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Tuesday Apr 22, 2014 - Air quality board considers easing diesel rules
The Associated Press

LOS ANGELES — California air quality officials are considering giving small trucking operations more time to comply with new rules to clean up diesel emissions.
The proposal would push back deadlines by a few years for small fleets, lightly used trucks and those in rural areas with cleaner air, and offer other adjustments to assist truck owners, the Los Angeles Times reported Sunday ( ).
The state Air Resources Board said even with the changes the state could still achieve 93 percent of pollution cuts envisioned through 2023. A vote is planned for Thursday.
The changes under consideration come in response to pressure from small trucking firms and owner-operators who have pleaded for more time to comply with rules requiring them to install costly new diesel particulate filters or upgrade to cleaner models. The rules took effect this year.
"We're all struggling," Allen Forsyth told the Times. Forsyth operates a three-truck fleet that hauls local freight near Los Angeles International Airport. "I used everything I had to buy a 2012 truck. But I'm absolutely broke now."
Environmentalists and other clean-air advocates have urged the board to limit amendments to the regulation and preserve what they call the single biggest step California has taken to reduce health risks from air pollution.
The proposed changes would slow the pace of cutting soot and smog-forming gases from the nation's most polluted basins in Southern California and the San Joaquin Valley, air quality officials acknowledge. But they say diesel emissions would fall to the same level as the existing regulation by 2020, when nearly every truck in the state will be required to have a filter to remove soot from its exhaust.
Diesel soot is by far the largest contributor to cancer risk of any air pollution source in California and was declared a toxic air contaminant by the state in 1998.
Information from: Los Angeles Times,
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Monday Apr 21, 2014 - E-log mandate to push droves of drivers from trucking?
Could the implementation of the electronic logging device mandate cause huge numbers of drivers to simply bow out and leave the industry out of frustration with perceived overregulation?

According to results from a recent survey done by CCJ publisher Randall-Reilly, a big chunk of drivers are threatening to leave the industry if the Federal Motor Carrier Safety Administration’s proposed ELD mandate comes to fruition, which could be as early as 2016.

The public comment period for the ELD mandate proposal opened Friday, March 28, and as of April 3, 20 comments had already been submitted. Commenters have come down on both sides of the issue, with ...

More than 70 percent of the more than 2,300 independent truckers surveyed said they’d retire or quit the industry if they’re required to use logging devices.
Another 52 percent of leased owner-operators and company drivers said they’d quit driving when the ELD mandate begins.

Whether they’ll follow up on these threats is not clear, but a more grounded and realistic expectation is that an ELD mandate could accelerate retirement of older truck drivers, says Jay Thompson, president of Transportation Business Associates.

“Those are the drivers I would expect to actually leave – those that see in [the mandate] a reason to go ahead and say ‘I’m done with it,’ ” he says.

It’s well known that while the American Trucking Associations and many fleets threw their support behind the ELD mandate in the MAP-21 rule (and before, with prior mandates), drivers and owner-operators have been skeptical of such a rule.

PieThompson, however, says once the mandate comes, he expects ” a really begrudging kind of adoption” by drivers and independents alike.

ATBS’ Todd Amen predicts a similar scenario, saying drivers who want a paycheck will use ELDs when the time comes. “I do think there are plenty of older independent contractors that are scared and stubborn,” Amen says. “But when it comes down to it, they’ll work under ELDs if they still need a paycheck, and most of them won’t be able to retire on Social Security [alone].”

The ELD mandate alone, however, may not be the issue, says Amen. It’s the piling-on effect for drivers, with the proposed mandate coming less than a year after restrictive hours rule changes that drivers say hurt their miles and pay. Both regulatory actions are unappealing to drivers who’ve been in the industry a while, Amen says.

E-logs and harassment: 8 steps the new rule takes to deter driver harassment, coercion

In developing the electronic logging device mandate rule this go-around, FMCSA had to include provisions to properly ensure the devices couldn’t be used as a tool for carriers to harass drivers. Here's a look at ...

