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Freight trucking rates continue downward trajectory

COLUMBUS, Ind. — Volumes and supply-demand balance increased in December 2022 while freight trucking rates continued to decline, according to ACT Research’s latest release of For-Hire Trucking Index. The ACT For-Hire Trucking Index is a monthly survey of for-hire trucking service providers. “We’re now nine months into this freight volume soft patch with lower goods spending, overstocked retail inventories, and declining imports,” Tim Denoyer, vice president and senior analyst at ACT Research, said. “The good news is that from a historical perspective, that means we’re closer to the end than the start.” ACT Research converts responses into diffusion indexes, where the neutral or flat activity level is 50. “Pricing power clearly shifted to shippers in 2022, but the recent stabilization hints the bottoming process is beginning,” Denoyer said. “Capacity continues to grow, with pent-up equipment demand still red hot, and freight demand is down, leaving the market balance loose near-term.” Denoyer said the Driver Availability index remained at a cycle high of 57.7, reflecting medium and large fleets that act as safe havens in times like these. “We also find the sharp slowdown in BLS trucking employment data interesting with regards to the industry at large,” Denoyer said. He said the supply/demand balance reading of 40.8 is better than its worst levels of recent months in the 37-38 range, signaling the freight cycle is starting to bottom. “With capacity starting to slow and demand to recover eventually, the market should begin to rebalance in the not-too-distant future,” Denoyer said.

More than 309k Class 8 tractors sold in 2022

COLUMBUS, Ind. — December Class 8 net orders were healthy for 2022, bringing total year-end ordering activity to a strong 159,000 (September through December). Units sold for 2022 equaled 309,615. Classes 5-7 orders declined 3% year-over-year to 17,464 units (-21% month over month), with seasonal adjustment trimming orders to 16,100, according to ACT Research’s latest State of the Industry: NA Classes 5-8 report. ACT’s State of the Industry: North American Classes 5-8 report provides a monthly look at the current production, sales and general state of the on-road heavy and medium duty commercial vehicle markets in North America. It differentiates market indicators by Class 5, Classes 6-7 chassis and Class 8 trucks and tractors, detailing measures such as backlog, build, inventory, new orders, cancellations, net orders and retail sales. Additionally, Class 5 and Classes 6-7 are segmented by trucks, buses, RVs and step van configurations, while Class 8 is segmented by trucks and tractors with and without sleeper cabs. This report includes a six-month industry build plan, backlog timing analysis, historical data from 1996 to the present in spreadsheet format, and a ready-to-use graph package. A first-look at preliminary net orders is also published in conjunction with this report. “For now, business activity in the truck industry rolls on, also seemingly unphased by higher interest rates, as pent-up demand remains for now,” Eric Crawford, ACT Research’s vice president and senior analyst said. “We expect this dynamic to shift in 2H’23, as the Fed continues its aggressive push to subdue inflation. Although there have been recent signs of inflation slowing, we do not expect the Fed to begin cutting rates in 2023.” Crawford said that Class 8 retail sales in December rose 19% year-over-year to a record 34,415 units. “The strong finish to the year led to a total of 309,615 units sold in 2022.” Crawford said. “Classes 5-7 retail sales (SA) rose 3.6% year-over-year to 19,000 units. Full year retail sales were 229,821.”

Spot rates remain at pre-holiday amounts

BLOOMINGTON, Ind. — The spot market continues to unwind the capacity-driven rate surge of the final two weeks of 2022, according to data from Truckstop and FTR Transportation Intelligence for the week ended Jan. 13. The increase in truck postings was the largest since the first week of 2022. The Market Demand Index fell to 69.0, which is its lowest level in four weeks. Broker-posted refrigerated rates in the Truckstop system fell by the most in a single week in more than eight years while dry van rates dropped by the most since April. Spot rates in both segments remain above those prior to the holidays. Load activity also was down in both segments. Flatbed saw gains in both rates and volume. Load activity changed little overall as stronger flatbed volume offset weaker loads in dry van and refrigerated. Volume was up in the Southeast and South-Central regions but down elsewhere. The surge in dry van and refrigerated spot rates during the final two weeks of 2022 continued to unwind in the second week of 2023. Total spot volume barely changed at a 0.3% increase as stronger flatbed loads offset declines in dry van and refrigerated. Volume was nearly 55% below the same week in 2022 and nearly 11% below the five-year average for the week. Load activity was up in the Southeast and South Central but down in all other regions. Truck availability jumped by 29.8% for the largest increase since the first week of 2022. The Market Demand Index — the ratio of loads to trucks — fell to its lowest level in four weeks. Broker-posted refrigerated rates in the Truckstop system fell by the most in a single week in more than eight years while dry van rates dropped by the most since April. Spot rates in both segments remain above those prior to the holidays. Flatbed rates increased after two down weeks. Refrigerated spot rates plunged nearly 28 cents after falling nearly 19 cents in the previous week. The decrease was the largest since July 2014. Even so, refrigerated rates were still a little higher than they were for most of the fall before Thanksgiving. Rates were nearly 28% below the same 2022 week but 2% above the five-year average for the week. Excluding fuel surcharges, rates were about 36% below the same 2022 week. Refrigerated loads fell 18.9%. Volume was nearly 57% below the same 2022 week and nearly 7% below the five-year average for the week. Dry van spot rates fell about 11 cents after declining nearly 5 cents in the prior week. Rates were still about 8 cents higher than during the week before Christmas. Dry van rates were about 25% below the same week in 2022 and 0.6% above the five-year average for the week. Excluding a fuel surcharge, rates were 35% lower than in the same week in 2022. Dry van loads declined 6.1% after rising 30% in the prior week. Volume was more than 53% below the same 2022 week and essentially equal to the five-year average for the week. Flatbed spot rates increased nearly 3 cents. Rates were 13% below the same 2022 week but 10% above the five-year average for the week. Excluding an imputed surcharge, flatbed rates were about 21% below the same week in 2022. Flatbed loads rose 17.7% to the highest level since early October. Volume was almost 60% below the same 2022 week and about 26% below the five-year average for the week. The total broker-posted spot market rate fell more than 6 cents. Rates were almost 19% below the same 2022 week but 6% above the five-year average for the week. FTR estimates that rates excluding a calculated fuel surcharge were more than 27% below the same 2022 week.

Diesel prices continue January slide

LITTLE ROCK, Ark. — The average price for a gallon of diesel fuel has continually fell since the start of 2023. According to the Energy Information Administration (EIA), the price sits at $4.524 as of Jan. 16, down from $4.549 on Jan. 9 and $4.583 on Jan. 2. Prices are still 80 cents higher than this time last year, EIA statistics show. The lowest prices can be found along the Gulf Coast, where the average per gallon sits at $4.222 as of Jan. 16. The highest prices are in California at $5.430. Benchmark U.S. crude oil for February delivery fell 70 cents to $79.48 a barrel Wednesday. Brent crude for March delivery fell 94 cents to $84.98 a barrel.  

