Business Archives

Choosing the right engine helps contain costs while providing the right tool for the job

Cliff Abbott - January 13, 2022

The market for both new and used Class 8 trucks is tight, but those with the desire to upgrade equipment or start a trucking business of their own are still finding some trucks to buy. At some point, however, the market will change, just as it always does. Trucks will be easier to find and cheaper to buy. Whether you plan to buy a new or used truck, the engine remains one of the most important items to consider. In years past, diesel engines for many trucks were produced by one of three manufacturers — Caterpillar, Cummins or Detroit Diesel. A few truck manufacturers produced in-house engine models, but often offered a choice of engines that included one of the big three makers. Then Daimler purchased Detroit Diesel and incorporated its offerings into the Freightliner and Western Star truck brands. Caterpillar phased out manufacture of truck engines to focus on its heavy equipment sector. Cummins engines remain an option for some buyers, but all of the major truck builders now supply their own engine brands. For years, the 15-liter engine ruled the sales lots. The addition of electronics produced more power than ever, even when diesel fuels were changed to remove sulfur and new emissions standards were introduced. Smaller engines worked for local routes and lighter-duty work, but buyers wanted the 15-liter engines for power and longevity. The choice today is typically between smaller engines. PACCAR offerings Kenworth and Peterbilt, for example, may come standard with a 12.9-liter MX-13 engine. A smaller version, the 10.8-liter MX-11, is an available option on Class 8 models. Years ago, an 11-liter diesel engine would have been considered laughably small for a Class 8 truck. The PACCAR version, however, offers up to 455 horsepower and 1,700 lb.-ft of torque — enough to get the job done. International still offers the 15-liter Cummins X15 but also has its own 12.4 Liter A26 engine that produces up to 515 HP and 1,850 lb.-ft of torque. Freightliner offers a variety of displacements in its Detroit-branded engines, ranging from the 12.8-liter DD13 to its 15.6-liter DD16. Also offered are Cummins X12 and X15 powerplants. Volvo offers its D13TC (turbo compound) engine as standard on its VNL models but lists its D11 and the Cummins X15 as available options. Mack Truck has similar offerings with its 11-liter MP7 and 13-liter MP8 engines. With all of the available choices, it’s easy to generalize that smaller engines reduce fuel costs while larger engines provide more power. However, fuel economy and power are only two considerations when choosing an engine. The intended use of the finished truck is a good place to start. Smaller engines are designed to pair with the latest automatic-shift transmissions to provide enough power for normal use. Automatic-shift transmissions are designed to keep the truck in the gear and engine RPM that provides the greatest amount of torque. Tractors that are used to pull normal loads in average conditions should have no problems, and their owners will benefit from reduced fuel consumption. Trucks that will receive heavier use, however, may need more oomph. Drivers who frequently run mountain routes where heavy loads must be pulled up mountain grades might opt for larger displacement engines for the increased horsepower they provide. Heavy-haulers that pull over-dimensional freight will likely choose the 15-liter engine with a 13- or even 18-speed manual transmission. Some drivers have complained that smaller engines may provide enough power but must work harder to do so, causing them to wear more quickly. Manufacturers offer warranties that should put such fears to rest. When choosing an engine, it’s also important to consider service requirements. Recommended service intervals can differ between manufacturers, but there’s more to consider than how often to change the oil. The type of oil used is a consideration, too. Some manufactures recommend synthetic or synthetic blend oils that can add to an engine’s maintenance cost. Some require the use of modern variants of engine oil. For many years, oils have been assigned classifications by the American Petroleum Institute (API). Starting in 1985, engine oils classified CE, CF and CG were formulated to meet higher demands for high-temperature deposits, oxidation resistance and soot accumulation. Later, classifications CH-4, CI-4, CJ-4 and the latest, CK-4, were developed to be compatible with new emissions systems required by the government. One thing all these oils had in common was “backward compatibility.” That means each new oil still met the requirements of the one before. So, if an engine was built to require oil classified CH-4, it was still safe to use the newer CJ-4. That’s not true of the latest oil classification of AF-4. This new oil type is designed to work with greenhouse gas emissions equipment, and even to work with exhaust treatment systems that haven’t been introduced yet. It’s the oil of the future, but it can’t be used in engines that require oil classified CK-4. It’s extremely important that truck owners understand which type of oil is required for the engine in each truck and doesn’t mix them. Oil in the AF-4 classification may still be hard to find at some truck stops, so it might be best to carry an extra gallon along in case it’s needed. Engines also differ in the number of filters required during maintenance, and the cost of replacing those filters can vary. It’s always a good idea to know what filters are needed and to carry spares, just in case. While it may never be necessary to change an oil filter on the road, having one in the storage compartment can help prevent multiple stops in search of a maintenance facility that has the right filter. Choosing the right engine is an important step when investing in a new or used truck. Knowing the available options can go a long way toward having the power needed to get the job done while controlling the cost of operation to maximize profits.

November numbers look promising: Analysts say freight volumes and rates should remain high for a while longer

Cliff Abbott - January 12, 2022

Data for the final month of 2021 isn’t in yet, but November turned out to be a good month for both freight volumes and rates. The American Trucking Associations (ATA) says tonnage reported by its member carriers pushed the organization’s freight index up 1.3% over October levels. The ATA For-Hire Truck Tonnage Index equaled 114.5 in November. The ATA index is based on volumes reported in 2015, meaning the November 2021 index was 14.5% higher than the 2015 average. The November rise followed a smaller 0.4% increase in October. “November’s gain was the fourth straight, totaling 4.3%, and the tonnage level was the highest since April,” said Bob Costello, chief economist for ATA. “The recent streak is very good, but it should be noted that from April through July the index fell a total of 4.6%, so we are not quite back to where we were last spring. With that said, the index saw the largest gain from a year earlier since May. In November, strong factory output and housing starts helped push the index higher.” The ATA Index is compiled using data submitted by member carriers and represents primarily contract truckload freight. In August 2021, ATA released its “U.S. Freight Transportation Forecast 2021 to 2032.” The forecast predicts freight volumes will end 2021 up 7.4% after falling 6.8% in 2020 and will continue climbing for the foreseeable future. Indexes published by industry analyst and forecaster ACT Research were all in positive territory for November. The firm’s Fleet Capacity Index was in positive territory for the first time in a year, indicating some easing of the capacity constraints that have pushed rates upward. The Capacity Index may have received an assist from delays in implementing vaccine mandates for drivers as government concerns grew over the contribution of the driver shortage to supply chain issues. “Led by better driver availability, the Capacity Index increased 6.1 points in November, to 54.6 (SA), the best result since May 2019 in a sharp deviation from the trend of the past two years,” explained Tim Denoyer, ACT vice president and senior analyst. “Exemptions from vaccine mandates for most truck driving jobs may aid hiring at the margin, though dock capacity will likely be strained.” ACT’s Pricing Index rose by 1.1 points in November. “While capacity remains tight and rates continue to rise, the increase in driver availability indicates gradual rebalancing in the market has begun,” Denoyer said. However, while capacity was increasing during the month, freight levels also increased, resulting in another strong month for ACT’s Supply-Demand Balance Index, which showed another month of demand outpacing supply. “Significant unmet demand remains in equipment markets, and the near-term outlook for freight volume remains positive,” noted Denoyer. Another industry analyst and forecaster, Cass Information Systems, reported that its Freight Index for Shipments increased 1.4% in November over October levels. At the same time, the Cass Index for Expenditures grew 8% over October, indicating that the rise in freight rates hasn’t peaked yet. The Cass report notes that freight capacity remains constrained — and it’s not only trucking that can’t provide enough transportation to meet the demand. Container ships remain backed up outside of U.S. ports, and rail is experiencing many of the same issues as trucking. The Cass index incorporates air, barge and pipeline shipments as well as ship, rail and trucking. The Cass release forecast a total 37% increase in freight expenditures for the year 2021, with the final results coming once the December data is in. The year 2022 is predicted to see another 18% to 20% increase in expenditures, boding well for freight rates in coming months. Truckstop.com reported that, as expected, freight volumes dropped during Thanksgiving week but were still more than double those posted in the same week of 2020. Also reported, total average spot rates were 19% higher than during the same week the previous year, but a little over half of the increase was due to fuel surcharges that compensate for fuel price increases over the past year. Truckstop.com reported average freight rates of $2.97 per mile to end the month with rates for refrigerated freight coming in highest at $3.44 per mile. The firm noted that average rates have been above $2.40 per mile for 65 consecutive weeks. Trucking services provider DAT reported spot rate increases for both van and refrigerated freight in November, with van freight averaging $2.92 per mile and refrigerated freight $3.44 per mile. Flatbed rates were down a few cents from October at $3.05 per mile. Spot rates for all three trucking types rose again in December to end the year on a high note. In a Dec. 14 blog entry by DAT’s Dean Croke, principal analyst for DAT iQ, DAT reported that truckload freight rates have almost doubled in the past 18 months since the 2020 “May Day” protest in Washington, when truckers were protesting low freight rates and a lack of broker transparency. Within 16 weeks of the May Day protests, Croke noted, diesel fuel prices had dropped by 34 cents per gallon and freight rates had risen to a level higher than at any point in 2018. More than 100,000 new DOT numbers were issued, Croke reported, representing 32% of all trucks added to the market. DAT data suggests that more than 25% of total trucking volume is comprised of spot-market freight. That’s more than twice the percentage of spot-market freight in the average year before the COVID-19 pandemic. With capacity remaining constrained and contract rates also on the rise, the trucking boon should continue for the coming months. Fuel costs remain a concern to most in the industry, and the Omicron variant of the COVID-19 virus is an unknown factor. If more shutdowns and restraints are put in place to combat the virus, freight volumes — and rates — could drop quickly. The market will eventually reverse course and conditions for trucking will become more difficult, because that what happens in the economic ups and downs of trucking. Until then, however, there are more months of prosperity to be enjoyed.

