Translate

Transport Financial Services

Oilfield operators, trash haulers petition FMCSA for ELD exemption

Four more trucking groups and fleets have filed for exemptions from the electronic logging device mandate that took effect in December.

Trash hauling and recycling fleet American Disposal Services (ADS), oilfield service fleet Cudd Energy Services (CES), the Agricultural Retailers Association (ARA) and the Association of Energy Service Companies (AESC), which includes well service rig contractors, have each petitioned the Federal Motor Carrier Safety Administration for ELD exemptions for five years.

In addition to requesting an exemption from the ELD mandate, ADS is also requesting an exemption from keeping paper logs. The garbage pick-up company, which has more than 300 CDL drivers, operates under the multiple-stop rule, it says, as well as the 100 air-mile short-haul exemption. Its drivers, however, exceed the 12-hour limit more than eight times in a 30-day period, requiring the use of ELDs.

Each route for ADS drivers has between 800 and 1,200 stops per day, and the drivers pick up trash at a home every 22 seconds, on average. Drivers currently leave the yard on driving time, and at their first stop, change their status to on-duty, not driving for the next 500 stops. When they go to a landfill, the switch back to driving status.

ADS says there is “no ELD that can accurately record driving time when the CMV makes constant short movements with the driver often exiting the vehicle.”

 

CES is requesting the exemption for its “specially-trained drivers of commercial motor vehicles specially constructed to service oil wells.” The exemption would cover approximately 939 drivers and 1,858 trucks. According to CES, the drivers are not eligible for the 100 air-mile radius exemption, so they are required to use ELDs.

The company says in its exemption request it plans to install equipment that would enable tracking of its trucks when communication capabilities exist, but these units would not meet AOBRD or ELD standards. CES adds that poor cell service in certain oilfield locations and prohibitions of cell phones and electronic equipment while on job sites would prevent drivers from logging into ELDs.

 

ARA is requesting an exemption for its member companies from the mandate, arguing the mandate places “undue economic and other burdens.” ARA relies on trucks to deliver their products and services to farms.

The group says its members need additional information and guidance on the ELD rule, and adds that ELD vendors and manufacturers don’t offer devices that meet their needs.

AESC’s exemption request is on behalf of well service rig contractors, who typically operate under the short-haul exemption but sometimes exceed the requirements of the exemption.

Without an exemption from the ELD mandate, AESC says, these drivers would have to monitor the number of days they exceed the requirements of the short-haul exemption. Contractors would also have to purchase ELDs, train drivers on them and monitor compliance, the group says.

The group adds these drivers spend little time on public roads and can spend between two and five days parked at a single location. Contractors are required to obtain state permits to drive well service rigs on public highways, and the rigs are then escorted as they move to their next location. If granted the exemption, AESC says drivers would continue to keep paper logs when necessary.

Indicators: Shippers ‘feeling the pinch’ of tight truck market

Tight capacity hammering shippers conditions: In the lead up to the year’s busiest freight season, market conditions for shippers continued to deteriorate, according to the monthly Shippers Conditions Index from FTR. The index’s reading in October plunged to one of its lowest points in recent years, with truck rates on both the spot market and contract market jumping due to tightened truck capacity, FTR reports. 

The Shippers Conditions Index is usually a mirrored reflection of conditions for carriers, with negative conditions for shippers usually indicating positive conditions for trucking companies. Eric Starks, FTR’s chairman and CEO, said market conditions for carriers and shippers “have been diverging dramatically” since August.

“The hurricanes highlighted the lack of extra capacity available in the system. This has been followed by continued strong freight conditions in Q3 and into Q4. Shippers are really feeling the pinch right now, and there is fear that the ELD mandate will impact capacity in the spring,” he said. “We have essentially hit the 100 percent capacity mark – there is little, if any, excess truck capacity. Add in regulations, continued freight growth, or winter storms and we could be pushing that above 100 percent. That would leave shippers scrambling to get loads delivered. And that means paying premium rates for those deliveries. It may be a tough first half of 2018 for shippers.”

With the change of the calendar to 2018, diesel fuel prices across the U.S. shot up by seven cents during the week ending Jan. 1, according to the Department of Energy’s weekly report.

The country’s average price for a gallon of on-highway diesel starts 2018 just shy of the $3 mark — $2.973. This puts diesel at its highest point in nearly three years, when prices topped $3 per gallon during the week ending Jan. 12, 2015.

Prices increased in all regions during the most recent week, with the most significant increase coming in the Central Atlantic region, which saw an 8.3-cent increase.

The nation’s most expensive diesel can be found in California at $3.59, followed by the Central Atlantic region at $3.151 per gallon.

