|Monday May 20, 2013 - Georgia Carrier Owner Indicted for FMCSA Violations
May 20, 2013
By TruckingInfo Staff
The owner of a Georgia trucking company, Devasko Dewayne Lewis, has been indicted for ignoring out-of-service orders and lying about his role in the company.
Lewis, 34, allegedly continued to operate Lewis Trucking after it was placed out of service, and hid his involvement by filing an application for authority under a different name.
If he is convicted he faces five years in jail and a $250,000 fine, said Michael Moore, U.S. Attorney for the Middle District of Georgia, in a statement.
The prosecution reflects the increased authority obtained by the Federal Motor Carrier Safety Administration in last year’s highway bill. That law gave the agency more legal tools to pursue “chameleon” carriers that disguise their identity in order to stay in business after being placed out of service.
The history in this case goes back to October 2008, when Lewis Trucking was involved in a fatal crash. FMCSA did a compliance review after the crash and found safety serious violations, the indictment says.
The agency determined that Lewis Trucking was an imminent hazard, and placed it out of service. That order remains in effect.
Then in July 2011, Devasko Lewis formed DDL Transport, which he operated under a Department of Transportation permit issued to another carrier he had formed, DL Transport, the affidavit says.
That September, after five roadside inspections, DDL Transport also was placed out of service.
The indictment lists two counts of false statements by Devasko Lewis. In forms submitted to the agency, Lewis allegedly obscured his ownership of yet another company, Eagle Transport.
Lewis and several other men also are charged with conspiracy to violate the out-of-service orders by obtaining DOT numbers without revealing Devasko Lewis’s association with the companies.
This is the second time Lewis has been indicted on similar charges. In November 2011, he was charged with false statements and continuing to operate after being placed out-of-service.
Attempts to reach Devasko Lewis for comments were not successful.
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|Monday May 20, 2013 - Mad cow crisis put brakes on trucking
BY TAMARA GIGNAC, CALGARY HERALD
On the morning of May 20, 2003, Mark Wendorff’s trucks rolled across the Montana border loaded with cattle.
Hours later, Alberta’s beef industry was in chaos with ranchers, feedlot operators and truckers facing financial ruin after a case of mad cow disease surfaced on an Alberta farm.
“It’s like someone woke up that day and turned the switch off,” Wendorff recalls ruefully. “Everything changed for good.”
The discovery of bovine spongiform encephalopathy, or BSE, in a single cow, slammed the door shut on the $2-billion annual beef trade with the United States.
Canada’s largest beef market banned all imports — and it would be 26 months before live Canadian cattle crossed the border again.
The decision all but crippled Canada’s export-dependent beef sector, leaving various industry players struggling with multibillion-dollar losses.
Ranchers faced the worst crisis ever to hit the sector as Canada was left without a market for nearly one million head of cattle.
But the mad cow crisis also wreaked havoc on Alberta’s trucking sector — and 10 years after a lone BSE case was discovered in the province, some argue the industry has never fully recovered.
Wendorff figures close to half of the companies who haul cattle in the province buckled under the enormity of the crisis and disappeared.
“The trucking industry has not rebounded from BSE. I don’t know if it ever will,” says Wendorff.
“A lot of my lease operators went broke and lost their trucks.”
A decade ago, his family-run outfit in Raymond, 30 kilometres south of Lethbridge, had 35 cattle liners on the road, the majority of which regularly crossed the border to packing facilities as far away as Utah.
Today, he’s down to eight trucks.
In nearby Fort Macleod, the mad cow crisis has also taken a toll on John Vanee’s cattle hauling business. The family-run company used to send 100 loads a week south of the border.
Today, it’s maybe 30 or 40. Vanee, who also operates a feedlot, figures BSE cost him more than $2 million.
The company was forced to shed half its fleet and lay off employees.
“We didn’t know what hit us. It really put us back — there were big, big losses,” he said.
It’s difficult to say with any certainty how many trucking companies were forced into bankruptcy. Most of the big-to-medium sized firms survived but BSE was cruel to smaller firms and independent drivers.
Many seasoned livestock haulers fled for greener pastures rather than wait for the border to reopen.
Some trucking companies are still paying the price today, says Grace Cattle Carriers’ owner Kevin Horsburgh.
“The BSE thing was devastating when it happened. We lost 70 per cent of our business overnight. It just shut down — bang,” he says.
