FTR’s Trucking Conditions Index drops, but growth is expected in 2017

While the trucking sector appears to be regaining its footing to an extent, the most recent edition of the Trucking Conditions Index (TCI) from freight transportation consultancy FTR shows that it is happening at a somewhat lower rate in advance of a potential expected capacity reduction next year.
The TCI reflects tightening conditions for hauling capacity and is comprised of various metrics, including capacity, fuel, bankruptcies, cost of capital, and freight.

According to FTR, a TCI reading above zero represents an adequate trucking environment, with readings above ten indicating that volumes, prices, and margin are in a good range for carriers.
For October, the most recent month for which data is available, the TCI came in at 2.84 compared to September’s 5.47. In June, July, and August, the TCI came in at 2.93, 5.99, and 6.76, respectively. May’s 1.69 was the lowest level for the TCI since 2011.

FTR said that this reading reflects the continuation of a current pullback ahead of expected 2017 capacity tightening, with the TCI , which is still in “low positive territory,” expected to reflect improving conditions for carriers when capacity tightens due to regulations being implemented, something which FTR said will improve pricing and margins for carriers through 2017. And it also noted that the TCI is expected to reach its peak in late 2017 or early 2018.

“Despite the pullback in the October TCI there is sufficient evidence in the marketplace to indicate a turnaround is in the works for truckers,” said FTR COO Jonathan Starks in a statement. “The spot market has shown a dramatic change with posted loads showing a 40% increase in November versus last year. Combine that with the recent reductions in truck capacity that have finally occurred, and you arrive at a market that is set to see year-over-year rate increases for the first time since the second quarter of 2015. That is 80+ weeks of negative results - even a small improvement will feel really good about now. The change in administration at the White House creates some inherent uncertainty, but we will have a better picture of a Donald Trump presidency fairly soon. The biggest unknown is the impact of ELDs on the marketplace in 2017. If regulations are delayed or expunged, the impact on 2017 will be muted and pricing won’t be as strong as expected. However, the market is already showing a positive shift, and the negative pricing of the last two years is unlikely to last much longer.”

What’s more, the freight environment remains in a pattern of largely flat growth, although there have been recent signs for optimism, including a better than expected third quarter GDP estimated over 3 percent, decent job growth figures, and signs of increased consumer spending.

But these alone have not been consistent enough to translate into sustained economic growth, coupled with excess trucking capacity still being hampered by elevated inventories, which have shown signs of heading down recently.

Extract taken from   https://goo.gl/HqkVll

By LM staff

http://www.logisticsmgmt.com

FTR Analyzes Potential Impact of Election on Trucking Industry

In a note to its subscribers, FTR foresees limited short-term impact to the overall economy — and the transportation industry in particular — as a result of the U.S. presidential election results.

Behind this assessment is the fact that the new President won’t take office for three months, and then any proposed legislation will take time to move through the legislative branch of government.

According to Noël Perry, transportation economist at FTR, “There are certainly particular risks that arise any time there is a change in elected power; but there is little near-term change in the outlook for the U.S. economy, as budgets are set and policies are intact until later in 2017.”

Some possible risks to watch for according to FTR:

Since the President does control foreign policy, trade agreements with the Chinese and Mexico are likely to be addressed early on in the new administration with the risk of an increase in inflation.

Regulations and enforcement will be addressed. And if electronic logging device (ELD) implementation gets sticky because of the FMCSA’s slowness in publishing complete technical standards, the new administration is much more likely to postpone the December 2017 deadline. That said, trucking regulations in general will not be a priority.

If a major tax cut bill is in place by summer of 2017, it would likely stimulate the economy and add up to 1 percentage point to GDP growth for as much as a year. At the same time, trade negotiations could stimulate exports and raise the cost of imports, with an acceleration in inflation likely. That may force a significant raising of interest rates by the Federal Reserve, making recession in late 2018 or 2019 a distinct possibility.

FTR does not expect to change its industry forecasts based on the election results but will be monitoring any activity that may cause an adjustment and will continue to advise their subscribers accordingly.

Extract taken from   http://goo.gl/VMk7jK

By Trucking News Staff

http://www.truckingnewsonline.com/

How a new breed of warehouse is fuelling eCommerce


Traditional warehouses — large buildings sitting in affordable rural areas along popular shipping routes — have been replaced by new breeds of fulfillment centers. Retailers’ warehouse strategies are changing dramatically and becoming a more critical piece of the ecommerce landscape — from how the geographic location of each warehouse is chosen to how products are documented and placed in a warehouse’s inventory. These logistical innovations are allowing retailers to stay competitive and offer shipping options that keep their customers happy.
From retail powerhouses to small businesses, companies are using fresh warehouse tactics to fuel their ecommerce success.

Walmart Uses Drones in the Warehouse

In a recent demonstration, Walmart suggested it may soon be using drones in at least one of its distribution centers to inspect labels and inventory, a process that now takes employees about a month to complete with handheld scanners. Currently, Walmart uses a mix of supercenters and distribution centers to fulfill orders placed online.

This new venture with drones comes at a great time, as Walmart recently rolled out its new two-day subscription shipping service, Walmart ShippingPass. The service also offers free returns online and in-store. With more orders and returns bound to be made by subscribers of ShippingPass, speeding up the logistics process with warehouse drones will help the Walmart operations staff keep up with the imminent increased demand.

Target Transforms Storefronts into Warehouse Space

It’s no secret that brick-and-mortar stores are struggling to stay relevant. But companies like Target are now pushing past its brick-and-mortar roots by converting some of its storefront space to mimic warehouses in order to increase sales and adapt to the changing needs of the consumer. Target fulfilled 30 percent of its online orders from stores in Q4 as well as netting a record number of online customers who picked up their orders in person over the holiday season.

