Business Archives

Consider carefully before signing a contract

Cliff Abbott - December 4, 2020

Owning your own truck can be a rewarding experience, but it can also be an exercise in frustration. Like any business, there are tasks involved outside of the main focus of trucking. Managing a business includes finding and serving customers, billing and debt collection, taxes, maintenance, compliance, accounting, record-keeping and more. Some drivers are excellent businesspeople and are able to handle all of these tasks themselves. Some have a friend or family member that handles the business side, allowing them to concentrate on the job of moving freight. Others are willing to pay professional services to handle the business details. Another option chosen by many truck owners, is to lease their equipment to an existing carrier. Most carriers have staff that handles the business details. When you lease on, the carrier’s staff works for you, too. The term “lease” can seem confusing, but it really isn’t. Under a lease, you allow a carrier the use of your equipment, just as if they were renting the truck from you. The carrier uses your equipment and, in return, you get a portion of the money they make with it. The difference usually is that you are required to provide a driver for the truck, even if it’s yourself. While leasing your equipment to a carrier can reduce your workload, it also reduces the compensation you’ll receive. After all, adding your truck to their fleet helps the carrier increase revenue. It’s important to fully understand how you’ll be compensated as well as your obligations under the lease contract you’ll be signing. Compensation Some carriers pay a flat percentage of the load revenue, while others pay a set per-mile rate. A set rate per mile means your compensation won’t be affected by current freight rates paid to the carrier. Percentage compensation means the rate you receive will fluctuate with freight rates paid to the carrier. If you’re compensated by percentage, it’s important to understand the complete picture. Will you receive a percentage of the total revenue, or the revenue that’s left after the carrier makes various deductions? Will the carrier show you the amount received from the shipper? Assessorial pay should be clearly spelled out, too. How much will you be paid when you and your truck are held up at a shipper or receiver? How much time must you contribute before the rate kicks in? What about layovers? What other activities will you be compensated for? Chargebacks When your equipment is leased, it is usually (but not always) covered under the carrier’s liability insurance policy. Some carriers charge you for liability, cargo and other insurance coverage. Some charge a rental fee for pulling their trailers, or other fees for administrative tasks and so forth. Those charges should be clearly spelled out in the lease agreement, either in the body of the text or by an addendum to the contract. Escrow Accounts Nearly every carrier will require you to keep money in at least one escrow account. An escrow account is a special savings account that carriers can access to pay insurance deductibles, freight claims or other expenses determined to be your responsibility. Some require an escrow deposit to begin the lease, but most will allow you to build the escrow through settlement deductions over a period of time. It’s important for you to know how much the carrier will hold, what it will be used for, and when and how you will have access to your money. Another type of escrow is sometimes kept for maintenance purposes. The carrier will keep a percentage of each settlement amount until a predetermined threshold is reached, out of which it will pay for repairs and maintenance to your truck. This arrangement can allow the carrier to pay for discounted maintenance services through its network, saving you from having to come up with cash when you break down. Like any escrow, however, you should know the limitations including how to access your money. Maintenance and tire discounts Some carriers will allow you to participate in networks from which it receives discounted pricing for parts and labor. Some will even perform repair and maintenance functions in their own shops for a discounted fee. It’s important to understand what services are available and what they cost. Independence As an independent contractor, you have the right to decide when to work and which loads to accept — and you can take loads for other carriers, too. Many carriers, however, will dispatch your truck just like its own and claim exclusive use of your equipment. You should understand how you’ll be dispatched and the carrier’s exclusivity rules before you sign a lease agreement. Leasing your truck to a carrier can be a successful strategy for a profitable business, but it’s important to fully understand the terms and conditions of the lease agreement before signing. Do your research, and choose wisely.

GM walks away from stake in electric vehicle maker Nikola

The Associated Press - December 1, 2020

NEW YORK — General Motors will not be taking a stake in the electric vehicle company Nikola, which announced Monday, Nov. 30, that it would scuttle one of its marquee vehicles, an electric and hydrogen-powered pickup that was to be called the Badger. Shares of Nikola plunged 21% at the opening bell. Nikola on Monday released updated terms between the companies for a supply agreement related to GM’s fuel-cell system, replacing an agreement signed in September. That deal would have given GM an 11% stake in Nikola. The earlier agreement would have allowed Nikola to use GM’s new battery electric truck underpinnings for the Badger and its fuel cell and battery technology as well. But that is no longer part of the agreement. With that end of the partnership now gone, Nikola said Monday that it will begin refunding deposits made by customers who wanted first dibs on the company’s pickup truck. “In a nutshell, the signing of GM as a partner is a positive, but ultimately no ownership/equity stake in Nikola and the billions of R&D potentially now off the table is a major negative blow to the Nikola story,” said Wedbush analyst Dan Ives. “This went from a game-changer deal for Nikola to a good supply partnership, but nothing to write home about.” However, there were tremors under the potential partnership in late September. GM cast doubt on whether the $2 billion partnership would close as scheduled, saying that discussions with Nikola were ongoing. That announcement, which sent Nikola shares sliding, came just days after Nikola founder and Chairman Trevor Milton resigned after a Hindenburg Research, a company that’s betting Nikola stock will drop, accused Nikola of Fraud. Nikola denies the allegations and called them misleading. Hindenburg said Nikola’s success was an “intricate fraud,” including a video showing a truck rolling downhill to give the impression it was cruising on a highway, and stenciling the words “hydrogen electric” on the side of a vehicle that was actually powered by natural gas. The Securities and Exchange Commission and the Justice Department are reportedly investigating. GM has said it did proper due diligence before entering the partnership. Nikola said Monday that its work on heavy trucks will continue. And GM will still be part of a global supply agreement that would integrate GM’s Hydrotec fuel-cell system into Nikola’s commercial semi-trucks. “Heavy trucks remain our core business and we are 100% focused on hitting our development milestones to bring clean hydrogen and battery-electric commercial trucks to market,” said Nikola CEO Mark Russell. Nikola is based in Phoenix.

Carrier culture: These 7 questions can help determine a potential employer’s values

