Demand pushing pay higher
Owner-operator pay will rise an average 4 cents to 6 cents a mile over the next 12 months, predicted Gordon Klemp, president of the National Transportation Institute.
Klemp spoke March 14 to Truckload Carriers Association members at TCA’s annual meeting in San Diego. Klemp’s firm surveys medium- and large-sized fleets quarterly.
He also predicted:
• Pay hikes tied more closely to freight rate increases.
• Company driver pay rising 3 cents to 5 cents per mile.
• Driver pay more closely tied to performance measurements, including driver scores under the new federal Compliance, Safety, Accountability program.
• More use of sign-on and referral bonuses, which virtually disappeared during the recession. Klemp said 40 percent to 70 percent of fleets now offer one or the other.
• Pay more closely tied to regions of the country.
• Expanded in-house driving training programs.
• Expanded truck lease-purchase programs.
Since the recession, carriers have found it difficult to rebuild driver forces because they have scaled back recruiting staff and training programs, Klemp said. Many former drivers are unwilling or unable to return to trucking because they enjoy generous unemployment benefits, they have found work in the underground economy or elsewhere, or they will not meet stricter hiring criteria under CSA. The proposed hours of service revision could reduce productivity as much as 15 percent, which would create demand for more drivers, he said.
“Supply’s not going to get better,” Klemp said. “Retention management, I think, is going to be huge.”
That will require not just good pay rates, but also finding new ways to recruit new drivers, to train them well, and to do a better job of explaining their total compensation package to prevent them from mistakenly leaving a good carrier during periods of high turnover, Klemp said.
— Max Heine
Charlie Daniels to perform at Super Show
Music legend Charlie Daniels will take the stage at the Charlotte Motor Speedway Oct. 7 during the 2011 Charlotte Diesel Super Show.
The 7 p.m. concert will be free with show admission, which is $20 for a two-day pass for adults. All events and parking are included in the purchase price.
Held Oct. 7-8 at the Charlotte Motor Speedway, zMax Dragway in Concord, N.C., the Charlotte Diesel Super Show offers equipment and truck demonstrations, industry-related exhibits and ride-and-drives and activities. Other events include truck drag races and the Custom Rigs’ Pride & Polish truck beauty contest. Additionally, drivers can do a test drive down the zMax Dragway.
— Staff reports
FMCSA sends CSA warning letters
The Federal Motor Carrier Safety Administration sent warning letters to 23,000 carriers that need to address areas of compliance, Administrator Anne Ferro said.
The letters, which are less serious than an onsite audit, are part of the agency’s new Compliance, Safety, Accountability program, which outlines how FMCSA will intervene with carriers whose performance is sub-par. Ferro spoke to Truckload Carriers Association members at TCA’s annual meeting last month in San Diego.
She said CSA and other regulatory initiatives support FMCSA’s three basic goals of raising standards for those entering the trucking industry, ensuring high standards for those in it and “getting the bad guys off the road,” meaning trucks, drivers, carriers, brokers or others.
Among other pending FMCSA matters, Ferro mentioned:
• HOURS OF SERVICE. The agency received 25,000 comments, which are being analyzed for shaping the final rule.
• COMMERCIAL DRIVER LEARNER’S PERMIT. The agency is about a month away from issuing a final rule.
• DRIVER PHYSICAL QUALIFICATIONS. It will be 12 to 18 months before FMCSA seriously addresses how obstructive sleep apnea and other physical conditions affect driver licensing.
• REGISTRY OF CERTIFIED MEDICAL EXAMINERS. Prior to tackling driver health qualifications, the agency will act on establishing certification for doctors who can verify that drivers meet CDL health criteria. It’s an area that seriously needs “integrity” restored, Ferro said.
• DRUG AND ALCOHOL TESTING DATABASE. The agency is establishing this to ensure that carriers get current records of all driver applicants.
— Staff reports
SPOT MARKET van freight rates nationwide in February remained stable, according to TransCore Trendlines. Flatbed rates increased 1.9 percent and reefer rates moved up 1.6 percent compared to January.
TRUCK FREIGHT as measured by the American Trucking Associations’ advance seasonally adjusted For-Hire Truck Tonnage Index increased 3.8 percent in January. Compared with January 2010, adjusted tonnage climbed 8 percent, which was the largest year-over-year increase since April 2010.
JANUARY TRAILER orders dropped 22 percent from December, said ACT Research Co. The January total of 17,800 units was 151 percent greater than a year earlier. Dry vans accounted for all of the month-to-month decline, while some specialty trailer types hit 4- and 5-year highs, ACT said.