The cheapest fuel in the U.S. can be found in the Gulf Coast region at $2.774 per gallon, followed by the Lower Atlantic region at $2.854 per gallon.

Prices in other regions, according to the DOE, are:

New England – $3.01
Midwest – $2.935
Rocky Mountain – $2.981
West Coast less California – $3.073

ProMiles’ numbers during the week saw diesel prices jump by 7.8 cents to $2.93 per gallon nationwide.

According to ProMiles’ Fuel Surcharge Index, the most expensive diesel can be found in California at $3.628 per gallon, and the cheapest can be found in the Gulf Coast region at $2.773 per gallon.

Carrier registration for 2018 fiscal year delayed indefinitely pending FMCSA notice

The carrier registration process for the 2018 fiscal year has been indefinitely delayed, according to a notice posted to the Unified Carrier Registration board’s website Friday.

The governing UCR Board of Directors has recommended that all states delay the enforcement period of 2018 registration compliance until 90 days after the Federal Motor Carrier Safety Administration publishes a final rule setting the 2018 registration period and an updated registration fee structure.

Registration is supposed to begin each year on Oct. 1, but a Federal Register notice issued by FMCSA last month announced that the annual registration period had been delayed until Nov. 1. The same notice announced that fees for the 2018 fiscal year would be reduced from 2017’s fee structure.

However, FMCSA’s failure to complete the formal rulemaking process regarding 2018 registration and fees has prompted a further delay in the registration period. “We regret this inconvenience and appreciate your patience,” reads the announcement from the UCR Board of Directors.

“Until further notice, please do not accept any carrier fees for the 2018 registration year,” the UCR Board told state administrators in an Oct. 27 letter. “If received prior to the final rulemaking, please return to the entity that paid the fee.”

A lawsuit filed in late September claimed the UCR Board of Directors violated federal open meetings acts by failing to notify the public of a Sept. 14 meeting, at which the UCR Board determined the 2018 fee structure and the delayed Nov. 1 registration start period.

A court agreed with the plaintiffs in the case and required the UCR Board to post to its website the minutes from the Sept. 14 meeting. However, the court said it lacked the authority to rescind the decisions made by the Board at the meeting

Shippers expect big rate increases as market swings in truckers’ favor

As noted by the red line here, DAT’s Freight Index shows soaring freight activity on the spot market in September compared to recent years.

Shippers fear “double-digit,” by percentage, rate increases loom in the coming months as trucking capacity continues to tighten and spot market freight activity — and rates — continue to gain ground. Spot market rates have soared in recent months, and the contract market could be next, says FTR analyst and Chief Operating Officer Jonathan Starks.

 

“Spot market rates are a leading indicator. And, although there is a lag, contract markets are starting to follow suit. Shippers are now taking notice and are getting worried about dealing with double-digit rate increases as we head towards bid season,” he says.

 

These notes come from FTR’s monthly Trucking Conditions Index report. The most recent TCI is from August, which shows modestly positive conditions for carriers. August’s reading isn’t “wholly reflective of the current environment for truckers,” FTR notes, because it doesn’t include the supply chain disruptions caused in September by hurricanes Harvey or Irma, nor does it fully reflect the ballooning spot market.

“The truck market is currently in the middle of a significant change in conditions,” Starks says. “While the recent weather events made it feel like it happened all at once, spot markets have actually been moving in this direction for the past year. Load activity was rising, truck availability was falling, and rates were already up 20 percent year over year before the storms hit.”

Loadboard DAT Solutions last week reported strong spot market gains in September from August and record-setting year-over-year growth.

Available loads on DAT’s loadboard were 74 percent higher than the same month last year, DAT reported.

The dry van segment in particular saw major gains, with freight activity climbing 15 percent from August and up 80 percent from September 2016. Rates, meanwhile, gained 19 cents a mile from August and were up 35 cents from last September, DAT reported. The load-to-truck ratio hit 6.6 to 1 — the highest average in 8 years.

Reefer demand grew 4 percent from August and 70 percent from last September, pushing rates up 15 cents from August. DAT says harvest season in the pacific northwest and upper midwest, as well as late harvests in California, drove the segment’s surge.

The number of flatbed loads grew 3 percent from August. Though flatbed freight activity typically declines in September, recovery and rebuilding efforts in storm-stricken areas helped boost the segment this year, DAT says. Rates in the segment climbed 8 cents in September.

DAT says it expects the elevated spot market activity to continue at least until February.

Trump nominates Raymond P. Martinez to head FMCSA

President Donald Trump plans to nominate Raymond P. Martinez to run the Federal Motor Carrier Safety Administration, according to an update posted to the White House’s website. Martinez is the current chief administrator of the New Jersey Motor Vehicle Commission. 

