TheTrucker.com

Former transportation secretary Chao joins board of directors at Hyliion

AUSTIN, Texas — Former U.S. Secretary of Transportation Elaine Chao is joining the board of directors for Hyliion Holdings Corp., the company announced Aug. 24. Hyliion specializes in creating electric powertrains for Class 8 trucks as well as for passenger cars. “Elaine Chao has had an incredibly distinguished career promoting innovation and American excellence, and we are fortunate to have her join our board,” said Thomas Healy, founder and CEO of Hyliion. “She brings a wealth of knowledge and experience from both a transportation and competitiveness viewpoint that will support Hyliion as we continue to move along our path to commercialization and work toward our vision of a global net-carbon-negative commercial trucking industry.” Chao, who served as the nation’s secretary of transportation from January 2017 to January 2021, has also served as president and CEO of United Way of America and as head of the Peace Corps, as well as a banker with Citicorp and Bank of America. She has also served on a number of Fortune 500 public boards, and now serves on the board of Kroger Co.

Continued shortage of critical parts: Difficulty obtaining components hampers Class 8 sales

After a June increase, sales of Class 8 trucks on the U.S. market dropped sharply in July to the lowest level since February, according to data received from ACT Research. In July, 17,324 Class 8 trucks were sold, less than two-thirds the number sold in the same month of pre-pandemic 2019. July sales were down 14.9% from June but up 17% from July 2020. Of the 17,324 units sold, 12,845 (74.1%) were road trucks equipped with fifth wheels for pulling trailers. The remaining 25.1% were vocational trucks destined for dump, trash or other purposes. Sales numbers were only a part of the Class 8 story in July. A better picture of the market might be obtained from build rates, backlogs and inventories. “The OEMs are just having such a hard time getting vehicles produced and vehicles to market,” said Kenny Vieth, president and senior analyst for ACT. “The retail sales numbers are somewhat reflected in production, but the sales numbers are actually good, relative to the production.” Vieth explained that the U.S. portion of truck production was 12,600 units. “We’d have to go back to February 2017 to find a lower non-COVID impacted production number,” he noted. Production has been stymied for months by a lack of critical parts and supplies, but which are the hardest to come by? “I think the answer is everything, but specifically, it’s coming down to semiconductors,” Vieth said. “In the first half of the year, the OEMs were able to cannibalize the aftermarket parts stream to find some additional components. I think those supplies have been largely consumed at this point.” Because vehicle manufacturers use so many semiconductors, they may have been able to use their buying power to corral supplies of chips still on the market, but that supply is dwindling. When production is down, OEMs can compensate by selling trucks that are already built and sitting in inventory at dealers and other locations. Some of those are built specifically for certain applications and may not be exactly what buyers are looking for — but they sell when nothing else is available. At this point, however, inventories are too low to provide much of a boost to sales numbers. In July, according to ACT, the U.S. inventory was down to 31,900 trucks. “December 2013 was the last time we saw a U.S. Class 8 inventory number as low as July’s,” Vieth said. “The problem, of course, is that the industry has been living off of inventory somewhat, but that’s kind of running out as an option.” While an inventory of 31,900 trucks may seem like plenty, the majority of those trucks aren’t available to be sold. Many of them are in the dealer prep stage, already pledged to a buyer but not yet turned over. Others are vocational trucks waiting for installation of wet kits, dump, trash or concrete bodies before final delivery. They count as inventory, but they aren’t available. Trucks that are available may have unpopular specs that are hard to move. For example, a truck designed for the logging industry might have a heavy double frame, large wheels and a big, fuel-consuming engine, specs not in demand for over-the-road use. “If you’ve got a truck on a dealer lot that’s been sitting there for more than two months, you know it has some really weird specs,” Vieth remarked. The backlog for new Class 8 trucks grew larger in July. At current build rates, it would take 18 months to build the 229,000 trucks currently on order on the North American market. A year ago, that backlog sat at a mere 80,000 trucks. Those thinking of turning to the used truck market will likely be disappointed. Inventories are low in that area, due to both buyers looking for equipment they can’t find on the new truck market and a lack of trades from buyers who can’t get new trucks delivered fast enough. Used trucks, when available, are selling for premium prices. Labor is an issue for truck manufacturers, too. A labor strike at Volvo’s New River Valley plant in Dublin, Virginia, couldn’t have helped production, but most of the labor problems faced by the OEMs aren’t happening on the assembly lines. Suppliers are having difficulty getting enough workers. “The lower you go on the supply chain, pay becomes an issue as well,” said Vieth. “And you also add extended unemployment benefits on top of COVID, and workers are hard to come by.” The situation isn’t likely to change any time soon. “It’s hard to see a short-term rebound,” Vieth remarked. “Though I will say, our understanding is there’s a lot of red-tagged trucks, trucks that are sitting around factories, waiting for semiconductors or an instrument cluster or window actuators.” Numbers aren’t available, but it makes sense that OEMs would build trucks that are mostly complete and can be quickly finished and sold when missing parts become available. Individual OEMs had mixed results in July, according to data received from Wards Intelligence. Volvo, impacted by the UAW strike, saw the largest drop in sales, moving only 888 Class 8 units. That number represents a 39.7% decline from June sales of 1,472. It was the company’s worst sales month since January 2012, and the worst July since the “Great Recession” of 2009. Mack sales of 1,252 were down 26.5% from June sales, while Freightliner sales of 5,845 represented a decline of 21.3%. International sales of 2,633 dropped 13.8% from June’s 3,043. Peterbilt sales of 2,735 were down 4.1% in July, beating the industry average. Kenworth posted the only gain, selling 3,031 trucks, 10.5% more than in June. Freightliner holds 38.4% of the Class 8 market after the first seven months of 2021. Peterbilt is next with 15.4%, followed by sibling Kenworth with 14.6% of Class 8 sales. Together, the PACCAR twins hold 30% of the Class 8 market. International has sold 12.2% of the Class 8 trucks moved in the U.S. market, followed by Volvo at 9% and Mack with 7.8%. Western Star’s share of the market is 2.6%. Freight rates remain high, but finding trucks to haul it is an ongoing problem.

Dash cams for fleets: Even for small fleets, in-cab video provides safety, training options

One trucking truth is that the larger your business grows, the less direct control you’ll have over it. Some truck owners are content to remain one-truck outfits, reasoning that adding that second truck will mean having to depend on the actions of another person for at least half of the success of the business. Growing large enough to require a dispatcher or other support personnel adds even more layers of complexity. Here’s another trucking truth: No matter how much you trust a driver, once the truck leaves your sight, you can never be absolutely sure what’s happening with that vehicle. One solution most of the larger carriers, as well as many of the smaller ones, have turned to is in-cab video cameras. These systems record continuously, saving video segments when incidents are detected or when manually requested by the driver. The simplest of these is the dash camera. Typically, dash cams save video to an SD card in increments ranging from 30 seconds to several minutes. When the card is full, the device records over older video. When an incident is detected, that segment of segment is saved to a separate file that is will not be overwritten. If the driver manually saves a video segment in which an event isn’t detected, that goes to a separate file, too. Many of these cameras also record audio and can reveal unwanted driver behaviors, such as talking on a cellphone or a conversation with an unauthorized passenger. In addition, some cameras are equipped with GPS information that record location, speed and other factors. These cameras offer some protection in the event of an accident, but you’ll have to wait for the truck to return to home base before you can check the video. Depending on how long the driver is out, incidents that did not result in a saved event may be overwritten. Incidents such as tailgating or lane departure may or may not be recorded — and even if they were, you’ll need to watch (and listen to) many hours of video to find out. Another problem with dash cams is that most devices can display the video, allowing the driver to review and delete any video that might not be good for the boss to see. Still, these basic camera systems are better than nothing. Many small carriers, however, want more information about their trucks on the road and they don’t want to wait until the next time the truck is in the yard. Commercial video systems offer a wide variety of options that provide more information. Some systems offer more than one camera. Depending on the service, the owner can choose from forward-facing cameras that show what’s happening in front of the vehicle and add multiple camera systems that show what’s happening alongside and behind the truck, and even inside the cab. Driver-facing cameras are unpopular with many drivers, who consider them an invasion of privacy — but they offer one way of revealing unsafe activity in the cab, such as use of a handheld device. They can also reveal unintended behavior, such as the driver nodding off due to fatigue or other issues. Some systems are even equipped with bio-sensors that measure the driver’s head and eye positioning, issuing an audible warning if the driver is distracted or sleepy. Camera systems offer a variety of access methods, with some offering live access via a computer or smartphone. Some systems must be downloaded when the driver returns. This can be done wirelessly in some cases. Other systems offer online access of any saved events. Many of these systems allow the customer to set the parameters for saving video. For example, incidents of traveling over a set speed can be saved, as well as incidents of hard braking or swerving suddenly. Some of these video systems send alerts to the truck owner or another designated receiver, such as a fleet or safety manager, letting them know a reportable incident has taken place and providing a link to the video. This allows the owner or manager to quickly identify problems and address them with the driver. Many video systems that aren’t owned outright are licensed by subscription, so you’ll pay for the service each month that you use it. Some owners find the extra services provided, such as text or email alerts and video storage, are well worth the monthly expense. Video evidence can be used to provide safety training for drivers you want to keep, making them better, safer drivers. It can also be used to discipline or even discharge drivers who are too great of a safety risk. In the event of an accident, video can be used to exonerate both driver and owner, saving thousands of dollars in potential court awards as well as traffic convictions and increased insurance rates. Your insurance carrier may be able to recommend a video service, and might even offer a discount on your rates if you use one. Check with your carrier before you commit to such a service, as some systems may qualify for a discount while others don’t. Some owners turn to the Internet, a search for “vehicle video systems” brings up pages of options. When you talk with a provider, you’ll want to consider the services offered, what parameters you’ll be able to set, how you’ll access the video and, of course, the cost. You’ll also need to consider the impact on your driver group. If you go with a video system, you’ll need a plan to introduce it to your drivers, clearly explaining what the video will — and won’t — be used for. You’ll also need to put clear rules in place about drivers tampering with or obscuring the camera. It’s possible some drivers will refuse to drive trucks equipped with cameras, so you should be prepared for that scenario. Your growing trucking business is a big investment — and you face an even bigger exposure to risk as your trucks travel the highways. Video systems provide a level of supervision that wasn’t possible a generation ago. There’s nothing like having long-term drivers who have earned your complete trust, but for everyone else, video can be an attractive option.

