TSA believes about 430,000 drivers will apply for a new or renewed hazmat endorsement in the first year.
The Transportation Security Administration has postponed until May 31 the start date for fingerprint-based criminal background checks for the transfer and renewal of hazardous materials endorsements on commercial driver’s licenses. Background checks for drivers applying for new hazmat endorsements will begin Jan. 31, as previously scheduled.
An interim final rule published Nov. 24 made various changes to the standards related to security threat assessments of commercial truck drivers authorized to transport hazardous materials. TSA required each state to declare whether it wishes to capture and submit fingerprints, applicant information and fees itself – or have TSA complete those tasks. Fees for TSA-performed information collection will depend on the number of states that ask TSA to handle the task.
In addition, TSA is changing the standards to allow certain aliens who are qualified for a CDL to apply for a security threat assessment. In addition to lawful permanent residents, TSA will allow people in lawful nonimmigrant status, refugees and aliens granted asylum as long as they possess valid evidence of unrestricted employment authorization.
TSA also modified the lengthy list of disqualifying offenses. For example, it removed one felony, simple drug possession, but added the unlawful purchase, receipt, transfer, shipping, transporting, import, export and storage of a firearm or explosives. The agency also is adopting some procedural changes, including the time limits and procedures for appeals. In addition, drivers that seek to transfer hazmat endorsements from one state to another when obtaining a license in a new state will not have to undergo a new background check, subject to some restrictions.
TSA estimates 432,000 drivers will apply for a new or renewed endorsement in the first year. While the agency has estimated 2.7 million endorsement holders exist, the U.S. Department of Transportation and the U.S. Census Bureau have calculated the number of truckers carrying primarily hazardous materials to be only 500,000 to 800,000.
Agency Proposes Fees of $83-$103
The U.S. Transportation Security Administration has proposed fees of $83 to $103 for background checks for hazmat drivers.
The agency proposes that drivers who submit fingerprints and applications to a TSA agent face an information collection and transmission fee of $25-$45, a threat assessment fee of $36 and an FBI fee of $22.
The first fee would apply only to applicants in states that have chosen to have the TSA, rather than some other party, collect and transmit the information.
The second fee would cover the cost of performing the actual security threat assessment, including the handling of any appeals and waivers. The third fee would cover the FBI’s criminal history records check.
The information collection fee would depend on the number of states that elect to have the TSA handle this task, the agency said. The more states participate, the less the fee, because “economies of scale would be greater,” the agency says.
States where the TSA does not handle this task could charge whatever they saw fit.
The agency estimates that the hazmat program’s start-up cost will be $4.76 million.
The agency says it expects the number of endorsement holders to drop in the first five years of the program, because getting the endorsement will be more expensive, more difficult and more subject to disqualification.
A recent TSA survey of states indicated the number of endorsement holders declined 17 percent from early 2003 to early 2004. The agency expects a 20 percent drop the first year of the program and a 5 percent drop in each of the second and third years. By the fourth year, the regulatory effect on the population should have run its course, the agency says, after which it projects a modest annual growth of 1 percent annually.
The total five-year cost for new and renewal applicants for whom TSA expects to perform security threat assessments will be $2 million.
ATA Economist Anticipates Continued Freight Increases
“It’s a good time to be a survivor,” Bob Costello, American Trucking Associations vice president and chief economist, told more than 200 attendees at the Randall Trucking Fall Symposium in Phoenix in November. Strong manufacturing production and increased consumer spending are driving robust freight volumes, yet truck capacity remains tight, Costello said.
Through September, truck tonnage is up 7 percent, Costello said. Freight increases are “across the board,” he said, with even small carriers, which ATA defines as less than $30 million in revenue, seeing an increase in demand for their services. “This year small carriers are booming,” he said. And demand is driving higher revenues. Costello predicts revenue per mile for long-haul truckload carriers will increase about 8 percent over last year.