 

For Martinez to become the official head of FMCSA, he must be confirmed by the Senate.

Martinez has served as head of New Jersey’s Motor Vehicle Commission under Gov. Chris Christie since 2010. Prior, he was commissioner of the New York State Department of Motor Vehicles. Martinez has also held positions as the Assistant General Counsel for the Long Island Power Authority and as Deputy U.S. Chief of Protocol and Diplomatic Affairs for the U.S. State Department, according to his bio on New Jersey’s website.

How technology has come to affect trucking

Mobile technology has revolutionized truck driving, making drivers more connected than ever before and changing how they work, relax and interact. The five ways it’s happened include:

Connection – Though trucking still comes down to a driver and a truck, the job is a lot less lonely than it used to be, thanks to the smartphone. No other piece of mobile technology has done more for truckers. It offers instant connections with friends, family and work; it’s also a safety device and source of entertainment. 

“I don’t have to look for a pay phone on a street corner in the rain or cold, blowing wind. Now, I sit in my truck and make my phone calls,” said Gary Wiggins, a Texas-based owner-operator.

While smart phones keep drivers in touch with family and friends, they’re also business tools.

“I use my phone to call agents about loads. Then I have the agent email the pickup info and delivery info. Then I print that info out on my printer in the truck. After I deliver a load, I call the agent on my cell phone to let them know their load has been delivered. Then I scan the paperwork and BOL and email that to the company that I’m leased to to get paid. I get paid online, I pay my bills online,” Wiggins said.

Navigation – Truckers do still get lost on occasion, but it’s rarer than it used to be, thanks to GPS technology. Satellite navigation, backed by apps that provide up-to-date maps, weather conditions and road construction, makes it easier for drivers to arrive safely and on time.

Entertainment – Laptops, tablets and smartphones put a world of entertainment at the disposal of drivers. They can binge on Netflix in their sleepers, listen to audiobooks and music or play Xbox as well as they could in their living rooms. That makes nights on the road a lot more bearable.

Accountability – Drivers like to say that they could never be cooped up in an office; ironically, their whereabouts are probably more closely tracked than that of many office workers. GPS devices on trucks and e-logs tell employers exactly where drivers are and, in many cases, how they’re driving. Dash cams record video of driving behavior while engine telematics track speed and acceleration, all of it information employers can use to monitor drivers.

Drawbacks — Though there is no doubt that mobile technology has made trucking easier, safer and more profitable, some drivers feel something has been lost along the way.

“Electronics is a double-edged sword,” said William Kolias, an owner-operator in New Hampshire and driving instructor. While electronics has removed a lot of the inefficiency from the industry, it has pushed the human element – the driver – to the limit, he said.

Technology and trucking will remain linked and drivers will continue to adapt mobile technology to make their jobs easier and to remain competitive.

IANA Panel Agrees Transportation Needs Are Dire, But They’re Not Sure About Funding

LONG BEACH, Calif. — Politicians in Washington agree on the dire need to modernize the ports, railroads and highways in the United States, but the “how do we pay for it” question sparks a debate between Democrats and Republicans.

At the Intermodal Association of North American exposition here, stakeholders discussed two funding ideas that are already the buzz on Capitol Hill: taxes and public-private partnerships.

 

“Our funding stream for infrastructure, especially freight movement, needs tremendous help. What we’ve relied upon primarily, the gas tax, is a nonsustainable funding stream. It will decrease as we go forward with better efficiency and less reliance on gas,” Rep. Alan Lowenthal (D-Calif.), co-chair of the Ports Caucus, told members of the expo late last month. “Right now, [lawmakers] are laying out the parameters. But we haven’t dealt with the 800-pound gorilla of how we’re going to pay for all of this with sustainable funding streams.”

The federal tax on diesel is 24.4 cents a gallon. For gasoline, it’s 18.4 cents per gallon.

In June, Lowenthal introduced House Resolution 3001 — The National Multimodal and Sustainable Freight Infrastructure Act — that would institute a new 1% ground transportation tax on freight transportation on railroads or in Class 7 and Class 8 trucks. Lowenthal believes the funding stream would be more stable than the gas tax.

“We already have it on air transportation, but we don’t have that kind of thing on surface transportation. The U.S. Department of Transportation estimates it would raise a minimum of $8 billion annually,” he said.

On public-private partnerships, or P3s, there was a skepticism that the idea should be used as frequently as President Donald Trump would prefer.