Although many retailers are still trying to strike the right ratio of inventory on store shelves vs. warehouse shelves, the proof for this strategy is in the pudding. Online sales for Target in Q4 jumped 34 percent, beating even the formidable Amazon — which had its biggest holiday shopping season ever and grew 26 percent in net sales. Target and other retailers will continue to adjust where products are kept as they diligently monitor where the demand originates.

Traditional retail is adjusting to the different expectations of consumers, changing their entire supply chain and points of sale to allow the consumer to have an excellent experience whether they buy in-store, online or via a catalogue. Customers can also choose whether they pick the goods up in-person or get them shipped with traditional methods, even within a couple of hours.

Amazon Builds Urban Warehouses

From 2013 to 2016, Amazon has opened roughly 33 of its 78 “traditional” warehouses in the U.S., according to estimates from MWPVL. On the other hand, Amazon opened 60 Prime Now hubs and fresh delivery stations in that same time frame. Prime Now hubs, according to MWPVL, are fulfillment centers built in dense urban areas that are filled with only the bestselling items for that particular metro area. These Prime Now hubs cater to customers who want one- and two-hour delivery timeframes.

Amazon is also experimenting with a third type of warehouse — the “sortation center.” Amazon sends small parcels to these facilities so it can rely less on FedEx and UPS and more on the U.S. Postal Service. Amazon employees sort and ship these packages to individual post offices since USPS is able to deliver small, lightweight packages for much less than private couriers. Amazon’s mix of all three types of warehouses will allow it to experiment in order to figure out the most efficient way to reduce the costs of shipping.

SMBs Use Predictive Data to Pinpoint New Warehouse Locations

Even small and medium-sized businesses are optimizing their warehouses in order to improve delivery times. For example, shipping software provider Endicia is working on using customer data and predictive analysis to guide the business decisions of small online retailers (its customers) in order to improve delivery for the end-consumer.

Predictive technology allows small businesses to meet consumer expectations and stand toe-to-toe with competitors. Looking at data from past shipments from customers can help small businesses figure out the best place to build a new warehouse, supply future shoppers with a more accurate delivery window, identify where to stock products based on customer demand, etc. The possibilities are endless when businesses have access to a large amount of data points.

Online customer expectations for shipping are constantly changing and becoming more challenging to meet. Traditional warehouse models alone do not make sense for online retailers who are trying to keep up with their customers’ shipping demands. The ability to offer affordable two-day shipping, same-day shipping and affordable returns requires some innovative thinking on the part of ecommerce businesses.

Online retailers that want to offer faster and more convenient shipping options to their customers need to adapt the right mix of innovative warehouse strategies for their businesses. Researching which locations make sense to build future warehouses, finding more efficient ways to account for inventory and using already owned space to house products offered online are all ways that a small business can keep up with the big names in retail.

Extract taken from   http://goo.gl/DKz9FD

By Amine Khechfé

http://www.supplychaindigital.com/

Strong Truck Engine Sales Seen Ahead of Class 8 Emission Standard

Total North American Class 8 truck production peaked in 2015, with ACT Research predicting at that time lower demand in 2016 and 2017 followed by recovery.

A pre-emission boom is forecast in 2019 and 2020, before a sharp drop into 2021, according to a new report by ACT Research and Rhein Associates.

The N.A. On-highway CV Engine Outlook, available now, is designed to present historical trends, current activity and forecasts of engine demand in on-highway commercial vehicles. The report analyzes significant trends in engine displacement, engine type (diesel, gasoline, natural gas, and other), captive versus non-captive engines, and premium versus non-premium power for Class 8 vehicles.

“This analysis of engine history and its related forecast highlight the trends in engine type and displacement,” said Tom Rhein, president of Rhein Associates. He added, “New and revised engine introductions over the next few years —together with emission impacts — will lead to changes in demand.”

According to Ken Vieth, ACT’s senior partner and general manager, “The Class 8 engine analysis centers on diesel engines because gasoline engines are not available in trucks of this size. And OEM-installed alternative-fuel engines (natural gas) are currently only available from Cummins Westport: ISL-G (8.9L) and ISX-12G (11.9L).”

Vieth continued, “Demand for natural gas engines has slowed in 2016, constituting less than 2 percent of total engines used in Class 8 trucks.”

Rhein Associates is a major supplier of powertrain information to worldwide clients enabling accurate and informed business decisions and marketing plans. RAI produces three publications: The Rhein Report (leading monthly newsletter), The Future of Diesel Engines (a five-year history and forecast book), and various engine databases as well as accomplishing various consulting projects.
ACT is a worldwide leading publisher of new and used commercial vehicle industry data, market analysis and forecasting services for the North American market

Extract taken from   http://goo.gl/9RCLEQ

By Trucking News Staff

http://www.truckingnewsonline.com

Motor Carrier Regulations Update: Caught in a Trap

The New York Times has called President Barack Obama the “regulator in chief.” Why? The nation’s 44th president has led a regulatory assault on American business—specifically the $748 billion trucking industry.

In fact, during Obama’s two terms, Washington regulators have produced 600 major regulations with dozens more in the pipeline. And while not all of them affect trucking, of course, many do. They cover everything from emissions, safety reporting of accidents, hours-of-service (HOS), electronic onboard recorders, entry-level training, fuel-mileage standards, overtime pay, hair follicle testing for drug cheaters, speed governors, sleep apnea testing, diesel emission standards and visas for foreign workers who might ease the truck driver shortage.

While economically deregulated since 1980, interstate trucking is still massively regulated at the federal level by the Department of Transportation (DOT), the Department of Labor, the Environmental Protection Agency (EPA), the Occupational Safety and Health Administration and scores of other units within other departments. In the meantime, states are nearly as aggressive.
Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce and former chief of the American Trucking Associations (ATA), sees all the fine print coming out of the agencies in Washington and sums it up in three words: “A regulatory tsunami.”

In 2016, George Washington University’s Susan Dudley and Washington University’s Melinda Warren conservatively estimated that 279,000 federal workers staff regulatory agencies. To put this in perspective, in 1960 at the end of President Dwight Eisenhower’s second term, that number was just over 57,000.

