Friday, March 29, 2019, 06:18 AM | No Comments »


Rachel Premack Mar. 25, 2019, 12:49 PM

Original Article Click Here

Chris Polk, who has been a truck driver for two decades, doesn't like the regulations that America's 1.8 million truck drivers must work under — especially the recently implemented safety laws that many truckers say actually make their jobs more unsafe.

Because of those laws and the general decrease in pay that truck drivers have seen, a Facebook group with more than 26,000 truckers called Black Smoke Matters is planning to close the US's highways on April 12. Some truckers might park directly on a highway, while others are planning to refuse to work that day and stay at home.

Polk and those truck drivers can agree that the so-called electronic-logging-device mandate and other laws are untenable — but he says he won't be joining them.

 

"At the core of my belief is that good ideas do not require force — coercing, aggression, blocking a highway, refusing to do work that you have agreed to do," Polk told Business Insider. "That, in my view, is an act of violence."

Jonathan Jenkins, who has been a truck driver for 15 years and owns a refrigerated trucking fleet, had a swifter indictment.

They're a bunch of criminals. They're a bunch of rebels. And the fact of the matter is they're all going to go to jail on domestic-terrorist charges," Jenkins told Business Insider.

Trucker strikes have had serious effects
If the Black Smoke Matters truck strike takes off on April 12 and the nation's highways are closed, the effects could be drastic. Trucks move some 71% of the nation's freight — and that's not just your Amazon Prime deliveries, but food, water, and medical supplies.

Within the first day of a trucker strike, basic medical supplies like syringes and catheters would be at risk of running out. Medication for people with cancer that uses radiopharmaceuticals, which have a life span of only a few hours, would expire.

Read more: The federal government just confirmed what America's 1.8 million truck drivers have been saying for years: The truck-driver shortage doesn't really exist

The American Trucking Associations has said that reports of a trucker work stoppage would stir up consumer panic, not unlike when hurricanes or other natural disasters lead to folks emptying grocery stores.

Further up the supply chain, manufacturing delays would become rampant. Computer and auto manufacturers, for instance, build their goods as components are received throughout the day.

And should a strike last more than a few days, grocery stores and gas stations would run out of supplies.

Some truckers say the strikes are immoral
Because of those massive effects, some truck drivers, like Chad Teague, say a trucking strike is immoral.

"Shutting down freight and stopping down movement for medical supplies and things like that is putting terror on the general public," Teague told Business Insider. "It's morally wrong to stop the movement of freight just because we want to stomp our feet and say we want you to hear us."

In 1973 and 1974, independent truck drivers organized over citizens band radio to stop trucking across the US for multiple days to protest skyrocketing oil prices.

About 100,000 truckers were laid off, and the National Guard in Ohio was deployed to forcibly remove trucks from blocking the highways, sometimes using tear gas on drivers. There were fatalities too.

"There was a time in my career — I've been 20 years in the business — I probably would have agreed with these guys," Polk said. "But I've grown to understand that my value is tied to what I can do for other people, and that's where I feel that this group is missing the mark, because they're only thinking about themselves. I don't think they care about all the people who are affected."

But the truckers in the 1970s got their demands, and the strike gave rise to the influential Owner-Operator Independent Drivers Association.

It might also fail
Trucking-labor experts have expressed doubts about the outcome of Black Smoke Matters.

"I would be shocked if anything was successful," Michael Belzer, an associate professor of economics at Wayne State University who has studied trucking for decades, told Business Insider. "I'm afraid organizing on Facebook is a little unrealistic."

Regional strikes leading up to Black Smoke Matters also suggest that outcome.

Truck drivers had planned for months to do a "slow roll" around Interstate 465 in Indianapolis on February 21. The police in Indiana told the local Fox affiliate they expected as many as 400 to 500 trucks to loop twice around I-465, moving at about 45 mph, to raise awareness for trucker rights.

Ultimately, 78 truckers showed up.

