Senate approves diesel retrofit

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Diesel prices hit a record at the end of June. For the week ended June 27, the national average retail price of a gallon of diesel was $2.336 – 2 cents higher than the previous high recorded in April. The average price of diesel at the end of June was more than 63 cents higher than it was a year earlier.

Federal Motor Carrier Safety Administration is proposing various changes to its Sept. 27, 2002, final rule concerning protection against shifting and falling cargo for commercial motor vehicles. Among the proposed changes is clarification that van-type trailers need not use tie-downs as long as cargo is loaded in a way to prevent it from shifting or falling during transport. For a copy of the notice of proposed rulemaking, visit this site and search Docket No. 21259.

U.S. Environmental Protection Agency delayed the compliance date for full implementation of ultra-low sulfur diesel (ULSD) until Oct. 15, 2006. The agency said a delay beyond Sept. 1, 2006, would allow more time for terminals and retail outlets to comply with the 15 parts per million (ppm) ULSD standard. Between Sept. 1 and Oct. 15, diesel fuel meeting a 22 ppm level can be marketed as ULSD.

Freight Transportation Services Index increased 0.5 percent to 130.2 in March, up from 129.5 in February. That’s the fourth increase in the last six months, according to the U.S. Department of Transportation’s Bureau of Transportation Statistics. The March 2005 level of 130.2 is 4.0 percent higher than the March 2004 level of 125.2.

Schneider National will participate corporation-wide in the American Trucking Associations’ Highway Watch, encouraging its 21,900 employees – including 15,500 drivers – to become certified under the national safety and security awareness program.

National Truck Driver Appreciation Week runs Aug. 21-27. To share plans for the week, visit this site.

Texas Gov. Rick Perry wants President Bush to help the state develop a pilot project to accelerate border crossings for truckers and people who meet the security standards of anti-terrorism programs. Six of the 10 busiest commercial border crossings handling North American trade are in Texas, including the top two – Laredo and El Paso.

Cummins Inc. named Joe Loughrey president and chief operating officer, setting in motion various other changes. Jim Kelly, who previously headed Cummins’ midrange and heavy-duty engine business, replaces Loughrey as president of Cummins’ engine business. Kelly’s previous position has been split, with Dave Crompton named vice president and general manager of the midrange engine business and Ed Pence holding the same position for heavy-duty engines. Sean Milloy has been named chief technical officer of the engine business.

Mobil Delvac will celebrate its 80th anniversary at the Great American Trucking Show by giving away $80 worth of Mobil Delvac every 80 minutes on Friday, Aug. 26. Enter to win at the ExxonMobil booth No. 17159.

Environmental Protection Agency is advising truck owners to avoid hydrocarbon refrigerants being sold as inexpensive substitutes for HFC-134a and CFC-12. Marketed under such names as OZ-12, DURACOOL 12a and HC-12a, the refrigerants may contain large quantities of propane, butane or other highly flammable gases, EPA said. For more information, visit this site.

The U.S. Senate late last month passed its version of H.R. 6, the energy bill, and adopted language that would authorize up to $200 million a year for five years in grants and loans for voluntary retrofits of diesel engines with technologies that reduce emissions. The diesel emissions reduction legislation, which earlier was introduced as S. 1265 by Sen. George Voinovich (R-Ohio), would cover diesel engines in medium- and heavy-duty trucks as well as diesel engines used in bus, rail, marine and off-road applications. The amendment was adopted 92-1.

In introducing the amendment to H.R. 6, Voinovich noted that it was supported by groups that often are at odds. For example, the major diesel manufacturers and the Engine Manufacturers Association support the legislation, as do various state and regional environmental and planning agencies.

Other provisions of the Senate bill encourage the development and production of biodiesel. Although biodiesel may reduce emissions, engine manufacturers and others are concerned about how such formulations may affect the durability and reliability of heavy-duty equipment.

The Senate did not consider an amendment that had been proposed by Sen. Gordon Smith (R-Ore.) to offer an investment tax credit equal to 5 percent of the cost of heavy-duty trucks built according to 2007 emission standards. Smith’s proposal also would allow truck buyers to expense lower-emissions trucks purchased in 2007 on their tax returns for that year. The amendment would have applied to trucks with gross vehicle weight ratings of more than 33,000 pounds and placed into service during 2007. The measure earlier was introduced as S. 1240 and referred to the Senate Finance Committee. In introducing the bill, Smith noted that while the federal government can require truck makers to build cleaner trucks, it “cannot mandate the purchase of these clean diesel trucks.”

The Senate passed its version of the energy bill 85-12. Despite the strong support for energy legislation, the House and Senate bills differ greatly, and similar legislation died in the last Congress.

In other news from Capitol Hill, House and Senate negotiators appeared unlikely to agree on a compromise highway bill as Congress prepared to adjourn for the July 4th recess. Among the issues tied up in the legislation are tolls, fuel surcharges and protection for the current hours-of-service rules.
Avery Vise


Supreme Court upholds Michigan truck fee
The U.S. Supreme Court ruled unanimously June 20 that Michigan’s flat $100 annual fee imposed on trucks used for intrastate hauling does not constitute an undue burden on commerce. The American Trucking Associations and USF Holland had argued that a flat fee discriminated against carriers that carried both interstate and intrastate loads because they carried less intrastate freight per truck than purely intrastate carriers.

In ATA vs. Michigan Public Service Commission, the Supreme Court ruled that because the state’s flat fee is imposed only on in-state transactions, it does not discriminate against interstate or out-of-state activities. The regulation applies evenhandedly to all carriers making domestic journeys and does not reflect an effort to tax activity taking place outside the state, the court said. And because the costs the fee seeks to defray – regulating vehicle size and weight – would seem more likely to vary per truck or per carrier than per mile traveled, a per-truck assessment is likely fair, the court said.

