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trucking regulations

Understanding The Need For A Stronger Supply Chain

As much as we’d like to believe that our supply chains are both quick enough to react to major disruption and flexible enough to maneuver around major obstacles, the global pandemic has taught us that often isn’t the case. It is the single major weakness of most supply chains, an inability to react to a sudden and massive large-scale disruption, which can include pandemics (such as Covid-19) massive weather events, and a myriad of other setbacks. This lack of resiliency is most notable in supply chains for life sciences, health care, and food industries in particular.

The Chinese market is massive, for one thing, and most companies can’t afford to withdraw completely, otherwise, they might lose any competitive edge they might have had.

After COVID broke loose around the world, the current administration issued a call for companies that have offshored their production to Asia, (China, in particular) to bring it back stateside. However, for many companies, this proves to be challenging and counterproductive. The Chinese market is massive, for one thing, and most companies can’t afford to withdraw completely, otherwise, they might lose any competitive edge they might have had. Additionally, because the Chinese market is now either the dominant, if not sole source, for thousands of different items, reducing the dependence on those goods will take a significant amount of both time and money.

Reshoring wouldn’t necessarily mean resiliency either. The meat shortage in the United States is a perfect example of this. The industry’s supply chain is entirely domestic. In an attempt to reduce costs, many companies focused on consolidating manufacturing activities, which means a smaller number of slaughter and processing plants are now producing much of the beef and pork products consumed in the United States. This created a vulnerability as shutting down one plant, even for a few weeks, creates a major impact throughout the country. Farmers, who get paid to raise the feedstock, are now stuck with taking a potentially devastating loss on their products while the rest of the country faces months of meat shortages.

Remap instead of Retreat

Instead of retreating outright from the forign market, the best approach to building resilience into the supply chain is by conducting an internal audit. More specifically it’s the process of mapping out the layers of suppliers, manufacturing plants, distributors, and the other various elements of the logistics network and then implementing a stress test to evaluate the ability to recover from the disruption of any of the various links. Understanding where various bottlenecks will occur means being able to create mitigation strategies which can include increasing manufacturing capabilities, adding more suppliers to the roster, or building up buffer stock.

The added advantage to mapping and stress testing the supply chain is that companies using this method can find unexpected weaknesses or high risks throughout the organization. The more complex the produced good is, the higher the risk of utter disruption.

“Work that one of us (David) did with the Ford Motor Company found unexpected high risk associated with small suppliers, including many local suppliers. One part it identified that fell into this category was a low-cost sensor widely used in its vehicles: If the supply of it were disrupted, the carmaker would need to shut down its manufacturing operations. Because the total amount spent on this item was low, Ford’s procurement group had not paid much attention to it,” reads a recent article from HBR.

Stress Testing on a Policy Level

Essential industries, such as pharmaceuticals and health care, need to have a level of government involvement to ensure that supply chains are resilient enough to continue operating, even during the worst-case scenario. Consider the mask and hospital supply shortage when the pandemic first started to hit the United States. While panic buying created part of the problem, the supply chain itself faltered and eventually failed under the crushing demand.

If such a test can be conducted for banks, it can similarly be conducted for all life-critical supply chains.

There is a precedent for such involvement, however. Back in 2008, during the recession, the U.S. government and the European Union conducted a stress test for banks to guarantee that the major financial institutions that prop up the entire financial system, could survive a major crisis. If such a test can be conducted for banks, it can similarly be conducted for all life-critical supply chains.

The Long Road to Resiliency

Creating supply chain resilience for essential products and services here in the United States could very well require domestic manufacturing. But that’s neither an easy nor cheap fix. Take the pharmaceutical industry, for example. Of the drugs sold in Europe, more than 80% of the required chemical components are manufactured in China and India. Because chemical production is a significant environmental hazard, it would require the development of clean technology and manufacturing processes to create a domestic supply chain. This process could take upwards of 10 years and would require a hefty financial investment. Could it be done? Absolutely. But not easy, and not cheap.

However, until companies have a full comprehension of the vulnerabilities throughout their supply chain, these kinds of decisions can’t be made. The pandemic has created an excellent opportunity and, perhaps more importantly, a motive to put in the necessary time, energy, and resources. Only then can they protect their supply chain from a potential devastating disruption that may be lurking on the horizon.

