Business

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.”

PORTLAND, Ore. — After a relatively strong January, truckload rates and volumes declined for dry van, refrigerated and flatbed equipment in February. The decreases are consistent with normal seasonal trends and not necessarily attributable to factory closures during the COVID-19 coronavirus outbreak in China, according to information released by DAT Solutions. Import traffic was already in a scheduled lull for Chinese New Year, but since the gap in traffic extended longer than anticipated, truckload demand in West Coast port markets is likely to be slow to rebound. “Ocean and air cargo was affected immediately by the coronavirus-related cutbacks,” said Peggy Dorf, senior market analyst at DAT. “That will certainly affect truckload freight later, but for now carriers are busy helping retailers restock empty store shelves.” Coronavirus threat will cause price volatility. DAT freight forecasts show that truckload rates will be higher than last year beginning in spring or early summer, but prices may not stay consistent with normal seasonality. “The impact of the coronavirus will add volatility to freight flows, as surges in consumer demand alternate with potential constraints on imports, exports, and industrial production,” explained Ken Adamo, chief of analytics at DAT. “Our predictive models continue to update, anticipating and accounting for these atypical trends when forecasting demand, capacity, and rates in the coming months.” February puts freeze on rates. Including fuel surcharges, spot van rates averaged $1.79 per mile nationally in February, down 8 cents from January and down 9 cents from February 2019. At $2.10 per mile, the national average reefer rate lost 14 cents compared to January and fell 11 cents from February 2019. National average flatbed rates dropped 2 cents month over month to $2.15 per mile, an 18-cent decline from February 2019. Volumes fell 7% for both vans and reefers month over month, while flatbed load counts edged down 3%. Compared to February 2019, however, volumes increased for all three equipment types. Vans gained 10%, reefers added 11% and flatbed volume rose 4%. About the DAT Truckload Volume Index The DAT Truckload Volume Index reflects the change in the number of loads with a pickup date during a specified month; the actual index number is normalized each month to accommodate any new data sources without distortion. The baseline of 100 equals the number of loads moved in January 2015 as recorded in DAT RateView, a database of rates paid on an average of 3 million loads per month. DAT national average spot rates are derived from RateView and include only over-the-road lanes with lengths of haul of 250 miles or more. Spot rates represent the payments made by freight brokers and 3PLs to the carriers.

BETHESDA, Md. — J&J Exhibitor and Motor Service has partnered with Liquidity Services to sell J&J’s entire fleet of transportation assets through negotiated sales and online auction. The sale includes late-model and low-mileage transportation assets such as tractors and trailers, scooters, forklifts, pallet lifts, passenger vehicles, step-decks and specialty vans. All items are up for auction at AllSurplus (www.allsurplus.com), Liquidity Services’ online auction marketplace for business surplus. J&J Exhibitors is a family-owned, full-service trade-show provider and special-event contractor that operated from 1927-2019 in the heart of Chicago. The company is offering for sale its entire fleet, which includes 35 truck tractors, more than 200 trailers, 13 scooters, 10 forklifts three pallet lifts and three passenger vehicles from manufacturers such as Freightliner, Mack, Peterbuilt, Sterling and International. “In our 93 years of operating, J&J has always taken great pride in the quality and maintenance of our assets. As we close our doors, we have full trust in Liquidity Services to find new users that will put our entire fleet of transportation assets back into service,” said Cathy Chambliss, co-owner of J&J Exhibitors. “This is a unique opportunity for other exhibitors, small moving or delivery companies, and small fleet operators to have quick access to a full fleet of assets owned and maintained by an established family-owned business,” said Chris Register, vice president of corporate services for Liquidity Services. “Working together with J&J, all assets are available on our new marketplace, AllSurplus, and provide business buyers with detailed information and photos for each asset as well as a trusted and secure platform to transact.” Interested buyers can view the items through Liquidity Services’ network of marketplaces, including AllSurplus and its legacy marketplace, Go-Dove. All assets from J&J Exhibitors can be found by entering “J&J” in the keyword search tool. Bidding will be open through 5 p.m. EST on March 24.

