FedEx buys Watkins Motor Lines

U.S. Transportation Secretary Norman Mineta resigned effective July 7, saying “it is time for me to move on to other challenges.” Mineta, who was the only Democrat in President Bush’s Cabinet, is the longest-serving secretary since the Department of Transportation was created in 1967.

American Trucking Associations is asking the California Senate to reject legislation that it says would authorize local air districts to control diesel emissions and dilute the authority of state and federal regulatory agencies over diesel-powered equipment operated at ports, rail yards and airports.

Freight Transportation Services Index fell to 111.0 in April, down 0.5 percent from the March level of 111.6, according to the U.S. Department of Transportation’s Bureau of Transportation Statistics. For the first four months of 2006, the Freight TSI rose 0.1 percent over the same 2005 period.

Georgia has become the first state to require drivers applying for or renewing a commercial driver’s license to complete safety and security training in Highway Watch. Under legislation signed by Gov. Sonny Perdue, the one-time-only, free training applies to CDLs granted or renewed on or after July 1.

Transportation Intermediaries Association last month unveiled a model broker-carrier contract, but ATA voiced significant concerns, saying the contract clearly favors the interests of brokers and their shipper customers over those of motor carriers. ATA has drafted its own model agreement that is currently under review by the Department of Justice.

FedEx Corp. in late May acquired the less-than-truckload operations of Watkins Motor Lines and certain affiliates for $780 million. FedEx said that Watkins will be rebranded FedEx National LTL and operate as a separate network within the FedEx Freight segment. The acquisition comes after UPS bought Overnite to build its own LTL network.

Headquartered in Lakeland, Fla., Watkins – which was No. 24 in CCJ’s most recent Top 100 ranking of for-hire carriers – is a privately held provider of long-haul LTL services, with more than $1 billion in annual revenue. Watkins management will remain in place, with Chip Watkins serving as president. FedEx also acquired the assets of Watkins’ business in Canada, Watkins Canada Express, which will be rebranded FedEx Freight Canada.

UCR board seeks more time to replace SSRS
In its first official act, the new Unified Carrier Registration board of directors last month unanimously approved a resolution urging the Federal Motor Carrier Safety Administration to support a 12-month extension of the single-state registration system. As part of last year’s transportation act, Congress repealed the SSRS effective Jan. 1, 2007, and ordered it replaced with the new UCR system. Thirty-eight states participate in the SSRS. If the UCR is not in place when the SSRS ceases, states could lose as much as $100 million in revenues used for motor carrier safety enforcement and related programs.

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But implementing the UCR by Jan. 1, 2007, would be difficult. The board’s work to draft an agreement and proposed fee schedule began only in June. And according to the resolution, some states still need enabling legislation to participate in the UCR, and all states must develop and approve their UCR plans. Even the SSRS data needed to determine fee levels hasn’t been collected. And once everything is in place, motor carriers will need to be educated on how to handle UCR requirements. That’s not a simple matter, as the UCR will cover one large segment of the industry – private carriers – that has not been subject to the SSRS.

Congress would have to approve any extension of the SSRS, although the resolution passed by the board does not acknowledge that fact. There was some concern among FMCSA legal counsel that a board resolution calling on Congress to delay the repeal would violate laws against federal agencies lobbying Congress.

In other action, Bryan Price, transportation specialist in the FMCSA Pennsylvania Division Office, told board members that the agency currently plans to adopt a fee schedule without conducting a formal rulemaking. Instead, the Department of Transportation plans to issue the fee schedule as a notice, giving interested parties an opportunity to comment. But the schedule wouldn’t be subject to all the regulations governing rulemaking proceedings, Price said. The UCR board planned to meet again this month in an attempt to complete its work in time for a Jan.1 transition if necessary.

CCJ SPRING SYMPOSIUM: Meeting of the minds
Several hundred trucking executives convened June 5-7 in Tuscaloosa, Ala., for the 17th annual CCJ Spring Symposium, organized by Randall-Reilly Publishing and Commercial Carrier Journal. Symposium attendance is by invitation only, but in these two pages you can glean some of the key observations and insights of the expert presenters.

The Spring Symposium is sponsored by Caterpillar, Comdata, Goodyear Tire & Rubber, International Truck and Engine Corp., Maddocks Systems, Parker Hannifin’s Racor Division, Pegasus TransTech, PeopLease, PeopleNet, Roadranger, Shell Lubricants, TravelCenters of America and Utility Trailer Manufacturing Co.

For additional Symposium coverage, see page 34. Links to presentations from the CCJ Spring Symposium are available in the online version of this article at www.ccjmagazine.com.