Post-adoption, however, drivers seem to become much more accepting of the devices, notes Artur Express’ Todd Walthall, recruiting manager for the carrier. “I have had people mention to me that they don’t know how they’ve gotten along without them” after making an initially reluctant transition, Walthall says. The 300-plus-truck carrier has 20 unites running with logging devices.
Amen, too, has seen a shift in attitudes of drivers even after just a few days of use. “It is not a big deal if the driver doesn’t make it a big deal,” Amen says, citing positives of taking “guesswork and burden” out of calculating hours and giving fleets the chance to plan better and help owner-operators boost their productivity.

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Monday Apr 21, 2014 - Bulk Freight Carriers Use New Online Radius Search to Find Loads Quicker
Nixa, MO (PRWEB) April 21, 2014, a load posting website for the dry and liquid bulk freight industry, added two new load search options to refine the way carriers search for loads, making finding loads quicker and more convenient. The release comes as the fast-growing load board reaches a record number of loads posted.
Load postings are reaching record highs online as shippers continue to overcome various challenges from this past winter from the heavy demand of rail freight to bad weather. is averaging 39,000 posted loads currently and it continues to climb. With the increased volume of available loads the website recognized a need for carriers to refine their searches.
“As our load postings continue to reach record levels it became apparent we had to enhance our search features to help both our carriers and shippers connect on the best freight option the first time,” said Jared Flinn, Operating Partner at “It’s just as important now for carriers to see all loads going to a specific destination to get them a reload or even see all load-by-origin radius going to a specific destination radius. These features can save carriers a tremendous amount of time and help them reduce empty miles, and get the load matched quicker for our shippers.”
Carriers have always been able to search by defining a state, equipment or load origin. Now using enhanced features on carriers can also search by radius of an origin to destination, or simply by radius of a destination.
“With every change and need we see, or hear about from our members, we’ll do our best to meet that need with a smart solution,” Matt Fredin, Operating Partner said. “We believe in listening to our members and responding quickly and effectively.”
About is an online community of professionals in North American’s bulk freight industry. Our shipper members are transportation logistics managers of grain, fertilizer, aggregates, feed ingredients and all agriculture commodities. Our carrier members pull hopper bottoms, walking floors, end dump trailers, belt trailers, live floors, pneumatic and liquid tankers. We provide to our members the industry’s most innovative bulk freight solutions including an enhanced load board, database of all carriers in North America, instant communication tools, industry forums and news updates, and much more.

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Sunday Apr 20, 2014 - How this agriculture startup taps the cloud to grow strong and lean
By James Dornbrook
Kansas City Business Journal

In a city better known as the home of Sprint Corp. and Hallmark Cards Inc., it can be easy to forget that Kansas City remains a leading agricultural hub. Five of the largest private companies and the second-largest public company based in the area do business related to agriculture or food.

Companies such as Dairy Farmers of America, Lansing Trade Group LLC, Seaboard Corp., The Scoular Co., and Bartlett and Co. are not only reminders of Kansas City’s heritage — they are big employers that each generate billions of dollars a year in revenue.

What could become the area’s next agribusiness giant is sprouting up — rapidly and largely unnoticed outside its industry — in Leawood.

For more news from the Kansas City Business Journal, check out James Dornbrook's work.

Agspring, founded in 2012, operates from a few cubicles in the Archer Foundation’s business incubator. When it relocated there from an office across the street, the move took about 15 minutes.

Yet Agspring isn’t your typical startup. It can call upon executives with decades of high-level agribusiness experience and is backed by hundreds of millions of dollars in capital from a variety of private equity investors.

This combination has allowed Agspring to make six acquisitions since the beginning of 2013, including huge grain operations in Idaho and Louisiana that already make it one of the nation’s 20 largest grain storage and transportation operations.

Core Focus

President Brad Clark said Agspring is able to build its business without a huge office because its headquarters is a cloud-based operation, with all noncore functions outsourced.

“What is not core to our business are things like accounting, IT infrastructure and human resources,” Clark said. “In those cases, there are many organizations out there that make a business of outsourcing those noncore functions and have world-class capabilities.

“We outsource to them, allowing us to focus on our core business. It allows us to compete very, very quickly, and we’re able to field a world-class organization without having to build a very large staff internally to do that.”