Do you have supply chain questions that you need answered? Do you need help bolstering your current supply chain to handle these new and disruptive global situations? Feel free to contact one of our logistics experts today and lets talk more about it today.

Detention and Dwell Times: The Menaces of Supply Chain Efficiency

Prolonged dwell times have been an age-old inefficiency that the trucking industry has been trying to curb. Longer dwell times affect the drivers, carriers and shippers alike. An estimated detention time or dwell time can cost trucking companies $3 billion per year as per the Federal Motor Carrier Safety Administration.

The total time spent at a facility by a driver is called dwell time while detention is the gap between the allocated time to start loading/unloading and the actual time of loading/unloading. Longer detention at customers’ premises has largely impacted drivers’ available hours-of-service. Ideally, shippers and receivers are allowed a 2-hour window to load or unload a truck. Any time spent outside the allotted time calls for detention charges. Detention is thus used to offset the cost of a truck being detained at a shipper or receiver’s premises.

Dwell time in unprecedented times – A challenge

The month of March saw an unprecedented rise in panic-buying, which resulted in a tremendous spike in demand. The truckers continued to ply on the highways, making essentials available throughout regions. With increased demand, came the perils of heightened dwell times and detention times. The added safety protocols, social distancing, precautionary SOPs to be followed at the shipper and consignee facilities and the shortage of manpower had considerably impacted the driver detention times. On the other hand, transit times may have improved, owing to less traffic congestion during the lockdown period.

Improvement in the check-in process, ensuring social distancing, enhancing driver safety and the use of technology to manage appointments and improve collaboration between all parties have been the key drivers of change.

Improvement in the check-in process, ensuring social distancing, enhancing driver safety and the use of technology to manage appointments and improve collaboration between all parties have been the key drivers of change. While the world adapts to the new normal in supply chains, it is of utmost importance that more sustainable solutions are innovated and implemented.

Detention: Causes and Impact

Inefficiencies at the facility such as the lack of manpower to load and unload consignments, the unwillingness of the shippers or consignors to invest in manpower to accommodate increased freight movement and the inability at the individual level are the main reasons for increased detention durations. Additionally, mismanagement of appointment times such as goods not being ready for dispatch while the vehicle arrives at the premises lead to unwanted delays. Another common reason is the overbooking of appointments – when more trucks are booked than what the loading location can handle. All of the above contribute to increased detention times, which in turn amounts to losses for truck drivers. On average, truck drivers spend two and a half hours waiting at the shipper or receiver premises to load or unload goods. These hours are not considered as working hours, thus, leaving them unpaid.

We need to understand that most of the drivers are paid on a per-mile basis, therefore, every moment lost in delays is a direct loss of income for drivers.

We need to understand that most of the drivers are paid on a per-mile basis, therefore, every moment lost in delays is a direct loss of income for drivers. On the other hand, for LTL carriers, waiting at a certain facility for longer durations can mean skipping the delivery altogether.

As per a  2018 report published by the Department of Transportation Officer of the Inspector General (OIG) that sought to understand the correlation between driver detention times, crash risks and costs incurred, it was found that detention time may impact annual earnings for truck drivers by $1,281 to $1,534 per year in the negative. Shippers of essential goods have experienced longer detention times at facilities lately. For example, the recent crisis of toilet paper around the nation had trucks lining up at facilities for hours before being loaded with goods. Detention fees paid by shippers to carriers can only offset the loss up to an extent but that money fails to cover the driver wages lost by not driving. Primarily, the carrier efficiency and a driver’s payable hours-of-service are at stake, but the effects of longer detention times invariably trickle down to every stakeholder across the supply chain.

Is there a long term solution – that can increase efficiency, while ensuring optimum asset utilization and prioritizing driver safety in times of crisis?

Longer dwell times and increased detention times are not a byproduct of the current economic crisis alone. They have lingered in the industry for quite some time now and only technology can help provide long term solutions to enhance supply chain visibility. In a recent statement by Collins White, the president of Alabama Motor Express, he stated, “It has become progressively worse since 2018. We have bought software that automatically tracks when the truck goes over the allotted two hours of dwell time and automatically bills the customer.” Better technology that tracks the movement of trucks with a precise estimation of time spent at shipper or receiver facilities will help us give a clearer picture of the spots where the detention is taking place. Identifying these spots will further enable a better understanding of bottlenecks, allow correct allocation of resources and change practices to streamline the flow wherever necessary.