“I don’t think there should be this blatant, overall, ‘let’s do P3s for the sake of doing P3s’ mentality. In certain contexts, it might not be the most efficient way to deliver a project,” said Shant Boyajian, attorney in the infrastructure group of Washington, D.C., law firm Nossaman. “Every public agency should think when doing a project what’s the most efficient way to actually deliver it and maximize the value of money.”

Lowenthal added that while public-private partnerships make sense in some cases for urban infrastructure projects, they don’t make sense in the rural areas.

When revamping the nation’s infrastructure Jones Lang LaSalle economist Walter Kemmsies noted that the design should focus on a transportation network designed for imports and exports. He argued that when the national highway system was originally built, it was prioritized towards importing based on economic conditions after World War II.

“The problem is we’ve succeeded. We have a growing global middle class, but our industries do not get access to those markets,” he said. “If we’re to rebuild our infrastructure to support our exports, that’s where the employment and wage growth comes from. Does the U.S. produce what the global consumers are buying? Yes. But are we supplying the global customer? Increasingly, no. The world market is where we’ll get our best return on investment.”

Emergency Freight: What Harvey Tells Us About Irma

https://www.dat.com/blog/post/emergency-freight-what-harvey-tells-us-about-irma

Less than ten days after Hurricane Harvey, trucks were already moving freight out of Houston, with almost the same volume as before the storm. That doesn’t mean nothing has changed. 

Harvey hit Houston on Friday evening, August 25, and hung over the metro area for days, dumping more than 50 inches of rain on Southeastern Texas and Southwestern Louisiana. Floods in the Gulf Coast region tragically cost the lives of at least 60 people. Economically, Harvey inflicted enormous damage on homes and businesses.

Houston is home to a number critical industries, including energy exploration, oil and gas refineries, and related manufacturing of petrochemicals and plastic resins, among others. Houston is also a major freight hub for rail and sea traffic, as well as trucking, including trade with Mexico by land and with South America and other regions by sea. The port has since re-opened, as have some portions of the railroads, but some capacity has yet to be restored. It could take months. 

Houston Rates Remain Elevated, Due to Disruption and Pent-Up Demand

Immediately after the rain subsided, trucks began hauling in emergency relief supplies for residents of the storm-affected zone. Inbound rates skyrocketed, as trucks were likely to leave empty, and so were paid the equivalent of roundtrip rates, with additional compensation for detention and layovers.

Outbound freight has picked up by now, and rates have declined in both directions after the initial, post-storm peak. But rates remain elevated in the region due to supply chain disruptions and pent-up demand. Ripple effects from Harvey, and now Irma, extend across the country, and will be felt for months to come. 

Irma’s Impact on Truck Freight is Different from Harvey’s

Hurricane Irma’s impact on freight appears to be following the patterns that are more typical of a big weather event, while Harvey was exceptional in many ways.

Big weather events, like Super Storm Sandy in 2012 and Hurricane Katrina in 2005, usually affect freight movements in three stages: 

  1. Before the storm, if it is predicted in advance, shippers hustle to move freight out of the way of the impending onslaught. Outbound rates rise sharply in the zone that will soon be battered by wind and rain.
  2. During the storm itself, nothing moves in or out of the area. It’s just not safe. FEMA and other organizations may move emergency relief supplies to a location on the outskirts of the storm zone, so they are ready to act as soon as roads are clear.
  3. After the storm is over, those emergency supplies are brought in, and the inbound rates shoot way up. This is usually a temporary increase, because conditions are still iffy. Plus, very few loads are available so soon after the storm, so truckers will probably have to deadhead back out. They are glad to help, but they want to be compensated for their time and effort. Van and reefer freight moves in first, and flatbed demand follows when it’s time to bring in construction equipment and materials for cleanup and rebuilding.

As of now, Irma is almost finished assaulting the Southeast. It is sunny today in Tampa and Atlanta, with a light breeze. But Irma caused the deaths of at least 11 people in the U.S., and dozens more in the Caribbean. Homes and businesses were destroyed. Millions are still without power in Florida. On a more positive note, relief supplies are being delivered by FEMA and other groups, and cleanup will get underway as conditions allow. 

It will take a very long time for freight transportation and logistics to return to normal, after two such monstrous storms in the same month. After Harvey smacked into Houston, some shippers started supplying the South Central region from distribution centers in the Southeast. So Atlanta,  Charlotte, Memphis and other regional hubs were moving freight to Arkansas, Louisiana, Texas, and Oklahoma, because Houston couldn’t do it. 

