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Recent Study Shows Overall Trucking-Related Costs on Decline

February 10, 2021 by Levinson and Stefani Leave a Comment

According to the American Transportation Research Institute’s recent update to its “Analysis of the Operational Costs of Trucking,” overall trucking operations costs have decreased. These findings come from 2019 financial data representing motor carriers across all fleet sizes and sectors.

The new report indicates a freight decline taking place during the last six months of 2019. Because of this, along with fuel prices dropping during the same period, the marginal cost of trucking fell as well.

Per mile, the average motor carrier marginal cost was $1.65 in 2019, a 9.3% decrease from the cost per mile of $1.82 in 2018.

“In 2018, trucking encountered record demand and the highest tonnage in the last 20 years,” said ATRI in its November report. “In the contraction that followed in 2019, a number of independent factors were at play to lower the operational costs of trucking.”

For the report, ATRI split costs into two separate categories–vehicle-based motor carrier costs and driver-based motor carrier costs. Fuel, repair, maintenance, licenses, tolls, insurance premiums, and truck lease and purchase payments made up vehicle-based costs, and wages and benefits made up driver-based costs.

The majority of major line item costs saw an overall decrease from 2018 to 2019, with the biggest drops taking place within truck insurance premiums (which dropped by 19%), and repair and maintenance costs (which dropped by 16%). Fuel costs saw a slightly smaller percentage decrease of 9%.

Additionally, around 15% of fleets took advantage of alternative fuel during 2019, 2% more than in 2018. For these alternative fuel methods, compressed natural gas options had the highest rate of adoptions in both years, and battery/hybrid models had the lowest rates of adoption.

Finally, the industry saw a slight drop in driver wages and benefits, coming to 69.3 cents per mile in 2019 from 77.6 cents per mile the year before. Still, overall benefits and wages are above 2016’s numbers–a year when the trucking industry saw more freight softening. Carriers continue to use higher wages as a way to attract and retain drivers, although the numbers dropping, even slightly, are no help to the current driver shortage.

However, many fleets have found loopholes.

“We’re still mining data to some degree, but it does look like the increase in starting and retention bonuses probably comes close to offsetting any declines we saw in wages,” assured Dan Murray, Senior Vice President of ATRI. “That was just sort of a new approach to compensate the drivers without necessarily raising wages.”

The decline in driver wages, according to Murray, comes from the trend of offering retention and starting bonuses as well as an uptick in entry-level driver on-boarding, as new truckers typically make less than more senior drivers.

Retention bonuses rose by more than 81% between 2018 and 2019, with the average starting bonus also increasing from $1,562 to $1,846 (18%), according to the analysis.

These bonuses are a panic-induced response to the driver shortage continuing on within the entire trucking industry, explained Sean McNally, spokesman for American Trucking Associations. The industry was short 60,800 drivers at the end of 2018, ATA estimates.

“These bonuses showed a recognition of the need to adequately compensate drivers by fleets, and that helped offset some of the economic softening toward the end of the year,” said McNally.

Still, ATRI’s report indicates that driver wages are likely to see a huge boost during 2020 due to increased trucker demand throughout the COVID-19 pandemic. With stay-at-home orders causing many more Americans to shop online, and with the surge in demand for medical equipment, resources, and personal protective gear, truckers have been working harder–and for longer hours–than ever before.

“I think e-commerce is growing stably, but in 2020 it will see huge leaps,” Murray predicts. “The million-dollar question is, ‘Is it temporary, or have we made a permanent change to eating, sleeping, [and] breathing on the internet?’ We don’t know at this stage.”

Regardless, transportation and logistics group CliftonLarsonAllen’s Brandon Knight said fleets need to be keeping as close an eye as possible on their current expenses.

“Given the chaos and volatility of freight markets these days, it is more critical than ever that trucking fleets closely monitor their cost centers,” he said. “ATRI’s Operational Costs report is an important benchmarking tool for fleets of all sizes and sectors.”

As COVID Vaccine Becomes Available, Truckers Could be Among First to Receive It

February 9, 2021 by Levinson and Stefani Leave a Comment

Right now, many major pharmaceutical companies are cooperating with transportation firms in order to deliver the first rounds of COVID-19 vaccinations. Among the first people to receive such vaccines are those working in essential and critical jobs–which could include truck drivers.

Operation Warp Speed–the name for these early distribution efforts–have been slated to begin in mid-December. By the end of 2020, the country could see at least 40 million doses having been delivered, according to the Centers for Disease Control and Prevention.