PORTLAND, Ore. — Daimler Trucks has reached the 200,000 mark in Western Star truck deliveries in the United States. The iconic trucks, with their striking front-end design and characteristic chrome look, are used in North America predominantly as special vehicles and construction-site vehicles in the vocational trucks segment. Western Star trucks are generally custom-made vehicles manufactured specifically in accordance with the body requirements of the customers, and the tractors are particularly well known for their robustness and resistance under harsh conditions. The anniversary vehicle — a Western Star 4700 SB with a waste-water disposal body — was handed over to the customer, Joe Johnson Equipment, at the Western Start plant in Portland on March 10. Western Star was founded in 1967 in Cleveland as a manufacturer of trucks for use in the wood and oil industries. In 2000, Daimler Trucks North America took over the brand. The first 100,000 vehicles were sold by Western Star over the course of 39 years, and 100,000 more have been sold to customers since 2006.

The amount of available freight hauled by the trucking industry grew in January, but not by much. That’s the consensus among industry analysts and forecasters. American Trucking Associations (ATA) reported growth of 0.1% in its monthly, seasonally adjusted For-Hire Truck Index, the second consecutive month of increase. The index is compiled from data submitted by ATA member carriers and is based on year 2015 averages. January’s index of 117.4 represents a 17.4% increase over the 2015 data. Compared to January 2019, the index increased by 0.8%. “Over the last two months, the tonnage index has increased 0.6%, which is obviously good news,” said ATA Chief Economist Bob Costello. “However, after our annual revision, it is clear that tonnage peaked in July 2019 and, even with the recent gains, is down 1.8% since then.” Costello blamed softness in manufacturing and elevated inventories for the 2019 declines. Contract freight dominates the ATA tonnage data. ACT Research also indicated growth in January with its For-Hire Trucking Index registering 53.9. For the ACT index, 50 is the baseline, so anything higher indicates growth while anything below 50 indicates decline. The index is compiled from answers to a monthly survey ACT sends to carriers and may include some carriers that are also ATA members. The ACT index, like the ATA’s, showed two consecutive months of increase, with the larger increase coming in December. A key difference in the ACT report is that a separate index is maintained for freight rates. The news on the rate front is not as cheerful, as ACT reported an index of 44.8, 10.4% below the “neutral” score of 50. Capacity remains the culprit. The near-record Class 8 truck-buying spree in 2019 resulted in more available trucks, but freight volumes haven’t grown as quickly. With more trucks competing for freight, rates have been dropping for months in the spot market, and decreases are reaching the contract freight market, too. As freight levels continue to increase and truck sales have slowed, the freight market could soon return to something like equilibrium, according to many analysts. “We see encouraging signs in improving volume and utilization trends that the freight downturn is in its late stages and the market will rebalance in 2020,” said Tim Denoyer, vice president and senior analyst at ACT Research. “The good news is that capacity additions have just stopped at the Class 8 tractor level, which we think will take pressure off rates as the year progresses.” Similar news was reported from Cass Information Systems in its January report. The Cass Freight Index for shipments, which includes freight moving by rail, ship and other modes, dropped 9.4% from January 2019. The report notes that elevated inventory levels are partly responsible for the drop in shipments, usually a symptom of a slowing economy, as adjustments to manufacturing capacity lag behind sales. Inventories could get some unexpected help from the unlikeliest of sources — the coronavirus. As overseas factories close their doors in response to illness or quarantines, inventories shrink when retailers sell off the stock on their shelves. A release by the American Association of Port Authorities predicted cargo volumes at U.S. ports in the first quarter could be down by 20% or more from 2019 due to disruptions caused by the virus. Cass maintains a Truckload Linehaul Index that measures per-mile linehaul rates in what Cass calls “the largest (and most fragmented) market in the domestic transportation landscape. This index showed a decline of 6.3% this January compared to last year, after falling 3.3% in December. The report blames loosened capacity (trucks coming back into service after being idle during the holidays) for the decline. The news from industry analyst and forecaster FTR seems to point the economy in the same direction. A Feb. 24 blog entry by analyst Steve Graham said, “At the recent Stifel Transportation & Logistics Conference, the common outlook from industry executives was that supply and demand should find equilibrium around midyear, at which point spot rates should resume their premium to contract rates and give contract rates room to rise again in 2021.” Graham’s March 2 “Monday Morning Coffee” blog entry was titled, “The Coronavirus has Emerged as the Latest Economic Threat.” In it, Graham noted that stock prices were falling in markets worldwide as number of victims continued to grow. The consensus from all sources seems to be that the current slowdown won’t last and that world economies — and the U.S. trucking industry — will be better off in the second half of the year.

