A report released in April showed that the overall economic activity in the United States dropped slightly in the first quarter of 2018, as the consumer spending post-holiday season eased. This estimate is the first of three, with the second set to be released around the end of May. Despite the economic growth dropping, analyst expected it to be much worse. It is common for the economy to drop some after the holiday season at the end of the previous year, and 2018 was no exception. The gross domestic product increased at an annual rate of 2.3 percent, which is down from the 2.9 percent annual rate in the first quarter of 2017, but still not as bad as it has been in the past.
This is one of the lowest percentages in economic improvement since 2013, which has a lot to do with a decrease in consumer spending. The measure of total output of goods and services was pulled down by a mere 1.1 percent raise in commercial spending, which is the largest sector of the American economy. Comparatively, consumer spending was at a 4 percent increase at the end of the final quarter of 2017.
It can be difficult to understand what all this means. Even though this percentage of growth is higher than expected, even with such a low standard, the economy cannot be supported with such low numbers. Analysts expect the numbers to pick back up later on in the year, but over time, they are slowly dropping which is mildly concerning looking forward. For now, though, most experts say that there is little reason to be concerned.
For the trucking industry, low consumer spending can mean a cut to industry-wide revenue, but most reports say that is not likely to happen. Regardless of material consumer spending, the industry will always be needed to transport everyday necessities like food, clothing, and livestock. With the recent shortage of drivers, it is even less likely that we will see an increase in layoffs.
It’s easy to complain about the problems we see every day– in this industry, in others, in life. I think it’s good to stop every now and then to acknowledge the good things. Some of these things are big, some of them are small. Every week, we see something in the news that tugs on our heart strings, or makes us think. This case is no exception. On April 24th, a man climbed over the rails of a Detroit overpass in an attempt to jump off and end his life. No one should have to face that fear and anxiety alone. Luckily, a group a truckers decided to step in and help, creating a line under the overpass to prevent him from jumping. The truckers were assisted by the Michigan State Police, who directed the truckers along the eastbound and westbound lanes of the I-696 freeway between 1 and 3 a.m.
It all started with one truck; soon, 13 trucks were closely packed in, creating a line across the freeway, and essentially saving a life. All eight lanes were shut down, and the trucks stayed there for a couple hours before the situation was deescalated. Because of the joint effort, the man was talked down from the edge and received treatment. According to the Michigan police, they have been practicing this procedure for years, but this is the first time that it has caught media attention. Luckily, these men and women are always more than willing to help.
Most of the heroic actions that make the news shouldn’t even be necessary, but they are. Thanks to the quick action of everyone involved, someone lived to see another day. In times like these, it is important to remember that help is always available, and you’re never out there alone.
National Suicide Prevention Hotline: 1-800-273-8255
Officials at some of the U.S.’s biggest trade gateways are concerned that new restrictions on steel and aluminum imports could be detrimental to industries that rely on those raw goods– the trucking industry included. Automobile and auto-parts manufacturers in the Southeast region rely heavily on ports for importing the raw components of their goods, as well as the exportation of finished products. Car manufacturers, and all the people involved in that process, are a large part of our global trade. Under these new tariffs, these companies cannot operate at the same levels they were before the tariffs were approved, which will be reflected in the economy if our trade partners decide to implement retaliatory measures. Should our trade partners institute their own tariffs, the agricultural industry could be affected as well. Most likely, the U.S. steel and aluminum restrictions will not just slow down the import and export of metals, it will affect almost every facet of trade: food, clothes, wood (and wood products), plastic, etc…
The tariffs will also affect jobs in some areas, most notably in the Northwest, where around 40% of the jobs are related to international trade. Experts in that region are worried that blanket tariffs will risk the job market, as well as the overall quality of life. The biggest concern is over retaliation and the subsequent spike in consumer prices. If consumer prices are raised, it will be mirrored in the costs of the trucking industry. In the long term, the United States may see a loss in cargo volume and jobs that depend on it; from port and dock workers, all the way through the chain of suppliers. There is no doubt that the industry will find a way to navigate these circumstances should they arise, but it certainly will not come easily. There is the possibility that the country can displace the loss of imports with domestic production, and the transportation industry will play a major role should that be the case.
