Trucking news and briefs for Tuesday, July 20, 2021:
Brake Safety Day nets more than 1,100 out-of-service violations
Commercial motor vehicle inspectors in the U.S. placed 1,151 vehicles out of service because of brake violations during a one-day inspection effort in May.
The Commercial Vehicle Safety Alliance said authorities in the U.S. inspected 8,658 vehicles during its annual Brake Safety Day May 26.
“Inspectors conducted their usual inspections and reported brake-related data to CVSA for Brake Safety Day,” said CVSA President Sgt. John Samis with the Delaware State Police. “We are sharing the results to call attention to the importance of commercial motor vehicle brake safety.”
In Canada, Mexico and the U.S., inspectors conducted a total of 10,091 inspections and placed 1,273 vehicles out of service for brake-related violations. The majority of inspections were conducted in the U.S., with 8,658 of the 10,091. There were also 946 inspections in Canada and 487 inspections in Mexico.
During the one-day enforcement effort, the brake-related out-of-service rate for all of North America was 12.6%. The rate in the U.S. was 13.3% (1,151 trucks placed OOS), while it was 11.4% (108 trucks) in Canada and 2.9% (14 trucks) in Mexico.
In addition, inspectors compiled and reported data specifically on brake hoses/tubing, the focus area for this year’s Brake Safety Day. There were a total of 1,725 brake hoses/tubing violations across North America, according to CVSA.
Brake Safety Day is the alliance’s unannounced brake safety initiative. However, CVSA also holds Brake Safety Week each year and announces those dates publicly well in advance. This year’s Brake Safety Week is scheduled for Aug. 22-28.
FMCSA shuts down trucker for OOS order violation
The Federal Motor Carrier Safety Administration has effectively shut down Tennessee-licensed truck driver Kristopher Anthony Adams following a crash that occurred after he was placed out-of-service.
On June 9, Adams was driving a truck in Adair County, Kentucky, when his vehicle drifted into the opposing lane and collided with another vehicle. At the time of the crash, Adams was operating in violation of an out-of-service order he had received less than 24 hours earlier.
On June 8, while operating in Branch County, Michigan, he bypassed an open weigh station. Stopped by a Michigan State Police officer, Adams admitted to the use earlier in the day of a Schedule II drug and was immediately ordered out-of-service.
Despite the Michigan OOS order, Adams continued operating his truck leading up to the June 9 crash in Kentucky.
In March 2020, during a federally mandated pre-employment drug and alcohol screening test, Adams tested positive for methamphetamine and amphetamine, and thereby became disqualified from operating a CMV until he completed a required return-to-duty process overseen by a Substance Abuse Professional.
In a blatant disregard of federal controlled substances prohibitions, Adams continued to operate a commercial motor vehicle, and in August 2020, he was involved in a single-vehicle crash in Kentucky. Three months later, he was subjected to two separate unannounced roadside inspections in Georgia and received citations for safety violations on both occasions.
Failing to comply with the provisions of the federal imminent hazard order may result in civil penalties of up to $1,951 for each violation. Knowing and/or willful violations may result in criminal penalties.
Reefer fleet raises driver pay
J.S. Helwig & Son, a temperature-controlled carrier based in Texas is raising pay for its drivers.
The company announced last week a pay increase of 4 cents per mile across the board, raising the starting pay to 55 CPM.
Additionally, drivers will receive a raise at six months and then annually for the opportunity to earn up to 62 CPM, according to a statement from the company.
Over the previous year, Helwig has increased pay by an average of 10 CPM. Additionally, the company has added a repower bonus and shortened the amount of time for drivers to reach seniority-based pay increases.
“Purpose built” is simply defined by Merriam-Webster as “built for a particular purpose.”
A paring knife is purpose built with a short-curved blade specifically to pare fruit. You probably could use it to cut a loaf of bread, but why would you when you can have a bread knife purpose built for that loaf?
There are a lot of purpose-built trucks out there, often referred to as work trucks. Utilities use bucket trucks to access powerlines. Waste haulers use garbage trucks. E-commerce deliveries use box trucks. Each of these has been optimized for their specific vocation.
Class 8 tractors are the Swiss Army knife of trucks. Designed to pull a trailer, they mostly don’t care what that trailer is — a dry van, refrigerated van, 28’, 45’ 48’, 53’, flat bed, drop, tanker, bulk carrier, car carrier, soft side, container chassis, dump, livestock, pole, you name it — if it has a king pin, odds are a Class 8 tractor can probably pull it.
Pulling it efficiently, now that’s a different story all together.
The industry has been trending towards specialization for first owner duty cycle for a long time. Fuel efficient aerodynamic tractors really took off in the 1990s. A combination of market and regulatory forces has continuously optimized this segment through today. These aerodynamic tractors have optimized powertrains for on-highway pulling dry and refrigerated van trailers, themselves also often equipped with aerodynamic treatments.
These highway flyers are less well optimized for second, third and fourth buyers. Yes, they can probably pull most any trailer, but they are not as well suited for those other duty cycles.