National average spot truckload rates were in line with seasonal expectations and load-to-truck ratios inched higher during the final week of February, according to DAT Solutions, which operates the industry’s largest load board network. Stable rates and ratios at this time of year are signs that shippers are emerging from a typical mid-winter lull. There were no specific indications that supply-chain disruptions due to the COVID-19 outbreak affected spot truckload freight in a significant way during the week ending March 1. This may change in the coming weeks depending on import levels, how quickly Chinese ports can reduce their backlogs and when those delayed sailings start to arrive in the U.S. National average spot rates for February were $1.79 per mile for van, $2.09 per mile for reefer and $2.14 per mile for flatbed. National average rates were higher at the end of the month and entered March at $1.88 for vans, $2.15 for reefers and $2.35 for flatbeds. Van trends The national average van load-to-truck ratio increased from 1.9 to 2.1 last week, part of a five-week upward trend. Load-to-truck ratios were up in the Los Angeles market during February and ended the month at a high of 2.6 loads per truck for van equipment, although van capacity is plentiful, and rates continue to be inconsistent. The impact at West Coast ports and outbound lanes will be felt this month. The Port of Los Angeles said container volumes in February would drop 25% due to the economic impact of the coronavirus as well as lower imports in general, and container ship operators have canceled 40 sailings from Asia to Los Angeles in February and March. Flatbed trends Rates for open-deck equipment have ranged from $2.15 to $2.17 per mile as a national average since October. One flatbed-market indicator to watch is the price of oil. High crude prices are a boon to trucking companies in markets like Texas because they spur demand for truckload capacity, which in turn leads to higher rates. Oil prices have fallen about 20 percent since late January to their lowest point since December 2018, near $50 a barrel, and forecasts are being lowered as the coronavirus outbreak cuts into travel and other activity in Asia. Should the price of oil drop below the marginal cost of production in the U.S., estimated at $35 to $40 per barrel, producers may curtail drilling. This would reduce demand for domestic ground transportation, especially for flatbeds and rail intermodal equipment, in key markets like Houston, Dallas and west Texas, leading to looser capacity and declining rates. DAT’s market trends are based on RateView, a database of $68 billion in annual market transactions. As the industry standard in truckload pricing, DAT’s freight rate database also provides the settlement prices against which trucking freight futures contracts are traded. For information, visit dat.com/trendlines.

