director for the Coalition for Independent Truckers, is skeptical. “To me, it’s just another one of those deaths by 1000 cuts for the independent contractor model,” he said. He believes this year’s November election will be crucial in retaining the current model. “(The DOL rule) does clearly change from a true AB5 model to something a little muddier, but I truly believe that we’re not going to see much until the presidential election is over,” he continued. “If Biden is reelected, then they will double down and probably begin to aggressively go after carriers based on this new rule.” According to Webb, the industry is in a “wait-and-see” mode, at least for now. “That doesn’t impact what’s going on at the state level,” he noted. “AB5 was a direct assault on the independent contractor model. Most state legislatures are doing it indirectly.” Jon Coca, president of Diamond Transportation, a 100% owner-operator carrier, also sees politics as a factor. “(Democrats) pick up the pressure and they try to reclassify Independent Contractors and employees, just like every time the red guys get in office,” Coca said. “Just part of the game, I guess.” When Truckload Authority visited with Coca, he had just returned from a lobbying trip to Washington. By the end of 2019 — the year California passed AB5— nine other states introduced similar legislation. A December 2023 article published by personnel management firm Wrapbook claims that 36 states are now using AB5’s “ABC Test” (or parts of it) to determine worker classification. But the issue goes beyond legislatures, Webb says. “When I ran the Texas Trucking Association, the Attorney General’s Office passed a rule — not even a law — that said if a truck driver is an independent contractor and is in default on a child support agreement, you have to withhold pay from him just like you do an employee,” he shared. “That’s just another line that’s cracking.” As Webb pointed out, any state or federal agency that has the authority can issue rules blurring the line between employee and IC status. “Sometimes they realize they’re doing it; sometimes they don’t,” he said. Whatever direction current classification rules are shifted after this year’s national elections, a carrier’s best protection is in the Independent Contractor Operating Agreement (ICOA). “As long as companies like us have valid Independent Contractor agreements in place, it’s the best bet to buoy their role in how we work together as business partners,” Coca explained. “I feel safe — but not safe.” For Coca, part of feeling “safe” is making sure the company’s ICOA is up to date with any new developments. “We get our Independent Contractor agreement fine-tuned every two years at a minimum, three years at maximum at the Scopelitis (Scopelitis, Garvin, Light, Hanson & Feary) firm,” he explained. “We feel pretty sound that they do a good job making sure that all of the issues are addressed.” Webb, on the other hand, maintains that the way carriers treat ICs has much to do with how drivers are classified. “It’s a little bit of a stretch, but I used to ask carriers, ‘Who does your lawn service? Do you make them put your logos on their mowers? Do you tell them what time they have to be there to do the lawn?’” he shared. Exclusivity is an issue often mentioned in classification cases. In both the ABC test and the Economic Reality test, the nature and degree of control of the IC is listed. If the ICOA specifies the IC is not allowed to haul loads from another carrier or a broker, a ruling might lean towards the status of employee. “Work that is continuous, does not have a fixed ending date or may be the worker’s only work relationship indicates employee status,” says an Employee Relationship Under the Fair Labor Standards Act fact sheet issue May 20, 2024. “The problem is, the rules now are being articulated in a way that is almost impossible for a motor carrier to operate and comply with,” Webb said. “You’ve got to do as many of the things right as you can.” Forced dispatch — or even the appearance of it — can indicate control leading to an employee classification. “Motor carriers have got to be smarter and get away from forced dispatch,” Webb said. “Many of them will tell you they’re not forced dispatch, but in practice, to some extent they wind up being so.” Coca says Diamond Transportation has a simple way to avoid this conundrum. “We just don’t do forced dispatch,” he said. “Our fleet managers are reaching out to just say, ‘Hey, this load game comes up after you’re done. What do you think?’” ICs make their own decisions about which loads they want to accept, Coca says. While ICs may not enjoy forced dispatch, they often chose to lease their equipment to a carrier because of the stability that comes from receiving regular loads from one source. “If you want to choose loads from different sources, just be truly independent and go through a broker,” Coca suggested. Doing so, however, requires the IC to obtain their own authority. “That’s basically what they’re leasing us for.” Unfortunately, the wishes of the IC is often lost in the classification dispute. “They lease on to a company because they want that company to be able to provide great for them,” Coca said. David Heller, senior vice president of safety and government affairs for the Truckload Carriers Association, agrees. “Independent contractors are independent contractors because they want to be,” he noted. “And they’ve chosen this business model because it’s successful and works for them.” As the debate continues, the question of how much longer the IC business model will be around remains a prime concern. “I think we can all agree that this business model is under threat and that we as an industry need to try to preserve it,” Heller said. “There’s no doubt it’s a valuable model.”

Weathering the storm: Capacity slowly eroding but not fast enough to change the freight market