The North American truck makers have thousands of options available for tractors, and this creates millions of possible permutations. I described this before in a CCJ commentary "The average truck."
Standing on a truck production line almost always causes a visitor to comment that every truck seems to be completely different than the one before or after. Option complexity exists because the market values specialization. Now, throw in a range of new technologies — battery electric, fuel cell hybrid electric, RNG hybrid electric, and a range of other new powertrain alternatives we’ve collectively called the "messy middle." Toss in automated and connected technologies, trucks without human drivers. Each new technology brings with it tradeoffs, decisions that have to be made on prioritizing for first owner performance and duty cycle.
I expect we will see even greater specialization moving forward. Each new truck will be specified for a particular duty cycle, around available or planned infrastructure, with regional influences due to regulations, incentives, credits, public acceptance and available energy types. That really is nothing new.
What is new, is that the second, third and fourth buyer for these vehicles will be even more challenged to operate these used vehicles efficiently in their completely different duty cycles.
Used truck buyers do not have the luxury of spec’ing exactly what they want to buy. They have to pick from the available pool of used vehicles previously specified by the first owner. When demand is high, like this year, they can’t pick and choose. They have to grab up whatever stock is available.
[Related: Used truck market 'completely nuts']
You see this in drayage and bulk haulers like gravel, where used trucks tend to be in demand. These duty cycles are significantly different than the highway flyers, but those highway flyers are the used trucks they have to buy. It’s not uncommon to see a high roof sleeper pulling a gravel truck where the sleeper never gets used. Take a photo at any port facility and you will see a range of tractor models and configurations.
There will come a point where the level of optimization may be too much for the used market buyers. Too many compromises between the first owner and the downstream buyers. NACFE has reported on battery electric and fuel cell electric trucks. I’ve written in CCJ that these are not really competitors for the same markets, but alternatives to help replace parts of the diesel spectrum. Each of these alternative powertrains optimizes better for different duty cycles, a different sweet spot where they operate best.
Put this in perspective of automotive market segmentation. Yes, you can compare a Tesla Model S sedan to a Ford F-150 Lightning, but these really are two different vehicles with two different purposes.
I drove my pickup to Lowe’s the other day and saw a MY2022 Corvette there. I asked my wife, where does the owner expect to put 20 bags of mulch? Comparisons of sub-compacts to SUVs, where the only metric of concern is fuel economy, has always rankled me. Yes, the Prius gets 58 mpg but its maximum freight capacity is about 800 lbs., and try to fit a 4x8 sheet of plywood in it. Apples and oranges comparisons abound.
Another market change coming is life span of the vehicle. Battery electric trucks and fuel cell hybrid electric trucks both are expected to have changes to life spans.
Batteries, fuel cells, and high-pressure tanks and system may require replacement by downstream users. This is not new to trucking. Diesel engines also get to a point where major service is required. But will it make sense to overhaul 10-year-old technology or just get a new unit that benefits from 10 years of improvements? This question is being answered in California where older diesel trucks by regulation are being replaced with newer, more efficient ones.
And what if the claims that battery electric and hybrid electric trucks have less maintenance are true? What if these vehicles cost 30%, 40%, or 50% less to maintain? Doesn’t that hint that they may be less in need of first owner trade-in at five years? Maybe the first owner is the only owner. Maybe there are no used trucks in the future?
Automation is another technology trend.
How will automation technology impact trade cycles? One of the primary reasons I’ve heard for trading in a truck is that the cab interiors need to be updated after five years of heavy driver use.
Wear and tear, odors, pets, etc., are hard on vehicle interiors. An automated truck doesn’t have a driver. The computers don’t care what the interior of the truck looks or smells like. The computers don’t need a new mattress, cup holder, microwave or television. Knobs, switches, buttons, etc. are less apt to fail with no one to push them. Automated trucks may have no cab at all.
I predict automated trucks will be even more likely to stretch out first ownership. Think in terms of computers and smart phones. How many of us buy 10-year-old laptops or even 5-year-old cell phones?
Many forces are contributing to vehicles being optimized for their first owner’s duty cycle. In other words, purpose built. Will these new technologies disrupt truck trade cycles? Will they influence used truck buyers to become new truck buyers? I expect these new alternative powertrain and automated trucks will change the market. Trucking is always evolving. Change is to be expected. This trend towards purpose-built vehicles may have a significant impact on how we spec, buy, sell and dispose of trucks.
Rick Mihelic is NACFE’s Director of Emerging Technologies. He has authored for NACFE four Guidance Reports on electric and alternative fuel medium- and heavy-duty trucks and several Confidence Reports on Determining Efficiency, Tractor and Trailer Aerodynamics, Two Truck Platooning, and authored special studies on Regional Haul, Defining Production and Intentional Pairing of tractor trailers.
