Freight Transportation Services Index rose 1.2 percent in July from its June level, rising for the fourth consecutive month, the U.S. Department of Transportation’s Bureau of Transportation Statistics reported. For the first seven months of 2008, the freight index advanced 4.2 percent, its largest increase for the first seven months of the year since 2002. In 2007, the index dropped 0.4 percent in the first seven months of the year.
IdleAire Inc., comprised of six investment management companies, now owns essentially all of IdleAire Technologies Corp.’s assets with the official closing Aug. 29 on its $17.5 million bid submitted earlier this year. IdleAire has 131 locations in 34 states, providing filtered heating and air conditioning, electrical outlets and a range of communications and entertainment options for truck drivers.
YRC Worldwide said that it is accelerating its integration of its two largest operating subsidiaries, Yellow Transportation and Roadway. Since acquiring Roadway, the company has reduced duplicate back-office functions, shared technology applications, formed common management teams and, most recently, combined corporate sales. While the brands will remain, the latest effort will bring together the local sales teams and offer a comprehensive portfolio of services through one operating network.
Forward Air Corp. said its wholly-owned subsidiary Forward Air Solutions Inc. has completed its acquisition of certain assets of Spartanburg, S.C.-based Service Express Inc. Terms were not announced.
Schneider National signed with the Army Reserve as an Employer Partner, joining in an alliance that allows the two organizations to recruit, train and employ individuals interested in both serving the nation and pursuing a career in the transportation and logistics industry. The agreement provides Army Reserve soldiers opportunities for employment with Schneider National after they successfully complete their military occupational training (MOS).
Anderson Trucking Service launched its EcoSolutions initiative to inform the public and its own employees about its efforts to address environmental challenges such as climate change and waste production. The company’s new website, www.atsecosolutions.com, discusses the EcoSolutions Environmental Policy Statement.
Citing federal restrictions on tolling interstates, the Federal Highway Administration said it was obliged to turn down an application from the Pennsylvania Department of Transportation and the Pennsylvania Turnpike Commission to place tolls on Interstate 80. PennDOT and the turnpike commission had submitted an application seeking tolling authority under a federal pilot program. Under the plan, PennDOT would transfer I-80 to the commission, which would make annual lease payments to PennDOT. But there is no basis to conclude that the proposed lease payments are legitimate operating costs, FHWA said.
Transportation Secretary Mary Peters, who previously headed FHWA, favors tolls and privatization, and FHWA’s announcement made clear that the agency would rather have approved the transaction.
“Tolling interstates is a viable option for many states to fund highway improvements or to improve performance conditions,” said FHWA Administrator Tom Madison. “Because we are legally bound to ensure applications for this program meet all congressionally mandated requirements, however, we are regrettably unable to approve this application.”
FHWA said Pennsylvania’s application failed to meet the legal requirements for correct use of toll revenue. Although the pilot program Congress has established for tolling interstates allows toll revenue to be used for lease payments, the amount of the payment is required to be based on an objective market valuation. The commission’s application, however, included no information or data justifying the proposed amount for the annual toll payment or establishing that the level was based on an objective market valuation, FHWA said. Despite a request that it do so, the commission provided no additional information supporting the lease payment level.
“There is simply no evidence that the lease payments are related to the actual costs of acquiring an interest in the facility,” Madison said. “Although we are unable to move the application forward, we stand ready to assist the Commonwealth in finding creative ways to address its transportation needs.”
The Americans for a Strong National Highway Network – a coalition that represents highway users, including the American Trucking Associations and the Owner-Operator Independent Drivers Association – applauded the decision. It had asked the Department of Transportation to reject the Pennsylvania plan, saying it was “inconsistent with the provisions and spirit” of the federal pilot program that authorizes tolls on interstate highways. Pennsylvania planned to use part of the toll revenue paid by the turnpike commission for projects throughout the commonwealth with the remainder going for I-80 maintenance and improvement and for toll collection expenses. Under the federal pilot program, toll revenue is designated for projects only on the tolled facility, the coalition said.
Had DOT failed to buy that argument, the coalition had others, including a claim that the commission’s plan to place toll facilities so as to exempt 70 percent of local residents from paying tolls opens the door to potential legal action under the Commerce Clause.
Court upholds ports’ concession plans
ATA continues to fight Los Angeles, Long Beach ports
The American Trucking Associations appealed a federal judge’s decision last month to reject a preliminary injunction against the concession agreements that the Port of Los Angeles and Port of Long Beach planned to implement this month. The U.S. Court of Appeals for the Ninth Circuit was expected to rule on the matter by Oct. 1.
U.S. District Judge Christina Snyder agreed with the ports that the security aspects of the ports’ plans were sufficient to qualify the agreements as meeting the safety exception to federal preemption. ATA called the safety and security issue “a red herring.” The association did win some points in Judge Snyder’s decision, however. For example, Judge Snyder suggested that ATA would win on its preemption arguments on all grounds other than safety and security. And the court rejected the ports’ contention that the ports are sovereign tidelands immune to federal preemption.