William Kovacs, U.S. Chamber senior vice president for Environment, Technology & Regulatory Affairs, says that Congress is mostly at fault. He says Washington bureaucrats feel they need to do something to justify their jobs, and trucking appears to be a ripe target.

The result in trucking is that the industry is not only being hit with new and creative rules, but it’s seeing a backlog of other rules such as the HOS 34-hour restart provision awaiting final word from the Federal Motor Carrier Safety Administration.

Whatever happens on these various rules, one thing is certain: shippers will pay more. That’s because in the thin-margin trucking business—carriers make on average 3% to 4% margin even in good years—there’s no place else to absorb these costs.

“It’s going to feel like a tremendous weight to bear because we have everything coming at us,” says Derek Leathers, president and CEO of Werner Enterprises, the nation’s 4th largest truckload (TL) carrier. “But to the extent that you can get out in front of regulations, it can work to your advantage.”
Analysts are warning that while the large mega-carriers have the savvy leadership and economies of scale to survive, other less well-capitalized carriers may fall victim to the regulatory onslaught.
“Looking ahead, smaller carriers may struggle under the weight of forthcoming regulations, competition for drivers and their reliance on truck brokers,” says John Larkin, veteran trucking analyst for Stiefel Inc. “Some slow consolidation may be inevitable as small carriers decide it’s not worth continuing in business given a challenging spot market and the coming requirement to operate in absolute compliance with federal regulations.”

With this heated environment in mind, let’s take a deeper dive into the regulatory maze facing truckers and work to figure out which new rules will be making the most impact on shipper transportation strategies and budgets.
“Black boxes”

Electronic logging devices (ELDs), also known in trucker parlance as “black boxes,” are about the size and weight of a Bible and are abhorred by many drivers and adored by most large trucking fleets.
Major truck fleets have long hinted that some independent drivers fudge their legal hours of service using paper logs—hence the reason that larger fleets pushed for mandatory ELDs. However, the Owner-Operator Independent Driver Association (OOIDA) has sued the DOT on grounds that the devices don’t help safety and merely are another tool for “harassment” of drivers. The case is pending in the 7th Circuit Court of Appeals. 

ELDs are not necessarily a new development. In fact, the 28 European Commission countries as well as some Central and South American countries currently require them. Costing about $300, these tamper-proof devices are in line to be required on all trucks in the United States by the end of next year—and major fleets say they’re worth every dollar.

“Simply put, it makes us safer as an industry,” says Chuck Hammel, president of less-than-truckload (LTL) carrier Pitt Ohio. He adds that the immediate productivity hit in eliminating illegal hours is between 7% and 10%, but that can be mitigated over time as carriers learn what they can and cannot do.

“ELDs provide many operational advantages internally,” says Hammel. “First and foremost, it gives you visibility as to when the driver is moving or sitting and exactly how many hours the driver has left to drive. This is critical information to have when scheduling pickups.”

Big carriers such as Swift Transportation, Schneider, Werner and others have been using ELDs for many years. In fact, Werner was the first large carrier to convert from paper logs to ELDs in 1998. “ELDs don’t make a fleet safer by themselves,” says Werner’s Leathers. “That comes through investments in safety training and creating a culture of safety within the organization. But it assures that shippers, carriers and drivers are on the same page when it comes to expectation of transit times.”















The emissions game

A new Class 8 truck cost roughly $80,000 a decade or so ago. Today, that same truck costs roughly $140,000 before any fleet discounts for multiple orders.

The 2017 model Peterbilt, Freightliner, Paccar, Volvo or Mercedes all come outfitted with world class emissions controls, costly electronics and other devices that OEMs say have eliminated as much as 98% of particulate matter into the atmosphere.

As Phase 2 of National Highway Traffic Safety Administration (NHTSA) and EPA truck emissions regulations are set to start in the coming years, carriers and government officials say shippers ought to get ready to help pay for them. The EPA estimates these Phase 2 rules, which start on Jan. 1, 2018, for trailers will be followed by tractor regulations coming in three rollouts through 2027. The EPA says that the move is projected to cut greenhouse gases (GHG) 13% by 2021, 20% by 2024 and 25% by 2027.

However, it will come with a considerable price. The cost for the trailers-only rule in 2018 is estimated at $1,090, but the per-vehicle tractor costs will be $12,300 by 2027.

“These standards are ambitious and achievable, and they’ll help ensure that the American trucking industry continues to drive our economy—and at the same time protect our planet,” says Gena McCarthy, EPA administrator. “We expect these will drive innovation as well as protect the air we breathe.”

ATA officials contend they were “cautiously optimistic” that the new rules were workable, and that the 10-year phase-in period for the regulation would not be unduly disruptive to fleets and manufacturers.

“While today’s fuel prices are more than 50% lower than those we experienced in 2008, fuel is still one of the top two operating expenses for most trucking companies,” says ATA president and CEO Chris Spear, noting that ATA worked with Washington officials for the past four years to ensure that these fuel efficiency and greenhouse gas standards took into account the wide diversity of equipment and operations across the trucking sector.

“ATA developed and adopted a set of 15 guiding principles to serve as our major parameters for inclusion in the final rule,” says Glen Kedzie, vice president and energy and environmental counsel for the ATA. “We’re pleased that our concerns such as adequate lead-time for technology development, national harmonization of standards and flexibility for manufacturers have been heard and included in the final rule.”

But some carrier executives are skeptical of the EPA because of past problems with emissions regulations. John White, chief marketing officer for U.S. Xpress, says that the recent EPA-required changes in 2010 and 2012 resulted in some problems with engine filters and after-market treatments.
“All of the larger fleet operators accelerated our trade-in cycles because of down time and maintenance,” says White. “We dumped a lot of low mileage trucks onto the used truck market place.”