Trucking news and briefs for Monday, July 19, 2021:
DOT watchdog critiques FMCSA’s CDL disqualification oversight
The Department of Transportation Office of Inspector General, in an audit of FMCSA’s oversight of states’ actions to disqualify commercial drivers when warranted, found that the agency has gaps and other challenges in this area.
According to OIG’s report, states did not transmit electronic conviction notifications in a timely fashion 17% of the time, including 18% of 2,182 major offenses and 17% of 23,628 serious traffic violations. OIG also estimates that 11% of 2,182 major violations were not posted to driver records in a timely fashion, and 2% of the 23,628 serious traffic violations weren’t posted at all.
“While states did take action to disqualify CDLs when appropriate, with exceptions, FMCSA’s evaluation of paper conviction notifications is limited by states’ processes for recording and tracking convictions sent by mail,” OIG said. “Furthermore, FMCSA's Annual Program Review process lacks adequate quality control measures for verifying that state CDL programs meet federal requirements." The OIG also called states out for their own "noncompliance with federal CDL disqualification requirements," among other state actions that "pose challenges for FMCSA’s oversight.”
OIG noted that some states offered appeals to out-of-state drivers, overturned disqualifications, and backdated CDL disqualification periods, resulting in some drivers serving shorter disqualification time periods than federal law requires.
“While FMCSA has established annual program reviews to monitor state compliance, those reviews have gaps in the oversight of CDL disqualifications," OIG said. "These weaknesses may limit FMCSA’s ability to keep unsafe CDL drivers off the road and enhance public safety.”
OIG made seven recommendations to strengthen the agency's oversight, which FMCSA agreed to undertake:
Trucker shut down following multiple violations
The Federal Motor Carrier Safety Administration has effectively shut down truck driver Kalilu Koneh for various CDL violations.
Koneh’s records from the Texas Department of Public Safety show that he did not have any driver’s license in the past three years and currently, he is not eligible to obtain any type of driver’s license.
Nonetheless, FMCSA says Koneh repeatedly operated a commercial motor vehicle in interstate commerce in, at least, January, February and June 2021. Additionally, he falsely indicated on his commercial driver application that he possessed a valid driver’s license, the agency notes.
On June 16, 2021, Koneh was notified of his positive test result for marijuana metabolites. Since marijuana is a Schedule I drug, Koneh is not qualified to operate commercial trucks. However, he continued to drive a truck in interstate commerce while disqualified, FMCSA said.
Additionally, in January, February, and March 2021, Koneh falsified records of duty status, according to FMCSA. On March 12-13, 2021, he operated a commercial motor vehicle in interstate commerce beyond the 11-hour driving limit and more than 14 hours after coming on duty.
Failure to comply with the provisions of the federal imminent hazard order may result in civil penalties of up to $1,928. Each day operating in violation of the agency's order will constitute a separate violation and may result in a separate penalty, FMCSA said. Knowing and/or willful violations may result in criminal penalties.
New legislation intro’d to spur electrification in trucking
A group of Democratic legislators introduced this week a bill that would establish a rebate program to promote the purchase and installation of electric vehicle supply equipment (EVSE) for medium- and heavy-duty electric vehicles.
The Medium- and Heavy-Duty Electric Vehicle Infrastructure Act was introduced by Sen. Jeff Merkley (D-Oregon), Sen. Alex Padilla (D-California), Sen. Edward J. Markey (D-Massachusetts), Rep. Nanette Diaz Barragán (D-California), Rep. Doris Matsui (D-California), Rep. Ann Kuster (D-New Hampshire), and Rep. Yvette Clark (D-New York).
If the bill were to become law, the Environmental Protection Agency would administer the rebate program to reimburse operators of public and private fleets for the purchase and installation of EVSE. The program would be authorized for $250 million for FY 2022-2025. Rebates for a private sector entity would be 50% of the capital purchase and installation costs up to $4,000 per networked level 2 charger and $100,000 per DC fast charger.
“Medium and heavy-duty vehicles are one of the biggest sources of greenhouse gas emissions and air pollutants in the United States, and this bill is an important step to fight our addiction to fossil fuels and ensure the right of overburdened communities to breathe clean air,” Markey said. “We need to clean up our freight sector now, or continue to see adverse health impacts and an ever-worsening climate crisis.”
Trucking conditions dipped in May but remain strong
FTR’s Trucking Conditions Index for May eased slightly from the record April reading of 16.82 to a still-robust 15.72, the firm reports.
Stronger freight rates would have pushed the index to a third straight record, but a swing in diesel prices from a slight positive in April to a negative in May, along with slightly weaker capacity utilization, offset those gains. The TCI is forecast to remain at double-digit positive readings through 2021 and to remain positive through 2022. However, this outlook depends on only incremental improvement in driver capacity in the near term.