Opposition builds against hours proposal
In comments submitted on the Federal Motor Carrier Safety Administration’s proposed changes to the hours-of-service rule, the Commercial Vehicle Safety Alliance, the American Trucking Associations and a shippers’ group all opposed the proposal.
In addition, more than 1,800 truck drivers made comments at truck stops about the HOS proposal that were transmitted to FMCSA. The comments were scanned for free at Pilot Flying J and Love’s truck stops.
Congress also joined the opposition, as 122 House members and 23 Senators wrote to Transportation Secretary Ray LaHood, urging retention of current rules.
Because truck crash rates have declined significantly while the current regulations have been in effect, CVSA contends FMCSA’s proposal does not appear to substantiate the need for the proposed regulatory changes. Instead, CVSA encourages enabling more tools for enhancing enforcement and additional exploration of the effect between hours of service, fatigue and performance.
“The consensus from our state and jurisdictional enforcement members regarding these proposed rules is that they are confusing and not easily understood,” said Stephen Keppler, CVSA executive director. “The proposed rules, in our view, will be more difficult to enforce roadside than the rules in place today.”
ATA said the proposed changes are politically motivated and that the current rules are based on science and have been proven to enhance safety.
“In its current HOS proposal, the agency has abandoned years of objective analysis in favor of speculation and internal ‘judgments’ of critical areas,” ATA said.
NASSTRAC, an industry association that represents freight shippers in all modes of transportation, urged FMCSA to preserve the current rule, which the group said has improved safety. Its filing also argues that under the proposed rule, an additional 180 drivers and trucks would be needed to maintain current service levels.
— Staff reports
CLASS 3-8 used truck registrations increased 21.7 percent in 2010 over 2009 to a record level of approximately 672,000 units, according to Polk. The demand for clean used equipment was greatest for Class 8 vehicles.
DAIMLER TRUCKS North America announced it plans to add 628 new positions in its Mt. Holly and Gastonia, N.C., manufacturing plants to accommodate rising demand. Officials also confirmed the company will add about 1,300 total jobs at all of its truck and parts manufacturing facilities during the first half of the year.
CARRIER R.L. CARTER TRUCKING was ordered to cease operations and was liquidated by a federal bankruptcy judge in Indiana. The carrier filed for Chapter 11 bankruptcy protection last year.
TCA names Best Fleet for Owner Operators
Paramount Freight Systems of Ft. Myers, Fla., was selected as the Best Fleet for Owner Operators by the Truckload Carriers Association. Fremont Contract Carriers Inc. of Fremont, Neb., was selected the Best Fleet for Company Drivers.
In addition to providing steady miles and home time, said TCA’s announcement, Paramount works with its owner-operators by providing insurance options at reasonable rates, quarterly surveys to collect input on the effectiveness of company programs and a “buddy” system that ensures a smooth transition for new contractors. Paramount has 122 owner-operators and no company drivers.
The Best Fleets to Drive For program is sponsored by the TCA, CarriersEdge and Marsh Inc.
— Staff reports
EOBR comment period extended
The Federal Motor Carrier Safety Administration is extending the comment period to May 23 on its Notice of Proposed Rulemaking regarding electronic onboard recorders and hours-of-service supporting documents.
FMCSA said both the Commercial Vehicle Safety Alliance and the American Trucking Associations requested the extension. In granting the extension, FMCSA said it believes that others planning to make comments also would benefit from the extra time.
Under the proposal, all interstate commercial truck and bus carriers that now use log books to track hours compliance would have to use EOBRs instead. The proposal would relieve carriers of the current requirement to retain certain HOS documents, such as delivery and toll receipts, that are used to verify the number of hours the vehicle is in operation. About 500,000 carriers would be affected by the proposed rule, FMCSA said.
Last year, the U.S. Court of Appeals for the District of Columbia ordered FMCSA to issue a NPRM on hours-supporting documents by yearend. In December, the court gave the agency another month – until Jan. 31 – to comply. The court order stemmed from a lawsuit ATA filed in early 2010 to compel FMCSA to move forward with a regulation as mandated by Congress in the mid-1990s.
— Staff reports
Report: FMCSA should study wait time
Without more data on the extent detention time contributes to hours-of-service violations, the Federal Motor Carrier Safety Administration may lack key information to reduce these offenses.