Separately, the Supreme Court ruled 7-2, in Mid-Con Freight Systems vs. Michigan Public Service Commission, that the state’s $100 fee on purely interstate carriers did not violate the federal law governing the Single State Registration System.

Both decisions are available in PDF format at this site.


Tonnage growth slower in May
The American Trucking Associations’ primary industry indicator rose in May as tonnage volumes increased slightly because of modest economic growth. ATA’s advanced seasonally adjusted for-hire Truck Tonnage Index rose 0.7 percent to 115.1, following a 0.9 percent drop in April.

Year-to-date, the tonnage index was 3.2 percent higher than the same period in 2004. That puts it in line with 2005 forecasts that the index will grow between 3.0 percent and 3.5 percent.

ATA Chief Economist Bob Costello said tonnage growth is good, but would not reach 2004 levels, when the economy was growing at a faster pace. At the same time, tonnage volumes are more modest this year because of a wide disparity between production levels for certain commodities. For example, domestic steel production is slipping, which could be a drag on tonnage figures going forward.

“The economy continues to decelerate from last year, but we are not in a significant downturn,” Costello said. “However, growth in freight volumes will be modest for the rest of this year compared with 2004, when our tonnage index grew 5.7 percent. I still believe there will be a favorable supply-demand market this coming fall freight season despite the moderation in volumes.”


ATA: Driver turnover declines slightly
Driver turnover at large truckload carriers – those with more than $30 million in annual revenue – softened a bit in the first quarter of this year from the fourth quarter 2004, but it remains very high, the American Trucking Associations reported. The first-quarter turnover rate was, on an annualized basis, 120 percent – down from a record 136 percent in the fourth quarter. Small truckload carriers fared better in absolute terms, but the 102 percent rate – also reported in the fourth quarter 2004 – is a record high for the group.

“Over the last two years, the driver market has tightened significantly,” says ATA Chief Economist Bob Costello. “Many large carriers noted that pay hikes in the first quarter helped with retention but not necessarily with recruitment.” Overall, small TL fleets ended the quarter with 0.3 percent fewer drivers. Large fleets ended the quarter with 2.7 percent more linehaul drivers.


Driver shortage seen surging
A study conducted by economic research firm Global Insight for the American Trucking Associations concludes that the long-haul heavy-duty trucking industry currently is experiencing a shortage of 20,000 drivers and that this deficit likely will rise to 111,000 by 2014 without significant changes in current trends.

Of the 3.4 million truck drivers on the road, 1.3 million are long-haul truckers. The supply of new long-haul heavy truck drivers will grow at an annual rate of just 1.6 percent, while economic growth will demand a 2.2 percent average annual increase in the supply of drivers, Global Insight said. In addition to these 320,000 new jobs, the industry will need to replace 219,000 drivers that are expected to retire or leave the industry by 2014.

To meet the demand, pay will need to rise to at least match that of the construction industry, and trucking companies will have to address quality-of-life issues, Global Insight said. In addition, the trucking industry will need to draw on a larger percentage of women and minorities.

The study, U.S. Truck Driver Shortage: Analysis and Forecasts, is available on ATA’s website, www.truckline.com.


ATA faults fingerprint-based checks
The Transportation Security Administration should perform only name-based driver checks until a coordinated nationwide security credential program is in place, the American Trucking Associations told a U.S. House subcommittee. A unified check system database would save time and money and not force carriers to go through multiple state and local check programs, said Dan England, CEO of C.R. England, based in Salt Lake City, in his testimony May 11 on ATA’s behalf.

Hazmat background checks are required for hauling everything from guns and toxic waste to paint and nail polish, England noted. Truckers are subject to additional federal background checks at airports, seaports and the Canadian and Mexican borders, as well as Pentagon checks if hauling arms or ammunition for the Department of Defense, England said. Now states and local governments are beginning to layer on their own background check requirements, England said.

TSA has been conducting name-based checks for a couple of years, and in early June it began requiring fingerprint-based checks on renewals of hazmat endorsements. In January, TSA began requiring truckers applying for the first time for a hazmat license to submit fingerprints and undergo a background check. Truckers must renew hazmat licenses at least once every five years, although a state may require more frequent renewals.


What driver problem?
“It blows my mind on a daily basis everyone crying about a shortage of drivers. … It seems to be a sickness within the truckload industry that we truckers have to haul all freight. It doesn’t matter if it pays. We just have to haul it.

“So in order to do that, we have to hire a whole bunch of bad drivers to haul a whole bunch of bad freight. I think we are finally finding out that we don’t have to grow at Wall Street ideals to make money.

“Without this driver shortage I’m afraid we’d all be losing money because we would be hauling all the freight again. So to me, the driver shortage is a good deal.”
Heartland Express President & CEO Russ Gerdin at the Merrill Lynch Global Transportation Conference, June 8


CCJ Equipment Demand Index: Illinois breaks through
After months of domination by Texas and California, Illinois could be tops for both van and refrigerated equipment demand in August, according to the CCJ Equipment Demand Index. Illinois usually holds the top spot in August for van searches, and it beat out California in August 2004 for reefer searches. Ohio was second in van searches in August 2004 with 11 percent fewer searches than Illinois. California was second in reefer demand in August 2004 with 16 percent fewer searches. Texas remained No. 1 for flatbed demand in August 2004, as it usually does in August. Alabama was second with 23 percent fewer flatbed searches than Texas.

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.