Money is flowing again at his Brooks operation and the wheels of his trucks continue to roll down Alberta highways full of cattle.
But some things have never returned to normal. Horsburgh lost 40 per cent of his driving team while waiting for the U.S. ban on live cattle imports to be lifted.
Many were drawn away by other jobs in Alberta’s oilpatch and never returned. There are no hard statistics, but it’s estimated that half of the province’s cattle haulers found jobs elsewhere.
“We lost a huge amount of expertise in the transport sector in a very short time. Everybody’s got commitments. It’s difficult to put life on hold and wait for things to turn around,” says Horsburgh.Indeed, a recent Conference Board of Canada study predicts that Alberta will have a severe shortage of truck drivers by the end of the decade.
According to the report, the province requires an extra 6,200 drivers to keep consumer goods and livestock flowing through the supply chain.
Older drivers are preparing to retire but the job doesn’t hold a lot of appeal for a younger generation interested in jobs close to home with better pay.
The Conference Board suggests possible solutions, among them offering higher wages and improved working conditions.
But cattle hauling firms say it’s difficult to boost salaries when the industry is already saddled with so many costs, from rising insurance fees to maintenance and fuel bills.
Repairs alone are a fortune, notes Vanee. “It costs about $425,000 to overhaul a diesel motor,” he says.
One option is to help new truckers pay for training costs.
“In Alberta, you can’t get a student loan to pay for a truck driving course. A full course can be $8,000. Who’s got that? People are looking for a job, they’re looking for money,” said Don Wilson, the executive director of the Alberta Motor Transportation Association.
In the 10 years since that fateful May day when the cattle rigs stopped rolling, Alberta’s trucking industry has survived with some hard lessons.
It’s a sector accustomed to setbacks — although BSE has been harder to weather than the usual financial challenges.
For Wendorff, who’s been in the business since 1977, the BSE scare is the toughest obstacle he’s had to face.
A decade later, he’s still worries about the future. “I say to people all the time, ‘I’m glad I’m getting to this age and not just starting out.’
“Truthfully, I wouldn’t want to do this again. BSE was a big turning point for the whole sector. It’s been one big hurdle after another since then.”
View a map of BSE cases across western Canada
© Copyright (c) The Calgary Herald
Read more: http://www.calgaryherald.com/life/crisis+brakes+trucking/8405952/story.html#ixzz2TqaE5CED
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|Monday May 20, 2013 - Opinion: It’s Not Too Late to Fight the Broker Bond
By James Lamb
Association of Independent Property Brokers & Agents
This Opinion piece appears in the May 20 print edition of Transport Topics. Click here to subscribe today.
As the United States and its trucking industry struggle to recover from what’s been dubbed the Great Recession, the new transportation bill — MAP-21, the Moving Ahead for Progress in the 21st Century Act — isn’t helping. If my own predictions are correct, the results will include:
• Thousands of businesses closing within the year.
• The loss of tens of thousands of transportation intermediary jobs.
• Shippers paying big brokerages more for transportation.
• Big brokerages paying owner-operators and carriers less to do the transporting.
• Americans being dealt a drastic rise in consumer prices because of the greed of the mega-brokerages that will control the industry from now on.
In today’s America, money wins out over sound judgment, and politics are used by powerful lobbies to secure laws and regulations favorable to them and their interests.
Take, for example, the $75,000 property broker bond, commonly referred to as the “freight broker” bond.
The Transportation Intermediaries Association, a trade group, wrote the provisions in MAP-21, which raises the property-broker bond from $10,000 to an astonishing $75,000 as of Oct. 1, 2013.
TIA first sought a $100,000 broker bond by introducing stand-alone legislation in both houses of Congress to that effect. However, a competing trade group for small and midsize brokers I founded in 2010 — the Association of Independent Property Brokers & Agents — managed, with help from other groups, to stop the TIA measure for two years. The bond amount ultimately was dropped to $75,000 via a Senate-House conference committee, even after the proposed $100,000 version already had passed the Senate.
Not wanting to be unfair toward the Owner-Operator Independent Drivers Association and owner-operators, we argued that U.S. policy on property broker bonds should follow the just and conventional wisdom of the experts in transportation regulation, namely the administrative rulemakers at the Department of Transportation, who have the technical expertise needed to properly make these decisions.