Cliff Abbott - July 1, 2024

Beginning in 2020, the COVID-19 pandemic brought global economic conditions that had not been seen for generations. Four years later, the disease that started it has abated somewhat, but the impact of government efforts to stimulate a stalled economy, combat supply chain issues and modernize the nation’s infrastructure are still felt worldwide. For the trucking industry, the impact was a brief slowdown followed by a sharp increase in rates, followed by the longest-known freight recession in history — one that continues today. For 2023, public carriers mostly reported lower operating income or losses, higher operating ratios, and higher expenses. First quarter financial reports for 2024 showed little (if any) improvement. Spot freight rates remained stubbornly low, and contract rates continued their downward spiral. The trucking industry wants to know: When will the freight market turn upward?” According to most analysts, the answer is: Not soon enough. “The typical U.S. three freight recessions were in the 17- to 23-month range. We’re at 24 to 25 months already,” noted Dean Croke, principal analyst at DAT IQ. “And there’s a sense that this could go on for quite a few months more.” Avery Vise, vice president of trucking for FTR Transportation Intelligence, concurs. “We think that it’s going to be next year before anyone really perceives a definite change in the market,” he said. Jason Miller, PhD, professor of supply chain management at the Eli Broad College of Business at Michigan State University (MSU), says he’s not optimistic. “It could improve a little bit, but I’m not going to get my hopes up too much,” he said. “We still have too much capacity relative to demand.” It’s the same old story: Capacity remains the biggest driver of freight rates. “We still have way too many trucks on the road as a result of the massive influx during the pandemic. That’s keeping a lid on for higher spot rates,” Croke explained. To be sure, trucks are leaving the freight market, but the process has been slower than expected. “We think U.S. tractor replacement is around 11,500 units to 12,000 units (monthly production of new trucks),” said Kenny Vieth, president and senior analyst at ACT Research. “In two months, we’ve done 14,600 and 14,400. A year ago in March and April we did 19,800 and 18,300, so we are making progress,” he continued. “But we think the Class 8 US tractor population is going to continue to grow on strong sales before slowing production down.” Vise believes the turnaround is on the horizon. “Are we going to continue to lose enough capacity where that by the end of the year, things will have turned around? Our expectation is that we will basically be back to a sort of a normal balance between shippers and carriers,” he said. “You hear people talking about the capacity over balance. The big question is: Why has that not corrected?” Vise said. Croke echoes this question. “When does capacity get to a point where we get to equilibrium? Because large truckload carriers on the contract market are still reducing truck capacity,” he said. Analysts gave a couple of reasons for the delay in reducing capacity. The top culprit could be private fleets, according to Croke. “If you’re a private carrier or a big manufacturer who saw double-digit rate increases during the pandemic that probably wiped out years of profitability on the transport spend side, you’d say, ‘What if we got more freight on our own trucks over a five year period?’” he noted. During the COVID-19 pandemic, it wasn’t as easy to find available trucks to haul loads. “You can recall back in 2021 and early 2022, (manufacturers) could not find someone to haul their freight, and it was $4 a mile on the spot market,” Vieth said. “And the Wall Street Journal would have a story where yet another CEO was explaining why their transportation costs exploded and that’s the reason why they missed their earnings goal.” Any time corporations increase the size of their private fleets as a hedge against future freight rate increases, there is an impact on current rates. Some of these private fleets may be picking up loads from the spot market to keep their trucks running, but the bigger impact could be the product that manufacturers are no longer tendering to the freight market. Another reason for the slowness of capacity removal may be the perception that “better days must be coming soon”; a hope that keeps some carriers hanging on. “I think the reason that they we haven’t seen more attrition is that same expectation that we’re going to have a rebound,” Vise said. “They have that ‘any day now’ philosophy, which didn’t used to matter all that much.” Of course, the other side of the supply/demand equation is freight availability — and that largely depends on the economy. Most analysts are calling for slow but steady economic growth for at least the rest of 2024. Miller, however, isn’t so sure. While some analysts point to data compiled from banking operations, billing services or organizational members, MSU’s College of Business team compiles a Ton-Mile Index using data from the U.S. Census Bureau and other agencies. “We have data that we pull for literally 41 North American Industrial Classification System (NAICS) codes,” he explained. “The Census Bureau has identified 700,000 locations in the U.S. that shipped something, that are not farms. So basically, we’re capturing 700,000 shipper locations.” Miller looks at the NAICS responsible for the largest shares of shipping ton-miles, such as food manufacturing — the largest share at 14.5%. “Food manufacturing is down a couple percent from where it was in 2023 and certainly 2022,” he said, adding, “That’s tens of thousands of fewer loads getting moved.” Chemical manufacturing, mining (except oil and gas) and non-metallic mineral product manufacturing (cement and aggregate) round out the sectors responsible for the largest numbers of ton-miles, and all of them are down, according to MSU’s index. “The big story is just that the demand side right now is quite weak for those key industries,” Miller explained. “And there’s not the type of encouraging economic news that would make me think there’s gonna be a spike in freight demand.” If there’s good news, it’s that there’s no news that would indicate a collapse. “I just see so many headwinds right now through the rest of this year, and the Feds not cutting rates anytime soon, so to me, I’m pretty much writing off this year,” Miller concluded. While economic growth may continue at a slow and steady pace, production will not produce enough freight to overcome the excess capacity in the freight market. There’s another factor, however, that could disrupt the market. The National Oceanic and Atmospheric Administration (NOAA) is predicting an “above average” hurricane season with 17 to 25 named storms and four to seven hurricanes rated at Category 3 or higher. The agency cites warm ocean temperatures, reduced trade winds due to La Niña conditions, and other factors in its prediction. Hurricanes can cause major disruption to the supply chain and can cause fuel price spikes due to refinery damage or shutdown. As it stands, the trucking industry may be looking to weather the storm, both economically and literally.

ATA commends House committee on blocking of Biden’s IC rule

Bruce Guthrie - June 28, 2024

WASHINGTON — A national trucking association is counting a House subcommittee’s push of a funding bill as a win. According to a recent press release, the American Trucking Associations (ATA) commended the House Labor Appropriations Subcommittee, led by Chairman Robert Aderholt (R-Alabama), for voting to advance a funding bill that would prohibit the Department of Labor from implementing the Biden administration’s independent contractor rule. “When the U.S. Department of Labor replaced a straightforward definition for independent contractors with an opaque and deliberately confusing standard, it jeopardized the livelihoods of independent truckers nationwide who have spent years or even decades building their own small businesses,” said ATA President & CEO Chris Spear. “By halting the implementation of this destructive rule, the provision included in the House Labor Appropriations bill would respect the wishes of more than 350,000 truckers who select this employment path because of the economic opportunity it creates and the flexibility it provides. ATA stands firmly behind this effort spearheaded by Congressman Aderholt to defeat this ill-advised rule, and we will continue to work alongside other Members of Congress to protect Americans’ right to earn a living in the manner that they choose.” ATA has strongly opposed the independent contractor rule since its inception, joined a broad coalition of organizations filing a lawsuit against it, and backed a legislative effort led by Rep. Kevin Kiley (R-California) and Sen. Bill Cassidy (R-Louisiana) to overturn the rule. ATA also released a video featuring the personal stories of independent truckers who have been affected by this rule. In April, over a dozen members of ATA’s Women In Motion Council participated in a Call on Washington with top policymakers on Capitol Hill and in the White House to discuss key issues, including the importance of protecting independent contractors. During their meetings, they distributed a booklet with testimonials from women who work as independent truckers. The booklet was used at a subsequent hearing by Representative Kiley as the foundation of a powerful line of questioning of Acting Labor Secretary Julie Su. In addition to the provision blocking the independent contractor rule, the House funding bill contains other trucking industry priorities, such as a provision that would stop the National Labor Relations Board’s joint employer rule. The bill would also freeze the Department of Labor’s worker walk around regulation, which proposes allowing an unlimited number of third parties such as union representatives and trial attorneys to accompany OSHA inspectors on safety inspections. The legislation now heads to the full House Appropriations Committee for a hearing.