Then Irma headed toward Florida, and those same Southeast hubs re-focused and moved freight south instead of west. Meanwhile, the Midwest had to supply the Northeast, to compensate for all the freight that would ordinarily arrive from Atlanta. And the Midwestern warehouses were also called on to supply Colorado, which is often served by Houston. So it’s not so surprising that rates went a little crazy last week, in between the two megastorms. The pressure intensified even more because it was a short work week following Labor Day. 

We’ll see how this plays out, and you can score the accuracy of my predictions. Keep checking the DAT blog and DAT Trendlines for updates, as well as Facebook and Twitter, and let us know how the hurricanes have affected your business.

Stay safe out there!

Want to Help With FEMA Loads? It’s Complicated.

https://www.dat.com/blog/post/want-to-help-with-fema-loads-its-complicated

First there was Harvey, then Irma. Clean-up and emergency relief efforts are still underway in Texas, Florida and surrounding regions. Now the Northeast is bracing for possible impact from Hurricanes Jose and Maria. So if you’re looking to haul FEMA freight, or to help with disaster recovery, there’s still plenty to do.

Trucks, warehouse space, and logistics services are needed in Florida, Georgia and even Texas, and they may be required soon in Massachusetts or New Jersey. You can volunteer or look for paid work. The paying jobs typically offer great rates, but that’s because they are complicated, difficult, and sometimes risky for the driver and the rig. 

There are a few things you should know before you accept a load, especially if you’re the driver. Information is available online, but you may need to do extra research before you get started with emergency freight for FEMA and other organizations. 

How can you help?

Find FEMA loads or trucks. Many freight brokers, including some of the largest 3PLs, have been charged with moving and warehousing emergency freight. They may be handling this work on behalf of FEMA itself, or for a non-governmental agency like the American Red Cross. If you’re a broker, and your customers have emergency freight, you may be working in an unfamiliar area where you don’t have a lot of carrier contacts. Look for trucks posted on DAT load boards with a destination near the storm-affected area, or use the LaneMakers tool in DAT Power to find carriers that run those lanes often.

Provide warehousing or trucks for non-FEMA relief. After the storm has passed, there will be a lot of stores and warehouses that need re-stocking, because inventory was either sold out or ruined by the floods. Brokers and carriers can learn about immediate needs at American Logistics Aid Network (ALAN) which provides a handy map and list of aid requests. This won’t necessarily be FEMA freight, but it could still be emergency relief, because there is urgent need for so many products, as local people try to put their lives back together.

Don’t become part of the problem. Safety is your number-one priority at all times, of course, but when you’re heading into a disaster area, conditions can be hazardous well after the storm has passed. Be sure to check your routes. If you’re the broker or dispatcher, learn as much as you can about the loads, the routes and the loading or unloading environment before you assign the truck. For example, there are a couple of section of interstate highways that are still closed due to high water in Houston, and many other roads are closed or partially closed for repairs, usually at night. Look at a map of road closures in Houston or Florida, sign up for alerts in the states you expect to drive through, or call 511 before you go. Brokers and dispatchers should be sure to give the driver an emergency contact number and be sure you don’t encourage risky behavior.  

Fuel is not always available.  Gas stations in Florida were running out of every kind of fuel, as hundreds of thousands of people were attempting to evacuate. After the storm passed, the shortages got bad again in Southern Georgia, as the evacuees headed home. Check on fuel availability before starting out. 

If you can’t go, you can still donate. The American Red Cross has a special donation site for hurricane relief. DAT employees are donating there, and the company is matching those funds. Many other organizations are  also helping out, including organizations like the ASPCA and the Humane Society that focus on evacuating shelter animals to make room for local pets who need a place to go during the storm. Unfortunately, some scamsters are also out there pretending to be relief organizations so they can steal your money. To be sure you are giving to a legitimate relief organization, check out National Voluntary Organizations Active in Disasters (NVOAD) which publishes “How to Help” advice and resources.

Remember that you can also help with disaster relief just by doing your everyday job. Massive numbers of loads have been re-scheduled and re-routed in recent weeks, and shippers are desperate for help, just to re-stock warehouses and distribution centers, which in turn, re-stock store shelves all over the country. That’s especially important in the storm-affected areas.

I have a cousin in Miami who made it through Hurricane Irma safely with her family, but they ended up with a week-long power outage and a stinky mess in the house from piles of seaweed, plus three kids and two dogs who could not go outside for days. You’d better believe that when it was safe to drive, my cousin was on her way to Publix or Walmart for carpet shampoo, bottled water, coffee, fresh food, and maybe a new bottle of ibuprofen. If you helped move those loads from Columbus to Atlanta, and those items eventually ended up on the shelf in that Publix store in Miami, you helped to restore hope and a sense of normalcy for my cousin and her neighbors. That’s a big win.