New NTSB report finds booze, pot as primary drugs detected in impaired drivers

​​​WASHINGTON — Actions from federal and state agencies are needed to address the continuing problem of impaired driving, including from alcohol, cannabis and multiple drug use, the National Transportation Safety Board (NTSB) said in a new report released on Jan 12. In the board-approved safety research report, the agency examined the crash risk associated with different drugs — including alcohol, cannabis, prescription, over-the-counter and other drugs — and the prevalence of their use among drivers. The report also makes recommendations aimed at preventing crashes caused by impaired drivers. “Impaired driving leads to tragedy every day on our nation’s roads, but it doesn’t have to,” said NTSB Chair Jennifer Homendy. “To create a truly safe system — one where impaired driving is a relic of the past — states and federal agencies must implement our recommendations, and fast. Further complacency is inexcusable.” Researchers found alcohol remains the most often detected drug in impaired driving incidents and cannabis is the second most common. They also found that while alcohol is most often detected alone, cannabis was most often detected in combination with alcohol or other drugs. The report also highlights that current testing practices and protocols need to be improved to both better detect a driver’s drug use and accurately report the prevalence of drug-impaired driving. For example, many jurisdictions halt testing when a driver’s blood alcohol concentration is over a certain threshold, losing valuable information on other drugs the driver may have used. Additionally, a lack of standardized drug testing and reporting hinders understanding of the issue and the development of policies that can reduce impaired driving, as well as treatment options for those with substance abuse disorders. “We’ve long known about the devastating impact of alcohol-impaired driving, but this report shows that impairment from other drugs, especially cannabis, is a growing concern that needs to be addressed,” said NTSB Member Tom Chapman. Recommendations in the report include: ​A requirement that cannabis products have a warning label about driving impairment. Enhancements to state drug-impaired driving laws. Standardization of toxicology testing for the detection of drug use. Research on how to improve compliance with driving-related warnings on potentially impairing prescription and over-the-counter drugs. The full report is available on the NTSB’s website.

DOT chief finds himself in the spotlight — for better or worse

WASHINGTON — The nation’s transportation secretary usually holds one of the most public-facing roles in any presidential administration. A core aspect of the Cabinet job is to travel the country, doling out millions of public dollars and attending ribbon-cutting ceremonies for new bridges and overpasses and ports. Even by those standards, Pete Buttigieg has spent an inordinate amount of time in the national spotlight delivering the largesse of the big infrastructure and domestic spending bills. But at the same time, the 2020 Democratic presidential candidate and onetime mayor of South Bend, Indiana, also has been the public face of a string of transportation-related crises, all amid steady speculation about his future political prospects. During the 40-year-old Buttigieg’s tenure, there have been widespread global supply chain issues and logjams at major ports, multiple instances of mass flight cancellations by airlines and a narrowly avoided nationwide strike by railroad workers that was only averted by an eleventh-hour intervention from Congress. The latest transportation mishap was the most high-profile yet. On Wednesday morning, a malfunction in an obscure and apparently obsolete internal system called the Notice to Air Missions, or NOTAM, forced the temporary grounding of all air traffic in the United States. The move touched off a cascading snarl that resulted in the cancellation of more than 1,300 flights and the delay of 9,000 more. It was the biggest shutdown of U.S. aviation since the attacks of Sept 11, 2001. Faced with a historic system failure, Buttigieg appeared to lean into his role as the face of the beleaguered American transportation network. Appearing Wednesday at a Transportation Research Board conference, Buttigieg jumped right into the airline debacle before anyone could ask. He called it “another challenging day for U.S. aviation” and said his department was “now pivoting to understanding the cause of the issue.” “We’re gonna own it,” Buttigieg later told reporters. Earlier that day, during an interview with CNN, Buttigieg offered a positive spin, saying that “part of what you saw this morning was an act of caution.” But he also acknowledged that the mishap had exposed a desperate need to modernize crucial and antiquated systems. “We need to design a system that does not have these kinds of vulnerabilities,” he said. Buttigieg’s challenges earn a special kind of sympathy from those who have sat in the same seat. Ray LaHood, a former Republican congressman from Illinois who served as transportation secretary for four years under President Barack Obama, said he met with Buttigieg for 90 minutes shortly after Buttigieg was nominated by President Joe Biden. “I told him, ‘When you walk in the door and turn the lights on, there’s going to be a crisis. And every day there’ll be one or more,’ ” LaHood said. “When something goes wrong, you become the face of it.” In his two years on the job, Buttigieg has repeatedly criticized U.S. airlines for chronic cancellations and shoddy customer service — making Wednesday’s debacle particularly awkward. It also highlighted the fact that the Federal Aviation Administration has been without a Senate-confirmed leader for nearly a year. Stephen Dickson, a former Delta Air Lines executive and appointee of President Donald Trump, resigned last March, midway through his five-year term. Biden’s nominee, Denver International Airport CEO Phillip Washington, has seemingly stalled in the Senate, despite Democratic control of the chamber, over questions about Washington’s qualifications and his involvement in a corruption investigation in California. Similarly, another major part of Buttigieg’s department, the National Highway Traffic Safety Administration, has been without a Senate-confirmed leader since last fall, when Steven Cliff resigned just three months after his confirmation to run the California Air Resources Board. Robert Mann, an independent aviation industry consultant and former executive at American and Pan Am, said the vulnerabilities highlighted by the transportation issues far predate Buttigieg’s tenure and run deep into the institutional fabric of the his department and many other large government agencies. “We’ve had pipeline problems, we’ve had maritime problems. How much does the secretary actually control? None,” Mann said. “Same with his predecessors as well.” But Republican politicians have been quick to pile on Buttigieg, perhaps seeking to damage the prospects of a young Democratic star who has already run for president once. In the wake of the mass flight groundings, Texas Republican Sen. Ted Cruz — himself a former and potential future presidential candidate — led the public charge. “The FAA’s inability to keep an important safety system up and running is completely unacceptable and just the latest example of dysfunction within the Department of Transportation,” said Cruz, one of 13 senators who voted against confirming Buttigieg. “This incident also highlights why the public needs a competent, proven leader with substantive aviation experience leading the FAA.” Cruz is expected to assume the role of the top Republican on the Senate Commerce, Science and Transportation Committee, which has jurisdiction over aviation. Rep. Sam Graves, the new chairman of the House Transportation and Infrastructure Committee, said he expected a “prompt update on DOT’s efforts to do right by the passengers it has wronged” and a full accounting of what happened. “The FAA does not run on autopilot – it needs skilled, dedicated, and permanent leadership in positions across the agency,” Graves, R-Mo., said in a statement. “The Biden Administration seems to think this lack of qualified leadership can go on indefinitely.” LaHood, a Republican who served in a Democratic administration, said he met with Buttigieg again after last year’s midterm elections when it became clear Republicans would control the House. LaHood’s message: “Get ready because you are going to have a target on your back. … You’re a high-visibility Democrat who ran for president. When things happen, be prepared for Republicans to take potshots at you.” Last year, Buttgieg moved from Indiana to Traverse City, Michigan, hometown of his husband, Chasten. Buttigieg said at the time it was primarily to be closer to Chasten’s parents, who were helping to care for the couple’s two young children. But the move to a longtime Democratic stronghold fueled speculation that Buttigieg was priming for his next campaign. When Sen. Debbie Stabenow, D-Mich., recently announced that she would not run for reelection, there was buzz that Buttigieg might run. But he was quick to knock down the speculation. He said he was “fully focused” on his Cabinet post and was “not seeking any other job.” The trials and tribulations of his current assignment have reached the point where White House press secretary Karine Jean-Pierre had to address questions on Wednesday about Biden’s confidence in Buttigieg’s performance. Biden, she said, “respects the secretary and the work he has been doing.”