The law of supply and demand: Good times continue for trucking, but could be slowing

Freight levels moderated in June, but only by a little, according to reports from several sources. Supply chain issues, like shortages of semiconductors (silicon chips) used in a variety of products and record prices for steel are responsible for some of the slowdown in shipments. The driver shortage is also being blamed. In the meantime, freight rates remained near record levels as the rising cost of diesel fuel raised both operating costs and fuel surcharge rates. The American Trucking Associations reported a 1.5% decrease in truckload volumes reported by its member carriers. Bob Costello, ATA’s chief economist, cited supply chain issues but also talked about the driver shortage in the organization’s monthly release. “Supply chain issues are likely putting some downward pressure on tonnage,” he said. “This index is dominated by contract freight, and the for-hire truckload carriers have seen their tractor counts fall because they are having difficulty finding qualified drivers. It is difficult to move more tonnage with less equipment, which is why we are seeing strong volumes in the spot market as shippers scramble to get loads moved.” The DAT Truckload Volume Index seemed to confirm Costello’s comments regarding the spot market. The country’s largest load board reported a June increase in freight volumes of 11% over May volumes. In June, shippers faced a supply-driven capacity crunch, according to Ken Adamo, chief of analytics at DAT. “While the number of trucks posted to the DAT load board network increased significantly in June, overall demand accelerated at a faster pace,” he said. “The typical seasonal decline in contract and spot rates from now to Thanksgiving looks less likely in 2021.” ACT Research also reported a decline in June freight volumes. “June’s Volume Index reading declined, but continues to represent a still-healthy level,” said Carter Vieth, research associate for ACT. Vieth mentioned “continuing lean U.S. inventories, increasing orders for durable goods and consumers enjoying record wealth and savings” as positives in the current economic cycle. The law of supply and demand is responsible for the positive market conditions faced by the trucking industry. With so many shutdowns and layoffs due to the pandemic, drivers left the industry in droves. As freight levels picked up, many of them returned to work, but not enough to fill all of the trucks needed to move available freight. The resulting capacity crunch helped raise spot freight rates to record levels with contract rates not far behind. Cass Information Systems (cassinfo.com) joined other analysts in reporting a June freight decline, citing a drop of 3.0% from June levels. “Our industry discussions suggest shipment volumes continue to be hindered by supply constraints, which range from driver and trailer shortages in TL (truckload) and LTL (less-than-truckload) to chassis shortages hampering intermodal capacity,” explained Tim Denoyer, senior analyst at ACT Research who writes for Cass. The Cass Index differs from the other sources in that it represents all modes of freight movement, including truck, rail, ship, intermodal, pipeline and air. All of the analysts reported very large freight increases over the corresponding month of June 2020, when the economy was beginning to rebound from the COVID-induced recession. The driver shortage isn’t expected to get better any time soon. The Federal Motor Carrier Safety Administration’s Drug and Alcohol Clearinghouse (FMCSA) has taken a large bite out of the available driver pool. As intended, the Clearinghouse has greatly increased the difficulty of finding another trucking job after testing positive for a controlled substance. Many drivers have simply chosen to leave the industry rather than go through return-to-work protocols. At a time when marijuana is being legalized in a growing number of jurisdictions, the substance continues to be responsible for more than half of all positive DOT drug screenings. There has been increasing support for removing Marijuana from controlled substance testing, but both the government and the trucking industry are against doing so in the absence of adequate field-testing to identify drivers who are under the influence. To help alleviate the driver shortage, the FMCSA is continuing a pilot program testing the safety of 18- to 21-year-old drivers, but results won’t be available for at least two years. Nearly every state issues CDLs to younger drivers. While they aren’t allowed to cross state lines, they have still racked up plenty of miles that can and should be used to evaluate their safety records. Obstacles or no, the trucking industry is losing drivers and is not attracting replacements fast enough. Most of the major carriers have announced driver pay increases, without obvious impact. Another factor that could impact freight rates is the rising cost of diesel fuel. The Energy Information Administration’s weekly national average price for the week of July 19 was $3.34 per gallon, the highest it has been since reaching $3.39 in October 2018. Two years ago, in July 2019, the price was $3.05; a year earlier it was $3.24. Fuel prices fluctuate with economic forces; however, inflationary pressures resulting from an over-stimulated economy could help push pricing higher. The Biden administration’s announced non-renewal of drilling permits on public lands as well as restrictions on fracking could add to long-term price increases. Finally, those supply constraints are likely to continue for at least the next few months. India, the world’s second-largest producer of steel, is still beset by a resurgence of COVID-19. Manufacturing is impacted both by slowdowns and by supplies of oxygen needed by steelmakers being redirected to hospital use for COVID victims. Semiconductor manufacturing is at full capacity and the demand still far outweighs the available supply. New plants are planned, but could take years to come on line. And — as if the world needed another problem — China is again making noises about “unifying” with Taiwan, where 90% of the world’s semiconductors are made. Despite the issues, the trucking market is a great place to be for now, and should remain so for at least the next few months. Rates are still high, and freight, although declining, is plentiful. If supply constraints ease up — and the driver shortage doesn’t — rates could see another positive surge. The good times are still rolling for the trucking industry.

WIT announces top woman-owned businesses in transportation for 2021

PLOVER, Wis. — The Women In Trucking Association (WIT) has recognized 17 companies on its list of 2021 Top Woman-Owned Businesses in Transportation. The list is designed to recognize women in leadership and encourage more women to become proactive leaders in their organizations — and even start their own businesses, according to Ellen Voie, president and CEO of WIT. Entrepreneurship is a viable means of economic self-sufficiency, and many women are choosing an enterprise connected to transportation to be part of their career aspirations, according to Brian Everett, publisher of WIT’s Redefining the Road magazine. Criteria used to identify qualified applicants include majority ownership by a woman, financial stability and growth, innovation and entrepreneurial spirit. Each company was nominated and chosen based on its business success and accomplishments, including those related to gender diversity. The list includes companies from a diverse range of business sectors in the commercial freight transportation marketplace, including motor carriers, third-party logistics companies and original equipment manufacturers (OEMs). Companies named to WIT’s 2021 Top Woman-Owned Businesses” list, along with the primary female business owners are: AGT Global Logistics (Angela Eliacostas) Aria Logistics (Arelis Gutierrez) Bennett Family of Companies (Marcia G. Taylor) Brenny Transportation (Joyce Brenny) Candor Expedite (Nicole Glenn) Conversion Interactive Agency (Kelley Walkup) Garner Trucking (Sherri Garner Brumbaugh) K & J Trucking (Michelle Koch, Sharon Koch Estate, Jessica Mitacek) Kenco (Jane Kennedy Greene) Knichel Logistics (Kristy Knichel) Powersource Transportation (Barb Bakos) Rihm Family Companies (Kari Rihm) S-2international (Jennifer Mead) Sunset Transportation (Lindsey Graves) Topel’s Towing Service/Topel Truck Center (Michelle Sukow) United Federal Logistics (Jennifer Behnke) Veriha Trucking (Karen Smerchek)

