Business

CARNESVILLE, Ga. — Landstar recently broke ground for the construction of a new 8,000-square-foot orientation center in Carnesville, Georgia. The building is planned for Landstar’s business capacity owners (BCOs), the company’s term for its independent owner-operators under exclusive lease agreements. It will include two classrooms, a conference room and several amenities including laundry, showers and break rooms for BCOs. There also will be a secured parking lot for more than 120 tractor-trailer combinations and 70 additional passenger vehicles. The Landstar orientation center currently located in Jefferson, Georgia, will close Aug. 31. The new center in Carnesville is expected to open in September 2020. In the above photo, Andy Hardaker project manager at Elkins Construction, left, is shown with Rocco Davanzo, Landstar Transportation Logistics executive vice president of capacity development, at the new site.

WASHINGTON — Thanks to America’s truck drivers and their willingness to risk infection from COVID-19, store shelves remain stocked and critical supplies continue to be transported across the nation’s highways. After this phase of the crisis is over and recovery begins, truckers will still have the same challenges with overregulation, working conditions and pay, according to the Owner-Operator Independent Drivers Association (OOIDA), an organization that represents 160,000 small-business truckers and professional drivers. The association sent a letter to Congress April 6 that outlines issues OOIDA sees as top priority moving forward. Click here to view the letter. “Without any sort of work-from-home option, truckers are manning the front lines of the industry as they always have done,” said Todd Spencer, OOIDA president and CEO. “They certainly welcome the public praise from all who have noticed their role in the pandemic response. But they will need more than words to stay afloat in an uncertain future.” OOIDA has asking Congress to prioritize the following: R. 6104, the Truck Parking Safety Improvement Act, should be passed to address the shortage of parking for trucks. This bipartisan legislation would provide dedicated funding for projects that expand truck parking capacity. Congress must support efforts by the Federal Motor Carrier Safety Administration (FMCSA) efforts to modernize and improve hours-of-service (HOS) regulations. Truckers shouldn’t just get temporary relief when the nation needs their help in responding to an emergency. Congress must take steps to address the persistent problem of excessive detention time, which reduces driver wages, slows the movement of freight and has been linked to increased crash rates. Many drivers spend countless unpaid on-duty hours being detained due to the inefficiency of others within the supply chain. Congress must repeal the overtime exemption for employee drivers in the Fair Labor Standards Act (FLSA). The average truck driver works 60 to 70 hours per week, which is rarely, if ever, reflected in their compensation. Congress must waive the 2020 payment of the Heavy Vehicle Use Tax (HVUT) to provide immediate tax relief to owner-operators, many of which are struggling to keep their businesses operational during and after the crisis. “These aren’t necessarily the only issues in trucking that need to change to bring improvements,” Spencer said. “But memes and applause don’t pay bills or reduce the overregulation that keep them from making a living. These are things that Congress can move quickly on to help truck drivers.”  

COLUMBUS, Ind. – Cummins Inc., best known for manufacturing diesel-truck engines, has announced several temporary salary cuts and working-hours reductions for employees in response to the impact of COVID-19. “The impact from the pandemic on the global economy has been sudden and is growing, and it is imperative for us to respond quickly to maintain our strong financial position,” said Tom Linebarger, chairman and CEO of Cummins Inc. In response to lower demand and customer shutdowns in several countries, the company is taking the following temporary actions to lower costs: A reduction of 50% in the salary of the CEO; A reduction of 25% in director compensation; and A reduction in salary for all other employees in the United States of between 10% and 25% and a reduction in working hours The company will take similar actions outside the United States based on local regulations and collective bargaining obligations. These reductions in pay are intended to be a temporary measure; the company will continue to monitor business conditions closely and reassess the program at the end of the second quarter. “These are difficult but necessary actions and I know they will have a real impact on the lives of our employees and their families,” added Linebarger. “I appreciate their understanding and support as we work through these challenging times together. I want to thank our employees for their continued commitment to ensuring our customers receive the products and service they need to provide essential support to the global economy.”