On the other hand, the tried and tested drop-trailer business model may have worked for some quite well. In the drop trailer method, a driver leaves a trailer at the facility for a stipulated time period until another vehicle picks it up. This doesn’t time-bound the shippers and they can load trailers at their convenience. Given the current situation of restricted labor availability, this method comes as an interim respite but cannot be considered as an all-round solution to the problem.

Investing in data-enabled technology is necessary to be able to make any supply chain more robust and induce complete visibility.

Investing in data-enabled technology is necessary to be able to make any supply chain more robust and induce complete visibility. Location Intelligence (LI) is set to make location data more accessible to participants in a supply chain. The use of LI is a promising trend as it uses geographical relationships to decipher complex data that can provide fleets with critical insights of accurate detention time calculations. It can provide accurate information such as time of arrival and departure of a truck at a site. They can also monitor a driver’s fuel stop time or break times which can further help enhance asset utilization. Insights into trends pertaining to a particular time of a day or week can translate to better prediction of transit times and estimated time of deliveries. All of these are elemental in aiding data-enabled business decisions through optimized route planning with reduced dwell times that boost overall productivity and enhance supply chain performance.

As the nation grapples with the ongoing economic crisis, a sudden surge in demand followed by flattening of the curve, the unpredictable rise of freight volumes and its correlation with increasing or decreasing dwell and detention times remain a cause of concern. What must not be forgotten is that these problems of detention and dwell times pose the opportunity for a permanent change towards creating a symbiotic relationship between carriers and shippers. There is an immense potential for cost savings and enhanced operational efficiency that will invariably impact the driver community’s way of life on the road.

What’s New in AgTech 2020

Investors are turning to AgTech in recent years, and it’s no mystery why. While much of the tech boom of the past couple decades has focused on saving time or money and entertainment, AgTech embodies higher ideals. The global population is predicted to grow to 9.8 billion by the year 2050, an increase that exceeds today’s food production capacity, so this technology is critical not only to moving humanity forward and reducing emissions, but to our survival.

On that dire note, let’s talk about what’s new in AgTech this year.

Tech-Savvy Farm Equipment

Farm equipment today isn’t your grandpa’s tractor, and it’s getting cooler by the day.

Drones are being developed to collect crop data, spread pesticides, selectively irrigate dry sections of fields to conserve water while improving yields, and even plant crops with utmost precision. Autonomous robots like the TerraSentia are being used to track plant health and field conditions. Custom farming is being carried out by autonomous vehicles (driverless tractors), as developed by up-and-coming AgTech company Sabanto. Wearable devices for animals are being developed and refined to monitor health, potentially heading off illness or other issues.

Data-Driven Farming and Land Management

As is the case in other industries, data and analytics are playing a big role in AgTech. Some data collection is being facilitated by specially developed devices as are mentioned above, but other data is gathered through networking.

Great data makes way for great analytics, helping to drive the ag industry

Great data makes way for great analytics, helping to drive the ag industry, from the fields to the boardroom, towards smarter, leaner, more productive operations.

Supply Chain Improvements

To get in line with recent years’ connectivity improvements in other industries, much of the agriculture industry is moving to more connected format. IoT sensors are being used to help track food through the supply chain, creating better accountability and understanding from fields to retail shelves. Companies like Intelliconn, with their VeriGrain data management program, are creating food supply chain game-changers.

Through networking, farmers and other supply chain players in the agriculture business are finding ways to communicate faster and better

Through networking, farmers and other supply chain players in the agriculture business are finding ways to communicate faster and better. When pricing, product information, and other pertinent data becomes readily available, everyone involved can make better decisions.

AgTech isn’t necessarily a new revelation. Farmers and ranchers have been looking to new tech to improve their operations for centuries, but the food supply chain is evolving faster than ever.

AgTech isn’t necessarily a new revelation. Farmers and ranchers have been looking to new tech to improve their operations for centuries, but the food supply chain is evolving faster than ever. Wondering how you can keep up? Call us at 800.MYSHIPPING or fill out the form below to set up a consultation with one of our supply chain experts who can help you springboard your agricultural logistics operation into 2020 and beyond.

Vertical Farming: The Next Level of Produce

The overall Consumer Price Index (CPI) has seen a nominal increase of 0.1 percent for the 12 month period ending May 2020, according to the U.S. Bureau of Labor Statistics. While this is an average across all measured goods and services, food is showing something completely different. According to the CPI, the total food index has increased by 4.0 percent while the food at home index has jumped up by 4.8 percent.

