New hurdles

| July 03, 2007

The wrangling over expansion of Mexican motor carrier operations in the United States ended – at least for now – when President Bush signed into law emergency funding legislation for the Iraq War on May 25.

The bill, stalled for weeks over war politics, includes language that requires the Department of Transportation to make various disclosures and assurances before it can launch a pilot program to allow Mexico-domiciled carriers to operate beyond the U.S. commercial zone.

In general, the Mexican truck language enacted merges provisions passed by Congress originally in late April as part of the emergency funding bill and overwhelmingly by the House on May 15 in H.R. 1773. As provided in the original version of the funding bill, the law requires “simultaneous and comparable authority to operate within Mexico” be given to U.S. carriers in Mexico.

Many of the provisions in H.R. 1773 appear in the final law, which requires that the DOT inspector general certify that DOT “has established sufficient mechanisms to apply federal motor carrier safety laws and regulations to motor carriers domiciled in Mexico that are granted authority to operate beyond the United States municipalities and commercial zones on the United States-Mexico border and to ensure compliance with such laws and regulations.”

Prior to the beginning of the pilot program, DOT must address any issues raised in the DOT IG report and report to Congress. In addition, DOT must publish in the Federal Register for comment:

  • Comprehensive data and information on the pre-authorization safety audits conducted before and after the date of enactment of this act of Mexican motor carriers in the program;

  • Specific measures to be required to protect the health and safety of the public, including enforcement measures and penalties for noncompliance;
  • Specific measures to be required to ensure compliance with section 391.11(b)(2) and section 365.501(b) of title 49, Code of Federal Regulations;
  • Specific standards to be used to evaluate the pilot program and compare any change in the level of motor carrier safety as a result of the pilot program; and
  • A list of federal motor carrier safety laws and regulations, including the commercial driver’s license requirements, for which DOT will accept compliance with a corresponding Mexican law or regulation as the equivalent to compliance with the U.S. law or regulation.

The DOT IG is to monitor and review the pilot program and report to Congress and DOT six months after the program begins and two months after it ends. The report would address whether (1) DOT has established sufficient mechanisms to determine whether the pilot program is having any adverse effects on motor carrier safety, and (2) federal and state monitoring and enforcement activities are sufficient to ensure that participants in the pilot program are in compliance with all applicable laws and regulations.

The provisions of H.R. 1773 were watered down to some extent in the final version in an apparent effort to preserve some flexibility for DOT. For example, the final law does not include measures that required DOT to detail the process for revoking Mexican carrier authority or to specify the penalties it would levy against Mexican carriers that haul goods between points in the United States, as prohibited by law.

In addition, the final version omits an independent review panel that would have had authority to change or terminate the pilot program unless DOT acted within five days to address any shortcomings the panel found.

“This is a significant step forward for safety on our highways,” says James Oberstar, chairman of the House Transportation and Infrastructure Committee. “It is a further indication of the American people’s concern over the Bush administration’s plans to open the borders without sufficient protections for the traveling public.”
- Avery Vise


FMCSA Proposes New Registration Fees
Motor carriers would pay between $39 and $37,500, depending on fleet size, under a schedule of fees the Federal Motor Carrier Safety Administration has proposed for the Unified Carrier Registration Plan and Agreement.

In August 2005, Congress ordered that the UCR Plan replace the Single State Registration System Plan by Jan. 1, 2007. The public comment period for the proposal ended last month.
Under the 2005 law, the UCR Plan is an organization that will administer the UCR Agreement – an interstate agreement governing the collection and distribution of registration and financial responsibility information provided and fees paid by motor carriers, motor private carriers, brokers, freight forwarders and leasing companies.

Thirty-eight states participated in the SSRS last year, and all but California and North Carolina will participate in the UCR this year. In addition, Oregon, which did not participate in the SSRS last year, will participate in the UCR.