SPRINGDALE, Ark. –Tyson Foods Inc. recently announced it will pay approximately $60 million in “thank-you” bonuses to 116,000 front-line workers and Tyson truckers in the U.S. who support the company’s operations every day to provide food during the COVID-19 pandemic. Eligible team members will receive a $500 bonus, payable during the first week of July. “We’re proud of how our team members have stepped up during this challenging time to make sure we continue fulfilling our critical mission of feeding people across America,” said Tyson Foods CEO Noel White. “Our team members are leading the charge to continue providing food to the nation. The bonuses are another way we can say ‘thank you’ for their efforts.” The payments are in addition to other changes Tyson Foods has made to protect and support workers and to ensure continuity in the U.S. food system. The company is restricting visitor access to its facilities and relaxed its attendance policy to reinforce the importance of staying home when sick or to meet child care needs. It has implemented the use of temporal thermometers to check the temperature of team members before they enter company facilities and expects delivery of infrared temperature scanners following a successful trial. In addition, the company is offering protective face coverings for production workers who request them and is working with the Centers for Disease Control and Prevention (CDC) on additional guidance on the use of personal protective equipment. Tyson Foods, which has mandatory health care coverage, is waiving the five-consecutive-day waiting period for short-term disability benefits so workers can receive pay while they’re sick with the flu or COVID-19 and is making other COVID-19-related health-insurance accommodations.

BELLEVUE, Wash. — PACCAR Inc. will extend the suspension of truck and engine production at its factories worldwide until April 20 as a consequence of the COVID-19 pandemic. Production was originally suspended until April 6. The company will review future actions on a regular basis. PACCAR will continue to provide aftermarket support to its customers who deliver medical supplies, food and essential infrastructure services to communities. PACCAR’s financial results for 2020 will be impacted by lower production schedules due to changes in customer demand and the impact of government regulations or mandates. The company will provide a business update and first-quarter results during the earnings call scheduled for April 21. “PACCAR’s excellent balance sheet, experienced leadership team and outstanding employees will contribute to the company successfully managing through this difficult period,” said CEO Preston Feight. PACCAR is a global technology leader in the design, manufacture and customer support of light-, medium- and heavy-duty trucks under the Kenworth, Peterbilt and DAF nameplates. PACCAR also designs and manufactures advanced powertrains, provides financial services and information technology, and distributes truck parts related to its principal business.

With supply chains strained by the impact of the COVID-19 pandemic, spot truckload rates were higher for all three equipment types during the week ending March 22, according to DAT Solutions, which operates the industry’s largest load board network. National Average Spot Rates, March (through March 22) Van: $1.85 per mile, up 3 cents from last week and 6 cents higher than the February average Refrigerated: $2.16 per mile, up 5 cents from last week and 7 cents higher than February Flatbed: $2.20 per mile, unchanged from last week, and up 5 cents compared to February VAN TRENDS Rates are up 12%: The average spot van rate increased on 88 of the 100 highest-volume lanes on DAT load boards compared to the previous week. The line-haul van rate (no fuel surcharge), which entered the month below last year’s average, has increased 12% from $1.51 per mile on March 1 to $1.70 per mile on March 23. Demand for trucks is rising: The national average van load-to-truck ratio last week was 3.5, up from 3.2 the previous week. That’s the eighth straight week of rising ratios. More dramatically, the average ratio has more than doubled (up 150%) since the same week in 2019. Mid-range hauls are paying better: Any overnight stay for the driver involves safe parking, decent food and other roadside necessities that are in short supply right now. Shippers are paying more for van capacity on “tweener” lanes with lengths of haul in the 250- to 600-mile range. Examples include: Memphis to Chicago averaged $2.06 per mile, up 25 cents; Chicago to Memphis added 10 cents to $1.93. Atlanta to Columbus, Ohio, averaged $1.78 per mile, up 19 cents; Columbus to Atlanta rose 8 cents to $2.06. Columbus to Memphis averaged $1.75 per mile, up 14 cents; Memphis to Columbus gained 8 cents to $2.16. Dallas to Houston averaged $2.42 per mile, up 19 cents; Houston to Dallas rose 3 cents to $2.03. REEFER TRENDS The average spot rate increased on 66 of the 72 highest-volume reefer lanes DAT tracks. Supply chain shifts: Large-scale shutdowns of schools, restaurants and other food-service venues have focused shippers’ and carriers’ attention almost entirely on retail grocery outlets, including e-commerce. Further, reefers must be loaded “live” with perishable goods, making delays and disruptions even more costly. More pressure coming: In the coming weeks, a new layer of demand will be added to the mix when spring produce harvests begin. Expect reefer rates to remain elevated from now through the end of June.