Month-over-month, there has been an increase in the cost of food, most notably a 3.7 percent increase for meats, poultry, fish, and eggs. Beef, in particular, has seen a massive up jump at 10.8 percent, the largest monthly increase ever.

Month-over-month, there has been an increase in the cost of food, most notably a 3.7 percent increase for meats, poultry, fish, and eggs. Beef, in particular, has seen a massive up jump at 10.8 percent, the largest monthly increase ever. This created an obvious concern for increasing prices in consumers and retailers alike, both of which are bracing themselves for further price increases as food production struggles with a myriad of issues, ranging from plant closures to the loss of farm labor.

While we can attribute at least some of the CPI increases due to more people dusting off their cookbooks during the quarantine period, there are other issues to consider as well. Arable land is subject to both inconsistent weather conditions as well as natural disasters. For example, an unexpected frost can wipe out an entire crop causing a significant delay in production and output. While that’s not great for farmers, it can also create shortages in the food market at both the consumer and commercial level. However, that might be an issue of the past before too much longer as indoor, vertical farms begin to take root.

Growing UP with the Fifth Season

For the uninitiated, vertical farming (as we are discussing) is the concept of growing consumables in a stacked and modular fashion which drastically increases crop yield per acre than traditional farming.

Vertical farming is actually a rather old idea. Indigenous peoples used vertically layered growing techniques like the rice terraces of East Asia. The term vertical farming was coined by American geologist Gilbert Ellis Bailey in 1915. In 1999, Dickson Despommier, a professor at New York’s Columbia University, popularized the modern idea of vertical farming, building upon the idea together with his students,”

Not only is the indoor farming movement growing, it’s thriving.

“It is the inefficiencies across the supply chain from farm to truck to packer to supermarket and foodservice that has fueled the burgeoning indoor farming industry, which in 2017 accounted for $106.6 billion and expected to reach $171.12 billion by 2026 growing at a CAGR of 5.4 percent during this period, according to the Worldwide Indoor Farming Market Report,” according to a recent article from Forbes.

Fifth Season is an indoor farming company, based just outside of Pittsburgh Pennsylvania, combines vertical farming concepts with proprietary robotics and artificial intelligence.

While neither indoor nor vertical farming is anything new, after all greenhouses have been around since the 1800s, Fifth Season is taking vertical farming to a whole new level. Fifth Season is an indoor farming company, based just outside of Pittsburgh Pennsylvania, combines vertical farming concepts with proprietary robotics and artificial intelligence. CEO and co-founder of Fifth Season, Austin Webb, is looking to disrupt the nation’s produce market by creating a completely new category of “hyper-local” fresh produce. Currently, two of Fifth Seasons’ biggest clients are the Giant Eagle supermarket chain and Whole Foods.

At 25,000 sq.-ft growing space, Webb’s company is seeing double the yield of traditional vertical farms, almost 500,000 lbs of produce in the first full year of operation. What’s even more impressive is the produce is grown using 95 percent less water and 97 percent less land than conventional farming. All of which is grown without the need for pesticides and has an average shelf life that lasts for weeks instead of a few days that is normal for shipped produce.

A New Future for Farming Supply Chain

Unfortunately for produce, the supply chain just isn’t nearly efficient enough for large scale distribution. Produce is typically harvested, then loaded onto a truck to be shipped for packing or processing. From there it’s loaded onto another truck before it reaches its final destination. That leads to a higher risk of spoilage and shrink.  Fifth Seasons use of machine learning, AI, and computer vision gives them the ability to track and trace down to an individual tray within their farm. Webb says this gives his company and its customers a whole new level of transparency that wasn’t previously available. The technology creates information from “seed, to harvest, to package, to a doorstep, to a table (or store shelf).”

This is about more than just fresh vegetables, however. This level of vertical farming has some interesting implications for the supply chain as a whole.

This is about more than just fresh vegetables, however. This level of vertical farming has some interesting implications for the supply chain as a whole. For starters, it drastically cuts down on the total mileage that fresh produces need to travel which, in turn, lowers overall food costs and transportation costs for customers. Moreover, hyper localization of production could lead to an interesting shift in logistics and food production in general.