Despite press reports to the contrary, “the manufacturing base in the U.S. is strong,” Costello said. He predicted that manufacturing production will remain high into 2005 and beyond. “There’s a lot of demand in the pipeline for manufacturers,” he said. And while manufacturers have been building up inventories lately, inventories remain low relative to sales.
Retail sales, which make up about two-thirds of the economy, were up 8 percent in September compared to September 2003.
While Costello projects freight volume will remain strong, capacity will continue to be tight, he said. Class 8 sales in 2005 and 2006 “will only climb from 2004,” he said, but these sales will not translate to increased capacity because “we’re taking out about the same amount of trucks as we’re putting in,” he said. He called any increases in capacity “marginal,” with most purchases going for replacement, not growth. The industry has not seen a corresponding boom in trailer sales, which would indicate growth, he said.
On the cost side, trucking spent $8 billion more on diesel in 2004 than in 2003, and diesel fuel prices will remain very high, Costello said. The Department of Energy is forecasting $2.04 per gallon average diesel price for the fourth quarter, but with the current price of diesel fuel at $2.16 per gallon, Costello called DOE’s outlook – which also showed lower prices for 2005 – “too optimistic.” He cited meteorologists’ predictions of a cold winter on the East Coast, which would put additional pressure on diesel fuel prices because heating oil is made from the same distillates as diesel fuel.
Carriers’ biggest cost, labor, is also on the rise, Costello said. Truck driver wages have not increased as fast as other blue collar wages in the past few years, yet turnover among large carriers is at 116 percent. Given simple supply and demand, “I just don’t see how wages are not going up,” he said.
Although business is booming right now, Costello cautioned carriers not to “just focus on growth this time around,” he said. He advised carriers to “enjoy the good times,” but reminded them that they “still have to watch those costs.”
FMCSA Working on Sturdy Hours Rule
The revised hours-of-service rule due next year must be able to “withstand any assault that might come from an outside party,” Rose McMurray, associate administrator, policy and program development for the Federal Motor Carrier Safety Administration, told attendees of the Randall Trucking Fall Symposium in Phoenix in November.
FMCSA is counting on a 10-person team of experts, who will be virtually sequestered for one year, to ensure the agency considers all aspects of the rule, including driver general health, 11 hours of driving, the 34-hour restart and the sleeper berth exception, McMurray said.
“When we promulgated the rule last year, we believed we had sufficient evidence to issue the rule the way it was, including years of fatigue research,” she said. “I think what we’ll see is more evidence that substantiates the rule. I wouldn’t expect to see wholesale changes.”
Interest groups that successfully filed suit to block the 2003 version of the rule included Public Citizen, Parents Against Tired Truckers (PATT) and Citizens for Reliable and Safe Highways (CRASH).
As FMCSA revamps the rule, it is looking at the feasibility of using electronic on-board recorders to monitor driver hours of service. The agency is mandated by Congress to consider the devices; also, “there is a tremendous push on the safety side of this industry to look at whether recorders are the answer,” McMurray said.
FMCSA will consider comments on the proposal from the trucking industry. “We’re of course concerned, as you are, with balancing the benefits of this technology with privacy,” McMurray said.
McMurray also encouraged carrier attendees to help FMCSA get drivers to wear seat belts. Of the 43,000 people who died on our highways last year, 50 percent were not wearing safety belts, she said. Only 48 percent of commercial drivers wear safety belts, although 80 percent of all drivers do.
Law Eliminates Installment Plan for Heavy-Vehicle Taxes
A new $136 billion corporate tax law modifies the excise tax on tires and eliminates the quarterly installment payments on the heavy vehicle use tax.
The 2004 American Jobs Creation Act, which was slated to go into effect Jan. 1, converts the highway tire tax from one based on the tire’s weight to one based on the tire’s load capacity, explains a federal online summary of the act. Tire load capacity, determined by the U.S. Department of Transportation, is the maximum load rating labeled on the tire.
The new law also will eliminate the quarterly installment option for the heavy vehicle use tax, which can be as much as $550 per vehicle. This change could hurt small fleets and owner-operators.