The Advisory Committee on Immunization Practices held a virtual open meeting in an emergency webcast on December 1st in order to vote on a temporary recommendation as to who will receive the vaccine first.

The committee decided, in a 13-to-1 vote, that health care personnel and residents of long-term care facilities should be the first to get the vaccine during its Phase 1A release. They also voted that essential workers–potentially including truckers–would comprise the entirety of Phase 1B’s deployment.

Phase 1C will include adults over the age of 65 and adults with high-risk medical conditions.

Now, the advisory committee’s interim recommendation will go to Robert Redfield, CDC Director, for its final approval.

On the day of the webcast, American Trucking Associations sent letters to the White House, President-elect Joe Biden, the CDC’s Advisory Committee on Immunization Practices, and the National Governors Association in an effort to convince them to take into account the essential status of the trucking industry while the national vaccine distribution strategy is decided upon within the government. In the letters, ATA claimed that truckers must be considered critical infrastructure workers and be among the first vaccinated.

“As the trucking industry is called upon to deliver vaccines across the country, it is imperative that truck drivers have prioritized access to the vaccine to minimize the potential for supply chain delays and disruptions,” said Bill Sullivan, ATA Executive Vice President for Advocacy, in the letter. “Our nation’s efforts to successfully confront the COVID-19 pandemic depend on the resilience and integrity of the transportation network. As we saw at the outset of the pandemic, when supply chains are disrupted, consequences are fast to follow.”

The U.S. Department of Transportation has been meticulously preparing for the safe and efficient transportation of the vaccine, once it is approved by the Food and Drug Administration, in order to avoid said consequences.

“The Department has laid the groundwork for the safe transportation of the COVID-19 vaccine and is proud to support this historic endeavor,” said Elaine Chao, U.S. Transportation Secretary.

UPS Inc., DHL, and FedEx Corp. have also said that they are already establishing their distribution plans, as are many other major transportation providers. Logistics companies that will need to transport the vaccine have been building new cold storage facilities where possible in order to have enough space for the vaccine.

Former truck driver, current trucking industry expert, and University of Minnesota-Morris economist and professor, Stephen Burks, who is also a recent COVID-19 survivor, maintains that it is imperative for truck drivers to be among the first to receive the vaccine.

“Medical personnel taking care of COVID patients would be the first in line, and that would make perfectly good sense,” he said. ”And there are essential workers, such as truck drivers and grocery store workers, who have to be interacting with people to make the basics of the economy go on, even when we have a lockdown. Truck drivers count in this group of essential workers.”

Burks explained that he feels positively in regards to the trucking industry and logistics industry’s plans that will hopefully allow for the speedy and efficient transportation of the vaccine to wherever it is needed.

“I am expecting some glitches, but I would expect [that] overall, it will mostly work,” he said. “It’s going to be tricky, especially for the Pfizer vaccine. The problem is to get through the next six months or eight months. After that, we’ll be in a world that will be relatively plentiful with vaccines. We’ve got to get through the summer. Will we substantially get the job done? I am hopeful.”

In regard to these truckers receiving the vaccine early, the panel is holding meetings this month while the vaccines go through the federal approval process in order to make its final decisions.

Industry Partnerships Collaborate to Boost Driver Visibility and Safety

February 8, 2021 by Levinson and Stefani Leave a Comment

Industry groups have banded together in efforts to boost trucking safety through a new design challenge, dubbed the ‘Truck of the Future.’

Together for Safer Roads, along with PepsiCo Inc., Republic Services, and Anheuser-Busch InBev are working together to find the most efficient and cost-effective methods of ending big-rig involved crashes. The groups say non-commercial vehicle drivers and passengers are particularly at risk in regards to visibility issues while on the road with heavy-duty trucks.

The timing of this new design challenge comes in honor of the World Day of Remembrance for Road Traffic Victims.

According to safety experts from large fleets gathered by Together for Safer Roads, one of the biggest issues currently at hand for road safety is that of driver visibility. TSR is a global NGO that aims to work with community stakeholders, government officials, and businesses on fleet safety management efforts, technology initiatives, and local projects that will help to prevent traffic crashes and deaths.

TSR also began in alignment with the UN’s Decade of Road Safety and is collaborating with TSR members around the globe. Partners also include groups like AT&T, CalAmp, Geotab, Lyft, Marsh, and Samsara.

“This project is our call to arms regarding an under-appreciated aspect of road safety,” said David Braunstein, president of TSR. “After all, drivers cannot react to what they cannot see or sense. We must make meaningful progress towards the 2030 agenda, and bringing together these influential partners is part of our unique contribution.”