A Cool Move for BlueGrace

Produce, like many perishables, requires the use of refrigerated trucks to keep goods fresh as they travel across the country. With vertical farms like Fifth Season boasting such a prodigious level of production, the need for reefer units will be that much greater. That is why we are proud to announce our newest acquisition, Anthym Logistics which has significantly bolstered our refrigerated truckload capacity for our customers. To learn more about Anthym and BlueGrace or to see how we can help your operations, visit us here.

Call us at 800.MYSHIPPING or fill out the form below to set up a consultation with one of our supply chain experts who can help you springboard your agricultural logistics operation into 2020 and beyond.

Why Are Heavy Duty Truck Orders So Low In North America?

The ongoing slump that had begun in October 2018 had started to affect the Class 8 truck market in early 2019. While there were a few months during the year where orders for heavy-duty trucks peaked – although not as high as the previous two years, it was all in all a slow year for the industry.  

How bad is the situation? 

An article in Wolf Street shared numbers released by the FTR Transportation Intelligence for 2019. According to the report: during the year there were 179,000 orders for Class 8 trucks. This was a drastic reduction of 64% when compared to the 497,000 orders during 2018. The difference in the orders in just the span of a year is telling of the difficulties that the trucking manufacturing industry is set to face until the freight market stabilizes. 

More recently, on February 19, 2020, in a write up on the issue Freight Waves shared: “The ratio of retails sales of Class 8 trucks to inventory in January 2020 ranked second-highest in the industry history, trailing only the worst month of the Great Recession a decade ago”, signaling that the heavy-duty vehicle market may continue to experience a downward trend for some more time. 

What’s the cause?

The cause of the current turmoil faced by the Class 8 truck manufacturing industry can be broadly bifurcated into two parts. 

The first reason stems from the slowdown in the manufacturing sector. It has a direct impact on the orders fleets place for new trucks.

The first reason stems from the slowdown in the manufacturing sector. It has a direct impact on the orders fleets place for new trucks. If the sector is doing well, there is a demand to increase the fleet size, hence more orders for new trucks. On the other hand, when it is experiencing a slowdown, trucking companies hold back on increasing their fleet size – exactly what is happening now. 

The current economic and political scenario in the country has put a strain on the manufacturing industry. The US and China trade war which began in 2018 and the tariffs imposed by the two countries on each other has been detrimental for business and allied service providers, including truck manufacturers. If we are to consider the disruption that the Coronavirus is causing in global trade, we can presume that it will be a while before the freight business picks up again. 

The other reason industry experts are giving for the drop in Class 8 orders is a market correction.

The other reason industry experts are giving for the drop in Class 8 orders is a market correction. Monitor Daily quotes Act Research’s President and senior analyst, Kenny Vieth explaining the downturn: “After peak sales and build in 2019, significant declines are ahead in 2020, as heavy-duty sales and build follow the net orders trend down. But if our forecast of ongoing (but slower) economic expansion holds in 2020, the drop will be a correction (along the lines of 2015 and 2016), not a devastating recession (as in 2008 and 2009).”  

What’s the impact? 

The declining order book for Class 8 trucks has already started to show its impact. According to reports, quite a few truck makers including larger manufacturers like Volvo, Mack Trucks, Daimler, and Navistar have already gone through a round off layoffs or are considering cutting their workforce and reducing their production plans. For example, Cummins, the engine maker is reported to have planned laying off around 2000 workers in early 2020 and Navistar has already gone through two rounds of layoffs last year. When the bigger companies are taking such drastic measures, it will be difficult for the smaller manufacturers to tide over this recessionary phase. 

The cost of maintaining and managing the excess inventory will be another issue that the truck manufacturers will have to deal with.

The cost of maintaining and managing the excess inventory will be another issue that the truck manufacturers will have to deal with. According to reports, the inventory to sales ratio was 3.9 months in January, which is much higher than the industry’s normal average of 2 to 2.5 months. Till this excess inventory is not sold off, the truck makers may have to further cut production plans and bear an additional burden of their operating funds. 

This problem doesn’t end at the manufacturers. Even the dealers who may have taken additional inventory of Class 8 trucks when the market was good, will now have to either hold the inventory till there are buyers in the market or sell their inventory at a discount. Either way, it will have a negative impact on their bottom line. 

Till the freight business does not pick up, it will be a rough ride for all the stakeholders in the ecosystem be it – shippers, carriers or truck manufacturers. 

