DOT OIG: Too little data on Mexico program

Repossessions and liquidations of tractor-trailer trucks surged 110 percent in 2007 compared with 2006, according to Nassau Asset Management’s NasTrac Quarterly Index. Factors include the decline in homebuilding, rising fuel costs and increased competition, the company says. Nassau provides collections, repossessions and remarketing services to the nation’s leasing and finance industry.

Environmental Protection Agency expects to have about $14.8 million available for the State Clean Diesel Grant Program during the current fiscal year. The program, which was authorized by the Energy Policy Act of 2005, allows states to provide grants or loans to diesel engine operators to retrofit anti-idling technologies that have been verified or certified by EPA or the California Air Resources Board. For more information, visit www.epa.gov/cleandiesel.

American Transportation Research Institute and the Federal Motor Carrier Safety Administration are collaborating on the design of field tests for onboard safety systems. The goal is to generate data and analyses allowing carriers to improve investment decision-making. The effort includes a confidential survey of motor carriers regarding use of onboard safety systems. The survey is available online at www.truckline.com/OSSUserSurvey.

Freight Transportation Services Index rose 2.4 percent in January from its December level, matching its largest monthly increase in the last two years, the U.S. Department of Transportation’s Bureau of Transportation Statistics reported. The January increase was the third rise in the last four months. At 111.5, the Freight TSI is down 1.5 percent from its peak of 113.1 achieved in November 2005, but up 3.2 percent in the four months since September.

Volvo Trucks North America on March 15 announced that workers had ratified a new three-year United Auto Workers contract that covers about 2,600 UAW members at the New River Valley plant.The new contract ended a strike that began Feb. 1.

Federal Highway Administration released an additional $195 million in emergency relief funding to help rebuild the Interstate 35W bridge that collapsed in August 2007, bringing the total federal transportation investment in the recovery and rebuilding effort to almost $377 million.

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A U.S. Department of Transportation study on the potential impacts of climate change and other environmental impacts on transportation infrastructure in 48 contiguous counties from Galveston, Texas, to Mobile, Ala., concluded that over the next 50 to 100 years, 27 percent of major roads in the region could be vulnerable to flooding due to future sea level rise and natural sinking of the area’s land mass. The study is available at http://climate.dot.gov.

American Trucking Associations told Connecticut Gov. Jodi Rell that it will seek new ways to help truckers safely remove ice and snow from atop their trailers. The State Legislature is considering penalties for drivers who cause crashes or injuries specifically because they neglected to clear their vehicles’ roofs.

EPA established final emissions measurement accuracy margins for in-use testing of heavy-duty diesel engines and adopted several changes to the in-use testing program. The changes are intended primarily to adjust to delays in initiating the pilot programs, as well as engine manufacturers’ concerns regarding the schedule for purchases and installation of the necessary devices. To view the rule, visit www.regulations.gov and search EPA-HQ-OAR-2004-0072.

Arizona Trucking Association joined with CDTA to offer its members substance abuse testing and background screening programs at a reduced cost. CDTA specializes in corporate drug and alcohol testing programs.

The Department of Transportation’s Office of Inspector General determined in a six-month interim report that because fewer carriers than expected have participated in the Federal Motor Carrier Safety Administration’s cross-border pilot program, “no reliable statistical projections regarding safety attributes can be made at this point.” OIG issued the report on March 10, and DOT Inspector General Calvin Scovel testified about the findings at a March 11 Senate Commerce Committee oversight hearing. The program, which began Sept. 6, allows Mexican trucks to travel beyond a 25-mile commercial zone into the U.S. interior. U.S. carriers participating in the pilot program also are permitted for the first time to haul freight into Mexico with their own equipment.

Only 19 Mexican carriers have been granted provisional authority, one of which has since withdrawn, OIG says. But in April 2007, FMCSA had anticipated granting provisional authority to 25 carriers each month, until 100 were participating. FMCSA says another 28 carriers have qualified but have not filed the proof of insurance. But even if those carriers did so, the total number would reach only 47 – less than half the 100 carriers FMCSA envisioned, OIG says.