“Market conditions in the flatbed segment appear to be stabilizing, but we do not have clear signs of the stress in the van markets easing,” says Avery Vise, FTR’s vice president of trucking. “The solid increase in for-hire trucking's payroll employment during June might be a hint that the market is peaking, but we expect considerable friction to remain in the supply of drivers at least into next year. However, one of the market stresses has been the unprecedented surge in small new trucking operations, which has added to market disruptions. With high diesel prices and truck insurance costs, we would expect many of those drivers to return to the security of larger employers once spot rates start falling significantly. This possibility along with the end of generous unemployment benefits represent risks in the outlook.”
A round up of trucking's people news and headline makers for the week of July 18.
SEFL promotes new service managers in South Florida and CharlotteSoutheastern Freight Lines (CCJ Top 250, No. 31) named Raul Garcia service center manager in Miami.
Garcia has more than 17 years of experience at Southeastern, starting his career at the Orlando service center in Florida as a freight handler. He has served in various leadership positions during his time with the company, including front line leader, operations manager and, most recently, assistant service center manager in Fort Lauderdale, Florida.
“Raul has demonstrated an outstanding ability to lead, including spearheading initiatives to further improve our culture and commitment to Quality Without Question out of the Fort Lauderdale service center,” said Mark Schwarzmueller, regional vice president of operations for Southeastern Freight Lines. “We look forward to the fresh perspective and refined skillset Raul will bring to the team in Miami.”
Garcia and his wife, Patricia, will relocate to Miami.
Kyle Donahue has been promoted to service center manager in Charlotte.
Donahue has more than eight years of experience at Southeastern, starting his career at the Charlotte service center in North Carolina as an outbound supervisor. He has served in various leadership positions during his time with the company, including operations manager, assistant service center manager and, most recently, service center manager in South Charlotte, North Carolina.
“Kyle communicates his devotion to his work through his desire to help people succeed and his remarkable leadership skills,” said Kim Shore, regional vice president of operations for Southeastern Freight Lines. “He has maintained a great track record since he started with our company, and we look forward to bringing his leadership to the strong Charlotte service center team.”
Donahue and his wife, Ashley, are excited to continue serving the Southeastern team in this new capacity.
Forward Air appoints new CFO
Forward Air Corporation (No. 33) has appointed Rebecca Garbrick Chief Financial Officer and Treasurer of the Company, effective July 4.
Garbrick joined Forward in November 2020 as Vice President and Controller before assuming the role of Chief Accounting Officer in March 2021.
“Rebecca has contributed a tremendous amount to our Company in a relatively short time," said Tom Schmitt, Chairman, President and CEO. "She is a very capable leader, who will drive our investor relations efforts and help inform our Company’s strategic growth goals. She will be a welcome addition to our Executive Leadership Team.”
Like how a blood test can reveal underlying heath conditions that are not immediately obvious, an oil sampling program gives fleets a similar peak into the lifeblood of the truck's diesel engine.
Darryl Purificati, OEM technical liaison at HollyFrontier Lubricants & Specialties, which includes the Petro-Canada Lubricants brand, said incorporating a used oil analysis program into your maintenance schedule provides "insight into the health of the lubricant, contaminants within the engine and the overall engine condition."
A sample's ability to help diagnose potential engine issues can prove to be "the bigger utility of oil analysis," added Chevron Senior Staff Engineer Shawn Whitacre. "It can tell you early on about the possibility to coolant leaks, issues with air filtration, maybe even about injectors that are bleeding fuel into the crankcase or not offering good combustion and putting a bunch of soot into the oil. Once you become familiar with the broad variety of information that is offered via the oil analysis, the more you can kind of warm up to its various utilities."
Karin Haumann, OEM technical manager for Shell Global Solutions, noted small fleets can use an engine oil analysis program to monitor the condition of each of their trucks and to customize the drain interval, while larger fleets can select trucks representative of a group of trucks within the fleet that operate in similar conditions and sample their oil to establish the optimum oil drain intervals for each group.
"Optimally, you should have a sample of used oil analyzed after every oil change for every truck," Haumann said. "Closely examining the characteristics of the oil regularly can tell you a lot about both the health of the oil as well as indicate mechanical issues with an engine. This can help spot any problems with an engine early on and save on downtime and expensive repairs."
Oil analysis, Haumann said, isn't just for fleets interested in testing new oil types or seeking to change oil drain intervals. It can determine the useful life remaining in engine oil as it looks at things like oxidation and nitration, additive depletion and viscosity.
Taking on a used oil analysis program can be daunting at first to sort through the various information about the sample, "but once you get familiar with it, it can actually provide a lot of insight, and many of the oil analysis providers take that extra step and help you interpret the information," Whitacre said. "So, they provide a bit of an action plan that kind of recognizes the significance of the various readings and kind of provides a little bit of a diagnosis, even if that diagnosis is that everything's okay. If there are things that are watch points, they'll signal that."
Whitacre said that it's rare that a carrier would need to take action based on a single reading, adding that action plans are developed over a period of time as part of a trend analysis. "A lot of times, the first recommendation from the provider is to re-sample at some other fixed interval and watch to see if that trend continues because that's a confirming indicator that something is going wrong and may at that point prompt the need for preventive action."