However, companies that have built-in diversity in their supply chain – keeping in mind the cyclical and uncertain nature of trade and keep a rigorous check on it, have a better chance of surviving such downturns. If you want to know what are the weak points of your supply and how you can strengthen it, get in touch with our team for a supply chain analysis today! 

Commercial Trucking: The Battle of the VMT Tax

Our highways and transit infrastructure are mainly funded through the Highway Trust Fund (HTF), which in turn is primarily funded by the federal motor fuel tax. Since 2001 the HTF has consistently spent more than it generates through highway and transit programs. The shortfall has been covered mainly by the $144 billion it’s received from the Treasury’s general fund. The Congressional Budget Office estimates that the HTF will hit bottom by 2022. 

Senate Environment and Public Works Chairman John Barrasso and Finance Committee member John Cornynhave proposed the S. 2302 bill which would impose a Vehicle Miles Traveled (VMT) tax on commercial truckers. The bill is part of a three-prong approach, Barrasso and Cornyn are also looking to tax electric vehicles as well as index the motor fuels tax.

As cars increasingly become more efficient, and the use of electric cars become more prolific, fuel tax revenues decline accordingly. The tax on electric vehicles looks to regain the lost revenue, and with automakers planning to launch up to 100 new electric vehicles by 2023, it’s a good idea. But it’s a small piece of a massive puzzle.

Commercial trucks do take a heavier toll on our highways than lighter vehicles. Therefore, the VMT imposes a tax on the miles traveled. The heavier the truck, the more damage it does to our roads, which is why a scaled tax structure based on a truck’s configuration and weight. It sounds like a fair deal, those who do the most damage pay the highest bill. 

However, the industry argues, that they already pay a steeper sum than other highway users through fees, an excise tax on tires, and a heavier gasoline bill, paying six cents-per-gallon more than other motorists. Then there’s the question if the industry can support the increase, given the number of trucking companies that closed its doors in 2019, it’s a fair question. And lastly, could the tax be implemented in a fair and trustworthy manner? 

The CBO Report

The Congressional Budget Office (CBO) recently released Issues and Options for a Tax on Vehicle Miles Traveled by Commercial Trucks. The report provides an analysis of the VMT tax, including the tax base, the rate structure, the revenue that would be generated, and the implementation methods.

Using data on 2017 truck traffic, the CBO estimated that a tax of 1 cent per mile on all roads would have raised approximately $2.6 billion if imposed on all commercial trucks. However, in order to cover $14.6 billion that truck owners paid in 2017, as well as their proportional share of the $13.5 billion deficit, the tax would need to be increased to 7.5 cents per mile, which would have generated a total of $19.4 billion. The CBO warns two behavioral responses would result: a reduction in overall freight shipments and a shift in some freight traffic from trucks to rail. 

Together, the gasoline and diesel taxes yielded close to 90 percent of the $40.9 billion in revenues credited to the trust fund in the fiscal year 2017. Of that amount, $25.9 billion (64 percent) came from gasoline taxes and $9.8 billion (24 percent) from diesel fuel taxes. The three taxes that apply to trucks and other large vehicles generated revenues totaling $5.2 billion.

Capital and Implementation Costs

Three methods of implementation are offered: 

  • Electronic logging devices (ELD) installed in cars (capital costs would depend on the set of trucks included in the tax base, intermediate enforcement costs)
  • Collection booths or RFID readers on road gantries (significant capital costs, low enforcement costs) 
  • Periodic odometer reporting (no capital costs, high enforcement costs)

Although costs are uncertain, capital and implementation costs would, of course, cannibalize a portion of the revenue.

The Battle

The American Trucking Associations wants to raise fuel taxes by 5 cents annually over four years, which would bring in $340 billion over ten years. Although it continues to lack Senate support, The American Road & Transportation Builders Association (ARTBA) advocates for both an increased motor fuel tax and the VMT tax.

The Owner-Operator Independent Drivers Association(OOIDA) members aren’t mincing their words. In a letter written on February 24th to Chairmen Grassley and Barrasso, the OOIDA says the ARTBAs support of the VMT tax is “shameless, and exposes the organization’s ignorance.” Chris Spear, President of the American Trucking Associations, and Sheila Foertsch of the Wyoming Trucking Association call the tax discriminatory

Trucking-aligned farm groupswant broad-based funding mechanisms and caution the VMT would place a disproportionate share of the burden on freight transportation and would leave U.S. agriculture at a competitive disadvantage against foreign competitors.