Technology on the road: Electronics make the job easier but can be less safe

Electronics have revolutionized modern vehicles. Today, drivers have access to more information than ever before, thanks to technologies such as GPS, Bluetooth, Wi-Fi and specialized phone apps. In fact, many drivers have multiple ways to access different forms of technology and can choose the method that is most safe and convenient. Perhaps the best example of this is GPS. Originally developed by the U.S. Department of Defense for military purposes, the Global Positioning System gradually became more accessible as the technology need to access it became cheaper. As the 21st century began, GPS became widely available for public use. Portable GPS units that mount to a vehicle’s dash or windshield became popular with drivers. In many cases, however, these units were quickly rendered obsolete as drivers chose phone and tablet mapping apps that provide the same information. At the same time, truck manufacturers were upgrading “information screens” on vehicle dashboards. Some of these contained similar GPS mapping programs, but also connected with the driver’s smartphone via Bluetooth to display phone programs on the larger screen. With so many options, every driver has access to GPS routing information these days, but there are some watchouts. First, make sure you can access the information in a safe manner. If your truck doesn’t have a dash display, devices are available to mount phones or tablets so they can be easily seen without the need to pick them up. Voice-recognition software, which comes with most phones, makes it easy to look up information, as well as respond to emails and texts, without taking your hands from the wheel. Second, never fully trust your GPS system without verifying the information it provides. Stories abound of drivers who were routed down roads that had low clearance or bridges with weight limits, and even of routings down roads that become dirt paths in mountainous terrain. It’s important to make sure the GPS programs you use contains truck-specific information. Some apps and programs allow you to enter vehicle dimensions. Some are made for recreational vehicles (RVs), but can work for trucks if the proper information is entered. There are also programs that integrate with GPS software and even with mapping programs such as Google Maps. It’s also important to make sure any GPS programs and units are updated regularly. Conditions can change overnight because of construction and other factors. Clearances can be reduced. For example, a 2-inch layer of new paving could raise the road surface enough to change a 13′ 7″ clearance to 13′ 5″. That’s enough to make a difference between a load clearing and hitting a bridge. No matter which mapping program or app you use, nothing can replace your eyes and ears. Always pay attention to warning signs and, when in doubt, don’t proceed until you’re sure it’s safe to do so. Another technological advance — one that isn’t popular among some drivers — is the electronic logging device (ELD). Use of these devices is now the “law of the land” for most drivers. Like the GPS system they depend on, ELDs come in a wide variety of options. Some are built into communications devices such as Omnitracs, while others have standalone units that are mounted within the vehicle. There are phone apps that serve this purpose, too. To meet the requirement of a connection to a vehicle’s electronic control module (ECM), phone apps usually come with a device that plugs into the vehicle’s diagnostic port, communicating with the phone via Bluetooth. Like GPS data, ELD information can be displayed on larger screens. To meet the requirement of being easily available to law-enforcement personnel, some logging apps can be displayed on the phone screen or tablet outside of the truck. Depending on the service used, an inspector may have to get into the truck, or information can be faxed or emailed to the inspector. No matter which system is used, the current and past seven days of duty status must be available to the inspector. The driver is required to carry instructions that explain how to access the information and can receive a citation if it isn’t produced on demand. Dash cameras are another item that many drivers regularly use. Video has proven to be valuable as evidence in insurance claims, especially when litigation is involved. After an incident, displaying the video to responding law enforcement can corroborate your version of events and save you from a citation. If you work for a carrier, video can help you avoid disciplinary action. Some drivers dislike video systems, especially those that have a driver-facing camera. Carrier-owned systems often have more than one camera and are often connected to the vehicle’s ECM. Many carriers install these cameras in their trucks for protection against frivolous lawsuits, as well as for driver training and disciplinary purposes. A key factor in video systems is this: Who owns the data? A driver who uses a personally owned dash camera owns both the camera and any video it saves. If the system is owned by the carrier, the driver may have no choice in whether the video is shown, what information accompanies the video and how the video is edited. Some drivers use a personal dash camera even if the carrier also uses a camera, just to make sure they can retain evidence in the event of litigation. Finally, it pays to become familiar with any electronic devices or programs before the truck is in motion. Drivers should know, for example, how to quickly reroute a trip if the planned route is blocked due to congestion or accident. Knowing how to save video so that the camera doesn’t overwrite it is important, as is knowing how to make, or correct, entries on an ELD — or how to explain to a DOT officer the process to access it. Trying to remember how to do these things while negotiating in heavy traffic can create a safety hazard. Becoming familiar with the technology built into your truck is vital, too. You should know how to operate lights, wipers, defroster, cruise-control and other features in your truck, especially if the truck is new to you. Technology has made doing the job of trucking (and day-to-day living) easier for everyone. Learning how and when to use it makes it safer, too.

Regulation process: Drivers have rights and responsibilities when new rules are made

Everyone knows the trucking industry is governed by government rules and regulations. Most drivers are familiar with a long list of acronyms representing federal agencies such as DOT, FMCSA, EPA, FHWA and so on. The Federal Register Agency List currently contains a total of 457 agencies and subagencies. What each agency does and how it creates, implements and enforces laws is a mystery to many — but it doesn’t have to be. It’s important that drivers understand their role in the rulemaking process and how to voice their opinions before rules that impact their work become effective. Agencies follow a prescribed process to enact rules and regulations, and every citizen should know how that process works. Without agencies, Congress would need to pass a new law for every new rule or regulation. By delegating some authority to agencies, the Senate and House of Representatives can focus their efforts on legislation that impacts the entire nation. Congress might not vote on rules issued by each agency, but they are involved just the same. The legislative branch of the government can (by vote) direct an agency to issue a specific rule or can impede a rule they don’t like by refusing to approve funding, or by passing legislation prohibiting implementation of the rule. The president can also direct an agency to take a specific action. The Federal Motor Carrier Safety Administration (FMCSA) is the agency that has the biggest impact on the day-to-day operation of most drivers, but the Federal Highway Administration (FHWA) and the Environmental Protection Agency (EPA), among others, also issue rules that impact trucking. Each agency is required to publish a “Regulatory Plan” each year and an “Agenda of Regulatory and Deregulatory Actions” twice a year. Together, these are often referred to as the “Unified Agenda.” Most of this information is published in the Federal Register. Any citizen can review these documents online to determine what progress has been made on current proposals and see what the agency plans to work on in the future. The Federal Register can be accessed at federalregister.gov. The visitor can click on links for current issues, proposed or final rules, and other information, or enter a specific topic, like “Hours of Service,” in the search box. By clicking on the “Sign Up” button, the user can choose to receive a daily email showing any action taken on rules from each agency. Those daily emails can be lengthy, but the agencies are listed in alphabetical order so that readers can scroll directly to the agencies they are interested in. For example, a driver might scroll directly to FHWA and then on to FMCSA. The rulemaking process is straightforward. The agency usually publishes an announcement that it has received a “Petition for Rulemaking” from a citizen or organization. When ready to move forward on a new rule or change to an existing one, the agency may publish an “Advanced Notice of Proposed Rulemaking” in the Federal Register. Either notification may ask for public comment, usually specifying a time period for commenting and several methods for submitting statements. Comments can be submitted online, by mail and, in some cases, in person, if a “listening session” is held. In most cases, the time period for comments is 30 to 60 days. Everyone has the opportunity to state their view, and those comments become a part of the rulemaking process. Many comments are published in the Federal Register. Unfortunately, while many proposed rules receive comments from advocacy groups and other organizations, individual drivers don’t often take advantage of their right to comment. Too often, those who are quick to criticize new regulations forego their chance to contribute to the process. Proposed rules are often revised or even withdrawn based on input received from the public. The president can review each proposed rule and gets an assist from another agency, the Office of Information and Regulatory Affairs (OIRA). Costs and benefits of new rules are considered. Those that require the public to provide information to the government are also reviewed by OIRA, including an estimate of the paperwork burden and other considerations. Based on the comments received, the agency can revise its proposed ruling, extend the comment period, schedule hearings or take other action. If the agency feels it has all the information it needs to make the ruling, a “Final Rule” is published in the Federal Register. An effective date is also published, usually at least 30 days in the future unless the agency can show good cause for the rule to be implemented sooner. Agencies can publish a Final Rule without first publishing a Proposed Rule, but only when there is good cause that the comment process would be “impractical, unnecessary or contrary to the public interest.” Doing so, however, provides opponents of the rule with a cause to take to the courts and could harm the final implementation of the rule. In some cases, agencies publish an “Interim Final Rule.” In this case, the rule goes into effect immediately, with the understanding that it can be revised or revoked based on public comments. New rules must be sent to members of Congress and the Government Accountability Office (GAO) before they become effective. If rules are considered “major,” at least 60 days must be allowed for review before the rule become effective. The House and Senate have the option of passing a “resolution of disapproval,” which is then signed (or vetoed) by the president. This is rarely done and has happened only once since 1996. Congress can also decide to hold hearings on the rule or withhold funding or they can simply pass a new law that supersedes the ruling. Agencies sometimes issue “Interpretive Rules” that help explain to the public how a rule applies, but these may not change the rule itself. Once a rule is issued, an individual or group may file suit to stop implementation. Courts determine if the agency has the authority to make the rule, was improperly issued or is unconstitutional. Truck drivers are governed by a long list of regulations. Knowing how they are made and each individual’s role in creating them is both a right and a responsibility.