FMCSA records also indicate that only 247 trips extended beyond the commercial zones, OIG says. In August 2007, FMCSA estimated that, based on the number of vehicles approved at that time, 540 vehicles would be participating in the project if 100 Mexican carriers eventually received provisional authority. But as of Feb. 25, only 70 vehicles were identified by the 16 Mexican carriers that had participated up to that point, including the carrier that dropped out. As of the same date, FMCSA records show 3,680 crossings into the United States by project participants, with 247 – or 6.7 percent – listing destinations beyond the commercial zones. About 89 percent of these appear to be to points in California.

OIG also found that DOT has followed through on its commitment to establish and support an independent panel to assess any adverse safety impacts from the pilot project, but that the panel is concerned that it will not have sufficient data to draw meaningful conclusions.

Also, FMCSA has established and enhanced mechanisms for state and federal monitoring and enforcement of safety rules. FMCSA records show that about 3,700 checks have been done at the border. But OIG found that a key quality control measure promised to Congress has not been implemented. The measure was intended to ensure that checks of all Mexican drivers and vehicles crossing the border are occurring as planned. “Without this quality control measure, FMCSA does not have assurance that it has checked every Mexican truck and driver that is participating in the project when they cross the border into the United States,” the OIG report states.

Peters versus Dorgan
During the Senate Commerce Committee hearing, a Democratic senator who sponsored a measure last year to restrict funding for the pilot program scolded Transportation Secretary Mary Peters for continuing the program despite what he described as an unquestionable ban by Congress.

“In my judgment, the intent of Congress is quite clear,” Sen. Byron Dorgan, D-N.D., said at the March 11 hearing. “The Department of Transportation is prohibited from using appropriated funds in this fiscal year to operate this pilot program.” Dorgan said he believed that the Bush administration “has always intended to do what it wanted to do, notwithstanding what Congress told it to do.” He added that he regretted supporting Peters’ confirmation as secretary of transportation.

In December, Congress prohibited funding to “establish” a program that allows U.S.-certified Mexican trucks to carry loads across the border and into the country. DOT interprets “establish” as meaning to start a new program rather than to stop the current one, which was adopted more than two months before the provision was enacted.

At the hearing, Peters noted that the House version of the DOT funding bill would have barred spending to “establish or implement” a cross-border program, so the final version is drafted more narrowly. Peters also defended the program as a way to give U.S. carriers direct access for the first time to the Mexican market.

The U.S. Circuit Court of Appeals for the Ninth Circuit is considering whether the Bush administration can continue the program despite congressional attempts to stop it.

The court heard arguments Feb. 14 in lawsuits filed by Public Citizen, the Teamsters, the Sierra Club and the Owner-Operator Independent Drivers Association. OOIDA, along with Advocates for Highway & Auto Safety, testified at the Senate hearing.

Tonnage index up 2.4% in January
The American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index increased 2.4 percent in January 2008 after rising an amended 1.5 percent in December 2007.

ATA recently revised the seasonally adjusted index back five years; the new seasonal factors resulted in slightly lower truck tonnage volumes for 2007 than previously reported. ATA’s Truck Tonnage Index fell 1.5 percent in 2007 from the previous year; ATA originally reported a 1.4 percent drop. December’s tonnage level, meanwhile, increased a modest 1.5 percent, down from the previously reported 4.1 percent gain.

ATA annually revises the index as part of its calculation for the upcoming year’s seasonal factors. ATA also restated the not-seasonally adjusted data for several months in 2007 as some carriers amended tonnage levels at yearend. The not-seasonally adjusted index surged 11.4 percent from December to 113.6.

The latest seasonally adjusted increase marked the third sequential gain, totaling 5.7 percent. The tonnage index stood at 117.3 in January, a 26-month high. Tonnage also was up 5.3 percent from a year earlier, which was the largest year-over-year gain since January 2005.

ATA Chief Economist Bob Costello said January’s strength is a good sign, but he stopped short of saying that truck tonnage is on the road to recovery. “The economy is either in a mild recession or on the brink of one, and we are hearing anecdotal reports that freight volumes slowed in February,” Costello said.