Speed limiters, and more

What else is coming down the regulatory pipeline for trucking? For one, the government wants to put the brakes on the trucking industry. In fact, NHTSA and the DOT are proposing speed governors on new trucks with a maximum speed probably around 62 to 68 miles per hour, although it says it’s waiting for public comments to determine the exact highest speed.

Transportation secretary Anthony Foxx says that the safety measure could save lives and more than $1 billion in fuel costs each year; and, more importantly for truckers, the rule wouldn’t require the retrofitting of the approximately 3.5 million older tractor-trailer trucks on the highways.

“It’s a reasonable rule,” says Leathers. “We have speed limiters set at 65 mph, but they can be brought down to 62.” The key, he says, is to find the correct relationship between safety and fuel economy.

Since 2006, the ATA has adopted a policy in favor of limiting the maximum speed of new trucks to 68 miles per hour. The proposed ruling sets up yet another fight between owner-operators, which are against the governors, and the organized trucking industry, which is in favor of the speed limiters.

OOIDA says that according to DOT data, less than 8% of fatal crashes involving trucks are speeding-related, compared to almost 30% for passenger vehicle crashes. The owner organization also says that speed limiters for trucks would result in a significant speed differential between cars and trucks on roads like interstate highways.

Safety advocates contend that the safest highways are those where traffic travels at the same or similar speeds. For every speed differential of 1 mile per hour between vehicles, the likelihood of interaction increases. Trucking executives agree that speed uniformity on the highways is key. “Speed should not be a competitive landscape,” adds Leathers.

Road ahead

State regulators are not far behind Washington bureaucrats when it comes to causing heartburn for truckers. Trucking executives say that state-specific regulations in California and elsewhere governing meal breaks, overtime pay and other issues threatens to create a “patchwork” of inefficient state regulations affecting interstate commerce.

Already, some LTL carriers have instituted a “California surcharge” of 2% or more on shipments in and out of the Golden State. As states get more aggressive in targeting the trucking industry for taxes and other fees, carriers worry that they’ll be ripe targets or even more creative rules.

“It’s an onslaught,” adds Werner’s Leathers. “It’s more than I’ve seen in a lifetime, and it just keeps on coming. They seem very efficient in finding ways to legislate things that cannot be legislated.” 

Extract taken from   http://goo.gl/J1iqAb

By John D. Shulz

http://www.logisticsmgmt.com

Uber sets its sights on long-haul trucking and brokerage markets

For shippers, carriers, brokerages and really all other industry stakeholders that have not given much thought to the possibility of Uber becoming a truckload carrier, it appears it may be time to change that mindset.

That is due to a couple of different reasons. One is the ride sharing service’s recent acquisition of self-driving truck startup company Otto for roughly $680 million. Upon completion of this deal in August, an Otto blog posting noted that “with Uber, we will create the future of commercial transportation: first, self-driving trucks that provide drivers unprecedented levels of safety; and second, a platform that matches truck drivers with the right load wherever they are,” en route to building the backbone of what it called the “rapidly-approaching self-driving freight system.”

Another reason was clearly spelled out in a Reuters report published yesterday that explained, with Otto in the fold, Uber is keen on becoming both a freight hauler and technology partner for trucking. And this comes with the expectation that in 2017 Otto-branded trucks, as well as others with Otto technology, will start moving freight headed for warehouses and stores, Otto Co-Founder told Reuters.

Uber’s goals are seriously ambitious to be sure. The report explained that it is now pitching its services to shippers, truck fleets, and independent drivers, not just to outfit trucks with self-driving technology but also to be a player in the highly competitive $700 billion truckload brokerage arena, too, which is replete with major players such as C.H. Robinson Worldwide, XPO Logistics, Echo Global, and many other players.

But the goals may need to be tempered somewhat, on the actual freight-hauling side specifically, with a current fleet of six trucks that Otto plans to expand to 15.

What’s more, it is one thing to say you are going to do these things and truly influence the market in profound ways, but it’s an entirely other thing to execute and make that happen.

That was made clear in a report issued earlier this year by supply chain consultancy Armstrong and Associates, which was based on feedback from 27 companies providing Uber for Trucking services, or “Digital Freight Matching” (DFM), which Armstrong said reflects these types of services far more accurately.

“One of the key components of Uber’s model is the commodity-like nature of the ride-hailing service,” Armstrong said.  “The principle behind Digital Freight Matching may be simple, but the trucking industry is not. Domestic transportation is not a simple commodity. Complexities arise in the form of specialized equipment types, shipments transported via multiple modes, and necessary exception handling for service issues such as equipment breakdowns.

Shipments are high-value and time sensitive. Placing an Uber-like app atop a complex industry doesn’t truly address the problem. Shippers and Carriers alike will be disappointed if this is the extent of the ‘solution.’”

And even with its now publicly stated goals to enter the freight transportation market, many industry observers do not expect immediate buy-in to Uberization within the space by Uber or other like-minded companies.

Stifel analyst John Larkin made that clear in LM’s Truckload Brokerage roundtable earlier this year, noting that while Uberization is something that will evolve but not burst onto the scene either.

“Shippers…are simply not going to turn over a $250,000 load to a company that has technology, but little knowledge or experience in the highly nuanced world of freight transportation,” he said. “Instead, the larger, better capitalized brokers will incrementally move us in the direction of more automated brokerage by rolling out automated modules that will gradually make brokerage less people intensive. Shippers will undoubtedly experience less heartburn with this approach.”

While self-driving trucks bring potentially bring some bright spots into freight transportation, such as possibly helping to alleviate the longstanding driver shortage, it also will come with challenges, including the impact of poor transportation infrastructure, and legal ramifications that could stem from accidents involving self-driving trucks, YRC President James Welch said at this week’s Council of Supply Chain Management Professionals Annual Conference in Orlando.

While it is clear self-driving trucks are a part of the future, there is a lot of ground to cover before it comes to fruition. Uber appears to be game in attempting to make a splash into the market, with an eye on becoming a market player, too. It is way to early to say what will or won’t happen, but it certainly looks like it will be an interesting ride.

