Trucking News: For the Record

Truckers News Staff | January 01, 2010

Special Report: Changes in the Air

A look at key issues that could impact you in 2010

This year stands to be a challenging one for the trucking industry and its drivers.

As the nation waddles out of the worst economic recession in recent history and regulators and Congress return their attention to pending issues, the prospects for change in several key areas affecting drivers and owner-operators get greater. Following find point of view from industry parties on six key concerns. For more on pending regulatory and legislative changes, see the CSA 2010 safety compliance system cover story on p. 18.

Hours of service: The Obama administration, preempting a court ruling late last year, has put the hours-of-service rule back on the table for FMCSA review this year. While a final rule is on a timetable that will extend into 2011, a proposal may be available for comment by yearend.

Opinions in the industry are divided. “They’ve put it off for such a period of time that they’re not going to change it,” predicts hotshot boat hauler Daniel Audet, host of the Truckstar Internet radio show (see “Exit Only,” p. 82). “I do know many times drivers have contacted me and they’re on their 34-hour restart near their destination.” Audet points to the rigidity of the 14-hour window, as well, combined with loading and unloading time, often adding a extra day to what might have in the past been a one-day trip.

“The shippers’ products are taking a lot longer to get to market because of this,” he says. “The hours of service are affecting the gross national product, then, of this country.”

“Oh, brother,” says Transportation Business Associates President Jay Thompson. “I could put on my optimistic hat and say they’ll reconfirm everything.” In the end, he says, it depends on exactly how powerful the Teamsters lobby is, which favors a return to 10 hours of driving time and elimination of the 34-hour restart provision.

Agreeing with the Owner-Operator Independent Drivers Association, Thompson also sees a return to allowing splitting sleeper-berth hours for teams as a necessary revision, however unlikely it might be: “If you don’t have the split sleeper kind of thing, what it does is people won’t stop when they’re tired. You can only do 11 hours in that 14 window.”

Fuel: After 2007-08 fuel prices approached crisis levels and stayed there for several months, the fall in prices through mid-2009 was welcome relief to many in the transportation industries. But in late September through October, prices rose 30 cents a gallon or more before leveling off, highlighting fears among many drivers of a repeat performance of late ’07 moving into 2010. “Up,” Audet said at the end of October when asked where he expected prices to go in 2010. “It shot up twenty-something cents in the last two weeks.”

TN0110NewsGraphAfter rising to No. 1 in the American Transportation Research Institute’s 2008 survey of American Trucking Associations member carriers on top industry issues, this year fuel dropped to No. 3. It was the fifth consecutive year, however, in which fuel was a top-five issue in the survey. Of concern, primarily, was price volatility, which makes carrier and driver business prospects unclear from day to day. According to the survey, “respondents indicate that recent fuel price declines are likely temporary; once the economy picks up, fuel demand will likely create upward pressure on fuel costs. The biggest agreed-upon fix among survey respondents was noted as increased government attention to/regulation of oil market speculators.

The Economy: “Inflation-adjusted crude ought to be around $35 per barrel, and we’re at $70,” Jay Thompson said in November. That added energy cost “comes out of consumer spending,” which drives demand in the trucking industry. If $70 is going to be the new norm, he adds, “consumer spending will be lagging for quite some time. The general income of people has to adapt to that different kind of a level. History repeats itself, and it adapts itself to today. Oil’s a little bit high now, and every recession we’ve had that I can remember, from the mid-70s on, you see spikes in oil prices driving recessions. Last year was this turbo spike as an indicator — we then went back down to $30-$40 a barrel for crude, but we’ve doubled that again.”

The wider economy and its related implications for freight demand was probably the No. 1 issue on every industry party’s mind in 2009. It was No. 1 in ATRI’s survey. If Thompson is right, the depressed situation will continue well into 2010. “Any time you double energy prices,” he says, “you expect an economic slowdown to follow. Our demand’s not going to come back” in 2010.

 

Recovery Act Road Spending Tops $20 Billion

The Federal Highway Administration crossed the $20 billion mark in approved obligations for highway, road and bridge projects, the U.S. Department of Transportation announced. Of the $26.6 billion available for federal highway and bridge projects under the American Recovery and Reinvestment Act, more than 75 percent now has been obligated.

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