Under the new law, the tire tax is 9.45 cents for every 10 pounds of tire load capacity over 3,500 pounds. In the case of non-radial and super single tires, the tax rate is 4.725 cents for each 10 pounds of tire road capacity over 3,500 pounds. A super single tire, designed to replace two tires in a dual assembly, is greater than 13 inches in cross-section width.
The previous system included a tax of 15 cents per pound on tires between 40 and 70 pounds, a base tax of $4.50 plus 30 cents for each additional pound on tires between 70 and 90 pounds, and a base tax of $10.50 plus 50 cents for each additional pound on tires heavier than 90 pounds.
The bill also modifies the definition of tires for use on highway vehicles to include any tire marked for highway use as defined by any regulations set forth by the U.S. Department of Transportation. The provision exempts any tire sold for the exclusive use of the U.S. Department of Defense or the U.S. Coast Guard.
The changes were designed to ease the measurement and enforcement of the tax. Before, the Internal Revenue Service weighed individual tire batches to determine their weight. Now, all the IRS must do is find the DOT-approved load rating stamped on the side.
The revenue generated by the new tax laws was designed to equal that brought in by the old one, but a Commercial Carrier Journal investigation found that the taxes on some tires may increase by as much as $8.50, while super singles may be taxed as much as $25 less.
The new law also does away with the reduced rates for Canadian and Mexican vehicles and requires truck owners with 25 or more vehicles to file their returns electronically.
New California DMV Director Supports a Per-Mile Tax
California Gov. Arnold Schwarzenegger’s appointments to key positions in November raised some eyebrows in the transportation community. The new Department of Motor Vehicles director, for example, recently recommended scrapping fuel taxes and taxing miles driven instead.
On Nov. 15, the Republican governor announced the appointment of Joan Borucki as director of the Department of Motor Vehicles. The Democrat has 24 years’ experience in state transportation administration. Recently she was a team leader for the California Performance Review, designed to identify ways to save the state money and streamline government.
On Aug. 13, Borucki presented transportation recommendations that included taxing miles traveled, not fuel bought. California fuel-tax revenues are down because motorists are driving more fuel-efficient vehicles, including vehicles using fuels that by California law cannot be taxed at all, such as electricity and fuel cells.
A one-tenth of a cent fee per mile traveled, the California Performance Review estimated, would generate about $310 million a year. The per-mile tax would replace the gasoline and diesel fuel taxes, currently 18 cents per gallon sold.
The proposal is far from implementation or even endorsement by the governor. But Oregon, too, is considering taxing miles traveled rather than gallons of fuel bought and is studying how that transition would best be made.
Another controversial California appointment in trucking circles is Terry Tamminen, whom Schwarzenegger selected to replace Marybel Batjer as his Cabinet secretary.
Tamminen, an Independent, previously was secretary of the state’s environmental protection agency. The California Trucking Association noted on its website that Tamminen “has hinted that he ultimately would like to ban the use of diesel in California.”
Schwarzenegger’s other appointments include Democrat Will Kempton, assistant city manager of Folsom, Calif., as director of the state’s transportation department.
Attempt to End Illinois’ Split Speeds Fails
The Illinois governor praised a House vote that left intact his veto of a bill that would have ended split speeds on rural highways.
Gov. Rod Blagojevich issued his statement Nov. 16 after the Illinois House voted 68-49 against overriding his veto.
To override the veto, SB 2374 needed to garner a three-fifths majority, but it failed to garner even a simple majority. The outcome was far different in spring, when the House voted 81-37 in favor of ending split speeds.
Had the motion passed, the speed limit would have become 65 miles per hour for all vehicles traveling on rural divided highways. Senators already voted 41-17 to override the veto.
“Today, members of the Illinois House of Representatives were asked to vote on a bill that would have raised the speed limit for trucks from 55 miles per hour to 65 miles per hour,” said Blagojevich, a Democrat. “Raising the speed limit for trucks would have meant more accidents, more injuries and more deaths on our roads.”