Cliff Abbott - December 1, 2020

One of the most important — and most often overlooked — factors in choosing a carrier to work for is the “culture” you’ll find when you get there. You’ll find tons of advertisements containing statements like, “You’re not just a number” and, “We treat you like family,” but those words are often slogans written by advertising agencies to attract drivers like you. In addition to pay, equipment, running areas and other details of the job, you’ll want some idea of how you’ll be treated if you decide to work for that carrier. Unfortunately, recruiters are often so isolated from the operations part of the business that they truly don’t know much about how drivers are treated, except for the occasional complaint received from someone they recruited in the past. Still, there are questions you can ask — and the recruiter isn’t the only person you should be asking. Current drivers can be a great resource. After all, they can tell you how THEY are treated by that carrier. Even then, however, it’s best to have some specific questions rather than simply asking, “How do you like Carrier ABC?” The internet can be a good resource, too, but be wary. Trucker complaint sites usually don’t present all sides of the story, and drivers generally don’t post about good experiences they’ve had. You can also access information through the Department of Transportation (DOT) Safety and Fitness Electronic Records (SAFER) system. Entering the carrier’s DOT or MC number or the legal name on the “Company Snapshot” page (safer.fmcsa.dot.gov/CompanySnapshot.aspx) brings up an information page that provides the number of trucks and drivers reported, commodities hauled and headquarters information for the carrier. On the same page are links to safety and accident information and a licensing and insurance history page. No website, however, can tell you what it’s like to actually work for the carrier. Whether you ask a recruiter, a driver or even someone in orientation, you’ll find out more by asking questions. Here are a few key questions to ask: Can I refuse a dispatch if I feel it can’t be completed in the allotted time or there are other safety factors? Many carriers talk a good safety game, but some can get downright ugly when you need to make a decision for safety reasons. What happens when conditions prevent you from making delivery on time? What about inclement weather, illness or delays? How much authority will you have to make decisions? If the carrier is more concerned about its on-time delivery percentage than your safety, it might not be a good fit. What is the carrier’s policy for accessorial pay?” Pay for activities such as detention, layover, breakdown, weather and so on can be important. Detention pay, for example, can differ greatly between carriers. One carrier might pay $15 an hour after the first hour of waiting, while another might pay $10 per hour, but only after you’ve waited four hours or more. Some detention policies require you to wait until the customer has paid — IF they pay — before you receive anything. Layover is another issue you’ll face from time to time. Layover occurs when the carrier doesn’t have a load for you for 24 hours or more. You’ll need to know how often layovers occur, how much the carrier pays and the circumstances. Some carriers pay a reasonable amount for the first 24 hours you sit. Others pay a small percentage of the day’s pay you could have made if you were running, and don’t pay anything for the first 24 hours. Some don’t pay for layover at all. Does the carrier use video cameras? Many carriers use video recording systems to collect evidence used in training, discipline and, when necessary, in litigation. What the systems record and how the data is used can differ widely. You’ll want to know if the system includes an inward-facing camera, one that records YOU as you operate the vehicle. If you’re being recorded and you aren’t comfortable with that, move on. Things can only get worse. How does the carrier handle family emergencies? How do I get home, and when? This can be a sensitive topic for many drivers. Most carriers won’t allow you to simply drive the truck home, unless home is close by and the truck is usually parked there when you’re off duty. Many carriers will try to find a load going in the right direction, but some situations might call for you to get home more quickly. Will the carrier understand if you need to park the truck and get to the nearest airport? Will it offer financial assistance for purchasing a last-minute ticket? Or, will it be more concerned about the truck than about you? How are breakdowns and repairs handled on the road? At many carriers, the policy is to pay for all safety-related repairs at the nearest facility, but it doesn’t always work that way. The “nearest facility” might mean a shop that offers a better rate or is in a network that the carrier uses, or it could mean the nearest company terminal. Stories abound of drivers limping a truck along, hoping to avoid a DOT inspection, until they arrive at a terminal. Air-conditioning repair is expensive on the road; more than one driver has experienced a week or more in a hot truck waiting for a dispatch to a company shop where it can be repaired more cheaply. What is the carrier’s turnover rate? Every carrier tracks driver turnover. Don’t settle for guesses, estimates and averages. If a carrier has a turnover rate below the industry average, they’re usually happy to talk about it. Along with this question, ask: What’s the most common reason given for leaving your company? If large numbers of drivers leave because of poor equipment, disputes over pay or unpaid waiting time, there’s a good chance you’ll experience these things, too. There are other questions to ask, and you may feel strongly about issues that aren’t mentioned here. Asking about a carrier’s culture before you commit to working there can help you make a better decision.

2020 has been ‘roller coaster ride’ for motor carriers, says ACT Research

The Trucker News Staff - November 30, 2020

COLUMBUS, Ind. — Motor carriers across the board — from big fleets to owner-operators and their vocational counterparts — have ridden a down-and-up roller coaster this year, according to ACT Research’s recently released Transportation Digest. “We’ve been tracking a number of trend-setting metrics that show what a wild ride it has been for carriers this year,” said Kenny Vieth, president and senior analyst of ACT Research. “According to the Bureau of the Census, retail data show non-store sales, primarily e-commerce, from May to September were over 17% of retail activity, a material increase from a 14.5% average in 2019,” he continued. “Stating the obvious, e-retailing got a big boost when the shutdown drove households to do emergency shelf stocking and avoid brick-and-mortar retail locations.” The Transportation Digest, which combines proprietary ACT data and analysis from a wide variety of sources, paints a comprehensive picture of trends impacting transportation and commercial vehicle markets. The monthly report offers a quick look at transportation insights for use by fleet and trucking executives, reviewing top-level considerations such as for-hire indices, freight, heavy and medium duty segments, the U.S. trailer market, used truck sales information, and an overview of the U.S. macro economy. “Light motor vehicle sales snap backed from April’s sales low of 8.7 million, topping a 16-million annualized rate in both September and October as the pandemic and work-from-home has driven out-migration from major urban areas,” Vieth noted. “Additionally, the third quarter showed a dramatic, if perhaps temporary, resurrection of activity for many retail sectors, after the shutdown and shelter-in-place shocks in Q2,” he said. “As in retail, there is a ‘K-shaped’ recovery taking place in construction, with housing and warehousing doing well, while construction of office buildings, retail space, and manufacturing facilities remains sluggish.”

When safety is a personal value instead of just a priority, compromise doesn’t happen