That was the conclusion of a Feb. 18 Government Accountability Office report, based on more than 300 trucker interviews and other research.
U.S. Rep. Peter DeFazio (D-Ore.) on Feb. 17 introduced H.R. 756, which directs the U.S. Department of Transportation to research trucker wait time and report results within a year of the bill’s passage. It was referred to committee without co-sponsors.
The DOT would issue a rulemaking within a year of that report on maximum hours drivers can be detained without compensation and set penalties for violations.
In that rule, the agency is to consider correlations between detention time and HOS violations and establish procedures for reporting violations, including the use of electronic onboard recorder data.
Wait time costs are “largely born by truckers,” the report said. About 4 percent of drivers said they misrepresented hours in their log books and kept multiple log books to disguise hours violations due to detention time.
Some carrier officials said not all carriers collect, even if fees are in the contract, for fear of alienating customers. Also, shippers and carriers sometimes disagree on the amount of time, which complicates collections.
— Jill Dunn
Stronger underride guard rules sought
The Insurance Institute for Highway Safety has asked federal officials to require greater rear impact protection for commercial trailers.
On Feb. 28, the group of insurance companies and associations petitioned the National Highway Traffic Safety Administration to upgrade Federal Motor Vehicle Safety Standards for underride guards, which are meant to prevent a car sliding under a truck or trailer in a crash.
The institute wants the agency to require underride guards strong enough to remain in place during a crash and to mandate guards for more large trucks and trailers than currently stipulated.
The institute released crash tests that indicated underride guards on tractor-trailers can fail in relatively low-speed crashes. It analyzed the Large Truck Crash Causation Study, a federal database of about 1,000 crashes in 2001-2003. Underride, was a common outcome of the 115 crashes involving a four-wheeler striking the back of a truck or semi-trailer.
— Jill Dunn
ARKANSAS. A bridge on U.S. Highway 63 over the Black River Bridge in northeast Arkansas has been restricted to 66,000 pounds. The bridge is due for replacement, which will begin in 2013.
CALIFORNIA. Since April 1, owners of 2003 model year reefers face new emissions standards. All model year 2003 refrigerated engines must comply with new emission control standards under the state’s Air Resources Board’s Transportation Refrigeration Unit regulation.
KANSAS. The state is developing the Kansas Truck Routing and Intelligent Permitting System. The web-based software routing system, which will be ready in about two years, is intended to streamline the permit process for trucking companies hauling oversize and overweight loads. Being developed in conjunction with ProMiles software, the system will automatically generate and evaluate alternate routes for large loads.
MICHIGAN. Road and bridge construction work is under way on M-84 and I-75. Lanes will be closed intermittently. The project is scheduled for completion in November.
NEW HAMPSHIRE. Gov. John Lynch is considering closing half of the state’s 16 rest areas to save money. If the facilities are closed, the number of truck parking spaces would be cut to 93 from 116. A final decision will be made when the fiscal 2012-2013 budget is ready July 1.
OREGON/WASHINGTON. A proposed I-5 bridge over the Columbia River between Portland and Vancouver, Wash., would require tolls to help pay for the $4 billion structure. The U.S. Department of Transportation supports congestion pricing on the proposed bridge, which would replace the current bridge in 2018.
TEXAS. The state is considering changing its law that limits truck idling to five minutes. The Texas Commission on Environmental Quality in scheduled to decide on a change June 22 that would permit idling for drivers using the sleeper berth for a mandated rest period and not within two miles of a facility offering shorepower.
WEST VIRGINIA. A bill would impose tolls to complete a 14-mile section of U.S. 35. The proposed toll would be $1.21 a mile for a five-axle vehicle.
WISCONSIN. Expect significant delays as work continues on 18 miles of I-43. The project will continue until August 2012.
WYOMING. Higher fines for oversize and overweight trucks are in a bill awaiting the governor’s signature. Minimum fines for oversize trucks would increase to $100 from $50, while overweight truck fines would go to $25 to $1,000 from the current maximum of $750.
Willie’s Place to reopen as a Petro
TravelCenters of America will convert Willie’s Place into a Petro Stopping Center, expected to open this month.
TA bought the Dallas-area property March 1 after it was posted for foreclosure, said company spokesman Tom Liutkus. TA had the winning bid of $6.4 million, according to a March 8 story in The Hillsboro (Texas) Reporter.
“We have a team of people assessing the property as we speak so our detailed plans are not yet final,” Liutkus said. “We are currently interviewing former employees and new candidates for the projected job positions we will need.”