Spot rate improvement in May: New trend or just another bounce along the bottom?

Cliff Abbott - June 27, 2024

Maybe it’s just that the freight market is getting tired of the gloomy predictions for the rest of 2024, but there was quite a bit of positive news in May. DAT Freight & Analytics reported that both dry van and refrigerated rates rose in May as the number of loads posted compared to available trucks also rose. Spot dry van average rates rose to $2.01 per mile, according to DAT, while refrigerated average rates rose by nine cents to $2.41 per mile. Flatbed spot rates stayed even for the month at $2.52 per mile. DAT’s Truckload Volume Index might have been the best news of the month. The index represents the number of loads moved in a given month. Compared with May 2023, the index for dry van rose 13% while the index for refrigerated loads jumped by 25%. The current low freight rates are caused by an overcapacity situation — there are too many available trucks and not enough loads. In May, shipment increases and truck fleet contraction combined to raise demand and lower supply. That’s good news for beleaguered trucking businesses that are hanging on for better rates. “Stronger van and reefer volumes are consistent with May, when shippers move seasonal produce and retail goods and truckload capacity tightens due to the Roadcheck inspection event and Memorial Day holiday,” said Ken Adamo, chief of analytics at DAT. “Carrier attrition created further pressure on capacity.” DAT reported that contract rates did not fare as well, reporting dry van average rates at $2.43 per mile, down 2 cents from April, and refrigerated rates at $2.79, down 3 cents. While carriers that depend on contract rates won’t see this news as “good,” truckers who depend on the spot market can see that the difference between contract and spot rates is shrinking. That’s a sign the freight market is inching towards an up cycle. The American Trucking Associations (ATA), whose members rely primarily on contract freight, reported a 3.6% increase in its For-Hire Truck Tonnage index for May. This follows an April decline of 1%. The ATA numbers are seasonally adjusted. “May was the first month since February 2023 that tonnage increased both sequentially and from a year earlier,” said Bob Costello, chief economist for ATA. “While there was clearly an increase in freight before the Memorial Day holiday, it is still too early to say whether this is the start of a long-awaited recovery in the truck freight market.” While DAT calculates its numbers from postings on its load board and ATA uses data reported by its members, Motive uses a different measurement — GPS data from trucks that have Motive products installed. In its June Monthly Economic Report, Motive reported that truck visits to the top 50 U.S. retailers increased by 4% in May from April and were up 7.8% over May 2023. While retailer visits across the board were up, Motive reported particularly high numbers of visits to home-improvement warehouses (29.1%), department stores for apparel and electronics (27.7%), and grocery (22.6%). The Motive report cautions that some of the increase would have been due to the Memorial Day holiday but said the data indicates that retailers are “restocking at healthy levels.” Motive predicts carriers will see profitability rise by the end of 2024 as rates increase, ultimately resulting in higher consumer prices. In addition, Motive predicts that retailers will need to rethink their restocking strategies. As freight rates plummeted, retailers could hold off on restocking inventories, confident they could find carriers to bring more at lowered rates. As rates increase however, waiting to reorder could mean higher shipping costs, so retailers are motivated to increase current inventory levels. Another industry resource, Cass Information Systems, wasn’t as bullish about the coming months. The Cass Freight index for Shipments for May remained the same as April, and when seasonally adjusted was down 3.1%. Compared with May 2023, the index dropped 5.8%. Cass compiles shipment data from invoices processed for its customers and includes shipments from trucking, rail, air, pipeline and ship/barge. The index also contains LTL freight data and may have been impacted by the changes to the market after Yellow Freight’s bankruptcy. The Cass Freight index for Expenditures showed a 9% decline from May 2023 and was down 23.3% from May 2022, a sign of just how far freight rates have fallen. ACT Research included some of the Cass data in its release about prebuys of Class 8 tractors. “Small fleets remain resilient as ever, but the record number of operating authority revocations over the past 18 months shows considerable capacity contraction,” wrote Tim Denoyer, vice president and senior analyst for ACT. “But we think the ongoing capacity expansion by private fleets is outweighing the capacity contraction in the small part of the market.” Denoyer explained that in a “typical” freight cycle, as rates hit bottom carriers buy fewer trucks. As the number of available trucks shrinks, rates begin rising again. The current cycle is different, however. Private fleets that were burned by the record-high shipping rates several years ago are safeguarding themselves from a repeat — by purchasing more trucks. In addition, the 2027 model-year EPA requirements for emissions and efficiency, expected to drive the price of a new truck skyward by $30,000 or more, is resulting in more truck-buying now to avoid the price increases later. At a time when the trucking industry needs to buy fewer trucks to lower capacity and cause rates to increase, it’s buying more. “To the ongoing question of whether the truckload market rebounds or continues to bounce along the bottom, this situation may lead to some more bounces,” Denoyer said. Whether freight rates are beginning to rise or will continue their bounce along the bottom might be a matter of which industry resource is used for data, and one positive month doesn’t guarantee a trend. Still, with so many carriers struggling to survive, a little good news is a breath of fresh air. Next month, we’ll have a better idea if May increases were the beginning of a trend or yet another bounce along the bottom.