ARLINGTON, Va. — American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index rose 1.8% in February after falling 0.3% in January. In February, the index equaled 119.1 (2015=100) compared with 116.9 in January. “Before any impacts from COVID-19, truck tonnage had a solid month in February. Last month, solid housing starts, high levels of retail sales and even a modest improvement in manufacturing activity all helped freight volumes,” said Bob Costello, ATA’s chief economist. “With truck tonnage up nicely from a year earlier in February, the trucking industry was in a fairly good place before economic impacts hit from the health crisis,” he said. “Trucking volumes, early in the COVID-19 emergency, will be positive for consumer staples and other commodities before we see a slowdown as the economy contracts in the second quarter.” ATA recently revised January’s index down from the initial reading that was noted in a Feb. 18 press release. Compared with February 2019, the SA index rose 2.6%, which was preceded by a 0.4% year-over-year gain in January. During the first two months of 2020, the index rose 1.5% compared with the same two months last year. In 2019, the index was 3.3% above 2018. The not-seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 108.2 in February, 5.2% below the January level (114.1). In calculating the index, 100 represents 2015. Trucking serves as a barometer of the U.S. economy, representing 71.4% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 11.49 billion tons of freight in 2018. Motor carriers collected $796.7 billion, or 80.3% of total revenue earned by all transport modes. ATA calculates the tonnage index based on surveys from its membership and has been doing so since the 1970s. This is a preliminary figure and subject to change in the final report, which is issued around the fifth day of each month. The report includes month-to-month and year-over-year results, relevant economic comparisons and key financial indicators.

LOWELL, Ark., – J.B. Hunt Transport, Inc. will provide a one-time bonus of $500 for drivers and personnel at field operations and customer facilities supporting the drivers who have kept the country’s freight moving during the COVID-19 pandemic. “All of our employees have gone above and beyond the call to action during this crisis. And nearly all of our field-level, front-line employees and certainly all of our drivers are required in person and have upheld the high standards of our company. They have kept pace with the evolving supply chain needs of our customers in the face of great uncertainty,” said John Roberts, president and CEO of J.B. Hunt. “These bonuses serve as a token of our appreciation for their service and hard work during these unprecedented times.” The bonus will be available to eligible employee drivers, as well as field employees and managers in terminals, intermodal ramps, maintenance shops, Dedicated Contract Service account locations, and Final Mile distribution centers who directly support drivers. The bonus will be paid on March 27. J.B. Hunt has taken several precautions to prevent the spread of COVID-19. Earlier this month the company issued a directive to work from home until at least April 3, 2020, for employees whose on-site presence is not required to perform their work. J.B. Hunt has also established internal protocols around travel restrictions, self-quarantining, social distancing, and other safety precautions. The company is providing employees with hand sanitizer and gloves and established an emergency COVID-19 paid time off policy for employees who are unable to work due to the illness or quarantine. “The safety and health of all J.B. Hunt employees and their families are of the utmost importance to us. We are very grateful for their dedication to ensure critical supplies reach their destination in these challenging times,” added Roberts.

BELLEVUE, Wash. – PACCAR Inc. has made the decision to suspend truck and engine production at its factories worldwide from March 24 to April 6 as a result of the COVID-19 economic threat. PACCAR, which manufactures of light-, medium- and heavy-duty trucks under the Kenworth, Peterbilt and DAF nameplates, said in a release on Tuesday, March 24, that the company will review future actions on a regular basis. PACCAR will continue to provide aftermarket support to its customers who deliver essential infrastructure services to our communities. PACCAR’s financial results for the first quarter and the remainder of 2020 will be impacted by lower production schedules due to changes in customer demand and the impact of government regulations and mandates. The company will provide an update on its 2020 outlook and first quarter results April 21. “PACCAR’s excellent balance sheet, experienced leadership team and outstanding employees will contribute to the company successfully managing through this difficult period,” said CEO Preston Feight. This decision follows similar actions by other OEMs that have also temporarily suspended some aspects of production, including Navistar, Volvo and Mack.

TONTITOWN, Ark. – Arkansas-based PAM Transport, Inc. has temporarily laid off more than 50 employees. Arkansas news station, KATV Channel 7, has reported that these layoffs include office staff as well as drivers. The layoffs are said to be a result of automotive plant closures in Michigan, which is a direct response to the COVID-19 pandemic. A spokesperson for PAM Transport said the company plans to bring the employees back on board as soon as possible. Arkansas’s Talk Business & Politics reported that General Motors is PAM’s largest customer, and the automotive industry accounts for about half of the carrier’s business.