Cliff Abbott - November 27, 2020

There’s a difference between values and priorities. On the surface, they seem similar, but let’s take a closer look. For example, imagine you’re hungry. Maybe you woke up late and didn’t have time for breakfast. Maybe the shipper took so long to load your trailer that you didn’t have time to stop for lunch. Whatever the reason, you’ve got to stop soon and get something to eat. Food is now very high on your priority list. Here’s another scenario: Just an hour ago, you made a valiant attempt to get much more than your money’s worth at the truck stop buffet (we’re imagining this pre-COVID). You’re still stuffed. At this point, food is much further down on your priority list. That’s the thing about priorities. They change when the circumstances do. Every driver who’s experienced the transition from “I might need to stop for a restroom when an opportunity comes up” to “I gotta stop right NOW!” has experienced a change of priorities. That’s why your safety and that of others you share the road with can’t be a priority — even if safety is “Priority 1” or “our highest priority” — because priorities change. When you’re starting out fresh and well-rested and there’s plenty of time to get the load there by the delivery appointment time, safety might be really high on your priority list. On the other hand, when you’re way behind schedule, the dispatcher is upset and you just can’t stop right now even though you’re really tired, it’s easy to let driving just a few more miles become a higher priority than worrying about safety. Maybe you usually drive the speed limit or just a little over, unless you’re running late and you need to make up time. Or, most of the time, you wouldn’t think of tailgating a vehicle, but that four-wheeler is clogging up the hammer lane and needs a little “persuasion” to move over. Maybe you just don’t have time to slow down for a snowstorm right now. Maybe that shortcut with the “no trucks” sign won’t be patrolled today. Often, there’s no conscious decision involved. There’s no thought process that says you’ll decide safety isn’t important any longer. For many drivers, it’s the gradual acceptance of higher risk. A little faster. A little longer. A little more aggressive. You’re a pro. You can handle it. After all, you’ve done it before. That’s why safety has to be a value for you as a professional driver. Values are different from priorities in that they are much harder to change. Values are deeply seated in your character, in your psyche. They come from your family, from your upbringing, from your church or school or mentors. They’re part of who you are. When you’re faced with a decision that could compromise your values, you aren’t as likely to pick the less-safe option. Imagine, for example, that your dispatcher asked you to drive off without paying for repairs made to your truck. That’s theft. Some might be deterred by the potential punishment when caught, but many drivers would simply refuse based on their values of honesty and integrity. It should be no different with safety. Many drivers are all too familiar with questionable requests made by carrier representatives. Requests or demands to drive beyond legal hours of service, bypass scales with illegally heavy loads or run with unsafe equipment because it’s cheaper to fix at the terminal are examples of things some drivers are sometimes asked to do. Other drivers make such decisions for themselves, without the involvement of a carrier. Refusal to do these things could result in consequences. In some cases, they might include loss of a job. But there’s a cost to acquiescence, too. There’s the risk of accident or injury, and there’s the sacrifice of character. When safety is a personal value, your main goal goes beyond getting home safely. Defensive driving, or driving in such a way as to keep other motorists from involving you in an accident, isn’t good enough. Your safety value prompts you to help others get home safely as well. It means viewing other motorists as co-workers to be assisted rather than enemies to defend against. It’s not an easy transition, especially when those other motorists don’t have the same value of safety. But every one of those motorists is a person — a parent, a spouse, a child or a friend of someone. Just like your parents, spouse, children and friends, they may not always make the safest driving decisions. Professional drivers are often very good at anticipating the actions of other motorists. The problem is that the other motorists can’t always be counted on to react as expected. For example, many drivers learn early in their career that “crowding” a four-wheeler, either from the rear or from the side, can prompt them to change lanes. But it could prompt them to do something else, too — like run off the road or slam on the brakes. That “wrong” action could be their last action. Even something as simple as blowing the air horn can startle another motorist into jerking the steering wheel, possibly causing an accident. It can also cause others to look for the source of the noise, taking their eyes off the road ahead. Blowing the air horn might not be appropriate in heavy traffic, and it’s never appropriate when done in anger or in revenge for a perceived slight. A value of safety asks a constant question: “What’s the safest way to handle the situation you’re in?” The answer doesn’t always fit your schedule or your mood or your dispatcher’s plans. It could cost you a missed appointment, your next load or even your job. But it won’t cost your life, and it won’t sentence you to a lifetime of guilt for causing the loss of someone else’s life. So, as the season of gift-giving approaches, take the time to think about how you handle safety. Is it, for you, a priority that changes with the circumstances? Or a deeply seated value that you don’t compromise? Think about times on the road when a value of safety might have changed the actions you took and reduced the risk you accepted. Think about how you might help someone else get home for the holidays, even if they ARE a bad driver who deserves a stocking full of coal. Have a wonderful and SAFE holiday season.

Safety pioneer Steve Bryan joins Drivewyze team as senior advisor

The Trucker News Staff - November 26, 2020

DALLAS — Steve Bryan, an expert on safety data, has joined Drivewyze as a senior safety advisor, the company announced last week. Bryan will assist the company in expanding its safety products and services, including Drivewyze Safety+, a customizable, proactive and content-based safety platform. Before joining Drivewyze, Bryan was executive vice president and general manager of Sambasafety. He also founded Vigillio, a safety data analytics company, in 2007. “Steve is an icon in the trucking industry when it comes to safety data,” said Brian Heath, president and CEO of Drivewyze. “He is a visionary with a proven track record in transportation safety technology and in advancing highway safety. We are thrilled that he is joining our team in an advisory capacity as we continue to expand and bring new safety products and services to market.” According to Bryan, joining Drivewyze is a natural fit. “I’ve been watching Drivewyze and how they’ve disrupted the industry with products that truly make a difference in safety,” Bryan said. “We’re aligned in our thinking, and in our commitment to helping the industry become safer and more productive. I’m looking forward to what we can do together.”

Fleet owners have gone ‘from fear, to hope, to optimism’ as Class 8 sales decline slightly

Cliff Abbott - November 26, 2020

U.S. sales of new Class 8 trucks declined slightly in October, according to figures received from ACT Research. During the month, 19,034 trucks were sold, compared with 19,380 trucks in September, a 1.8% decline. Compared with October of last year, sales declined 18.5% from the 23,346 sold. It’s not that 2020 is a bad year for truck sales. It’s that 2019 was an exceptionally good year. “The comps on sales are very tough right now,” said Kenny Vieth, ACT’s president and senior analyst. “Sales are not weak; they just look bad compared to the monster numbers the industry was putting up last year.” Of the trucks sold this October, 14,402 (75.7%) were over-the-road tractors equipped with fifth wheels. The remaining 4,632 were vocational trucks equipped with dump, trash, concrete or other bodies. Vocational truck sales consumed a larger share of the market than normal for the first six months of 2020, peaking at 45.4% of new trucks sold in May. Since then, the percentage has declined, reaching just 23.7% in August before rebounding slightly. Vieth believes the COVID-19 pandemic plays a part in that decline. “A lot of trucks are purchased by municipalities and other government entities,” he explained. “With shutdowns and unemployment due to COVID, those local governments are hurting for tax revenues. They don’t have money to spend.” One of the surest ways to predict future truck sales is to look at orders for new trucks. ACT reported 39,100 trucks ordered in October on the North American market, far more than can be produced in a single month. FTR reported preliminary numbers of 40,100 Class 8 trucks ordered during October. Don Ake, FTR’s vice president of commercial vehicles commented in a press release, “Fleets became much more confident about future freight demand and began placing large orders to replace older units and for expansion purposes, as capacity tightened. In just a few months, the industry has gone from fear, to hope, to optimism.” Tractors weren’t all the trucking industry was buying. ACT reported in a Nov. 12 release that 54,200 trailers were ordered in the U.S. during October, an increase of 68% over orders received in October 2019. “Fleet commitments over the past two months have now pushed the industry backlog to the highest level since June of last year,” said Frank Maly, ACT’s director of commercial-vehicle transportation analysis and research. “Increases in both freight volumes and rates, along with capacity challenges, have influenced fleets to aggressively enter the market.” Maly predicts that the current backlog of trailer orders will, at current production rates, take until next July to build. While order numbers and backlogs suggest strong sales well into 2021, there are positive economic factors, too. Spot freight rates are hovering at or near record levels, even though freight levels are down compared to last year. That normally doesn’t happen — but circumstances are different this year. Carriers are reporting a driver shortage again, making it difficult to seat the trucks they’re buying. COVID-19 could be part of the reason for that as well. As trucks were parked during shutdowns and restrictions due to COVID-19, some of the aging driver workforce simply retired. Government supplements to unemployment benefits provided additional incentive for those who didn’t officially retire to stay home. And, there’s another factor. The FMCSA’s Drug and Alcohol clearinghouse has made it more difficult for drivers to work who have a positive drug or alcohol test on their record. The number of states that have legalized recreational marijuana hasn’t reduced the chances of driver consumption, either. A vaccine for the COVID-19 virus could do much to recharge the economy, said ACT’s Vieth. “The coiled spring of pent-up demand in manufacturing will eventually take off,” he noted. At the same time, the reopening of restaurants, bars and vacation destinations would stimulate the service side of the economy. Looking at individual manufacturers, Peterbilt and Kenworth, the U.S. PACCAR companies, both increased sales over September results, as did International, according to numbers received from Wards Intelligence. Kenworth sales of 2,859 were a 2.1% improvement over 2,850 sold in September, but 14.2% behind sales of 3,332 in October 2019. Peterbilt’s 2,699 sold in October bested September sales of 2,686 by 0.5% and only 13 trucks. Compared to October 2019, sales were down 21.6% from 3,444. International saw its best sales month of the year for Class 8 trucks, selling 2,377 of them in October. Although October sales weren’t close to October 2019 sales of 4,609 (a 48.4% decline), they were still 5.4% better than the 2,256 sold a month ago in September. Western Star had a great month with sales of 484 trucks, an increase of 23.8% over September’s 391 and a 2.8% increase over sales in October 2019 of 471 trucks. Mack sales of 1,077 represented a decline of 18.3% from September sales of 1,319. Compared to October 2019, sales declined 12.0% from 1,224. Volvo’s October sales of 1,943 were only 0.9%, or 17 trucks, behind September sales of 1,960. Compared to last October, however, sales declined 13.8% from the 2,248 sold in that month. Freightliner reported sales of 7,332 in October, down 4.9% from 7,713 sold in September and down 4.4% from 7,673 sold in October 2019. As for the share of the new Class 8 U.S. market each manufacturer controls, Freightliner leads them all with 37.3%, up from the 36.8% it held at the same point last year. Kenworth’s 15.3% of the market is up from the 14.7% held last year. Peterbilt’s 14.5% is next, down from 14.8% at the end of October 2019. International holds 12.5% of the new Class 8 market, down considerably from the 14.8% held at the same point of 2019. Volvo, with 9.9%, has gained over last year’s 9.4%, while Mack rests at 7.4%, up from 7.2% last year. With the announcement that Volkswagen’s heavy truck unit, Traton SE, has purchased remaining stock in Navistar for $3.7 billion, a transition to better days may be in the cards for International. Trucking is poised for a great 2021, with Class 8 truck sales expected to continue an upward trajectory. The biggest problem may be in finding drivers for all of those trucks.