Truck tonnage, which often leads both recessions and recoveries, has rebounded, in some cases, before the overall economy actually started a recession, Costello said. “I anticipate that truck tonnage will recover before the general economy, but I am withholding judgment on whether truck tonnage is in a recovery mode until I analyze another month or two of data,” he said.

ATA calculates the tonnage index based on surveys from its membership and has been doing so since the 1970s. The report includes month-to-month and year-over-year results, relevant economic comparisons and key financial indicators. The baseline year is 2000.

Con-way slows trucks to cut carbon
Con-way Freight announced March 10 that it has turned back the speed governors on its 8,400-tractor fleet in a move to improve fuel conservation and reduce carbon emissions. The company has adjusted the governors on its engines to run at a maximum of 62 miles per hour, down 3 miles per hour from previous settings.

The less-than-truckload carrier says the move is expected to reduce consumption of diesel fuel from its over-the-road tractor fleet by nearly 3.2 million gallons annually while eliminating about 72 million pounds of carbon emissions from the environment; the carbon gas reduction is equivalent to removing nearly 7,300 automobiles from America’s highways.

“Freight transportation, by its nature, is a significant consumer of carbon-based energy resources,” says John G. Labrie, president of Ann Arbor, Mich.-based Con-way Freight. “Yet it also is one where if we look creatively at how we operate the business, we can find and adopt practices that reduce our carbon footprint and help the bottom line. Fuel conservation and cost savings aside, this speed reduction initiative will have the single-largest impact on carbon footprint reduction of any operational or business practice change available to us.”

TCA honors Jenkins with Past Chairman’s Award
The Truckload Carriers Association presented its Past Chairman’s Award posthumously to Richard “Buck” Jenkins, co-owner of Diamond Transportation System Inc. of Racine, Wis. The Past Chairman’s Award – TCA’s highest honor – is given to industry leaders who make a significant contribution to the business community, the industry and TCA.

Jenkins, a TCA member for 36 years, served as a TCA officer and treasurer from 2000-2004 and also served as chairman of the Bylaws Committee from 1992-1993 and 1997-1998. He also was involved in the Wisconsin Motor Carriers Association and served in numerous positions, including chairman. In 2003, he received the Frank W. Babbitt Award, WMCA’s highest honor, for his outstanding service, support of the trucking industry and contributions to the association. Jenkins died from cancer in November 2007 at 74.

Haight receives PTDI’s Crittenden Award
The Professional Truck Driver Institute presented the 10th annual Lee J. Crittenden Memorial Award to Ray Haight, executive director of MacKinnon Transport of Guelph, Ontario. The award is given to the person who has done the most to advance the ideals and goals of PTDI, of which Crittenden was a staunch supporter until his death in April 1998. Haight – who also was elected 2008-2009 chairman of the Truckload Carriers Association – was instrumental in changing PTDI’s board of directors to a fully functioning board that took an active role in moving the institute forward, PTDI says.

CCJ Hotspots: Midwest, Southern states hot in February
The leading spot-market states in February were Illinois, Ohio and South Carolina, according to the latest CCJ Hotspots data. 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, all of the destination states have 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.

Navistar sues Ford again over engines
Navistar International Corp. announced that it is again seeking hundreds of millions of dollars from Ford Motor Co. in a long-running disagreement over a diesel engine contract it claims the automaker violated. Navistar, which originally sued Ford last June for alleged breach of contract, said it re-filed the lawsuit after mediation last year failed to settle the dispute. The engine maker claims Ford broke its contractual promise that Navistar would be the company’s primary manufacturer and supplier of V-6 and V-8 diesel engines in North America.

The lawsuit, re-filed in Cook County Circuit Court on Feb. 26, claims that Ford itself plans to manufacture a 4.4-liter diesel engine in North America by late 2009 or 2010, and that the engine will be used in the F-150 pickup truck and possibly other vehicles. Navistar has been the exclusive diesel engine supplier for Ford’s heavy-duty pickup trucks since 1979.