Most oil sampling partners have streamlined the submission process, which includes pre-labeled supplies and pre-paid return labels to simplify the process for drivers or carriers who don't have a dedicated preventive maintenance technician.
"It really just becomes a matter of taking the sample, making sure there's good supporting for that sample – which includes the mileage at which it was taken, the type of oil that's used, as well as information about the unit that sample came from," Whitacre said, adding that practically any third-party maintenance provider would also have partners who could help facilitate an oil sampling program. "You'd be surprised that if you engage with them that there are likely to be avenues – that they have partnered with oil analysis providers to offer that as a bundled service in addition to the actual maintenance event itself."
Preliminary trailer orders last month hit just 11,000 units, 16% above a weak May but down 24% year-over-year.
Trailer orders for the past 12 months total 364,000 units.
While the sequential increase in net orders was welcome, Frank Maly, Director CV Transportation Analysis and Research at ACT Research, said a full response to actual fleet demand would have generated higher order volumes.
"Some OEMs, due to their extended backlogs, continue to be unwilling to book meaningful order volumes at this time,” Maly said. “June’s negative year-over-year comparison for net orders was the first since May 2020, the tail-end of last spring’s COVID-depressed order activity. These preliminary results point to a backlog that still extends into late Q1 of next year on average, with dry van and reefer backlogs extending into Q2 of 2022 at current production rates. While total production did improve last month, the gains came from additional days in the production schedule. Preliminary analysis indicates OEMs were not able to achieve any significant increase in build rates during the month, as headwinds from material and component supplies, as well as staffing challenges, continue.”
FTR Vice President of Commercial Vehicles Don Ake noted that order activity was constrained as most OEMs are not taking additional orders for 2021 delivery. However, vocational trailer orders were steady, as there are still open build slots in those segments. The industrial sectors of the economy recovered slower than the consumer side, he said, delaying the demand for flatbeds and tank trailers.
“The market is in a holding pattern until ordering for 2022 shipments begins. Demand for trailers remains robust, as fleets attempt to move an increasing amount of freight during a shortage of Class 8 trucks," Ake said. "Fleet capacity is extremely tight."
Trailer production is also constrained by supply chain disruptions and labor shortages and orders are expected to set records once the order boards for 2022 are opened, Ake said.
"Trailer demand is expected to be sturdy throughout next year. However, the actual demand for trailers will not be ascertainable until the supply chain problems dissipate," he added. "The production situation for early 2022 could be complicated if OEMs cannot build all the orders currently on the books in 2021.”
Trucking news and briefs for Thursday, July 15, 2021:
Teamsters score first win at XPO
Following a years-long battle, workers at XPO Logistics (CCJ Top 250, No. 6) in Miami, Florida, voted unanimously on Saturday, July 10, to ratify the first Teamsters contract at the transportation and logistics giant.
“XPO management said workers in the U.S. would never ratify a contract, but never is now,” said Jim Hoffa, Teamsters General President. “I applaud the workers who stood strong and united over the past six years, despite the company’s horrific anti-worker actions and delays.”
The drivers and dockworkers at the former Con-way Freight voted to join Local 769 in December 2014. While thousands of workers at XPO in Europe belong to unions, this is the first ever Teamster contract at the company.
The contract includes “just-cause” protections, a grievance process, successorship language, job protection language and retirement protections, among other improvements.
TuSimple partners with lidar developer
Self-driving truck technology company TuSimple has partnered with lidar developer AEye to help develop its autonomous technology.
TuSimple is working with Volkswagen’s Traton Group to develop a commercial-ready fully autonomous system for heavy-duty trucks, and is co-developing Level 4 self-driving trucks with Navistar, targeting production in 2024.
“TuSimple has the world’s most advanced autonomous driving system, with the industry’s best long-range perception,” said Chuck Price, Chief Product Officer at TuSimple. “AEye’s adaptive LiDAR complements our solution, with its ultra-long range, high performance enabling object acquisition and avoidance capabilities at highway speeds that are imperative for safe autonomous trucking implementations. AEye’s software-configurable hardware enables us to utilize a single sensor for both low speed, wide field-of-view cut-ins and high speed, long-range, small object detection – flexibility that is incredibly powerful for addressing the wide scope of trucking corner cases.”
AEye’s lidar has a 1,000-meter range. It delivers more than twice the range and over two times the resolution of any other long-range lidar, the companies said.
DAT: Van, reefer spot rates up so far in July
The weeks leading up to Independence Day typically mark an annual peak in spot truckload freight volume and rates following a rush to move goods ahead of the close of June and the July 4 holiday.
While last year was an exception, 2021 is starting to follow a more typical pattern, albeit at elevated levels. According to DAT Freight and Analytics, spot rates for van, refrigerated and flatbed freight are on average 70 cents per mile higher than at this time in 2020 and nearly 76 cents higher than the five-year post-July 4 average.
The number of available dry van loads on the spot market was down 17% during the week ending July 11, in line with expectations given the holiday-shortened workweek, DAT said.