Extract taken from   http://goo.gl/h6SwNT

By Jeff Berman

http://www.logisticsmgmt.com

OOIDA Asks Senate Panel to Nix Plans for Speed Limiters on Trucks

The Owner-Operator Independent Drivers Association (OOIDA) has asked the U.S. Senate Committee on Appropriations to exclude language from any federal spending measures that mandates the installation of speed limiters on heavy commercial vehicles.

The association says that to do so would undermine the regulatory process and take away the public’s ability to make informed comments to an already proposed rule.

The Federal Motor Carrier Safety Administration (FMCSA) and the National Highway Traffic Safety Administration (NHTSA) announced recently a notice of proposed rulemaking that would require U.S. trucks larger than 26,000 pounds be set at a maximum speed of 60 or 65 or 68 miles per hour.

OOIDA points out that language currently included in the Senate THUD bill would force the FMCSA and NHTSA to issue a final rule that mandates this policy, ignoring the sacrosanct ability of industry stakeholders to help shape the regulations affecting them through the traditional federal rulemaking process.

OOIDA says Congress should take time to understand the true impact this policy would have on highway safety and allow the rulemaking process to continue, rather than imposing a mandate through the appropriations process.

“Congress has never analyzed the effect of mandating lower speeds for heavy vehicles through any public hearing or forum,” said Todd Spencer, executive vice president of OOIDA. “We believe the Senate’s first significant action on the issue should not be in the form of mandating something that decades of research has proven increases the likelihood of crashes between trucks and other vehicles.”

“The agencies making the proposal fully acknowledge the potential for increases in crashes between trucks and other vehicles, and only want to attempt to mitigate the severity of such crashes.”

“Such a mandate would have serious consequences such as promoting road rage among other motorists and creating ‘rolling roadblocks’ of trucks on highways,” said Spencer. “Many states that used to have lower, separate speed limits for trucks have realized this was not the best idea and changed their policies to the same speed limit for all vehicles.”

OOIDA wants the motoring public to know that this is a nationwide policy that would affect all who use the roads where large trucks travel. The association is opposing it and encourages the motoring public to join in opposition.

“Highways are safest when all vehicles travel at the same relative speed,” said Spencer. “This wisdom is backed by science. NHTSA’s messages have promoted the practice for years based upon their own research, going back decades.”

OOIDA is a national trade association representing the interests of small-business trucking professionals and professional truck drivers with more than 158,000 members nationwide.




Extract taken from goo.gl/rfMSVB

http://www.truckingnewsonline.com

FTR’s Trucking Conditions Index heads up from June to July

Freight transportation consultancy FTR’s Trucking Conditions Index (TCI) showed signs of improvement, the company recently reported.

The TCI reflects tightening conditions for hauling capacity and is comprised of various metrics, including capacity, fuel, bankruptcies, cost of capital, and freight.

According to FTR, a TCI reading above zero represents an adequate trucking environment, with readings above ten indicating that volumes, prices, and margin are in a good range for carriers.
For July, the most recent month for which data is available, the TCI headed up to 5.99, an improvement over June’s 2.92, and May’s 1.69, which is its lowest reading going back to 2011.

Reasons for July’s improvement cited by FTR included moderate economic growth, and a regulatory agenda that will tighten capacity utilization, with the firm adding that building regulatory drag over the next 18 months should increase pricing and margins for fleets that have capacity. And it added that TCI readings for the remainder of 2016 and into early 2017 are expected to be in the same range at July.

“The freight market is doing slightly better than just treading water, but there is still a disconnect between activity in the spot and contract markets,” said FTR COO Jonathan Starks in a statement.

“This is a result of the slow growth environment that we are in right now. You use your contract carriers whenever you can. There just hasn’t been enough extra freight to spill over into the spot markets. Plus, shippers were able to use the big drops in spot rates to help put pressure on their contract carriers. I believe that those conditions will soon be turning, especially for van freight. Van loads on the load boards are up this summer, and capacity has noticeably tightened. It isn’t extremely tight, but compared to last year it is a welcome relief for carriers. That should soon take root in contract rates, especially as shippers and carriers prepare for their 2017 negotiations.

Starks said that one note of caution is in the flatbed segment, as the big reductions in oilfield activity has continued to put too much carrier capacity back into the spot market, and pricing is still weak for this segment. And he noted that until oil prices move higher or housing and business investment rally, the long-haul flatbed market is going to continue to struggle for volumes and rates.”

Stifel analyst John Larkin observed on a conference call hosted by his firm this week that trucking continues be in a very difficult rate environment in 2016, especially on the spot market side of the sector, with current spot market pricing likely not sustainable.

Larkin added that smaller trucking companies are downsizing and dropping out of the market altogether, or experiencing some financial pain.

On the contract pricing side, which he said “held up beautifully in 2015,” has accelerated this year, with some shippers tossed aside talk of collaboration and reverted to aggressive pricing practices.

“Some of the big fleets are downsizing, which fits in nicely with smaller ones doing the same thing and ultimately will bring supply and demand into balance, as capacity-sapping regulations are rolled out from 2017-2019, that will further tighten supply and demand and improve the pricing outlook, but we don’t expect pricing to be any better than it is right now, until, at the earliest, in the second quarter of 2017, and it is not clear it will even improve then.”

Extract taken from 
By Jeff Berman   goo.gl/EYazzq
http://www.logisticsmgmt.com

Slow down! Feds want to put limiters on newly manufactured heavy trucks.

Department of Transportation (DOT) Secretary Anthony Foxx announced last week that the National Highway Traffic Safety Administration (NHTSA) and Federal Motor Carrier Safety Administration (FMCSA) want to propose equipping heavy-duty vehicles with devices that limit their speeds on U.S. roadways.