One obstacle for internet-organized strikes is the size of the trucking community. There are nearly 2 million truck drivers in the US, and they are spread across the country, spending most of their days alone.

Labor unions used to merge disparate interests for not just truck drivers but employees nationwide. Labor-union membership across private-sector industries has fallen from one in three soon after World War II to one in 10 today, according to Jake Rosenfeld of Washington University in St. Louis.

A few decades ago, most truckers were unionized. In 1974, Belzer said, there were 2,019,300 truckers in the Teamsters. Now there are 75,000.

The 350,000 owner-operators nationwide, who average 26 years in the trucking industry, are outright barred from forming labor unions.

Polk, Teague, and Jenkins all said they were not interested in unionizing.

There has also been a decline in trucking pay and working conditions. A Business Insider analysis found that median wages for truck drivers had decreased by 21% on average since 1980 and by as much as 50% in some areas. In 1977, the mean earnings of a unionized truck driver were $96,552 in 2018 dollars, while the median earnings for a truck driver now are $42,480.

That all points to another reason the trucker strike may struggle: Truckers aren't paid enough to be able to take a day off work.

"The average truck driver has a family to support," Teague said. "They have a wife at home; they have kids at home. The last thing that they're concerned with is blocking a highway. They simply just cannot afford financially to shut down the truck and not support their family."


Wednesday, September 12, 2018, 07:35 AM | No Comments »

http://theweek.com/articles/794682/how-fix-american-trucking-industry

September 10, 2018 Jeff Spross

America's trucking industry employs roughly 3.5 million people, hauls 10.6 billion tons of freight back and forth across the country per year, and brings in $738.9 billion in revenues annually. It is, in some ways, a logistical marvel.

But this is also an industry in crisis.

Few would argue that America's existing trucking industry provides the most efficient way to haul goods all over the country. Much in the same way that if you were starting a constitutional democracy from scratch today you would never decide to implement the Electoral College system, if you were to devise a system for hauling and delivering a variety of goods, many of them perishable, across thousands of miles, you probably wouldn't recommend an army of hundreds of thousands of gas-guzzling, pollutant-emitting, traffic-congesting trucks driven by underappreciated, sleep-deprived, and underpaid men.

But here we are. America's trucking industry may one day be replaced by zippy new freight trains, or giant trucks piloted by AI systems. But for now, we need to fix the system we have, not daydream about a new one.

Truck driving used to be a desirable profession for a certain brand of American man. But almost no one wants to be a truck driver anymore. The industry is already short 50,000 tractor-trailer drivers, and that number could expand to 174,000 by 2026. Look at a wider array of heavier trucks, and the labor shortage could be as big as 270,000. Among other problems, this is constraining shipping routes across the country, adding extra costs to almost everything you buy.

The solution is simple: Raise driver pay.

While trucking is generally considered a high-quality blue-collar job, median pay for truckers is only around $42,000. That's more than $10,000 below the median household income in America. There are truckers who make six-figure salaries, sure, but they are rare. Once you adjust for inflation, pay for truckers has fallen anywhere from 35 to 40 percent over the last four decades.

Bear in mind too, that the economically essential function served by the trucking industry creates a very taxing and tough quality of life for truckers themselves. Being crunched behind the wheel of a truck for 10 hours at a time causes discomfort, illness, and injury. Being gone from home for days or weeks at a time causes all sorts of personal issues.

Truckers deserve to be paid more — a lot more.

The good news is that last week's jobs report did show an uptick in wages. In trucking specifically, compensation finally jumped 10 to 12 percent over the last year, with half of all truckers seeing a pay bump. It's not enough to make up for the 40-year stagnation, but it's a step in the right direction.

There are regulatory issues here too, however. A federal rule from 2004 limits truckers to driving 11 hours in any 14-hour period. From a human well-being standpoint, that's obviously a good thing. But it also lowered the amount of driving any one trucker could do, increasing the number of drivers needed to cover the same amount of routes.