HUDSON, Wisc. — A week ago, RCX Solutions of Little Rock, Arkansas, ceased operations in part due to skyrocketing insurance premiums resulting from a lawsuit against the company. Just seven days later, another carrier, 101 Transport, of Hudson, Wisconsin, has decided to follow suit. Tom Dahlberg, owner of 101 Transport, said increasing insurance premiums and maintenance cost forced his hand In an interview with Freightwaves, Dahlberg said, “Insurance is making it untenable to do business.” For 101 Transport, the point of “untenable” was reached after one of his company’s trucks was involved in a serious accident in Utah. Following the accident, 101 Transport saw its insurance premiums increase by 70%. “The government has got to step in on this issue before more companies go out of business,” he said. Dahlberg said he founded 101 Transport in 2007, and the company’s mission could be summed up in three words, “back to basics.” The basics for 101 Transport, in a longer, 14-word format, are “pick up and deliver freight on time, bill it correctly and do it safely.” While RCX Solutions was a comparatively small carrier, Transport 101 employed 72 company drivers and owned a similar number of trucks. When Dahlberg saw his insurance premiums increase last fall, he had to cut back operations to remain financially solvent. At that time, he prepared for what he saw as inevitable by laying off drivers and returning equipment. He turned to owner-operators as a substitute and had contracts with 32 haulers when he decided to close business. Dahlberg said his company was trying to trim costs and maintenance expenses, but maintenance averaged $10-15,000 every time a truck required repairs. Those costs, coupled with insurance rates, outweighed what it took to keep 101 Transport a sustainable company in a period of uncertainty in the freight markets. Great West Casualty Company, the insurance carrier providing liability coverage for 101 Transport, insured the company for $1 million, well above the required $750,000. Information from the U.S. Department of Transportation indicates that coverage was canceled effective March 1, 2020. DOT also indicates 101 Transport lost its authorization as a contract carrier effective March 9. The DOT database lists the reason as “involuntary revocation.” Based on the contents of the 101 Transport website, the company placed a priority on taking care of its drivers “It’s not about hauling freight; it’s about people hauling freight,” is the homepage slogan and the company’s testament to its commitment. With owner-operators having replaced company drivers, 101 Transport offered three promises in its recruitment efforts: great miles, home time, and respect.  The company claimed its owner-operators averaged 135,000 miles annually, could get home time when they wanted or needed it, and stated that its drivers were a top priority. In 2018, company drivers combined for a reported 7.9 million miles. Drivers were informed of the pending closure on February 29, Dahlberg said. By that date, he had cut all company drivers and contracted with 32 owner-operators. And based on what has happened since Dahlberg announced 101 Transport’s closing, the company commitment to drivers rings true. Dahlberg said another carrier, which cannot be named at this time, has agreed to hire all owner-operators working under contract with 101 Transport. He said that assuming the drivers pass mandated background and safety checks, their unemployment window will be brief. In fact, most are expected to be driving for the new carrier as early as Wednesday (March 11, 2020). 101 Transport was primarily involved in hauling general freight, beverages, and paper items. It also contracted with the U.S. Postal Service to deliver mail to various postal destinations. The closure of 101 Transport represents an ongoing trend in the trucking industry that saw well over 800 carriers cease operations in 2019. Recent closures also include BK Transport of Arlington Heights, Ill.; Howard Baer, Inc. of Nashville, Tenn.; Cold Carrier Logistics and its three affiliated company of Lakeland, Fla.; and both California’s Michael Dusi Trucking, Logistics, and warehousing and Rodgers Trucking. In comparison to 2019 closures including Celadon and Fleetwood Transportation, the five carriers listed are but a few blips on the carrier closings and bankruptcies radar screen. But, as the number of companies ceasing operations since January 2019 nears 1,000, the collective impact could soon reach what analysts consider “crisis levels” in the trucking industry.

ATLANTA — Alabama Motor Express (AMX), a trucking and third-party logistics company, recently announced the acquisition of substantially all the assets of Powell Transport Solutions, a trucking asset firm specializing in refrigerated freight, and its affiliates. The deal, announced in February, adds 35 refrigerated trailers to the AMX fleet, helping the company achieve its goal to expand its service offerings to a wider customer base and become the most prominent freight company in the Southeast. “We’re on a clear path forward. This acquisition is an exciting step as we bolster our position as a leading full-service, logistics provider in the region,” said Taylor White, AMX vice president. “We are very pleased to add Paul Powell, the Powell Transport Solutions employees and their accomplished drivers to our team. Paul has developed excellent relationships with his company’s long-time customer base, and we look forward to building on that base.” “We are delighted to join the AMX team,” said Paul Powell, Powell Transport Solutions president. “Our focus on customer service and our ability to achieve the highest service standards will be enhanced by the resources and scale provided through AMX.” Powell will serve as the leader of AMX’s refrigerated-services division. All Powell Transport Solutions employees and drivers are expected to retain their positions with AMX. In addition, AMX has access to Powell’s customer base, offering them a broad range of truckload and 3PL services. “We’re in the middle of Freight Alley, where refrigerated freight demands continue to grow,” said White. “Now we can meet the diversified needs of our customers using more of our own trucks, drivers and 3PL services. And we’re gaining the support of a savvy, experienced team that knows temperature-controlled freight, understands its customers and wants to grow with us in the sector. We’re capitalizing on our long-term growth strategy and ready to grow with new opportunities.” The acquisition is the latest in a series of growth-focused decisions designed to broaden the scope and reach of AMX, which began with the recently opened branch offices in Atlanta and Savannah, Ga. The acquisition puts AMX’s sister company, AMX Logistics, in the heart of major distribution hubs where it can streamline communications with customers and shippers in the region. AMX continues to add drivers, logisticians and other transportation professionals to accommodate its ever-growing business portfolio. In addition, AMX has invested in innovative technology platforms to ensure optimal service for its customers, carriers and drivers. Terms of the transaction were not disclosed.