New technology looks to multiply logistical efficiencies

Dwain Hebda - January 11, 2022

BENTONVILLE, Ark. — Trucking has never been an easy business, but the recent degradation of supply chain combined with a lack of drivers has put unprecedented pressure on profitability as companies struggle to deliver goods on time and safely. One new tech company, Arkansas-based Fr8relay, is looking to change that scenario. Offering a fresh perspective on logistics and route management, the company’s software looks to ferret out inefficiencies related to downtime, speeding delivery along the way while reducing wear and tear on drivers, according to company founder Aayush Thakur. “The technology is essentially a play on combining the long-haul trucking with relay racing,” Thakur noted. “In relay racing, the runners hand off the baton every 100 meters to the next runner. We’re applying the same principle to building trucking gains across the country.” The concept looks to maximize the 11-hour driving window allowed by federal law before drivers take a mandatory 10 hours off. Traditionally, the driving window has been utilized in a straight line from Point A to Point B. Fr8relay seeks to use these hours more efficiently by creating a hand-off of trailers along a route, similar to the way the Pony Express riders of old distributed mail in a relay fashion. “There is enough cargo that is moving so that we can match drivers every four to five hours so that they swap their trailers and head back home,” Thakur said. “Meanwhile, the trailer keeps moving and is not sitting roadside because the driver is forced to pull over and rest.” Through coordinated logistics, Fr8relay makes it possible for any distance haul to be made in real time by coordinating multiple drivers along the route in such a way that no one driver exhausts his or her allowable hours. It also allows more freight to be hauled in that window on trucks returning to point of origin. “One example we give regularly is a lane from Chicago to Dallas; that is usually a 14-hour drive,” Thakur said. “Today, you can do a conventional one-driver model where you have a driver drive 11 hours, sleep for 13 and then drive the remaining three hours. That would be a 27-, 28-hour drive. “In our model, you can cover it in just 14 hours,” he continued. “A driver will start to travel, drive four hours, meet someone in Springfield, hand over the trailer (and) take that other trailer back to Chicago while the trailer that was handed off in Springfield moves farther down to say, Tulsa. Then an exchange happens there, and that trailer again moves to Dallas.” The concept of relays is not new, but is currently practiced only sporadically in the trucking industry, Thakur said, adding that Fr8relay provides scalable technology that automatically implements relays as an integrated part of a company’s logistics and scheduling. In addition to maximizing efficiencies, the technology provides a series of equally compelling ancillary benefits, he said. For one thing, it gives freight companies a new tier of delivery service for which they can charge a premium. It also helps companies make the most of available drivers at a time when the industry is struggling to attract new workers behind the wheel. And third, it makes the job more attractive to veteran and prospective drivers alike by allowing more runs to end at home. This third benefit is what excites Thakur’s business partner and wife, Deme Yuan, the most. “Aayush is the visionary and the tech guy, but he lured me in because he knows that what I care about is the potential social impact that this can have for truck drivers,” Yuan said. “There are a lot of harsh conditions that can be improved with this model that are transformative for truck drivers and their families. “It also makes the job more accessible,” she added. “There are all sorts of barriers to female drivers in the industry, for instance, whether it’s being taken away from traditional gender roles of having to care for small children or aging parents, or fears about potential gender-based violence when you’re isolated.” Thakur filed a patent for his technology in 2014 and, upon receiving it four years later, jumped full-time into building the company. In 2020, the couple moved from Memphis, Tennessee, to Bentonville, Arkansas — a locale that is not coincidentally home to two of the largest logistics entities on the planet, J.B. Hunt and Walmart. “The big guys already have their technology systems built,” Thakur said “Our technology would be simply a plug-in module where you connect our software and upload a list of drivers and trucks; (then) we create a schedule dynamically for them, enabling a relay. If something changes, based on driver availability or a load gets canceled or something, then that schedule will automatically update and notify the stakeholders.” The system even tracks weather in real time to anticipate bottlenecks and lane closures. Thakur said the technology not only works with large fleets, but it can also help owner-operators similarly maximize profits. Finally, there’s an economic impact for communities that are currently bypassed by the trucking industry, but the location of which makes them an ideal relay station. In 2021, Fr8relay was awarded a U.S. Department of Agriculture (USDA) small business innovation grant to study the potential for creating just such employment opportunities in rural areas. “We are talking to rural communities along interstates where our exchange locations will be to see if they would like to partner with us for the next phase of the USDA grant so we can explore the mechanics of establishing a rural hub for exchange,” Thakur said. “If that works out, we want to commercialize it in 2023 and onward. That is something that we are really passionate about.” The company will begin pilot programs this year. Both Thakur and Yuan admit that a key cog in the success of Fr8relay is trucking companies being willing to approach logistics from a different angle than in the past — and that such thinking is not assured. But, they said, the multiple potential benefits of the freight relay technology make a compelling case to do so. “We understand how there would be some paradigm shift for some drivers,” Yuan said. “But when you realize that you have this asset that could be producing more revenue, you’re more likely to make that choice. Plus, this is a play to make the lives of drivers better while making it possible for cargo to be delivered in half the time, because it’s not sitting on the roadside when the driver is resting.” Thakur says he believes the system will be appealing to both drivers and owner-operators. “It is a win-win scenario for all the stakeholders,” Thakur said. “It’s not like it’s written in scripture that drivers need to spend their night at gas stations. You can still move cargo interstate across the country with coordinated local drivers who are driving four to five hours out of their home base and getting back home. That is where want this to go.”