During its recent rulemaking on household goods broker bonds, DOT released its opinion that any bond amount exceeding $25,000 (to merely adjust the current $10,000 bond set in the late 1970s for inflation) would have anti-competitive effects and do more harm than good.
We also noted that the states of Virginia and Florida, which regulate intrastate brokers, also maintain a $25,000 broker bond requirement.
But in today’s America, public policy is for sale, and the current leaders of Congress act like shepherds steering the flock in a general direction they have decided to go and encouraging the rest of the body not to worry about what’s actually in major legislation — just follow.
In this instance, TIA — unhappy with the DOT’s position not to impose higher bonds — sought to overrule the agency’s decision and convinced Sen. Harry Reid (D-Nev.) to introduce their previously rejected bill as an amendment to the Highway Bill. Without affording the people’s representatives the notice required by Senate rules, the more than 600 pages of the highway bill were rubber-stamped by the majority.
However, some members of Congress believe the House and Senate should actually read the bills they pass. We agree.
The present challenge is to help Congress understand what they’ve done and its effect on Americans and on the trucking industry before this law and its rules take effect in October.
TIA seems to think its method of pushing the bill through was honorable and praiseworthy. Notwithstanding what I think is its failure to perform its fiduciary duty to protect the rights and interests of all its dues-paying brokers, I believe the group has done a disservice to the country and the industry. I also believe many members of our industry agree with me, even some larger brokers who have recently started to come forward and remind the industry that they themselves would not have the businesses they have today if a chilling obstacle such as this new $75,000 bond had been placed on them decades ago when they were would-be entrepreneurs.
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|Monday May 20, 2013 - Regulations, Drivers, Truck Capacity Focus of Shipper Meeting
Panelists warn shippers to treat drivers with respect — or risk not having reliable truck service as capacity tightens.
May 2013, TruckingInfo.com - WebXclusive
By J.K. Jones, Contributor
Shippers must work smarter and cooperate closely with their carrier partners to offset expected losses in truck capacity caused by government regulation, according to presentations at the 11th Annual Transplace Shipper Symposium held earlier this month in Dallas.
“Everyone is in favor of safety. The trucking industry has done a phenomenal job,” Transplace CEO Tom Sanderson told the gathering of shippers, carriers, industry experts, analysts and academics. “But regulations that drive up our costs, that make life for the trucking industry more difficult and don’t improve highway safety, are not benefitting anyone.”
In a session to explain recent legislative and economic impacts on freight transportation, attendees heard updates on the regulatory ABCs so familiar to the trucking industry — CSA, HOS, and EOBRs — along with the driver shortage, the rise in intermodal freight, and the possibility of a capacity crunch to rival 2004.
But shippers were told they won’t need a complex economic model to predict the arrival of a truck and driver shortage.
“Just look at your own service record,” said trucking analyst Thom Albrecht, managing director at BB&T Capital Markets, who shared the stage with Sanderson. “When you start to see a decay in either on-time pick up or on-time delivery, there’s probably a reaction up the chain and it’s probably tied to drivers. And watch your load tender/acceptance figures. When those begin to deteriorate, it’s either someone having problems with drivers, or your fleets are starting to play poker with you and they may not be honoring their commitments.”
While carrier representatives in attendance might have been disheartened to learn of innovative methods designed to reduce truckload freight costs, the event is a valuable gauge of shipper sentiment and a look at trends in industry practices.
Transplace was founded by a group of large carriers, so the meeting historically emphasizes cooperation, regardless of the swings in the transportation supply and demand marketplace.
Why Shippers Shouldn't Use CSA
Sanderson opened his presentation with a discussion of his latest blog post, an update to his running criticism of the Federal Motor Carrier Safety Administration's Compliance, Safety, Accountability enforcement program launched in late 2010.
Sanderson is also the front man for ASECTT, a group suing to remove carrier scores in the CSA performance categories (BASICs) from public view.
Starting on a positive note, Sanderson characterized CSA as a mechanism designed to prioritize the enforcement resources of the Federal Motor Carrier Safety Administration.
“The original intent was good, and that’s still valid,” he said.
He also noted that many carriers appreciate the feedback and have used CSA data to improve safety within their operations.
His remaining remarks, however, were detailed and critical.
Sanderson told the shippers’ meeting that CSA is “in flux” and “not ready for prime time.”
Among its numerous flaws, he said, CSA still doesn’t measure most carriers. Of those carriers with enough inspection data to be scored in one of the BASICs, about 55% have at least one score above the intervention threshold, according to Sanderson’s analysis.