The team effort is looking for startups dedicating efforts to commercially-viable new technology to partner with, and the participating groups say this is the key to finally improving overall driver visibility on roads worldwide.

“There are many interventions that can address driver visibility issues–improved cab designs, collision avoidance systems, and better infrastructure, to name a few,” said PepsiCo’s vice president of global environment, health, and safety, Cormac Gilligan. “PepsiCo is pleased to be a part of a collective solution.”

The group has also partnered with other organizations such as the NYC Department of Citywide Administration Services, UPS Inc., and advisors from prominent truck safety research agencies.

The main goal of the effort is TSR’s intention to reaffirm the groups’ Stockholm Declaration commitment, along with their commitment to the United Nations’ Decade of Action for Road Safety plan, which will continue through 2030.

“At AB InBev, we believe that multi-stakeholder approaches are key to tackling road safety effectively,” said AV InBev global director of safety, Joshua Girard. “The inclusion of our technology incubator in this unique initiative allows us to solve big business challenges with innovation and creativity, all while contributing to the United Nations’ Sustainable Development Goals, and [while] fostering safe communities globally.”

Donald Slager, CEO of Republic Services, agrees, explaining that the company is right to be urging for further innovation within the trucking market and safety initiatives.

“We’re the seventh-largest vocational fleet in the nation,” Slager said. “When you get [to that point], those benefits accrue in large ways because we’ve got 16,000 trucks on the street every day.”

Republic is also consistently looking toward newer technology in order to find ways to keep drivers as safe as possible, according to the company’s vice president of safety, Jim Olson.

“Republic Services operates one of the nation’s largest fleets, and safety is our number one priority,” Olson explained further. “We are constantly evaluating new technologies to help our drivers stay safe behind the wheel. Over the last decade, there have been significant advances in video and sensor technology. We are excited to be part of the core focus team for the Truck of the Future project and the potential for fleet innovation.”

For the TSR project, the chosen innovative solution provider is set to be announced during a virtual pitch day in December. This innovative solution will be implemented throughout international markets, along with that of the United States, throughout 2021.

The overarching goal of all of these initiatives, according to group members, is for the participants to be able to create steady, lasting, and scalable changes within domestic and international road safety.

As Gas Tax Revenue Plummets Across the Country, Diesel Revenue Brought by Truckers Adds Some Stability

February 3, 2021 by Levinson and Stefani Leave a Comment

When states across the country implemented shelter-in-place mandates to try and curb the effects of the pandemic, traffic numbers throughout the nation’s roadways plummeted–except for those of truck drivers.

Truckers, who stepped up during 2020 to deliver our essential supplies, food, and medical resources, also helped keep state transportation department revenue with their regular diesel purchases.

Still, the drop in fuel tax revenue from non-commercial drivers was expected as fewer and fewer people were taking to the roads, according to the Institute on Taxation And Economic Policy’s research director, Carl Davis.

“Especially in the spring, it’s clear that driving just cratered,” said Davis. “Folks are paying a lot less in fuel taxes.”

States typically rely heavily on gasoline tax revenue, but the revenue generated by truckers’ purchases of diesel did help lessen the blow, even while more people than ever were staying home and not filling their tanks.

Unfortunately, the loss in revenue was heavy–$16 billion estimated to have been lost for state transportation departments throughout the year of 2020, according to The American Association of State Highway and Transportation Officials.

“It’s been an incredibly hard time, these last five to six months, for state DOTs and transit agencies, because the revenue isn’t coming in the way that they had planned for it to come in at the beginning of the year,” said Jim Tymon, Executive Director of AASHTO.

Specifically, gas sales dropped to around 228.2 million gallons per day in the month April (as compared to April 2019’s 368.5 million gallons). Sales didn’t drop quite as significantly for ultra-low-sulfur diesel, which showed numbers of around 143.5 million gallons per day (as compared to April 2019’s 159.5 million gallons per day), according to data provided by the U.S. Energy Information Administration.

EIA’s data also shows that April 2020’s gasoline sales were the lowest recorded since 1983–when the group first started collecting this kind of data.

“As we watch traffic patterns, the percentage decrease in trucks [is] significantly less than the percentage decrease in passenger vehicles over the course of COVID,” said Luke Reiner, Director of Wyoming DOT.

Indiana DOT’s spokesman said he saw this first hand, as both truck and passenger vehicle traffic numbers decreased heavily in the beginning of the pandemic, but truck traffic began to increase again much more quickly. Within 20 days, he said, truck traffic numbers had risen back to their typical level of around 27 million vehicle miles traveled daily.

