Truck Driving Job News

PHILADELPHIA — Dockworkers at ports from Maine to Texas began walking picket lines early Tuesday, Oct. 1, in a strike over wages and automation that could reignite inflation and cause shortages of goods if it goes on more than a few weeks. The contract between the ports and about 45,000 members of the International Longshoremen’s Association expired at midnight, and even though progress was reported in talks on Monday, the workers went on strike. The strike affecting 36 ports is the first by the union since 1977. Workers began picketing at the Port of Philadelphia shortly after midnight, walking in a circle at a rail crossing outside the port and chanting “No work without a fair contract.” The union had message boards on the side of a truck reading: “Automation Hurts Families: ILA Stands For Job Protection.” At Port Houston, which is in the Central time zone an hour behind the East Coast, at least 50 workers gathered outside the port with signs saying “No Work Without a Fair Contract.” They appeared poised to begin picketing. Workers showed a statement from the ILA on the strike saying that employers have refused to compensate workers fairly. “The ILA is fighting for respect, appreciation and fairness in a world in which corporations are dead set on replacing hard-working people with automation,” the statement said. “Robots do not pay taxes and they do not spend money in their communities.” The U.S. Maritime Alliance, which represents the ports, said Monday evening that both sides had moved off of their previous wage offers, but when picket lines went up just after midnight, it was apparent that no deal had been reached. The union’s opening offer in the talks was for a 77% pay raise over the six-year life of the contract, with President Harold Daggett saying it’s necessary to make up for inflation and years of small raises. ILA members make a base salary of about $81,000 per year, but some can pull in over $200,000 annually with large amounts of overtime. But Monday evening, the alliance said it had increased its offer to 50% raises over six years, and it pledged to keep limits on automation in place from the old contract. The union wants a complete ban on automation. It wasn’t clear just how far apart both sides are. “We are hopeful that this could allow us to fully resume collective bargaining around the other outstanding issues in an effort to reach an agreement,” the alliance statement said. The union didn’t answer requests for comment on the talks Monday night, but said earlier in the day that the ports had refused demands for a fair contract and the alliance seemed intent on a strike. The two sides had not held formal negotiations since June. The alliance said its offer tripled employer contributions to retirement plans and strengthened health care options. During the day Monday, some ports already were preparing for a strike. The Port of Virginia, for instance, was in the process of ceasing operations. It accepted the last inbound train for delivery at 8 a.m., closed its gates to inbound trucks at noon and required ships to leave by 1 p.m. Cargo operations halted at 6 p.m. “We are handling this just like we would during the ramp up to a possible hurricane,” Joe Harris, the port’s spokesperson, told The Associated Press. “And we will bring it back online just as we would recovering from a hurricane. We have an experienced team. We’ve done this in the past.” Supply chain experts say consumers won’t see an immediate impact from the strike because most retailers stocked up on goods, moving ahead shipments of holiday gift items. But if it goes more than a few weeks, a work stoppage would significantly snarl the nation’s supply chain, potentially leading to higher prices and delays in goods reaching households and businesses. If drawn out, the strike will force businesses to pay shippers for delays and cause some goods to arrive late for peak holiday shopping season — potentially impacting delivery of anything from toys or artificial Christmas trees to cars, coffee and fruit. The strike will likely have an almost immediate impact on supplies of perishable imports like bananas, for example. The ports affected by the strike handle 3.8 million metric tons of bananas each year, or 75% of the nation’s supply, according to the American Farm Bureau Federation. It also could snarl exports from East Coast ports and create traffic jams at ports on the West Coast, where workers are represented by a different union. Railroads say they can ramp up to carry more freight from the West Coast, but analysts say they can’t make up the cargo handled to the east. “If the strikes go ahead, they will cause enormous delays across the supply chain, a ripple effect which will no doubt roll into 2025 and cause chaos across the industry,” noted Jay Dhokia, founder of supply chain management and logistics firm Pro3PL. J.P. Morgan estimated that a strike that shuts down East and Gulf coast ports could cost the economy $3.8 billion to $4.5 billion per day, with some of that recovered over time after normal operations resume. The strike comes just weeks before the presidential election and could become a factor if there are shortages. Retailers, auto parts suppliers and produce importers had hoped for a settlement or that President Joe Biden would intervene and end the strike using the Taft-Hartley Act, which allows him to seek an 80-day cooling off period. But during an exchange with reporters on Sunday, Biden, who has worked to court union votes for Democrats, said “no” when asked if he planned to intervene in the potential work stoppage. A White House official said Monday that at Biden’s direction, the administration has been in regular communication with the ILA and the alliance to keep the negotiations moving forward. The president directed Chief of Staff Jeff Zients and National Economic Council Director Lael Brainard to convene the alliance’s board members Monday afternoon and urge them to resolve the dispute fairly and quickly — in a way that accounts for the success of shipping companies in recent years and contributions of union workers.