“That is absolutely crazy. When you look at the track record of the motor carrier industry, it’s a phenomenal record of safety over the last 30-plus years,” Sanderson said. “To brand over half the carriers that FMCSA measures as having some kind of deficiency is absurd.”
Additionally, the BASIC scores do not correlate with a carrier’s accident frequency, he suggested.
“The system is not suitable for use by the shipping public to determine which carriers they’re going to do business with,” Sanderson said.
Hours of Service and Productivity
The expected July 1 changes to the hours of service rule will take capacity off the highway, Sanderson said, which will lead to higher prices for shippers. He cited specifically the new 34-hour restart provision and its impact on scheduling for some segments, particularly those who rely on early morning deliveries.
The new 30-minute driver rest break may or may not prove to have a significant impact on productivity, he noted. Still, he pointed out a possible safety risk if drivers feel compelled to “make up for lost time” after the mandated mid-shift pause.
Tightly scheduled routes with multiple deliveries will feel the change more than over-the-road operations, Albrecht agreed. He also questioned how many drivers actually are going to be back on the road in exactly 30 minutes, and not 45 minutes or more.
“Some organizations are going to be left with a 1% to 2% impact on productivity, while others are going to see at least 10%,” he said. “The food warehouse industry is going to very vulnerable. It’s going to be very challenging.”
The net effect will be a 2% to 5% reduction in productivity, Sanderson said. Doing the math, even a comparatively modest impact will result in the need for another 100,000 drivers.
“Where are we going to find 100,000 more truck drivers?” Sanderson said. “And does anyone think that new drivers are going to be safer than the 3 million professional drivers on the road today? Not a chance.”
Albrecht added that a driver currently gets 660 minutes of time behind the wheel in the daily duty cycle.
“The challenge for your organization is how can you help carriers find 20 or 30 more minutes a day,” Albrecht said. “A carrier can work smarter, but are you working with them to help them accomplish their goals? They can’t do it as a solo effort.”
Electronic Logs and Sitting at the Dock
The new rule mandating electronic on-board recorders, or electronic logging devices as they're now being called, will probably be published sometime next year, Sanderson said, likely to be followed by legal challenges and a grace period for universal adoption.
“From a practical standpoint, it’s going to be five or six years from now,” Sanderson said, adding that he supports EOBRs and sees the potential for modest productivity gains rather than losses.
“The real pinch point could be when EOBRs are scheduled to be implemented,” Albrecht said, noting that while most large carriers have already adopted EOBRs, many, many small carriers have not. “However, until there is a level playing field, [shippers] are going to have a little bit of a relief valve from carriers willing to ‘run hot and heavy.’ There’s going to be a part of the carrier population willing to operate that way, and they’re not going to change. “But think twice,” he cautioned shippers.
“A lot of driver dissatisfaction has to do with hassles at the dock, when that driver has to sit and wait,” Sanderson said, adding that electronic logs can’t be fudged. “When the clock’s up, it’s up. And sitting really takes money out of the driver’s pocket. Just make sure that you’re better than the next guy by being a shipper that is friendly to drivers, and that you’re a shipper that a trucking company wants to do business with.”
Next Page: Why shippers should care about the driver shortage
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|Saturday May 18, 2013 - Flat volumes and ample capacity collide with higher spot rates; is HOS to blame?
Spot rates brace for a July 1 government enforcement deadline.
By Mark B. Solomon DC Velocity
Trucking volumes are flat and capacity is relatively ample, yet spot market truckload rates are rising.
This seeming paradox could be explained by the calendar. Barring a stay by a federal appeals court in Washington, D.C., the federal government will start enforcing new standards July 1 governing a driver's hours of service (HOS). As the date nears without any court action, more observers are forecasting that the enforcement will begin as scheduled. As a result, rates are rising as the marketplace anticipates fewer truck miles driven and reductions in driver productivity.
Bradley S. Jacobs, chairman and CEO of XPO Logistics Inc., a Greenwich, Conn.-based truck broker, expedited transporter, and freight forwarder, said truck volumes are neither rapidly accelerating nor precipitously declining, a trend that mirrors the lackluster performance of the overall economy. Truck capacity remains abundant, as it has for months, he added.
