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Long Expected Woes of the Trucking Industry are Beginning to Appear

October 30, 2019 by Levinson and Stefani Leave a Comment

There is a lot to be said nowadays about the fate of the trucking industry. Not only has it become a recurring theme over the last decade for publications to seemingly write one article every few months highlighting the idea that the trucking industry would soon disappear, only to retract those words when the American Trucking Association (ATA) or another prominent figure in the industry would produce new statistics establishing just the opposite. It’s been a recurring theme for years, and even we have covered the “expectations” that industry representatives have set amid the continued “crisis” we are all hearing about. In May of 2019, we wrote about the ATA’s announcement that by 2026 there was an expectation that there would be a driver shortage of 175,000 drivers in the United States. Rightfully so, those in the industry panicked and in turn, it became once again widely publicized that arguably one of the most important industries in the United States would potentially be in a position it could never get out of.

When news broke in the beginner of October that 4,200 truck drivers had lost their jobs in September 2019, it proved something that many had long been arguing against; the idea that the trucking industry was resilient and had the ability to adapt to changing demographics. In fact, Trucking Info had the opportunity earlier this year to interview the Chief Economist for the ATA, Bob Costello, who stated “some trucking companies have put an emphasis on female drivers, but the highest percentage of female drivers we have seen is around 20% for those fleets,” speaking volumes to the weight the trucking industry is placing on diversifying its fleet in an attempt to keep pace with the ever changing dynamics of the US workforce. Further, we have also written about how companies are attempting to change their recruiting tactics to not only reach women, but reach younger drivers altogether to ensure that the shortage does not get out of hand. While these tactics are sure to help diversify and hopefully alleviate the potential shortage, what happens when the economy begins to suffer? How does the industry the respond to a driver shortage when fleets are being forced to layoff thousands of drivers each month?

A Bleak Outlook for the Industry May Be Getting Worse

There is a lot to be said nowadays about the fate of the trucking industry. Not only has it become a recurring theme over the last decade for publications to seemingly write one article every few months highlighting the idea that the trucking industry would soon disappear, only to retract those words when the American Trucking Association (ATA) or another prominent figure in the industry would produce new statistics establishing just the opposite. It’s been a recurring theme for years, and even we have covered the “expectations” that industry representatives have set amid the continued “crisis” we are all hearing about. In May of 2019, we wrote about the ATA’s announcement that by 2026 there was an expectation that there would be a driver shortage of 175,000 drivers in the United States. Rightfully so, those in the industry panicked and in turn, it became once again widely publicized that arguably one of the most important industries in the United States would potentially be in a position it could never get out of.

When news broke in the beginner of October that 4,200 truck drivers had lost their jobs in September 2019, it proved something that many had long been arguing against; the idea that the trucking industry was resilient and had the ability to adapt to changing demographics. In fact, Trucking Info had the opportunity earlier this year to interview the Chief Economist for the ATA, Bob Costello, who stated “some trucking companies have put an emphasis on female drivers, but the highest percentage of female drivers we have seen is around 20% for those fleets,” speaking volumes to the weight the trucking industry is placing on diversifying its fleet in an attempt to keep pace with the ever changing dynamics of the US workforce. Further, we have also written about how companies are attempting to change their recruiting tactics to not only reach women, but reach younger drivers altogether to ensure that the shortage does not get out of hand. While these tactics are sure to help diversify and hopefully alleviate the potential shortage, what happens when the economy begins to suffer? How does the industry the respond to a driver shortage when fleets are being forced to layoff thousands of drivers each month?

Safety Takes a Hit as the Industry Suffers

Our previous articles on this subject were in response to the growing age gap in the trucking industry and how the roads could be less safe as a result. For example, due to companies being unable to hire younger drivers, some turned to incentivizing older drivers who would push back retirement for more money or benefits. While these drivers provided much more experience and understanding of the roads, it could be argued that having fewer drivers who happened to be older also presented serious concerns about road safety, such as response time and vision concerns.

This argument becomes even stronger with the news that the industry is slashing jobs, meaning active recruitment for new drivers takes a backseat and the age demographic likely continues to be pushed back, becoming much older. Additionally, the current administration’s push to change the hours-of-service rules for truck drivers also presents issues with tired, overworked drivers, who may no longer be forced to stop for mandatory 30-minute rest breaks.