As called for in the legislation, FMCSA last year appointed a 15-person board to recommend a fee schedule, which the agency has followed in drafting its proposal. The proposed schedule, which is the total amount to be paid by the company, is as follows:

  • 0 to 2 power units, as well as brokers and leasing companies – $39

  • 3 to 5 power units – $116
  • 6 to 20 power units – $231
  • 21 to 100 power units – $806
  • 101 to 1,000 power units – $3,840
  • 1,001 and above – $37,500

The fees would raise about $107.3 million in fiscal 2007, all but $5 million of which would go to participating states to replace SSRS revenues. The remaining $5 million goes for administrative expenses of the UCR Plan.
- Avery Vise


ATA Criticizes Real ID
The federal Real ID Act is impossible for the states to implement and would have “extreme consequences” for many truckers, the American Trucking Associations said in comments submitted May 4.

Passed by Congress and signed into law by President Bush in 2005, the Real ID Act is designed to create national standards for issuing state driver’s licenses and identification cards in 2009. A Real ID would be required of anyone using a driver’s license to board a commercial flight or enter a federal facility.

The ATA submitted comments on the U.S. Department of Homeland Security’s draft Real ID rule. “Unfortunately, both the act and DHS’s rule prescribe requirements which the states cannot meet, either in the time provided or with the resources available to them,” the association wrote. “In addition, since the Real ID requirements include commercial driver’s licenses, the rule would have extreme consequences for motor carriers and truck drivers who serve federal facilities and for those facilities themselves.”

Homeland Security should reassess whether a consolidated transportation worker identification credential, or TWIC, can substitute for a Real ID among truck drivers and other transportation workers, the ATA said.

The National Conference of State Legislatures and the National Governors Association also have expressed concerns, saying states lack the resources to carry out the Real ID mandate. Some states have adopted measures opposing Real ID.

The American Civil Liberties Union has charged that Real ID will be a bureaucratic nightmare. “By placing personally identifiable information in databases accessible across the country, Real ID makes the information more vulnerable to identity theft and misuse,” the ACLU said in a statement.
- Jill Dunn


TA Acquires Petro
TravelCenters of America has acquired the operating businesses of Petro Stopping Centers for $70 million and simultaneously leased 40 Petro travel centers from parent company Hospitality Properties Trust.

Prior to this acquisition, Petro was a privately owned company headquartered in El Paso, Texas. Its majority owner was a Texas family and minority interests were owned by affiliates of Exxon Mobil and AB Volvo of Sweden.

The combined properties total 233 facilities in 41 states and Canada.

Both truckstop brands will be operated separately after the transaction closes, said Thomas O’Brien, president and CEO of TA. “Each of the TA and Petro operations excel at certain aspects of the travel centers business,” he said. “I expect the combined company will benefit by utilizing the best practices of each company.”

TA was spun out of Hospitality Properties Trust as a separate public company in January 2007.

Petro operates and franchises 69 travel centers in 33 states. The travel centers operated by Petro generally are newer and larger than the 164 travel centers TA operates and franchises.

The Petro assets acquired by TA include two owned centers, one partially owned center and two leased centers operated by Petro, Petro’s franchisee business that provides services to 24 centers operated by Petro franchisees, related businesses, four land sites acquired for future development of new travel centers, inventory and other working capital.

TA’s purchase price for these assets, including closing costs and the cost of certain Petro employee retention payments, is approximately $70 million.

TA funded the transaction using cash on hand.

Simultaneously with TA’s acquisition of Petro, HPT acquired the remaining 40 Petro travel centers and leased them to TA for an initial net rent of $62.2 million a year through 2024 with renewal options thereafter. Starting after 2012, HPT’s rent will increase annually based upon percentages of increased gross revenues at the leased centers.

In addition to its purchase price of approximately $630 million, HPT has agreed to pay certain costs of this transaction, including prepayment of debt secured by the Petro properties being acquired by HPT and customary closing costs. HPT estimates that these costs may be approximately $25 million.
- Max Heine and Randy Grider


GATS Builds on Success With Ninth Annual Show
The ninth annual Great American Trucking Show is shaping up to be one of its biggest and best events yet, according to show organizers. The show takes place Aug. 23-25 at the Dallas Convention Center in downtown Dallas.