Yet the rise in spot market rates reflects the belief of most carriers that they will need to boost prices to offset the negative impact of the rules on driver productivity and the costs of replacing that lost productivity, he said. Jacobs expects productivity levels to be affected from day one, rather than it having a phased-in effect. That's because he expects everyone to obey the law from the start, with predictable consequences on truck miles driven.
The rules, implemented by the Federal Motor Carrier Safety Administration (FMCSA), a sub-agency of the Department of Transportation, will reduce a driver's maximum weekly work hours from 82 to 70. For the first time ever, drivers will have limits placed on their traditional 34-hour minimum restart period, requiring it to occur once every seven days and to include two rest periods between 1 am and 5 am over two consecutive days. FMCSA left unchanged a key provision allowing 11 hours of continuous drive time after a driver has spent 10 consecutive hours off duty.
Most shippers and carriers oppose the new rules as a safety hazard and an unnecessary disruption to their supply chains. While estimates vary, the consensus is that the rules will result in a 3- to 5-percent decline in truck productivity.
Oral arguments on the matter were held March 15 in Washington. The FMCSA has already denied an industry request for a three-month delay of the enforcement deadline.
VOLUMES FALL, BUT RATES STILL RISE
DAT, a Portland, Ore-based information consultancy, said spot market rates in April rose over March levels for all three equipment types: dry van, flatbed, and refrigerated, or "reefers." Yet spot volumes fell 5.8 percent over March levels, according to the firm's freight index. The decline—which was surprising given that better weather in April usually drives strong sequential traffic gains—was due in part to unusually inclement weather, such as floods in the upper Midwest, DAT said.
Year-over-year volumes in April fell 16 percent from record levels in April 2012, DAT said. Van and flatbed rates dropped, while reefer rates rose, it said.
About 20 percent of all truckload volumes move under spot rates, based on DAT's estimates. The balance moves under contract.
A monthly index of shippers' conditions published by Bloomington, Ind.-based consultancy FTR Associates came in with a March reading of -7.3, an improvement over the February read of -9.5. However, the March reading gives only marginal relief to shippers as any level below zero indicates a sellers' market for truck services.
Lawrence Gross, a senior consultant for FTR, said that although FTR's estimate of the hit that HOS will have on productivity is less than the consensus, "even a 3-percent decline will be sufficient to tip the balance of supply and demand significantly away from shippers, assuming the economy continues to maintain at least the anemic growth levels seen recently."
Gross said HOS enforcement will "usher in an extended period of difficulty for shippers, as there is an array of new regulations lined up behind the HOS change that will further impact trucking in the months and even years to come."
HOS is the latest, but not the only, trigger driving up freight rates. Carriers and their customers must also cope with the impact of CSA 2010, a government safety initiative designed to winnow out unsafe drivers; the cost of recruiting and retaining drivers; compliance with new federal engine emission standards; and escalating expenses for all types of equipment ranging from trailers to tires.
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|Saturday May 18, 2013 - Late planting means long hours for farmers
By Tim Landis ([email protected])
The State Journal-Register
Central Illinois farmers added a night shift this week.
“I started about 5:30 in the morning and went to 11 last (Wednesday) night,” Rochester farmer Larry Beaty said Thursday, adding that he was back planting corn at 5:30 a.m. Thursday and planned to go well into the evening — weather allowing.
“It just depends on how long the rains hold off,” Beaty said. There is rain in the forecast into the weekend.
The U.S. Department of Agriculture reported earlier this week that farmers across Illinois are playing catch-up after the fourth-wettest April on record brought planting to a halt for much of the month.
At the start of the week, only 17 percent of the crop was in compared with 94 percent at this point in the unusually dry year of 2012 and the five-year average in Illinois of 64 percent of corn planted by mid-May.
But thanks to technology and corn hybrids that are more resilient and grow faster, the USDA this week also predicted a big crop.
‘Head high by July’
“New hybrids in general are better than the older ones, and by ‘better,’ I mean they grow more vigorously,” said University of Illinois crop specialist Emerson Nafziger. “That means they tend to grow larger plants, including larger root systems.”
Faster-growing plants allow farmers to get into fields later and still produce good crops, Nafziger said. But he said faster-growing hybrids also mean faster use of water and nutrients.
Seed companies promote hybrids that reach maturity in as little as 90 days, though Nafziger said central Illinois corn hybrids typically are in the 110- to 113-day range. The ranges are based on reaching maturity before the normal first frost in the fall.