Parts shortages, record material prices keep Class 8 truck sales ‘mushy’

Parts shortages and dwindling inventories are holding back what should be a robust new Class 8 truck market, according to Kenny Vieth, president and senior analyst at ACT Research. “The industry is still having just the hardest time building units,” he told The Trucker. “Inventories are super low. And so sales, at least on a seasonally adjusted basis, have really softened up.” According to ACT, 20,369 new Class 8 trucks were sold in June on the U.S. market. That’s an 8.6% improvement over May sales of 18,761 and a whopping 50.1% better than June 2020 sales of just 13,567. Last year, the market was just beginning to recover from its lowest point of 9,510 trucks moved in May. A better comparison might be the 25,607 Class 8 trucks sold in June 2019, when the backlog of orders was shrinking as assembly lines reached for maximum output. June 2021 sales trailed that figure by 5,238 (20.4%). June is typically a strong sales month for trucks, in part because it’s the final month of the second quarter. When profits are strong, carriers tend to invest in new equipment at the end of each quarter. Investments reduce the amount of profit that must be reported and the taxes that are paid on that profit. Vieth said inventories haven’t been this low in years. “I have to go back to June of 2017 to find a lower inventory number,” he said. Record prices for steel and other materials haven’t helped. Global shortages of plastics, parts and, especially, semiconductors are keeping production levels down, too. “All these supply chain constraints are just making it very difficult for the industry to shift into to another gear for production,” Vieth explained. “Semiconductors is the big one, because semiconductors go into so many different products used on a truck, like door actuators or instrument panel clusters,” he stressed. “There are silicon chips all over the place.” A single vehicle can use more than 100 semiconductor “chips” in parts as small as a turn-signal indicator up to the electronic control modules (ECMs) in engines and transmissions. Modern electronics-based safety equipment, such as collision avoidance, vehicle stabilization and lane departure, also require semiconductors. In a typical recession, some industries are able to amass large inventories of products while sales are down. When the recovery begins, products are available to get the process moving quickly. That didn’t happen with semiconductors during the COVID-19 recession because consumers continued to purchase items that use them while they were at home. Phones, televisions and other appliances that use the chips ate up stockpiled inventory. Estimates for declines in production of automobiles, a huge sector of the U.S. economy, range from a 1.5 million to upwards of 5 million, and truck builders are facing the same problems. If you’re thinking of ordering a new Class 8 truck, as 25,800 others did in June, plan on a long wait until delivery. The current backlog will take a year to build at current production rates. The impact of steel prices is also being felt. Data shows that 5,105 of the Class 8 tractors sold in June (about 25.1% of the total sold) were for the vocational market. The bodies these tractors will be fitted with, whether trash, dump, concrete or other, all require steel for construction. Those who are thinking of turning to the used truck market for relief aren’t likely to find answers. Used Class 8 volumes fell by 6% in June, according to ACT’s latest “State of the Industry, U.S. Classes 3-8 Used Trucks.” More telling is that, despite year-to-date numbers showing that 2021 sales are 23% higher than the same point in 2020, June actually registered a decrease of 12% from June 2020 numbers. While sales numbers were falling, the average price of a used truck rose by 5%. The ACT report states that on a year-to-date basis, average used truck prices are up by a whopping 38% while inventories have fallen drastically. Steve Tam, vice president and analyst at ACT, put it this way: “The simple law of supply and demand has created a scarcity situation, and there is no viable substitute to the venerable Class 8 truck. Hence, prices are through the roof, with no relief in sight.” Circling back to new trucks, Western Star showed the biggest month-over-month sales increase, according to data received from Wards Intelligence. The company sold 601 trucks in June compared to 447 in May for an increase of 34.5%. The biggest sales increase in terms of numbers rather than percentages, however, goes to International, which sold 3,043 new Class 8 trucks in June, an improvement of 766 (33.6%) over May sales of 2,277 and 76% better than sales of 1,729 in June 2020. Freightliner sales improved by 773 trucks to 7,426 for a gain of 11.6%. Kenworth and Peterbilt were the only two OEMs to register declines in sales for June. Kenworth’s 2,743 was down 6% from May sales of 2,919. Peterbilt sales declined by 2.8% to 2,851 from May sales of 2,933. Volvo’s 1,472 trucks sold in June bested May’s 1,413 by 4.2%, while Mack’s 1,704 was 10.3% better than May’s 1,545. For the first six months of 2021, 39% of new Class 8 trucks sold were Freightliners. That’s up from the 36.3% of the market they controlled in 2020. Kenworth’s 14.1% share of sales is down from the 15.3% they enjoyed last year, while Peterbilt’s 15.3% share has improved from last year’s 14.2%. International enjoys 11.7% of the new truck market compared to last year’s 12.6%. Volvo is next with 9.5%, down a little from last year’s 9.7%, and Mack’s 7.9% is down from last year’s 8.3%. Comparisons are difficult, however, considering the COVID-19 recession of last year and the parts shortages holding back production this year. The bottom line for 2021 is that if you want a new truck, you’ll probably have to order it, and the wait will be long. If you want a used truck, it’ll be hard to find, and the price will be high when (and if) you find it.

JB Hunt commits $5 million to fund children’s hospital in Northwest Arkansas

SPRINGDALE, Ark. — J.B. Hunt Transport Services Inc. has committed to $1 million annually for five years to support expansion at Arkansas Children’s Northwest campus (ACNW), at 2601 Gene George Blvd. in Springdale. Arkansas Children’s is the state’s only hospital dedicated to pediatrics care. The main campus is in Little Rock. This new $5 million commitment brings J.B. Hunt’s overall investment in the hospital’s Northwest campus to $10. In 2016, J.B. Hunt made a $5 million leadership gift in 2016 to support the construction of ACNW. “J.B. Hunt is proud to extend our support for Arkansas Children’s as it continues advancing pediatric health care in this region,” said John Roberts, president and CEO of J.B. Hunt. “The hope that these extremely talented, driven professionals bring to our community is very special, and helping Arkansas Children’s expand its services and capabilities will benefit the diverse needs of the Northwest Arkansas community.” J.B. Hunt’s $5 million gift marks the final culminating gift to the Arkansas Children’s Campaign for a Healthier Tomorrow, a $250 million campaign designed to support the promise of unprecedented child health for children in Arkansas. “The J.B. Hunt team has long been committed to Arkansas Children’s. There is a history of investing in community and health care. This new $5 million, five-year gift helps ensure Arkansas Children’s Northwest is right-sized to meet the community’s needs,” said Fred Scarborough, president of Arkansas Children’s Foundation. “Northwest Arkansas continues to grow at a rate that outpaces the rest of the state, and Arkansas Children’s Northwest is an integral part of our work to make Arkansas the safest, healthiest place to be a child.” J.B. Hunt has supported Arkansas Children’s for nearly four decades through annual employee giving campaigns and leadership gifts to support capital projects, programs and services, including the construction of the South Wing on the Arkansas Children’s Hospital campus, the purchase of an Angel One ground ambulance, and the construction of Arkansas Children’s Northwest.

Drivewyze launches e-inspection service in select states

DALLAS — In an effort to improve speed, efficiency and accuracy at weigh stations, Drivewyze has launched open enrollment for automated electronic inspections (e-inspections) at weigh stations in Maryland, Maine and Virginia. Software activation is free for Drivewyze PreClear customers and available through participating Drivewyze ELD partners. “This is the beginning of streamlining inspections, which is a major win for fleets and drivers, plus for those in law enforcement,” said Brian Heath, CEO and president of Drivewyze. “For those using our weigh station bypass service, it means in-station inspections no longer require drivers to manually submit their HOS files and inspectors can complete inspections in a matter of minutes versus the traditional 30- to 60-minute processing time at weigh stations. Our system automates traditional manual processes, and everyone benefits. It’s a major step forward in the modernization of roadside inspections.” According to Heath, Drivewyze e-inspections are an industry first and represent the power of an innovative ecosystem of ELD providers, public partnerships with leading enforcement agencies, and the desire of carriers to eliminate delays and improve their safety scores. While e-inspections are currently available in only three states, other states are expected to offer the service as their software is upgraded or enhanced to process e-inspections. “We’ve done testing and trials with major fleets and state inspection sites to prove the accuracy and efficiency of e-inspections,” Heath said. “We’ve found that a clean Level 3 inspection can be reduced from a 30-minute detention to mere minutes. That allows the driver and fleet to improve or maintain their safety score while logging more miles. It also frees the inspection officer from time-consuming manual data entry so they can concentrate efforts on trucks that truly do need inspecting.” Currently, drivers undergoing an in-station inspection must go through manual steps on an ELD to transfer their logs to the inspection site’s computer, including entering the officer’s inspector code. “This not only takes time; manual entry leads to input errors,” said Heath. “If the driver, for example, mistypes the officer’s inspector code and the logs can’t be transferred, it’s an HOS violation. Likewise, if a driver isn’t familiar with the ELD and doesn’t know how to transfer logs or locate the driver instruction sheet, the carrier can be dinged on their safety score. With the advent of e-inspections to automate HOS data transfer, problems sending logs to inspections sites are no longer an issue.” Here’s how an e-inspection works: The ELD automatically sends the driver’s logs to the roadside inspection site when an e-Inspection is started, eliminating manual transfer steps entirely. An officer conducting the inspection can view vehicle, carrier and driver-level information and has their inspection report form automatically pre-filled at the start of their inspection. The inspector evaluates the vehicle and driver, and decides if any further validation or investigation is required without having to manually search multiple systems to verify the Carrier, Vehicle, and Driver credentials. When the officer is satisfied, the inspection can be completed at the touch of a button, saving significant time and improving the accuracy of the inspection. “Drivers and law enforcement have tough jobs,” said Daniel Patterson, director of safety at Western Express, which participated in e-inspection trials. “Being able to efficiently transfer data to make inspections more seamless and a positive experience for both parties is very important to us. E-inspections allow us to achieve the goal of gathering more data and increasing the safety of our roadways. We are very excited for this program to expand throughout more states and increase the effectiveness of our partnership both with Drivewyze and with law enforcement agencies.”