Average marginal cost per mile for trucking drops to $1.65, ATRI report shows

The Trucker News Staff - November 25, 2020

ARLINGTON, Va. — The American Transportation Research Institute (ATRI) this week released the findings of its 2020 update to “An Analysis of the Operational Costs of Trucking” (Ops Cost). This newest report documents the slowdown of freight that occurred in the second half of 2019. The economic softening, combined with a number of independent factors — including lower fuel prices — decreased the marginal cost of trucking. The average marginal cost per mile incurred by motor carriers in 2019 decreased 9.3% to $1.65. The line-item costs for almost every major line item experienced some level of decrease. In comparison to the last freight softening, which took place in 2016, marginal costs were still 6 cents higher, indicating the persistence of generally higher costs, the report shows. Combined driver wage and benefits decreased in 2019 — from 77.6 cents per mile in 2018 to 69.3 cents per mile in 2019 — a counterintuitive decrease, given the driver shortage. However, bonuses for drivers universally increased, with retention bonuses showing increases of more than 80%. While the cost per mile for total driver compensation fell, carriers are clearly addressing the driver shortage through other mechanisms, ATRI stated in a press release. ATRI’s 2020 report includes a targeted analysis on “Driving the Trucking Industry: Small Carrier Spotlight,” which compares fleets of 100 or fewer trucks to fleets with more than 100 trucks. “Given the chaos and volatility of freight markets these days, it is more critical than ever that trucking fleets closely monitor their cost centers,” said Brandon Knight, principal of transportation for CliftonLarsonAllen LLP. “ATRI’s Operational Costs report is an important benchmarking tool for fleets of all sizes and sectors.” Using detailed financial data provided directly by motor carriers of all sectors and fleet sizes, ATRI’s Ops Cost research annually documents and analyzes detailed trucking costs from 2008 through 2019. For a free copy of the current report, click here.

ATA’s October Truck Tonnage Index down 6.3% from September, 8.7% below October 2019

The Trucker News Staff - November 25, 2020

ARLINGTON, Va. — American Trucking Associations’ (ATA) advanced seasonally adjusted For-Hire Truck Tonnage Index decreased 6.3% in October after gaining 5.7% in September. In October, the index equaled 106.8 (2015=100) compared with 114 in September. “While there are indications that the economy is losing momentum, I believe October’s tonnage softness was more of a seasonal issue during a pandemic than anything else,” said Bob Costello, chief economist for ATA. “Typical seasonality is off this year, and it was a reason why October was down so much. Not seasonally adjusted tonnage was down a fraction as much as normal over the last five years during September, leading to a big seasonally adjusted gain,” he continued. “However, that means October’s not seasonally adjusted tonnage grew less than half as much as it typically does, leading to a big drop in the seasonally adjusted figure. There are plenty of carriers still saying that tonnage, retail tonnage in particular, is good.” September’s gain was revised down to 5.7% from ATA’s October 20 press release. Compared to October 2019, the seasonally adjusted index contracted 8.7%, the seventh straight year-over-year decline. Year to date, compared with the same period in 2019, tonnage is down 3.9%. The not seasonally adjusted index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, equaled 114.4 in October, 2.7% above the September level of 111.4. In calculating the index, 100 represents 2015. ATA’s For-Hire Truck Tonnage Index is dominated by contract freight as opposed to spot market freight. Trucking serves as a barometer of the U.S. economy, representing 72.5% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 11.84 billion tons of freight in 2019. Motor carriers collected $791.7 billion, or 80.4% of total revenue earned by all transport modes. ATA calculates the tonnage index based on surveys from its membership. This is a preliminary figure and subject to change in the final report issued around the fifth of each month. The report includes month-to-month and year-over-year results, relevant economic comparisons, and key financial indicators.

Tight supply-demand balance reflected in ACT’s latest for-hire index

The Trucker News Staff - November 24, 2020

COLUMBUS, Ind. — The latest release of ACT Research’s For-Hire Trucking Index, which includes data for October, shows a second consecutive month of record tightness. October’s volume index was flat at 70.7 (seasonally adjusted), while pricing dropped two points to 69.2, but still a top-decile result. With capacity and driver availability in contraction territory, at 45.8 and 28.6 respectively, the combination of strong demand and tight supply pushed the supply-demand balance to its tightest level in survey history, now at 74.9. “As capacity tightened further, volume (demand) remained elevated, tightening the market balance even further from already tight levels in recent months,” said Tim Denoyer, vice president and senior analyst for ACT Research. “Class 8 retail sales have improved recently, suggesting equipment capacity will start to grow over the next few quarters, but as a steel shortage could constrain production and with ongoing driver market constraints, tightness is likely to continue in the near-term,” he continued. “We would still expect some loosening after the holiday season, as parked trucks are redeployed when extended unemployment benefits expire, but strong demand from restocking should keep the market fairly tight in the near-term.” ACT Research’s For-Hire Trucking Index is a monthly survey of for-hire trucking service providers. Responses are converted into diffusion indexes, where the neutral or flat activity level is 50. For-hire executives interested in participating in the survey can email [email protected] for information. Survey participants receive a detailed monthly analysis of the survey data, including volumes, freight rates, capacity, productivity and purchasing intentions, along with a complimentary copy of ACT’s Transportation Digest report.