The ports were slated to begin their Clean Trucks Program on Oct. 1. The program would immediately bar 1988 and older trucks from the ports, and truck engines must meet 2007 federal emissions standards by 2012. Also on Oct. 1, the port will begin assessing a $35 fee per 20-foot-long cargo container to fund a truck replacement financial assistance program.
ATA doesn’t oppose those elements of the Clean Trucks Plan, but rather its litigation focuses on the ports’ requirement to force carriers to sign concessionaire agreements with the ports. The association argues that the concessions would impose a broad range of operational requirements that recreate a regulatory environment comparable to state intrastate economic regulation, which is federally preempted. ATA also said it is especially troubled by the Port of Los Angeles’ plan to ban independent contractor drivers within five years.
California sues firms over contractors
As the Port of Los Angeles and Port of Long Beach battled with the trucking industry over concession agreements limiting or eliminating the use of independent contractors, the state launched its own assault on some companies that use owner-operators. California Attorney General Jerry Brown on Sept. 5 filed lawsuits in Los Angeles Superior Court against two trucking companies he charges misclassified owner-operators serving the two ports and said other lawsuits would follow.
“We are cracking down on these two companies and investigating several others that are taking advantage of their workers and cheating the state out of payroll taxes,” Brown said in a statement. “These are low-paid truck drivers working long hours under onerous conditions who are not getting the benefits they deserve.”
Brown said an investigation it began in February uncovered numerous state labor law violations by several trucking companies. The lawsuits allege that the two trucking companies have an unfair advantage over their competitors in violation of California Business and Professions Code 17200 by depriving employees of benefits and protections entitled to them under California law. These companies also are cheating the State of California out of thousands of dollars in state payroll taxes, Brown said.
The two operations in question are Jose Maria Lira and Pac Anchor Transportation. The state charges that Lira controlled all aspects of his drivers’ work, yet classified his employees as independent contractors and made them sign documents stating that they were independent. The drivers worked exclusively for Lira, working 60 hours or more per week, delivering cargo in Lira company trucks, the state charges.
Brown charged that Pac Anchor and Alfredo Barajas were involved in an arrangement in which Barajas supplied Pac Anchor with 38 trucks and drivers. Pac Anchor directly paid Barajas’ truck drivers, providing them with 1099 tax forms at the end of the year. The investigation found that the drivers should be classified as employees because they do not own the trucks they drive, do not have a business independent of Pac Anchor or Barajas, have no real opportunity for “profit” other than compensation on a piecework basis delivering loads, and can be terminated at will.
CCJ Hotspots: Illinois and Alabama again
Illinois made its seventh consecutive appearance as a CCJ Hotspot in July, while Alabama joined the ranks for the second consecutive month. The third CCJ Hotspot was Ohio. 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 these 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.
Penske’s certifiable technicians
Company’s certification gets its own certification
Michael Peters joined the military at 17 right out of technical school and went to work for Penske after his service ended. With three years at the company, he’s now a Technician 1 in the Louisville, Ky., facility. David Scrivner has worked for Penske Truck Leasing for 16 years – 10 as a Lead Technician in Lexington, Ky. It was a career he had long wanted, and he joined Penske right after he graduated from Nashville Auto Diesel College.
Scrivner and Peters have something important in common besides being Penske employees. They are among only 25 technicians who have completed Penske’s technician certification program (TCP). But while certification will always be a remarkable achievement, its ranks won’t remain exclusive forever; about 670 are enrolled in the TCP as the company rolls the relatively new program out to more regions. And just this summer, Penske’s TCP program was certified by the National Institute of Automotive Service Excellence (ASE) as a Continuing Automotive Service Education (CASE) program.
Penske has had a strong technician training program for years. Aside from the certification program, each Penske technician typically receives 40 hours of training annually, says Mike Hasinec, vice president of maintenance support. “Our training has grown and become enhanced over time,” Hasinec says. For example, Penske has worked with suppliers to provide online training tools and now offers 70 Web-based modules to its technicians. But despite a wealth of training resources, Penske’s training program remained somewhat unstructured until recently. “We didn’t have anything formalized,” says Ken Coots, senior vice president of maintenance services.
In December 2004, the maintenance leadership team decided that a technician certification program would add more structure and clarity to Penske’s training efforts, says Holly Clark, maintenance training administrator for Penske. Clark and other members of the maintenance training management team spent more than a year developing the curriculum and other elements of the TCP. In September 2006, Penske began a pilot demonstration of the program in two of its 16 service areas. The program is now finalized, and Penske is rolling it out nationwide one region at a time.
The TCP covers three levels of training, from Level 3 through Level 1. Each level includes hands-on Web-based and classroom training on internal policies and procedures – such as Penske’s 101-step preventive maintenance process for medium- and heavy-duty trucks – and truck- and component-specific maintenance practices. The program also includes a distance learning curriculum developed with and conducted for Penske by Penn Foster, a nationwide career education school. The training becomes more rigorous depending on the level. For example, the Level 3 Penn Foster curriculum includes an introduction to diesel mechanics and engine fundamentals, while Level 1 includes advanced steering and suspension and advanced brake systems.