Van equipment posts also declined as truckers took time off for the holiday. The national average van load-to-truck ratio narrowed from 6.7 to 6.1 and the national monthly average van rate through July 11 was $2.75 per mile, 8 cents higher than June.
Contract van rates are on the rise, with new routing-guide rates up 7% in the two weeks ending July 1 compared to the prior two-week period. The average contract van rate is now 37 cents higher than this time last year.
The national average spot reefer rate through July 11 was $3.18 per mile, 9 cents higher than the June average. The number of available reefer loads fell 17% compared to the previous week and, with 2% fewer equipment posts, the national average reefer load-to-truck ratio edged down from 14.2 to 12.7. Demand for trucks is expected to ease in the coming months – between July 4 and Thanksgiving, weekly truckload volumes of produce typically decline an average of 21%, which translates to carriers hauling 7,300 fewer truckloads per week by the end of November.
With fewer load and equipment posts last week, the national average flatbed load-to-truck ratio fell from 49.7 to 44.1. The average spot flatbed rate slipped to $3.12 a mile through July 11, down from $3.15 in June.
Women in Trucking seeks award nominees
The Women in Trucking Association and Freightliner Trucks are seeking nominations for the 2021 Influential Women in Trucking award.
Over a decade ago, the award was created to honor women in the transportation industry who make or influence key decisions in a corporate, manufacturing, supplier, owner-operator, driver, sales or dealership setting, have a proven record of responsibility, and mentor and serve as a role model to other women in the industry.
Nominations will be accepted through Sept. 1. The winner will be announced at the WIT Accelerate! Conference & Expo in Dallas on Nov. 7-9. Each finalist will be asked to serve as a panelist for the “How Remarkable Women Unleash their Leadership Potential” panel discussion.
Last year, in an unprecedented tie, Kristy Knichel, CEO of Knichel Logistics, and Jodie Teuton, vice president, Kenworth of Louisiana/ Hino of Baton Rouge and Monroe, received the recognition in honor of their outstanding commitment and service to the industry.
United Auto Workers (UAW) Local 2069 members on Wednesday ratified a new six-year labor agreement, ending a strike at Volvo Trucks North America's New River Valley (NRV) plant in Dublin, Virginia, that had turned the corner toward six weeks.
Local 2069 members last week rejected a third proposed labor agreement. That deal, which was okayed by UAW leadership, was shot down with 60% 'no' votes locally, but put back before the membership Wednesday as Volvo's "last, best and final" offer.
"Our focus now will be on getting trucks to customers as quickly as we can, and strengthening our relationship with our employees.” NRV Vice President and General Manager Franky Marchand
Local members Wednesday ratified the common overall agreement and hourly agreement by a margin on 17 votes each. Both failed last week 60% to 40%. Salary language failed Wednesday by 14 votes. UAW members will return to work on their Sunday and Monday shifts.
“The democratic process played out at Volvo Trucks. UAW Members stood together through their strike and now the overall agreement and hourly agreement have been ratified despite the company's actions earlier in the week,” said Ray Curry, President of the UAW and Director of the Heavy Truck Department, adding the UAW Constitution provides for an established process that will work to address the concerns raised by members over the salary agreement.
Volvo on Sunday said it would begin this week ramping up new truck production, and would honor the terms of its third offer to any UAW members who returned to work, even though the UAW strike was formally ongoing.
Volvo Senior Vice President of Communications John Mies said Wednesday afternoon that some workers had returned, but declined to comment on how many. Brian Rothenberg, UAW International director of public relations, noted "it was less than a handful."
Volvo's NRV plant employs more than 3,300 people, about 2,900 of whom are UAW members.
The plant is in the midst of a $400 million investment for advanced technology upgrades, site expansion and preparation for future products, including the VNR Electric truck. The plant has added 1,100 jobs since the current union agreement was implemented in 2016 and is on track to have a net increase of approximately 600 positions this year.
Contract negotiations between UAW and Volvo started Feb. 8. UAW Local 2069 workers went on strike Saturday, April 17, following the lapse of a 30-day extension to a five-year contract that expired March 15. The union strike ended April 30 after a two-week work stoppage when the parties reached a tentative agreement on a new five-year deal, but local members ultimately rejected the proposal.
The new six-year agreement includes elimination of the second tier; health care premiums protected for the life of the agreement; provides protections around shift scheduling and plant operations; as well as providing a major signing bonus and aggressive annual wage improvements every year of the agreement.
“This agreement allows us to continue providing our employees with a great quality of life, with guaranteed wage growth and excellent benefits,” said NRV Vice President and General Manager Franky Marchand. "It will also help secure the plant’s long-term growth and sustainability. Our focus now will be on getting trucks to customers as quickly as we can, and strengthening our relationship with our employees.”