Use available tools and resources to understand freight rates

Many drivers begin their trucking careers working for a carrier that pays by the mile. Some pay different rates for loaded and empty miles, but you’ll have at least a general idea of the expected pay for each load you haul. Owner-operators who lease to a carrier for a per-mile rate have the same benefit. Whether you’re a company driver or an owner-operator, per-mile compensation removes the need of understanding how freight rates work. Your per-mile pay might be the same, regardless of load origin or destination, but the rates paid by shippers can vary widely depending on a number of factors. If you’re considering obtaining your own authority and becoming your own carrier, you’ll need to be familiar with how freight rates work. To begin, rates are generally classified as either “spot” rates or “contract” rates. Spot rates are “market” rates for loads posted “on the spot.” Shippers offer a load at a set price and carriers simply pick the loads they’re interested in. Rates for haulage fluctuate based on market conditions, seasonality, weather and other factors. The law of supply and demand rules, and rates can fluctuate quickly. Contract rates, as the name implies, are set by an agreement between the carrier and the shipper. Often, a commitment for a certain number of shipments is built into the contract. Sometimes specific lanes or destination points are built in. Contract rates allow both shippers and carriers to lock in commitments and help cushion both parties against fluctuations in the spot market. Many small carriers, especially new ones, depend on the spot market to find loads. After all, the work of driving and maintaining the truck and trailer is already a full-time position. There isn’t much time left over to make sales calls to customers. Additionally, dependence on the spot market leaves the owner free to accept the most profitable loads, whereas a carrier under contract might have to accept whatever load is available that gets the equipment back at the shipper for the next load. A trucker who gets most of his or her business from the spot market needs to understand how that market works. All loads are not the same. Both the location of origin and the destination can make a huge difference. The state of Florida is a good example. Carriers can often get excellent rates to haul freight into Florida. Nearly 22 million people live there, and since it’s a popular vacation destination, another 90 to 100 million people visit each year. That a lot of folks using a lot of groceries, paper products, clothing and everything else that people buy. The problem is, Florida doesn’t produce nearly enough product to balance out the number of loads coming into the state. There’s a huge amount of competition for loads coming out of Florida, driving outbound rates downward. For this reason, profits made on the trip to Miami can quickly disappear when the rate for the return load doesn’t cover operating costs. Carriers often demand a rate to Florida that’s high enough to cover the cost of making the trip back without a load at all. Another strategy is to accept a short load from a point in Florida to Atlanta or another city in the Southeast, hoping to find a better paying load there. Fluctuations like this occur all over the U.S. In some states, and even some cities, it’s easy to find high-paying inbound loads, but hard to find outbound loads once you get there. Other areas are the opposite, with plentiful outbound freight at good rates but hardly any inbound freight to get you there. To complicate matters, the freight mix in each area can change during the year as local crops come in or other seasonal factors come into play. Even weather can make a difference, as in the case of a hurricane leaving massive damage in an area, creating a short-term demand for building materials and appliances. This is why successful carriers consider more than just rates before accepting a load. The idea is to accept the best-paying load going to a destination where another good-paying load will be available. Many truckers use load boards to search for loads in their area and to research future loads. There are excellent load boards at dat.com, truckstop.com, 123loadboard.com and truckerpath.com. Some are subscription services that can help the carrier earn many times the subscription cost. By using a load board, truckers can sometimes work two or three loads ahead. For example, if a load moving towards the driver’s home isn’t available, there may be a load going to another area, where it’s easier to find a load towards home. Although loads can be posted on a load board by shippers, many loads are posted by brokers. Using a broker helps the shipper because the broker makes sure the carrier chosen has a good record for safety and performance and is trustworthy. At the same time, carriers benefit by knowing the broker has checked out the customer’s credit and payment history, reducing the risk of nonpayment. In many cases, brokers will advance a portion of the freight charges to the carrier for fuel and other expenses. Freight rates listed on load boards or offered by brokers are very often negotiable. It never hurts to ask for a higher rate. Knowing what other loads along the same lane are paying and what the outbound situation near your destination looks like can help in negotiations. Some drivers prefer to work with a single trusted broker, or perhaps a small group of brokers. Establishing a relationship with a broker can help the carrier navigate the complicated world of freight rates. A broker who works with dozens of loads every day understands the market and can help the carrier make sound decisions about which loads to haul and which to avoid. Unfortunately, there is no quick-and-easy method to understanding rates. Even the experts get it wrong at times. Using the best tools available, creating relationships with trusted peers and advisors, and thinking a couple of loads ahead will help any truck owner make business decisions that maximize earnings.

Knight-Swift Transportation acquires LTL carrier AAA Cooper for $1.35 billion

PHOENIX — On July 5, Knight-Swift Transportation Holdings Inc., acquired 100% of Dothan, Alabama-based AAA Cooper Transportation. AAA Cooper is a less-than-truckload (LTL) carrier that also offers dedicated contract carriage and ancillary services. The enterprise value of the transaction was $1.35 billion. “We have long had interest in the LTL space and admired the success of AAA Cooper,” said Dave Jackson, Knight-Swift CEO. “We feel honored to be stewards of the AAA Cooper brand and, similar to previous acquisitions, AAA Cooper will continue to operate independently, while benefitting from the many synergies we expect through Knight-Swift.” The purchase price consideration consisted of $1.3 billion in cash, $10 million in Knight-Swift shares and approximately $40 million in assumed debt, net of cash. Cash for the transaction was funded from a new $1.2 billion term loan provided by Bank of America to Knight-Swift. The transaction is expected to be immediately accretive to Knight-Swift’s adjusted earnings per share. Reid Dove, CEO of AAA Cooper, has been appointed to the Knight-Swift board of directors and will continue to serve as the CEO of AAA Cooper. “In seeking our first LTL partner, we had three main requirements — the scale for entry with significant market share, the profitability and management depth to operate independently and provide a platform for compelling growth opportunities, and a world class culture. We were excited to have identified AAA Cooper as a partner that meets all three requirements, and I couldn’t be happier to finally find the right time for both of us to create a partnership,” Jackson said. “This transaction firmly positions us as a meaningful player in the LTL space, where we intend to grow both organically and through future acquisitions.” Dove noted that joining the Knight-Swift team is “an exciting combination for the AAA Cooper team members and customers.” “It will allow us to pursue new opportunities and accelerate our growth. We will continue to operate as an independent company, headquartered in Dothan, Alabama, and will do so with the support and partnership of the strongest provider in the full truckload space,” Dove said. “This is the fusion of two excellent companies in their respective sectors of the transportation industry, which makes this a win for our people, our customers, and for the newly expanded Knight-Swift team.”