New study ranks Iowa as best US state for driving

WASHINGTON — Iowa is the best state for driving, according to WalletHub’s ranking of the best and worst states to drive in for 2023. The worst — the island state of Hawaii. WalletHub compared the 50 states across four dimensions: Cost of ownership and maintenance. Traffic and infrastructure. Safety. Access to vehicles and maintenance. WalletHub evaluated those dimensions using 31 relevant metrics with their corresponding weights, according to a news release. Each metric was graded on a 100-point scale, with a score of 100 representing the best for drivers. WalletHub determined each state’s weighted average across all metrics to calculate its overall score and used the scores to rank-order the states. The top 10 best states, according to WalletHub were: 1. Iowa 2. Georgia 3. Ohio 4. Oklahoma 5. North Carolina 6. Idaho 7. Texas 8. Tennessee 9. Kansas 10. Indiana On the other hand, WalletHub ranked the following states as the worst: 41. California 42. Michigan 43. New Hampshire 44. Nevada 45. Missouri 46. Maryland 47. Rhode Island 48. Delaware 49. Washington 50. Hawaii “Congestion cost the average U.S. driver $869 in wasted time during 2022, with an average of 51 hours spent sitting in traffic,” according to WalletHub. “The U.S. also has eight out of the world’s 25 worst cities for traffic, and 19 of the worst 25 in North America.” Congestion isn’t the only concern. Safety and maintenance were also taken into consideration. The World Economic Forum only places the U.S. at rank 17 of 141 when it comes to road quality. Road conditions are inconsistent across the country. To identify the states with the most positive driving experiences, WalletHub compared all 50 states across 31 key indicators of a positive commute. Our data set ranges from average gas prices to rush-hour traffic congestion to road quality.  

Dates set for 2023 CVSA International Roadcheck

WASHINGTON — The Commercial Vehicle Safety Alliance’s (CVSA) annual International Roadcheck puts tens of thousands of big rigs and other commercial vehicles under the microscope as inspectors search bumper-to-bumper for violations. This year, the annual safety blitz will be held from May 16-18. Roadcheck is the largest targeted enforcement program on commercial motor vehicles in the world, with nearly 15 trucks or buses inspected, on average, every minute across North America during a 72-hour period. In 2022, CVSA-certified inspectors conducted 59,026 inspections and placed 12,456 commercial motor vehicles and 3,714 commercial motor vehicle drivers out of service, according to a CVSA news release. A commercial motor vehicle is placed out of service when an inspector finds critical vehicle inspection item out-of-service violations, which are outlined in CVSA’s North American Standard Out-of-Service Criteria, during a roadside inspection. Being placed out of service means the driver or vehicle is prohibited from operation for a specified period of time or until the violation is corrected. On May 17-19, 2022, inspectors conducted a total of 58,287 North American Standard Inspections, which consisted of: 36,555 Level I Inspections — This 37-step process checks the driver’s operating credentials and requirements and the vehicle’s mechanical fitness and regulatory compliance. 12,411 Level II Inspections — This inspection involves reviewing the driver’s operating credentials and requirements and includes only vehicle inspection items that can be inspected without the inspector physically getting under the vehicle. 8,171 Level III Inspections — This is the driver credentials and operating requirements inspection. 1,150 Level V Inspections — This inspection involves vehicle inspection items and may be conducted without a driver present, at any location. Level I Inspections During International Roadcheck, inspectors in Canada and the U.S. primarily conduct the Level I Inspection, which is a comprehensive 37-step inspection process that involves thorough inspection of the vehicle (including underneath the vehicle) and the driver’s operating credentials. Of the 36,555 Level I Inspections conducted in Canada and the U.S., 23.7% of the vehicles inspected (8,672) were placed out of service and 6.1% (2,242) of drivers were placed out of service. In the U.S., of the 33,196 Level I Inspections were conducted, 7,912 commercial motor vehicles (23.8%) and 2,051 drivers (6.2%) were placed out of service. In Canada, of the 3,359 Level I Inspections were conducted, 760 commercial motor vehicles (22.6%) and 191 (5.7%) drivers were placed out of service. Level V Inspections For International Roadcheck, inspectors in Mexico conducted 1,150 Level V Inspections. The Level V Inspection includes each of the vehicle inspection items specified under the North American Standard Level I Inspection and may be conducted without a driver present, at any location. Thirty-six commercial motor vehicles were placed out of service, which is a 3.1% out-of-service rate.

High winds overturn big rig on Golden Gate Bridge in latest round of wild California weather

SAN FRANCISCO — High winds roaring into the California coast on Jan. 14 toppled an 18-wheeler on the Golden Gate Bridge, blocking both southbound lanes, according to the California Highway Patrol (CHP). The driver, who suffered injuries, had to be extracted from the tractor, CHP officials said. A status on the driver’s health was not immediately available. The highway was blocked for several hours. The National Weather Service had just issued a high wind warning for the Golden Gate and other bridges close to the time of the accident, giving notice to high-profile vehicles about the dangers of overturning. California has been plagued all month by severe weather. More rain and snow fell during the weekend, making travel dangerous and prompting evacuation warnings over flooding concerns along a swollen river near Sacramento. Bands of gusty thunderstorms started Saturday in the north and spread south, with yet another atmospheric river storm following close behind Sunday, the National Weather Service said. Up to two inches of rain was predicted for the saturated Sacramento Valley, where residents of semi-rural Wilton and surrounding communities were warned to prepare to leave if the Cosumnes River continued to rise. The warning was downgraded from an evacuation order Sunday afternoon. Gusts and up to 3 feet of snow were expected in the Sierra Nevada, where the weather service warned of hazardous driving conditions. Interstate 80, a key highway from the San Francisco Bay Area to Lake Tahoe ski resorts, reopened after being closed most of Saturday because of slick roads and snow. The University of California Berkeley Central Sierra Snow Lab tweeted Sunday morning that it received 21.5 inches of snow in 24 hours. Its snowpack of about 10 feet was expected to grow several more feet by Monday. The California Highway Patrol rescued three people whose car slid off a rain-slicked road and ended up teetering at the edge of a cliff in the Santa Cruz Mountains on Friday. The occupants of the car “were scared for their lives and were in disbelief” when they were pulled safely from the car as the vehicle’s front end hung precariously over the cliff’s edge, the highway patrol said in a statement. “We cannot stress this enough. Please ONLY drive if it’s necessary,” the statement said. Just to the south in Santa Cruz County, the tiny community of Felton Grove along the San Lorenzo River was under an evacuation warning. The swollen Salinas River swamped farmland in Monterey County. To the east, flood warnings were in effect for Merced County in the agricultural Central Valley, where Gov. Gavin Newsom visited Saturday to take stock of problems and warn of still more possible danger. “We’re not done,” Newsom said. He urged people to be vigilant about safety for a few more days, when the last of a parade of nine atmospheric rivers was expected to move through. Several roads, including State Route 99, were closed because of flooding Sunday in San Joaquin County. In Southern California, winter storm warnings and advisories were in place for mountain areas, where many roads remained impassable because of mud and rockslides. Two northbound lanes of Interstate 5 near Castaic in northern Los Angeles County were closed indefinitely after a hillside collapsed. Downtown Los Angeles set a rainfall record Saturday with 1.82 inches, the weather service said. The series of storms has dumped rain and snow on California since late December, cutting power to thousands, swamping roads, unleashing debris flows, and triggering landslides. President Joe Biden declared a major disaster in the state and ordered federal aid to supplement local recovery efforts in affected areas. At least 19 storm-related deaths have occurred, and a 5-year-old boy remained missing after being swept out of his mother’s car by floodwaters in San Luis Obispo County. Dry days are in this week’s forecast for California starting on Tuesday. The Associated Press contributed to this report.

