Tonnage rebounds in December

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Swift Transportation’s board agreed Jan. 19 to accept a buyout offer from an entity formed by company founder Jerry Moyes in an all-cash transition valued at about $2.74 billion, including the assumption of approximately $332 million of net debt. Under the deal, shareholders would receive $31.55 a share; the board rejected an earlier bid from Moyes at $29 per share. The transaction is expected to close during the second quarter of this year.

YRC Worldwide has brought management of its two largest subsidiaries – Yellow Transportation and Roadway – under one organization. Mike Smid has been named president and chief executive officer of the new YRC National Transportation. Separately, YRC Worldwide subsidiary YRC Regional Transportation has consolidated USF Bestway and USF Reddaway under the USF Reddaway brand.

Freight Transportation Services Index fell 1.4 percent in November from the October level, declining for the fifth time in six months to drop to its lowest level since January 2004, the U.S. Department of Transportation’s Bureau of Transportation Statistics reported. The November freight index of 107.6 was down 4.7 percent from its peak of 112.8 in January 2005.

The owner of a motor coach that exploded during the Hurricane Rita evacuation, killing 23 elderly evacuees, was sentenced Jan. 10 to five years of probation for mismanaging his fleet and failing to require drivers to complete vehicle inspection reports. Global Limo owner James Maples also has been barred from the bus industry. Maples was acquitted Oct. 3 of the most serious charge of conspiring to falsify driver time logs.

A notice in the Federal Register indicates that the Departments of State and Homeland Security may require passports for U.S., Canadian or Mexican citizens entering or re-entering the United States by Jan. 1, 2008, even though Congress has allowed for an extension until June 2009.

Ol’ Blue, USA recently conducted a survey on its website (www.oldblueusa.org) about the Federal Motor Carrier Safety Administration’s hours-of-service regulations. The survey revealed that 77 percent of the 1,094 respondents admitted to deliberately violating the HOS regulations in the past, and 55 percent said they currently were still deliberately violating the rules.

Truckers smoking alone in their cabs now are exempt from Ohio’s new anti-smoking law. The Ohio Department of Health decided to exempt commercial trucks from the ban after facing criticism from drivers and the trucking industry. Ohio voters on Nov. 7 approved the constitutional amendment that prohibits almost all workplace smoking and bars it in most public places.

Georgia Department of Trans-portation, in partnership with HELP Inc., is installing PrePass to allow tractor-trailers to bypass weigh stations along state interstates.

Tonnage rebounds in December
The American Trucking Associations’ advanced seasonally adjusted for-hire Truck Tonnage Index jumped 3.9 percent in December after falling 3.6 percent in November. On a seasonally adjusted basis, the index increased to 110.9 from 106.8 in November.

Still, the index decreased 5.5 percent compared with a year earlier, although this was an improvement from November’s 8.8 percent year-over-year plunge. While subject to revision once the final numbers are released, the index was down 3 percent, compared with 2005. The not-seasonally adjusted index decreased 6.3 percent from November to 99.8.

“Clearly the fall freight season is changing,” said ATA Chief Economist Bob Costello. “The robust 3.9 percent month-to-month gain in December, the largest monthly increase since a 7.3 percent surge in January 2005, is the result of more shipments later in the fall freight season than what we typically saw in the not-too-distant past. As retailers sell more merchandise in January due to the proliferation of gift card giving, this trend is likely to continue in the years ahead.”

Although the increase from November was solid, tonnage was off 5.5 percent from December 2005, Costello said. “Nevertheless, it is important to remember that year-over-year comparisons are difficult due to the boom in heavy-construction freight during the fall of 2005 as the rebuilding of the hurricane-struck areas in the Gulf Coast commenced.”

ATA calculates the tonnage index based on surveys from its membership and has been doing so since the 1970s. The baseline year is 2000.


ATA sets sights on next reauthorization bill
Planning for the next reauthorization of highway programs has begun but will become a higher priority during 2007, American Trucking Associations President Bill Graves said during a conference call last month with transportation journalists. Although the current highway authorization was approved only in August 2005, it was a couple of years overdue, and the current authorization ends in 2009. “Much of the work in 2007 will be working toward a strong agenda,” Graves said.

During the conference call, Graves said the association’s activities will be focused on five major issues:

*Recognition of the essentiality of the motor carrier industry. ATA wants to be sure that the next highway reauthorization bill reflects the importance of the trucking industry to commerce and the national economy.

*Getting more drivers behind the wheel. “We have an aggressive campaign under way to *Moving freight safely. Graves highlighted several initiatives ATA already supports, such as mandatory seat belts for truck drivers and limiting speed for trucks. In the coming months, ATA will look more at driver training and on security, including finalization of the transportation worker identification program.

*Being environmentally responsible. The 2007 engines are a big step in that area, and ATA wants to help the nation further its energy self-sufficiency, Graves said. He added that ATA

*Paying the industry’s fair share when it comes to infrastructure.

More money is needed, and “there will be lots of discussion about what the appropriate way to do that is.” For now, ATA supports funding through the current mechanism of the fuel tax, but the next reauthorization may force the trucking industry to consider alternatives.

Tim Lynch, senior vice president of federal relations and strategic planning, added that there are three specific developments ATA is watching carefully and is preparing to become engaged in:

*A federal appeals court soon will rule on the challenges to the hours-of-service regulations.