Agspring scouts for agricultural supply chains whose local owners want a well-capitalized, highly experienced partner. Agspring buys the companies, provides the capital needed to modernize and expand them, and aggregates them into a larger company that is more competitive on a global basis.

The strategy calls for keeping current management of its acquisitions in place and investing to increase capacity and efficiency. With each acquisition, the various operations in the fold gain buying and selling power.

Agspring’s focus on outsourcing helps it grow quickly. It doesn’t have to slow down to build a large staff to handle the business issues that come with rapid growth. And through a stable of what it calls executives in residence, it can quickly bring high-level management skills to projects.

Roll-up strategy

Agspring CEO Randal Linville is a 30-year veteran of the agriculture and commodity industry. Linville previously was CEO of The Scoular Co., growing it into a nearly $5 billion- a-year operation before he left in 2009. Recently cleared of his noncompete agreement with Scoular, Linville has set his sights on growing Agspring into a big agribusiness player.

Linville’s partner is Clark, who previously was senior vice president of Embarq Logistics, leading its turnaround and divestiture in 2009. The two were introduced by their pastor after both expressed an interest in finding a new project to work on.

The pair established several charitable-minded social enterprises designed to improve the standard of living around the globe. Then they decided to up the ante and found Agspring, a for-profit endeavor that could provide a serious benefit to the world’s food supply.

Agspring’s first purchases point to what the company has in mind for the big picture. Its initial focus was on acquisitions that created Big River Rice and Grain, a major grain and rice storage and transportation operation in Louisiana. It then bought the Idaho grain operations of General Mills Inc.

“You’re seeing more companies that own the farm and all the real estate, produce the crop, handle the transportation, store it, turn it into packaged product and send it to the store,” said Ray Tubaugh, a senior vice president of commercial lending for Arvest Bank. “It’s now all vertically integrated.”

He said Agspring’s early purchases point to a strategy of starting in the middle of the supply chain and working outward toward owning the farms and processing plants.

Agspring’s most recent acquisitions bear out what Tubaugh outlined. It bought a food service brand called Simply Omega and an organic food producer called Organic ID, then combined them into an entity called Function-O Foods LLC.

Simply Omega is a line of branded and co-branded meats with naturally elevated levels of omega-3 fatty acids, a substance that can lower triglycerides and blood pressure. The company boosts levels of the healthy substance by feeding animals a mix that includes flaxseed or other omega-3-rich substances. Agspring is focused on ensuring the integrity of the supply chain for delivering the feed to the animals, slaughtering the animals and delivering the product to market.

The focus at Organic ID is very similar. It works with consumer packaged-good companies and processors of organic, nonpesticide or non-GMO (containing no genetically modified organisms) products, ensuring that these specialized crops are delivered and stored in a way that avoids co-mingling with regular agricultural products. Accomplishing that on a larger scale requires additional investment in infrastructure, such as storage and transportation, but it’s a highly lucrative market.

“Being truly organic is tough to do without any current-day production methods,” Tubaugh said. “It’s why you pay more for organic foods.”

The focus of Agspring’s roll-up strategy extends beyond the United States. Clark just returned from a trip to South America, where he sees a similarly fragmented agricultural market in need of investment capital.

Agspring is just getting started.

“The ethos and the thinking behind (Agspring) is the need for a large, well-capitalized company to aggregate this highly fragmented industry, to deliver more food across the globe to a growing population,” Clark said.

“We have to make money to sustain the organization, but the goal is to feed a changing world. A saying we have here is ‘Work hard, have fun, make money and feed the world.’”

