Trucking news and briefs for Wednesday, July 21, 2021: Paper Transport partners with investment firmSam Zell’s private investment firm Equity Group Investments (EGI) recently invested in Paper Transport (CCJ Top 250, No. 112). EGI is partnering with Paper Transport’s senior management team, who will continue to lead the business and retain an ownership stake in the company. The partnership provides additional capital for add-on acquisitions and strategic support for the organization’s growing truckload, intermodal and truck brokerage offerings. EGI President Mark Sotir, Managing Director Evan Harwood, Advisor Rob Silberman, and Senior Associate Tyler Goldstein are joining the De Pere, Wisconsin-based truckload fleet's board of directors. “We’ve been impressed with Paper Transport’s management team, who have demonstrated an ability to grow, innovate and diversify the business during their tenure,” Sotir said. “One of our strengths is aligning with like-minded partners. EGI’s deep experience in the transportation industry and track record of scaling businesses, coupled with Paper Transport’s experienced leadership team and growth mindset, makes this partnership a win-win.” Paper Transport was named a CCJ Innovator last year. “After 30 years of steady growth, our partnership with EGI will accelerate our strategy,” said Jeff Shefchik, president of Paper Transport. “EGI has a history of doing things differently than what the marketplace has done – we believe that same strategy is what has led to Paper Transport’s success in the past. We believe partnering Paper Transport with EGI will allow us to outpace the industry in both innovation and growth.” New nonprofit forms to help recruit trucking’s next generationA recently launched nonprofit, The Next Generation in Trucking Association, is partnering with schools to provide CDL driver and diesel technician programs for young adults in Kentucky, Wisconsin and California. The group was started by leaders in the trucking industry to engage the next generation of trucking industry professionals by partnering with both public and private schools and community/technical colleges to offer training opportunities that will eventually lead to jobs. “Programs like this one are critical game changers for not only developing a skilled workforce but also creating pathways for that skilled workforce to advance in their careers in the trucking industry,” said Lindsey Trent, Ryder Customer and Business Development Manager and co-chair of Next Generation in Trucking. “We are eager to train, mentor and match a fresh generation of drivers to the 21st century needs and demands of the trucking industry.” The Next Generation in Trucking Association aims to bring new drivers to the industry while at the same time providing access to well-paying careers to students without the need to incur college debt. Their goals of the group are to:
The Next Generation in Trucking Association partners with schools around the country to launch CDL programs that fit their needs. Recent partnerships include Lawrence County High School in Louisa, Kentucky; Jessamine Career and Technology Center, Nicholasville, Kentucky; Fairdale High School, Louisville, Kentucky; and Lux-Casco, Luxemburg, Wisconsin. The Next Generation in Trucking Association has been approved by the U.S. Department of Labor as a Nationally Registered Apprenticeship Program for CDL Driving. Benore purchases first EV truckBenore Logistic Systems (CCJ Top 250, No. 144) recently announced the purchase of its first Peterbilt 579EV to be added to its fleet. During an event at the company’s Greer, South Carolina, headquarters, Jeffery Benore, President and Owner, announced the implementation of an electric fleet. The goal is to add 50 electric class 8 tractors over the next two to three years and to convert half of the entire fleet over the next five to ten years to electric units. By implementing an electric fleet, Benore will be able to reduce its carbon dioxide output by one metric ton for every 100 gallons of fuel saved, the company said. Kenworth adds Hendrickson suspension optionKenworth is now offering the Hendrickson Haulmaax EX as an option for the Kenworth T880, W990, T680 and T480 models. The Hendrickson next-generation heavy-duty lightweight rubber suspension is designed for vocational applications such as dump, concrete mixer, refuse, logging, crane/boom, platform, and fire/rescue. The new suspension replaces the Hendrickson Haulmaax family of 40,000- and 46,000-pound capacity suspensions and also adds a new 52,000-pound capacity. In addition to the increased capacity range, the Haulmaax EX provides a higher site rating and maintains the same weight and durability compared to its predecessor. The suspension utilizes a unique rubber spring design that balances empty-ride quality and loaded stability. Angled bolster springs and a unique progressive load spring provide extra stability for demanding applications such as refuse, concrete mixers and dumps. https://ift.tt/2ytPsnD