Although the government is not saying exactly what the top speed of the governors would be, the proposed ruling would require those devices be set to a maximum speed. Foxx says the safety measure that could save lives and more than $1 billion in fuel costs each year.

“There are significant safety benefits to this proposed rulemaking,” Foxx said.  “In addition to saving lives, the projected fuel and emissions savings make this proposal a win for safety, energy conservation, and our environment.”

The DOT proposal would establish safety standards requiring all newly manufactured U.S. trucks, buses, and multipurpose passenger vehicles with a gross vehicle weight rating more than 26,000 pounds to come equipped with speed limiting devices.  The rule would not require retrofitting of older trucks.

The proposal discusses the benefits of setting the maximum speed at 60, 65, and 68 miles per hour. But Foxx said the DOT “will consider other speeds based on public input.”
The American Trucking Associations (ATA) hailed the proposed rule as “a potential step forward for safety,” setting up a fight with the owner operators, who oppose the proposed rule.

“We are pleased NHTSA and FMCSA have, almost 10 years after we first petitioned them, released this proposal to mandate the electronic limiting of commercial vehicle speeds,” ATA President and CEO Chris Spear said.  “Speed is a major contributor to truck accidents and by reducing speeds, we believe we can contribute to a reduction in accidents and fatalities on our highways.”

Since 2006, ATA has adopted a policy in favor of limiting the maximum speed of new trucks to 68 miles per hour. Later that year, the ATA petitioned FMCSA and NHTSA to issue a regulation requiring their use. In 2008, as part of ATA’s 18-point highway safety agenda, the federation endorsed a national speed limit of 65 mph for all vehicles.

“As an industry, we cannot be afraid of technology, but we also must make sure that technology has proven benefits,” Spear said. “Carriers who already voluntarily use speed limiters have found significant safety, as well as fuel efficiency and equipment lifespan benefits with little to no negative impact on productivity. We will be carefully reviewing and commenting upon today’s proposal.”

Motor carriers operating commercial vehicles in interstate commerce would be responsible for maintaining the speed limiting devices at or below the designated speed for the service life of the vehicle under the proposal.  While the maximum set travel speed will be determined in the final rule, estimates included in the proposal demonstrate that limiting heavy vehicles will save lives.

“This is basic physics,” said NHTSA Administrator Mark Rosekind.  “Even small increases in speed have large effects on the force of impact.  Setting the speed limit on heavy vehicles makes sense for safety and the environment.”

Other government officials said the DOT proposal was an efficient compromise between improving truck safety and ensuring efficient surface freight transport around the nation.

“Safe trucking moves our economy and safe bus operations transport our loved ones,” said FMCSA Administrator T.F. Scott Darling, III.  “This proposal will save lives while ensuring that our nation’s fleet of large commercial vehicles operates efficiently.”

The proposed ruling sets up yet another fight between owner-operators, which are against the governors, and the organized trucking industry, which is in favor of the speed limiters.

The Owner-Operator Independent Drivers Association (OOIDA) says it is against the speed limiters for various reasons.   OOIDA says it opposes anti-competitive measures such as speed limiters that are falsely promoted as safety initiatives. It says it is against the new rule for three reasons:

According to DOT data, less than 8% of fatal crashes involving trucks are speeding-related, compared to almost 30% for passenger vehicle crashes.

Speed limiters for trucks would result in a significant speed differential between cars and trucks on roads like Interstate highways.

Speed differentials lead to conflicts between cars and trucks, which lead to crashes.  Most states have done away with posted speed differentials due to increased accidents with cars and trucks.


Extract taken from  goo.gl/YodbI3
By John D. Schuldz
http://www.logisticsmgmt.com

Hanjin bankruptcy gives shippers crash course in risk mitigation

The bankruptcy of Hanjin Shipping will have shippers scrambling for transport alternatives during Peak Season, as global seaports also struggle to find ways of mitigating the impact of this colossal event.

Hanjin operates 98 container ships totalling 600,000 twenty-foot equivalent units (TEUs), 11 port terminals and 74 deployments.

The largest container line bankruptcy in history already has other carriers scrambling to accommodate shippers, too.

CKYHE Alliance partner, Evergreen Line, for example, is activating a “contingency plan.” According to spokesmen, no Evergreen Line cargo will be loaded on the vessels operated by Hanjin and Hanjin cargo will not be allowed to load on the vessels operated by Evergreen Line.

“Evergreen Line, as the Carrier to issue the Bill of Lading for the shipment under Evergreen Line's custody, will not prejudice to cargo owner's rights,” added spokesmen. “Evergreen Line undertakes all carrier's obligations and responsibilities under the governing Bill of Lading clauses will remain binding in all circumstances.”

As report in LM, the seventh largest maritime container line had been enduring a long period of economic distress before this collapse. Shippers who had not anticipated the event are now being schooled in risk management.

According to Rick Bridges of Roanoke Trade Insurance logistics managers should be cancelling bookings with Hanjin and look for space with other container lines.

Meanwhile, they should take the following precautions:

*The shipper should take all reasonable measures to protect the cargo and to ensure it is delivered to the intended destination should Hanjin fail to complete the voyage(s). In such cases, the shipper will likely be reimbursed for charges properly and reasonably incurred via the cargo insurance provider. 

*The shipper should confirm that insured cargo will continue to be covered for physical loss or damage even if insolvency is the cause of physical loss or damage.

“It is also suggested that your company consider the possibility of abandonment of freight and how to best protect against non-payment of demurrage and storage charges,” said Bridges.

Extract taken from   http://goo.gl/otwh82

By Patrick Burnson

http://www.logisticsmgmt.com

Get the Right Lift Truck for the Job

We’ve all seen the shiny new truck on the job site with an extended cab, leather, DVD player—and a tailgate that looks like a tree fell on it. Just as familiar is the truck whose best years are far behind it, yet it’s hauling a family camper. These are clear examples of the wrong truck for the job, but the match between lift truck and application is not always quite so obvious. If the loads get lifted and the trucks get loaded, all is well.