Mother-daughter team works to serve trucking industry

Cliff Abbott - January 11, 2022

There are many people who can describe the difficulty of starting up a business in the trucking industry. Doing so as a woman — and an immigrant to the U.S. — adds to the challenge. But it’s all in a day’s work for JagDeep (Deep) Dhillon, founder and CEO of Livonia, Michigan-based RoadEx. In 1994, Dhillon immigrated from the Punjab region of India to the Toronto, Ontario, region of Canada. Not long afterward she married, and soon the family was joined by daughter, Simran. “We started a small coffee shop, and when (Simran) was 2 years old, we started a trucking company,” Dhillon explained. During the recession in 2008 and 2009, Dhillon recognized an opportunity to come to the U.S. “I saw lots of people that don’t have jobs in the USA,” she said. “When we posted ads in the paper or online, I got almost nonstop phone calls.” After a half-decade in trucking, the Dhillons decided to start a factoring business to serve other trucking companies. “A lot of our Indian community is involved in the trucking business,” Dhillon said. “I noticed Indian drivers on the road, or Indian [company] names on their trucks, and from that I got the idea.” Dhillon’s factoring company grew and increased the services it offers. Today, RoadEx provides dispatch services, fuel cards, trucking insurance and assistance in obtaining authority, permits and more — all in addition to invoice factoring. Currently, about 30 employees work at the company’s Livonia location, and additional staff works from India. Dhillon said company revenues of $60 million in 2019 are expected to be more than double that amount for 2021. In September 2021, Simran joined RoadEx as the company’s associate counsel, following her graduation from law school. Before attending the prestigious law school at Wayne State University — one of Michigan’s largest schools — she graduated from Wayne State with a Bachelor of Science in psychology and a business minor. “I graduated law school this past May and took the bar exam over the summer,” Simran said, adding that she became fully licensed about a week before visiting with The Trucker. “So now, I’m a full-fledged attorney, but I’m taking on a lot of roles under that umbrella.” Simran could have sought a law career with a firm in Detroit, but she said she wants to work in the family business. “I feel passionately about what we’re doing here,” she said. “And I feel very personally invested. I have such a soft spot for trucking because my family’s always been in trucking.” Of course, Simran has been around the RoadEx office for many years, even though she wasn’t always officially on the payroll. She spoke about how her mother, Deep, handled the issues of working as an immigrant and speaking with an Indian accent in U.S. society. “In the beginning, I think she got nervous talking to people on the phone,” Simran explained. “I think the trucking community is just so diverse that she hasn’t had too many issues with it. Over the years, she’s definitely become more comfortable.” Any doubts about Deep’s ability to succeed in the U.S. were quickly put to rest. “When I was younger, she (Deep) would answer the phone and the caller would be like, ‘We need to talk to whoever’s in charge,’” Simran recalled. “When we get people calling now, they ask for her first because they know she’ll get the problems taken care of.” Helping to improve the image of the trucking industry is an important goal for Simran. “I think sometimes trucking can get a bad rap for not being super-sophisticated or whatever,” she explained. “But that’s coming from people who don’t know much about trucking and the field. Having knowledge about it has made me want to provide for this field.” None of this means Simran is abandoning her law education or degree, however. “I think it’s a really untapped market where (the trucking industry) would benefit greatly by having more attorneys who can provide more detailed legal services to potential trucking clients,” she said. “That’s also one of the fields that we plan to branch into in the next few years.” How does Deep feel about her daughter growing up and joining the family business? “I’m so proud of her, and she’s gonna take our company way up,” she said with a big smile. Part of the RoadEx mission is to give back to the community that supports the company and its employees. The company lists Forgotten Harvest and Trucker’s Final Mile as two charitable groups selected for its support. “One of the pillars of our (Sikh) religion is to provide to our community and always give back,” Simran explained. “So, for example, if you ever need a warm meal, you’re always welcome at a Gurdwara, a Sikh Temple. Those principles carry naturally into our business.” The company has also funded a display for Trucker’s Final Mile at the Mid-America Trucking Show in Louisville, Kentucky. “When my parents had their trucking company, we had a few truckers who had someone pass (away) in the family and their first priority wasn’t, “What are we going to do with this load?’” Simran said. “Their first priority was, ‘Let’s get the driver home. Let’s make sure they can be with their family.’” The Dhillon family feels strongly about supporting other women in the trucking industry. “Our goal is always to advocate for truckers and especially now, more and more, advocate for these female truckers, Simran stated. “We want to be leaders within the field to show other women that you can also be a leader,” she continued. “So, every opportunity we get to partner with a female-owned trucking company, it’s a big deal. It ripples through our all of our offices that we got another one.” Deep says she plans to continue the company’s growth in the coming months. “(RoadEx clients) are asking for more services,” she said. “We have (clients) every day looking for trailers and trucks. We try to connect them with sellers. That’s our next plan.” Simran acknowledges her mother’s role in paving the way for women in the industry. “I have been able to reap the benefits of the hard work she put in,” she acknowledged. Under the leadership of Deep and Simran Dhillon, there’s more hard work and more success ahead for RoadEx.

Shortage or not, change must occur to bring more drivers to trucking

Cliff Abbott - January 10, 2022

Some trucking organizations and carriers claim it’s the most important issue the trucking industry is facing today. Others, such as the Owner-Operator Independent Drivers Association (OOIDA) and many drivers, claim it’s an imaginary issue that will go away as soon as the industry starts paying fairly. What is it? It’s the driver shortage. An Oct. 25 update from the American Trucking Associations (ATA) claimed the trucking industry would need a record high of over 80,000 drivers by the end of 2021. That number is expected to more than double by the year 2030. “Because there are a number of factors driving the shortage, we have to take a number of different approaches,” said Bob Costello, chief economist for ATA. “The industry is raising pay at five times the historic average, but this isn’t just a pay issue. We have an aging workforce, a workforce that is overwhelmingly male and finding ways to address those issues is key to narrowing the shortage.” The American Trucking Research Institute (ATRI) listed the driver shortage as the No. 1 concern on its Top 10 Trucking Industry Issues for 2021, as determined by a survey of more than 2,500 stakeholders. Driver retention and driver pay were the next two items on the list. In recent days, President Joe Biden has pledged to address the issue. A Dec. 16 statement from the White House announced a near $10 million program support a registered apprenticeship programs as well as resources to support veteran recruitment. Biden’s team also pledged a study of current driver compensation, including lengthy wait times at shippers and receivers. Some studies have suggested that the average driver spends 30 to 40 hours a week waiting to get loaded or unloaded, time that is paid at very low rates, if at all. Detractors, however, suggest that any perceived “shortage” of drivers is simply a market response to poor working conditions and a pay scale that hasn’t kept pace with inflation. In August, Levi Pugh, executive vice president of OOIDA, sent a letter to Commerce Secretary Gina Raimondo that described the driver shortage as a “myth.” Pugh claimed the shortage is a creation of carriers and trucking trade associations used to “support the cheapest-possible labor.” Pugh stated that the FMCSA issues more than 400,000 new CDLs annually, providing enough drivers to solve any shortage several times over. It might be hard to convince carriers that are struggling to hire enough drivers to keep trucks moving the driver shortage is a mythical problem. At the same time, an industry that routinely experiences driver turnover rates in excess of 90% has to recognize that retention is an issue. Ed Naugle, president and CEO of Walbridge, Ohio-based Naugle Cos., employs several strategies to keep turnover under 40% annually. “Our difference is that we don’t take new drivers,” he said. “We try to make sure they have at least five years of experience.” Naugle said paying drivers by salary has made a difference in retention. Hayden Carden, founder and chief innovation officer of Idelic, a developer of software management tools, thinks new drivers aren’t getting an accurate picture of what the trucking job entails. “When it comes to the driver shortage, some of the biggest areas that we start to understand is that fleets are having a very, very hard time retaining their drivers,” he explained. “And a lot of that is happening in the first 90 days.” Carden said carriers often use orientation to take care of paperwork and regulatory items rather than as an opportunity to help new drivers acclimate. “A lot of fleets have a hard time distinguishing the difference between orientation and onboarding,” he said. The ATRI study suggests bringing younger drivers into the industry as a potential solution. Allowing the use of 18- to 20-year-olds in interstate commerce would allow the industry to compete with trades and businesses that hire candidates right out of high school, instead of waiting until several years later — when they may have already chosen a career. Naugle acknowledges that states that currently allow younger drivers already have a wealth of safety data, but he’s still in favor of a pilot program. “When I was 18, I was more mature than most of my peers,” he said. “(However,) there are some 18-year-olds that are like 12-year-olds in their minds.” He suggested a thorough interview and advanced testing might help to determine the driver’s fitness. “I think there are other people at that same age that qualify for the military or, at least, have that same responsible attitude and maturity,” he said. “That’s what we want to tap into.” Rather than using state lines as boundaries, Naugle suggested a limit, such as 250 miles from the terminal, might make more sense. “I think that would be a fair limitation,” he noted. ATRI also called for the expansion of the EB-3 Permanent Work Authorization permit that would allow carriers to recruit qualified applicants from foreign countries. One area the industry could address is the loss of drivers who purchase their own equipment and obtain their own authority. In 2020, just under 77,000 new carriers were granted authority, according to the FMCSA. In 2021, the number had nearly doubled to almost 150,000 by the end of October, the latest numbers available at the time of this writing. Carriers can approach the issue in two ways: 1) Improved pay and working conditions might encourage more drivers to remain company drivers; and 2) Those who buy equipment could be enticed to enter lease agreements, providing both truck and driver to a carrier. Another potential relief area might be recruiting more women drivers, who currently represent only about 7% of the driver workforce. Unfortunately, there’s no one-size-fits-all fix for the driver shortage. There are, however, several avenues that could help the industry solve the problem with a combination of solutions. Few industries can offer a middle-class lifestyle with far less training than obtaining a college degree.