Iowa DOT continues to weather flooding issues

Bruce Guthrie - June 27, 2024

The flooding in the midwest, including a large chunk of the state of Iowa, has that state taking drastic measures. According to a release issued by the Iowa Department of Transportation, it is working closely with what it calls “vital transportation stakeholders including cities, counties, railroads, airports, and public transit providers to coordinate flood response.” IDOT said the flooding emergency is a rapidly evolving situation noting that road closures and the condition of roads and bridges can change quickly. “In some communities, the water has receded and in others, the flood waters are still rising,” the release stated. “As flood waters recede, bridges and pavements need to be inspected to ensure they are safe for you to use and have good structural integrity. Please keep in mind that transportation infrastructure such as roads, bridges, and railroads may be owned by different jurisdictions or private entities. Each owner may handle recovery efforts in their own way.” “This inspection can take some time, particularly when bridges could be damaged below the waterline and require additional inspections once the water level recedes, said Scott Marler, Iowa DOT Director. “We ask that you have patience as we work to get you safely moving again.”A According to an Associated Press report, hundreds of Iowa residents have needed rescue from record-setting flooding that has swamped parts of the state, covering buildings up to their rooftops, shutting down major roads, and disrupting basic services like electricity and drinking water. The AP reported that Iowa Gov. Kim Reynolds said water in some areas rose above records from 1993, a flood many in the Midwest remember as the worst of their lives. The floods have hit parts of Iowa, South Dakota, Nebraska and Minnesota. The water was so powerful that it pulled down a train bridge connecting North Sioux City, South Dakota, with Sioux City, Iowa. On the Blue Earth River in Minnesota, water forced its way around the Rapidan Dam and local officials warned of its possible failure. “Businesses are shuttered, main streets have been impacted. Hospitals, nursing homes and other care facilities were evacuated,” Reynolds said at a news conference over the weekend, calling the expected damage “staggering.” The Associated Press contributed to this report.

Temporary route around collapsed portion of Wyoming’s Highway 22 will open Friday, officials say

The Associated Press - June 26, 2024

JACKSON, Wyo. — On Tuesday, June 25, crews were almost done building a temporary route around a landslide that shut down a portion of Wyoming Highway 22, a vital road for thousands of workers in a western resort town. Wyoming Department of Transportation (WYDOT) officials were eyeing Friday to reopen the temporary route. The road over Teton Pass near the Idaho state line has been closed since the landslide sent both lanes crashing into a deep ravine on June 8. No one was hurt when the pavement gave way. The road was already closed because another landslide had washed mud and debris across the road nearby. However, the collapse was a big headache for thousands of drivers. Many people work in Jackson — a ski and tourism hub at the doorstep of Grand Teton and Yellowstone national parks where the average home costs millions — and live in more affordable eastern Idaho. Because of the road collapse, workers have been following a different route, adding over an hour to their commute each way. Vehicles will need to slow down through the temporary section to 20 mph but won’t have to stop, said Bob Hammond, an engineer with WYDOT. The two paved lanes will span 600-700 feet. “We have a steeper grade, which really isn’t that big of a problem. But the turns are a little tighter,” Hammond said during a news media site tour Tuesday. A permanent fix costing perhaps upward of $20 million will take longer, Hammond said. The U.S. Federal Highway Administration earlier this month allocated $6 million in emergency relief funds to help offset the cost of repairing the highway.

New ATRI research: Industry costs increased more than 6% during freight recession

Dana Guthrie - June 25, 2024

WASHINGTON — The American Transportation Research Institute (ATRI) released today, June 25, the findings of its 2024 Analysis of the Operational Costs of Trucking. “The current economic environment makes cost management essential to successful operations,” said PGT Trucking President Gregg Troian. “ATRI’s Operational Costs report provides the targeted costs and operational benchmarks necessary to identify opportunities for reducing expenses and how to best act on those opportunities in our fleet.” The annual report analyzes line-item costs, operating efficiencies and revenue benchmarks by fleet sector and size, providing crucial benchmarking for motor carriers and a comprehensive overview of the financial state of trucking for decision makers in both industry and government. The overall marginal costs of operating a truck hit $2.270 per mile in 2023. While the increase was only 0.8% over the previous year, when surcharge-protected fuel costs are excluded, marginal costs rose 6.6% to $1.716 per mile. Overall, 2023 expenses rose moderately across most categories, with average costs across line-items increasing at less than half the rates experienced during 2021 and 2022. Truck and trailer payments grew by 8.8% to $0.360 per mile, driver wages grew by 7.6% to $0.779 per mile and repair and maintenance costs grew by 3.1% to $0.202 per mile. The exception to this trend was truck insurance premiums, which grew by 12.5% to $0.099 per mile after two years of negligible change. The soft 2023 freight market posed many challenges for operational efficiency, as tracked in the report. Deadhead mileage, a critical financial drain, rose to an average of 16.3% for all non-tank operations, and driver turnover rose by 5 percentage points in the truckload sector. These pressures combined with low freight rates strained profitability across the industry. Average operating margins were 6% or lower in all fleet sizes and sectors other than LTL. The truckload and specialized sectors experienced drops in per-mile or per-truck revenue, and most saw “other costs” — expenses outside of the core marginal line-items — increase as a share of total revenue. The report also includes analyses of cost trends in 2024 and beyond, including, for the first time, carrier-reported changes in Q1 2024 costs.