All these factors present serious risks to drivers on the road. In any industry, workers who are overworked, tired, and not forced to take breaks present disastrous results to production and safety. The trucking industry should be no different. News of the industry’s financial struggles just force the public to be aware of the potential ramifications that could occur on the road. Our lives could be put in danger due to the truck driver shortage and now, its very real financial shortcomings.

$77 Million in Grant Funds to Support Truck Driver Training and Safety Efforts

October 29, 2019 by Levinson and Stefani Leave a Comment

Big rigs semi trucks of different colors makes and models stand in row on truck stop parking lot for truck driver rest according to log book

Over $77 million in grants will be funneled into states and their training facilities in order to improve commercial vehicle safety.

The Federal Motor Carrier Safety Administration announced in late September that the purpose behind these grants is to perpetuate the organization’s commitment to reducing accidents and increasing overall road safety–and working with local partners to do so.

“Safety is the department’s top priority and these grants will further assist state and local officials in their efforts to prevent commercial motor vehicle crashes,” said Transportation Secretary Elaine Chao.

These grant funds are divided into three classes:

1) High Priority: $43.3 million toward improving commercial motor vehicle safety and advancing states’ safety technology capabilities

2) Commercial Driver License Program Implementation: $42 million toward states’ improvement of the national commercial driver license program

3) Commercial Motor Vehicle Operator Safety Training: $2 million for education groups working to train veterans for commercial bus and truck driving jobs

“These important grants demonstrate the agency’s commitment to providing local areas with the resources they need to make a difference for commercial motor vehicle safety,” explained FMCSA Administrator Ray Martinez.

High Priority Program funds–which are comprised of commercial vehicle safety effort and Innovative Technology Deployment grants–are being distributed to universities, police divisions, and state transportation departments.

One recipient, South Dakota’s Department of Transportation, was awarded $1.1 million from the High Priority grant for its tire and thermal brake inspection systems and for its Department of Revenue’s International Registration Plan and International Fuel Tax Agreement information system upgrades.

“The funding made available by U.S. Department of Transportation will allow us to continue our commitment to motorists and the trucking industry to provide a safe and efficient state transportation system,” said deputy secretary of South Dakota transportation, Joel Jundt. “The detection system to be installed will alert truckers to problems they may not be aware of and the upgrades to the registration system will make it easier for interstate truckers to register, report and pay fees.”

For the Commercial Driver License Program Implementation grant recipients, funds will be applied in order to help states comply with federal licensing standards and program rules. Funds will also give a boost national groups who work with states in their compliance efforts.

The American Association of Motor Vehicle Administrators and the New York State Department of Motor Vehicles have both received over $5 million from this grant.

Additionally, The Delaware Department of Transportation was granted $1.8 million from both the High Priority and Commercial Driver License programs, to support its tire abnormality detection system as well as its “trucker portal,” which will act as a repository for Delaware’s commercial motor vehicle systems information.

Lastly, the Commercial Motor Vehicle Operator Safety Training grant is given to 16 different community colleges, vocational schools, and truck driver training schools that specifically provide commercial driving training.

On top of these new grants, the FMCSA is working toward implementing new programs that would potentially encourage more drivers to join the industry–especially young people and veterans.

Joliet Junior College was given over $169,000 in support of its Commercial Driver’s License training program. The college’s dean of workforce education and training says the school serves an area southwest of Chicago with more than 35,000 veterans, and that the college is particularly military-friendly.

These efforts by the FMCSA come right around the time that the American Transportation Research Institute released its “Critical Issues in the Trucking Industry” list for 2019–which shows the concern of driver shortage at the top of the rankings for the third year in a row. 

The American Trucking Associations says the trucking industry was 60,000 drivers short as of 2018. ATA President Chris Spear identifies veterans as a specific group that can help to offset this shortage.

However, several groups, such as the Owner Operator Independent Drivers Association, find that the driver shortage issue is a myth, backed by carriers not admitting to the bigger problems at hand: driver retention and recruitment, low wages, poor working conditions, and disappointing employee treatment.