By the first of June, GATS Executive Director Alan Sims said the show had “more space commitments than we did the first day of the show in 2006. The show is very near being sold out, and that is with a considerable addition of exhibit space in Hall D.”

Last year, GATS was named as the “Fastest Growing Consumer-Hybrid Show” by Tradeshow Week – it was one of only three shows nationwide to receive top honors.

This year will feature scores of industry exhibitors, free educational seminars and renowned entertainment.

From OEM truck and parts manufacturers to fleets to trucking industry organizations, the exhibit hall will offer a wealth of information about the industry under a single roof and a space for networking with other trucking professionals, according to the show’s website, gatsonline.com, where a full list of exhibitors is available.

Among attractions, Sims says to expect in the neighborhood of “600 exhibiting companies, representing all of the truck OEMs at the corporate level, as well as the five largest trailer manufacturers and a myriad of other key suppliers and service providers to the industry.” Also, the GATS Expedite Pavilion, including the ExpressTrucking.com-sponsored InfoCenter Hub for information about expedited trucking, graces the exhibit hall’s floor for the sixth year in a row.

Also in the exhibit hall, the show-truck competition Pride & Polish, sponsored by Overdrive magazine, will pit the nation’s best show trucks against each other, as well as feature rigs detailed by the Chrome Shop Mafia of CMT’s Trick My Truck.

This year’s show features free entertainment in the form of concerts by the Wreckers, the modern country duo of Michelle Branch and Jessica Harp, sponsored by Volvo Trucks on Saturday at 6:30 p.m. The country trucker legend Aaron Tippin makes his second appearance in as many years at GATS, brought by Mobil Delvac, on Friday at 6:30 p.m.

Educational seminars and forums are available daily, including:

  • The Partners in Business Seminar, a free program put on by ATBS, the owner-operator business services firm, and Overdrive magazine, 2-4 p.m. Friday.

  • Various hour-long free seminars for drivers and owner-operators Thursday 2-4 p.m. and Friday and Saturday 10 a.m.-2 p.m.

Drivers and owner-operators can take advantage of free on-site truck parking in the Reunion Arena Parking Lot and at Gilley’s on Lamar Boulevard behind the Convention Center, sponsored by Peterbilt Motors Co., and can register by calling (800) 633-5953, Ext. 1361, or visiting gatsonline.com, roll over “Attendees,” click “Register to Attend.”

GATS is owned by Randall-Reilly Publishing Co., which also publishes Truckers News and other trade magazines in the trucking, construction and woodworking industries.
- Todd Dills


Highway Watch to Receive $11.6 Million
The U.S. Department of Homeland Security has granted the Highway Watch program $11.6 million for fiscal year 2007, more than double its allocation last year.

Highway Watch trains truckers and other highway professionals to report security and safety problems on U.S. roads. It also operates and maintains a Highway Information Sharing and Analysis Center in Herndon, Va.

Homeland Security operates the Highway Watch program under a cooperative agreement with the American Trucking Associations.

Highway Watch received $4.8 million last fiscal year.

The award is part of Homeland Security’s Infrastructure Protection Program for fiscal year 2007.
- Jill Dunn

For more information about Highway Watch, visit this site.


History Channel Features Iowa 80
The Iowa 80, “the world’s largest truckstop,” was featured on the June 13 episode of Modern Marvels on the History Channel.

The one-hour show focused on modern truckstops and featured another business in the Iowa 80 Group: CAT Scale, begun in 1977 by longtime Iowa 80 owner-manager Bill Moon.

“We are flattered that the History Channel chose us to represent the trucking industry,” said Delia Moon Meier, Iowa 80 Group senior vice president, “and equally pleased to be able to share our newly expanded and remodeled facility with History Channel viewers.”

The Iowa 80, located in Walcott, Iowa, at Exit 284 in I-80, is known for its annual Truckers Jamboree, which more than 30,000 people attended in 2006. The 2007 Jamboree is July 12-13, featuring a truck beauty contest, food, games, music and more than 175 exhibits.
- Kristie Busam

For more information on the Iowa 80 and the Jamboree, visit this site.


Paccar to Build Mississippi Engine Plant
Paccar plans to build a $400 million engine plant and technology center in Columbus, Miss., the company announced May 14.