Freight cycle in transition; spot market bottoming quickly

COLUMBUS, Ind. — The spread between spot and contract freight rates has started tighten, according to the latest report from ACT Research. Tim Denoyer, ACT Research’s Vice President and Senior Analyst, said that truckload spot rates experienced their first significant upswing in the past year from late November into early January, and While market conditions remain broadly loose, “we’re seeing more signs of slowing supply, key to the bottoming process.” Denoyer added that “slowing supply is key for the US truckload market to transition from the late-cycle stage experienced in 2022 to the cycle-bottom phase which features a thinning of marginal capacity amid lower rates, preceding an early-cycle market tightening. Because rates are now far below costs in some cases, the market may experience both the cycle-bottom and early-cycle phases in 2023.”

Feds: Heavy electric vehicles, such as big rigs, could pose big safety risks due to weight

DETROIT — The head of the National Transportation Safety Board (NTSB) is expressing concern about the safety risks that heavy electric vehicles pose if they collide with lighter vehicles. Consider this: A diesel semi tractor’s unladed weight can range from 10,000 to 25,000 pounds, depending on how powerful the engine is and its towing design, and if it’s a sleeper cab. An electric Tesla Semi is estimated to weigh at least 27,000 pounds, although the company has yet to confirm it. The estimate is based on a recent Tweet by Tesla founder Elon Musk, who bragged about the Semi hauling a 53-foot flatbed loaded with jersey barriers for 500 miles on a single charge. “Our best clue to date for the weight of the 500 mile Tesla Semi. The load, 11 jersey barriers at 4K lbs each, is ~44K lbs. A 53 ft flatbed weighs about 10K lbs empty. Assuming this was the 500 mile test, total weight was 81K lbs so tractor is 27k lbs, 2000 lbs lighter than Tre,” a recent tweet from Nikola Insider read. Nikola is another electric truck manufacturer. Their Tre Bev Class 8 tractor — a cabover design — weighs in at 29,800 pounds on its own. NTSB head Jennifer Homendy raised the issue in a speech in Washington to the Transportation Research Board. She noted, by way of example, that an electric GMC Hummer weighs about 9,000 pounds, with a battery pack that alone is 2,900 pounds — roughly the entire weight of a typical Honda Civic. “I’m concerned about the increased risk of severe injury and death for all road users from heavier curb weights and increasing size, power, and performance of vehicles on our roads, including electric vehicles,” Homendy said in remarks prepared for the group. The extra weight that EVs typically carry stems from the outsize mass of their batteries. To achieve 300 or more miles of range per charge from an EV, batteries have to weigh thousands of pounds. Some battery chemistries being developed have the potential to pack more energy into less mass. But for now, there’s a mismatch in weight between EVs and smaller internal combustion vehicles. EVs also deliver instant power to their wheels, making them accelerate faster in most cases than most gas-powered cars, trucks and SUVs. Homendy said she was encouraged by the Biden administration’s plans to phase out carbon emissions from vehicles to deal with the climate crisis. But she said she still worries about safety risks resulting from a proliferation of EVs on roads and highways. “We have to be careful that we aren’t also creating unintended consequences: More death on our roads,” she said. “Safety, especially when it comes to new transportation policies and new technologies, cannot be overlooked.” Homendy noted that Ford’s F-150 Lightning EV pickup is 2,000 to 3,000 pounds heavier than the same model’s combustion version. The Mustang Mach E electric SUV and the Volvo XC40 EV, she said, are roughly 33% heavier than their gasoline counterparts. “That has a significant impact on safety for all road users,” Homendy added. The NTSB investigates transportation crashes but has no authority to make regulations. For vehicles, such authority rests largely with the National Highway Traffic Safety Administration. Even apart from EVs, the nation’s roads are crowded with heavy vehicles, thanks to a decadelong boom in sales of larger cars, trucks and SUVs that’s led to extreme mismatches in collisions with smaller vehicles. But electric vehicles are typically much heavier than even the largest trucks and SUVs that are powered by gasoline or diesel. Michael Brooks, executive director of the nonprofit Center for Auto Safety, said he, too, is concerned about the weight of EVs because buyers seem to be demanding a range of 300 or more miles per charge, requiring heavy batteries. Setting up a charging network to accommodate that may be a mistake from a safety perspective, Brooks said. “These bigger, heavier batteries are going to cause more damage,” he said. “It’s a simple matter of mass and speed.” Brooks said he knows of little research done on the safety risks of increasing vehicle weights. In 2011, the National Bureau of Economic Research published a paper that said being hit by a vehicle with an added 1,000 pounds increases by 47% the probability of being killed in a crash. He points out that electric vehicles have very high horsepower ratings, allowing them to accelerate quickly even in crowded urban areas. “People are not trained to handle that type of acceleration. It’s just not something that drivers are used to doing,” Brooks said. Also, many newer electric SUVs are tall with limited visibility that poses risks to pedestrians or drivers of smaller vehicles, he said. Sales of new electric vehicles in the U.S. rose nearly 65% last year to 807,000 — about 5.8% of all new vehicle sales. The Biden administration has set a goal of having EVs reach 50% of new vehicle sales by 2030 and is offering tax credits of up to $7,500 to get there. The consulting firm LMC Automotive has made a more modest prediction: It expects EVs to make up one-third of the new-vehicle market by 2030. The Trucker Staff contributed to this report.

Diesel prices, teetering up, down in recent weeks, land down for now

LITTLE ROCK, Ark. — Picture current diesel fuel prices as children in a playground on a seesaw. Up and down. Up and down. According to the Energy Information Administration (EIA), the average price for a gallon of diesel sits at $4.549 as of Jan. 9, down from $4.583 on Jan. 2. The Jan. 9 pump rate still rings up slightly higher than the Dec. 26 price of $4.537. The Jan. 2 hike prevented seven straight weeks of declines, according to the EIA. Looking back over the past year, prices are up almost $1. Diesel prices went up during the pandemic due to increased demand for winter shipping and farm equipment fuel, according to economists. Additionally, inventories are running short, and U.S. refining capacity is down about 2 million barrels a day from pre-pandemic levels. The war in Ukraine after Russia’s invasion is also a major factor in diesel prices, as Europe has received lots of diesel imports that would have otherwise gone to the U.S. Meanwhile, benchmark U.S. crude oil for February delivery rose 49 cents to $75.12 a barrel on Tuesday, Jan. 10. Brent crude for March delivery rose 45 cents to $80.10 a barrel.    

FMCSA, following DOT mandate, hikes fines for certain violations

WASHINGTON — Violation of Federal Motor Carrier Safety Administration rules will cost, in some cases, a lot more in 2023 than ever before. The Department of Transportation (DOT) has published a final rule that will increase civil penalty amounts imposed for violations of certain DOT regulations. The new fine amounts include FMCSA regulations. The DOT emphasized the rule will only apply to violations taking place after it became effective Jan. 6. The rule does not change previously assessed or enforced penalties that DOT is actively collecting or has collected. The fine increases are required in order to keep up with inflation. The latest increase is based on the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The act mandates that all federal agencies adjust minimum and maximum civil penalty amounts for inflation “to preserve their deterrent impact.” The increases follow a formula with guidance from the White House’s Office of Management and Budget of December 2022. To figure how much the fine hikes would be, the government multiplied the maximum or minimum penalty amount by the percent change between the October 2021 and 2022 consumer price index for all urban consumers. The change amounted to 1.07745%. At a glance, some of the heftier increases include: The fine for violating the of the out-of-service order (failure to cease operations as ordered) has risen from $29,893 to $32,208. The fine for conducting operations during suspension or revocation has increased from $26,269 to $28,304. The fine for financial responsibilities violations has risen from $18,500 to $19,993. The fine for tariff violations has increased from $179,953 to $193,890. The fine for knowingly falsifying records was hiked from $13,885 to $14,960. The fine for a first-time alcohol violation has increased from $3,471 to $3,740. Click here for a full list of the fine increases.  