As a response to the economic impact of the novel coronavirus threat, some heavy-duty original equipment manufacturers (OEMs) have temporarily halted some aspects of their production. Navistar International Corp. announced Monday, March 23, that it is suspending production at its truck assembly plant in Springfield, Ohio, for two weeks in response to disruptions to Navistar’s supply chain that are resulting from the evolving COVID-19 pandemic. The company is also withdrawing its previously announced financial and industry guidance for the fiscal year ending October 31, 2020. Last week, Volvo and Mack Trucks also announced a temporary suspension of production. In a letter to customers dated March 21, Jonathan Randall, senior vice president of sales and marketing for Mack Trucks, said “while the situation is still very fluid, at this time we have suspended manufacturing operation.” Among other notes, Randall said Mack Trucks will maintain operations in parts-distribution centers and uptime centers. The letter went on to say that once confirmed, Mack will inform customers and dealers of the delivery impact on truck orders. Freightwaves reported that the Mack and Volvo production plants in Lehigh Valley, Pennsylvania, and Dublin, Virginia, as well as a powertrain plant in Hagerstown, Maryland, that feeds both assembly plants will shut down March 23-27. In an email to media on Friday, a Daimler Trucks North America spokesperson said that because an employee at its Detroit Powertrain campus tested positive for COVID-19, the campus was closed, cleaned and disinfected, but that the facility should be up and running again today (March 23). In a letter from Daimler leadership to fleets and customers that was shared in the email, the team noted that “all manufacturing facilities in North America are in task-force mode to maintain the continuity of our operations. The supply chain continues to be relatively stable, allowing us to continue to deliver trucks on time. So far this month, our on-time delivery rate continues to be at a very high level.”

COLUMBUS, Ind. – February net US trailer orders of 12.7k units were down 15% month over month and 45% below the previous year. Before accounting for cancellations, new orders of 14.8k were down 12% versus January, according to this month’s issue of ACT Research’s State of the Industry: U.S. Trailer Report. The report provides a monthly review of the current U.S. trailer-market statistics, as well as trailer OEM build plans and market indicators divided by all major trailer types, including backlogs, build, inventory, new orders, cancellations, net orders and factory shipments. The report is accompanied by a database that gives historical information from 1996 to the present, as well as a ready-to-use graph packet, to allow organizations in the trailer-production supply chain, as well as those following the investment value of trailers and trailer OEMs and suppliers, to better understand the market. “The conservative investment posture of fleets continued into February,” said Frank Maly, director of CV Transportation Analysis and Research at ACT Research. He added, “As dire as those figures are, they were highly pre-COVID-19 driven. Now we are operating under some of the most unusual and unexpected market conditions in history.” Maly noted that reduced freight volumes and rates had already impacted fleet financials, as well as companies’ need and ability to invest in equipment, before the February numbers were compiled. “While freight volume may have skyrocketed, if you are carrying the correct goods for the correct sales channels, for many fleets the shuttering of restaurants and retail locations may have pushed operations to the sidelines,” he said. “Recent discussions indicate that order placement has virtually disappeared as fleets begin to assume their version of ‘shelter in place’ with regards to equipment investment.”

COLUMBUS, Ind. — Preliminary used Class 8 volumes (same dealer sales) increased 21% month over month in February, according to the latest release of the State of the Industry: U.S. Classes 3-8 Used Trucks published by ACT Research. Longer-term, volumes also rose by double digits, up 24% year over year and 12% year to date. Other data released in ACT’s preliminary report included month-over-month comparisons for February 2020, which showed that average prices, miles and age of used Class 8 trucks all dropped, down 3%, 2% and 4%, respectively. ACT’s Classes 3-8 Used Truck Report provides data on used trucks’ average selling price, miles and age based on a sample of industry data. In addition, the report provides the average selling price for top-selling Class 8 models for each of the major truck OEMs — Freightliner (Daimler) Kenworth and Peterbilt (Paccar); International (Navistar); and Volvo and Mack (Volvo). This report is used by those throughout the industry, including commercial vehicle dealers to gain a better understanding of the used-truck market, especially as it relates to changes in near-term performance. According to Steve Tam, vice president at ACT Research, “Although same dealer sales rose 21% from January, it is important to keep in mind that most of February’s activity was likely unaffected by COVID-19. Seasonality accounts for about half of the sequential increase, and the catalyst for the remainder of the gain is elusive, but may be the result of the continued drop in prices.” Commenting on the impact of COVID-19 to this market, Tam noted, “The recent cancelation of events, ranging from public school and university classes to college and professional sporting events to industry trade shows, is expected to have a chilling effect on the economy and by extension, the truck industry. Besides washing your hands, the best advice is to closely monitor this incredibly fluid situation.”