On Jan. 11, Judge Harlin Hale of U.S. Bankruptcy Court for Northern District of Texas permitted the business’ financial backers to foreclose on the truck stop after rejecting its Chapter 11 reorganization plan.
The Carl’s Corner convenience store and truck stop opened Willie Nelson’s Truck Stop, DBA as Willie’s Place, in late 2008, off of U.S. 35. Carl Cornelius is president and Nelson is an equity holder, court documents stated.
New Jersey-based SBL Capital Funding financed completion of the truck stop in February 2008. It employed nearly 80 people but was never profitable, according to the court.
Cornelius founded the town of Carl’s Corner in the late 1980s to house Carl’s Corner Truck Stop. In 2005, Cornelius and Nelson opened the concert theater Willie’s Place at the truck stop, located 15 miles from the singer’s Abbot, Texas, birthplace.
— Jill Dunn
Oakland port truckers seek emissions rule delay
Drayage trucking companies that serve the Port of Oakland, which use primarily owner-operators, are seeking support to delay a California Air Resources Board mandate that requires trucks to be retrofitted with nitrogen oxide-reduction equipment by 2014.
A trade group representing port truck operators estimates that without a postponement in the NOx requirement, 4,400 1994-2006 model year trucks would have to be replaced with 2007 or newer models by January 2014. In December, CARB voted against a proposal to push back NOx emissions compliance to 2020.
The West State Alliance has contacted Oakland city officials and port executives for meetings to discuss the situation and to appeal to CARB to reconsider the deadline. “We want CARB to be responsive,” said Ron Light, West State executive director.
Light said the drayage truckers face a series of deadlines that are expensive and could put several operators out of business. By January 2012, 700 trucks of 2004 engine model year would require retrofits under a Phase I diesel emissions reduction mandated by CARB. By January 2013, another 1,700 trucks of 2005-2006 engine model years would require retrofits.
Light said many operators could meet the deadlines by purchasing diesel particulate filters.
— Max Kvidera
CLASS 8 TRUCK net orders for February dropped 12 percent from a strong January, according to preliminary data from FTR Associates. Class 8 orders of 23,998 units were up 210 percent from February 2010. The figure includes orders from Canada, Mexico and exports.
AN ECONOMIC indicator that measures of the flow of goods to U.S. factories, retailers and consumers fell 1.5 percent during February. However, February marked the 15th straight month of year-over-year growth for the Ceridian-UCLA Pulse of Commerce Index, which is based on diesel consumption by over-the-road trucks.
SURFACE TRANSPORTATION trade between the United States and Canada and Mexico rose 13.8 percent in December over December 2009 to $66.5 billion, according to the Bureau of Transportation Statistics of the U.S. Department of Transportation. BTS reported the value of trade fell 2.2 percent in December from November.
Industry challenged to find drivers
“There’s a tsunami coming,” Robert Low, president of Prime Inc., said March 15 during a panel discussion at the Truckload Carriers Association annual meeting in San Diego. Low referred to a looming driver shortage that will keep capacity tight and force up rates.
“But what is a higher rate going to do for you if you can’t get a driver?” he asked.
Low and panelists Richard Stocking, president and COO, Swift Transportation, and Kevin Knight, president and CEO of Knight Transportation, agreed the ability to hire qualified drivers is the biggest challenge carriers face. The panel was moderated by Todd Amen, president of financial services firm ATBS.
Factors such as the Federal Motor Carrier Safety Administration’s Compliance, Safety, Accountability program and the possibility of mandatory electronic on-board recorders will further shrink the pool of drivers, panelists said. They also agreed drivers don’t earn enough to compensate them for the difficulties of life on the road. “Drivers need predictability in their lives, in their home time and their paycheck,” Stocking said.
Low and Stocking spoke positively about the long-term viability of using leased owner-operators to meet their capacity needs. The way carriers compensate owner-operators is “a natural incentive program,” Low said. Prime pays 72 percent of a load’s revenue to the owner-operator. “Our philosophy has been that if 72 percent doesn’t produce good earnings for the owner-operator, we don’t need another truck,” he said.
Having “skin in the game” is what drives owner-operators to be successful, panelists said. “They have a business owner mentality, so they run more miles,” said Stocking. Swift leases to about 4,000 owner-operators. They work harder and they watch costs closely, he said.
“Getting the worker to understand the concept of costs in a business is very powerful in terms of running an efficient business,” Low said.
— Linda Longton