GPS apps and common sense can help keep drivers out of trouble spots

Cliff Abbott - January 7, 2022

Every week, it seems, there’s another story about a truck and a bridge. One week, it’s a tractor-trailer damaging a suspension bridge by hitting a crossbeam with the trailer; the next, it’s a commercial motor vehicle attempting to cross a pedestrian bridge. Many of these stories make us shake our heads and marvel at the mental gymnastics the driver had to complete to put the truck there in the first place. Often, the answer is that the driver followed directions provided by a GPS routing program. That’s the excuse used by the driver of a tank truck loaded with calcium chloride that smashed through the wooden deck of a pedestrian bridge over wetlands in Angola, Indiana, in mid-November. The walkway parallels Indiana Highway 127, and the bridge was just wide enough to accommodate the vehicle. In the old days of trucking, professional drivers carried a road atlas. The gold standard was the Rand McNally Motor Carriers’ Road Atlas, which not only featured individual state maps but also clearly covered and explained the National Highway Network (something many drivers still don’t understand). The McNally atlas also had separate sections that listed low-clearance locations, restricted routes, and state-specific weight and dimension regulations. Some drivers preferred the fancy spiral-bound version with laminated pages, while others liked the plain paper version on the grounds that it was cheaper to replace each year when the new one comes out. It’s a new day, however, and drivers are more tech-savvy than ever. Those atlases are still available, but many new drivers get directions from the routing software their carrier uses, along with their dispatch management system. Others rely on GPS devices that can be mounted on the dash, and newer trucks come with such systems already installed with dashboard display screens. For other drivers, smartphones are the answer because they can download the latest routing apps and, thanks to Bluetooth technology, can send maps and information directly to the display screen in the vehicle. The most important thing to remember about route guidance systems is that none of them should be trusted 100% of the time. Some apps and programs update automatically, while others don’t update unless the owner manually requests it. On the road, conditions can change quickly, and even “updated” software can be wrong. Many drivers prefer to purchase commercial vehicle versions of GPS devices. Rand McNally makes an excellent one, as do other familiar names like Garmin and TomTom. Other manufacturers are less well known, so make sure the unit you purchase has software specific to trucking. For drivers who prefer to use their smartphone instead of relying on a stand-alone GPS device, there is a long list of apps available at Google Play or Apple stores, many of them free. Google Maps is a tested and true app that provides very good directions — for cars and bicycles. The app is not designed for commercial motor vehicles or RVs, and leaves out information that could be crucial. Apple Maps is a similar program that works on iPhones and equipment running Apple operating systems. Trucking-specific apps do a better job of routing and can provide information important to truckers, such as the locations of truck stops, weigh scales and more. Some allow the driver to enter weight and dimensional information so that routes that aren’t suitable can be avoided. TruckerPath has been around for years and is trusted by many drivers. TruckerTools is another well-known app. TruckMap is gaining in popularity. The makes claim it is the only app with “truck optimized GPS routes” along with location information on weigh stations, parking areas, fuel stops and even Walmart stores. SmartTruckRoute is similar to the others, and Hammer is a GPS app sponsored by the website TruckersReport.com. Websites such as the Rand McNally homepage and TruckersReport.com feature routing programs that are accessible online without downloading any programs. Turn-by-turn directions can be downloaded or printed from the website. Whatever system you choose, understand how the program works. Some require a constant internet connection and may not work well in a moving vehicle. Others communicate through your phone’s network system and may consume data at a high rate. If your plan allows unlimited data, you won’t incur extra charge;, however your data speed could be slowed when your usage reaches a predetermined threshold. Programs that provide turn-by-turn directions are generally the most convenient, but they can also be the most problematic. That’s because it’s tempting to simply rely on the app rather than checking the entire route prior to the trip. By the time the driver finds out about a route restriction, it may be too late to change to the most efficient route. For this reason, some drivers still carry the tried-and-true road atlas. The route recommended by the software or app can be checked against the low clearance or restricted route sections to eliminate issues. Some drivers compare data from two or more apps to make sure they’re getting all the information needed. Other sources for determining low clearances or restrictions include state-specific DOT websites and some trucker forum websites. Keep in mind that reported clearances can change. New pavement on the road raises the surface and can shorten the distance to the overpass above. Lane changes that route lanes toward a lower part of the bridge can cause problems. In states where snow and ice can build up on the road surface, clearances can be reduced. Many locations have signs announcing height restrictions, but sometimes those signs aren’t updated immediately when conditions change. Then, there’s the tried-and-true method of watching another truck go under the bridge. Just make sure the truck you follow isn’t shorter than the one you’re driving. Finally, there’s simply no substitute for common sense. If the bridge looks too low or the road too narrow, stop and make sure before any damage is done. If a clearance is close, creep underneath, and keep an eye above. And, most importantly, if the road surface is made out of wood planking, there’s a good chance it wasn’t made to hold 40 tons of tractor-trailer.

Bison Transport Inc. acquires Hartt Transportation

The Trucker News Staff - January 6, 2022

WINNIPEG, Manitoba — Bison Transport has acquired Bangor, Maine-based Hartt Transportation Systems, Inc. after obtaining 100 percent of the company’s issued and outstanding shares. According to a Bison news release Hartt is one of the largest truckload carriers based in the northeast with 360-plus tractors and 2100-plus trailers, along with a sizeable logistics offering. “I am excited for my employees to become part of the Bison family, as we share similar core values and cultures,” said Billy Hartt, past president and CEO of Hartt Transportation Systems, Inc. “I am certain that, with the merger of Hartt’s and Bison’s teams, they will produce amazing results and become an even stronger carrier for the future.” Hartt is a second-generation business founded in 1948 by Delmont E. Hartt and then owned by his son, Billy Hartt, until it was acquired by Bison. “Hartt’s success over the last 70-plus years has been driven by a long tenured and reputable customer base, low driver turnover, a focus on safety, a quality fleet and a strong company culture,” the Bison news release stated. “These factors are similar to those that have allowed Bison to be successful, leading us to see a strong strategic fit between our companies.” Bison President & CEO Rob Penner said at the closing of the transaction that, “These are truly exciting times for all involved. I have had the privilege of meeting and spending time with the Hartt leadership team, and collectively we feel strongly about the cultural fit.” Marc Wolding, president of Bison Transport USA, noted that, “We want to extend a warm welcome to all Hartt employees. The entire Hartt Transportation team should be extremely proud of the business which has grown to become a premier carrier in the eastern U.S. There is a very bright future in front of us, and I am looking forward to seeing us grow together.” Financial details of the transaction will not be made public.

Flat sales continue: Supply chain issues, parts shortages constrain November truck sales

Cliff Abbott - January 5, 2022

There was little change to the numbers of new Class 8 trucks sold on the U.S. market in November. The “good news/bad news” freight market continued as freight rates were propped up by an inability to add trucks. U.S. sales of 17,021 new Class 8 trucks in November represented a decline of 2.7% from October sales of 17,486, according to data received from ACT Research. In a typical year, November isn’t a strong sales month; it’s not the final month of a quarter, and it has 30 days compared to 31 for both October and December. The Thanksgiving weekend also removes days from the selling cycle, so a decline in sales numbers isn’t unexpected. Sales in November 2021, however, lag behind sales in November 2020 by 5.9%. In 2020, sales were returning to “normal” after recessionary months earlier in the year and weren’t yet hampered by shortages of semiconductors and other critical parts. This year, supply chain problems persist. The bigger news might be the huge numbers of order cancellations in both October and November and the market attempts to adjust itself to the new reality. “We had the two biggest cancellation months since the third quarter of 1995,” remarked Kenny Vieth, president and senior analyst at ACT. “This time every year, we get OEM kind of paperwork level cancellations.” What’s happening is that carriers and manufacturers realize the build backlog is so huge that it’s not likely to be met. There have been more orders placed for 2022 model year trucks than can be built before the 2023 model year is upon us. So, either carriers or manufacturers are canceling orders for 2022 trucks and then immediately ordering 2023 trucks. In a typical year, about 75% of Class 8 trucks manufactured are destined to be fifth-wheel-equipped road tractors. The remaining 25% are vocational trucks, fitted with dump, concrete, trash or other bodies. In November, those percentages were right on the money. The ratio may change as infrastructure money flows into the economy and more trucks are needed for construction work, but there’s a hitch: Steel prices remain at near-record highs. Specialized bodies for trucks, such as dump beds and trash compactors, are fabricated from steel sheets. So, any incentive to purchase vocational trucks will be offset by higher prices. If supply issues aren’t bad enough, there’s another problem lurking. Nations are shutting down travel and imposing other restrictions due to the latest variant of the COVID-19 nightmare, the Omicron variant. “We’ve got all these supply chain constraints that we’ve had all through 2021. We’ve got this new variant that’s highly contagious,” Vieth explained. “My concern is the Omicron variant becomes the next problem on a global basis.” Even if manufacturers can get the parts to build trucks, they may not have enough labor. Trailer manufacturers are experiencing the same issues as truck manufacturers. Customers are paying more for trailers as OEMs adjust pricing to offset the cost of parts and materials. Aftermarket parts are scarce too, as builders buy up available parts for production, leaving trailer owners with sidelined equipment scrambling to find the items needed for repairs. In the meantime, capacity remains tight in the freight market, helping keep rates at record or near-record levels. When buyers can’t get new trucks, many of them turn to the used truck market. “As has been the case since late 2020, the industry’s inability to meet truckers’ equipment needs has resulted in relentless (SP) used truck price escalation,” said Steve Tam, vice president of ACT. ACT’s monthly “State of the Industry: U.S. Classes 3-8 Used Trucks” report claimed the price of the average used truck sold in November was 69% higher than in November 2020. The average truck was older and had more odometer miles this year, too. As they did in October, new truck builders experienced wide production and sales swings in November, most likely based on parts availability. For example, Kenworth sales increased by 25.2% while International sales dropped 44.2%, according to data received from Wards Intelligence. Fluctuations in sales numbers can occur for a variety of reasons, but normally aren’t as large in scope as seen in November. Freightliner’s 6,134 Class 8 trucks sold was a decline of 5.9% from sales of 6,520 in October and a drop of 20.4% from November 2020. For the year to date, Freightliner has sold 75,363 Class 8 trucks on the U.S. market, good for 38.2% of all Class 8 sales. International’s 1,314 sold was a huge drop from 2,356 sold a month earlier. Compared to November 2020, Class 8 sales dropped by 28.3%, close to the 28.0% decline International has experienced for 2021 to date. Peterbilt sales of 2,842 represented the best month-over-month increase of the industry. Compared with November 2020, sales increased by 6.1%. Peterbilt has sold 14.9% of Class 8 trucks in the U.S. this year. Kenworth sales of 2,342 represented a 14.9% increase over 2,055 sold in October but were 9.5% behind November 2020 sales of 2,588. The company holds 14.5% of the U.S. Class 8 market for 2021. Volvo sales of 2,048 were 4.5% higher than the 1,959 sold in October and a whopping 43.2% higher than the 1,430 sold in November 2020. For the year to date, Volvo owns 9.4% of the U.S. Class 8 market. Volvo-owned Mack Truck had a similar month, selling 1,356 trucks in November compared to 1,278 in October for an increase of 6.1%. For 2021, Mack has 8.2% of Class 8 sales in the U.S. Western Star, owned by Freightliner, reported sales of 503 in November, down 10.8% from sales of 564 in October. Compared to November 2020, sales increased 2.2%. For the year, Western Star holds 2.7% of the new truck market. December is typically a huge month for new truck sales as dealers adjust end-of-year inventories and carriers invest profits to lower tax liability. With production curtailed and inventories at their lowest level in decades, the final month of 2021 isn’t likely to be typical at all.