*The infrastructure commission plans to complete its work this summer, and will recommend financing options for highway development.

*In state capitals around the nation, governors and legislatures are looking at selling or leasing toll roads to private third parties. Lynch said ATA will fight efforts where the proceeds will not be going toward funding highway infrastructure.
– Avery Vise


Turnover rises in third quarter
The driver turnover rate among truckload carriers increased during the 2006 third quarter following improvements during the first and second quarters of the year, the American Trucking Associations reported. ATA reported higher annualized driver turnover rates for both large and small truckload carriers during the 2006 third quarter.

Large truckload carrier line-haul driver turnover increased to 121 percent from 110 percent in the second quarter. Small truckload carrier turnover, meanwhile, jumped to 114 percent from 100 percent. Large truckload carriers generate at least $30 million in annual revenue. A small carrier earns less than $30 million in annual revenues. Less-than-truckload line-haul driver turnover was 14 percent.

Small truckload carrier driver turnover exceeded 100 percent during the last four consecutive quarters for the first time since ATA began collecting driver turnover statistics in 1995. “As more and more large carriers try to get out of the long-haul market, more small carriers are filling the gap,” says ATA Chief Economist Bob Costello. “This is resulting in higher turnover rates for the segment of the industry that traditionally had a much lower turnover rate.”

Year-to-date through October, and compared with the same period in 2005, the average length-of-haul for large truckload carriers dropped 1.5 percent, while the small truckload carriers saw an increase of 12 percent.

ATA, in conjunction with A.C.T. Research, is conducting a study to quantify turnover in several markets, as well as to identify factors associated with turnover. ATA says the information will help the industry structure operations to lower turnover. Participating carriers will receive a summary of the results. The online survey is at this site.


Senators reintroduce security legislation
Leaders of the Senate Commerce Committee introduced legislation (S. 184) to implement measures that the Senate passed last year in a comprehensive transportation security bill and that Congress failed to adopt before the end of the session. Due primarily to time constraints, Congress adopted a relatively narrow version of security legislation that included measures to tighten rules governing illegal residents working as truck drivers and to require name-based background checks of truck drivers operating at ports who don’t hold hazardous materials endorsements. Drivers applying for or renewing hazmat endorsements already must undergo a more stringent fingerprint-based check.

Trucking-related items in S. 184 would:

*Order the Department of Transportation to assess the state of trucking security and the economic impact of possible upgrades;

*Require DOT in consultation with the Department of Homeland Security to study highway routing for hazmat transportation; and

*Order DHS to consider development of a national public sector response system to receive security alerts.


CCJ Hot Spots: A Midwest trifecta

Illinois (Outbound)
Destination State Avg Rate Min Rate Max Rate Avg Fuel Surcharge Avg Accessorial
Van WA 1.5233 1.2805 1.766 0.21 539.07
OR 1.5143 1.2602 1.7684 0.26 576.04
MS 1.4227 1.2013 1.6442 0.25 197.96
Reefer MS 1.8296 1.5886 2.0706 0.19 272.06
OR 1.4479 1.3145 1.5813 0.22 718.03
ID 1.4202 1.3131 1.5272 0.21 451.93
Flatbed ID 1.8863 1.5881 2.1845 0.23 534.8
AR 1.7436 1.3777 2.1095 0.18 158.85
MN 1.7413 1.4874 1.9952 0.14 94.93
Ohio (Outbound)
Destination State Avg Rate Min Rate Max Rate Avg Fuel Surcharge Avg Accessorial
Van ID 1.4834 1.2797 1.705 0.27 849.14
WA 1.3997 1.1814 1.6179 0.24 703.35
OR 1.392 1.1814 1.6025 0.26 696.53
Reefer MN 1.4164 1.1674 1.6654 0.14 212.55
MO 1.3931 1.2017 1.5845 0.22 236.18
MS 1.387 1.2032 1.5709 0.12 284.31
Flatbed AR 1.7771 1.4401 2.1141 0.12 178.58
WA 1.6306 1.5423 1.7189 0.06 382.93
MS 1.5726 1.3468 1.7983 0.27 216.25
Indiana (Outbound)
Destination State Avg Rate Min Rate Max Rate Avg Fuel Surcharge Avg Accessorial
Van ID 2.2108 1.7981 2.6236 0.31 719.33
WA 1.5558 1.2335 1.8781 0.25 605.91
AR 1.4426 1.271 1.6142 0.27 187.1
Reefer MS 1.5826 1.4206 1.7446 0.26 223.86
AR 1.4544 1.3398 1.5689 0.27 185
WA 1.4445 1.3123 1.5768 0.18 558.19
Flatbed ID 1.8252 1.326 2.3243 0.32 566.16
MN 1.6835 1.5301 1.837 0.13 85.57
MS 1.6337 1.3884 1.8789 0.16 121.58

For December, the CCJ Hot Spots for spot-market freight opportunities were Illinois, Ohio and Indiana. In cooperation with freight-matching leader TransCore, we highlight the nation’s three hottest states – those where the outbound load to truck imbalance is most in favor of the carrier.

We then pair these states with market rate data to identify the three best outbound paying lanes by each of the three most popular equipment types – van, reefer and flatbed. And like the three origin states, each of these destination states has positive load-to-truck ratios. Load-to-truck ratio and market rate data are courtesy of TransCore. The goal is to highlight not only the best states for spot-market freight but also the best outbound opportunities from those states.