Port of Oakland Forms Alliance for New Transportation Center
The Port of Oakland has allied with a containerized logistics company and the city of Shafter, Calif., to develop a new transportation center.
The California Integrated Logistics Center, developed by Shafter city officials, will combine an inland intermodal center with dedicated rail serving the Oakland marine terminal, according to information released by the port and its partners.
Northwest Container Services will operate the intermodal facility, coordinating transportation services for rail and truck, including the repair and maintenance of marine containers, chassis and trailers.
At the rail freight intermodal facility, inbound containers loaded with consumer goods, destined for the Central Valley and Southern California, will be reused as outbound containers for agricultural export.
Northwest Container Services has operated this type of shuttle train service between Seattle, Tacoma and Portland for nearly two decades.
The Port of Oakland’s maritime facilities have expanded to relieve California’s congestion problems caused by increased trade, says Wilson Lacy, a port director. “This project will improve the flow of commerce, take trucks off the highways and will help keep California competitive in the world market,” Lacy says.
Today, when an international marine container is on the highway, it is empty 50 percent of the time, but this partnership will change that, says Gary Cardwell, chief executive officer of Northwest Container Services.
As yet unbuilt, the new facility is expected to be operational by the fall.
Mississippi to Run Highway Watch Center
A $2.3 million federal contract has been awarded to Mississippi State University to establish and run Highway Watch’s Emergency Planning and Education Center.
The Transportation Security Administration grant will establish the facility at the university’s Center for Advanced Vehicular Systems campus in Canton, Miss., near the Nissan plant, the university announced Nov. 9.
The center will conduct exercises with trucking companies and organizations to assess readiness and capabilities. It will also help the trucking industry to develop response plans for terrorist attacks and national emergencies.
The American Trucking Associations began Highway Watch as a highway safety and theft prevention program in 1998. The group added an anti-terror emphasis after Sept. 11, 2001.
Detroit Diesel to Build New Engine for 2007
Detroit Diesel announced plans to build a new heavy-duty diesel engine at the company’s Redford, Mich., plant.
The new engine, being developed by Detroit Diesel and parent company DaimlerChrysler, will be launched in 2007 and will meet the stringent federal emissions requirements that take effect that year. During a period of transition, the new engine will be sold in tandem with the Detroit Diesel Series 60 engine.
Detroit Diesel also announced Nov. 22 that it plans to begin North American assembly of the MBE 900 medium-duty diesel engine at Redford. That engine platform, too, will be online by 2007.
The MBE 900, available since 1998, is offered in four and six-cylinder versions and is common in Freightliner vehicles.
The announcement of new engine production at Redford came one day after the ratification of a new labor contract covering 1,300 hourly workers at the facility. Detroit Diesel and United Auto Workers Local 163 reached a tentative agreement Nov. 10. The contract was formally ratified by a vote of the UAW membership Nov. 21. The new contract, effective immediately, runs until April 30, 2010.
“The agreement signals a spirit of partnership and gives us tremendous momentum as we make plans to move forward with new investments at Redford,” said Carsten Reinhardt, president and CEO of Detroit Diesel.
–From Staff Reports
NTSB Updates Most Wanted Safety Improvements List
The National Transportation Safety Board updated its list of Most Wanted Safety Improvements and criticized other federal agencies for giving unacceptable responses to its recommendations or moving too slowly to implement recommended safety measures.
The Most Wanted list, established in 1990, highlights recommendations that the Board believes would significantly reduce deaths and injuries in air, highway, marine, railroad and intermodal transportation.
“Our recommendations are derived from the hard lessons we have learned over the years investigating many tragic accidents,” said NTSB Chairman Ellen Engleman Conners. “Quite simply, implementing these measures will save lives.”
NTSB’s recommendations for highway safety, announced Nov. 9, call for changes in fitness rating procedures to prevent motor carriers from operating if they put vehicles with mechanical problems on the road or unqualified drivers behind the wheel. While noting recent progress, the board voted to change its classification of the response from “acceptable and making timely progress” to “acceptable but implementation progressing too slowly.”