The Bureau of Labor Statistics also published a study showing that the shortage in the long-haul trucking industry could be remedied with wages that finally meet trucker demands and that align with their working conditions.

Hidden Dangers of Construction Zones

October 28, 2019 by Levinson and Stefani Leave a Comment

The holidays are approaching. If you’ve spent any time in the Woodfield Mall area recently, you would know that there is a lot of road construction going on, making an already heavy-traffic area even more congested, especially on the weekends when the shopping faithful are out in full force. If that isn’t frustrating enough, you may have also heard about the driver who crashed his car into the mall and drove around a bit before being taken into custody by police. It just goes to show that there are some things in life that you can’t control, like the actions of others. When it comes to traffic safety there are things you can look out for that will hopefully make your next trip to the mall safer and more bearable. 

Avoid Road Rage

Everyone has seen people lose their cool while driving. Maybe you’re guilty of it yourself.  Remember, even if people can see your hand signals, they likely can’t hear what words you are screaming at them. If you have kids in the car, they will certainly hear them. Sometimes hand gestures are appropriate while driving, like waiving thank you to another motorist who lets you merge in front of them, or letting someone else know you are waiting to let them through. However, expressing your disdain for someone probably won’t help them learn any kind of lesson and will only cause your own blood pressure to rise. The best bet is to try and stay calm. Focusing your attention on one guy you think might be a jerk can leave you at risk of getting distracted and might make you miss other hazards. It’s much better to keep your cool and keep your attention focused on avoiding collisions.

Look for Construction Vehicles 

There are all kinds of dump trucks, backhoes, pickup trucks, and other heavy machinery roaming around construction areas. Sometimes they leave the coned-off sections of the road and meander through traffic. If you’re not looking, suddenly a bulldozer can jump out in front of you. It’s worth it to scan the portions of the road that are blocked off to normal traffic as you look forward in anticipation of other vehicles maneuvering in front of you. Often times, workers will signal to drivers to let them know when a work vehicle is attempting to cross or enter the road. It would be a mistake to always rely on that. You can’t expect everyone else to always do safe and reasonable things, but you can take steps to help ensure your own safety. This is one of them. 

Take Your Time 

Eventually, we all get where we’re going. It’s best to plan for the worst and take your time. This is especially true for shopping trips. The value of your life and limbs far exceeds any stuff you can buy. If you put things into perspective, parking spots are not worth fighting over. Merging ahead of that one guy who has been irritating you since the last stop sign isn’t worth it. Plus, (parents will get this one), if you are less stressed out from your perilous journey to the mall, you are less likely to lose it when your child inevitably begs you to buy another worthless piece of plastic they will forget about five minutes after returning home. You may show up a little later, but you’ll glide through the mall, sipping your latte, skillfully deflecting your kids’ outright obnoxious demands to get them more stuff they don’t need. Take solace in knowing that even if you have to sit in the car longer you can always drop a few quarters into one of those mall massage chairs and let those automated rollers knead the frustration away. 

It’s Teal Pumpkin Project Time!

October 25, 2019 by Jay Stefani Leave a Comment

Halloween is usually a fun time for kids and parents alike. The neighborhood comes alive, decorations come out, and children contemplate costume choices. If you have kids, it’s a safe bet you’ll have access to a treasure trove of candy (with the kids’ permission, of course…). And if you have more than one child, you can enjoy them discovering the joys and dilemmas of the bartering system. If one of your kids has a food allergy, like my daughter, the trading game takes on new challenges.

My son has long since learned he gets all of the candy my daughter can’t have (nothing with dairy, peanuts, or tree nuts) — but he has to forfeit an equal amount of his haul that is safe for her. Over the past several years though, thanks to the growing awareness of Teal Pumpkin Project®, my daughter has fewer pieces of “noncompliant” candy.

TealPumpkinProject.org

What is The Teal Pumpkin Project?