But if you look at maintenance, utilization, productivity and total cost of equipment, you get a clearer picture of a lift truck’s fitness for the task. As equipment sellers, users and service providers collect more data and get better at interpreting it, the art of pairing tool and task is becoming a well-honed science. It’s now possible to accurately predict whether a given lift truck model will under-perform, over-perform or get it just right.

But this analysis can also uncover applications where no new piece of equipment quite fits. The utilization is too low, and renting or purchasing a used lift truck might make better sense. Lift truck manufacturers have taken note and are now working to expand their offerings at the “low cost of acquisition” end of the market. The idea is that end-users can then enjoy the warranty, service and support of a new piece of equipment without overpaying for something they don’t need. However, this new battleground for lift truck customers presents its own assortment of risks and challenges.

Utility on an economic budget

Like any bell curve, the mid-range lift truck market will always comprise the majority of sales. The upper tier premium products are largely identical to those mid-range platforms, but with added features and options like telematics solutions and robust support for maximum uptime.

“In the lower utilization category, a lot of manufacturers have struggled with how to play in that space,” says Martin Boyd, vice president of counterbalanced solutions at Hyster Company. “Manufacturers have spent enormous amounts of time and energy establishing their brands in the marketplace and it can be challenging to maintain that brand image while catering to the lower-utilization market. It’s also difficult to directly target this ‘utility’ market with products while simultaneously optimizing the supply management chain so the number of variations doesn’t become overwhelming.”

For the low-cost segment—whether it’s called utility, economy or budget—the end-user challenge is for purchasers to determine exactly why the price is so low.

“It becomes a matter of trust,” Boyd says. “Why would I pay 25% more for one tool when another tool performs the same basic functions to meet my operational requirements? Trust in emerging ‘utility’ type industrial lift trucks will ramp up quickly when customers realize the service and support they have become accustomed to will also apply to these new utility brands.”

Boyd says all industrial lift truck manufacturers in North America have been carefully monitoring the movement of lower-cost, off-shore brands as they pursue a bigger share in the North American market. Unlike the eastern European region, he says, the North American market has experienced modest penetration from these off-shore lift truck manufacturers.

“There are more low-cost or import dealers popping up, and some of them follow a good model of providing the lift truck, parts and service,” says Andrew Omahen, business development manager for UTILEV. “Others are quoting with no service or support at all, and tell customers any other lift truck manufacturer can service the equipment. If a low-cost lift truck is imported, if there is unplanned maintenance it can take time to get parts.”
Kevin Trenga is the North American product manager for Baoli, a Chinese brand KION acquired in 2009. He says the arrangement—which is mirrored in similar relationships among top lift truck manufacturers—results in more effective coordination of global resources.

“It’s important to remember that ‘economy’ doesn’t have to mean ‘cheap,’” Trenga says. “Good quality and effective service support are two key elements of industrial equipment customer satisfaction, regardless of price. When a manufacturer has an in-house Chinese brand, the company is able to more directly influence product quality and effectively ‘owns’ the supply chain for parts and service support. That makes a difference in the customer experience.”

As the top manufacturers have expanded low-cost offerings, they have been keen to emphasize the support of their existing dealer networks. Nonetheless, the budget shopper is still likely to go with the lowest up-front cost, so a conversation around total cost of ownership remains important.

“I don’t know how many fleet buyers step back and think about it,” Omahen says. “I suspect it’s not happening a lot. More often it’s ‘I need this many, send a quote.’”

Over the long term, Omahen says the periodic maintenance requirements for a low-cost and premium lift truck are similar and the robustness of engineering behind both is comparable.

“The design intent for a premium product is to last,” he says. “For low-cost, some components might not be as robust, and the life expectancy might not be as long. This tiered approach is following the same mindset in materials handling in general.”

A fleet worth more than the sum of its parts

Of course plenty of fleets need both low-cost and premium equipment. In fact, saving at the low end can help fund the additional features and capabilities at the high end. Not all customers will be able to keep certain equipment in one area or another to fully realize these benefits, but benefits come with standardization, too.

“I completely understand why people would go in either direction,” Omahen says. “But if you really look at different operations within facilities, there could be a big swing in the type of lift truck required.”

Data from end-users and dealers eventually rolls up to the manufacturer level, where it can illustrate the spectrum of usage and potentially inform the creation of new products. Many manufacturers will admit to having a phase where expansion of their product range had more to do with what was trendy in an effort to differentiate, but current efforts are based on identified needs. Tim Combs, president of sales and marketing for The Raymond Corp., offers the example of a new reach model with four-directional travel capability.

“It was developed for customers who needed an easier way to handle long, bulky loads,” Combs says. “It was something we were seeing consistently and that needed to be addressed.”

Combs emphasized the closer pairing of equipment and application as a key driver for the industry. Telematics and data analysis can help inform new product design, but they can also rapidly diagnose problems in real-world applications. For example, high horizontal transport times and minimal lifting times on a reach truck would indicate the truck is not a good fit. Dealers can monitor these patterns on behalf of customers and recommend adjustments accordingly.

Dealers therefore have incentive to be proficient in a variety of models, brands and services. Boyd says a dealer portfolio that only represents the forklift brand they support will find it increasingly difficult to compete.

“More sophisticated dealers almost act as a general contractor,” he says. “They might identify the need for better lighting while discussing very narrow aisle equipment, or improved air quality where internal combustion trucks are used indoors.”

According to Mick McCormick, vice president of warehouse solutions for Yale Materials Handling Corp., dealers should also be prepared for change as customers’ businesses and workforces grow and change. This is a challenging dynamic for low-cost, entry-level models, he says, where the cost of initial acquisition is a more significant driver.