FMCSA clarifies agricultural commodity definitions for farmers, commercial drivers

The Trucker News Staff - November 19, 2020

WASHINGTON — The U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) has published a final rule clarifying agricultural commodity and livestock definitions in hours-of-service (HOS) regulations, the agency announced Nov. 19. FMCSA worked closely with the U.S. Department of Agriculture (USDA) on the rule in an effort to provide clarity for the nation’s farmers and commercial drivers. “The agriculture industry is vital to our nation, and this new rule will provide clarity and offer additional flexibility to farmers and commercial drivers, while maintaining the highest level of safety.” said U.S. Transportation Secretary Elaine L. Chao. “I applaud Secretary Chao for recognizing these obstacles and working with USDA to come up with common sense definitions for agricultural commodities and livestock that meet both the needs of agricultural haulers and public safety – critical concerns for all of trucking,” said U.S. Secretary of Agriculture Sonny Perdue. Currently, during harvesting and planting seasons as determined by each state, drivers transporting agricultural commodities, including livestock, are exempt from the HOS requirements from the source of the commodities to a location within a 150-air-mile radius from the source. The agricultural commodity rulemaking from FMCSA was prompted by indications that the current definition of these terms may not be understood or enforced consistently when determining whether the HOS exemption applies. FMCSA published an advanced notice of proposed rulemaking in July 2019 to solicit feedback from the agriculture community. Based on a review of the public comments, FMCSA has published this new rule to clarify the meaning of these existing definitional terms to ensure that the HOS exemptions are utilized as Congress intended. “Our nation’s farmers and agriculture haulers will benefit from this clarification of the rules and will be able to deliver their products in a safer and more efficient manner. These improved rules will help farmers move commodities and get food to our grocery stores. We have heard the concerns from our famers and ag haulers and we’ve worked closely with USDA and the industry to provide regulatory clarity and craft this new rule,” said FMCSA Deputy Administrator Wiley Deck. FMCSA continues to work closely with the U.S. Department of Agriculture to eliminate confusion and further align the agencies’ interpretations of agricultural commodity definitions. To read the final rule on agricultural commodity clarifications, click here.

Knichel, Teuton tie for this year’s ‘Influential Woman in Trucking’ award

The Trucker News Staff - November 17, 2020

PLOVER, Wis. — Kristy Knichel, CEO of Knichel Logistics, and Jodie Teuton, vice president of Kenworth of Louisiana/Hino of Baton Rouge and Monroe, have been honored with the 10th annual Influential Woman in Trucking award by the Women in Trucking Association (WIT) and Freightliner Trucks. The winners were announced during WIT’s Accelerate! Virtual Conference & Expo, after a panel discussion that included all of the finalists for the 2020 Influential Woman in Trucking award and was facilitated by Dr. Rita Webster, a women’s leadership coach. The award was presented by Kary Schaefer, general manager of product marketing and strategy for Daimler Trucks North America. “Congratulations to all the nominees and the 2020 winners, Kristy Knichel and Jodie Teuton. The diverse pool of nominations, from across all parts of the trucking profession, highlight the impact women have in our industry and the contributions they make to help promote careers in trucking and logistics,” Schaefer said. “Kristy and Jodie are inspirational not only for being exceptional business leaders and role models but for driving change in their local communities. It is an honor for Freightliner to be able to recognize all of the nominees for their achievements over the past year.” The Influential Woman in Trucking award recognizes women in the trucking industry who make or influence key decisions, have a proven record of responsibility, and mentor and serve as a role model to other women. The award was developed in 2010 as a way to honor female leaders in trucking and to attract and advance women within the industry. Finalists for the 2020 Influential Woman in Trucking award also included Crystal Anderson, owner of Donald D. Anderson Jr. Trucking; Katrina Liddell, president of global forwarding and expedite operations in North America for XPO Logistics; Vana Matte, senior vice president of engineering and technology for J.B. Hunt Transport Services Inc.; and Michal Yariv, vice president and general manager of strategic initiatives for Omnitracs LLC. “The six finalists were all outstanding candidates,” said Ellen Voie, WIT president and CEO. “After scoring the nominations, the judging panel had a tie for first place. With 2020 being the tenth anniversary of this award, it seemed appropriate to have two winners this year. This award is our way of thanking Kristy and Jodie for their commitment and service to the industry.” Kristy Knichel Knichel, a lifelong Pittsburgh native, is a second-generation logistics executive. Since taking over as president of Knichel Logistics in 2007, she has been the driving force behind the company’s yearly growth and reputation as one of the top service providers within the IMC community. As of 2019, Knichel Logistics has grown to $83 million in revenue. Knichel said her proudest accomplishments are winning the inaugural Distinguished Woman in Logistics Award from WIT and her appointment as the Intermodal Logistics Conference Chair on the TIA board of directors. She has recently been featured in Pittsburgh Magazine for Women in Business. For the second year in a row, she has received an award for the top 50 fastest-growing companies in Pittsburgh. Today, her focus is on expanding Knichel Logistics’ footprint through strategic development and continuing to offer her team members the opportunity for growth and self-improvement. “I am so honored to be chosen, along with Jodie, by the Women in Trucking Association for this prestigious award. All of the finalists are such talented women in this industry and deserve to be recognized for their accomplishments,” Knichel said. “WIT’s mission is one that I wholeheartedly support and am passionate about, which makes being named a 2020 Influential Woman in Trucking even more amazing. Words cannot describe how grateful I am.” Jodie Teuton Teuton is the co-founder of Kenworth of Louisiana, a heavy-duty truck dealership group that represents both Kenworth and Hino truck brands and has seven Louisiana locations. Before devoting her professional career to the retail auto and truck business in 1997, she practiced law locally in South Louisiana. Teuton is a native of Terrebonne Parish where she currently lives with her husband and business partner, Scott Oliphant. She is also “Wonder Woman” to the couple’s daughter, Victoria, a junior at Millsaps College in Jackson, Mississippi. Teuton received a bachelor of science degree in business from Nicholls State University in 1987 and her juris doctor degree from Loyola University in 1990. She said she is passionate about business and proud to carry on her family’s legacy. She is a past president of American Truck Dealers-ATD (a division of the National Auto Dealers Association) and currently represents Kenworth Dealers on ATD’s board of directors. “All women who choose transportation careers are winners,” Teuton said. “I am humbled by this recognition and ready for more opportunity to grow our ranks in an industry that welcomes all. Trucking has been called the lifeblood of this country. Let’s keep it flowing together.”