Finally, truck traffic levels ended up becoming around 5% higher than normal numbers by early September 2020 in the state. This increase in Indiana’s monthly diesel revenue came out to around $1.5 million above the state’s normal revenue income.

However, while truck driver traffic has been on the incline, passenger vehicle traffic has not seen such improvement throughout Indiana. Non-commercial vehicle traffic dropped to around 55% below regular baseline levels of the average daily vehicle miles traveled per passenger vehicle, and was still down 8% from normal by September.

INDOT’s revenue for 2020 is estimated to have dropped by around 15%, according to Manning–a loss of about $145 million.

“It does seem to give some sort of indication that people are heavily reliant on trucks to move goods,” said Oregon DOT’s assistant director for revenue, finance, and compliance, Travis Brouwer. “Typically, we find that trucking activity is fairly cyclical of the economy. You would expect in a major downturn that we see today that people would be putting off major purchases. We just have not seen the economy translate into less trucking activity.”

According to Brouwer, Oregon saw driving levels that were down between 40 and 50% this year as compared to years prior. At the end of August, the state saw a 10% drop in driving levels from regular numbers, and a drop of 33% in the number of gallons of fuel sold in April 2020 as compared to previous years.

Additionally, according to Daniel Porter, ODOT’s chief economist, only 100.6 million gallons of taxable gasoline and diesel were sold throughout Oregon in April 2020, as compared to 149.8 million gallons sold in April of 2019. With Oregon Driver and Motor Vehicle Services offices closing for a number of months during the pandemic, the organization has seen an additional further drop in overall revenue.

New Program Launched Urging Truckers to Join Fight Against Human Trafficking

February 2, 2021 by Levinson and Stefani Leave a Comment

A new campaign out of Florida will help truckers become involved in efforts to fight human trafficking throughout the country.

The Highway Heroes campaign, launched in late October by the Florida Department of Highway Safety and Motor Vehicles along with Attorney General Ashley Moody, has a goal of recruiting at least 500,000 truck drivers for this initiative.

According to the U.S. Department of Transportation’s Advisory Committee on Human Trafficking, around 25 million people are forced into commercial sex acts or other forms of labor each year. Ways to identify victims of human trafficking include a person’s particularly anxious behavior, appearance of malnourishment, or lack of control in regards to money and legal identification documents.

“Truck drivers play an important role in our fight to end human trafficking,” Moody said. “By spending so much time on the road, visiting truck stops, and communicating with each other regularly, these drivers create a powerful network that can be called upon to spot and report suspected human trafficking.” Moody is currently serving as the chair of the Statewide Council on Human Trafficking.

Because there are more than 500,000 licensed commercial truck drivers in the state of Florida, around 500,000 letters detailing the program and explaining human trafficking have been sent out to truckers. The letters also direct readers to training resources on the Highway Heroes website. The campaign itself has been dedicated to providing outreach materials to truckers as well as creating a brand new webpage with resources regarding ways to identify human trafficking and how to report potential crimes.

The training resources listed on the Highway Heroes website is provided by Truckers Against Trafficking, a national organization that works to help trucking industry members learn about how best to fight human trafficking. Every Florida CDL holder is able to become a TAT-trained driver through the campaign.

“We are receiving requests for more materials from Florida’s professional drivers and an outpouring of positive comments about their being a part of the solution to this heinous crime,”said Kylla Lanier, Deputy Director for TAT. Lanier hopes that the efforts made in Florida will inspire other states to pursue similar endeavors in order to help end human trafficking across the country.

A digital media campaign for Highway Heroes has also been launched across Florida and will serve messages to commercial truck drivers throughout the state about the realities of human trafficking and how they can make a difference. This digital effort will continue through the month of January, which is National Slavery and Human Trafficking Prevention Month.

These actions are especially important in Florida, which currently ranks third in the United States in number of calls to the National Human Trafficking Hotline, according to the Statewide Council on Human Trafficking. The letter mailed to truckers for the Highway Heroes campaign emphasizes the fact that because there are 12,000 highway miles in the state of Florida, truckers have a vital role to play in these efforts.

“Truck drivers serve as the eyes and ears on our roads–ensuring everyone stays safe,” said Ken Armstrong, President of the Florida Trucking Association. “The members of FTA have made it a priority to train their professional drivers to spot and report human trafficking, with almost 1 million drivers having already received the training nationally. We encourage all Florida commercial truck drivers to become a certified Trucker Against Trafficking.”