Does it take your eyes and/or your mind from the road? If it does, it’s a distraction. Chances are that your day is full of them. Little things, like turning on the radio or adjusting the air conditioning can take your focus away from driving. If we’re being realistic, many of the tasks done behind the wheel take very little time to do. If you’re familiar with your vehicle, you might be able to turn on windshield wipers or set the cruise control without looking at all. But then there’s the other extreme. There are tasks that are done while driving far too often. A lot of them require a cell phone. Dialing a phone number or reading or composing a text while driving are unnecessary and stupid. In many states, it’s illegal to even talk on the phone without a hands-free device. But this isn’t about phones or radios or cruise control. It’s about allowing your focus to go from the road to, well, anything other than driving. That’s a decision that every driver must control, all day, every day. The consequences of diverting your attention from the road for even a few seconds can be devastating. Most people in the non-metric world think of speed in terms of miles per hour. Thinking of speed in feet per second adds perspective to the distraction issue. You could use a calculator and multiply your speed in mph by 1.46666666666667 to convert to FPS. Or, you could “ballpark” the answer by simply multiplying by 1.5. So, 30 mph is roughly 45 FPS. At 50 mph, you’re covering the length of most tractor-trailer combinations every second. At 67 mph, you’ll travel end zone to end zone on a football field in three seconds flat. If you’re traveling at the speed limit in a 70-mph zone, you’re covering 105 feet each second and nearly a tenth of a mile every five seconds. How long does it take for conditions in front of your vehicle to completely change? How long does it take to dial a phone number? So, when you make the decision to dial, you’re really making the decision to travel a few hundred feet without looking at the road. You can apply that logic to anything else you decide to do behind the wheel. We know that it’s impossible to expect to never be distracted. Sometimes, even traffic distracts us from other traffic. That’s why we’re taught to keep moving our gaze, scanning near and far, right and left, including the mirrors. We can’t control billboards, traffic signs and construction barrels or other things that attract our attention on the road. We do, however, have control over things in our cab. Phones and tablets are obvious distraction items, but what about the ELD? How about the control touchscreen built right into the dash? The GPS? And lunch? Anyone who thinks a driver should never, ever eat while behind the wheel has never kept the schedule of most over-the-road drivers. Fortunately, you can minimize the distractions you face while driving. For example, by unpacking the burger and fries, putting the straw in the drink and the drink in the holder, all before leaving the parking lot, you’ll minimize the time you’ll be distracted while eating. If something falls to the floor, it stays there until the next stop. Most phones can be set up so they can be answered with a single button, often one on the side of the phone that your finger naturally finds when you pick it up. Every driver should be using a Bluetooth headset, but even if you aren’t you can minimize the attention needed to answer a call. With a little thought, most drivers can identify any number of things that can be prepared before putting the truck in motion. Every carrier has rules about distractions. And, every carrier has a dispatcher or two that expects an instant answer to a satellite message or whatever communication service used. You can get fired for using a cell phone while driving, but your dispatcher wants a call right now? Hopefully, the safety culture at your carrier, if you work for one, extends from the top management of the company down. The safety culture in your truck, however, is up to you. Too many carriers are spending millions of dollars each year to find qualified drivers to put up with a carrier that preaches safety and practices something else. Make the safety rules in your truck and stick to them. Somebody’s family might be very glad you did. Maybe yours.