Completing the certification program clearly will give a technician a major leg up in career advancement, although it’s no guarantee of a promotion in a specific situation as such decisions involve more than an applicant’s technical skills and knowledge. But certification does come with a definite financial benefit. Technicians completing Level 3 certification receive a $500 bonus, while Level 2 certification brings $600 and Level 1 is worth $700.
“Technicians are the lifeblood of what we do, and for them, the technician certification process is a career development tool,” says Mark Oliver, senior vice president of field maintenance. “There is an incentive financially, and the TCP program represents an opportunity for upward mobility if they choose to participate.”
For many technicians, however, enrolling in the TCP is not really about the bonus or even career advancement, Coots says, adding that a large number of technicians pursuing certification are already at Technician 1. “For many, it’s about the pride of achievement.”
Penske is the first – and so far only – truck leasing, rental and logistics provider to earn an ASE certification for technician training. Industry suppliers and dealers had obtained CASE certification, but no fleet had done so.
“The automotive community is proud of Penske’s commitment to a quality in-house technician training program,” says ASE President Tim Zilke.
Penske officials learned about the opportunity for CASE certification while the company was still conducting the initial pilot of its TCP. Generally speaking, ASE certifies technicians themselves, but the CASE program certifies entire training programs that might be offered by companies, organizations and institutions. CASE program standards address the training provider’s process of developing and delivering training; it doesn’t prescribe specific program content.
Clark began working on CASE certification in June 2007, a process that ultimately took about a year. Just preparing the documentation and application took eight months.
Penske decided to pursue CASE certification for a couple of reasons. For starters, executives and managers thought it would be useful to have an independent group examine Penske’s program, Coots says. And then there were the technician recruiting and business development benefits of being the first fleet to obtain such certification.
Oliver believes that customers will recognize the CASE certification as further evidence that Penske’s maintenance meets stringent criteria. “We believe this will lead to increased trust and confidence from our customers, now that we’re now formally certified as a quality provider of maintenance services,” he says.
And it’s about the technicians themselves, Coots adds. “To provide techs with leading-edge training that keeps pace with the ever-changing engine and vehicle technologies is an invaluable asset for recruiting and retaining the best-in-class talent we need to serve our customers and their fleets.”
– Avery Vise
House votes to end Mexican program
The U.S. House of Representatives last month voted 395 to 18 to block U.S. borders to Mexican trucks – and, in effect, Mexican borders to U.S. trucks – without congressional approval. If enacted, the legislation (H.R. 6630) effectively would kill the existing pilot program, which the Federal Motor Carrier Safety Administration renewed for another two years in August.
Whether the Senate will take up the legislation before Congress adjourns for the year is unclear. Moreover, a presidential veto would be certain, although based on the margin in the House and the Senate vote on similar legislation last year, Congress would have the votes to override a veto. In addition, the Senate version of the transportation appropriations bill includes a similar measure.
The Bush administration sharply criticized the House vote. “The world is watching how we choose to honor our international commitments,” FMCSA Administrator John Hill said. “At a time of surging exports and growing demand by U.S. truck drivers for new opportunities, it is simply irresponsible for Congress to deny American drivers the opportunity to compete in Mexico and American shippers a more efficient and timely way of getting their goods south.”
In a letter to the House before the vote, the White House said that President Bush’s senior advisers would recommend that he veto H.R. 6630 if it were passed by Congress because the legislation would prevent the United States from meeting its obligations under the North American Free Trade Agreement. The White House added that intensified enforcement activity has addressed any Mexican truck safety concerns. “In fact, data from October 1, 2007, through March 28, 2008, show that Mexico-domiciled carriers in the demonstration project have been ordered out of service for safety reasons at a lower rate than U.S.-based carriers overall.”
Congress OKs $8 billion for highways
Congress last month agreed to boost the highway trust fund by $8 billion, thereby preventing the fund from running out of money by the end of September. President Bush signed it into law Sept. 15. An unprecedented decline in highway miles due to high gasoline prices led to a sharp decline in federal fuel tax receipts.
Transportation Secretary Mary Peters said the shortfall in the trust fund clearly shows the need for reform. “It’s time to embrace a new approach to transportation that does not rely on high fuel consumption and instead directs funds where they are actually needed.”
Sen. Barbara Boxer (D-Calif.), chairman of the Environment and Public Works Committee, credited the concerted lobbying efforts of the American Trucking Associations and other highway user groups, highway construction firms and state and local governments with helping to move the legislation forward.
“We’re pleased to see that the administration and Congress recognize the significant need to sustain the nation’s infrastructure, which is a vital link to the health of the U.S. economy,” said Bill Graves, ATA president and chief executive officer. “Restoring these critical funds is an important step in solving the complex problem of funding our transportation network.”