Local, over-the-road, regional routes each offer pros, cons for drivers

Trucking provides a variety of opportunities for drivers, and each type of job has its own pros and cons. Many drivers begin their career with a large carrier, benefitting from available driver training and accumulating experience before moving on to a different driving job. When it’s time to make a change, it helps to know what types of driving jobs might be available — and what each type of job entails. Most truck-driving jobs are classified as either over-the-road (OTR) or local. Another option, regional jobs, have elements of each type. The biggest difference is when the driver gets home. Local driving jobs Local drivers, for the most part, go to work and then come home every day, just like workers in offices or manufacturing facilities. Local drivers might make a series of pickups and deliveries in an area, or they might make longer runs that still allow them to return home without a rest break. Pay for local driving positions is often less than what OTR drivers can make, because more drivers want the local jobs. Because drivers are home daily, road expenses for things such as meals, snacks and showers are greatly reduced. When it comes to local deliveries, it’s important to understand that many companies do not offer paid breaks or overtime pay. That’s because transportation workers, in general, are not covered by the Fair Labor Standards Act that guarantees these benefits. While some employers pay overtime, others do not. Some local jobs, like petroleum transport, are usually paid a per load rate that varies depending on the round-trip mileage and other factors. Some, like hauling feed, gravel or logs, might be paid based on the weight of each load at delivery. Drivers may be encouraged to load beyond legal limits to increase their earnings. Some local jobs require a good deal of physical labor. Grocery and beverage deliveries often require the driver to unload product and bring it inside stores or restaurant. In some cases, the driver is responsible for setting up and maintaining store displays. Among the more desirable local positions are terminal shuttle runs for LTL carriers. Drivers often travel from terminal to terminal, perhaps delivering one trailer and bringing back another. These jobs frequently involve hauling double trailers. In some cases, drivers are required to run “peddle,” or local pickup and delivery, routes before earning a more desirable shuttle run. OTR driving jobs OTR drivers have many choices as well. OTR drivers stay away from home for days, weeks or even months at a time. That’s because OTR carriers are often classified as “irregular route” businesses. That means the truck goes wherever freight is headed at a profitable rate. Empty miles are unprofitable, so once a delivery is made, another paying load is found. The ideal business scenario is when the truck takes the best paying load, regardless of destination, with the driver staying on the road for as long as there’s money to be made. There are, of course, other considerations, such as the need for driver home time, as well as repairs and maintenance to the truck. Some drivers (and carriers) prefer taking the longest-distance load possible. Doing so reduces the number of pickups and deliveries necessary, allowing for some days when the driver can simply drive the legal number of hours and then shut down. The downside is that the driver could be thousands of miles from home, and it could take days — or weeks — to find a profitable load going that way. Regional driving jobs Regional runs are popular with drivers because the truck is usually within a one-day drive of home. Regional positions often offer weekend time at home, although the amount of time can vary, depending on the carrier. The downside of regional work is that it often involves a delivery and a pickup on the same day. A common scenario is a morning delivery, followed by a short deadhead (traveling empty) run and a pickup of the next load. At carriers who pay by the mile, the time spent at receiver and shipper isn’t compensated. It isn’t uncommon for a driver to have six to eight hours or more invested in getting the trailer emptied and reloaded, followed by 10 or 11 hours of driving. Regional runs can also be much shorter than can be driven in an 11-hour shift. Drivers who are paid by the mile often find they get less rest and take home less money. “Dedicated” runs can be great — or not. Some dedicated runs entail picking up and delivering at the same locations every trip, while others might haul from a single location to multiple delivery points. Still others involve being dedicated to one particular customer, which may have multiple shipping locations and thousands of delivery points. Another term most drivers are familiar with is “backhaul.” A backhaul is simply a load that gets the driver back to the starting point, or at least, close to it. For example, after hauling a load across the country from Atlanta to Salt Lake City, the driver might look for a load going back to the Atlanta area. Unfortunately, backhauls often don’t pay well, so drivers who are paid by percentage won’t earn as much, and carriers who pay by the mile might look for a more profitable load, even if it’s headed in the opposite direction from home. In some types of trucking — including tanker, auto and livestock hauling — drivers return empty more often than they find backhauls. With all of the variables in trucking, it’s impossible to describe the conditions of every available job. The best advice for a driver looking for a change is to talk to drivers who hold or have held the position being considered. They have experienced the ups and downs and can explain the job without the “sales pitch” a company representative or recruiter might give. When applying for a new job, it’s important for the driver to have a list of priorities and to discuss them with every potential employer before accepting a job. For example, one driver might value getting home more often, while another wants to stay out longer in order to maximize earnings. Both should clearly communicate their expectations, and take the job that helps them achieve their goals.

Freight volumes down slightly but tight capacity keeps rates high

Shipping volumes are picking up for rail, ship and pipeline but declining slightly for trucking, according to reports from several industry sources. Cass Information Systems reported in the Cass Shipments Index for May that the month was the second-best ever, bested by only the month of May 2018. On a seasonally adjusted basis, shipments improved by 5.9% over April and by a whopping 35.3% over May 2020 numbers. Tim Denoyer, vice president and senior analyst at ACT Research, wrote, “It’s safe to say the pandemic recovery is progressing much faster than the recovery from the Great Recession.” On the truck side, volumes declined, according to the American Trucking Associations (ATA). The ATA reported a 0.7% decline in freight tonnage from April, which was 0.6% behind March. It’s not as bad as it might seem, according to ATA Chief Economist Bob Costello. “Tonnage, despite falling slightly over the last two months, remains well above the lows of last year,” he said. “This is no small deal considering that truck tonnage fell significantly less than many other indicators during the depths of the pandemic in the spring of 2020.” Costello mentioned retail inventories being at historic lows, driven there by consumer spending of stimulus dollars received from the U.S. government. Restocking of inventories is expected to result in more freight for truckers. It isn’t a lack of freight that is pushing volume levels downward. “As has been the case for some time, trucking’s biggest challenges are not on the demand side, but on the supply side, including difficulty finding qualified drivers,” Costello explained. Production of new trucks has been slowed by shortages of parts and materials, especially plastics and semiconductors. Currently, orders for 2021 model year Class 8 trucks are completely filled, with a nine-month backlog. Orders have recently slowed but are expected to increase again when manufacturers begin accepting orders for 2022 models. Then, there are drivers. A driver force that has been gradually aging is not attracting replacements for the drivers who leave. Recent pay increases have stimulated driver churn, as drivers change carriers to take advantage of higher pay. They have not, however, attracted large numbers of new drivers to the industry. When carriers can’t grow their fleets by adding trucks and can’t hire enough drivers to keep the trucks they have rolling, freight sits, waiting for an available truck. Another factor impacting May volumes was the International Roadcheck inspection event (April 29-May 6). Many drivers and owner-operators scheduled time off during the inspection period, hoping to avoid costly delays and, in some cases, put off expensive repairs. The good news is that freight rates remain high when capacity is in short supply, a condition that is helping more than a few truckers prosper this year. Truckstop.com reported that total spot rates on its load board increased slightly, with a small decline in flatbed rates offsetting gains in van and refrigerated rates. For the month, postings declined slightly. Average spot rates for van increased to $2.77 per mile while average refrigerated rates increased to $3.20. Flatbed rates fell by a penny to an average of $3.18 per mile. The site reported that truckers are being very selective of loads, rejecting nearly one of every four. On the DAT One load board, records were set for monthly average rates despite a 6% decline in posting volumes. Typically, volume reductions (reduced demand) drive lower rates, but the capacity crunch is severe enough that rates rose, anyway. The national average for van freight at DAT was $2.69 per mile, setting a new record for van cargo. The national average rate per mile for refrigerated freight rose to $3.11 per mile, while flatbed average rates rose to $3.13. Perhaps more telling are load-to-truck ratios at DAT. For every van truck posted on the board, there were 6.1 loads posted. Refrigerated loads were even more plentiful with 13 posted for each refrigerated truck posting. Flatbed load postings went through the roof with 97.1 loads posted for every truck posted. Load vs. truck postings are not a one-to-one proposition, as many truckers look for loads on the board without posting their truck as available, but the climbing ratio numbers do indicate that the gap between available freight and trucks to haul it is widening. On the West Coast, container ships are still stacked up, waiting to be unloaded, despite tremendous throughput at ports. Workers simply can’t unload them fast enough to keep up with the demand. The Cass Freight Index for shipping expenditures increased by 49.9% this year over May 2020, but the comparison doesn’t mean much since little freight was moving at the height of the COVID-19 pandemic shutdowns. For the coming months, capacity is expected to continue to tighten while the economy continues to produce more freight to haul. “Even with considerable supply constraints, the freight cycle is in high-growth mode. The freight markets continue to benefit from a very strong retail economy, very tight inventories, and a backlog of containerships still anchored in the San Pedro Bay,” said Denoyer. “In addition, U.S. capital goods orders have recently broken through a generational ceiling,” he continued. “We believe this portends an unprecedented U.S. capex (capital expenditure) boom.” In a June 14 release for ACT Research, Denoyer noted, “Soaring freight demand has been overwhelming the industry’s capacity these past ten months, as the industry continues to cope with bottlenecks and shortages in this extraordinary recovery.” Denoyer cautioned, however, that the good times for freight rates can’t last forever, saying, “While the pendulum of pricing power is clearly with the asset owners, we analyze several leading indicators which suggest it will begin swinging back to shippers in the coming months, with rebalancing likely in 2022.” Increased costs for equipment and the fuel to power it, along with rising wages for drivers, will consume at least a portion of additional revenues derived from high freight rates. Regardless, truckers who want to work and can keep equipment running can look forward to more months of very favorable trucking conditions.

Trucker Tools driver app acquired by Alpine Investors’ ASG

RESTON, Va. & WALNUT CREEK, Calif. — ASG, a portfolio company of Alpine Investors, has acquired Trucker Tools, a digital freight management platform that provides capacity management, predictive freight matching, automated booking, GPS-based visibility and digital workflow solutions for the transportation industry. “ASG has a proven track record of helping SaaS companies grow and build out reliable, resilient software services delivering enduring value and competitive advantage,” said Prasad Gollapalli, founder and CEO of Trucker Tools. “Their philosophy, mindset and approach complement Trucker Tools culture and values, and are well-aligned with our laser-focus on superior customer engagement and product performance. We are excited to leverage the ASG team’s skills and experience as we chart this next chapter in our sustainable growth journey.” Gollapalli founded Virginia-based Trucker Tools in 2013. With nearly 20 years of experience in management and product strategy for trucking, Gollapalli built a shipment tracking solution for drivers, owner-operators and small fleets that provides capabilities for a driver to book load shipments straight from their phones. He brought on Murali Yellepeddy who has 20 years of experience in building and delivering enterprise-grade, concurrent, customizable mobile and web platform applications built for devices. The two then expanded the platform’s scope to address additional driver needs and deepen a digital connection with freight brokers. Trucker Tools later launched predictive, digital freight matching and automated one-click booking, streamlining the way brokers find available trucks, and enabling drivers to prioritize, select and book loads straight from their phones. As part of the acquisition, Trucker Tools will welcome Jesse Buckingham, a former executive at two high-growth logistics technology businesses, as chief revenue officer. “ASG and Alpine’s access to resources and their deep experience building successful SaaS (software as a service) companies is a tremendous advantage that will further improve our product development, delivery and platform utility for 3PLs, brokers and truckers,” Gollapalli said. He added that the acquisition will help Trucker Tools’ employees, suppliers, partners, its more than 300 3PL and broker-customers, and the more than 1.3 million truckers and 165,000 small-fleet operators who rely on the Trucker Tools mobile app to secure freight, automate the booking process, provide real-time automated tracking, digitally manage documents, and optimize how they route and run their trucks.