More recent regulations require electronic logging devices in all driving rigs. Before that rule, truckers kept track of their hours manually in paper notebooks. The good news is the new electronic logging rule makes sure the 11-hour limit is adhered to. A 2014 study by the Federal Motor Carrier Safety Administration concluded that using electronic monitoring reduced the total crash rate by 12 percent, and cut violations of the hour rules by half. The bad news is that it's a little Big Brother-ish, and more practically it reduces drivers' flexibility. Sometimes a trucker needs to deal with a traffic jam or drive a little bit further to find a place to sleep.

 
Finally, there's also a rule that limits truck driving to workers 21 and older, which also cuts into the labor supply. Drivers between the ages of 20 and 34 are only a fifth of the trucking industry, versus almost a third for construction. As America's existing truck drivers age, shouldn't we be encouraging younger drivers — as young as, say, 18 — to get a job in this industry? Driving a big-rig truck is complex — but if you're old enough to fight in a war, surely you're old enough to drive a truck. (There's already a bill in Congress to allow workers 18 and up to become drivers after completing an apprenticeship program.)

Of course, all these rules were put in place to make truck driving a more humane, less grinding industry. This is a good thing! Plenty of truckers enjoy their work, but there's no escaping the long hours on the road, the accompanying health problems, lonely nights in hotels, and long periods away from family. Government regulations that make it better to be a trucker should encourage more Americans to consider a career in trucking.

But the bigger fix is obvious: If your industry can't find enough workers, you need to pay them more. It really is as simple as that.


Monday, August 20, 2018, 07:39 AM | No Comments »

August 14, 2018 Brian Straight, managing editor

https://www.freightwaves.com/news/cashflow-corner/finding-freight-with-direct-shippers

Many truck drivers get their start hauling for one of the larger carriers like a Schneider National or a Swift, for instance. After a period of time, though, the driver decides more money and more freedom is available if they go it alone.

Welcome to your own authority. Running for yourself offers plenty of challenges, but some would have it no other way. One of the biggest challenges will be finding freight. Load boards, and now apps, offer plenty of loads, but a quick search of social media finds complaints about the “cheap freight” that populates these places. Cheap freight, aka loads that are priced extremely low, abound on load boards. The problem is that they wouldn’t be there if truckers didn’t accept them. Filtering through the cheap freight to find good-paying freight can take time, though, which is why some advocate for shipper direct freight.

What is shipper direct freight? This is freight that you, as the owner-operator or small fleet owner, contracts for directly with the shipper. It has several advantages over load boards, namely a more consistent nature and often better paying as you are negotiating directly with the shipper, cutting out the middleman. This can also benefit the shipper by lowering the overall cost. You are also able to quickly react to issues or concerns and build a rapport with that shipper that leads to better overall service and, perhaps, more business.

The key to getting that direct shipper freight, though, is not an easy path to take in many cases. Unless you have an in already, the process starts the old-fashioned way, with boots on the ground. It starts with research. Before you start contacting shippers, ask yourself a few questions.

What rate do I need? It’s important to know what hauling rate you need to make the lane profitable. Is $2 per mile sufficient, or you do you need more to sustain your business? Don’t start contacting potential shippers until you know the minimum rate you need for sustainability – and then add a little to it to give yourself some negotiating room. Research what rates along that lane are going for – now and historically - so you are not under-pricing or over-pricing your services.

What lane do I want to run? This is important to help you identify potential shippers. Find a lane or lanes you want to operate in and then make a list of shippers along these lanes to contact. A more targeted approach will lead to better results and more likely, a group of shippers clustered together.

Is there enough freight along this lane to sustain my business? This is a question that many people ignore. Getting one customer along a lane is a good start, but if that is the only customer, it might be a losing lane. Be sure you can get enough freight along a lane to keep your trailer filled and revenue-producing.