NTSB also recommends eliminating flaws in the process of medically certifying commercial vehicle drivers. The list designates the FMCSA’s response as “acceptable but implementation progressing too slowly.”
Two items were removed from the list, one because action on it is almost completed and the other because the Federal Railroad Administration refused to adopt the recommended safety enhancement.
Further details, including the texts of the safety recommendations in each issue area, summaries of federal agency actions and the status of each recommendation can be found on the board’s website at this site.
–From Staff Reports
DOT Official: Progress Made, But CDL Fraud Still Problematic
The Federal Motor Carrier Safety Administration has made progress in preventing fraudulently obtained CDLs, but problems remain, according to the U.S. Department of Transportation’s oversight office.
Each fiscal year, Kenneth Mead, the department’s inspector general, identifies the DOT’s top 10 management challenges. In this year’s review, he expressed concern that the FMCSA had not yet issued a rule for CDL applicants to show proof they’re in the United States legally, as Mead’s office has urged since 2002.
During the past five years, law enforcement agencies, with FMCSA backing, conducted more than 75 CDL investigations and uncovered more than 8,000 CDLs wrongly issued to drivers who obtained them through corrupt testing, Mead’s report said.
Usually the problem involved “third-party examiners,” private companies certified by states to test CDL applicants, the report said. In too many instances, third-party examiners passed applicants without testing or supplied test answers in exchange for bribes, the report said.
The FMCSA’s overhaul of the system should include more retesting of suspect CDL holders and more covert testing of third-party examiners, the report said.
FMSCA Officially Exempts Werner Enterprises From Paper Logs
After a six-year pilot project, the Federal Motor Carrier Safety Administration formally has exempted Werner Enterprises drivers from keeping paper logs of their hours of service.
Werner becomes the only trucking company in the United States to be granted such an exemption. Instead of paper logs, the FMCSA will require Werner to record drivers’ hours using the carrier’s global positioning system.
Werner drivers now document their hours of service with a GPS-based paperless log system using Qualcomm equipment and an in-house truck-tracking program.
Della Sanders, Werner associate vice president of safety and compliance, said the system is different from other paperless logs in that anyone with network access can see where a truck is, gauge how far it traveled that day and determine the driver’s current status.
“We know where the trucks are 24-7,” Sanders said.
Sanders said the network is easy to install, using a keyboard and a dome-shaped antenna fastened to the rear of the truck, and can be learned easily. After a quick orientation, one driver who had been apprehensive about the system told everyone he would never go back to paper logs again, Sanders said.
Sanders said the system cuts costs by eliminating the need for paper and mailing supplies; cuts the hours drivers spend tracing their routes on maps; and reduces the likelihood that a driver can manipulate the system to work around hours mandates.
Werner received the exemption after six years of being pilot-tested and monitored by the FMCSA. Based on this experience, a FMCSA representative said Werner had achieved a level of safety equal to or greater than that provided by the paper log system.
Annette M. Sandberg, FMCSA administrator, signed the exemption at the Werner Corporate Training Center in Omaha, Neb.
The exemption “supports Federal HOS regulations that help to ensure truck drivers get ample rest and, consequently, are more alert behind the wheel,” Sandberg said. “Innovation and technology are critical to achieving our goal of improving safety on the nation’s highways.”
FMSCA exemptions last two years, and Sanders said Werner plans to apply for a second one.
The agency noted that in 1998, when it first asked carriers to participate in the GPS-based pilot program, Werner was the only one to sign up.
Bush Taps Former Trucker for Secretary of Commerce
Carlos Gutierrez went from delivering Kellogg’s Frosted Flakes to reviving that company as its chief executive officer to nomination as the next U.S. secretary of commerce.
The 6-year-old boy who arrived in the United States as a Cuban refugee is living the American dream, Gutierrez said after President Bush announced his nomination.