Diana Beaty, who farms with her husband, Larry, said they decided to stick with their traditional 112-114-day corn this year, despite the wet spring and late planting start.
“With the longer-growth corn, you get better yields,” she said. “We have always used the longest.”
The seed industry rule of thumb is the longer corn has to develop, the greater the yields. But shorter growing times are useful when time is running short, as it is this year in Illinois.
Whatever the maturity guidelines, said Diana Beaty, modern corn hybrids grow much faster and are more resilient than the seeds that went into the ground when she started farming in 1977.
“My grandpa used to say, ‘knee-high by July.’ Now, it’s head-high by July,” she said.
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|Friday May 17, 2013 - Former WV transportation firm broker pleads guilty to wire fraud
By Andrea Lannom - email
A former West Virginia transportation management firm broker recently pleaded guilty to wire fraud after federal prosecutors say he created 230 fake cash advances and took more than $100,000 to deposit in his personal bank account.
Richard Maurice Haddix, 33, worked for MegaCorp Logistics LLC, which is a transportation management firm based in North Carolina and which has an office in Elkins.
As a broker, Haddix's job was to match client company shipment orders to available trucking carriers and negotiate terms of the shipment deal, court documents state.
Haddix issued cash advances to truck drivers from the MegaCorp Logistics account by using the software program Via TMS.
Federal prosecutors say between July 23, 2011, and February 19, 2012, Haddix used the software program to create 230 fake cash advances and deposited $102,260 into his personal bank account.
Haddix will make restitution. He is free on bond and faces up to 20 years in prison and a $250,000 fine.
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|Friday May 17, 2013 - 7 Tips for Teaching New Log Rules
May 2013, TruckingInfo.com - WebXclusive
By HDT partner, Today's Trucking
The American Trucking Associations has published an easy-to-use, free tipsheet to help you help your drivers understand the new hours-of-service rules.
Here’s the Reader’s Digest version:
1. Start now: The new rules must be followed July 1 and the ATA warns that if caught unawares, the change “may cause significant disruption to your daily procedures.
If caught off guard, unaware drivers may be confused about the requirements and potentially incur violations that could generate fines and that will affect carrier CSA scores.”
2. Use a personal approach: Most find that drivers retain information better in a one-on-one or face-to-face classroom environment. If drivers can’t attend, make the information available as soon as you can and be ready for follow up questions. Train early and train a lot.
3. Use real-world examples: ATA recommends that you develop log-book examples based on a typical and/or exceptional driving week at your company. If possible, select a small group of drivers to operate under the new restart and rest-break provisions for a week or two.
4. Update route planning protocol: Update your route planning to meet the new HOS criteria. “With truck parking scarce, it may be challenging to find somewhere a driver can rest and it may have to come sooner, or later, than expected.”
5. Discuss efficiency: Drivers who use the current 34-hour restart may experience significant losses in productivity depending on what time of day they begin the new period. “Educating them on the benefits of planning will undoubtedly pay significant dividends.”
6. Educate your entire organization and your customers: “It is important that all parts of your organization are fully aware of the potential changes and their consequences. This is especially the case if your drivers use the current 34-hour restart. Driver managers will need to alter their procedures and the sales staff will need to work hard to adjust shipper and broker expectations. Flexibility will need to be built into business relationships to ensure continued efficiency and productivity.”
7. Do more research: For your own copy, with the new rules included, click here.
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|Friday May 17, 2013 - New trucking rules have wide-ranging effects
By Vicky Boyd
SAN DIEGO — Two new trucking rules — one from California and the other federal — could have wide-ranging effects on the fresh produce industry from the shipper all the way to the retailer.
A panel of industry experts outlined the two regulations and their implications during the Expert Council Workshop Series, May 15, at United Fresh 2013.
Of the two, the California Air Resources Board’s Transportation Refrigeration Unit, is the more challenging, said Kenny Lund, vice president, support services, for The Allen Lund Co. Inc., La Canada, and chairman of the United Fresh Supply Chain & Logistics Council.
The rule requires all reefer units operating within California or entering the state to have engines manufactured in 2007 or later.
To comply, older units can be retrofitted with an Environmental Protection Agency-approved filter designed to remove 85% of the particular matter produced.
But the filters cost at least $8,500 and have been plagued by performance issues, so few operators have chosen this route, Lund said.