Is there return freight or will I have to deadhead back to the next load? Just because there isn’t return freight from a destination doesn’t mean you should turn down that business, but you need to know this when bidding on a contract. If there is no return freight, your rate needs to reflect the costs associated with deadheading to the next location that has available freight.

Look for smaller shippers. Smaller shippers with more infrequent loads sometimes have a harder time booking capacity from larger carriers. And there are a lot of them, so look for these types of companies that have a need for reliable, cost-effective shipping options.

Once you’ve identified potential shippers and set potential rates, the hard work now begins: getting a contract. Social media has made it easy to reach out to many people quickly, but consider personal letters or trying to schedule a meeting with decision makers at the shipper to make your presentation. Making your pitch through an in-person presentation can be more effective than simply sending along a document. Be professional and be prepared. Anticipate questions the shipper may ask, such as what happens if your truck breaks down or you get sick? Make sure you know everything you can about the shipper, what it ships, where it ships, and how often. And make sure you know everything about your own business – it’s amazing how many people get tripped up on a question about their own business.

In your presentation, it is often best to focus on service, not price. There is always someone willing to haul it cheaper, and shippers who are focused only on price will eventually leave for that cheaper carrier. Instead, sell your services – what you will provide, your attention to detail, your communication skills, your ability to treat their freight like it is your own. Do you offer any additional services that others may not? Let the shipper know this, especially if it might pertain to their business. Don’t overpromise but deliver on all your promises.

As you look to find direct shippers, keep in mind that a good rule of thumb is not to let any one shipper become the sole source of revenue for your business. It’s nice to have only one customer, but if that customer bolts, your business goes with it. If possible, don’t let any one shipper account for more than 25% of your overall revenue. A good freight mix also can keep your truck moving when there is a pause – maybe the shipper shuts down operations for two weeks each summer.

The success of landing a direct shipper depends on your own knowledge of your operations and its needs, your knowledge of the shipper and what they need, and a lot of hard work to land those initial accounts. Doing so, though, can provide a good source of revenue that you can build your operation’s foundation upon.

 


Monday, August 20, 2018, 07:35 AM | No Comments »

https://www.freightwaves.com/news/cass-index-july-2018

 

Even as DAT spot rates start to slide from their recent highs, and analysts on earnings call ask executives if they believe the freight market may have peaked, another market index shows all green lights.

The July Cass Truckload Linehaul Index published Wednesday had its first double digit year-on-year increase since the pre-Great Recession boom of 2008. The index in July was 138.1, 10.2% more than the level of a year ago. Even in this current runup in freight rates, there has not been a year-on-year double digit increase in the Cass Linehaul Index before the July number. The index of 138.1 is the highest ever in the history of the index, which goes back to January 2005, the base year.

The Cass Intermodal Index was also up double digits year-on-year, though that is not as unique; the June index also was up by double digits, but not as much as the 12% posted for July. The rate of growth in July increase was described as the biggest year-on-year increase since July 2011.

The Truckload Linehaul index has now risen year-over-year for 16 consecutive months, though there have been some months sequentially lower than the prior year. July was not one of them; the 2.5% increase over June was one of the larger monthly gains during this bull market run.  "Last month we increased our realized contract pricing forecast for 2018 from a range of 6% to 8% to a range of 6% to 12%, and current data is clearly signaling that the risk to our estimate may still be to the upside," Donald Broughton, the principal managing partner of Broughton Capital and the official commentator for Cass said in the release accompanying the indexes. "We believe that this is the strongest normalized percentage level of truckload pricing achieved since deregulation.” He defined “normalized” as “except for extreme periods of recovery from recession."

The Intermodal Index hasn’t had a year-over-year decline in almost two years. At 139.2, it is not at its all-time high, which was 143.2 recorded in March. But its 12% year-over-year gain does mark the biggest comparative 12-month increase since the index began its rise from its most recent 121.1 low of June 2016.