Strong US Class 8 sales for May reflect atypical pattern for freight market

Cliff Abbott - June 24, 2024

U.S. sales of new Class 8 trucks in May were a virtual repeat of April results. Manufacturers reported sales of 19,764, just 34 trucks fewer than in April, for a decline of 0.2%, according to data received from Wards Intelligence. The long-expected downturn in sales continues to stubbornly defy expectations. Low freight rates tend to result in a subdued new truck market as carriers downsize or go out of business. The resulting smaller number of available trucks typically prompts higher freight rates as shippers compete for trucks to haul their product. This time, however, the cycle isn’t “typical.” Tim Denoyer, vice president and senior analyst at industry forecaster ACT Research, explained why. “The record number of operating authority revocations over the past 18 months shows considerable capacity contraction,” he said in a June 18 blog posting. “But we think the ongoing capacity expansion by private fleets is outweighing the capacity contraction.” There’s also another factor, Denoyer says. “Elevated equipment demand as fleets gear up for EPA’27 is a key factor likely to drag overcapacity on further,” he said. While carriers are still buying trucks, they’re placing orders for more. FTR Transportation Intelligence reported May preliminary Class 8 orders for North America at 18,900 units, up 25% from April and up 37% from May 2023 order numbers. “Despite the trend of stagnant freight markets, fleets remain willing to invest in new equipment,” wrote Dan Moyer, FTR’s senior analyst for commercial vehicles, in a monthly blog post. ACT Research reported final May Class 8 orders at 23,560 units, up 51% from May a year ago. Kenny Vieth, ACT president and senior analyst, says much of that order activity is going to build inventories rather than being delivered to customers. “Given the build was 6,900 units above retail sales in April and May, inventories should have risen,” he explained. Trailer Sales May 2024 On an adjusted basis, Vieth calculated that “inventories have risen by more than 22,000 truck in the past nine months, reaching levels not seen since 2019.” While May truck orders were rising, orders for new trailers were down 46% from May 2023 at 6,100 units. The largest decline, by trailer type, was dry van, which fell 85%. Unlike truck sales, trailer sales do not benefit from the EPA’27 pre-buy and are more likely to reflect the freight market as a whole. Rather than buying new trailers, many carriers are choosing to invest in tractors, allowing trailer inventories to remain stagnant until rates improve. Used Class 8 Sales May 2024 On the used Class 8 market, sales volumes were up again in May, according to ACT Research. May sales were 7% higher than April and were 30% higher than in May 2023. As carriers downsize or go out of business, those trucks end up on the used truck market, joining the units being traded in by carriers who are upgrading their fleets. The good news for buyers is this: Increased availability of used equipment has brought prices down. Compared with May 2023, the average used Class 8 truck on the market costs 12% less, has 3% fewer miles and is 6% younger. Insurance, Interest Rates Rising Two issues that undoubtedly will impact the sale of new trucks are interest rates and the cost of commercial auto liability insurance. The current Federal Discount Rate for banks to borrow money is 5.5%. Depending on creditworthiness and other factors, used truck buyers can expect to pay higher interest rates and will face tighter loan restrictions. Larger down payments may be required by some lenders, too. Avery Vise, vice president of commercial vehicles for FTR, used the Producer Price Index (PPI) from the U.S. Census Bureau to explain what’s happening. “The PPI for commercial auto insurance premiums was up 3% year over year in May,” he said in a June 17 podcast. “That matches the comparison in December of 2019 and is the highest since June of 2019. And 2019 is an interesting comparison because that is a year many of you will remember that we lost a lot of trucking operations, due principally to insurance costs going up.” While insurance rates are rising, the increase may push more small carriers into closure, decreasing available capacity and prompting freight rate increases. OEM Sales Freightliner led the way in May with U.S. sales of 6,800 Class 8 trucks in May, up 4.9% from April but about 27.4% behind sales in May 2023. For the year to date, Freightliner Class 8 sales are down 20.7% from last year’s pace, while the market as a whole is down 14.6%. Volvo sales of 2,334 represented a gain of 14.6% over April and were down just 5.5% from May of last year, outperforming the market. YTD Volvo sales are down 10.4% from last year’s pace. Volvo-owned Mack reported sales of 1,613 in May, up 5% from April sales and up 2.6% from May 2023. YTD, Mack sales are down 9.4%. International sales of 1,911 were down 1.4% from April but were 40.9% lower than an excellent May 2023. For the year to date, International sales are down 39.5%, the largest decline of the major manufacturers. Kenworth reported sales of 2,876, down 19.7% from April and down 10.1% from May 2023. Year to date, however, Kenworth is outperforming the Class 8 market as a whole with a sales decline of just 2.2%. Peterbilt has reported similar numbers with May sales of 3,266, down 1.6% from April and down 6.7% from May 2023. YTD Peterbilt sales are just 1.4% down from the same point in 2023. Western Star has stepped up production and sales this year. May sales of 935 were up 5.2% from April and were up 26.9% from May 2023. For the year-to-date, the company has seen sales rise by 47.8%. Hino, mostly known for its Classes 5-7 commercial vehicles, reported sales of 29 Class 8 tractors in May. Representing a tiny portion of the Class 8 market, Hino Class 8 tractors are mostly suited for local and regional runs rather than over the road applications. Continued robust sales of Class 8 trucks are delaying the capacity reduction necessary to start pushing freight rates upward, a situation that isn’t likely to change soon.

ACT Research: May Class 8 net orders unseasonally high

John Worthen - June 21, 2024

COLUMBUS, Ind. — Some of the recent Class 8 order strength is likely due to a small amount of pre-buying, but overall, May’s orders are likely anomalous, as the industry is in the weakest period of the year for orders, according to the latest report from ACT Research. Final North American Class 8 net orders totaled an unseasonally high 23,560 units in May (29,2000 seasonally adjusted), up 51% year-over-year. Total Classes 5-7 orders fell 4.9% year-over-year to 19,306 units (20,900 seasonally adjusted). “U.S. Class 8 tractor orders rose 51% year-over-year in May, and vocational truck orders increased 48% year-over-year,” according to Kenny Vieth, ACT’s president and senior analyst. “Again, these increases are largely untethered from current market conditions, and we expect next month’s orders to be more representative of the current market.” Regarding inventories, Vieth said that between strong production and softening U.S. tractor sales over the past eight months, Class 8 inventories have risen quickly. “The reported inventory decrease from March to May is attributed to a fire that broke out at a supplier plant, requiring OEMs to red tag units,” he noted. “Given build was 6,900 units above retail sales in April and May, inventories should have risen, rather than fallen the past two months. On that adjusted basis, Class 8 inventories have risen over 22,000 units the past nine months, reaching levels not seen since August 2019.” Meanwhile, Class 8 cancellations increased in May to 2,623 units and 1.8% of the backlog on a nominal basis. Seasonally adjusted, cancellations were 3,394 units and 2.3% of the backlog, above the long-term average of 2% for the first time in two years.