“It’s simple economics,” he said. “Coming out of this recession, they don’t have the financial wherewithal to comply with some of these rules.”
In surveying the hundreds of small owner-operators that Alan Lund contracts with to haul produce, only 25%-30% meet the CARB regulation, Lund said.
“So if you’re 25% compliant, how do you eliminate 75% of the trucks and move half of the U.S.’s produce? And how can the state (of California) regulate interstate commerce?”
Although CARB doesn’t have the authority to stop truckers, it teams with the California Highway Patrol, said Joe Rajkovacz, director of governmental affairs and communications for the Western Trucking Alliance, Upland.
In addition, CARB’s two dozen or so inspectors focus on areas where large numbers of truckers congregate, such as the Flying J Truck Stop near Barstow, to perform spot inspections.
Rajkovacz said he’s already heard anecdotal stories of out-of-state truckers refusing to haul into California because of the regulations.
Not only can CARB ticket drivers of non-compliant reefer units, but it also can fine shippers, truck brokers and even produce receivers for knowingly using non-compliant truckers, he said.
The state already has made headline by fining an Ontario, Calif., egg producer $300,000 for using non-compliant units.
New Jersey and Oregon also are exploring similar rules, Rajkovacz said.
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|Thursday May 16, 2013 - Werner president advises carriers to move less freight, more efficiently
By Aaron Huff http://www.ccjdigital.com/
Motor carriers can no longer be in business just to move freight. Their services must start with freight management, said Derek Leathers, president and chief operating officer of Werner Enterprises, during the keynote address at the ALK Transportation Technology Summit, held in Princeton, N.J., May 15-16.
“This is how we believe and think the industry is headed,” he said. “The world we live in today is much more designed around how do we move less freight and how do we do it more efficiently?”
Rail intermodal provides the biggest opportunity for cost savings. The predominant amount of freight that moves by truck today (77 percent) is freight that cannot be converted to rail intermodal, he said. The amount of freight that is still competitive between truck and rail is about 8 percent.
“Our job as logistics providers is to look every single day for increased opportunities to save our customers money,” he said. “Maximize the amount of conversion opportunities you can find.”
Converting freight from truck to rail is not always an easy transition for a company. Werner Enterprises is the third largest truckload carrier in the United States with 7,600 trucks.
“It was hard for us to wake up one day and say, ‘my number one mission in life is to work with my customers to eliminate the need for trucks,’” he said. “The reason is that if we don’t do it someone else will.”
Intermodal involves more than converting truckloads to rail cars, either trailer on flat car (TOFC) or double-stack containers on flat car (COFC). Today’s logistics providers have to look continuously for the best combination of ocean, rail and truck to lower costs for customers, he said. And large shippers will expect their providers to have global services.
“Customers expect to make one call to make all that happen,” he said.
Another trend, and opportunity for logistics providers, is the increase in cross-border Mexican freight. Manufacturing activity is increasing as companies look for “near shoring” strategies to make their transportation costs more predictable and limit supply disruptions from port activities. Cross-border trade increased 22 percent in first quarter, he said.
Leathers predicted that freight demand (the ratio between freight volumes and truck capacity) will increase sharply in advance of Memorial day and the next six weeks. As an early indication, Werner has seen its “pre-book” percentages, a metric it uses to measure the tightness in its network, increase by 13 percent over the last five days.
Freight volumes typically increase in the Spring, but this year the uptick has been delayed due to an unusually cool April, he said. Compared to last year, temperatures in April were 7 degrees lower, on average.
Among publicly traded carriers, rates were up between 1.3 and 1.9 percent in the first quarter of 2013, but costs have risen by the same or more. Leathers predicts truckload rates will increase by 1.5 to 2 percent range for the rest of the year.
“The rate issue is going to be an ongoing struggle. I think the winners in the rate game are the ones that can offset costs with enough innovation,” he said. “The secret sauce in all of that is that you simply have to find a way to move less loads.”
Leathers also commented on the increasing costs of government regulations and flaws with the Compliance, Safety, Accountability program of the Federal Motor Carrier Safety Administration. One of the glaring flaws is a lack of due process for challenging speed warnings, particularly in Indiana, which issues 35 percent of all speed warnings nationwide.
“That’s on my record and because it is a warning I can’t fight it. Think about a world not where we could live, but where we do live, where there is no due process. We are already there,” he says. “That is un-American and unacceptable.”
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