The 139.2 for July was 1.8% more than June 2018.

“Tight truckload capacity and higher diesel prices are creating incremental demand and pricing power for domestic intermodal," Broughton said in his comments regarding intermodals. The Cass forecasts are for crude oil in a $45 to $65 range and diesel in $2.50 to $3.25. With average retail diesel in the U.S. at about $3.20, according to the EIA, and WTI crude at about $65—the top end of the Cass estimate—movement in the range can mostly only go down, which presumably would be bearish for intermodal. But that is movement in the range; prices can obviously go higher and wouldn’t need much to break out of the estimated range.

Cass defines the methodology on the intermodal index as being drawn from the actual invoices of its clients, for whom it is the initial payer. It is described as an “accurate, timely indicator of market fluctuations in per-mile U.S. domestic intermodal costs.” The costs are all-in: linehaul, fuel and accesorials. But the Truckload Index is based on movement in per-mile truckload linehaul rates, “independent of additional cost components such as fuel and accesorials.”

The strong Linehaul and Intermodal numbers were not the only healthy indices published by Cass this week. On Tuesday, the broader Cass Freight Index was published with 1.245 for its shipments index and 2.901 for expenditures. That expenditures index was a record for the  index, which goes back to 1999. The shipments number was not, but it is the highest since 2007. Cass defines these indices as representing “monthly levels of shipment activity, in terms of volume of shipments and expenditures for freight shipments.”

Suggestions that the freight markets may have hit a peak—though not necessarily headed for a significant fall—have been fueled in part by weekly DAT spot rates. In the last four weeks, DAT average spot dry van rates have dropped to $2.18 per mile from $2.37; flatbeds have declined to $2.69 from $2.79; and reefer vans have fallen to $2.51 from $2.65.


Monday, August 20, 2018, 07:35 AM | No Comments »

https://www.freightwaves.com/news/cass-index-july-2018

 

Even as DAT spot rates start to slide from their recent highs, and analysts on earnings call ask executives if they believe the freight market may have peaked, another market index shows all green lights.

The July Cass Truckload Linehaul Index published Wednesday had its first double digit year-on-year increase since the pre-Great Recession boom of 2008. The index in July was 138.1, 10.2% more than the level of a year ago. Even in this current runup in freight rates, there has not been a year-on-year double digit increase in the Cass Linehaul Index before the July number. The index of 138.1 is the highest ever in the history of the index, which goes back to January 2005, the base year.

The Cass Intermodal Index was also up double digits year-on-year, though that is not as unique; the June index also was up by double digits, but not as much as the 12% posted for July. The rate of growth in July increase was described as the biggest year-on-year increase since July 2011.

The Truckload Linehaul index has now risen year-over-year for 16 consecutive months, though there have been some months sequentially lower than the prior year. July was not one of them; the 2.5% increase over June was one of the larger monthly gains during this bull market run.  "Last month we increased our realized contract pricing forecast for 2018 from a range of 6% to 8% to a range of 6% to 12%, and current data is clearly signaling that the risk to our estimate may still be to the upside," Donald Broughton, the principal managing partner of Broughton Capital and the official commentator for Cass said in the release accompanying the indexes. "We believe that this is the strongest normalized percentage level of truckload pricing achieved since deregulation.” He defined “normalized” as “except for extreme periods of recovery from recession."

The Intermodal Index hasn’t had a year-over-year decline in almost two years. At 139.2, it is not at its all-time high, which was 143.2 recorded in March. But its 12% year-over-year gain does mark the biggest comparative 12-month increase since the index began its rise from its most recent 121.1 low of June 2016.

The 139.2 for July was 1.8% more than June 2018.