U.S. Xpress, MIT partner to improve driver efficiency

The Trucker News Staff - November 16, 2020

CHATTANOOGA, Tenn. — U.S. Xpress Inc. is collaborating with the Massachusetts Institute of Technology’s (MIT) Center for Transportation & Logistics to develop a roadmap to improve driver efficiency, according to a statement released by U.S. Xpress. Graduate students in the MIT Supply Chain Management master’s degree program will use statistical modeling and artificial intelligence to study U.S. Xpress company data, including GPS stats for more than 7,500 tractors; loaded and unloaded data for nearly 15,000 trailers; driver hours of service; shipper rates; appointment times; and arrival and departure trends. MIT plans to publish research findings in summer 2021. “This partnership with MIT is another example of U.S. Xpress tapping the brightest minds in technology to help drive company innovation,” said Eric Fuller, president and CEO of U.S. Xpress. “Improving driver efficiency can ultimately enhance the driver experience and generate more value for our shipping partners.” Per federal hours-of-service regulations, truck drivers are limited to a 14-hour shift, but just 11 of those can be spent driving. MIT’s capstone research will outline opportunities to safely maximize efficiency within that 11-hour driving window to bring more value to shippers, drivers and the company. In addition to partnering with MIT, U.S. Xpress is taking steps to improve efficiency by developing parking locators that reduce wasted miles spend finding open parking spaces; telematics, geo-fencing and GPS tracking to route tractors to service facilities; and predictive analytics that bring tractors in for service before service failures occur on the road. In 2019, U.S. Xpress introduced Variant, a new carrier brand built on technology. Proprietary software utilizes machine learning and algorithms to automate load planning and scheduling, generating more revenue for drivers and the company.

Medallion Transport names Jesse Merrell as new chief operating officer

The Trucker News Staff - November 13, 2020

MT. LAUREL, N.J. — Medallion Transport Holdings has appointed Jesse Merrell as chief operating officer (COO). Merrell has served as vice president of Medallion’s heavy haul division for the past five years. He will now play a critical role in overseeing operations for all of Medallion’s entities, including Medallion Transport & Logistics, NHH Services, ACE Heavy Haul, Medallion International and Medallion Hospitality. The company’s safety department, business development, marketing and communications, dispatch, agent development and retention, and owner-operator recruitment will all be managed under Merrell’s leadership. “He’s a leader; he’s a great ambassador for the company. He brings the ability to merge what’s made us great and we need to do to be great going forward,” said Gary Weilheimer, president and CEO of Medallion. Merrell will oversee a national agent network and a fleet of more than 400 power units from the company’s newest corporate office in Kokomo, Indiana. He has hired and brought over team members in various departments, including qualifications, company communications, trailer rentals and fleet maintenance, and will continue to drive growth while improving internal processes and communication. “With Jesse as our COO and as a leader in our organization, we are positioned to meet the demands of the future of transportation and logistics in all different dynamics that we service,” Weilheimer said. “Jesse’s the complete package with knowledge, background and diversity, and brings us the experience and the new way of doing business.” Merrell is a diverse company leader with roots in the trucking and logistics industry as an agency owner. He began his 20-year career in the trucking and logistics industry during college. At 18, he earned a commercial driver’s license (CDL) and drove a truck delivering building materials to pay for tuition. In the early 2000s, after earning a degree in agriculture degree from Purdue University, he took a position selling semitrucks throughout the Midwest. After much success in sales, Merrell was hired as an operations and sales manager for a transportation company in 2003. In 2007, he and his father opened their own agency, National Heavy Haul. The pair grew the agency significantly, and became the largest exporter of construction equipment overseas, shipping more than 5,000 tractors per year at the time. After almost eight years of managing trucks and his own agency, Merrell made the decision to join Medallion in 2015. Merrell has an impressive track record with the company. As the vice president of heavy haul, he built a successful marketing program, involving the company in major truck shows nationwide. He also built a team of business developers and capacity recruiters, adding more than 75 trucks to the company’s capacity in the past year, including during the COVID-19 pandemic. Merrell attributes this achievement to the hard work of agents, employees and company capacity. Medallion also opened its first truck yard and driver’s lounge outside of Houston, Texas, under Merrell’s direction. The company plans to open more yards and lounges, while continuing to develop more initiatives to support company owner-operators. Merrell has expanded the company’s use of technology, coupling his hands-on, face-to-face approach with advanced software and applications to keep the company thriving. “It’s about finding ways to better utilize technology to make us more efficient, but without losing our focus on human interaction,” Merrell said. Refining Medallion’s owner-operator onboarding program is a main factor that put Merrell on the path to becoming COO. He added additional touch points and communication, giving every owner-operator the ability to learn more and take advantage of program perks. Since Merrell joined Medallion, National Heavy Haul grew from a single agency to 35, with more than 100 trucks. While Merrell and the current management team have big plans to maintain an edge through technology and new programs, Merrell said his main focus is to create a better life for everyone affiliated with the company. “Trucking is not a job; it’s a lifestyle,” he said.

Make the most of fuel surcharges by squeezing the most from each gallon

Cliff Abbott - November 13, 2020

Fuel discounts are good. So are fuel surcharges. If you’re an owner-operator, you’ll be able to quickly answer this simple question: What is your average fuel cost per gallon? If you can’t answer, you’re not doing a good job of managing your trucking business. No business expense impacts the bottom line as much as the cost of fuel. A truck running 10,000 miles per month — not particularly difficult on highways with 65 to 75 mph speed limits — burns 1,667 gallons of fuel in the same month, at 6 mpg. At $2.39 per gallon, the national average price for a gallon of diesel fuel on Oct. 31, according to the U.S. Energy Information Administration (EIA) (eia.gov/petroleum/gasdiesel), it adds up to just shy of $4,000 per month in fuel cost. A 5-cents-per-mile fuel surcharge, at the same 6 mpg, knocks 30 cents per gallon off the fuel price. At the end of the month, that’s worth $500 off of the fuel bill — a reduction of more than 12.5%. About that fuel price. We’re entering an uncertain period for the petroleum industry after enjoying relatively low fuel pricing for several years. The reduction in travel due to COVID-19 restrictions has undoubtedly reduced demand for fuels, driving prices downward. As the country reopens, demand should increase, and prices will likely increase along with it. Additionally, advances in the manufacture of hybrid and electric-powered vehicles, coupled with increased sales, could further impact fuel prices. Changes in government policy to restrict fracking and promote transition away from petroleum products may have an impact as well. As diesel fuel prices rise, fuel surcharges should rise as well. What impact the changes will have on your bottom line depends to a great extent on the mpg your tractor achieves. That’s because the fuel surcharge is usually paid on a per mile basis. In some cases, it is paid as a percentage of the per mile freight rate, which equates to the same thing. The end result is that by increasing your mpg, you’ll decrease the number of gallons of fuel you’ll burn for that trip — without decreasing the fuel surcharge you’ll receive. Using our prior example of an average nickel (5 cents) per mile fuel surcharge, applied to 10,000 miles per month, results in $500 extra to spend on fuel. But what if you could increase your fuel mileage to 7 mpg? You’d still receive the extra $500 in surcharges, but you’d be buying 1,429 gallons of fuel instead of 1,667 (238 fewer gallons). At the current price of $2.39 per gallon, that’s a savings of $568.82, on top of the $500 surcharge payment. If you can achieve 8 mpg, your fuel consumption for 10,000 miles drops by another 179 gallons, while your fuel cost drops by another $426. Granted, these examples call for some pretty drastic declines in fuel consumption. But remember, your total fuel consumption includes all the fuel burned, even while idling. If you could reduce idling, decrease your average speed by a few miles per hour and take greater advantage of fuel-saving technologies available for tractors and trailers, you might be surprised at how much you could improve your fuel mileage. Other decisions could be impacted by fuel savings, too. For example, our example of a 2 mpg improvement nets about $995 per month additional cash. If you’re planning to upgrade your tractor any time soon, would an extra $995 per month help with the financing? True, you’d be spending your fuel savings on a truck payment, but you’d have newer equipment that, in theory, saves on maintenance costs and missed revenue due to downtime. Perhaps the additional revenue could pay for an APU that helps eliminate idling in your current truck, or maybe the purchase of fuel-saving technology like trailer skirts, scoops and tails, or tractor tech like wheel covers and flow-through mud flaps. Or, maybe the additional bottom-line income would go home to your family and help with the bills. No matter how you choose to use the additional income, fuel surcharges go farther when you reduce the amount of fuel you burn. As fuel prices go higher, it becomes even more important to make the most of fuel surcharges by reducing fuel consumption. It’s just good business.