Now that the ELD compliance date is here, along with the general movement toward online data tracking, we can see an increasing need for data standardization in the trucking industry. As a result, there has been a call for a blockchain approach to standardizing the industry’s data. Essentially, blockchains are a way for companies to upload and share their data with ease. The trucking industry is massive, even with the driver shortage, and companies need a way to record transactions and track assets in a cohesive way.
Blockchain is an online ledger that facilitates the process of both recording transactions and tracking assets within a network of businesses and employees. An asset can be something tangible like a truck, or intangible like an insurance requirement. So what a blockchain would do is allow more efficient communication from business to business, as well as from employer to employee. It’s no secret that the trucking industry is wildly inefficient, which leads to safety issues and loss of revenue. It can take hours to set up a single delivery, which frankly, is a waste of time. With blockchain technology, delivery transactions can take mere minutes, meaning that drivers can get on the road quicker. If implemented, shippers, carriers and brokers will be operating on a secure, instantaneous network.
Unlike the ELD mandate, blockchains will not be required or enforced, which unfortunately means that users will have to trust the information that is uploaded. Manufacturers must trust that carriers have the required insurance, and carriers must trust companies to uphold their contracts and pay them. Data standardization is in no way easy, and blockchain is still in its early stages, but the advantages to the program could be instrumental to the success of the industry in the future. Sometime very soon, the entire world will move toward standardization and online data tracking.
If you would like more information on how blockchains work, visit these websites:
It comes as no surprise that long wait times mean a loss of revenue, but how much money are truckers losing annually? Detention time is loosely defined as the minutes, or sometimes hours, that truckers are forced to wait beyond the anticipated time that they need to load or unload their trailers. The unspoken rule in the industry is anything over two hours is considered detention time, which is incredibly inaccurate, and robs drivers of pay. Some estimates put annual loss per trucker at around $1,500 per year, which adds up to over $1 billion per year industry-wide, and makes up about 3-4% of their average income. These numbers come from the audit by Department of Transportation’s Office of Inspector General. According to this report, the estimated loss of for-hire carriers is around $302 million. Although DOT estimates losses in the billions, the actual amount could possibly be even higher. However, because the amount of data that they have is so limited, they could not know for certain. With the new ELD mandate, detention time may be easier to track. But, most electronic systems do not distinguish between detention time and actual loading and unloading tasks.
This report points to a much larger issue with the industry, and long-standing labor problems– drivers are not paid for their detention time, and they do not have the power to control it. Long wait times mean a loss of revenue for everyone involved, and indicated inefficiency. Not only are long wait times wasteful and irritating, they can cause safety problems. Unexpected wait times at ports and weigh stations can also increase probability of getting into an accident. Detention time cuts into available waking hours, which can lead to fatigue. Even a fifteen minute increase in detention time can increase the chances of getting into an accident by six percent.
A measure that would mandate guard rails on truck trailers is making its way through the House and Senate. These underride guard rails would prevent cars from sliding underneath semi trucks, and would significantly reduce the amount of deaths from collisions with truck trailers. The act was introduced by Senator Gillibrand (D) of New York and Senator Rubio (R) of Florida, and the bipartisan measure is likely to pass without much push-back from Congress.
The law would require guards to be fitted to the side of trailers, as well as the front of the truck. As of now, both of these are optional. The bill also requires stronger rear guards, which have been mandatory since the mid-1950s. These guard rails are a simple solution to a big problem– the Insurance Institute for Highway Safety estimates that a little under 1,500 people die every year as a result of collisions with semis, but does not specifically state which of those were from the vehicle sliding under the trailer. In 2015, the National Highway Traffic Safety Administration published a proposal to upgrade current impact guards, but never followed through with the plan. They sought to align U.S. standards with those in place in Canada, which are much more stringent. Their ultimate aim is to make these kinds of crashes less fatal, if not less common overall.