A panel of trucking industry experts came up with a new way of looking at the trucking industry's number one problem that just might turn the conventional wisdom about a "driver shortage" on its head. This, in addition to a look at the U.S. economy's response to the pandemic pushing the trucking industry to historically high rates and tight capacity comprised FTR Transportation Intelligence's webinar on Thursday last week.
"In a nutshell, the economy is doing well," said FTR Vice President of Trucking Avery Vise. "We've seen a strong rebound from the contraction early in the pandemic, but neither industrial production or manufacturing output is where they were before."
Overall, FTR's panel of experts predicted rates would slightly drop off all-time peaks but stay high through 2022, trucking capacity will remain an issue, and a meteoric rise in small new trucking companies may be muddying the waters around the industry's much feared labor shortage.
Here's what the experts talked about, and what fleet owners and drivers alike need to know about the current state of the economy.
Is there a truck driver shortage or not?
FTR Transportation Intelligence
FTR's panel looked at recent data from the Bureau of Labor Statistics (BLS) to see there are about 38,300 fewer drivers employed in June 2020 than at the beginning of the pandemic. This number often gets cited to support the idea that the industry suffers from a driver shortage, but the number bears closer examination.
By definition, the BLS's payroll data only looks at drivers employed by a company. For equipment owner-operators who work for themselves, that number becomes much more difficult to track. The U.S. government does not track what industries self-employed people belong to, but there's good reason to believe that the number of drivers on payroll has shrunk while many of those same drivers made their way toward self-employment, leaving the total pool of drivers untouched but projecting the appearance of a driver shortage.
From 2018 to the dawn of 2020, only four months saw more than 4,000 new for-hire trucking companies launch. In 2021, not a single month has seen fewer than 6,000 new for-hire trucking companies launch, with more than 10,000 such companies starting in June.
The "unprecedented surge in new and mostly very small trucking companies probably affects how we look at the employment figure," said Don Ake, the Vice President of FTR's Commercial Vehicles division. "Most of these new carriers are very small, so if even a tiny portion of those former employee drivers became owner-operators, that could offset the picture we're seeing."
According to Ake, the huge uptick in new companies is a "new phenomenon" that upsets the way industry analysts "usually depend on payroll employment" as reported by BLS. As many as 157,000 drivers may have moved from payroll positions to opening up a new business, he said.
That said, the trucking industry still faces a tremendous uphill battle in attracting and retaining talent thanks to an unprecedented mix of circumstances following the pandemic.
Economic threats to trucking
FTR Transportation Intelligence
FTR cited several factors keeping drivers away from trucking: reduced CDL training and testing during the pandemic; constraints in the broader labor market; competition from industries like construction, warehousing, and parcel delivery; positive drug and alcohol tests sidelining 64,000 drivers; and generous unemployment payouts.
According to the panel, the industry can expect CDL training to return to normal as the pandemic continues to ease, and unemployment benefits will expire nationally in September. But recruiting is still a challenge.
"The unemployment compensation represents a real issue," said Ake. "We did an analysis and looked at the median wage of a truck driver compared to maximum unemployment benefits and the difference was less than $5,000 a year in 22 states. That's not a big delta when you consider that one is doing nothing and one is doing a difficult job."
But according to Ake, states that have done away with the expanded benefits have seen more drivers returning to work. CDL holders know they can easily reenter the workforce, so they may simply be taking advantage of the free money.
The U.S.'s uneven economic recovery
FTR Transportation Intelligence
Basically, the broadest measure of the U.S. economy's output, GDP, has come roaring back to life since Q3 of 2020, and the explosion in goods transported, which includes imports not included in GDP, has dwarfed even those massive growth figures.
As the U.S. government pumped nearly $5 trillion into the economy, mostly on the consumer side via stimulus payments and enhanced unemployment insurance benefits, Americans found themselves cash-rich with few options for travel and entertainment due to COVID-19 restrictions. This resulted in an explosion of e-commerce and, with that, an extremely high demand for goods movement.
But during that same period, the pandemic hamstrung global supply chains creating a "huge stall in industrial production," according to Vise.
Industrial production in the U.S. swung wildly in 2020, with a 42% crash in Q2 and a 45% rebound in Q3, but in 2021, the Q1 uptick came in at a weaker-than-expected 3.6%. FTR expects Q2 of 2021 to show a more respectable 6.5% bounce, but the supply chain disruptions that suppressed production in previous quarters show no signs of abating.
Relatedly, the panel expected rates to stay near all-time highs as capacity and labor remained tight and a semiconductor shortage threatened new builds.
The real shortage impacting the trucking industry
FTR Transportation Intelligence
Surprisingly, the real shortage impacting the trucking industry may not have to do with drivers, but instead with high tech semiconductors used in building trucks and automobiles. For months now, the pandemic-induced shortage of semiconductors has hamstrung production of automobiles and trucks while other commodity prices – namely lumber, steel, and rubber – have combined to drive up prices for tractors and trailers alike.
"Looking at the supply chain, basically as far as Class 8 goes, the number one problem is the shortage of computer chips," said Ake. "The good news is there’s been reports that the semiconductors will start flowing into auto manufacturers in August, but some reports from financial groups out there that claim the shortage is getting worse."