Tenstreet acquires Stay Metrics, companies plan to provide enhanced resources for driver recruiting, retention, data

The Trucker News Staff - November 10, 2020

TULSA, Okla. — Tenstreet, a provider of driver-recruiting software and workflow solutions for the trucking and transportation industry, has acquired Indiana-based Stay Metrics, a company best known for its driver-retention strategy solutions and metrics. The acquisition will allow Tenstreet and Stay Metrics to provide a more powerful, comprehensive service for both carriers and drivers in the areas of recruiting and retention, according to a statement released Nov. 10. With experts in recruiting and retention working together under one virtual “roof,” the companies said they can provide solutions to help clients fill their trucks faster and retain drivers longer, now with a more extensive driver data set shared among the client base and over one unified platform. Each company is known for its unique collection of driver data, which provides carriers insight into the current state of the driver market, highlights trends in driver behavior, and helps companies overall to make better data-based decisions. In addition, drivers will benefit from the acquisition because Tenstreet’s Driver Pulse, a mobile app that helps drivers find jobs, onboard and manage their career, will be enhanced to encourage deeper engagement with carriers through satisfaction surveys, rewards programs and driver-wellness training. Tim Hindes, CEO of Stay Metrics, will continue to lead the retention side of the organization, while Tim Crawford, CEO of Tenstreet, will lead the whole of Tenstreet in its core service categories of marketing, recruiting, onboarding, safety, compliance — and now retention. Crawford expressed enthusiasm about the acquisition. “I’m really excited to be joining forces with the team at Stay Metrics,” he said. “We both share a vision for better connecting carriers and drivers and are looking forward to bringing great solutions to the market.” Hindes agreed, saying the team is “energized” by the possibilities afforded by the merger. “This transaction allows us to bring our suite of driver retention products to the broader market,” Hindes said. “Being on the Tenstreet platform will make it easier for drivers to engage with our surveys and rewards programs and will bring the market best in class recruiting and retention services.” Stay Metrics will exist under the Tenstreet umbrella, and Stay Metrics’ service offerings will be added to Tenstreet’s existing product catalog. Current clients of both companies will continue “business as usual” with their current account manager/team and current pricing.

Industrial truckload shipments see decline, while retail markets show definite benefit for smaller carriers

Cliff Abbott - November 10, 2020

Trucking capacity continued to be tight in September, with plenty of freight to haul and too few trucks to haul it. The result was another month of increasing freight rates and complaints from carriers about a lack of driver availability. The American Trucking Associations’ (ATA) September For-Hire Truck Tonnage Index showed a 6.7% increase in September over August numbers. The ATA Index was 115.1, meaning the amount of freight reported was 15.1% higher than the baseline year of 2015. The ATA release noted that September 2020 figures were 3.3% lower than September 2019. ATA was one of the few sources to actually record a freight decline in August, but the type of freight hauled undoubtedly had an impact. ATA members haul a lot of truckload contract freight from industrial sources, while the strength in the recent economy has been in consumer (retail) and building. The result is that smaller carriers and independents benefit more from the type of economy seen over the summer. “The truck freight market continues to be bifurcated, with strength in retail and home construction, but some continued weakness in industrial freight,” said Bob Costello, ATA’s chief economist. “During the third quarter, truck tonnage increased 2.4% over the second quarter, but fell 5.3% from a year earlier.” The Nov. 2 “Monday Morning Coffee” blog from FTR reported that U.S. orders for durable goods such as vehicles and appliances rose 1.9% in September. Motor vehicles and parts were a large part of the increase. Orders for durable goods have risen for five consecutive months, a good omen for trucking. The downside of the current economy, according to the FTR blog, is continued unemployment and the uncertainty of the spread of COVID-19. Further shutdowns or restrictions can quickly reverse economic gains. ACT Research’s For-Hire Trucking Volume Index for September rose to 70.7. The ACT Index uses 50 as a baseline; anything higher is positive or growing, and anything lower is contracting. The firm’s Pricing Index hit 71.3, a two-year high. Both are influenced by the Supply-Demand Index, which should be at 50 when supply and demand are in equilibrium. In September, they weren’t. The Supply-Demand Index was at 74.1, the tightest level since ACT started conducting the survey. “As capacity tightened further, volume (demand) also accelerated, tightening the market balance even further from already tight levels in recent months,” said Tim Denoyer, ACT’s vice president and senior analyst. The ACT report also monitors capacity and driver availability. Capacity came in at 46.6, indicating that there still aren’t enough trucks available. A huge reason for the dearth of trucks, however, is shown in the firm’s Driver Availability Index, which was 30.6 for September. Some drivers who were laid off or furloughed during COVID shutdowns simply haven’t returned to trucking, while numerous small trucking businesses and owner-operators have elected to park or sell their equipment due to difficult times. An Oct. 28 press release by ACT outlined findings in the firm’s Transportation Digest, stating that motor carriers “are enjoying a period of volume growth and pricing power that would have been considered nearly impossible to achieve, though welcome, from an April 2020 vantage point.” “While we were even then projecting a second half 2020 rebound, the slope of the upward trajectory that started in May has been as unexpected as it has been exponential,” said Kenny Vieth, ACT’s president and senior analyst. “While severe, the 2020 recession was short-lived for some sectors of the U.S. economy, particularly transportation,” he explained. “The voluntary and mandatory shutdowns of March and April triggered a downturn of unprecedented severity, but the corresponding relaxation has brought a strong revival.” The positive news was reflected in DAT spot pricing numbers, too. The company’s website reported that posts for spot loads have been decreasing in recent weeks, slowing the growth of spot rates, which may be lower in some areas. Those rates are still in record-setting territory, however, as DAT reports the number of available loads at double the volume available in September of 2019. According to DAT, average van spot rates ended October at $2.41 per mile, up 4 cents from September’s $2.37. Flatbed rates showed a similar increase, ending October at $2.45 compared to September’s $2.41. Refrigerated rates increased to an average of $2.59 per mile in October, 2 cents above the September average of $2.57 per mile. We are entering the time of year when winter weather can impact spot rates, with a strong storm system having the potential to shut down transportation, depending on where it strikes. Additionally, DAT reports record import numbers arriving at West Coast ports, expected to tighten capacity, and drive rates upward, for loads out of that area. On the refrigerated side, the “leafy vegetable” season is set to commence in Arizona and Southern California, creating rate pressure in those markets. Finally, the national election will be over by the time this story reaches newsstands. Factors such as COVID-19 restrictions or shutdowns, fuel prices and the pace of economic growth could all be impacted by election results. How severely, and in which direction, will become evident in coming months. 8