ATA pens letter of concern to DOT chief over proposed marijuana reclassification

John Worthen - June 20, 2024

WASHINGTON — In a letter to U.S. Transportation Secretary Pete Buttigieg, the American Trucking Associations (ATA) on Thursday, June 20, expressed concern about the U.S. Drug Enforcement Administration (DEA) proposal to reschedule marijuana from Schedule I to Schedule III. The proposal still must be reviewed by the White House Office of Management and Budget; it would recognize the medical uses of cannabis and acknowledge it has less potential for abuse than some of the nation’s most dangerous drugs. However, it would not legalize marijuana outright for recreational use. Schedule III drugs are still controlled substances and subject to rules and regulations, and people who traffic in them without permission could still face federal criminal prosecution. ATA officials say that this “major policy shift could have significant negative consequences for highway safety, endangering all who share the road.” ATA is asking Buttigieg to share whether the U.S. Department of Transportation will maintain the authority and means to conduct testing of marijuana use by commercial motor vehicle drivers and other safety-sensitive transportation workers. “Without this certainty, industries that must screen workers performing safety-sensitive roles would operate under a cloud of uncertainty,” an ATA news release states. “If the trucking and broader transportation industries’ ability to conduct drug testing for marijuana use is restricted, a heightened risk of impaired drivers threatens our nation’s roadways. The absence of a reliable standard for marijuana impairment — in alignment with blood alcohol content measures for alcohol impairment — makes it all the more vital for motor carriers to have visibility into marijuana usage.” ATA Senior Vice President of Regulatory Affairs and Safety Policy Dan Horvath wrote in the letter to Buttigieg that it is “critical for transportation safety that we maintain the scope and scrutiny of testing that currently exists for individuals engaged in safety-sensitive industries, including commercial trucking, bussing, airlines and rail.” “While ATA does not maintain a formal position on marijuana legalization or the ongoing testing of non-safety sensitive employees under HHS’s Federal Workplace Drug Testing Programs, we remain concerned about the broad public health and safety consequences of reclassification on the national highway system and its users,” the letter states. Marijuana and alcohol remain the most detected drugs in impaired driving crashes resulting in serious or fatal injuries, according to the ATA. Between 2000 and 2018, crash deaths involving marijuana more than doubled, from 9% to 21.5%. Immediately following Canada’s 2018 legalization of marijuana, the country’s emergency rooms saw a 94% increase in the rate of marijuana-involved traffic injuries. “Though ATA understands that the process and content of DOJ’s rulemaking falls outside the purview of DOT, we believe DOT and ATA share the goals of achieving zero highway fatalities and ensuring the commercial driving workforce is qualified to safely operate on our nation’s roadways,” Horvath wrote.

US trailer demand under growing pressure, ACT reports

John Worthen - June 20, 2024

COLUMBUS, Ind. — May’s net trailer orders totaled 6,100 units, about 46% lower year-over-year, and 7,650 units below April’s intake. This is according to ACT Research’s latest State of the Industry: U.S. Trailers report. May’s tally brings the year-to-date net order activity to 68,200 units, 25% lower than the first five months of 2023, with its faster paced order environment, pent-up demand and moderately congested supply chain, ACT reports. “Seasonally adjusted (SA), May’s orders were nearly 7,200 units compared to a 17,300 SA rate in April,” said Jennifer McNealy, director of commercial vehicle market research and publications at ACT Research. “On that basis, orders decreased 59% month-over-month. Dry van orders contracted 85% year-over-year, while reefers, albeit at low volumes, were still an improvement from last May’s negative net order tally. Flats were 37% lower compared to May 2023.” McNealy added that total cancellations again oscillated to the higher side of the pendulum’s arc in May. “The cancellation rate rose to 3.2% of the backlog, from April’s 1.5% rate,” she noted. “Eight of 10 markets remained at or above the 1% mark, with OEMs indicating cancellations from multiple fleets and dealers.” McNealy said that this capex constrained environment, and with an expensive EPA mandate landing in 2027, fleet willingness to spend on trailers is under growing pressure. “Coupling these factors and overstocked dealer inventories that are proving harder to move and the absence of a need for carriers to boost trailer-tractor ratios in the short-term, as capacity remains plentiful and spot market volumes and rates remain under pressure from private fleet capacity expansions, and it adds up to a challenging part of the cycle for the US trailer industry,” she said.