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Sunday Apr 20, 2014 - New DOT Rules in the Pipeline
The U.S. Department of Transportation expects developments for three new trucking related rules in the rest of 2014. The rules deal with driver coercion, a system for identifying carriers that need safety intervention, the use of speed limiters and an increase in minimum insurance coverage for carriers.
A rule which would help prevent driver coercion was expected to clear the White House’s Office of Management and Budget earlier this week, but it has not yet been released. The rule could be published as soon as April 23 pending OMB clearance.
This rule is unique in that it regulates how the Federal Motor Carrier Safety Administration creates future rules. It would require the agency to evaluate whether future rulemakings would be likely to result in driver coercion from shippers, receivers, carriers or brokers. Once the proposed rule is published, the public will have 60 days to comment on it before the final rule is created.
A second rule that may see action soon deals with the development of a carrier “Safety Fitness Determination.” The rule would allow the FMCSA to produce a score for carriers that could be used to target companies for safety interventions. The score would be based on data similar to that which was used for the Compliance, Safety, Accountability program’s Safety Measurement System.
DOT expects the rule to be submitted to the Office of the Secretary of Transportation May 6. It will then move to the OMG by June 6.
A rule to require the use of speed limiters in heavy trucks is also in the works. The FMCSA announced this rule last month, and DOT expects it to reach the OST May 21 and the OMB June 26. The speed limiter mandate will apply to trucks weighing more than 26,000 pounds. The agency has not released details as to what speed or speeds the rule will require limiters to be set to.
If all goes according to schedule, the speed limiter rule will be published September 16 with a 90-day public comment period.
Finally, the FMCSA just announced the formation of a rulemaking team to determine the appropriate minimum level of insurance for carriers. The administration reported to Congress that the current $1 million minimum is not sufficient to cover the costs of some accidents.
- See more at:

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Sunday Apr 20, 2014 - 7 more things members of the general public don’t know about truckers
Wendy Parker

It’s time again to put a little list together for the people who are officially unaffiliated with the industry. This statement alone is a fallacy: trucking is everyone’s business, as I have found myself reminding people time and again. Which brings us to number one on the list of things the Facebook readers, who just happen to also be professional drivers, wanted me to get out to the general public.

1. When we asked drivers what they wanted known about the industry, Paul Stogdill stated, “That people consume what we deliver.”

This may seem like a real “duh” to industry alums, but I’ve found the general public absolutely does not make the connection. They have no idea the truck they cut off to make the exit for Walmart is the very truck going to Walmart to deliver the steaks they’re busting a trucker’s chops to get to for their cookout that night. For some reason, they can’t make the connection to a very simple fact of life: Trucks bring you everything, and there are human beings driving those trucks. Which leads us to the next fun fact the pros want you to know.

2. We are not dirty, uneducated heathens and serial killers. Stephen Henderson touches on the human aspect by saying this, “I am a husband, father and grandfather. I own a house and a vehicle that does not have 18 wheels. I work for a living. I do not come into your office and mess with you while you are at work; please don’t come into my office (the road) [and mess with me] while I am at work.”

Bryan Whitten continues in a similar vein by suggesting this: “We sacrifice a lot in our lives, so their lives don’t miss a beat. So that ice cream they’ve been craving all day is right there on the shelf waiting for them, even though we had to wait six hours at the store to get said ice cream off our truck.”

3. Petra Ham is a new trucker who is learning first hand something people outside of the industry should be aware of. She posts, “As a new trucker, it surprised me that there is such a huge parking deficit — I never paid attention to that before.” No one really has, Petra, which is why there are such ridiculous problems with hours of service rules. The public needs to understand that time restrictions are all fine and well if there is adequate parking, and every rule restricting drive hours needs to be accompanied by money to fund it. Making rules is pointless if you don’t provide people a way to follow them.

4. Being impatient isn’t going to make us go faster. Honking and pulling around us unsafely isn’t going to do anything other than risk both our lives, and the lives of everyone else around us. Bryan has excellent advice. “This is not NASCAR out here! They are not saving any gas by being two feet off our trailer. It makes us nervous.” He goes on to say, “If we are kind enough to move over to allow you to get on the freeway, then do so. Move ahead of us, or slow down enough so we can get back in the slow lane where we belong.”

5. No matter how big your personal vehicle is, it’s not anything like driving a commercial vehicle. You can’t impose your driving experience in a Hummer with a boat trailer onto being able to understand what it’s like to drive a tractor-trailer — it’s not the same, it’s not even close, it never will be. If you want to learn what it’s like to drive a tractor-trailer, ride along in one for a day. A lot of states and private entities have instituted truck awareness programs and implemented driving safety around commercial vehicles in their drivers’ education. If you are a newly licensed individual, or have teenagers who will be driving soon, this type of education is incredibly important, especially if you’re using the highways. Which leads us to more advice from drivers.