Ake couldn't confidently predict when the semiconductor market will get back to normal, but he pointed out that it takes 15 to 35 semiconductors to build a truck.
"If you can't get enough, you can't build a truck," said Ake. This has pushed the industry to a gap of about 40,000 units, meaning demand that at this point in 2019 (when the industry also saw great demand for Class 8 trucks), 155,000 trucks had been built, whereas in 2021, that number sits just around 115,000.
Vision Zero is one of the newer strategies looking to eliminate deaths and severe injuries due to road traffic and unsafe infrastructure.
First successfully implemented in parts of Europe, the strategy has recently gained traction in North American cities, in addition to the new administration.
Since the inception of roadways and traffic, most drivers were conditioned to think fatalities on the road were inevitable, but the reality is that there are now many resources that can prevent these tragedies.
The key is to take a proactive, preventative approach that prioritizes traffic safety as a public health issue. With more than 40,000 people killed in crashes in the U.S. last year, something needs to start changing immediately. The significant loss of life exacts a tragic toll. Moreover, pedestrian deaths in 2020 increased by 21% from 2019 – even with fewer vehicles on the road that year.
Not only is there personal loss, but also deep community impacts – including economic costs and emotional trauma – as well as increasing taxpayer spending on emergency response and long-term healthcare costs.
Committing to change with new strategies and new technology
Vision Zero specializes in showing a different approach to traffic safety. It is much different than the traditional approach used today in that it starts with the ethical belief that everyone reserves the right to experience safe use of the roadway, and it is the shared responsibility of policy makers, system designers and technology experts to ensure safer roadways.
The traditional approach of traffic pushes responsibility onto an individual, however with system designers working together to create smart infrastructure through the new strategy of Vision Zero, various different aspects of the roads and traffic will ultimately become safer. Vision Zero also differs from traditional approaches by acknowledging the many factors that go into creating safe mobility in communities.
Collaborations are integral between traffic planners, engineers, and policy makers alike. Committing to Vision Zero means unlearning old ways of the roads and making room for new strategies to better the transportation infrastructure we use every day. This means that system designers and policy makers are expected to improve the roadway environment and policies in addition to other related systems in order to dramatically lessen the severity of crashes.
Advanced technologies, including video analytics solutions, use artificial intelligence (AI) and machine learning approaches to analyze large quantities of video streams in real-time to then provide actionable insights on complex traffic situations including road hazards, congestion and traffic collisions.
For example, companies like Waycare, Derq and Applied Information provide software that analyzes behavioral patterns of vehicles, pedestrians, and traffic flows from existing traffic infrastructure in real-time to identify and predict potential road incidents. These advanced video analytics can then activate a pedestrian blinking sign to alert a distracted driver and prevent them from colliding with a pedestrian about to cross the road. They can also alert a city operator so emergency responders can be dispatched to the location of the incident if a collision is detected. Furthermore, real-time AI analytics provide additional context in the form of incident identification, near-miss heatmaps and accurate traffic counts to traffic engineers and operators, which ultimately allows them to better understand traffic patterns and proactively improve the safety of roads.
The U.S. administrative plan for infrastructure
The Biden administration has proposed to spend an estimated $1 trillion on infrastructure projects. The proposed bill was negotiated among a group of bipartisan Senators that includes a large piece of the bill targeting innovations for smart infrastructure.
The administration’s transportation infrastructure goes hand in hand with the Vision Zero strategy as they are both working to fix the same problem. Through increased funding for roadway projects, the bipartisan proposal puts roadways on the right track to decrease fatalities, and hopefully lead to zero fatalities over the years.
It’s estimated that the infrastructure plan will spend $312 billion on surface transportation projects, with $109 billion invested in roads, bridges and other major projects. From there, $20 billion is estimated to be put toward improving the safety of all roadway users, with a specific emphasis on bicyclist and pedestrian safety. The proposed plan includes increasing funding on existing safety programs, while also creating a new program called “Safe Streets for All.” This new program will provide funding for state and local governments’ Vision Zero plans.
Preventing roadway incidents is key to Vision Zero, and advanced technologies like real-time video analytics play an integral role in smart infrastructure.
While legislation is a good first step, it will not work without new technology to enable better road safety. It’s important that local city and community leaders adopt the mentality of Vision Zero to enable smart infrastructure advances. While access to the data collected through sensors being deployed is a crucial first step, the implementation of technology solutions is necessary to move forward to actually improve road safety and reduce traffic fatalities.
Dr. Georges Aoude is the CEO and Co-Founder of Derq, an MIT spinoff powering the future of connected and autonomous roads, making cities smarter and safer for all road users and enabling the deployment of autonomous vehicles at scale. Derq provides cities and fleets with an award-winning and patented smart infrastructure platform powered by AI that leverages existing traffic cameras and sensors to help them tackle the most challenging road safety and traffic management problems.