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In Feb. 2016, David Broyles was settling into a new role as Averitt Express' director of driver services when he attended an Omnitracs user conference in Nashville. He was intrigued by a service he discussed with an exhibitor, Atlantic HR Solutions, for managing per diem driver pay. When Broyles mentioned the benefits of per diem pay to Averitt’s chief financial officer, the response was “we’re not getting into that mess. That will not help anybody,” he said. Shortly after this exchange, Averitt got a new CFO. Boyles again discussed per diem pay and set up a meeting between Atlantic HR and Averitt’s executive team. After evaluating the data with accountants and lawyers, the new CFO was onboard. Averitt Express has been paying drivers a daily per diem rate since January 1, 2017. “It made such a difference in pay,” Broyles said. “Luckily we did it when we did.” The trucking industry was going through a downturn in 2017. Averitt was unable to do a pay increase for drivers, but made it possible for them to net more money. Broyles credits Averitt's per diem pay for a four percent reduction in driver turnover in 2017. Today, virtually all if its drivers are in the program.. “Per diem made sense for everybody across the board,” he said. Averitt’s driver turnover rate has been trending down every year since 2017. Last year it ended at 39% in the over-the-road division. This year, amid a severe driver shortage, its annualized turnover rate is at 47%, he noted. The tax advantagesA lot of fleets offer per diem programs because drivers are asking for it, but owners and executives may not understand the tax advantages, said Kehl Carter, chief executive and founder of Atlantic HR Solutions. The Tax Cuts and Jobs Act, signed into law by President Trump in Dec. 2017, increased the standard IRS tax deduction for individuals but removed the ability for company employees to deduct travel expenses. The change makes it easier for more people to file a short form for federal taxes, Carter said. Owner-operators do not get the same tax advantages as company drivers, but they can deduct per diem by filing a Schedule C with their federal taxes. Company-sponsored per diem programs were not impacted by the new tax law. Motor carriers are still able to allocate $66 per day, which amounts to between $300 and $400 of income each week shifting to the tax-free column. Using per diem to shelter income saves about 30% in taxes. This increases drivers’ take-home pay by about $100 a week, Carter explains. Over a typical year of 50 workweeks, drivers see an increase in take-home pay by approximately $5,000. Without a per diem program, motor carriers would need to increase driver pay by more than $8,500 a year to put the same $5,000 into their pockets, he said. Drivers who use their company per diem programs still can use the standard deduction and file a short-form federal tax return. Since per diem reduces drivers’ payroll tax withholdings it also saves motor carriers significant money by reducing their matching amount of state and federal payroll taxes. By doing so, carriers in most states also pay less in workers comp premiums, Carter said. For drivers who are concerned that paying lower taxes will have a negative impact on future Social Security benefits, Carter said the math shows they have no reason to worry. To calculate retirement benefits, the Social Security administration uses a taxpayer’s highest years of earnings for a 35-year period. The income is averaged and tied to a monthly index. The first $800 of income from the index is paid at 90%. The second tier of income, from $800 to $5,000, is paid at a 32% rate. To illustrate how per diem would impact the Social Security calculation for drivers, Kehl uses an example of $1,900 a week in taxable income. Whether or not a driver uses per diem, his Social Security benefits will be no different for the first $800. Per diem pay would only impact his benefits for income between $800 and $1,900, which is paid at the lower 32% rate. The math shows that drivers are better off with an extra $100 a week in take-home pay and saving a portion of it, such as $20, in an IRA. When the driver retired at 67 years old, the extra income would far exceed the minimal reduction in Social Security benefits, he explains. “It is much better to take $100 a week home to your family to decrease debt or put into a third-party investment tool,” he said. Payroll automationData collected by electronic logging devices (ELDs) can be used to verify when and where drivers qualify for per diem pay. About eight years ago, Omnitracs developed a program called Per Diem Manager that integrates with Atlantic HR Solutions software to automate per diem calculations and the substantiation process required by the IRS for record keeping. Motor carriers and drivers do not need receipts for meals. What they do need is a record of the date, time and location to show each day where they could or should have stopped for a meal on the road, Carter said. Omnitracs’ Per Diem Manager captures all of this information for substantiation. The record includes both the distance a driver was from home and whether or not they spent a night away. Atlantic HR also integrates with other ELD providers and with back-office software systems to automatically move the appropriate amount of income, based on the daily per diem rate of $66, from taxable to non-taxable columns. The Omnitracs and Atlantic HR program has a small charge, per driver, that is applied only when drivers have per diem pay in a given week. Most carriers cover this cost for their drivers, Carter said. Atlantic HR has a call center to answer per diem questions from drivers. The company does this so that payroll departments of motor carriers do