5 things members of the general public don’t know about truckers

From typical speed to on-the-road conditions and pay packages, misunderstood elements of the trucking business remain in the dark for many in the general public.

6. “We make wide turns…if we swing to the left and have our right signal on it isn’t because we are dyslexic…we need that much room.” Candy Crichfield goes on to explain the nuances of those wide rights: “If you see I am going to be turning your way (hint: there are little flashy lights all along the side of the truck indicating that I am going to turn) stop short and let me around.”
7. Christine Gonyea and Richard Porky Young both mentioned the importance of four wheelers understanding blind spots. The message here goes something like this: We’re not kidding when we say, “If you can’t see our mirrors, we can’t see you.”

5 more things members of the general public don’t know about truckers

Costs of operation eat up a majority of an owner-operator business's revenue -- more on fuel, maintenance, tires, oil and food in this occasional series.

Bryan sums it up with this, “We try hard to know where we are going — sometimes our directions aren’t the best. Please be patient: we are guiding a huge vehicle down a street while trying to figure out address and access points to our destination.”
Have a little love for the truckers. They’re human beings, out there doing a hard job and a lot of them aren’t making as much money as people think. According to the Bureau of Labor Statistics, tractor-trailer truck drivers had a median pay of $38,200 in 2012, so they’re definitely not getting rich on the road.

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Friday Apr 18, 2014 - Grain elevator construction around the clock
Jim Grawe,

CANTON, Kan. -
Along Highway 56 east of McPherson is something you don't see every day, and it's growing by a foot every hour.

"I've never seen anything like it," Moundridge resident Richard Morgan says as he watches from his car.

Sightseers are just parking and marveling at the sight of a giant grain elevator appearing before their eyes.

"Just the size of it and the way it's all coming together--it's an amazing project!" Morgan adds.

Construction started Sunday, and it's reached 100 feet high. It will be 131 feet by the time it's finished sometime late Friday or early Saturday.

This kind of construction requires the concrete to be poured continuously until it's finished. A lot of the grain elevators you see along the Kansas countryside were built this way, but few of us were alive back when they were built.

"This is not a real common sight in this part of the world," Mid-Kansas Cooperative's Erik Lange says. "Slip-form construction was very common in the 1950s and 1960s, but there have not been many slip-form grain elevators built in the last 20 or 30 years."

Mid-Kansas Cooperative is building the 1.2 million bushel elevator because more Kansas farmers are growing high-yield crops like corn and soybeans, requiring more storage space.

The elevator will also be attached to a rail like that will make it easy to export local grain to other states and countries.

People in the McPherson area are hoping the towering new building will elevate the local agriculture economy to new heights.

The elevator will start accepting grain in September.

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Friday Apr 18, 2014 - Fracking Sand Spurs Grain-Like Silos for Rail Transport
By Thomas Black

The U.S. shale oil boom is putting millions of tons of sand onto North American railroads, enabling carriers to pack trains full instead of hauling just a handful of cars at a time.

With help from Union Pacific Corp. (UNP) and Warren Buffett’s BNSF Railway Co., the sleepy silica sand industry that once mostly supplied glassmakers now ships more than 20 million tons of the material a year. Buyers including Halliburton Co. (HAL) and Schlumberger Ltd. (SLB) use the sand in hydraulic fracturing at oil fields in Texas and North Dakota.

Miners such as Emerge Energy Services LP, U.S. Silica Holdings Inc. (SLCA) and Hi-Crush Partners LP (HCLP) are taking a page from the grain industry’s playbook to deliver sand faster and cheaper. They’re building facilities at their mines to load unit trains, which move just one type of cargo, and near oil fields to empty them.

“The customers more and more are saying ‘We don’t want the headache of logistics. That’s on you,’” Rick Shearer, chief executive officer of Southlake, Texas-based Emerge (EMES), said in an April 14 phone interview. “We’ve scrambled to put in a network of storage and trans-load sites all over North America.”

100 Cars

For decades, sand-mining companies catered mostly to glassmakers that sent a few rail cars, said Shearer, whose company was created in 2012 by combining Superior Silica Sands with two energy-service firms. Now, with fracking helping drive oil output, Emerge fills trains pulling 100 cars on newly laid track from shiny metal silos.