ATA seeks help on fuel prices
In the wake of a six-week 73-cent surge in the average price of diesel, the American Trucking Associations is asking for help from various federal authorities and agencies to contain the price of both diesel and gasoline. In a March 20 letter, ATA President Bill Graves urged President Bush to release oil from the Strategic Petroleum Reserve (SPR) in an attempt to break the current run-up in crude oil prices. “I know that crude oil inventories are not the problem, but the oil market is no longer functioning on supply-and-demand fundamentals as many hedge funds drive up the price of crude based on speculation. We need something to break that chain, and a SPR release could do it.”

Graves told President Bush that the trucking industry is “very concerned that out-of-control energy prices will greatly magnify our current economic slowdown and delay our economic recovery,” Graves said. “If households have to spend their forthcoming tax rebate checks on energy, the stimulus will be significantly limited. The more consumers spend on fuel, the less they have to spend on other goods or services.”

The trucking industry is on a pace to spend an unprecedented $135 billion on diesel fuel this year, $22 billion more than a year earlier, Graves said. The trucking industry is experiencing the highest prolonged fuel prices in history, he said.

ATA’s request to President Bush followed by less than a week a letter to Energy Secretary Samuel Bodman to suspend the filling of the SPR. “At a minimum, we don’t believe the government should be buying oil during this time of record-level prices,” Graves told Bodman.

In the letter to Bodman and other letters to the administrators of the Federal Motor Carrier Safety Administration, Federal Highway Administration and the Environmental Protection Agency, ATA sought various forms of near-term and long-term relief, including:

· Increased refining capacity;
· Environmentally sound exploration of Alaska’s Arctic National Wildlife Refuge and Outer Continental Shelf;
· A 400-pound weight exemption for auxiliary power units (APUs);
· Increase in funding for the SmartWay Program;
· A 65 mph national maximum speed limit;
· Suspension of the 12 percent federal excise tax on the purchase of APUs; and
· Further encouraging the use of the energy-saving devices.

Los Angeles port approves Clean Truck Program
After more than three hours of debate and public testimony, the Los Angeles Harbor Commission on March 20 approved the Clean Truck Program designed to accelerate the replacement of high-polluting trucks with cleaner trucks, provide market incentives to encourage private investment and create a capitalized asset-based drayage system at the nation’s largest container port.

The plan now goes to the Los Angeles City Council for final consideration. “The passage of L.A.’s Clean Truck Program puts us on the road toward cleaner air for the benefit of all Southern Californians,” said David Freeman, Los Angeles Harbor Commission president. “This historic vote is a victory for our health, our environment and our economy.”

The port’s CTP is designed to encourage an evolution of the port drayage market toward an asset-based system in which licensed motor carriers (LMCs) enter into drayage concession agreements with the port and are responsible for owning and maintaining the truck assets used to perform port drayage services. Port of Los Angeles drayage concessionaires also must commit to using employee drivers for port drayage by year 2012 through a phased-in schedule, with flexibility afforded for peaks and troughs in demand by use of temporary or part-time employees.

In November 2007, the Los Angeles and Long Beach Boards of Harbor Commissioners approved a progressive dirty truck ban schedule that begins Oct. 1 by prohibiting all pre-1989 trucks from working in port drayage. By Jan. 1, 2012, all drayage trucks operating in the port complex will be required to meet 2007 federal emissions standards, which will reduce port-related truck pollution by an estimated 80 percent. In December 2007, both port commissions approved a $35 gate fee per 20-foot container unit (TEU) to generate funds to help underwrite and accelerate the replacement of the existing truck fleet.

The Port of Los Angeles CTP is consistent with the similar program recently approved by the Port of Long Beach in terms of the truck ban schedule. At the March 20 meeting, the Harbor Commission approved a revised start date for the collection of the Clean Truck cargo fee to Oct. 1 in order to align implementation dates with the Port of Long Beach’s clean truck initiative and allow more time for distribution of radio-frequency tags and reader installation at terminal gates.