Schneider purchases Midwest Logistics

The Trucker News Staff - January 5, 2022

GREEN BAY, Wis. — Transportation and logistics giant Schneider has acquired Ohio-based truckload carrier Midwest Logistics Systems (MLS) for $263 million. MLS, a dedicated carrier with more 1,000 professional drivers, operates 900 tractors across 30 central U.S. locations. Schneider has acquired 100% of the equity interest in MLS, according to a Schneider news release. The carrier will run as an independent subsidiary of Schneider. MLS professional drivers and associates will continue to operate under the MLS name. “Preserving the MLS identity is essential,” said Schneider President and CEO Mark Rourke. “The carrier’s family-owned nature combined with its strong culture and customer service make it a valuable contributor for growing Schneider’s dedicated operations. With this acquisition, we believe Schneider is on track to generate $1 Billion in annual revenue in our dedicated operations with over 5,000 trucks.” MLS annual revenues are approximately $205 million, and the acquisition is expected to be immediately accretive to Schneider’s earnings per share. MLS financial results will be reported in dedicated operations as part of the Truckload segment beginning in the first quarter of 2022. “Schneider is a well-established company and a great cultural fit,” said MLS Vice President Dave DeMoss. “We are excited to be a key component to Schneider’s dedicated growth strategy.” According to the news release, Schneider financed the transaction through cash on hand.

Is it a necessary expense? Trailer ownership brings independence but adds cost and responsibility

Cliff Abbott - December 30, 2021

If you’re considering the purchase of your own trailer, the first question to ask yourself — and answer with total honesty — is: Why? The second question: Does owning your own trailer help or harm your business? If you’re running under your own authority, you may have no choice. Depending on the customer, you’ll need a tractor and a trailer to make the business work (unless the customer has trailers of their own). If you lease your tractor to a carrier or your business serves a customer that provides trailers, consider carefully before you make a deal to purchase your own. Advantages of owning a trailer can add up quickly. You can spec exactly the equipment needed for the work your customers provide. You can customize your trailer’s looks to help build the brand you chose for your company, including as many lights as you want to install or have installed. If you lease your equipment to a carrier, owning a trailer may bring higher revenues, or at least keep you from having to pay rental fees to a carrier to use their trailer. Also, you can take advantage of the latest aerodynamic features that help reduce your fuel cost. However, trailers also come with problems, including acquisition and maintenance costs. Consider carefully whether revenues will increase enough to cover the cost of the trailer plus the maintenance dollars you’ll spend. During this time of shortages, trailers are hard to find, and good deals are nearly impossible. Don’t forget to factor in financing costs if you plan to borrow to pay for your trailer. Those costs include any aerodynamic features you add, such as side fairings, rear-end spoilers, or tails or wheel treatments. If your customer (or the carrier you lease to) demands special paint colors or brand decaling, find out if the costs are your responsibility. Your insurance costs may rise, too. Check with your agent for the cost of all of your policies. You may need to carry physical damage insurance on the trailer, especially if you financed the purchase. Other insurance, such as liability or even “bobtail,” which provides coverage when the trailer is empty, may be necessary. There are registration costs as well. States differ on costs, and some charge ad valorem (property) tax on owned trailers. You’ll need to factor in those costs. You’ll need to adjust your business plan to account for more maintenance cost. Trailers are normally less expensive to maintain than a tractor, since there’s no engine or transmission to fix, but they still have tires and brakes — two expensive maintenance items. If your trailer includes a refrigeration unit, it DOES include a motor and other parts that will need to be maintained. You’ll need oil changes and other preventive maintenance in addition to any repairs. Some trailer owners save money by recapping used steer tires and using them on the trailer, sometimes following the process with drive tires. Every driver and trailer situation is different. There is also an air system on the trailer, from gladhands to storage tanks and all the lines and valves in the system. The dual lines to sliding tandems are often a problem. If the spring is connected improperly, it will fail to take up the slack when the tandems are slid forward, allowing the lines to drag the ground. Even when properly adjusted, the lines can rub against one another, eventually resulting in failure of the hose if not caught during an inspection. There are other drawbacks to owning your own trailer, too. Many carriers operate with trailer “pools,” allowing drivers to drop their trailer at a customer location and pick up another that has been pre-loaded by the customer. This saves the driver from waiting at the dock for trailers to be unloaded and reloaded. Obviously, if you own the trailer, that’s not an option. Plan to wait for loading and unloading. Securement equipment can be another issue with owning a trailer. At some dry van or refrigerated deliveries, unloading personnel — including lumpers — sometimes remove load locks or straps and place them in a “community area” where you’re expected to retrieve them. Unfortunately, some drivers “retrieve” the newest or best-looking equipment, leaving the worst behind. The problem isn’t as common for straps, chains and other securement equipment, but you’ll still need to keep track of everything. You’ll also have the expense of replacing equipment as it wears beyond its useful life, including tarps. Repairs on the road may be more expensive, too. When you’re pulling a carrier’s trailer, you can often call in to report needed repairs, such as a service call for a flat tire. With your own trailer, and depending on the carrier’s policy, you may be responsible for finding and paying for any needed service calls. Of course, any violations identified in a DOT inspection, and the cost of any citations issued, will also be yours. You’ll also need to consider parking. Some drivers are blessed with ample space to park a tractor and trailer. Others, such as those who live in areas where truck parking isn’t allowed on the street, leave the trailer at a terminal or at a convenient location, such as that abandoned shopping strip down the road, and drive the tractor home. When you own a trailer, you’ll need a plan to keep both tractor and trailer secure. Depending on the characteristics of your home, you may find you need to rent parking space at a nearby truck stop or other business. All costs associated with trailer ownership must be dealt with before you can determine the financial impact of buying that equipment. If it will cost more to own the trailer than you’ll earn in additional revenues, it’ll be a poor investment. Owning your own trailer can be a characteristic of a truly independent business, but it’s important to remember that independence often means more responsibility and cost.