Last year, a final rule was passed by the Federal Motor Carrier Safety Administration permanently banning commercial truck drivers who have been convicted of human trafficking from working in the industry–especially truckers who used a truck to commit a trafficking-involved crime.

Additionally, earlier this year, Transportation Secretary Elaine Chao boosted the need to combat human trafficking at the federal level when she challenged trucking industry members to make a commitment to take actions that would help fight trafficking–asking for 100 pledges within 100 days, which was far exceeded by industry representatives in that time frame.

To view the letter sent out to Florida truckers, or to find more information regarding Truckers Against Trafficking and the Highway Heroes campaign, click here.

Vendors Rush to Update ELD Software When HOS Rules Change

February 2, 2021 by Levinson and Stefani Leave a Comment

Electronic logging device manufacturers have been working quickly and diligently to ensure their technology aligns with the changes recently made to hours-of-service regulations–specifically, the rules affecting the number of operating hours a truck driver is allowed to work.

In addition, ELD software changes have been made to boost a commercial drivers’ ability to take advantage of the added flexibility that came with the new HOS regulations. After the Federal Motor Carrier Safety Administration published its final rules in mid-May, ELD vendors had to finish and install all necessary software changes before the September effective date–even beginning to make updates as early as the spring.

“I think it went just about as smooth as you could expect, since there wasn’t any grace period in this regulation.” said National Oilwell Varco transportation compliance manager, James Victory, of the software updates. He noted that NOV’s ELD supplier helped the company in its preparation for the HOS changes. “They just went live with it on [September 29th]. This was an anomaly as far as regulations go, because they were less restrictive instead of more restrictive. So, it wasn’t a big problem adapting to that.”

With the new hours-of-service revisions, a driver can operate for eight hours of driving time with just a 30-minute rest period, as opposed to having eight hours of on-duty time with an off-duty time requirement. “On-duty, not driving” periods now qualify as rest breaks. Additionally, drivers are now able to split their required sleeper berth time by dividing the 10-hour requirement into either an eight- and two-hour period or a seven- and three-hour period.

The new regulations also allow for an extension of the maximum on-duty time period and distance limit under the shorthaul exception, and allow drivers to extend the 11-hour driving limit and 14-hour driving window in adverse or challenging driving conditions by up to two hours.

“It was a tight timeline,” said Teletrac Navman’s safety and compliance product manager, Oswaldo Flores. Teletrac Navman provides its ELDS to companies like National Oilwell Varco. “Fortunately for us and for the industry as a whole, there weren’t many changes” [between the time of the proposed changes and the final rule].

Things looked a little different for Trimble Transportation, though, whose vice president of product management, Glenn Williams, said that once the regulation updates were announced, “our teams worked diligently to deliver software code that accounted for these changes.”

Williams noted that due to his team’s quick work, the company’s software updates became available to its customers in August.

“Since any new rule like this can impact a driver’s workflow, we made a consistent effort to educate customers on what these changes entailed,” Williams explained.

The bulk of software updates during this time were made over-the-air, according to Trimble and many other software vendors. For those who wanted to manually update their ELDs, Trimble created a code for USB sticks.

“To ensure a smooth transition, the new rules were already in the latest version of the software and ready to be activated,” said Verizon Connect’s head of compliance products, Ray Sweeney. “We had teams all over the world on standby at midnight to make sure that the switchover went smoothly and the software was working to the new rules.”

Vendors said the overall appearance of their software didn’t typically change much with these updates, so many users didn’t notice the changes that were made.

“The majority of the work is hidden beneath the surface in the rules engine that is constantly monitoring activity,” said Sweeney.

Software updates for Samsara Fleet Management included “updating our cloud dashboard so that fleet managers would be able to see what drivers’ logs looked like under the rules,” according to the company’s director of product management, Sean McGee.

Over-the-air updates for ELDs are meant to be as user-friendly as possible, said Zonar Systems’ vice president of safety and compliance, Fred Fakkema, who said the user accepting an update is similar to someone allowing an update on his or her smartphone.

Still, the timing of the update is vital, especially considering time zone differences.

“The time was 12:01 a.m. Eastern Standard Time, which was 9:01 here on the West Coast,” said Fakkema. “A lot of trucks aren’t moving at that time, so you can get the update done, and when the driver comes into work, the update is there once they log on.”

Samsara also sent an update over-the-air, which was convenient for drivers because “when they logged in on September 29th, they would see their clocks reflect the new rules without them having to do anything,” McGee explained.