NEW YORK — With a strike deadline looming, the union for 45,000 dockworkers and the group representing East and Gulf Coast ports have exchanged wage offers, leaving a ray of hope that a deal can be reached without a major work stoppage. In a statement, the U.S. Maritime Alliance, which represents 36 ports from Maine to Texas, said that both sides have moved from their previous positions. The alliance said it also asked the union to extend the current contract. The International Longshoremen’s Association is threatening to strike at 12:01 a.m. Tuesday, Oct. 1, in a move that could silence ports that handle about half the ship cargo coming in and going out of the U.S. A message was left Monday evening seeking comment from the union. “We are hopeful that this could allow us to fully resume collective bargaining around the other outstanding issues in an effort to reach an agreement,” the alliance statement said. The Alliance said its latest offer would increases wages by nearly 50% over the six-year contract, and triple employer contributions to retirement plans. The offer also would strengthen health care options and keep current language that limits automation. The union has demanded 77% pay raises over six years to help deal with inflation. Many of the ILA workers can make over $200,000 per year, but the union says they must work large amounts of overtime to reach that figure. The two sides had not held formal negotiations since June, and a strike appeared imminent. In a statement Monday morning, the union said the ports had refused its demands for a fair contract and the alliance seemed intent on a strike. The alliance has said it was willing to bargain. A work stoppage would significantly snarl the nation’s supply chain, potentially leading to higher prices and delays in goods reaching households and businesses if it drags on for weeks. If drawn out, the strike would force businesses to pay shippers for delays and cause some goods to arrive late for peak holiday shopping season — potentially impacting delivery of anything from toys to artificial Christmas trees, cars, coffee and fruit. A strike could have an almost immediate impact on supplies of perishable imports like bananas, for example. The ports that could be affected by the strike handle 3.8 million metric tons of bananas each year, or 75% of the nation’s supply, according to the American Farm Bureau Federation. Americans could also face higher prices as retailers feel the supply squeeze. “If the strikes go ahead, they will cause enormous delays across the supply chain, a ripple effect which will no doubt roll into 2025 and cause chaos across the industry,” noted Jay Dhokia, founder of supply chain management and logistics firm Pro3PL. Dhokia added that East Coast ports aren’t the only ones at risk for disruption, as concern leading up to the strike has already diverted many shipments out West, adding to route congestion and more pressure on demand. Impacts will also be felt internationally — particularly in places like the United Kingdom, he said, where the U.S. is its largest trading partner. In addition to higher wages, ILA members want a total ban on the automation of cranes, gates and container-moving trucks used in the loading or unloading of freight. A strike by the ILA workers — set to impact ports from Maine to Texas — would be the first by the union since 1977. West Coast dockworkers belong to a different union and aren’t involved in the strike. If a strike were deemed a danger to U.S. economic health, President Joe Biden could, under the 1947 Taft-Hartley Act, seek a court order for an 80-day cooling-off period. That would suspend the strike. Just weeks ahead of a tight presidential election, Biden has signaled that he will not exercise this power. During an exchange with reporters on Sunday, Biden said “no” when asked if he planned to intervene in the potential work stoppage. A White House official said that at Biden’s direction, the administration has been in regular communication with the ILA and the alliance to keep the negotiations moving forward. The president directed Chief of Staff Jeff Zients and National Economic Council Director Lael Brainard to convene the alliance’s board members Monday afternoon and urge them to resolve the dispute fairly and quickly — in a way that accounts for the success of shipping companies in recent years and contributions of union workers.