The Teal Pumpkin Project, which we’ve promoted for years, exists to raise awareness of food allergies, as well as creating beacons for children searching for safe treats during their tricking adventures. FARE (Food Allergy Research & Education) is an excellent resource for parents and families with food allergies, but it really helps kids during “candy season” with a page dedicated to safe ideas for non-food treats for the little ghosts and goblins. The site has some great suggestions, not only for cheap “prizes,” but also how to make kids with food allergies feel welcome. Here are some non-food suggestions from FARE:

  • glow sticks, bracelets, or necklaces
  • Pencils, pens, crayons or markers
  • Bubbles
  • Halloween erasers or pencil toppers
  • Mini Slinkies
  • Whistles, kazoos, or noisemakers
  • Bouncy balls
  • Finger puppets or novelty toys
  • Coins
  • Spider rings
  • Vampire fangs
  • Mini notepads
  • Playing cards
  • Bookmarks
  • Stickers
  • Stencils

Please be mindful that some non-food treats contain food allergens too. One common example is modeling clay, which sometimes contains wheat. Further, check non-food treats for latex, which is also a rather common allergy.

Don’t misunderstand us, we’re not saying no candy ever. Instead, we’re advocating some basic safety precautions. Let’s make trick-or-treating more inclusive. You can keep the experience safe by keeping your food treats and non-food treats in separate bowls.

Trucking Industry Slowdown: Especially Difficult Quarter for Knight-Swift Transportation

October 24, 2019 by Levinson and Stefani Leave a Comment

Capacity has increased due to big rig orders hitting a record high last year, with both major and independent trucking companies upping capacity in correlation with higher rates. This was caused mostly by the trade war, which led to a change in regular shipping patterns.

Overcapacity has proven itself a huge cause in the current challenging freight industry of 2019.

David Jackson, CEO of the country’s largest trucking company, Knight-Swift Transportation, is predicting overcapacity to make for a highly difficult next quarter for the industry.

As Knight-Swift gears up to report its earnings for the third quarter of the year, Jackson says he is currently working with the company’s investors to prepare for instability.

“The freight environment is difficult,” he explains. “It has been more difficult than people expect from an earnings standpoint.”

Jackson says the trucking industry is about to hit his leading company’s bottom line, while he also expects truck and rail stocks to experience a similar negative impact.

Knight-Swift has lowered its earnings plan for the rest of 2019–previously, its earnings guidance was between 54 and 57 cents per share now, its forecast falls between 47 and 48 cents.

The trucking company is also expecting to make even less during its fourth quarter, lowering its prediction of earning between 73 and 77 cents per share to between 62 and 65 cents.

According to Jackson, overcapacity is the culprit. Capacity has increased due to big rig orders hitting a record high last year, with both major and independent trucking companies upping capacity in correlation with higher rates. This was caused mostly by the trade war, which led to a change in regular shipping patterns.

Additionally, while the trucking market is working to correct itself, employment rates given by the U.S. Department of Labor indicate a for-hire reduction of 4,200 trucking industry jobs last month–the third month in a row the industry has retracted open employment opportunities.

In August, the trucking industry dropped 5,100 jobs, on top of 300 back in July.

Jackson says these reductions aim to improve the carrier operating environment. “People in the industry and investors are looking for when that inflection point will come. [The] general consensus is, that is happening the second quarter of the year.”

Because capacity will most likely reduce after this challenging period, Jackson expects freight rates to return to stability during the first half of 2020.

Until this upswing, company earnings will continue to reflect the repercussions of overcapacity.

While Knight-Swifts’ overall business is comprised of 90% contract trucking, its revenue per truck declined 3% in the second quarter of 2019. The company’s brokerage revenues–where it uses the spot market to directly connect drivers and customers–decreased by 10%.

“There is going to continue to be near-term pressure on freight rates, but capacity is leaving the space and that is reducing the oversupply problem,” explained Jackson, whose comments come while the American Trucking Associations is also warning the industry of a continuation truck driver shortage.

The American Transportation Research Institute’s list of critical issues shows truck driver shortage leading the industry’s concerns for the third year in a row.

The list comes after the ATRI collects over 2,000 surveys from industry stakeholders, with 51% of responses from trucking companies and another 35% from professional commercial truck drivers.

However, there is a fierce debate regarding the validity of this issue. The ATA has been fighting against a study by the Bureau of Labor Statistics, which finds that the driver shortage is in fact a myth.

In the BLS study, findings show the labor shortage within long-haul trucking would potentially be solved with proper wages that meet truckers’ demands and working conditions.