Unit trains will move about 25 percent of sand sent to oil and gas users this year, a fivefold surge from 2013, and the share could rise to 50 percent in the future, according to U.S. Silica. Union Pacific and BNSF, the two major carriers in the western U.S., are poised to benefit from shale-oil production in the region and sand mines in Wisconsin, Illinois and Minnesota.

“The whole shale development for us is great,” Union Pacific Chief Executive Officer Jack Koraleski said today in a telephone interview. “We move so much frac sand and so much pipe, that’s really our key franchise strength.”

U.S. frac-sand shipments jumped more than fourfold to 20.9 million tons in 2012 from 4.9 million tons in 2007, according to Freedonia Group, a Cleveland-based market researcher. Demand is expected to more than double to 52.1 million tons by 2022, Freedonia said.

Texas Projects

Union Pacific, the largest publicly traded U.S. railroad, and U.S. Silica together are constructing a $12 million storage facility for the sand in Odessa, Texas, that will handle two unit trains at a time.

BNSF built an off-loading operation near San Antonio with U.S. Silica that reached capacity of 15,000 tons sooner than expected and will be expanded, U.S. Silica CEO Bryan Shinn said in an April 11 phone interview.

Unit trains help railroads because the cargo is hauled quicker and doesn’t have to be switched at crowded yards. Trains loaded only with sand can reach their destination and return in four days instead of two or three weeks. The cost savings is as much as 20 percent, Emerge’s Shearer said.

The payoff for the mining companies is a higher price, Shinn said. A ton of sand that sells for $50 at the mine gate can fetch $130 near the drilling area, he said. The sand moves in covered hoppers also used for cement. They’re shorter than grain cars because the product is heavier, Shinn said.

Fracking Boom

Driving the sand demand is fracking, which extracts crude and natural gas from shale rock. The sand is needed to keep open cracks in the shale after water and chemicals under high pressure fractures the rock. That allows hydrocarbons trapped in the shale to escape. BP Plc (BP/) projected in January that rising output would help make the U.S. energy self-sufficient by 2035.

Drillers covet the hard, round sand grains that are produced in the U.S. Midwest. The sand comes in several varieties and sizes depending on the shale fractures’ width, making the shipping logistics even more complicated than grain.

Unlike crude-by-rail shipments that face pipeline competition, frac sand is railroads’ domain. The amount hauled is growing faster than drilling activity as oil producers find they can improve yields by packing in more sand per well.

“Everyone has their own recipe, but nearly every method to improve production means more sand per well,” said Taylor Robinson, president of PLG Consulting, a Chicago-based logistics consultant.

Sand Shipments

Union Pacific, based in Omaha, Nebraska, hauled almost 200,000 carloads of frac sand in 2013, a 26 percent jump from a year earlier. Shale-related cargo including sand, pipe and crude oil accounted for 4.5 percent of the railroad’s total shipments.

BNSF’s shipments of sand, with the large majority of it for fracking, rose 15 percent to 140,000 carloads, said Mike Trevino, a spokesman for the Fort Worth, Texas-based railroad.

Shale-related freight is helping pump up results at both carriers. Union Pacific’s 2013 net income rose 11 percent to $4.39 billion on a 5 percent gain in revenue to $21.96 billion. BNSF’s net income climbed 12 percent to $3.79 billion on a 5.7 percent gain in revenue to $22 billion.

The railroads will also benefit from having a few large mining companies that ship most of the sand. The drive toward unit trains and the investment it requires puts smaller miners at a disadvantage on delivery times and cost, said Brandon Dobell, an analyst with William Blair & Co. in Chicago. The seven largest silica-sand companies have more than 60 percent of the market, Robinson said.

‘Logistical Equation’

“It’s really a complicated logistical equation and the small companies can’t do it,” Dobell said. “The big guys are really going to take a lot of market share because they have the capital to make the investments.”

Emerge is building toward 20 unit trains of sand a month from none two years ago, Shearer said. The company is adding two new mines that together will have annual capacity of 5 million tons and give it access to Canadian National Railway Co. (CNR) and Canadian Pacific Railway Ltd. (CP) The company’s existing mines are served by Union Pacific and BNSF, he said.