Total spot rates remain steady, with some gains shown in May

John Worthen - June 19, 2024

BLOOMINGTON, Ind. — Although spot rates increased for two of the three principal equipment types, total broker-posted spot rates in the Truckstop system were essentially unchanged during the week ended June 14 (week 24) due to changes in the freight mix. Meanwhile, spot truckload rates bounced higher in May in the DAT One freight marketplace as shippers sought capacity to move greater volumes of van and refrigerated freight, said DAT Freight & Analytics, operators of the DAT One freight marketplace and DAT iQ data analytics service. Truckstop’s report Total rates had barely moved in the previous two weeks. Refrigerated spot rates rose after two down weeks, and flatbed rates were up for a fifth straight week — a streak that had not occurred in more than two years. Dry van rates eased marginally from the prior week. Total loads Total load activity fell 8.4% after rising more than 14% during the first full week following the Memorial Day holiday. Total volume was more than 5% below the same 2023 week and more than 35% below the five-year average for the week. Flatbed was a drag on volume as both dry van and refrigerated load postings were higher y/y in the latest week. Total truck postings rose 5%, and the Market Demand Index — the ratio of load postings to truck postings in the system — fell. Total rates The total broker-posted rate was unchanged from the previous week. Rates were 2.6% below the same 2023 week and about 7% below the five-year average for the week. Total rates were flat despite higher flatbed and refrigerated rates and barely any change in dry van rates largely because of a substantial drop in volume for flatbed, which has the highest rates. If total rates were to continue holding steady, by week 27 they would be higher year-over-year for the first time since June 2022. Dry van rates Dry van spot rates declined by less than a tenth of a cent after falling 2.5 cents during the prior week. Rates were 0.2% above the same 2023 week but 10% below the five-year average. Dry van loads declined 1.4%. Volume was 1.5% above the same 2023 week but more than 30% below the five-year average for the week. Refrigerated rates Refrigerated spot rates rose nearly 4 cents after falling slightly more than 4 cents in the previous week. Rates were nearly 1% above the same 2023 week but more than 6% below the five-year average for the week. Refrigerated loads increased 2.3%. Volume was nearly 8% above the same 2023 week — the strongest year-over-year comparison since January — but about 29% below the five-year average for the week. Flatbed rates Flatbed spot rates rose just over 1 cent after rising by a slightly larger amount during the prior week. The last time that flatbed spot rates increased in more than four consecutive weeks was April 2022. Rates were 2.4% below the same 2023 week — the least negative year-over-year comparison since August 2022 — and 6% below the five-year average for the week. Unless flatbed rates fall by about a cent or more in the current week, they will be higher year-over-year in week 25. Flatbed loads fell 14.2%. Volume was nearly 12% below the same week last year and 42% below the five-year average for the week. DAT One’s report The DAT Truckload Volume Index (TVI), an indicator of loads moved during a given month, hit all-time highs for van and refrigerated (reefer) loads: Van TVI — 289, up 4% from April Reefer TVI — 224, a 4% increase month-over-month Flatbed TVI — 301, down 2% from April The van and reefer TVI numbers climbed 13% and 25% higher, respectively, compared to May 2023. The flatbed TVI fell month-over-month for the first time since December 2023. “Stronger van and reefer volumes are consistent with May, when shippers move seasonal produce and retail goods and truckload capacity tightens due to the Roadcheck inspection event and Memorial Day holiday,” said Ken Adamo, DAT Chief of Analytics. “Carrier attrition created further pressure on capacity.” Spot rates reflected higher demand Spot prices responded last month, with national average van and reefer linehaul rates within 2% of where they were in May 2023: Spot van — $2.01 per mile, up 2 cents Spot reefer — $2.41 a mile, up 9 cents Spot flatbed — $2.52 a mile, unchanged Linehaul rates, which subtract an amount equal to an average fuel surcharge, increased for all three equipment types. The average van linehaul rate was $1.58 a mile, up 5 cents compared to April; the reefer rate jumped 9 cents to $1.94; and the flatbed rate gained 4 cents to $2.01. National average rates for contracted van and reefer freight declined compared to April: Contract van — $2.43 per mile, down 2 cents Contract reefer — $2.79 a mile, down 3 cents Contract flatbed — $3.16 a mile, up 1 cent Load-to-truck ratios edged higher National average van and reefer load-to-truck ratios rose in May: Van ratio — 4.4, up from 1.9 in April, meaning there were 4.4 loads for every van truck on the DAT One marketplace Reefer ratio — 6.3, up from 4.8 Flatbed ratio — 18.0, down from 18.5 Load-to-truck ratios reflect truckload supply and demand on the DAT One marketplace and indicate the pricing environment for spot truckload freight.

Lawsuit filed to stop EPA’s emissions rule for new heavy-duty vehicles

John Worthen - June 18, 2024

WASHINGTON — The American Petroleum Institute (API) filed a lawsuit in the D.C. Circuit Court of Appeals on Tuesday, June 18, challenging the U.S. Environmental Protection Agency’s (EPA) heavy-duty (HD) vehicle emissions standards for model years 2027-32. This is just the latest in a series of suits that have been filed against the EPA over the new emissions standards. A total of 24 state attorneys general, the Western States Trucking Association, along with the Arizona Trucking Association and members of the state’s legislature have all sued EPA over the rule as well. “Today, we are standing up for consumers who rely on trucks to deliver the goods they use every single day,” said API Senior Vice President and General Counsel Ryan Meyers. “The EPA is forcing a switch to technology that simply does not presently exist for these kinds of vehicles — and even if it were someday possible, it will almost certainly have consequences for your average American. This is sadly yet another example of this administration pushing unpopular policy mandates that lack statutory authority, and we look forward to holding them accountable in court.” The Owner-Operator Independent Drivers Association (OOIDA), National Corn Growers Association and American Farm Bureau Federation joined API as co-petitioners in today’s lawsuit. “Small business truckers make up 96% of trucking and could be regulated out of existence if the EPA’s unworkable heavy-duty rule comes into effect,” said OOIDA President Todd Spencer. Spencer went on to say that the the rule would devastate the reliability of America’s supply chain and ultimately increase costs for consumers. “Mom and pop trucking businesses would be suffocated by the sheer cost and operational challenges of effectively mandating zero emission trucks, but this administration appears intent on forcing through its deluge of misguided environmental mandates,” he noted. “As the voice of over 150,000 small-business truckers, we owe it to our members and every small-business trucker in America to leave no stone unturned in fighting these radical environmental policies.” In April, the Biden administration finalized new federal emissions standards for heavy-duty vehicles, including commercial vehicles. In the final rule, EPA projects that there would need to be significant deployment of zero emission vehicles (ZEV) throughout the HD fleet to meet emissions standards. For example, more than 40% of vocational vehicles (work trucks) would need to be ZEVs by model year 2032. Additionally, long-haul tractors (semi-trucks), which currently have no ZEV deployment, would need to go from 0% today to 25% of the fleet by model year 2032. “EPA has tried to impose a one-size-fits-all approach to addressing climate change by prioritizing electric vehicles over other climate remedies like corn ethanol,” said Minnesota farmer and National Corn Growers Association President Harold Wolle. “But while it could take decades to get enough electric vehicles on the road to make a dent in GHG emissions, lower carbon fuels such as ethanol are critical and effective climate tools that are available now. Ethanol is not only critical in the climate fight, but it also saves consumers money at the pump while benefiting America’s rural economies. We look forward to making this case in court.” American Farm Bureau Federation President Zippy Duvall said that farmers rely on heavy-duty trucks to transport livestock long distances, and they choose the most efficient routes to ensure the animals in their care remain on the vehicle for as little time as possible. “Unfortunately, heavy-duty vehicles that are powered by batteries have short ranges and require hours to charge,” he said. “Impractical regulations will extend the amount of time on the road, putting the health and safety of drivers and livestock at risk if they need to stop for long periods of time to charge.”