Kemp recalls lessons of trucker father
Republican statesman and former vice presidential nominee Jack Kemp had a simple message for the attendees of the CCJ Spring Symposium: “Freedom works!”

Pacing the stage in shirtsleeves, roaming the audience, the longtime advocate of lower tax rates gave an enthusiastic speech in favor of limited government, the right of inheritance and the sanctity of private property. “Think of the Ten Commandments,” he said. “Half of them are about private property.”

Kemp served 18 years in the U.S. House of Representatives and as a cabinet secretary for the first President Bush, and played professional football for 13 seasons. But he focused much of his comments on the lessons from his early life in California.

“I am the son of a trucker, and proud of it,” Kemp said to applause. “I am really at home. I appreciate the men and women in this room.”

Kemp’s father was a one-truck owner-operator in Los Angeles in the late 1940s, his company rather grandly called California Delivery Service. The elder Kemp made enough money with his one truck to buy 12 trucks and employ 12 truck drivers.

Kemp said his father’s relative success in trucking taught him an early lesson about the importance of entrepreneurship to the public good. “Truck drivers’ wages are higher when they have trucks to drive than when they don’t,” Kemp said. “That truck is provided by a capitalist. Capital is not the enemy of labor, and labor is not the enemy of capital. We need them both.”
–Andy Duncan

ATA’s Costello: Plenty of freight on way
Despite higher interest rates and a slowing business climate, the economy is still strong, and there’s going to be plenty of freight for trucking companies, an industry economist told attendees of the CCJ Spring Symposium.

“We are going to see a deceleration of the U.S. economy through the year,” said Bob Costello, chief economist for the American Trucking Associations. “By end of the year, we’ll have an under-3-percent growth rate. But that’s not such a bad thing. As long as we’re growing, that’s not bad. It’s sustainable.”

The last three quarters should be better for trucking companies than the first quarter of 2006, when truck tonnage fell, Costello said. That slowdown was related to a $6 billion inventory correction by a major retailer and its ripple effects, he said. Carrier revenues were not affected as much. And while long-haul trucking fell 9 percent in the first quarter, flatbed and refrigerated applications actually grew, according to Costello.

Industry challenges include driver availability, capacity and fuel prices. “Our industry will spend nearly $100 billion on fuel this year,” he said. Costello also is concerned that the Federal Reserve is interested in raising interest rates further to slow inflation; he believes those increases could cool the economy. “I would much prefer the Federal Reserve would take a break and back off raising rates,” Costello said.

There are good signs in the economy as well: Business investment and manufacturing are performing robustly, and that should help trucking, Costello said. “The first quarter was a bit of a surprise. Does that mean we should panic? No. The economy is certainly not going to stop by the end of year.”
– Sean Kelley

Work-life issues are key for drivers, panel says
Trucking executives addressing driver turnover agreed in a panel discussion at the CCJ Spring Symposium that work-life issues are becoming more important to employees who increasingly are preferring shorter, dedicated routes to long-haul deliveries.

This year, turnover “is the highest it’s been in the nine years I’ve been there,” said Stacia DeWitt, recruiting director for Marten Transport of Mondovi, Wis. Marten is looking to add more regional terminals to keep drivers closer to home, she said. “A lot of drivers see long-haul as their start to getting into the industry.”

Paul Williams, president of Wooster Motor Ways of Wooster, Ohio, said that new drivers often are blindsided by the demands of trucking. “Their families cannot accept the lifestyle change that just happened with their spouse,” said Williams, whose company now requires candidates to read over a lengthy list of job requirements and sign off on each stipulation. “It has really helped the ‘he said, she said’ issues that come up,” Williams said.

Jeff Wilmarth, president of Silver Arrow Express of Rockford, Ill., said he has lost a few drivers to local carriers but has seen less turnover than larger companies. “Being a regional hauler, we have a lower turnover ratio, and we try to get them home more often,” Wilmarth said. “We have more drivers knocking on our door attempting to apply.”
– Dean Smallwood

CCJ Equipment Demand Index: Illinois shows its strength

Illinois looks to be the gem for the month of August in terms of spot-market equipment demand. In August 2005, Illinois and Ohio tied for the top for dry van spot-market demand. Texas and Indiana tied for third with 4 percent fewer searches.

Illinois nearly had double the number of reefer searches as the next closest state, Texas, in August 2005. There’s a three-way tie for third between California, Wisconsin and Ohio.
Texas remains the king of spot-market demand for flatbed equipment with a commanding 6 percent lead in terms of search activity over Illinois and Ohio.

The CCJ Equipment Demand Index, based on equipment searches performed by TransCore customers, shows the top 15 states in terms of demand for trucks in the spot market. 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.