The new bill proposes that rear and side guards must be able to withstand an impact from a vehicle going at least 35 MPH, and would apply to truck trailers, and single-units that weigh 10,000 pounds or more.
Many tests have been conducted to prove that these panels will be able to withstand that kind of force. The manufacturer of the panels does not yet make the front panels, but is in the process of developing them. The disadvantage, however, is the cost. Two panels will put buyers back $3,000-$4,000. They also weight up to 800 pounds, which can slow down trucks and weaken the trailers.
Last week, the City of Los Angeles filed three lawsuits against some of the largest port trucking companies in the nation: CMI Transportation, K&R Transportation and California Cartage Transportation Express. All three companies are owned by a New Jersey logistics firm, NFI Industries. The lawsuits were filed after a scathing USA Today report on the abuse surrounding the industry. The litigation demands that the companies halt the systematic exploitation of their contract workers and seeks restitution of the money and property that the companies attained as a result of their practices. The companies also face civil penalties up to $2,500 for each infraction
The companies are accused of misclassifying hundreds of workers as independent contractors instead of employees, although the three companies exert almost complete control over the schedule of the drivers. They do this to avoid federal and state laws that require companies to pay employees minimum wage and offer benefits.
This forces the drivers to absorb thousands of dollars in costs while taking home only pennies. In some cases, the drivers make nothing in pay and owe the company money at the end of the pay period. These law suits are the culmination of several long-running disputes between drivers and the trucking companies. Over 1,000 California port truckers have filed labor complaints in civil courts since 2008, and since then, the labor commissioner’s office has awarded over $46 million to port tuckers. Since the beginning of USA Today’s investigation, drivers for these companies have filed three more class-action lawsuits and established 23 more cases with the Labor Commission.
City Attorney Mike Feuer called their practices “disgraceful” and vowed to continue the city’s investigation into unfair labor practices in the ports. One councilman said that port trucking in California is the modern-day equivalent of the exploitative sharecropping industry in the late 1800s. Senators are calling it “brazen disregard.” As a result of the USA Today articles and the lawsuits filed by L.A., goods manufactures, shippers, and six major retailers so far, have launched internal audits of their supply chain. Two of those retailers have discontinued their partnerships with their trucking companies.
2017 has been a big year for the trucking industry, and included a lot of changes. The year started off with a presidential issuance of a regulatory freeze, which stifled a few minor regulations that were in the works under the previous administration. The order also placed the FMCSA’s speed limiter mandate on the back-burner, but did not rescind it outright, which means that they could possibly resume work on it at any time; however, that seems unlikely. We also saw an expansion of how the DOT conducts its on-site compliance reviews with the addition of carrier and employee interviews. The FMCSA also unveiled the Crash Preventability Demonstration Program and extensive ELD exemptions. In addition to new rules, they also withdrew a couple big ones that had been highly critiqued: the Safety Fitness rule and 34-hour restart regulation. Following Hurricane Harvey, the FMCSA temporarily lifted regulations in 26 states to allow truckers to deliver goods and fuel to affected areas. Then there was, of course, the ELD mandate, which has been highly debated since its announcement. In June, the U.S. Supreme court chose not to hear a case against the DOT in regard to the mandate, and upheld the compliance date of December 18th.
The FMCSA very heavily pushed not only safety, but education as well. To help relieve some of the burden, and give the states more autonomy, they awarded over $70 million dollars in grants for states and educational facilities. These rulings along with the grants are an attempt to keep drivers and the public safe, and improve road conditions nation-wide. Keep in mind, most of the changes that were released or approved this year will not take effect until 2019, or even 2020.