TRATON, Navistar announce definitive merger agreement at $44.50 per share, total cost nearly $3.7 billion

The Trucker News Staff - November 9, 2020

MUNICH and LISLE, Ill. — TRATON SE and Navistar International Corp. announced Nov. 7 that the two companies have reached a definitive merger agreement. Under the agreement, TRATON will become the owner of all of the outstanding common shares of Navistar not already owned by TRATON at a price of $44.50 USD per share in cash — a final cost of cost of nearly $3.7 billion USD. “Together, we will have an enhanced ability to meet the demands of new regulations and rapidly developing technologies in connectivity, propulsion and autonomous driving for customers around the world,” said Matthias Gründler, CEO of TRATON. “Navistar has been a valuable partner, and we are confident this combination will deliver compelling strategic and financial benefits, create enhanced opportunities for both Navistar and TRATON, and best position us to drive sustained value in the evolving global commercial vehicle industry.” TRATON and Navistar formed a strategic alliance in March 2017 that allows both companies to benefit from an increased purchasing scale and the integration of new technologies. “This transaction builds upon our highly collaborative and successful strategic alliance and further enhances the growth trajectory of the combined company, while delivering immediate and substantial value to our shareholders,” said Persio Lisboa, president and CEO of Navistar. “We look forward to continuing to work with the TRATON team to create opportunities for our employees and provide an outstanding experience for our customers and dealers through best-in-class products, services and technologies.” According to a prepared statement released by TRATON and Navistar, the merger builds on the success of the 2017 alliance by combining TRATON’s strong position in Europe and substantial presence in South America with Navistar’s footprint in North America to create a well-positioned global company. As TRATON’s biggest shareholder, Volkswagen also has a stake in the merger. “The agreement is … an important milestone for Volkswagen because it underpins our strong strategic commitment to continue driving growth also during the ongoing challenging economic climate,” said Gunnar Kilian, member of the board of management of Volkswagen AG and responsible for Volkswagen’s truck and bus division. “The acquisition of Navistar will significantly leverage TRATON’s positioning in North America, one of the biggest and most profitable markets for heavy trucks. Together, the companies can enhance scale and reach in key markets as well as create further synergies.”

Volvo, Daimler cement agreement on production of commercial fuel-cell systems for heavy-duty trucks

The Trucker News Staff - November 3, 2020

STUTTGART, Germany, and GOTHENBURG, Sweden — The Volvo Group and Daimler Truck AG have signed a formal, binding agreement for a joint venture to develop, produce and commercialize fuel-cell systems for use in heavy-duty trucks as the primary focus, as well as other applications. The two companies initially announced the signing of a preliminary nonbinding agreement in April. According to a Nov. 2 statement released by Volvo and Daimler, the ambition of both partners is to make the new company a leading global manufacturer of fuel cells; by doing so, they hope to help the world take a major step toward climate-neutral and sustainable transportation by 2050. Under the terms of the formal agreement, the Volvo Group will acquire 50% of the partnership interests in Daimler Truck Fuel Cell for approximately 0.6 billion euros (about $702,269 U.S. dollars) on a cash, debt-free basis. The Volvo Group and Daimler Truck AG will own equal interests in the joint venture but will continue to be competitors in all other areas such as vehicle technology and fuel-cell integration in trucks. The transaction is expected to close during the first half of 2021, but is still subject to merger control review by relevant authorities, as well as other approvals. “For us at Daimler Truck AG and our intended partner, the Volvo Group, the hydrogen-based fuel-cell is a key technology for enabling CO2-neutral transportation in the future,” said Martin Daum, chairman of the board of management for Daimler Truck AG and member of the board of management for Daimler AG. “We are both fully committed to the Paris Climate Agreement for decarbonizing road transport and other areas, and to building a prosperous jointly held company that will deliver large volumes of fuel-cell systems.” The joint venture will take advantage of the expertise and extensive experience from several decades of development work on fuel-cells at Daimler, along with both companies’ experience in technology development, industrialization and large-scale vehicle production. “In the future, the world will be powered by a combination of battery-electric and fuel-cell electric vehicles, along with other renewable fuels to some extent,” said Martin Lundstedt, president and CEO of Volvo Group. “The formation of our fuel-cell joint venture is an important step in shaping a world we want to live in.” In addition to trucks, there are other areas of application for the type of fuel-cell system Volvo and Daimler plan to create. The joint venture will develop a system with several power stages, including a twin system with 300 kW continuous power for heavy-duty long-haul trucks. Based on the demanding conditions in heavy-duty truck applications, the joint venture’s products are also ideally suited for other use cases such as stationary power generation. The two companies hope to begin customer testing of fuel-cell trucks by 2023, and to begin series production during the second half of this decade.

Sherri Garner Brumbaugh elected ATA chair, becoming second woman to lead association

The Trucker News Staff - November 2, 2020

ARLINGTON, Va. — The Board of Directors of American Trucking Associations (ATA) have elected Sherri Garner Brumbaugh as the organization’s 76th chair during ATA’s Management Conference and Exhibition Oct. 28. Garner Brumbaugh, president and CEO of Garner Transportation Group, Findlay, Ohio, will be the second woman to lead the association. “I am humbled and honored to be chosen by my fellow truckers to be chair of ATA,” Garner Brumbaugh said. “Despite the unprecedented challenges we face, I look forward to representing ATA and telling the country just how important and essential our industry is. The past seven months have shown just how much our country relies on trucking, and that is a message I want to shout loudly and proudly as your chair.” Garner Brumbaugh succeeds Randy Guillot, president of Triple G Express Inc. and Southeastern Motor Freight Inc., as ATA chair. “Sherri has been tireless booster of trucking, not just in Ohio, but across the country,” said Chris Spear, president and CEO of ATA. “As a second-generation trucker and ATA leader, she has deep roots in our industry and association, and I congratulate her on this honor.” In addition to being ATA’s second female chair, Garner Brumbaugh is the second member of her family to be elected ATA chair. She follows in the footsteps of her father, Vern Garner, who led the association from 2002-2003. In addition to Garner Brumbaugh’s work with ATA, she has been active with the Ohio Trucking Association, the Truckload Carriers Association, Truckers Against Trafficking and Wreaths Across America. The ATA board also elected Harold Sumerford Jr., CEO of J&M Tank Lines Inc., Birmingham, Alabama, as ATA first vice chairman, and Dan Van Alstine, president and COO of Ruan Transportation Management Systems, Des Moines, Iowa, as ATA second vice chairman. In addition, the Board named Andrew Boyle, co-president of Boyle Transportation, Billerica, Massachusetts, and Darren Hawkins, CEO of YRC Worldwide Inc., Overland Park, Kansas, as ATA vice chairmen. The Board re-elected John M. Smith, chairman of Admiralty Holdings Inc., as secretary and John A. Smith, president and CEO of FedEx Freight, as treasurer.