Changing jobs? Know what a background check will show before you apply

Cliff Abbott - December 28, 2021

If you’re paying attention to the trucking industry, you already know the trucking industry is suffering a driver shortage, according to many sources. In fact, the most recent survey published by the American Trucking Research Institute (ATRI) listed “Driver Shortage” as the biggest current industry concern, followed by “Driver Retention” and “Driver Compensation.” Carriers are revising their pay rates and bonus structures to address at least the first two on the list. Many carriers are raising compensation rates, and many are offering hefty “sign-on” bonuses to help attract and retain drivers. If you’re considering making a change in your career, whether you plan to apply as a company driver or an independent contractor, keep in mind that any carrier you apply to will conduct background checks in accordance with federal regulations. It’s important that you know what they will find in that check — BEFORE they find it. One very large reason for this is your credibility. If you listed three prior jobs on your application and your record turns up nine, the safety professional at the carrier you applied to won’t be impressed with your honesty. This is especially true if the jobs you didn’t list report derogatory information. Even if you only attended orientation and never went to work for the company, list it. Driving records are another area of scrutiny. If moving violations show up on your record that you didn’t report, it could keep you from getting hired. There are sometimes legitimate reasons for not reporting a citation, such as tickets you thought were old enough to have fallen off the record, or violations that were set aside through a court-sponsored adjudication program, such as defensive driving school. By making sure you know what will be reported, you can avoid embarrassing explanations later. If you’ve moved to a different state in the past few years, you should have a driver’s license number for each state. If you’re still driving on a CDL from your old state, get it changed. The law gives you 90 days to do so. Some carriers won’t make a hire unless the state on your application and your CDL match. Situations such as these are all too common among trucking applicants. There simply isn’t a good reason for the information on your application to be different from that in your record. The good news is that you have access to most of the same reporting information that prospective carriers do. However, that only helps if you take the initiative to order the reports and read through them, before you apply. Always order your Motor Vehicle Report, sometimes called a driver’s abstract, from the agency that issued your CDL. It can be hard to remember how long ago you received a citation or whether it remains on your record. Don’t guess — this is info you should know. If a violation falls within the period requested on the application, be sure to list it. The “DAC Report” is used by many carriers to obtain drivers’ employment history. There are other services that provide similar information, but the DAC Employment History issued by HireRight is currently the most popular. Carriers that order this report usually also report your information once you leave the company. The report can list accidents or incidents that occurred while a company vehicle was in your possession, even if they were not reported to the police. Some carriers report accidents, and some report every instance where money was spent, such as a broken mirror or needing a tow truck to get unstuck. In this report, carriers can report if your performance was satisfactory — or not — without leaving details. They can also report the circumstances of your leaving the carrier, noting such things as “truck left in unauthorized location” if you didn’t return their truck to a specified terminal, or “fraudulent use of funds” if you advanced cash on your fuel card before quitting. Some carriers are meticulous about what goes in your report. Unfortunately, some may leave the task to a disgruntled safety clerk who may have an ax to grind. Regulations give you the option to contest anything in your report or to have your rebuttal statement included with the information provided. Rebut with facts, however, not emotional outbursts. For example, you could contest an “unauthorized equipment location” with something like “instructed by dispatcher John Doe to leave truck at…” In any case, it’s best to review your record and make your case before you start applying for another job. You can get one for free by calling 866-521-6995, or online at hireright.com/applicant-assistance/answers/requesting-a-copy-of-your-background-report-file. There are two reports from the Federal Motor Carrier Safety Administration (FMCSA) that you’ll need. The Pre-Employment Screening (PSP) report is important because it contains information that can catch you unawares. For example, if you were issued a citation in conjunction with an inspection, that citation may still be listed on your record — even if you were found to be not guilty or the charge was dismissed. Some carriers use a point system for PSP violations to determine how much risk there might be in hiring you. Further, if you worked for a carrier briefly — so briefly that you didn’t include it on your job application — any inspections done will result in that carrier showing up on your PSP report. The PSP report is easy to obtain. Simply go to psp.fmcsa.dot.gov/psp/public to order a copy of yours. There is a small fee, but it’s worth it. Since January 2020, carriers are required to check with the FMCSA Drug & Alcohol Clearinghouse for all new hires. Carriers, MROs and others are required to report any positive testing results, refusals to test and other information to the Clearinghouse. Before January 2020, carriers usually had to contact each of an applicant’s former employers individually to get this information. That’s still the way it’s done for any drug or alcohol testing done prior to the effective date. To obtain information from your Clearinghouse file, you must give your consent. That consent must be given electronically, online at clearinghouse.fmcsa.dot.gov. By making sure you know what your record says about you, it’s easier to navigate the sometimes complex hiring process at the carrier you want to work for.

Driving into the new year: Conditions into 2022 are good, but trucks are expensive and hard to find

Cliff Abbott - December 27, 2021

Following the onset of the COVID-19 pandemic and the resulting social and economic turmoil of 2020, 2021 was supposed to be a “normal” year for business. It wasn’t. The year started with positive news, including people getting vaccinated and the economy roaring back from the COVID-induced recession. But shortages of parts and materials, especially semiconductors, held back production of trucks, trailers and freight. The workforce that left their jobs due to the pandemic returned much more slowly than expected, causing labor shortages around the world. So, with 2022 looming on the horizon, what’s in store for trucking, especially for single truck and small fleet owners? That’s a question that trucking executives from carriers both large and small are trying to answer. Today, container ships sit idle off both U.S. coasts, especially the ports of Los Angeles and Long Beach, California, where 40% of the nation’s imports are unloaded and sent on to their final destinations. While the headlines point to supply-chain constraints, what one carrier considers a problem can easily be a blessing to another. Consider those container ships, for example. One reason they’re waiting to unload is the massive amount of freight being brought in. During the pandemic, warehouses were emptied to keep store shelves stocked. The products being delivered today were ordered to replenish those depleted inventories while still making products available at retailers. Another reason the container issue is good for trucking is that railroads aren’t able to haul all those containers, leaving a percentage of them available to trucking. Some containers are unloaded at cross-dock facilities, with the freight reloaded into dry van or refrigerated trailers. Domestic industries are producing at high levels, too, although the inability to obtain needed parts is keeping them from maximum production. The end result is that freight is plentiful, and the rates to haul it remain near record levels. When freight is this good, carriers generally increase the size of their fleets to take advantage of the revenue opportunities. This time, however, increasing fleet size isn’t so easy. Production of new trucks, hampered by parts availability, is so far behind schedule that a new truck ordered today won’t be delivered for more than a year. Prices are sky high, both for new and used trucks. Carriers are also reporting increased difficulty finding drivers. Many companies are increasing pay and offering bonuses to attract new drivers. All of this begs the question: If carriers can’t buy enough trucks or hire enough drivers, who hauls all that available freight? If you own a truck, it could be you. If you’re running under your own authority, spot rates have been at or near record levels for months, and are expected to remain so. If you prefer to lease your equipment to a carrier in an independent-contractor arrangement, you may be able to find more cents per mile from carriers that are turning to owner-operators to foster growth of their fleets. Conditions for profitable operation are expected to last well into 2022, and possibly even longer. Another benefit of plentiful freight is the ability to choose your lanes. There’s less competition than usual, so it’s easier to find longer hauls or hauls into desirable areas If you’re thinking about purchasing a truck, however, expect that it will be hard to find — and you’ll pay more. If you already own a truck, take good care of it. You might be stuck with it for a while. Two major negatives for a trucking business are fuel prices and inflation. Prices for food and many other products have been on the rise. Those prices will remain high, or they might go back down as the economy recovers, depending on which economist you’re following today. It will definitely cost more to purchase a truck, and that holds true for parts and repairs, too. Another potential downfall of inflation is interest rates. Inflation often results in an increase in interest rates as the government attempts to keep rising wages and prices under control. If you’re thinking about purchasing a truck on credit, watch for interest rate increases. In addition, diesel fuel prices have risen to their highest point since October 2014 and aren’t expected to decline any time soon. Demand for oil has increased significantly as the global economy returns to normal. In many cases, fuel surcharges make up for most or all of the increased fuel costs, but truck owners must be diligent about making sure total compensation covers the fuel cost. It’s important to note that trucking is a cyclical business. When there aren’t enough trucks to haul all the freight, rates go up and more trucks are sold. At some point, the balance tips the other way and there are too many trucks. That condition drives rates downward. It’ll happen this time, too, but since carriers can’t buy all the new trucks they want, the current conditions should last a while longer. Even the best of conditions don’t guarantee success, however. It’s always a good idea to arm yourself with the latest industry news and information. Industry publications like The Trucker (thetrucker.com) are a good place to start. Larger carriers often use industry analysts to provide more detailed information. Firms like ACT Research (actresearch.net), FTR Intel (ftrintel.com) and Cass Information Systems (cassinfo.com) offer in-depth analysis, but charge their clients for the information. All of them, however, offer free email newsletters and blogs that can help any trucking business owner keep up with current conditions — and, of course, The Trucker works to keep its readers apprised of information provided by these services. Load boards like DAT (dat.com) and Truckstop.com offer general pricing trends and other information. If you subscribe to these or other load boards, you’ll be able to get a feel for freight availability and rates in different parts of the country. The coming year looks to be a good one for truck and small fleet owners. It’s important to learn as much as possible about the freight market, and budget carefully against the day when conditions turn downward. Owners who manage their business carefully, including keeping debt under control, can see success in the coming year.

J.B. Hunt awards millions in appreciation bonuses to frontline workers

The Trucker News Staff - December 21, 2021

LOWELL, Ark. — After celebrating their 60th anniversary in October, J.B. Hunt Transport Inc. announced on Dec. 17 that they are providing nearly $10 million in appreciation bonuses to company drivers, maintenance technicians and full-time hourly employees. “This year, our drivers and frontline employees have gone the extra mile to honor our commitments and meet the needs of customers,” said John Roberts, president and CEO of J.B. Hunt. “We wanted to express our gratitude for their dedication to making J.B. Hunt the industry leader it is today.” This isn’t the only bonus money the company has doled out this year. In October, J.B. Hunt recognized 116 drivers for achieving two, three, four and five million miles driven without a preventable accident, awarding more than $1.6 million in safe driver bonuses.