Truck transportation industry’s final ’22 job numbers show modest gains

WASHINGTON — The trucking industry gained around 2,100 workers in December 2022 from November, seasonally adjusted data from the U.S. Department of Labor (DOL) shows. According to the DOL’s final 2022 employment report for the truck transportation sector, there were 1,601,500 workers in the industry, up from 1,599,400 in November and 1,598,800 in October. Average hourly salaries shrunk by a cent in November 2022 to $29.67, while the average weekly hours worked rose to 40.8 in November from 41.3 in October, the statistics showed. December salary and work-hour statistics are not yet available. In 2022, average job growth in transportation and warehousing — plus 17,000 jobs — was about half the average job growth in 2021 at plus 36,000 jobs, according to the DOL. Overall, America’s employers added a solid 223,000 jobs in December, evidence that the economy remains healthy even as the Federal Reserve is rapidly raising interest rates to try to slow economic growth and the pace of hiring. With companies continuing to add jobs across the economy, the unemployment rate fell from 3.6% to 3.5%, matching a 53-year low, according to the DOL. All told, the December jobs report suggested that the labor market may be cooling in a way that could aid the Fed’s fight against high inflation. Last month’s gain was the smallest in two years, and it extended a hiring slowdown that began last year. And average hourly pay growth eased to its slowest pace in 16 months. That slowdown could reduce pressure on employers to raise prices to offset their higher labor costs. Average wage growth was up 4.6% in December from 12 months earlier, compared with a recent peak of 5.6% in March. And in the past three months, job gains have averaged 247,000 — a decent pace but well below 2022′s monthly average of 375,000. “If these trends continue, we can feel more and more confident that the strength of this labor market is sustainable,” said Nick Bunker, head of economic research at the online job site Indeed’s Hiring Lab. “The outlook for next year is uncertain, but many signs point toward a soft landing,” rather than a feared recession. At the same time, December’s hiring figures don’t necessarily make the Fed’s path forward any clearer. The pace of job gains is still strong enough to keep lowering the unemployment rate, which, in turn, could keep pay growth high. Lisa Cook, a member of the Fed’s Board of Governors, said in a speech Friday that “inflation is far too high” and “of great concern,” though she also noted that wage growth “has indeed started to decelerate.” Other recent data also point to a cooling economy: A measure of business activity in services, including finance, restaurants and transportation, contracted in December for the first time since 2020. A similar measure for manufacturing also shrank last month. And a near-doubling of mortgage rates this year has sent home sales tumbling for 10 straight months. Last month’s job gains capped a second straight year of robust hiring during which the nation regained all 22 million jobs it lost to the COVID-19 pandemic. Yet the rapid hiring and the hefty pay raises that accompanied it likely contributed to a spike in prices that catapulted inflation to its highest level in 40 years. The picture for 2023 is much cloudier. Many economists foresee a recession in the second half of the year, a consequence of the Fed’s succession of sharp rate hikes. The central bank’s officials have projected that those increases will cause the unemployment rate to reach 4.6% by year’s end. Though the Fed’s higher rates have begun to cool inflation from its summertime peak, they’ve also made mortgages, auto loans and other consumer and business borrowing more expensive. For now at least, the pace of hiring is showing surprising resilience in the face of higher interest rates across the economy. One recent beneficiary is Ethan Edwards of Oklahoma City, who accepted a job offer last month after having looked around for nearly a year. Edwards, 41, had taken his time because he was picky: He already had a job in local broadcasting, where he worked in marketing. But he wanted to find a position in a new industry in which he could work from home while avoiding a pay cut. The strong job market eventually delivered. A recruiting firm, Aquent, connected Edwards to a digital marketing company, where he now leads strategic planning. “So far,” he said, “every step of the way has been awesome.” Among industries, the largest job gains last month were in health care, which added 74,000. Leisure and hospitality, a category that includes restaurants, hotels, and entertainment, gained nearly as much: 67,000. Retailers added 9,000, transportation, and warehousing companies nearly 5,000. Construction companies added 28,000 — a surprisingly large gain considering that higher borrowing rates are dragging down residential and commercial real estate. Many of those jobs were part-time positions. That trend suggests that as inflation began to accelerate, some people took on second jobs to help keep up with rising costs. Bill Adams, chief economist at Comerica Bank, noted the December jobs report showed that roughly 80% of people who found jobs the last month of 2022 took part-time work, which typically pays less than full-time jobs. That is likely one reason why wage growth has been slowing. President Joe Biden suggested Jan. 6 that the continuing job gains were, in part, a reflection of his policies, in which the government supplied vast aid during the pandemic to boost hiring and then added spending on infrastructure, computer chips, manufacturing and other areas to support business investment. “It’s a good time to be a worker in America,” Biden said in a statement. “We still have work to do to bring down inflation.” Jared Bernstein, a top economic adviser to Biden, said the administration is still hoping for growth in inflation-adjusted wages. “What’s important to us is that families have the buying power through their paychecks to get ahead,” Bernstein said Some companies, notably restaurants and hotels, are still scrambling to regain jobs lost to the pandemic. Among them is HMSHost, which operates 990 airport restaurants in North America under 350 different brands. The company is looking to hire 100 workers to help staff new restaurants that will open in the coming weeks. Laura E. FitzRandolph, the chief human resources officer, said the company expects demand for travel to remain strong in 2023. “We’re not slowing down in our hiring efforts or our business at all,” she said. HMSHost hired roughly 23,000 people last year as the company desperately tried to staff up after laying off 90% of their workers during COVID-19 shutdowns. FitzRandolph said many job applicants had failed to show up for interviews. But in recent months, the company is seeing more people apply for openings, and those applicants are more likely to appear for interviews. “It’s becoming somewhat easier to find people to work in the restaurant industry,” she said. In June, year-over-year inflation had reached 9.1%, the highest level in 40 years, before slowing to 7.1% in November. Last year, in an aggressive drive to reduce inflation back toward its 2% goal, the Fed raised its benchmark rate seven times. Fed Chair Jerome Powell has emphasized in recent remarks that consistently strong job growth, which can force employers to raise pay to find and keep workers, can perpetuate inflation: Companies often raise prices to pass on their higher labor costs to their customers. And higher pay typically fuels more consumer spending, which can keep inflation elevated. For that reason, Powell and other Fed officials have signaled their belief that to tame inflation, unemployment will have to rise from its current low level. Technology companies have been laying off workers for months, with some, including Amazon, saying that they had hired too many people during the pandemic. Amazon has boosted its layoffs to 18,000 from an earlier announcement of 10,000. Cloud software provider Salesforce says it will cut 10% of its workers. And Facebook’s parent company Meta says it will shed 11,000. Yet outside of high tech, smaller companies, in particular, are still hiring. According to the payroll processor ADP, companies with more than 500 employees cut jobs in December, while businesses below that threshold added many more workers. And an analysis by investment bank Jefferies showed that small companies were posting a historically high proportion of job openings. The Associated Press contributed to this report.