DAT’s Truckload Volume Index (TVI) for August rose month over month for the dry van, refrigerated and flatbed segments tracked. DAT reported an increase of 2.8% from July for dry van, 4.3% for refrigerated and 0.3% for flatbed. Also in August, however, national average spot freight rates fell for all three segments, with dry van falling by a nickel a mile, refrigerated by four cents and flatbed by seven cents. The news wasn’t all bad, though. DAT’s TVI showed a 6.3% improvement over August 2023, and the refrigerated TVI was up 17.6%. “Linehaul rates were year-over-year positive for the first time since March 2022, a trend that should continue into the fall shipping season,” said Ken Adamo, chief of analytics at DAT. “However, year-over-year comparisons are little consolation for truckers looking for better pricing now.” Increasing Costs Because of inflation, truckers are already contending with higher prices for everything they purchase — with the exception of fuel — but fuel is often covered by a surcharge and isn’t included in the DAT rate calculations. The recent half-percent rate cut by the Federal Reserve isn’t likely to show up on credit card interest for months, if at all, and existing truck loans with fixed interest rates won’t be impacted anyway. A 2024 update on the Operational Costs of Trucking, published in June by the American Transportation Research Institute (ATRI), reported that trucking costs, minus fuel, rose by 6.6% in 2023 compared to 2022 costs. Insurance premiums and truck and trailer payments are growing at the fastest rates: From 2022 to 2023, insurance costs rose 12.5%, while truck and trailer payments rose 8.8%. It’s important to note that those increases added to even higher increases the year before. In 2022, for example, truck and trailer payments rose 18.6% and then rose another 8.8% in 2023. Respondents to another ATRI survey reported that those costs continued to rise in the early months of 2024. ATRI reported that driver wages rose by 7.6% in the same period, but truck owners are finding it difficult to increase their take-home cash after paying the increased business costs. Those that are leased to carriers may be seeing a higher per-mile compensation. The Seasonal Factor A part of the rate problem in August is seasonal. Harvests of vegetables and early fruits have mostly been completed and shipped, leaving refrigerated trucks to compete for dry van loads. Grain harvests are beginning, but these products are mostly handled by hopper-bottom or dump equipment. In short, August is typically a slow shipping month, which translates to lower shipping rates. The Cass Freight Index for Shipments reported a 1.0% increase in shipments, but a decrease from last August of 1.9% following a 1.1% decline in July. “These were the smallest declines in 18 months as goods demand continues to grow slowly — and slowing capacity additions reduce the pressure on for-hire shipments,” wrote Tim Denoyer, vice president and senior analyst for ACT Research, who administers the Cass report. The Cass report is compiled using billing data from its clients and includes data from trucking, rail, ship, air and pipeline transportation segments, with about 75% coming from trucking. The data skews towards contract freight rates rather than the spot market. Politics Play a Role There’s no denying that this year’s presidential election, along with numerous other races at both the federal and state levels, have created uncertainty in the trucking industry. “We generally strive to base our outlook on industry economics, rather than politics … but no strategy worth its salt can avoid election implications right now,” Denoyer wrote. Those implications, according to Denoyer, include elevated near-term uncertainty and slowing industrial activity as normal short-term features of presidential elections. “Almost regardless of the outcome, some combination of near-term softness and post-election relief recovery in freight demand is thus likely,” he said. Available Freight The American Trucking Associations (ATA) weighed in with its Truck Tonnage Index, which showed an increase of 1.8% in available freight in August. The ATA index is comprised of survey data received from its membership and leans heavily to contract freight. “August tonnage levels rose to the highest level since February 2023,” said Bob Costello, chief economist for ATA. “Not only does the latest robust gain show freight levels are coming off the bottom, but so does the sequential pattern over the last eight months,” he said. “Starting earlier this year, every time tonnage falls, it is higher than the previous low. For me, this month-to-month pattern is more important than looking at the year-over-year percent changes since we are at an inflection point in the freight market.” Possible Port Strike The Motive Monthly Report for September showed a 7.7% increase during August in truck visits to warehouses of the top 50 U.S. retailers. The report noted an increase in inventory-to sales ratios, indicating that retailers are increasing their stocks ahead of the holiday season. There’s another reason, however. A labor agreement between the International Longshoremen Association (ILA) and port owners is due to expire, and a deadline of Oct. 1 has been set to reach a new agreement. The ILA handles 43% of all U.S. imports, moving through ports on the East Coast and the Gulf of Mexico. A strike could impact consumer goods, causing shortages and price increases. Shipping costs, already on the rise, will be pushed further upward, both by shortages caused by a strike and by higher labor costs once agreement is reached. With the election so close, President Biden isn’t likely to become involved in the negotiations unless conditions become severe. A strong holiday retail season would be a badly needed boon to the trucking industry, but potential strikes at Eastern ports could remove a lot of freight from the market. In the meantime, both presidential candidates have discussed import tariffs that could dampen trade. Per Diem Boost In other news, per diem rates are increasing from $69 to $80 per day, effective Oct. 1. This 16% increase in per diem amounts to another $21 per day on the road to deduct from the income tax bill. This is especially important for owner-operators who pay self-employment tax, as it can increase tax deductions as much as $3,000 to $4,000 per year. That’s not much difference to struggling trucking businesses … but every little bit helps. In the meantime, truckers are still waiting for conditions to get better.