“I left with my parents and my brother and we started, essentially, from scratch at that time,” Gutierrez said. He learned English from a Miami hotel bellhop and became an American citizen. His family later settled in Mexico City, where Gutierrez took his first job for Kellogg delivering Frosted Flakes to local stores.
“I joined the Kellogg Co. and started selling cereal out of a van in Mexico City,” Gutierrez said. He moved up to running Mexico’s product sales and marketing.
“And 15 years after that, he was running the entire company,” Bush said in his announcement. “At every stage of this remarkable story, Carlos motivated others with his energy and optimism and impressed others with his decency.”
Gutierrez, now 51, became Kellogg’s chief executive officer in 1999 before becoming chairman as well in 2000.
The president said he had been friends with Gutierrez for 30 years. “I’ve counted on his wisdom and optimism and character at every step on my journey to the White House,” Bush said.
Gutierrez would fill the post vacated by the resignation of Don Evans, but the U.S. Senate will have to confirm Gutierrez before he becomes secretary.
Gutierrez studied business administration in Mexico. He and his wife have three children.
GE Buys Truck Financer
CitiCapital, a part of Citigroup, will sell its Transportation Financial Services Group to GE Commercial Finance in a $4.4 billion deal. CitiCapital’s Transportation Financial Services Group provides financing, leasing and lending to the trucking industry. Mike Neal, president and CEO of GE Commercial Finance, said the headquarters of the transportation group will stay in Dallas.
ATA Officer Receives Honor
The International Association for Counter Terrorism & Security Professionals named American Trucking Associations Don L. Rondeau, director of ATA’s Information Sharing and Analysis Center, as its Homeland Security Executive of the Year.
The award recognizes excellence in innovation, dedication, teamwork and training of other security professionals over the past year. The ATA operates the center in cooperation with the U.S. Transportation Security Administration and with the support of the U.S. Department of Homeland Security and ATA’s Highway Watch Coalition and Anti-Terrorism Working Group.
A Love’s Travel Stop opened in Clovis, N.M., on Nov. 4. The stop is located at the intersection of Highway 60 and Curry Road G. This is the ninth of 13 new Travel Stops scheduled to open in 2004. Upcoming Travel Stop openings are planned in Indiana, Virginia, Kentucky and Illinois.
Freightliner Trucks launched a new branding campaign and tagline on Nov. 15. The new tagline, Run Smart, will be integrated into all external communications and logo usages. The Freightliner Trucks product line enables customers to choose from a wide variety of vehicles for specific applications. The Run Smart tagline was designed to connect with each of Freightliner Trucks’ core market segments: fleets, owner-operators and vocational customers.
The Iowa 80 Group bought the TravelCenter of America in Kenly, N.C., Nov. 11. The truckstop is off the 106 Exit of I-95. Iowa 80 Group plans to expand the store and remodel the truckstop – which will remain part of the TravelCenters franchise – as early as spring.
Dana Research Center Expands
Dana Corporation completed the $6 million expansion of its heavy vehicle research and development center in Kalamazoo, Mich., on Oct. 29. The center houses Dana’s North American commercial vehicle systems group’s headquarters and research and design center. The expansion added 15,000 square feet of research, development and testing space to the existing 155,000-square-foot facility. A MTS axle dynamometer was installed in the expansion.
Paccar Executive Receives Recognition
Stark’s Truck and Off-Highway Ledger selected Mark Pigott, chairman and chief executive officer of Paccar, Inc., as the 2004 Manager of the Year. The publication cited returns on assets, capital investments and productivity gains as the chief reasons why the chairman was selected.
Petro Stopping Centers opened a new location in Waterloo, N.Y., off Exit 41 on I-90. The 50-acre complex includes parking for 350 trucks, a five-bay Petro:Lube Truck Service Center, 12 truck fueling lanes and CAT scales. The main building holds a 250-seat Iron Skillet Restaurant, Travel Store, Subway Sandwich Shop, 18 private showers, laundry room, hair salon, game arcade and movie theatre. Wireless Internet service is available.