Feds: Funds aimed at improving bridges will benefit big trucks, freightways

WASHINGTON — The U.S. Department of Transportation’s Federal Highway Administration (FHWA) has announced the first round of Large Bridge Project Grants from President Biden’s Bipartisan Infrastructure Law’s competitive Bridge Investment Program. The program is one piece of the administration’s largest dedicated investment in highway bridges since the construction of the interstate highway system, with nearly $40 billion over five years, according to a news release, which also noted that the funds will help repair or rebuild 10 of the most economically significant bridges in the country, along with thousands of bridges across the country. In turn, the improvements will ease traffic congestion for big rigs and the vital freight that they carry across the nation each day, federal officials said. “These grants will fund construction for four projects, which connect communities in five states and are vital to the everyday lives of working people and freight travel that supports our national economy,” according to the FHWA. “Improvements to these bridges will address significant safety issues for drivers and delays in the movement of freight that currently raise costs for American families.” U.S. Transportation Secretary Pete Buttigieg said that safe, modern bridges “ensure that first responders can get to calls more quickly, shipments reach businesses on time, and drivers can get to where they need to go. The Biden-Harris Administration is proud to award this historic funding to modernize large bridges that are not only pillars of our economy, but also iconic symbols of their states’ past and future.” The First Large Bridge Project Grants, awarded in Fiscal Year 2022, are as follows: The Kentucky Transportation Cabinet will receive $1.385 billion to rehabilitate and reconfigure the existing Brent Spence Bridge to improve interstate and local traffic flow between the interconnected Kentucky and Ohio communities on either side of the Ohio River. The current bridge is the second worst truck bottleneck in the nation and carries more than $400 billion in freight per year, according to the FHWA. The project includes construction of a new companion bridge immediately west of the existing bridge to accommodate interstate through traffic on two bridge decks, and complete reconstruction of eight-mile interstate approach corridors both in Ohio and Kentucky, replacing 54 additional bridges. The project will separate Interstate 75 traffic from local traffic, making commutes quicker and improving freight passage along this critical corridor. The Golden Gate Bridge, Highway and Transportation District in California will receive $400 million to replace, retrofit and install critical structural elements on the Golden Gate Bridge to increase resiliency against earthquakes. The Golden Gate Bridge is vital to an estimated 37 million vehicles crossing the bridge per year, including 555,000 freight trucks, as well as waterborne commerce through the Golden Gate Strait connected to the Port of Oakland. The improvements will ensure the structural integrity of a vital transportation link between San Francisco and Marin County. This bridge allows for the movement of people and freight along the California Coast and is a critical link for bicyclist and pedestrian traffic in the region. The Connecticut Department of Transportation will receive $158 million to rehabilitate the northbound structure of the Gold Star Memorial Bridge, which is part of the Interstate 95 corridor over the Thames River between New London and Groton, Connecticut. The bridge carries five lanes of traffic and 42,600 vehicles per day and is a vital connection on the I-95 corridor for people and goods traveling between New York and New England. The rehabilitation will address structural repairs, increase load capacity and eliminate a load restriction for overweight vehicles. Additionally, the project will add a new multi-use path to foster bike-sharing and pedestrian access to transit services. The City of Chicago, Illinois, will receive $144 million to rehabilitate four bridges over the Calumet River on the Southside of Chicago. The Calumet River connects Lake Michigan with the Lake Calumet Port District which is further connected to the Illinois River providing access to the Gulf of Mexico. Each bridge lifts an average of 5,000 times per year, providing continuous and safe access for marine traffic to and from the Port and surrounding industry. Rehabilitating these bridges ensures that communities on either side of the river remain connected and the bridges continue to function to allow barge and ship traffic to traverse to the Illinois International Port and beyond. The project will eliminate a load restriction and truck detours. It will also add dedicated bike lanes and improved sidewalks to support community connections. In addition to the four FY22 Large Bridge Project Grants, FHWA also announced an additional Bridge Planning grant to the U.S. Army Corps of Engineers in the amount of $1.6 million to advance critical planning work in support of replacement of the Bourne and Sagamore Bridges over the Cape Cod Canal. The project will improve the flow of roadway traffic between Cape Code and mainland Massachusetts. The bridges provide the only means of vehicular access across the canal. The bridges are currently in poor and fair condition, at risk of falling into poor condition. Replacing these bridges will improve their condition and provide for bicycle and pedestrian access, eliminating a gap in the current network. This $1.6 million planning grant comes in addition to $18.4 million in Bridge Planning Grants awarded in Fall 2022. “These first Large Bridge grants will improve bridges that serve as vital connections for millions of Americans to jobs, education, health care and medical care and help move goods from our farms and factories,” said Deputy Transportation Secretary Polly Trottenberg. “And over the next four years we will be able to fund construction for the pipeline of shovel ready projects we are creating through Bridge Planning Grants.” Large Bridge Project Grants under the Bridge Investment Program are available for bridges with total eligible project costs over $100 million, with minimum grant awards of $50 million, and maximum grant awards of 50 percent of the total eligible project costs. As part of the selection process for this first round of grants, priority consideration was given to projects ready to proceed to construction, as well as those that require pre-construction funding and would benefit from a multi-year grant agreement. “The Bridge Investment Program reflects President Biden’s commitment to rebuilding our nation’s infrastructure and represents a historic reinvestment in our economy,” said FHWA Administrator Shailen Bhatt. “These Large Bridge Project Grants are going to projects that are construction ready and will have a real impact for vehicles, transit, pedestrians and bicyclists traveling on America’s roadways who will benefit from these improvements for decades to come.” Additional information on FHWA’s Bridge Investment Program, including Large Bridge Project Grants and Bridge Planning Grants, can be found by clicking here.  

Spot freight market meets expectations in final week of ’22

BLOOMINGTON, Ind. — There was nothing out of the ordinary in the spot freight market in the final days of 2022. It mostly moved according to expectations for the week between Christmas and New Year’s Day, according to new data from Truckstop and FTR Transportation Intelligence. Total spot volume increased 1.7%, nearly 46% below the same week in 2021 but about 2% above the five-year average for the week, a news release stated. Load activity was down week-over-week in the Southeast and Midwest but up in all other regions. Truck availability fell by 21.3%, and the Market Demand Index — the ratio of loads to trucks — rose to its highest level since July. The total broker-posted spot market rate increased almost 9 cents. Rates were about 16% below the same week in 2021 but nearly 10% above the five-year average for the week. However, FTR estimates that rates excluding a calculated fuel surcharge were about 24% below the same 2021 week. The total market rate of $2.71 a mile was the highest since August. Based on historical patterns, rates likely will give back at least some of these capacity-driven gains in January, the news release noted. Overall broker-posted spot rates increased during the week as gains in refrigerated and dry van offset a decline in flatbed. Dry van spot rates increased 6.5 cents. Rates were almost 22% below the same week in 2021 and more than 2% above the five-year average for the week. Dry van rates excluding a fuel surcharge were almost 31% lower than in the same week last year. Dry van loads increased 4.5%. Volume was about 42% below the same 2021 week but almost 6% above the five-year average for the week. Refrigerated spot rates jumped nearly 29 cents after the prior week’s surge of almost 39 cents. Rates, which were at their highest level since February, were almost 21% below the same week in 2021 but nearly 10% above the five-year average for the week. Rates excluding fuel surcharges were more than 27% below the same 2021 week. Refrigerated loads surged 29.7% after jumping about 22% in the previous week. Volume was about 44% below the same 2021 week but about 20% above the five-year average for the week. Flatbed spot rates declined 3 cents after rising nearly 9 cents in the prior week. Rates were more than 8% below the same week in 2021 but about 14% above the five-year average for the week. Excluding an imputed surcharge, flatbed rates were about 16% below the same 2021 week. Flatbed loads fell 13.3%. Volume was more than 56% below the same 2021 week and nearly 23% below the five-year average for the week. The increase in refrigerated spot rates did not match the prior week but otherwise was the largest since late Dec. 2021. The dry van spot rate gain was solid but much smaller than the prior week’s increase. The total market broker-posted rate was the highest since August. Based on historical patterns, rates in the coming weeks likely will give back much of their capacity-driven gains during the December holidays. Total spot load activity ticked up slightly. Load postings were down week-over-week in the Southeast and Midwest but up in all other regions. Truck postings saw their sharpest drop since July 4, resulting in an increase in the Market Demand Index to 81.8, which is the highest level since July.