Out with the old: Plan any adjustments to your personal tax liability before the end of the year

Cliff Abbott - December 20, 2021

The final two weeks of the year can be a joyful time filled with Christmas cheer, creating new memories with family, and making plans for the new year. If you own a trucking business, it’s also time to wrap up the current year and prepare for the next. One of the most important things to handle is your year-end tax preparation. You’ll need to pay income tax on your profits, of course — but keep in mind that profit is what’s left over after you subtract business expenses from your revenue. Any money you spend on your business before the year ends will reduce the profit you’ll owe taxes on. A good example is the purchase of new tires. A set of steer tires, mounted and balanced, can cost $1,000 or more. Make the purchase before Jan. 1, and you can deduct the cost from this year’s taxes. But first … do you NEED to reduce this year’s taxes? To answer this, you need to know how your business is performing. If you had a great 2021 and expect your profits to be high, you’ll want to claim as many business expenses as you can. On the other hand, if 2021 was a rough one and you expect little to no profit (or even a loss), your income tax liability for the year needs to be low. You might choose to hold off on any large expenses so they can count against next year’s tax liability. Of course, a professional accountant or tax preparer can help you make sound business decisions. Dennis Bridges of eTruckerTax shared some advice about spending. “If you are considering the purchase of a new or replacement tractor or trailer or other major equipment, do your best to at least get it under contract by Dec. 31,” he advised. One reason for adhering to this time frame is depreciation. “Current liberal depreciation rules allow an owner-operator to deduct up to the full cost of heavy equipment,” he explained. “So, if you had a very good year and you’ll have a high net income, you and your tax preparer can elect to deduct up to the full purchase price of your new equipment.” Bridges points out that the purchase of used equipment qualifies, too — and it doesn’t matter how much of the purchase price you finance. The cost is what matters, not how long it takes you to pay for it. Smaller purchases can be worth making too, according to Bridges. “Anything you purchase on a credit card can also be fully deducted for the current calendar year,” he explained. “Even purchases you were planning for February or March can be deducted if you go ahead and put them on your card this year before Dec. 31.” He suggests buying items such as tires, office furniture, computers or even having heavy maintenance work done. You can also set up an IRA or other retirement account to prepare for the future. “It’s never too early OR too late to start saving for retirement,” Bridges said. “And a plan such as a SEP-IRA or single-owner 401k allow you to contribute 25% of your net income or W-2 earnings, up to $58,000 annually for 2021.” Keep in mind that many retirement plans have penalties for early withdrawal of funds, so plan to leave your investment alone if you can. A review of your personal financial records, and your spouse’s, if applicable, could reveal more business-related expenses you can claim. Don’t forget that mileage on your personal vehicle is deductible if it’s used for business purposes. Trips to obtain parts or visit tax offices (or your tax preparer) are deductible — but even trips to the grocery store or a department store can be deducted if you bought items for the business. The folks at eTruckerTax offer a downloadable checklist to make the job of providing information to your tax preparer easier. Included is a list of items you may have purchased but didn’t know you could deduct. Those air fresheners you purchased are deductible. So is the pillow you bought for the bunk, and the duct tape in the side box. Don’t forget, face masks are also deductible if they’re used for business. The end of the year is also a good time to consider the entity you have set your business up under. Many truckers file as a sole proprietor. “Depending upon your situation and your income, it could make sense for you to consider switching to an LLC, which can be easily converted to an S-Corporation for significant tax savings — again, depending upon your current income picture,” Bridges explained. Consider, too, your tax liability. “Do you typically owe a bunch at tax time?” Bridges asked. “Start making at least some amount of estimated payments, or increase your withholding if you’re on a W-2.” He explained that you can even make monthly estimated tax payments if you want, allowing you to contribute more during months of high revenues so your total bill the following April is reduced. Bridges also had some advice for truckers who aren’t sure if they’re counting all their expenses or are having difficulty keeping up with all of them. “Evaluate your record-keeping system, or ask your tax professional how to better capture expenses that you’re losing out on,” he suggested. Of course, Bridges has one additional piece of advice that he hopes drivers will follow — and that’s to use the services of a tax professional. Operating a trucking business is hard work, made harder by the need to keep up with tax laws and obligations. By carefully reviewing your records and your practices at year’s end, you may find ways to decrease your tax liability while increasing your take-home dollars. You just might reduce your stress levels, too.

Looking up: Plentiful freight, high rates keep trucking conditions favorable

Cliff Abbott - December 17, 2021

There was more freight to haul in October and the rates to haul it rose higher, according to industry sources. The American Trucking Associations (ATA) reported that its seasonally adjusted For-Hire Truck Tonnage Index rose 0.4% over the September index, marking the third consecutive month of growth. “The combination of solid retail sales, inventory rebuilding and generally higher factory output offset some areas of softer freight growth, like home construction,” said ATA Chief Economist Bob Costello. “Economic growth remains on solid footing, which is good for truck freight volumes going forward.” Compared with October 2020, the ATA index rose 1.8%. For the year to date, tonnage is up slightly, just 0.1% compared with the first 10 months of 2020. ATA’s index is calculated based on surveys from its membership and represents primarily freight hauled at contract rates. ACT Research reported that freight volumes were down slightly for the month but that the demand for trucks to haul available freight remains strong. “While the pandemic continues to cast uncertainty, the freight volume outlook remains positive,” said Tim Denoyer, vice president and senior analyst at ACT Research in the report. “In spite of the supply-chain constraints, retailers have managed to stock up ahead of the holidays.” Denoyer also noted that the “consumer balance sheet is strong, and massive restocking demand remains ahead.” The ACT report also calculates a Driver Availability Index that showed some increased driver availability in October. One reason, Denoyer said, was the news that most fleets will be exempt from proposed federal rules mandating vaccination against COVID-19. “The large fleets who train the vast majority of the industry’s drivers would be impacted by the mandate,” Denoyer said. If it’s true that more drivers are becoming available to hire, freight rates could be impacted. That’s because the supply of new trucks and trailers is still constrained by supply issues. There may be more drivers, but there won’t be more trucks. “We continue to see a slower-than-normal rebalancing in U.S. trucking markets, featuring record rate increases,” Denoyer said regarding the issue of tight capacity, where trucks are in high demand to haul available freight. “With some structural driver issues likely to outlast the pandemic and a generally positive freight outlook, we do not expect the market to loosen quickly,” he added. The Cass Freight Index, compiled by Cass Information Systems reported that its shipments index rose 2.8% in October. The index was 0.8% higher than October 2020. The Cass Indexes include freight from multiple modes of transportation, including trucking, rail, ship, pipeline and air. The Cass report, issued Nov. 15, stated: “Freight volumes remain capacity-constrained, as shown by declining rail volumes and the ongoing backlog of containerships at anchor waiting to unload, but the 2.9% month-over-month improvement shows a modest rebound as restocking demand remained elevated.” Cass also monitors freight expenditures, comparing amounts spent on shipping from month to month and year over year. Per the Cass Index for Expenditures, cash spent on shipping rose 3.9% in October over September. The October index was a whopping 37% higher than October of 2020. Since freight levels have not increased at that torrid pace, the increased expenditures are being attributed to rate increases. The Cass report states that “normal seasonality implies double-digit increases through most of the first half of 2022.” While freight rates continue to climb across the board, many owner-operators are especially interested in spot rates. A joint survey conducted by Bloomberg Intelligence and Truckstop.com predicts robust pricing into 2022. “The survey data shows what has likely become the tightest trucking market in a generation and looks poised to keep supporting spot rates into 2022,” said Lee Klaskow, senior freight transportation and logistics analyst at Bloomberg Intelligence. DAT Freight & Analytics reported a 2% rise in average spot rates in October over September numbers, bringing spot rates to an all-time high. “Congested ports, intermodal yards and warehouses acted as a drag on the number of loads moved last month,” said Ken Adamo, chief of analytics at DAT Freight & Analytics. “As a result, retailers and online sellers took on higher truckload prices in order to make sure their freight is positioned for success for the November and December shopping period.” DAT reported that the national average spot rate (including fuel surcharge) for van freight rose to $2.87 per mile in October, the fifth consecutive month of increase. Compared to October 2020, the average is up 47 cents. Reefer and flatbed spot rates, according to DAT, averaged over $3 per mile for the sixth consecutive month. According to DAT, load postings fell 3.3% in October while truck postings rose, an indication that capacity is expanding. There’s still a lot of room to expand, however. For example, there were 5.6 available loads for every available van truck posted, a ratio that provides plenty of options for equipment owners and portends the high rates will continue awhile longer. In comparison, in October 2020, the ratio was 4.3 loads per truck, and in October 2019, the ratio was 1.7 loads per truck. If there’s a fly in the ointment, it’s that inflation is now at a 30-year high. In the Nov. 22 “Monday Morning Coffee” blog published by FTR Intel, writer Steve Graham explained, “It is important to remember that retail sales are measured in nominal terms. Although the total numbers look impressive, the consumer is getting a lot less ‘bank-for-the-buck.’” What he means is that, due to inflation, increased spending doesn’t mean more goods being sold or more shipments for the trucking industry. That’s because consumers are paying more for the same goods and services. “In other words, spending is up but the impact is muted,” Graham wrote. One example is the cost of diesel fuel. A portion of the increased rates goes to fuel purchases. Fuel prices are up $1.22 per gallon from one year ago, according to the latest report from the Energy Information Administration. Other costs, both business and personal, are rising, too. Still, favorable conditions for the trucking industry should be around for at least a few more months.