Construction on the 400,000-square-foot facility will begin in mid-2007. When completed in 2009, the new facility will manufacture 12.9-liter and 9.2-liter diesel engines for Kenworth, Peterbilt and DAF. The new plant will complement Paccar’s state-of-the-art engine facility in the Netherlands, the company said.

“This will be Paccar’s most technologically advanced and environmentally friendly facility,” said Jim Cardillo, Paccar executive vice president. “The facility will initially hire approximately 200 employees, and it is anticipated that there will be 500 employees as production increases over time.”
- Kristie Busam


America’s Traveling Truck Show Steams Through the Summer
America’s Traveling Truck Show continues trucking through the summer with stops this month at the Detroiter Truck Stop in Woodhaven, Mich.; the Greater Chicago I-55 Truck Stop in Bolingbrook, Ill.; and the Petro Stopping Center in Rochelle, Ill.

The show, which began in March with 29 planned stops, features Class 8 trucks, aftermarket products, oil and lubes, engine parts and services, seat displays and APUs along with top truck dealerships.

Major exhibitors include Castrol, Chevron, Freightliner, International, Caterpillar and Volvo, and daily attendance is averaging 1,500, according to Bob Scroggins, ATTS national sales manager.

Scroggins says a Volvo dealership from Greensboro, N.C. is offering a special financing rate for any Volvo truck purchased at an ATTS event. “Only attendees of America’s Traveling Truck Show get the discounted interest rate,” Scroggins says.

Other highlights of the show include the 2007 Dream Package, which includes a Harley Davidson Motorcycle and other donated items. Any trucker with a CDL can enter to win.
- Kristie Busam

For more information about the show, visit the ATTS website at this site.


FYI
Colorado Chain Fines Increase

Colorado Gov. Bill Ritter signed a bill May 29 that will increase the fine for chain law violations. The bill increases fines, from $116 to $500, for truckers not using chains when chain laws are in effect. It also increases the penalty, from $500 to $1,000, for blocking a lane because of an accident caused by not using required chains.

Bridgestone-Bandag Deal Complete
Bridgestone has completed its $1.05 billion takeover of tire retread giant Bandag Inc. The two companies entered into a merger agreement in December, with Bridgestone Americas Holding Inc. committing to paying $50.75 per share. The deal was closed May 31.

Traffic Deaths Down Slightly
The Department of Transportation recently announced that traffic deaths on U.S. roads were down slightly from 43,443 in 2005 to 43,300 in 2006, according to preliminary figures. More than half of passenger vehicle occupants killed were unbuckled, according to DOT. The preliminary figures also show that between 2005 and 2006, overall alcohol-related fatalities increased 2.4 percent from 17,525 to 17,941, and fatalities from large truck crashes dropped from 5,212 to 5,018, a 3.7 percent decline.

Traffic Enforcement from Truck Cabs
In July Kansas started putting its state Highway Patrol troopers in the cabs of tractor-trailers to enforce traffic laws from a trucker’s point of view. The seven-week program, called Trucks on Patrol for Safety, allows troopers in the cab – who will be armed with a radar gun – to radio ahead to another trooper to have vehicles making dangerous moves around a truck pulled over.

April Tonnage Index Down
The American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index decreased 2.2 percent in April, after posting a 1.2 percent jump in March. On a seasonally adjusted basis, the index declined to 112.1 in April from 114.6 the previous month. After March’s year-over-year increase, which was the first since June 2006, April’s tonnage was down 2.7 percent year over year.

FedEx Express Adds Hybrids
FedEx Express announced it has signed agreements with Azure Dynamics to develop hybrid electric powertrains for its delivery fleet. Once the development phase is completed, FedEx Express has committed to purchase a minimum of 20 pre-production hybrid electric Ford E-450 delivery vans, to be delivered by May 2008.

New Love’s
Love’s Travel Stop No. 344 in Memphis, Tenn., is now open. The store is located off I-240, Exit 21. It is the 138th travel stop opening for Love’s, and the company has new locations opening soon in Louisiana and Kentucky.

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