Average US diesel prices see slight increase, preventing 8 straight weeks of declines

LITTLE ROCK, Ark. — As the old adage goes: All good things must come to an end. The Energy Information Administration’s (EIA) most recent report shows that the average price of a gallon of diesel currently sits at $4.583 as of Jan. 3, up from $4.537 on Dec. 26 but still lower than the $4.596 average on Dec. 19. This slight spike ends seven straight weeks of declines in average diesel prices, according to EIA data. Not every part of the nation saw increases, however. According to the EIA, average diesel prices continued to drop in New England, along the West Coast (outside of California), in the Rocky Mountain region and in the Central Atlantic states. Patrick De Haan, the head of petroleum analysis at GasBuddy, said there are several things to consider when watching the nation’s fuel prices. U.S. production of diesel is slim. Out of one barrel of crude oil — two-thirds becomes gasoline and one third becomes diesel — he said. That means when oil refineries have production issues, diesel output is particularly affected. The war between Russia and the Ukraine is another factor. The conflict has reduced the amount of oil transported from Russia to the U.S. “Russia produces a lot of heavy oil, that heavy oil produces … diesel, and because countries aren’t importing as much of that heavy oil, the refineries (in the U.S.) aren’t able to produce as much heavy product like diesel,” De Haan said. In addition, refining capacity has decreased about 4% since 2020.   According to the EIA, in 2020, there were 135 operable refineries in the U.S. and as of the start of 2022, there were 130. Benchmark U.S. crude oil for February delivery fell $3.33 to $76.93 a barrel on Tuesday, Jan. 3. Brent crude for March delivery fell $3.81 to $82.10 a barrel.

Biden set to launch New Year’s infrastructure pitch in Kentucky

WASHINGTON — President Joe Biden and top administration officials will open a new year of divided government by fanning out across the country to talk about how the economy is benefiting from his work with Democrats and Republicans. As part of the pitch, Biden and Senate Republican leader Mitch McConnell will make a rare joint appearance in McConnell’s home state of Kentucky on Wednesday to highlight nearly $1 trillion in infrastructure spending that lawmakers approved on a bipartisan basis in 2021. The Democratic president will also be joined by a bipartisan group of elected officials when he visits the Kentucky side of the Cincinnati area, including Sen. Sherrod Brown, an Ohio Democrat, Democratic Gov. Andy Beshear of Kentucky and Republican Gov. Mike DeWine of Ohio, the White House said. Biden’s bipartisanship blitz was announced two days before Republicans retake control of the House from Democrats on Tuesday following GOP gains in the November elections. The shift ends unified political control of Congress by Democrats and complicates Biden’s future legislative agenda. Democrats will remain in charge in the Senate. Before he departed Washington for vacation at the end of last year, Biden appealed for less partisanship, saying he hoped everyone will see each other “not as Democrats or Republicans, not as members of ‘Team Red’ or ‘Team Blue,’ but as who we really are, fellow Americans.” The president’s trip appeared tied to a recent announcement by Kentucky and Ohio that they will receive more than $1.63 billion in federal grants to help build a new Ohio River bridge near Cincinnati and improve the existing overloaded span there, a heavily used freight route linking the Midwest and the South. Congestion at the Brent Spence Bridge on Interstates 75 and 71 has for years been a frustrating bottleneck on a key shipping corridor and a symbol of the nation’s growing infrastructure needs. Officials say the bridge was built in the 1960s to carry around 80,000 vehicles a day but has seen double that traffic load on its narrow lanes, leading the Federal Highway Administration to declare it functionally obsolete. The planned project covers about 8 miles and includes improvements to the bridge and some connecting roads and construction of a companion span nearby. Both states coordinated to request funding under the nearly $1 trillion bipartisan infrastructure deal signed in 2021 by Biden, who had highlighted the project as the legislation moved through Congress. McConnell said the companion bridge “will be one of the bill’s crowning accomplishments.” DeWine said both states have been discussing the project for almost two decades “and now, we can finally move beyond the talk and get to work.” Officials hope to break ground later this year and complete much of the work by 2029. Biden’s visit could also provide a political boost to Beshear, who is seeking re-election this year in his overwhelmingly Republican state. In a December 2022 interview with the Associated Press, Beshear gave a mixed review of Biden’s job performance. Biden had joined Beshear to tour tornado- and flood-stricken regions of Kentucky last year. “There are things that I think have been done well, and there are things that I wish would have been done better,” Beshear said of Biden. Other top administration officials will also help promote Biden’s economic policies this week. In Chicago on Wednesday, Vice President Kamala Harris will discuss “how the President’s economic plan is rebuilding our infrastructure, creating good-paying jobs — jobs that don’t require a four-year degree, and revitalizing communities left behind,” the White House said in its announcement. Transportation Secretary Pete Buttigieg was delivering the same message in New London, Conn., also on Wednesday. Mitch Landrieu, the White House official tasked with promoting infrastructure spending, will join soon-to-be former House Speaker Nancy Pelosi on Thursday in San Francisco, which she represents in Congress.

DOL’s proposed independent contractor definition would turn clock back to 2020

Exactly what defines a worker as an independent contractor? That’s what the U.S. Department of Labor (DOL) is trying to determine with a proposed rulemaking about independent contractors under the Fair Labor Standards Act (FLSA). On Oct. 13, 2022, the DOL published its notice of proposed rulemaking, which seeks to provide guidance on classifying workers and to combat what the department labels “employee misclassification.” What do these proposed rules mean for the trucking industry, and would they be in line with California’s Assembly Bill 5 (AB5), which has caused many companies to stop hiring independent contractors from that state? “When you look at everything, they’re still independent contractors,” stated Darrel Hopkins, controller for Prime Inc. He believes the proposed rules look more like “wordsmithing of what’s already there” rather than a change that would drive more independent contractors away from the trucking industry. In other words, the DOL’s proposed change is not dramatically different from current laws. The biggest change would be the rescinding of the 2021 Independent Contractor Rule. This rule, put in place during the final days of former President Donald Trump’s administration, issued an “economic realities test” that focused on two factors. The first factor was the nature and degree of the individual’s control over their work. “If an individual exercises substantial control over key aspects of the work performance, such as their schedule, selection of projects and ability to work for others, that individual would likely be considered an independent contractor,” according to the 2021 rule. “If, however, the individual did not exercise such control, they would likely be considered an employee under the FLSA.” The second factor focused on an individual’s opportunity for profit or loss. “If an individual had the opportunity to earn profits and incur losses based on the exercise of his or her own initiative or management of his or her own investment on helpers or equipment to further their work, that individual would likely be considered an independent contractor,” according to the 2021 rule. “If, however, an individual did not possess these opportunities, they would likely be considered an employee under the FLSA.” Essentially, the proposed changes by the DOL would turn the clock back to a standard that was in place in 2020. “As we continue to examine every line of the DOL’s proposal, we appreciate that the rule stresses a classification decision should be based on all the circumstances in each specific case,” noted Todd Spencer, president of the Owner-Operator Independent Drivers Association. “However, we have concerns with provisions that could ignore specific aspects of the trucking industry and wrongfully deny owner-operators the chance to continue working as independent contractors,” he added. “We will continue to review the proposal and provide clear feedback to the department on how to address these concerns and ensure the continuation of the owner-operator model within the trucking industry. Small-business truckers and professional drivers are the backbone of the trucking industry and failing to listen to them would make any rule unworkable.” The comment period for the proposed rules closed on November 28. So, the question remains: Is employee misclassification a major issue in the trucking industry? “Trucking is under so much scrutiny, it would not be worth it,” Hopkins said. “We get challenged all the time.” Hopkins, who says 85% of Prime’s fleet is comprised of independent contractors, thinks it would be careless for a company to not comply with independent contractor rules. “When a driver enters (the Prime fleet), they can choose whether to lease or be a company driver,” he said. “With 85% being independent contractors, that should say something.” Independent contractors have the authority to make their own decisions and are good at finding ways to save money and make repairs without relying on the company, he noted. “Independent contractors outperform and make more money than company drivers,” Hopkins said. “These guys are good businessmen.” One of the biggest concerns in freight is that the new rulemaking could open the door to allowing legislation like California’s AB5 being applied across the nation. California’s AB5 expanded on a ruling made in a case that reached the California Supreme Court in 2018, Dynamex Operations West, Inc., vs. Superior Court of Los Angeles. AB5 put in place a three-pronged test when determining whether workers are independent contractors or company employees. AB5 was originally designed to regulate companies that hire gig workers in large numbers, such as Uber, Lyft and DoorDash — but the test became the new “gold standard” requirement for all companies in the state. Hopkins says the most troublesome prong of the AB5 “test” is one that essentially states that an independent contractor can’t work in the same industry as the employer. AB5 requires companies to reclassify their contract drivers as employees, with the same protections and benefits as their other staffers. This entitles them to workers’ compensation, unemployment insurance, paid sick and family leave and health insurance, among other employee benefits. While this might be a plus for some drivers, others prefer to maintain the autonomy and flexibility afforded to independent contractors. There are some contractors who are exempt from AB5. There are exemptions for doctors, dentists, insurance agents, lawyers, accountants, securities brokers, real estate agents, hairstylists and many other professionals — but not for truck drivers. “We basically don’t have independent contractors in California (due to AB5),” Hopkins said. “We have independent contractors in California that would like to work for us but can’t.” If a rule like AB5 goes national, Hopkins says, he believes many drivers who are now functioning as independent contractors and owner-operators would move to other professions. “I think it would have a terrible impact on the already short supply of drivers,” he said. “If they can’t make the same money, they’ll move to something else. AB5 is a bad law.”  