Hudson Capital to merge with Freight App, Inc.

The Trucker News Staff - December 15, 2021

NEW YORK — Hudson Capital Inc. has announced a merger with Freight App, Inc. (Fr8App), a technology company based around transportation logistics. The sum of the transaction wasn’t disclosed. Hudson said in a Tuesday news release that Fr8App would become a wholly-owned subsidiary of the company. “Fr8App is a leader in transportation technology with a focus on US-Mexico cross-border shipping that provides compelling solutions to carrier and shipper partners,” said Warren Wang, chairman and CEO of Hudson Capital. “Over the past year, Fr8App has grown its market leading solution set, broadened its shipper relationships, expanded its carrier base and greatly improved the company’s financial performance. Based on the significant growth in North American logistics market, and for Fr8App specifically, we are excited to continue supporting Fr8App and set the stage for the next phase in its evolution.” Javier Selgas, CEO of Fr8App, said, “During 2021, we achieved many operational and financial milestones. We are excited to enjoy the privileges of being part of a public company and improve our position to capitalize on numerous growth opportunities.” Fr8App uses its proprietary technology platform to connect carriers and shippers, offering live pricing and real-time tracking. Incorporated in 2014, Hudson Capital Inc., formerly known as China Internet Nationwide Financial Services Inc., began business by providing commercial payment advisory, intermediary bank loan advisory and international corporate financing advisory services to small and medium size companies.

Central Freight shuttering operations this month

The Trucker News Staff - December 12, 2021

WACO, Texas — Citing steep operating losses that could not be overcome, executives with Waco, Texas-based Central Freight Lines announced Sunday that the company will close by the end of December. The closure means that 2,100 employees at the less than truckload carrier (LTL) will be jobless right at Christmastime. New shipments will stop Monday and all current orders are expected to be completed by Dec. 20, according to a news release. “We make this announcement with a heavy heart and extreme regret that the company cannot continue after nearly 100 years in operation,” the news release stated. “We would like to thank our outstanding workforce for persevering and for professionally completing the wind-down while supporting each other. Additionally, we thank our customers, vendors, equipment providers, and other stakeholders for their loyalty and support.” The news release further stated that the company “explored all available options to keep operations going. However, operating losses sapped all remaining sources of liquidity, and the company’s liabilities far exceed its assets, all of which are subject to liens in favor of multiple creditors.” Company officials said that “despite diligent efforts,” Central “was unable to gain commitments to fund ongoing operations, find a buyer of the entire business, or fund a Chapter 11 reorganization. Given its limited remaining resources, the company concluded that the best alternative was a safe and orderly wind-down. As we complete the wind-down process, our primary goal will be to offer the smoothest possible transition for all stakeholders while maximizing the amount available to apply toward the Company’s obligations.” Central Freight is in negotiations to sell a substantial portion of its equipment. Additionally, Central Freight is coordinating with other regional LTL carriers to afford its employees opportunities to apply for other LTL jobs in their area. Discussions are ongoing and no purchase of assets or offer of employment is guaranteed. Central Freight Lines was founded in 1925 in Waco by W.W. “Woody” Callan Sr., who bought a Model T and drove it from Waco to Dallas to pick up some goods for a Waco merchant. The company was founded as Central Forwarding and Warehouse company. Through the years, the company grew to become one of the nation’s largest LTL carriers.

Knight-Swift acquires Midwest Motor Express

The Trucker News Staff - December 7, 2021

PHOENIX — Knight-Swift transportation announced Monday it has purchased Midwest Motor Express (MME) and Midnite Express Inc. in a $150 million cash transaction. Founded more than 100 years ago, MME provides less-than-truckload (LTL), full truckload and specialized and transportation service to the upper midwestern and great northwestern regions of the United States. According to a Knight-Swift news release, “the MME regional footprint complements our current southeastern and midwestern LTL presence alongside our AAA Cooper Transportation (\ACT) brand, which together cover over half of the United States. The MME acquisition reflects progress on our ongoing commitment to building a nationwide LTL footprint, leading to the further diversification of our revenue streams.” The news release further stated that “on a longer-term basis, we have identified potential areas of revenue and cost synergies that are expected to lead to growth and margin expansion consistent with our return-on-investment targets while preserving MME’s brand, locations, people and culture.” Knight-Swift CEO Dave Jackson said he is excited to welcome MME to the Knight-Swift organization. “MME is our next step toward a nationwide LTL network,” he said. “While preserving and supporting MME’s identity and culture, we expect to bring many synergies from Knight-Swift. MME and ACT have minimal regional overlap, and we expect they will be a benefit to one another.” Marlin Kling, president and CEO of MME, said: “We believe that combining our company with North America’s truckload industry leader, Knight-Swift, and being part of building the next nationwide LTL network is an exciting development for MME and its employees. We look forward to achieving synergies, sharing best practices, and creating value for all Knight-Swift stakeholders.”

TFI International buys D&D Sexton

The Trucker News Staff - December 1, 2021

MONTREAL – TFI International Inc., a North American transportation and logistics industry, has announced its purchase of Carthage, Missouri-based D&D Sexton. According to a TFI news release issued on Nov. 29, “D&D has been a family-owned business for more than 40 years, specializing in refrigerated transportation and serving a long-standing customer base with both long-haul over-the-road services as well as local and shuttle operations.” D&D has more than 150 company drivers and owner operators and close to 40 non-driving employees. Operating more than 120 tractors and nearly 400 refrigerated and dry van trailers, D&D generates annualized revenues in excess of $25 million. The acquired business will operate within TFI International’s CFI group of companies. Terms of the transaction were not disclosed. “D&D is an excellent strategic fit with the organization, culture and business model of our CFI operating company, adding strategic capacity and valuable, longstanding customer relationships to its temperature-controlled business,” said Alain Bédard, chairman, president and CEO of TFI International. “In addition to an overlapping refrigerated freight network, D&D brings significant experience in local and shuttle operations. We see multiple near-term opportunities around costs, routes and pricing to enhance profitability, as well as longer-term opportunities to optimize equipment and the capacity network design, taking D&D to the next level of excellence. We extend our warmest welcome to the entire D&D team and look forward to their many upcoming contributions to TFI International’s continued growth.”

Werner Enterprises acquires NEHDS Logistics

The Trucker News Staff - December 1, 2021

OMAHA, Neb.,— Werner Enterprises, Inc., one of the nation’s largest transportation and logistics companies, has announced it has signed a definitive agreement and has closed on the acquisition of Monroe, Connecticut-based NEHDS Logistics, LLC for $64 million. That includes a $4 million earnout, according to a Werner news release. NEHDS operates a fleet of over 400 delivery trucks primarily in the Northeast and Midwest U.S. corridors. The company delivers primarily big and bulky products using two-person delivery teams performing residential and commercial deliveries through a network of 19 cross dock, warehouse and customer facilities. “The addition of the NEHDS operations, management team, talented staff and strong customer relationships to the Werner family represents a significant step forward in our Final Mile delivery program. The combination of award winning service that NEHDS provides to its clients, along with the comprehensive portfolio of trucking capability, final mile logistics services and technology will bring the Werner and NEHDS customer base many advantages,” said Derek Leathers, Werner’s chairman, president and chief executive officer. Leathers further stated that NEHDS’s skilled drivers, operations team, independent contractors and facilities network “strengthen our big and bulky products delivery offering by adding asset and employee-based operations with experience in complex deliveries to our already established national network of independent contractor agent locations. We expect this transaction to be accretive in 2022 and anticipate cost synergies in several areas of the business.” The NEHDS leadership team, drivers, non-driver associates and independent contractors will remain with the business, and NEHDS will be rebranded into Werner Final Mile. Leathers continued, “Both companies share a passion for valuing its professional drivers, associates and customers. We look forward to welcoming the NEHDS team and working together to maintain and grow the excellent relationships with current customers, independent contractors, employee drivers and office associates. We are excited at the opportunity to create additional value for new and existing customers. We remain committed to profitably growing our Logistics portfolio.” Gerry Burdo, founder and president of NEHDS, said of the deal: “With a deep heritage of compassion for all associates, contractors and customers, we are grateful to unite with a likeminded company in Werner that has similar core values to NEHDS. Werner’s technology, logistical expertise and geographic footprint is extremely attractive in partnering together. I am personally grateful for the opportunity to join the Werner team along with our entire management team, associates and contractors.” Werner financed the transaction through a combination of cash on hand and existing credit facilities. Beginning in fourth quarter 2021, NEHDS financial results will be included in the Werner Logistics segment.