“We will be on four Class I railroads when we finish these plants,” Shearer said. “That was a key focus for us to add this logistics flexibility.”

U.S. Silica is now selling 70 percent of frac sand from its storage facilities near drilling areas, up from 5 percent two years earlier, U.S. Silica’s Shinn said.

“It’s been really a massive transformation,” Shinn said. “Some days it feels like we’re more of a logistics company that just happens to sell sand.”

To contact the reporter on this story: Thomas Black in Dallas at

To contact the editors responsible for this story: Ed Dufner at Philip Revzin

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Thursday Apr 17, 2014 - The Fight to Clean Up the Truck Broker Industry
By Karen E. Klein

In 32 years as a truck driver and seven years as a transportation broker, DuWayne Marshall has seen it all: brokers who pay late or not at all; brokers who go bankrupt; brokers who run outright scams.

“You’ve got a pile of somebody else’s money and there’s great temptation to use it for yourself, since you’re always paying backwards,” says Marshall, the owner of Watertown Refrigerated Logistics, based in Watertown, Wis. And the victims are, more often than not, small business owners.

That’s because, despite the large, highly visible trucking fleets that dominate American highways, the vast majority of trucking companies are small businesses. Of the estimated 500,000 trucking companies nationwide, the average fleet size is five to six trucks, says Kenny Lund, a board member of the Transportation Intermediaries Association (TIA). He’s also vice president of Allen Lund transportation brokers, founded by his father nearly 40 years ago in La Cañada Flintridge, Calif.

STORY: Why No One Wants to Drive a Truck Anymore
In the complex industry known as third-party logistics, or 3PL, brokers are middlemen between the companies that need stuff moved and the people who have trucks to move it. “In just about every industry there’s a bad element, but in transport there was a higher percentage,” Lund says. “My father, when he was selling, wouldn’t even tell people he was a truck broker. He used phrasing like ‘freight forwarder’ to get away from that notorious image.”

Unscrupulous brokers will take payment from the shippers but withhold payment from their drivers for months, leaving them scrambling to cover fuel and maintenance costs with high-interest merchant cash advances. Others offer quick payment terms, but only if the trucker will agree to take 3 percent to 4 percent less than what he’s owed.

“A normal business would turn around and pay the guy, but instead they float the money,” says Joe Rajkovacz, director of governmental affairs for the California Construction Trucking Association, a trade group. That means brokers use money collected from one shipment to pay truckers who delivered goods in earlier months—or for their own personal use. In that respect, he says, “brokering is not much different from what took down [Bernie] Madoff.”

STORY: Are Truckers About to Get Rich?
Those suffering the most are the smallest operators—the 97.2 percent of trucking companies with 20 or fewer vehicles, according to the TIA—many of them owned by immigrants and first-generation Americans. They depend on brokers for business, Rajkovacz says, because “they’re just too small to contract directly. They get squeezed from every angle.”

Jim Kienbaum, whose Stepping West trucking company takes produce from the agricultural fields in California to the Midwest, has horror stories about brokers. One owed him $1,500 but filed for bankruptcy before he could collect. Another broker’s checks bounced when he owed Kienbaum $40,000. “I got really nervous because I have a truck and a family. I had hauled for him forever but he got a divorce and started drinking and gambling, and things just went downhill,” he says. After weeks of hounding, Kienbaum finally got paid, but many other truckers did not. “One guy got burned for $18,000,” he recalls.

Since 1980, when the transportation industry was deregulated, small truckers have had little recourse in such situations. The law made it easy to become a broker and required only a $10,000 bond—insurance to make sure a broker could pay. In the event a broker didn’t pay, the truckers owed small amounts could file claims and expect to get paid, but those stiffed for more than a few hundred dollars would often have to eat their losses if the bond was exhausted, Rajkovacz says. “Truckers don’t even think of turning something over to collections,” he says. “Most of them are like Timex—they take their licks and keep on ticking.”