More states are pushing drastic emissions regs — but at what cost?

Not since Benjamin Franklin’s fabled kite-and-key experiment has the concept of electrification jolted the nation as strongly as the push to advance all-electric electric vehicles. The debate over efforts to electrify the freight industry and mothball diesel trucks continues to rage in many parts of the country. Increasingly, this drama is being played out in the statehouse. According to Electric Trucks Now, 16 states, along with the District of Columbia, are in various stages of developing clean air plans in which electric vehicles are central. With about a third of states in this legislative pathway, the likelihood of Washington, D.C., adopting similar federal standards continues to grow. If enacted, these regulations would have far-reaching consequences for the trucking industry — much like the tipping of the first domino in creating a chain reaction. “Different regulations, whether they be environmental or labor-based or whatever the case may be, each have their challenges,” said Dave Williams, senior vice president of equipment and government relations for Knight-Swift Transportation. “This one, from a magnitude standpoint, feels like it could have a greater impact than any of them.” Of the 16 states, six have adopted the Advanced Clean Trucks (ACT) rule, which is now law in California, New York, Massachusetts, New Jersey, Oregon and Washington state. The rule represents the most aggressive measures yet to replace diesel engines with electric ones. Three more states — Connecticut, Maryland and Maine — are actively working toward ACT legislation. The remaining states (Colorado, Hawaii, North Carolina, Pennsylvania, Rhode Island, Vermont, Virginia and the District of Columbia) have signed a memorandum of understanding (MOU) for zero-emission trucks but have yet to advance any legislation. The MOU signals a state’s intent to achieve a goal that 100% of all new medium- and heavy-duty vehicle sales be zero emission by 2050, with an interim target of 30% zero-emission vehicle sales by 2030. Williams, who has spent 30 years in the trucking business, says while regulation is nothing unfamiliar in the trucking business, the impact of ACT rules is nothing short of transformative for the industry. “With all regulations, there are things we have to change and there are costs we have to bear,” he said. “But in this case, we’re talking about moving from a piece of equipment that is very flexible, is highly efficient, that has a tremendous amount of range and capability to equipment that doesn’t do near as much work, that costs a lot more and that doesn’t go as far and isn’t as flexible. So, from an impact standpoint, this (regulation) has the potential to rank very high.” California, the bell cow in this lineup, has adopted myriad emissions regulations over just the past two years, going after everything from commercial trucks to passenger cars to leaf blowers. In June 2020, the state’s 16-member California Air Resources Board (CARB), a non-elected body appointed by the governor and legislature, made headlines for adopting ACT, the world’s first zero-emission commercial truck requirement. Per CARB, the regulation “is part of a holistic approach to accelerate a large-scale transition of zero-emission medium- and heavy-duty vehicles from Class 2b to Class 8.” In addition to addressing new vehicle sales, steadily increasing the percentage of electric models by 2035, the new rules impose a schedule for replacement of diesel trucks with electric ones in existing fleets. Williams says that on the face of such legislation are serious questions about infrastructure and services — such as the power grid limitations and lack of charging stations — to support its implementation. But the bigger issue, he notes, is the piecemeal way in which these laws are coming into being. “Our supply chain — through the (COVID-19) pandemic, we’ve already seen that it’s fairly fragile,” he said. “Now, instead of having the Environmental Protection Agency lead in this area and really set a standard that allows us to have freight in this country move seamlessly, we’ve now got a patchwork started by California and then adopted by various states throughout our country. “California has basically created a de facto national standard and they’re the ones leading the way followed by patchwork regulation that creates confusion and is really inefficient,” he continued. “What we’re ending up with is that you could be on an interstate, going coast-to-coast, and about every 400 to 500 miles, the rules change. So, how do you do that?” Williams says the other problem with the fast-tracking of still-evolving electric vehicles is that it ignores other technologies that are ready now, such as renewable natural gas engines and hybrids. “This is very technology-forcing,” he said. “We’re trying to go somewhere really, really fast. With any new technology, there’s a development cycle. There are things that need to be accomplished in order to mature that technology appropriately. In this case, it feels like we’re trying to skip the middle — that entire development phase that allows us to learn and grow and modify and adapt — and go right to the final phase.” That is problematic in a number of ways, he pointed out. “There are a lot of technologies, that I would call bridge technologies, that help achieve a lot of environmental gains,” he said. “But we’re not spending any time or any money developing those technologies, because of the way the rule is written, there’s no incentive to do that.” The regulations have had assistance from Washington, D.C., with moves that have allowed this patchwork to come into being. Last April, the National Highway Traffic Safety Administration rolled back restrictions that limited states’ ability to pass stricter guidelines on emissions standards and zero-emissions vehicle mandates, mirroring the waiver California has enjoyed since the 1970s. Under former President Donald Trump, such loopholes were closed, including revoking California’s waiver, establishing the framework for uniform regulations and rolling back emissions regs from the Obama administration. Each of these was quickly rescinded by President Joe Biden, which suggests that national guidelines similar to what’s being passed in the states would have a willing ally in the White House. “Make no mistake; clean air, clean water, good environment — these are all things that we all want,” Williams said. “From a sustainability standpoint, we think that’s a great thing. But there’s another form of sustainability that I think is being overlooked, and that’s economic sustainability. It’s not a matter of whether this is a good place to go; it’s how you get there and how fast you get there.”