Average US diesel price rises for 1st time in 10 weeks

John Worthen - June 18, 2024

LITTLE ROCK, Ark. — The streak is over. The average price for a gallon of diesel fuel in the United States has gone up for the first time in 10 weeks, according to the Energy Information Administration (EIA). As of June 17, the price sat at $3.735, up from $3.658 on June 10 and $3.726 on June 3. Prices are up in all parts of the nation except New England, where averages are sitting at just above $4 per gallon as of June 17. Drivers there can expect to pay $4.085 per gallon on average, up a hair from $4.086 on June 10. The lowest average price per gallon in the nation can be found along the Gulf Coast at $3.472 per gallon. That’s up from $3.384 on June 10 and $3.450 on June 3. In the Midwest, the average price is $3.621 per gallon, up from $3.512 on June 10 and $3.592 on June 3. Along the West Coast, the price is $4.417 per gallon on average, up from $4.377 on June 10, and in California, drivers can expect to pay almost $5 a gallon at $4.915. That’s an increase from $3.911 on June 10. According to the EIA’s Short-Term Energy Outlook, U.S. crude oil production is up 2% from 2023 to an annual average of 13.2 million barrels per day (b/d) in 2024. EIA officials say the nation should see around a 4% growth in 2025 to reach 13.7 million b/d. The EIA also reported that current monthly diesel retail prices are meeting or just above the average price. Prices are, however, expected to dip below the average through the latter half of 2024 and then rise again heading into 2025.

FMCSA increases state fees collected from motor carriers, brokers

John Worthen - June 17, 2024

WASHINGTON — The Federal Motor Carrier Safety Administration (FMCSA) has hiked the fees that states collect from motor carriers, brokers and leasing companies. According to a posting from Monday, June 17, on the Federal Register, the increase will be 25% above the fees collected in 2024 and will vary “between $9 and $9,000 per entity, depending on the applicable fee bracket.” States use these funds to pay for state highway safety programs. “FMCSA believes this upward adjustment is within a reasonable range,” the Federal Register notice states. “This adjustment to the 2025 registration year provides the required $13 million in revenue allocations to the participating States and the UCR (United Carrier Registration) Plan.” FMCSA officials called the fee increase “a rare occurrence … which has only previously occurred once, over a decade ago.” This upward adjustment follows two years of reductions in fees affecting the 2023 and 2024 registration years, averaging a 37.3% decrease in fees, as well as steady, unmodified collections from 2010 to 2017. Many commenters viewed the increase in fees as unwarranted and unexpected, and explained the UCR Plan should be adjusting its own budget and spending instead. An anonymous commenter expressed confusion over the increase, claiming that the fees were intended to be eliminated “after full reciprocity.” A different anonymous commenter connected this increase to the UCR Plan’s poor budgeting, while another suggested the UCR Plan’s spending should be cut instead. In response, FMCSA officials said they disagreed the commenters’ statements that the fee increase was unwarranted, unpredictable and sudden. “FMCSA stated it anticipated the UCR Plan would recommend an upward adjustment in the fees for the 2025 registration year to comply with the statutory provisions discussed herein,” the Federal Register posting states. “By statute, the UCR fee is authorized for annual adjustment by FMCSA, either to increase or decrease the fee to ensure adequate funds to provide participating states with their revenue entitlement.” FMCSA also disagreed that the UCR Plan has not been operating within its budget. “To FMCSA’s knowledge, the UCR Plan has operated within its approved budget and in recent years has steadily decreased registration fees,” according to the Federal Register post. “In fact, this is the first upward adjustment since 2010. The UCR Plan’s approved allocation for the costs of administration of the Plan and Agreement over the last several years decreased from $5 million per year and is now at $4.25 million. For these reasons, FMCSA declines to modify the final rule in response to the commenters’ suggested changes.” The chart below, provided by the FMCSA, notes the coming fee changes.

Though still negative, FTR’s trucking conditions index improved in April

Bruce Guthrie - June 13, 2024

BLOOMINGTON, Ind. — While the numbers are trending in the right direction, FTR’s Trucking Conditions Index (TCI) indicated a more hospitable environment for carriers in April but remained negative at a reading of -1.95. However, that reading was up from -7.25 in March, according to a release issued this week. Both freight rates and financing costs were less negative, and freight volume improved. The TCI has not been positive in any month since early 2022 and likely will be mostly mildly negative for the rest of the year. The index could see some outlying positive readings as it moves closer to neutral territory. “Better days are in sight for trucking companies, but the market still needs to work through the tough combination of too much capacity and sluggish freight demand,” said Avery Vise, vice president o trucking for FTR. “The May payroll jobs figures for trucking offered some encouragement that this transition is underway, but a healthier situation for carriers will require continued rightsizing of capacity and stronger volume,” he continued. “We still do not expect consistently favorable market conditions for carriers until early next year.” Details of the April TCI can be found in the June issue of FTR’s Trucking Update, published May 31, 2024. Additional commentary in the June edition analyzes the lingering excess trucking capacity among both small and larger carriers. The Trucking Update includes data and analysis on load volumes, the capacity environment, rates, and the economy.