not have to be tax professionals, he said. https://ift.tt/2ytPsnD American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index decreased 1.5% in June after falling 1% in May, however, the June index equaled 111.6 compared with 113.3 in May. ATA Chief Economist Bob Costello noted that tonnage has flattened out, on average, over the last six to nine months, adding that "the good news is that it remains slightly above 2020 levels." “Supply chain issues are likely putting some downward pressure on tonnage,” he said. “But it is also likely that tonnage isn’t growing as much as it could because of industry-specific supply constraints. This index is dominated by contract freight, and the for-hire truckload carriers have seen their tractor counts fall because they are having difficulty finding qualified drivers. It is difficult to move more tonnage with less equipment, which is why we are seeing strong volumes in the spot market as shippers scramble to get loads moved.” May’s reading was revised down slightly to -1% from ATA's estimation released June 22. Compared to June 2020, the SA index rose 0.5%, which was preceded by a 3.3% year-over-year increase in May. Year-to-date, compared with the same six months in 2020, tonnage is up 0.3%. The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 116.2 in June, 2.4% above the May level (113.4). Spot market softening but still above $3/mileATA’s For-Hire Truck Tonnage Index heavily weights contract freight as opposed to spot market freight, but data from Truckstop.com and FTR Transportation Intelligence for the week ended July 16 suggest that after more than a year of stress, spot volumes in dry van and refrigerated freight might finally be starting to return to normal. Volumes can be volatile surrounding holiday weeks but, generally, load availability in a post-holiday week will recover at least a portion of the volume lost during the holiday week. However, total load postings in the Truckstop.com system fell 5.6%, and the declines in dry van and refrigerated were similar to those during the week that included the Independence Day holiday. Flatbed volume was up 3.6%, which is not a strong figure either given that the prior week had included an observed federal holiday. However, because the actual holiday fell on a weekend, expected impacts on the market both heading into and out of the holiday might be distorted. Although the lack of a partial recovery from the holiday week was a surprise, seasonal weakness is typically expected after June. The market saw no seasonality in the rebound last year. Truckstop.com noted that upward pressure is unlikely comparable to last year, but that the economy will see additional stimulus in the form of monthly advance child tax credit payments that began last week. Meanwhile, many supply chains are still constrained, and capacity remains tight for a variety of reasons. For example, one major rail carrier has temporarily suspended inbound intermodal shipments from most West Coast ports. All this disruption is supporting spot market volumes even if they aren’t staying at the stratospheric levels that have been experienced over the last year. Although the tax credits and other disruptions might still lead to another boost, pricing in the spot market might have peaked until yearend holiday moves. Rates have declined in five of the last seven weeks. The broker-posted rate per mile excluding fuel surcharges fell less than 2 cents last week and remains about 36% above the same 2020 week. Total truck postings edged up 0.3%, although the increase was principally focused in flatbed. The Market Demand Index fell to 149.4, which is the lowest level since early February. Load volumes decreased 13% week-over-week, even though the daily high point for last week was 1,014,000. Capacity remained constrained at 32.01 week-over-week, according to Truckstop.com (the 5-year average is 88.00). Rates fell 1 cent to $3.06/mile (46 weeks above $2.40. The 5 year average is $2.28). Van rates, according to Truckstop.com, decreased a penny to $2.72; flatbed slid 1 cent to $3.12; and reefer decreased 5 cents to $3.20. Outbound tender rejections saw a small decrease to 23.12 from 24.95, meaning almost one of every four loads are being rejected. https://ift.tt/2ytPsnD Truck leases and rentals grew during a surge of ecommerce shopping last year and have continued score with fleets “desperate for trucks” amid rising demand and an ongoing microchip shortage that's hampered new truck production. To help meet demand, Enterprise Truck Rental plans to open a new location in Macon, Ga. about 80 miles south of Atlanta near truck-heavy Interstate 75, according to Fox affiliate WGXA. A map on Enterprise’s website shows eight truck rental locations in the Atlanta area and none in Macon. Brisk truck and van rentals brought on by growing online sales combined with a shortage in new truck inventory have helped to counter losses incurred during the pandemic for Enterprise’s car rental division. “Our truck business has seen an uptick in demand for rentals due to the COVID-related rise of ecommerce and online shopping,” said Enterprise Truck Rental Vice President Mike Pugh. [Related: When truck leasing makes sense] “Typically, we see a natural peak in demand for our business several times throughout the year, particularly in the summer and holiday seasons where demand doubles,” Pugh added. The chip shortage