Backlog of truck orders nears 10 months as shortage of semiconductors, plastics impact manufacturers

If there are statistics that best show the weirdness of the U.S. market for Class 8 trucks, it might be these: May sales were down 4.8% from April, but at the same time were up 97.3% from May 2020. The odd occurrence happened because May was the worst sales month of 2020 as the economy bottomed out due to COVID-19 shutdowns. In May, 18,761 new Class 8 trucks were sold in the U.S. market, compared to 19,714 in April — and only 9,510 in May 2020 — according to data received from ACT Research. It could have been more, but shortages of steel, plastic, semiconductors and other supplies meant manufacturers sold fewer trucks from the assembly line and more from existing inventories. The shortage of semiconductors has made the news, but a shortage of plastics, including the commonly used polyethylene, may end up having a bigger impact on builders. Polyethylene is the most widely used plastic product in the world, and 85% of the U.S. supply comes from Texas. “That deep freeze that we had in Texas back in February, I want to say destroyed most of the plastic-producing machinery in the United States,” explained Kenny Vieth, president and senior analyst for ACT. “You’ve got machines with melted plastic running through them. So, when you shut the system down, it’s a very precise process.” That shutdown process wasn’t followed because the machines stopped suddenly when the plants lost power. While they waited for the lights to come on, the melted product solidified in the machines, resulting in a time-consuming cleaning and repair process for parts and tubing that weren’t destroyed. The electricity was out for days but many of the plastic-making machines were out of commission for weeks. Manufacturers of truck parts that require plastics couldn’t get the pellets that feed their machines. Vieth noted that shortages were also reported for items such as wiring harnesses and tires, as well as forged parts such as transmission housings. “You could build a truck with all the parts that you couldn’t get ahold of,” he said. Some of these shortages are just part of the normal economic recovery process. “There’s always that normal constraint when the industry ramps up. It just, takes time to get the process moving,” Vieth explained, adding that better days are coming. “I think it gets better from here. And I think it gets better rapidly,” he predicted. Truck orders fell in May to just 23,100 for the North American market, but not because carriers aren’t interested in buying. “The near-term backlog is filled,” Vieth noted. “And the OEMs haven’t fully opened their 2022 order books.” Simply put, there are no build slots left for 2021 model trucks. The manufacturers typically start taking orders for the following model year in October, but they have started as early as July in the past — and Vieth predicts they will do so again this year. When they do, things will “pop,” according to Vieth. “We’re expecting in the next few months to see that backlog of 250,000 units to rise to 300,000 or more,” he said. The current backlog of a quarter-million orders would take 9.9 months to fill at current build rates — and that’s if no further orders are received. “If you ordered a truck in May, the first quarter of next year is when you could expect delivery,” Vieth said. With the long wait time, very few orders are being canceled. “We had 1,100 cancellations in May, which is nothing,” Vieth said, explaining that a carrier with an order in for a truck with a 15-liter engine, for example, might accept a truck with a 13-liter engine if it’s available without the wait, resulting in a cancellation of the original order. Carriers that are thinking about the used tractor market to improve their fleets may not be happy with what they find, according to a release of ACT’s preliminary “State of the Industry” report. Average prices for used trucks in May increased another 5% over April prices and were a whopping 52% higher than in May 2020, when the market was depressed due to the pandemic. Part of that increase could be attributed to carriers buying newer, recent-model trucks to fill fleet needs, driving the average price higher. “By all indications, demand continues to outpace supply, and for that reason, it should come as no surprise that truck prices continue to increase,” said Steve Tam, vice president of ACT. In any event, those planning to turn to the used tractor market may be disappointed at the selection and the prices, if they can find a truck that meets their needs at all. International was the only OEM to sell more trucks in May than in April, according to data received from Wards Intelligence. International sold 2,277 units, compared with 2,192 a month earlier for a 3% increase. Volvo Truck experienced the largest month-over-month decrease with May sales of 1,413 compared to 1,934 in April, a decline of 26.9%. For the year to date, Volvo has captured 10% of the U.S. Class 8 market compared to 9.4% at the same point of 2020 and 9.7% at the end of that year. Mack sales declined by 6.3%, from 1,649 in April down to 1,545 in May. Freightliner sales of 6,653 in May were down 5.8% from April’s 7,065. Year to date, the company still holds about 39.3% of the U.S. Class 8 market. Kenworth sales of 2,919 were down 2% from April sales of 3,005, while Peterbilt sales declined 1.9% with 2,933 sold in May compared to 2,990 in April. Together, the PACCAR siblings are responsible for 29.6% of U.S. Class 8 sales for the year-to-date. Western Star sold 447 trucks in May, down 11.3% from April sales of 504. So far in 2021, the company has sold 2,259 trucks, behind last year’s 2,430 at the same point for a decline of 7%. As parts become available, the build pace should pick up at the OEMs. For the next six months or more, however, trucks will be hard to find, and prices will be high.

Truckload rates soared in May despite lower freight volumes

PORTLAND, Ore. — Spot truckload freight rates hit record highs in May despite a month-over-month decline in volume, a sign that transportation networks are not growing fast enough to keep up with demand, according to the DAT Truckload Volume Index. The DAT Truckload Volume Index fell to 212 last month, 6% lower than April — but still the fourth highest month on record. The index is an aggregated measure of dry van, refrigerated and flatbed loads moved by truckload carriers and an industry-standard indicator of commercial freight activity. A baseline of 100 reflects freight volume in January 2015. The national average rate for van loads on the DAT One load board network increased 10 cents to $2.69 per mile (including fuel surcharge) in May, the highest monthly average van rate on record. Refrigerated and flatbed spot rates topped $3 a mile for the first time last month. The national average refrigerated rate was $3.11 per mile, up 18 cents compared to April. The flatbed rate averaged $3.13 a mile, a 17-cent increase month over month. Spot rates for May were higher, despite an overall decrease in volume. The number of van and refrigerated loads moved on the DAT network declined 6% in May, while the number of flatbed loads fell 9%. The national average van load-to-truck ratio was 6.1 in May, meaning there were 6.1 available loads for every van posted to the DAT network, up from 4.8 in April. The refrigerated ratio increased from 9.9 to 13.0, and the flatbed ratio was 97.1, the highest monthly average ratio for flatbed freight since April 2018. Several factors constricted freight volumes in May: Dwell times increased in May, leaving carriers effectively unavailable for dispatch as they waited for trucks to be loaded or unloaded. A surge in imports has chassis trailers in high demand. Drayage rates are up in addition to the length of haul from ports to warehouses. The cost of wood pallets has more than doubled due to rising lumber prices. A pallet shortage is threatening the ability of produce distributors to move products at a time when harvest activity is increasing. “Imbalances and shortages plague supply chains across most segments of the industrial and consumer economies,” said Ken Adamo, chief of analytics at DAT Freight & Analytics. “For many businesses, ‘on-time and in-full’ shipments are essential to the efficiency and accuracy of their logistics operation. Right now, shippers are having to choose one or the other.” On the shipping calendar, June exerts the most seasonal pressure on truckload rates, except for November’s Black Friday. Southern states are in the middle of peak produce season, while those further north are on the cusp of it. In addition, retailers are gearing up for summer and back-to-school shopping, and construction activity increases demand for flatbed equipment. Entering June, the national average van spot rate was 93 cents higher compared to the same period last year and 55 cents higher than in 2018, the last time there was a typical summer freight cycle. The refrigerated rate was 89 cents higher year over year and up 54 cents compared to the same period in 2018. Domestic total truckload volumes of produce entered June down 22% year over year (7,600 fewer loads per week). Expect volumes to make a big comeback this summer as restaurants reopen and regulations around social gatherings are relaxed. The national average price of on-highway diesel was $3.22 a gallon in May, the highest since December 2018. Spot rates include a calculated surcharge that fluctuates with the price of fuel.