Outside of the DOT, there were even more big changes. Swift and Knight, two giants in the industry, announced a merger that gave Swift shareholder 54% of the company and Knight shareholders the remaining 46%. Walmart instituted fees for both early and late deliveries. The EPA rolled back regulations on glider kit emissions. Tesla unveiled their new semi designs, which many think will revolutionize the industry. 2017 was a year filled with a lot of big changes, and I am sure 2018 will be much the same.
Recently, the Environmental Protection Agency (EPA) revealed plans to roll back emissions rules that govern gliders (trucks that have been built out of both new and remanufactured parts). These vehicles cost about twenty-five percent less than a new semi, but they are often built with outdated equipment that does not meet EPA standards. The Greenhouse Gas Emissions (GHG) Phase 2 Rule was a product of lengthy negotiations between regulators, car manufacturers, and leaders in the trucking industry. The rule was meant to regulate greenhouse gas emissions from buses and diesel trucks. Because of the practice of equipping gliders with old parts to keep costs down, this rule would phase out the production of such vehicles.
This decision has split the trucking industry– the bigger companies like Mack and Volvo are strictly against the repealing of the rule, while smaller companies are all for it. Large vehicle manufacturers have spent the last decade or so developing new equipment and technology to control and limit truck emissions, and they do not want their investments undercut. Smaller companies, however, are in favor of tossing the rule so they do not have to buy brand new trucks. GHG, Phase 2 was created as a compromise for both bigger and smaller companies, but it appears that they are unwilling to do so.
The EPA estimated that around ten thousand glider kits were produced in 2016, whereas a little over two-hundred and fifty thousand new semis were sold. Perhaps the problem is not with smaller companies being edged out by the bigger manufacturers, but with the rule itself. Many smaller glider manufacturers believe that they are being targeted by the EPA. Others claim that the rule did not discriminate against gliders, but only makes sure that everyone is complying with the rules. Glider companies are able, for the most part, to rebuild semis and make sure that they are compliant with the new rule. They just do not seem to want to because of the higher cost. As the new rules stands now, gliders would not be subjected to regulation because they are not considered “new” vehicles.
Once the final rule is posted, proponents and opponents of the rule will have sixty days to legally challenge it. Meaning that environmental groups can petition to keep the rule, or glider companies could file a lawsuit if they are not exempt. Spokespeople on both sides have expressed their disappointment and almost guaranteed that there will be legal actions taken.
As we approach the second phase of the three-phase compliance time line, there has been increasing hesitancy and even full-blown refusal from those in the trucking industry. Some of the complaints are reasonable: they are worried about the high costs of the logging systems themselves, as well as the upkeep of the devices draining the resources of smaller companies and ultimately putting them out of business. The ELDs can cost anywhere from $160 to $500 and the upkeep depends on the system. If you want more information about those costs, check out this blog I wrote when the initial ruling was made. Some of the other fears, however, can easily be soothed.
The trucking industry is typically very slow to change, and most major compliance rules are met with a lot of initial push back. One concern that emerged following the ELD mandate that has snowballed within the last few weeks, is the security of the systems themselves in regard an outside person’s ability to hack into them. There are a number of people that are under the belief that because the ELDs are a computer system that monitors the activity of the engine and the brake system, that a hacker can take control of the system from outside of the vehicle. That is not quite true. ELDs, while they do operate on a computer system, do not automate the vehicle, and do not have the capability of doing so. They are completely safe to use. The FMCSA addressed this issue and many others on their FAQ page. There is no current requirement for the automation of truck-tractors, and it is unlikely that there will be any time soon. The nation, or really the world in general, cannot function without the trucking system as it currently stands, and human skills and reasoning in this area are not things that can easily be replaced by a machine. Truckers do not need to worry about ELDs subjecting them to harm or a violation of their safety. If you would like to learn more about ELDs and the FMCSA’s rule, visit their website, or check out our blog.