UPS will offer less-than-truckload and some truckload operations if it successfully closes a planned acquisition of Overnite Corp. for $1.25 billion in cash. The deal, expected to close in the third quarter, must be approved by regulators and Overnite’s shareholders. “We want to offer our customers the broadest portfolio of transportation and logistics services available from a single source,” said Mike Eskew, chairman and CEO of Atlanta-based UPS.
Yellow Roadway Corporation has completed its acquisition of USF Corp. With the $1.5 billion deal, Yellow Roadway generates more than $9 billion in revenue and has 70,000 employees. USF will join New Penn Motor Express to form YRC Regional Transportation, which will be based in Akron, Ohio, and headed by Jim Staley, former president of the Roadway Group.
Fatalities in accidents involving large trucks rose 3.7 percent in 2004 compared to 2003 for a total of 5,169, according to the National Highway Traffic Safety Administration. American Trucking Associations emphasized that according to both the Federal Motor Carrier Safety Administration and the AAA Foundation for Traffic Safety, as many as 75 percent of fatal crashes begin with an error by the car driver.
Freight Transportation Services Index fell 1 percent to 129.5 in February from the January level of 130.9, U.S. Department of Transportation reported. The decline followed the biggest one-month gain since December 2003. The February 2005 level was 4.5 percent higher than the February 2004 level of 123.9. The index’s baseline year is 1996.
Despite a veto threat from the White House due to spending levels, the U.S. Senate last month passed a $295 billion highway bill by an overwhelming margin, sending the legislation to a negotiating committee of House and Senate leaders. The bill authorizes $11 billion more than the spending in the House version of the bill (H.R. 3). In late May, Congress extended the highway reauthorization act for 30 days. The six-year highway authorization originally expired in September 2003 and has been subject to a series of short-term extensions ever since.
The trucking industry won some significant battles in the Senate version of H.R. 3. For example, the Senate adopted an amendment that limits tolls on existing interstate highways to one single project – I-81 in Virginia. Although the trucking industry has resisted tolls on I-81, restricting the scope of tolls to that project alone would be a clear victory. The Senate also included a new $20 million grant program for training entry-level truck drivers, which had been requested by the American Trucking Associations.
And the Senate action also was notable for what did not happen. For example, one amendment had been filed to impose additional federal restrictions on states’ authority to increase truck size and weight limits. The amendment never was offered on the Senate floor, however.
ATA supports several items in the Senate bill, including replacement of the Single State Registration System with a new Unified Carrier Registration Agreement, roadability legislation to ensure the safety of interchanged intermodal equipment and clarification of the hours-of-service exemption for transporters of agricultural products. Among the items ATA opposes are several provisions that adversely affect hazmat deliveries as well as a new medical oversight program for truck drivers that ATA considers to be overly burdensome.
The Senate bill does not address a mandatory fuel surcharge for truckload transportation, but it will be a matter for the House-Senate conference because it was included in the House bill. Nor was codification of current hours-of-service regulations – requested by the Bush administration – included. Although neither version of H.R. 3 includes codification of the hours rules, it still will likely be considered in conference.
Normally, only items contained in at least one of the bills are supposed to be a subject for the conference committee, but controversial and politically sensitive measures occasionally come out of a legislative conference without being considered openly in the House and Senate. This mechanism allows Congress to adopt a politically uncomfortable measure as part of an overall compromise without individual legislators having to vote specifically on the measure.
It appears likely that codification will be subject to considerable lobbying in the next few weeks. “We have got to get the hours-of-service codified,” said ATA Chairman Steve Williams in a speech late last month in Tuscaloosa, Ala., at the Randall Trucking Spring Symposium, which is presented by CCJ. ATA staff will be lobbying for codification, but carriers need to help, he said.
“Pick up the phone and send e-mails to congressional delegations,” Williams said. “It’s going to take all of us together. If we fail to get the hours-of-service codified, the court battle will remain.” Although litigation may delay a final resolution for years, leaving the hours-of-service battle to the courts alone is not in the long-term interests of the trucking industry, Williams said.
–Avery Vise and Aaron Huff
Trucks set to up freight share
Trucking will increase its share of the nation’s freight pool and continue to dominate freight movement into the next decade, the American Trucking Associations reports in its U.S. Freight Transportation Forecast to 2016, which was prepared by economic analysis firm Global Insight. The forecast, which reports on the present and future of the entire U.S. freight transportation industry, predicts growth for most sectors, greater cooperation between modes and an even greater role for trucking in moving the nation’s economy.
The forecast suggests that trucking’s share will approach 88 percent of total freight revenue and 69 percent of freight tonnage by 2016. Overall rail tonnage is estimated to reach 2.56 billion tons in 2016, up from 2.06 billion tons in 2004, giving it 13.6 percent of the total tonnage market.
The fastest-growing segments through 2016 likely will be rail intermodal and air transport, although neither is forecast to have more than 2 percent of the total tonnage market share by 2016.
Tonnage index falls in March
American Trucking Associations’ advanced seasonally adjusted for-hire Truck Tonnage Index in March suffered its first year-over-year decrease since November 2001, although the drop was only 0.4 percent. The seasonally adjusted index dropped 3.3 percent in March from February 2005. ATA Chief Economist Bob Costello said tonnage volumes slipped slightly as consumer spending decelerated and as higher energy costs weighed modestly on economic growth. He projected that the economy and tonnage would grow between 3 percent and 3.5 percent this year.
“This is no time for panic,” Costello said. “We anticipated there would be a slowdown because the economy isn’t growing as robustly. It would be difficult for freight volumes to grow significantly faster than the economy. Our projected growth for this year will translate into solid expansion for the industry.”
Year-to-date, tonnage increased 3.9 percent, compared with a year earlier. The Truck Tonnage Index increased 5.7 percent in 2004. ATA calculates the tonnage index based on surveys from its membership and has been doing so since the 1970s.
NPTC honors safest private fleets
At its annual meeting in Pittsburgh, the National Private Truck Council recognized its member private fleets that experienced the lowest ratio of accidents per million miles for the past year. Winners of the awards, sponsored by Bridgestone/ Firestone, are:
Small Fleet (less than 50 vehicles)
First Place: Barnes & Noble
Mixed operation – Small Fleet
First Place: Pendleton Woolen Mills
Second Place: George’s Foods LLC
Third Place: Cooper Tire & Rubber Co.
Large Fleet (50 vehicles or more)
First Place: Dynegy Midstream Services L.P.
Second Place: General Nutrition Centers
Third Place: Russell Corp.
Regional operation – Small Fleet
First Place: Jerico Services Inc.
Second Place: Target Stores
Third Place: Webster Industries Inc.
First Place: Milliken & Co.
CCJ Equipment Demand Index:
More of the same
The richest sources of spot-market freight for vans and flatbeds in July likely will be in Texas, while California likely will be the best place for filling empty refrigerated trailers, according to the latest CCJ Equipment Demand Index. Texas topped van searches in both July 2004 and 2003. In July 2004, Illinois was second with 19 percent fewer searches. In flatbed demand, Texas has led for the past three years. In July 2004, Alabama took its usual second position with 30 percent fewer flatbed searches than Texas. California in July 2004 retained its traditional top slot for reefer demand. Texas was second with 44 percent fewer reefer searches.
The index, based on equipment searches performed by TransCore customers, shows the top 15 states in terms of demand for trucks in the spot market in the three most common equipment types: dry vans, flatbeds and refrigerated units. The index is intended to help fleet operators identify the most promising opportunities for backhaul and other spot-market freight in the month after its publication.