“Sales and service models are broadening or blurring because of the way customers want to consume trucks today,” he says. “It’s driven by distribution centers that are really focused on staying on the cutting edge of labor productivity and might be looking to rotate and rebalance the fleet on a very frequent basis. It’s not to the extreme of a pure rental model, but they want a two- or three-year window to rebalance or completely change out equipment to take advantage of new technology and anything that can add value.”

McCormick says it comes down to how the customer approaches the purchase. Low-cost equipment is often approached from a purely product standpoint—a round peg for a round hole.

“When the customers say they need to increase labor productivity and get more out of assets and people, they’re really looking beyond a product for a solution,” he says. “The surprising benefits come not from discrete products but how well a dealer puts them together.”

Extract taken from   http://goo.gl/WHwwTy 

By Josh Bond

http://www.logisticsmgmt.com

DOT, EPA issue final rules for heavy-duty trucks greenhouse gas and fuel efficiency standards

The United States Environmental Protection Agency and the Department of Transportation’s National Highway Traffic Safety Administration announced their jointly finalized standards for medium- and heavy-duty vehicles that will augment fuel efficiency and reduce carbon pollution.

This final rulemaking marks the culmination of standards rolled out in June 2015 by the DOT and EPA. And it also leverages the current fuel efficiency and GHG standards in place for model years 2014-2018, which DOT and EPA said will result in 270 million metric tons in CO2 emissions reductions and reduce vehicle owners fuel costs by more than $50 billion. The first round of these truck standards covered model year 2014 and 2015 trucks.

DOT and EPA said that the final phase two standards were called for by President Obama’s Climate Action Plan in response to the President’s 2014 directive to develop new standards into the next decade. 

And the agencies added that this final phase two program promotes a new generation of cleaner, more fuel efficient trucks by encouraging the wider application of currently available technologies and the development of new and advanced cost-effective technologies through model year 2027. The final standards are expected to lower CO2 emissions by approximately 1.1 billion metric tons, save vehicle owners fuel costs of about $170 billion, and reduce oil consumption by up to two billion barrels over the lifetime of the vehicles sold under the program. The final standards are cost effective for both consumers and businesses, delivering favorable payback periods for truck owners, they said, adding that the buyer of a new long-haul truck in 2027 would recoup the investment in fuel-efficient technology in less than two years through fuel savings.

“The actions we take today on climate change will help lessen the impacts on future generations,” said EPA Administrator Gina McCarthy. “This next phase of standards for heavy and medium duty vehicles will significantly reduce greenhouse gas emissions while driving innovation, and will ensure that the United States continues to lead the world in developing fuel efficient technologies through the next decade and beyond.” 

This rulemaking has a sharp freight transportation and supply chain focus, considering that heavy-duty trucks represent the second largest segment and collectively account for the largest increase in U.S. transportation in terms of emissions and energy use, said DOT and EPA. What’s more, they added that globally GHG emissions from heavy-duty vehicles are growing at a quick clip and expected to surpass emissions from passenger vehicles in 2030. 

These vehicle and engine performance standards would cover model years 2021-2027 for semi-trucks, large pickup trucks, and work trucks, among other vehicles. And when the standards are fully phased in, DOT and EPA said tractors in a tractor trailer, as an example, will see up to 25 percent lower CO2 emissions and fuel consumption compared to an equivalent tractor in 2018.

“This is a good rule for all entities involved,” said Environmental Defense Fund (EDF) Senior Manager, Supply Chain Logistics Jason Mathers.  “For trucking companies, it provides the certainty of long-term standards in knowing their trucks will get more efficient over the next decade-plus. That is important, given that the standards will drive manufacturers to invest and build better quality products that will ultimately drive savings for truckers.”

On the shipper side, he said that this ruling is a clear win in that these standards will drive total cost of ownership savings that will come in the form of lower fuel usage and lower fuel surcharges, too, which he called a big win for them.

“For large consumer brand companies, we think this could result in several hundred millions in savings per year,” he said.

Extract taken from   http://goo.gl/S5755I

By Jeff Berman

http://www.logisticsmgmt.com

ATA Report Sees Growth in
Freight Trucking Through 2026

A new report released Monday by the
American Trucking Associations 
(ATA) projects freight volumes will
increase by nearly 29 percent
over the next 11 years.

“The outlook for all modes of freight transportation remains bright,” said ATA Chief Economist Bob Costello in releasing its U.S. Freight Transportation Forecast to 2026. “Continued population growth, expansion of the energy sector and foreign trade will boost trucking, intermodal rail and pipeline shipments in particular.”



Forecast, a collaboration between ATA and IHS Global Insight, projects a 28.6 percent increase in freight tonnage and an increase in freight revenues of 74.5 percent to $1.52 trillion in 2026.

“Forecast is a valuable resource for executives and decision makers in both the private and public sector,” said ATA President and CEO Bill Graves. “Knowing where the industry and economy is headed can help shippers and fleets make key business decisions and instruct lawmakers and regulators on the best policies to move our economy forward.”

For the first time, this year’s Forecast includes near-term projections for 2015 and 2016 and estimates for changes in the size of the Class 8 truck fleet.
Among Forecast’s findings:

Trucking will still be the dominant mode of freight transportation, although the share of tonnage it hauls dips slightly. Even though truck tonnage grows over the forecast period, trucking’s share will dip from 68.8 percent in 2014 to 64.6 percent in 2026.

Due to tremendous growth in energy production in the U.S., pipelines will benefit more than other modes. Between 2015 and 2026, pipeline volumes will increase an average of 10.6 percent a year and their share of freight will increase from 10.8 percent in 2015 to 18.1 percent in 2026.

While railroads’ share of freight tonnage will drift down from 14.2 percent in 2015 to 12.3 percent in 2026, intermodal freight will be the second-fastest growing mode at 4.5 percent annually through 2021 and increase 5.3 percent per year thereafter.

The number of Class 8 trucks in use will grow from 3.56 million in 2015 to 3.98 million by 2026.


Extract taken from : http://goo.gl/Ad0H9O
www.truckingnewsonline.com