“Tight truckload capacity and higher diesel prices are creating incremental demand and pricing power for domestic intermodal," Broughton said in his comments regarding intermodals. The Cass forecasts are for crude oil in a $45 to $65 range and diesel in $2.50 to $3.25. With average retail diesel in the U.S. at about $3.20, according to the EIA, and WTI crude at about $65—the top end of the Cass estimate—movement in the range can mostly only go down, which presumably would be bearish for intermodal. But that is movement in the range; prices can obviously go higher and wouldn’t need much to break out of the estimated range.

Cass defines the methodology on the intermodal index as being drawn from the actual invoices of its clients, for whom it is the initial payer. It is described as an “accurate, timely indicator of market fluctuations in per-mile U.S. domestic intermodal costs.” The costs are all-in: linehaul, fuel and accesorials. But the Truckload Index is based on movement in per-mile truckload linehaul rates, “independent of additional cost components such as fuel and accesorials.”

The strong Linehaul and Intermodal numbers were not the only healthy indices published by Cass this week. On Tuesday, the broader Cass Freight Index was published with 1.245 for its shipments index and 2.901 for expenditures. That expenditures index was a record for the  index, which goes back to 1999. The shipments number was not, but it is the highest since 2007. Cass defines these indices as representing “monthly levels of shipment activity, in terms of volume of shipments and expenditures for freight shipments.”

Suggestions that the freight markets may have hit a peak—though not necessarily headed for a significant fall—have been fueled in part by weekly DAT spot rates. In the last four weeks, DAT average spot dry van rates have dropped to $2.18 per mile from $2.37; flatbeds have declined to $2.69 from $2.79; and reefer vans have fallen to $2.51 from $2.65.


DOT's Chao calls hours-of-service rules 'inflexible'
By Mark Schremmer, Land Line associate editor | 3/27/2019
Original article click here: 
http://www.landlinemag.com/story.aspx?storyid=73968#.XJ4YuhNKgSJ

U.S. Department of Transportation Secretary Elaine Chao described the current hours-of-service regulations as “inflexible” during a U.S. Senate subcommittee hearing on Wednesday, March 27. The comment was in response to a question from Sen. John Hoeven, R-N.D., about the Modernizing Agricultural Transportation Act, which would provide regulatory relief for the transportation of agricultural products. “Well, this is what happens when there’s a one-size-fits-all solution – it doesn’t work across the country because our country is so diverse,” Chao said. “And obviously with electronic logging devices, that created hardships for small truckers and also created hardships for agricultural interests, farmers, people who are hauling in rural areas. “But the issue, as it turned out, is not the electronic logging device, it’s the hours of service. So we are actually looking at that as well on a bipartisan basis, and we hope to come out with some conclusions on that. But, again, we’re very much aware of the hardship that these inflexible rules have placed on rural and agricultural interests.” The testimony came only days before Chao is scheduled to provide a regulatory update on Friday, March 29, at the Mid-America Trucking Show in Louisville, Ky. According to a news release, Chao “will be providing an update on the Department of Transportation’s efforts on safety, infrastructure, truck parking, and reducing burdensome regulations on truck drivers.” Many truck drivers hope the speech will provide some details regarding hours-of-service reform. In August, FMCSA issued an advance notice of proposed rulemaking regarding possible changes to the hours of service. The agency hosted five public listening sessions, and a common response from OOIDA and truck drivers was that there needed to be more flexibility within the rules. The FMCSA received about 5,200 comments on the possible rulemaking, and the agency is expected to announce its proposed changes to the hours of service soon. OOIDA said it is hopeful that Chao’s testimony hints at positive changes regarding the hours of service. “We appreciate the Secretary’s conclusion that inflexible rules like the ELD mandate present distinct hardships for segments of the trucking industry, especially small businesses,” said Collin Long, OOIDA’s director of government affairs. “We hope this is an indication that the Department will follow the advice of truckers and push for greater flexibility in the current hours-of-service regulations when they issue a notice of proposed rulemaking in the near future. “Modernizing hours of service will not resolve our outstanding concerns with the ELD mandate, but it will be an important step in providing drivers greater control over their own schedules and improving highway safety.”

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