According to data from Truckstop and FTR Transportation Intelligence for the week ended Sept. 20 (Week 38), broker-posted spot rates for dry van equipment fell to their lowest level since June 2020, a “notable benchmark” according to a Sept. 24 press release. Dry van spot rates in the latest week were a tiny fraction of a cent lower than they were during a single week in May 2023, which had been the previous low since June 2020. Total spot rates and rates for flatbed equipment had already been at their lowest level since July 2020. Refrigerated spot rates are not as weak as the other equipment types relative to history, although they declined in the latest week to their lowest level since April. With the growth in truck postings outpacing the uptick in load postings, the Market Demand Index declined to 58.4, which is the lowest level in three weeks. Following is a breakdown of rate activity for the past week. Total spot load availability Total load activity edged 0.9% higher to the highest level in seven weeks after jumping nearly 20% during the week following Labor Day week. Load postings were 3.6% below the same 2023 week and about 34.5% below the five-year average for the week. Total truck postings rose 3.7%, and the Market Demand Index — the ratio of load postings to truck postings in the system — declined to its lowest level in three weeks. Total spot rates The total broker-posted rate decreased 2.6 cents to the lowest level since July 2020 after declining just over 2 cents in the prior week. Rates were 4% below the same below the same 2023 week and more than 10% below the five-year average. The current week (Week 39) historically has seen mostly rising rates for dry van and flatbed but mostly declining rates for refrigerated. The all-in broker-posted rate has been predominantly negative year over year since April 2022, but the lowest diesel prices in nearly three years shows a somewhat different picture for carriers’ overall finances when compared to last year summer when diesel prices were surging. Excluding fuel costs (as estimated by a hypothetical fuel surcharge), broker-posted rates have been positive year over year for the past 10 weeks. Dry van spot rates Dry van spot rates declined more than 3 cents after falling just over 6 cents during the previous week. The decrease was expected as dry van rates have fallen in every week 38 since 2018. Rates were more than 6% below the same 2023 week — the largest negative year-over-year comparison since March — and almost 17% below the five-year average for the week. Excluding an imputed fuel surcharge, rates were 4.6% higher than the same 2023 week. Dry van loads barely changed, ticking up 0.4%. Volume was about 26% below the same 2023 week and close to 49% below the five-year average. Refrigerated spot rates Refrigerated spot rates fell nearly 8 cents after declining 2 cents in the prior week. As with dry van, refrigerated spot rates have fallen in every week 38 since 2018. Rates were 3.5% below the same week last year and close to 13% below the five-year average. Rates excluding an imputed fuel surcharge were up 5.6% year over year. Refrigerated loads fell 8.9%. Volume was almost 9% below the same 2023 week and about 40% below the five-year average for the week. Flatbed spot rates Flatbed spot rates declined just over a half-cent for the 13th decrease in the past 14 weeks. In recent years, flatbed rates have mostly risen in Week 38 and declines have been small. Rates were more than 4% below the same 2023 week and about 10% below the five-year average for the week. Flatbed rates excluding an imputed fuel surcharge were up 4.7% year over year. Flatbed loads increased 3.1%. Volume was 15.5% above the same week last year but more than 28% below the five-year average.