NBA star invests in trucking company to turn former inmates into trustworthy drivers

ATLANTA — In May, NBA superstar Kyrie Irving invested $500,000 in Fleeting, a Black-owned, New York-based commercial trucking and fleet management services company. This investment didn’t come out of the blue for Irving, who has been an activist for seven years, and recently started his own consulting firm and venture fund to help support Black- and women-owned businesses. It also wasn’t out of the blue for Fleeting’s founder and CEO, Pierre Laguerre, to support and train formerly incarcerated men and women to the trucking industry. Fleeting is preparing to launch a three-month training program to provide former inmates with the tools needed to obtain a commercial driver’s license (CDL). The program is also designed to address the nationwide truck driver shortage and expand opportunities for formerly incarcerated individuals. “Right now, this transportation industry is on the brink of being short 900,000 drivers,” Laguerre said. “Too often, we live in a world where people think that a trucking industry problem is just a trucking industry problem, and I’m here to tell everyone that’s not true. A trucking industry problem is one that can affect every American citizen in this country.” Laguerre’s goal is also to destigmatize truck driving and employment for formerly incarcerated individuals. By removing bias from Fleeting’s hiring process, it can give employees equal access to more financial freedoms, he said. More distinctly, it’s about destigmatizing female employment. “It’s 2021, and I think you’re supposed to be in a place now where we can provide tools for young women and young men to be able to make better financial decisions,” Laguerre said. “I think as men truckers, we have a moral obligation to make trucking a safe space for women so we can attract more women into the industry. Women face the same challenges as men truckers, if not more.” With current employees, Fleeting provides incentives for women truckers and those with families by providing flexible hours and access to shorter trips. His primary business model is to provide a platform for independent truck owners and small carriers to have large carrier resources. Although Fleeting has the resources, owner-operators and drivers still have the freedom to control earnings and schedules. This also applies to truck drivers who would like to have their own truck but do not have the flexibility or earnings to purchase one. “By taking those existing assets that aren’t being utilized, putting them into our platform, it (allows) drivers in the industry to operate like an owner-operator without the headaches of owning the truck or the entire pain point of going through owning a truck,” he said. While Laguerre was creating his company, he captured the attention of Marcus Glover, co-founder and managing director of Irving’s Lockstep Ventures. When Irving discovered an interest in Black-owned farms and how trucking impacted the agriculture industry, Laguerre’s business seemed a perfect fit. “It just turned out that we both had, for different reasons, this tremendous interest in the venture that Pierre was leading,” Glover said. With the joint KAI 11 Consulting and Lockstep Ventures investment, curriculum and community directors will be added on to the program. Incarcerated individuals will be informed of the program three months before their release. “Prior to their release, we want them to really get the understanding of general knowledge of transportation,” Laguerre said. To do this, participants will be given a CDL handbook to study before eventually being matched to a training school. Once the individuals obtain a CDL, they will be placed with Fleeting’s existing drivers for six months to understand safety, customer interactions and trucking regulations. Laguerre’s inspiration to support others comes from his own background. At age 16, he had dreams of becoming a neurologist, but his normal day-to-day picture of life was watching his peers being locked up for one reason or another. “My fear of becoming a statistic, my fear of becoming a part of that environment … I wanted to escape,” he said. “Trucking was my only escape.” Trucking also turned out to be Laguerre’s fate — in a good way. While his dreams landed him in college, financial hardship led him to become a truck driver. He continued his career and eventually created his own company, but he never forgot the streets that built him. “I felt like I had a moral obligation to build this platform to give drivers the true flexibility and upward mobility that they deserve and give the shippers the transparency and access that they desperately need today,” he said. “With me being a driver, I can relate to drivers. I can show them empathy, and exactly what they need to do to be successful, or just how I was able to be successful myself.” While on that mission, Laguerre has found a way transform the fate he avoided into an opportunity for those who have been incarcerated. The training program to turn inmates into truck drivers will begin later this year.

Averitt Express marks 50th anniversary by celebrating associate milestones

COOKEVILLE, Tenn. — Averitt Express is celebrating its 50th anniversary in 2021 by celebrating milestones achieved by members of its “Over 20 Team.” Averitt’s Over 20 Team is a group of associates who have been part of Averitt for at least 20 years. This team and its members represent all facets of Averitt, from customer service specialists to service center leadership to local and regional drivers. Every associate role is represented in the Over 20 Team. Members of the Over 20 Team represent a combined total of 36,875 years of service at Averitt. The majority of Averitt’s Over 20 Team is made up of professional drivers with 727 members. These drivers have achieved 15,808 total years of safe driving. Dock associates are well represented on the team with 147 members, while leadership represents 273 members. Various other operations areas also have members on the team, including mechanics, sales, administrative support, customer service and freight clerks. There are nearly 90 new inductees to the Over 20 Team this year. More than 500 team members have 21 to 24 years of service, with the next largest group (308 team members) having between 26 and 29 years. The average age of an Over 20 Team member is 57, while the youngest person on the team is 40. The company has 10 associates with more than 40 years of service. “Our Over 20 Team brings an incredible wealth of experience to the table,” said Gary Sasser, chairman and CEO of Averitt. “These associates’ commitment to excellence and dedication to the Averitt team are among the reasons we’re able to celebrate our 50-year anniversary. As our Over 20 Team continues to grow, I’m even more excited about what we can accomplish together in the future.” The company credits its longevity, leadership and focus on teamwork as being instrumental in developing its unique culture and position as a leader in the transportation industry. Members of the Over 20 Team are honored with a display of team members’ names, which covers a full wall in the company’s corporate headquarters.

Money mechanics: Using a factor can help cash flow, allowing owner-operators to focus on freight

When it comes to operating your own trucking business, being a great driver isn’t enough. It takes more than driving skill to profitably manage a business. Successful owners know the various tasks necessary to keep the business running. They also know their limitations. For example, some owner-operators perform all the maintenance on their equipment. Everything from oil changes to engine rebuilds become do-it-yourself projects accomplished by the owner’s hand. Others, however, leave the wrenching to the professionals — or they handle the grease and oil but trust any projects requiring more knowledge or equipment to a local shop. When it comes to the cash flow of a trucking business, factors could be considered “money mechanics.” They understand the tasks of billing and collection, and can help truckers stay focused on serving their customers by handling some of the business duties the driver may not be comfortable with or have time to handle. It doesn’t matter how good the shipping service is if the trucker isn’t paid for it. After the delivery, the factor takes care of invoicing the customer and collecting payment. It may seem like an easy task, but owners who are on the road can’t always find time to complete an invoice and send it to the customer. And there’s more. Each open invoice must be tracked to make sure payment is received. After a period of time, another invoice needs to be sent, or the customer called, or both. If the customer still doesn’t pay, collection actions may be necessary. It can be a lot to keep track of while still performing driver duties. Even when the customer pays, it still takes time. Many businesses operate on a 30-day payment cycle, meaning the driver waits a month before payment is received. Others may have a 45- or 60-day cycle, making the wait even longer. Then, there are those that aren’t very good at keeping bills paid. They can lose invoices, forget payments and otherwise cause extra collecting effort. Factors not only keep track of all this; they can help with the waiting, too. That’s because most factors advance the payment to the trucking business. Some pay within hours of delivery, keeping cash flowing through the trucking business. The factor waits for payment, not the trucker. When considering a factoring service, when and how payments are made is an important detail. Options can include direct deposit into the trucker’s bank account, the assignment of funds to a fuel card or a prepaid debit card, or even mailing a check. As for the conditions for making payment, most factors are able to pay upon receipt of a photo of the paperwork. Those that require faxing or mailing of documents are behind the times. If the customer never pays, the trucker may have to pay back the advanced funds, but there’s a choice here, too. Factors often offer “recourse” or “nonrecourse” services. In nonrecourse agreements, the factor takes the loss if the customer doesn’t pay. Fees for factoring services vary among businesses offering the service and are an important consideration when choosing a factor. In most cases, the factor simply keeps a percentage of the invoiced amount, or a flat fee plus a percentage. The fee goes up if the agreement is for nonrecourse billing, because the factor is assuming greater risk. Factors can also help the trucker decide which customers to accept. A great freight rate may look attractive, but if it comes from a shipper with a poor history of paying, the deal might not be so good. Factors can often help identify which shippers have poor payment histories, bad credit records and more. They can advise drivers about which customers to avoid, which take a long time to pay and so on. In cases where a shipper has failed to pay in the past, the factor may simply decline to advance any funds based on the load; this action protects both trucker and the factor. It’s important to ask the factor whether they allow “spot” factoring. Some factors require the trucking business to use their services for all loads they haul. However, some trucking businesses have certain customers that are very good about paying on time. In these cases, the owner may want to deal directly with the customer, avoiding the additional step and expense of involving a factor. They might prefer using the factor for loads from new or occasional shippers they haven’t established a relationship with. Ancillary services are another area to ask a prospective factor about. Most factoring businesses offer additional services, either directly or through partnerships with other businesses. Free credit checks are one such service; fuel cards are another. Some owner-operators carry large amounts of cash for fuel purchases, while others use credit cards that charge high interest rates if the bill isn’t paid off by the due date. Factoring services can offer fuel cards with smaller fees and no interest, saving money and keeping the businesses debt down. In some cases, fuel cards come with discounted pricing on fuel, oil, tires and other items and services. Some factors can assist with emergency cash needs, too. Expensive repairs, such as an engine rebuild, can sideline a trucking business if the owner can’t fund the work. Some drivers turn to predatory lenders who offer quick cash, sometimes in a single day. Often, these lenders charge exorbitant fees along with high interest rates. Some lenders insist on access to the business bank account so they can make withdrawals without the owner’s input. Factors may provide low- or no-interest solutions to help owners get the business back up and running. Others partner with firms that help manage programs to keep the business viable. Anyone doing business with a factor should carefully read the agreement paperwork. Some factors impose fees for certain actions — including a fee to terminate the agreement. It’s best to understand all rates and fees from the beginning of the relationship. Factors can smooth out cash flow for trucking businesses, allowing the owner to concentrate on the business of moving freight. Factors can also help owner-operators make sound business decisions and can help when things go wrong.