STORY: Germany Wants More Truck Drivers
The situation may be getting better for truckers. A new provision of federal transportation law that went into effect in December tightens restrictions for brokers and their bonding companies, and increases the bond requirement to $75,000 annually. That means that someone owed $20,000 at least has a chance of collecting it from the bonding company.

The legislation was contentious, although the TIA and other industry groups wound up supporting it. When brokers had to re-register and post the higher bond, Lund says about 7,000 of the 24,000 licensed brokers disappeared overnight, though many may have been inactive companies. Critics blamed the regulation for killing businesses, but Marshall says he’s not sorry to see some brokers go. “There was an uproar from small brokers about it. But honestly, if you can’t get a bank or bonding company to trust you for $75,000, why should anyone else trust you?” Marshall says.

Kienbaum hopes the new law will help. And he lives by lessons he’s learned from getting burned, like always checking brokers’ online ratings, and calling recent references even for highly rated brokers. “Things change fast,” he notes. He avoids brokers vague on details and those who sound desperate. “Someone who’s putting a lot of pressure on you is having trouble getting trucks,” he says. “That tells you something right there.”

Lund and other industry insiders want to hold land shipping to the same high standards that apply to other areas of transportation. He recalls his father, Allen, chastising foul-mouthed truckers on his CB radio in the 1970s. “He’d get on the radio and say, ‘Can you imagine airline pilots talking that way?’ He expected more and would push them all to be professional.”

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Thursday Apr 17, 2014 - Trucking Rates Expected to Stay Steady in 2014 and Accelerate in 2015
Spend Matters welcomes another guest post from John Bauman, Principal Economist at IHS. IHS anticipates that 2014 will see weak prices for trucking, with the truckload sector experiencing flat prices and the less-than-truckload (LTL) sector experiencing only mild gains. The second half of the year is expected to be stronger than the first, but this improvement may be delayed, resulting in a weaker 2014 than forecasted before. This is particularly true in the truckload sector, where rates have had little growth recently. Trucking rates are diverging between sectors. Truckload rates have been going down since 2012 and are not expected to rise until the second half of 2014. Overall, the producer price index (PPI) for truckloads will decline 0.1 percent in 2014, after a meager 0.4 percent increase in 2013. Next year is expected to see a 2.4 percent rise, however. Meanwhile, the PPI for the LTL sector remains on an upward trend and will rise throughout the year, albeit at a subdued rate. LTL rates will increase 2.4 percent in 2014, after having risen by 3.1 percent last year. IHS expects price growth to reach 3.2 percent in 2015. There is little to propel rates upwards. Carriers have only a bit of pricing power, while fuel prices are drifting downwards. Fuel costs are always a large risk to trucking prices. Diesel prices have peaked and are expected to continue decreasing over the next two years, slipping 5.2 percent on average and removing upward pressure within trucking rates. Any rise in costs would be passed along to customers, and fuel prices can certainly shift rapidly and unexpectedly. Geopolitical issues in the Middle East would seem to represent the largest risk to a price spike. Conversely, if economic struggles erode petroleum demand and fuel prices drop sharply, rate increases would slow or halt. Meanwhile, demand for trucking continues to strengthen. While this has not been happening at a particularly rapid pace, recent history justifies some cautious optimism about the near-term outlook. Traffic has been climbing steadily since 2010, and many industries that ship heavily by truck continue to show improvement. Consumer spending and construction activity will both accelerate in 2014, though the latter sector is hindered by austere government budgets restraining growth in infrastructure spending. Manufacturing expansion remains a bit lackluster, though. There is growing concern about capacity tightness, and shippers are reporting occasional difficulty in finding space on trucks. Carriers took a significant amount of capacity offline during the recession, and plenty of it was scrapped due to aging. New equipment orders are still primarily driven by the replacement cycle rather than expansion plans. But 2014 will be a better year for equipment orders and carriers will start to place more orders. US medium truck sales grew 6.2 percent in 2013. It’s a slowdown from prior years, but still makes for decent growth. Another 6.0 percent gain is on tap for 2014. Meanwhile, heavy-duty truck sales will jump 11 percent in 2014 and 12 percent in 2015. Capacity tightness is not expected to be a serious issue over the next year, but carriers will have more pricing power and rates will rise if the supply situation deteriorates. - See more at:

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