has also brought on additional business. Budget Commercial Trucks“In addition, the ongoing increased demand for new vehicles coupled with the automotive global chip shortage manufacturers are experiencing has led to an even larger spike in business as companies seeking alternative transportation options turn to truck rentals as a solution,” Pugh continued. Though new truck production has tanked, Enterprise feels prepared to meet increased demand. "The automotive global chip shortage has certainly impacted the industry," Pugh said. "But we’ve taken a proactive and thoughtful approach with our fleet so that we can keep it fresh as we normally would and be prepared to meet increased demand from customers. We’ve been able to maintain vehicle availability to support our customers’ ongoing transportation needs as they deal with peak business demand and the continued rise of ecommerce." Avis Budget Group, which rents trucks and cars through separate divisions, said there’s been “encouraging signs in the U.S.” as Covid restrictions relax around the globe prompting more travel and commerce. “Rapid, uneven global recovery from COVID has led to an evolving travel recovery and rental market that has no precedence,” an Avis Budget Group representative said. Some of Budget Truck Rental’s most notable business of late is leaning more on personal use instead of commercial. “Within the U.S. one of the busiest markets for truck rentals is California where people are often renting larger trucks to move,” the Avis rep added. [Related: Global chip shortage accelerates fleet plans for 3G migration] As demand continues for more trucks and vans in a tight market, Penske Truck Leasing remains confident in meeting customer needs. “We continue to help customers navigate these uncertain times using our rental assets, new build slots and ability to redeploy underutilized assets,” said Jim Lager, senior vice president of sales. “We also can help with our supply chain and dedicated contract carriage products. We have dedicated build slots for the balance of 2021 and 2022.” Lager credits Penske’s large, diverse inventory in helping them to navigate the pandemic and tight days ahead. “Having the largest rental fleet in the industry gave us an advantage,” he said. “The ability to redeploy or move assets from businesses that were suffering, to businesses that were thriving, was an advantage. Because of our strong partnerships we have better access to inventory.” Only so many trucks to go aroundStrong partnerships or not, FTR Vice President Don Ake, a commercial vehicle analyst, is concerned that leasing and rental opportunities will dry up as demand remains strong for both new and used trucks.Ritchie Bros. reported this week that “unprecedented demand” had driven used tractor-trailer prices up 30% year-over-year through its auction and marketplace venues. [Related: Manufacturers call on Biden to fix chip shortage] In its latest Commercial Truck Guidelines report released Thursday, J.D. Power reported that “Retail selling prices continue to accelerate. The newest available sleeper tractors are breaking records.” A benchmark group of 4 to 6 year-old trucks brought in 85.8% more revenue for the first six months of 2021 versus the same time period in 2020. “Fleets are desperate for more trucks,” Ake said. “Right now the spot market prices are at record levels and that's partially the result of fleets not being able to get more trucks on the road. Fleet capacity utilization is super tight. The remedy is to get more trucks, but we can't get enough new trucks on the road fast enough.” The chip shortage has reduced new truck inventories 26% from 2019, Ake said. Though chip production is expected to increase “in the next few months,” Ake said a healthy rebound will take time. “Even if the chip constraint went away next week, they still wouldn't be able to build all the trucks they wanted to build,” he said. “And we're seeing that on the trailer side too where they’re not constrained by microprocessors but by a number of other factors like labor that's holding things back.” https://ift.tt/2ytPsnD Trucking news and briefs for Tuesday, July 20, 2021: Brake Safety Day nets more than 1,100 out-of-service violationsCommercial 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 violationThe 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 payJ.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. https://ift.tt/2ytPsnD “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. https://ift.tt/2ytPsnD Trucking news and briefs for Monday, July 19, 2021: DOT watchdog critiques FMCSA’s CDL disqualification oversightThe 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 violationsThe 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 truckingA 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 strongFTR’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.” https://ift.tt/2ytPsnD 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 CFOForward 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.” https://ift.tt/2ytPsnD
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." Are you sampling engine oil? Maybe you should be. Here's why. Check out the video above. 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." https://ift.tt/2ytPsnD 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.” https://ift.tt/2ytPsnD |
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