As the ARTBA pointed out in their letter, if a controversy-free solution existed, it would have been enacted years ago. But America’s infrastructure is failing, and transportation investment is coming up short by the tune of $1.1 trillion by 2025.  According to the American Society of Civil Engineers’failure to Act study, by 2025, the nation will have lost almost $800 billion in GDP and have 440,000 fewer jobs due to transportation system deficiencies. Time is of the essence.

Round Two of the ELD Rush 

We could be seeing another speed bump in the road for trucking as we’ve just passed the Dec. 16 deadline for motor carriers and truck drivers to make the switch from automatic onboard recording devices (AOBRDs) to the federally mandated ELD or electronic logging device. 

The AOBRDs were originally grandfathered into the ELD mandate back in 2017, but are currently being targeted for an upgrade. No one is quite sure just how many of the older systems are in play currently, let alone how many companies and drivers have made any progress towards the switch.  

As ELD technology continues to evolve, the technological (and financial) gap between the two technologies continues to widen.  

What complicates this issue is the growing complexity behind the switch from AOBRD to ELD. As ELD technology continues to evolve, the technological (and financial) gap between the two technologies continues to widen.  

“The industry as a whole would have liked to transition earlier, but the providers didn’t have software ready at the time,” said Michael Owings, vice president of corporate services and support at less-than-truckload (LTL) carrier Southeastern Freight Lines. 

And, to a certain extent, there are a number of carriers that are hesitant to make the change to the more exacting ELD. With AOBRDs it was easier to find logging loopholes in how you move a truck,” said Jeremy Stickling, chief administrative officer of truckload carrier Nussbaum Transportation. 

For example, ELDs will trigger “on-duty” status for a truck that begins to move faster than 5 mph. For tractor-trailers that have to stay overnight at a customer’s site before they can be loaded for their trip, that becomes problematic.  

“Let’s say the docks were full the night before, so they knock on the driver’s tractor door at 5 a.m. to get him to drive to the dock for a live load that takes three hours,” Stickling said. The ELD will start the driver’s clock for the yard move, meanwhile, the driver is left waiting until the truck is loaded before they can hit the road. If the loading process takes around 3 hours, the driver has now lost over a quarter of their daily on-duty time.  

“We try to train [drivers] against this, but it does happen,” Stickling adds. “Shippers leaned on that, but it’s not going to be an option anymore.” As ELDs become the norm, “shippers are beginning to feel the letter of the regulations a little more than they used to, and that’s not a bad thing.” 

Installation Takes Time 

For the past few months, ELD vendors and truck telematics companies have been warning the trucking industry that waiting to have an ELD installed to the last minute could impact last-minute deliveries. Barring the physical hardware installation, there is also the need to train drivers on new policies, orient them to the new device, and adapt the software to communicate with company operating systems. All of these things take time and time is running out.

For the South Carolina based regional carrier, Southeastern, making the switch from AOBRD to ELD took approximately six months. The company had to install the new software and subsequent equipment in nearly 3,200 trucks and tractors, and train their driving team of over 4,000 drivers on how to use it.  

“It went well, but it did take a very long time,” Owings said. “We sent teams from our safety department and operations to every location to do onsite training. We would convert all the tractors during the training, and then the drivers would come out and log in to the ELD. Our team would be there for a couple of days to help as they got used to the system.” 

The ELD is Not the End of Efficiency 

When the ELD mandate was first announced, it was heralded as the end of times. Carriers rallied that it would kill productivity and it would cause the industry to come to a grinding halt. But in truth, Southeastern, and Nussbaum, two very different companies operating in different regions, have seen little impact on their productivity levels as a result of switching over the ELD. 

However, that is because both companies were diligent in keeping up with the hours of service regulations.  

While trucks are still picking up and dropping off loads more or less within their routine operating schedule, the missing time usually comes out of a driver’s “home time.”  

There is, however, a trade-off. While trucks are still picking up and dropping off loads more or less within their routine operating schedule, the missing time usually comes out of a driver’s “home time.”  

“Our productivity really hasn’t dropped, we’re getting the same loads and the same miles,” Nussbaum’s Jeremy Stickling says. “But it takes us more on-duty time to do it. We’re using more of that 14-hour daily on-duty time to get the same work done, and that squeezes the driver’s weekly 70-hour limit.” According to the US HOS ruling, drivers may work up to 70 hours in an eight-day period, or 60 hours in seven days. 

That loading delay that we mentioned earlier is the real impact of the ELD. A seven-hour loss of driving time in one day means that a driver is likely not where they wanted or expected to be by the next day or even the day after. The loss in driving time, which is measured in minutes instead of miles, is cumulative throughout the week.  

“The drivers feel it when they’re not getting home Friday at 7 p.m., they’re getting home Saturday at 6 a.m. That’s squeezing their home time, the amount of time they sleep in their own beds during their 34-hour reset. Maybe it’s just on Saturday night, rather than Friday and Saturday. You can still leave Sunday evening for a Monday pickup, but it’s less time at home.” 

Still, the closing of loopholes that allowed drivers to take shortcuts around hours of service rules “is a good thing,” Stickling said, as is pressure on shippers to eliminate slack in their own operations, ensuring that they’re not saving time and money at the expense of truckers hauling their freight. 

An Overall Positive Change  

The trucking industry is decidedly less doom and gloom about the logging device, although some grumblings are still being heard about the hours of service regulations. And, overall, there is a positive change taking place due to the ELDs.

As a safety precaution, there are less exhausted drivers on the road, making it safer for everyone. 

By having a more permanent less “fudgeable” means of tracking drivers times, companies are cutting the slack out of their operations, running cleaner, leaner, and more efficiently. As a safety precaution, there are less exhausted drivers on the road, making it safer for everyone.  

The additional benefit is the vast influx of new data that is being collected by the ELDs. This data will create a turning point for the transportation industry. Linked into the various technologies that are driving change throughout transportation and logistics, the ELDs might be the herald of the new future for trucking.  

#BGInvestigates: How Regulations Affect the Transportation Industry

The transportation industry is no exception when it comes to government regulations. In the coming year, many regulations will be enforcing drastic changes in the transportation industry. These changes will impact the bottom line of truck drivers, carriers, shippers, consignees and even consumers. As regulations increase, trucking companies are forced to increase shipping costs, in turn, driving the cost of products in the market to rise. BG Investigates points out why it’s important to be aware of new industry laws and regulations.

Many transportation regulations are highly controversial in regard to their costs and effectiveness. Specifically, the CSA 2010 law was passed in December of 2010 and remains a top concern. According to the FMCSA, a part of the US Department of Transportation, the Compliance, Safety, Accountability (CSA) initiative is a regulation that is working to further reduce commercial motor vehicle crashes, fatalities and injuries on our nation’s highways. The trucking industry (including common carriers) feel the impact of this regulation as drivers are taken off the road due to safety concerns. Although this helps to increase safety, the loss of truck drivers due to CSA regulations has caused driver and capacity shortages.

“We are really starting to see the impact (of CSA 2010) in the industry right now. Every day we are seeing carriers that are being rated down to conditional and last week we saw five carriers shut down by the DOT for unsafe ratings. Obviously that increases the capacity constraints we have in the market by reducing the amount of drivers on the road and causes an increase in rates,” says Chris Reeves, Director of Specialized Services.

The debate continues on many other government policies. The Hours of Service regulations published in December 2011 were enforced to control the amount of hours a driver can be in operation. The HOS rules cause changes in the current transit times for shipments, as drivers are not able to travel as long. There are severe penalties for both the driver and carrier for violations. Industry groups argue that these regulations should change before they officially go into effect July 1, 2013.

BG Investigates uncovered the following transportation industry regulations that all readers should be aware of for 2012 and beyond:

  • Stability Control Standards – Technology mandate controlling stability on heavy-duty tractors to preventing rollovers of trucks and trailers.
  • Mandatory Speed Limiters – Controlling the speed of trucks to prevent accidents.
  • Crashworthiness Standards – Standards, similar to automobiles, that help protect truck drivers involved in accidents
  • EOBR RegulationsElectronic on-board recorders tracking the time truck drivers are on the road.

The laws and regulations of the transportation industry are constantly changing. Whether you are a truck driver, carrier, shipper, consignee or consumer, you should consistently be informed to be compliant and understand the effects it may have on your business model.  BG Investigates will continue looking and reporting the status of new transportation laws and regulations that affect you, so keep an eye out for future articles. Contact one of our knowledgeable representatives at BlueGrace Logistics with any questions about industry regulations or call 800.MYSHIPPING.

– Ben Dundas, Sr. Marketing Analyst