The Owner Operator Independent Drivers Association (OOIDA) also believes the idea of driver shortage is a farce backed by major carriers refusing to admit to large industry problems–such as those surrounding driver retention and recruitment, poor working conditions, wages not keeping up with inflation, and unsatisfactory employee treatment.

The ATA currently estimates that there is a need for over 60,000 drivers, with a possible shortage of 100,000 drivers over the next five years.

The ATA also says it supports the ‘Drive-Safe Act’ legislation, otherwise known as the Developing Responsible Individuals for a Vibrant Economy Act, which works to allow 18-year-old drivers to have a CDL and contract as regular employees in the industry.

Critics say the driver shortage myth aims to win lawmakers’ support in legislation such as this, which they say will not remedy the industry’s chronically excessive driver turnover rate.

American Trucking Association Targets “Nuclear” Verdicts

October 21, 2019 by Levinson and Stefani Leave a Comment

American Trucking Associations President Chris Spear is planning to lead the organization in fighting large court verdicts against the trucking industry. He claims the association is always quick to compensate those involved in cases in which the ATA is at fault, but that most cases are not being settled fairly.

“We’re growing very tired as an industry of being picked on by the plaintiff’s bar,” Spear said. “I think we’re growing very tired of padding the pockets of trial lawyers at the expense of trucking jobs, and we’re just not going to stand for it anymore.” Spear claims these verdicts are an “all-out assault” against the trucking industry, and therefore, ATA should be positioning itself to fight back.

Spear told Transport Topics Radio that he believes the number of lawsuits against the trucking industry is increasing as attorneys who specialize in these kinds of lawsuits are amping up their advertising. These are what he calls “nuclear” lawsuits.

He claims these “massive” suits come against the trucking industry regarding incidents that “are clearly not [its] fault,” and that trial lawyers in these particular suits are working a false narrative that the industry is “devastating the fabric of families involved in these accidents,” which he claims are usually not at the hands of truckers. 

However, as any individual who has learned of any trucking-involved accident knows, this is clearly not the case.

We recently wrote about a historic “underride accident” case that comes after a slew of these accident reports over the past few years. Underride accidents take place when a car slides underneath a tractor trailer, and is one of the deadliest types of accidents on U.S. roadways.

The particular case referenced occurred when a family was awarded $42 million in a lawsuit against trucking company Barkandhi Express and Utility, when 16-year-old Riley Hein’s car became trapped under the side of a trailer made by Utility Manufacturing Company, causing the truck to drag Riley’s car for a half mile until it caught on fire, killing Riley immediately.

Trailers are not currently required to have side guards, even though the trucking industry has admitted in trial that over 200 people a year die in underride accidents.

The Truck Trailer Manufacturers Association says adding the weight of new guards to trailers would require companies to add more tractor trailers onto the roads, which it says would be more of an inconvenience than a safety benefit.

What is worse–documents revealed in Riley’s case show the TTMA asking major trailer manufacturers to provide detailed information regarding side guard costs so that the association could be able to potentially develop defense strategies against future underride lawsuits.

Still, Chris Spear and the American Trucking Associations have been handpicking cases to highlight only what they hope will gain public traction in opposition of lawsuits against the trucking industry.

Spear brought up a particular case in his Transport Topics interview, which occurred in 2014 and involved a pickup truck crossing a median and colliding with a tractor-trailer on a Texas interstate. The family of the pickup driver argued in court that the trucker should have pulled over due to inclement weather conditions, and the jury awarded them close to $90 million. The carrier, Werner Enterprises, is still working to appeal this decision.

“We’re paying substantial money to make [verdicts like these] right, and this [legal] profession needs to be called out,” says Spear.

However, Spear isn’t giving all of the facts of the case. According to court documents, evidence shows Werner had been staying quiet in regards to its disregard for safety policies around new student drivers. Each year, Werner hires 4,000 new drivers without previous truck driving experience. The driver in this case was a student driver, who exceeded 60 mph in icy conditions. The National Weather Service had been reporting freezing rain and icy roads 12 hours before the collision, yet Werner never communicated this warning to its driver.

“Werner’s lack of basic safety systems and its inadequate training processes for students drivers–combined with the business model of assigning student drivers on expedited deliveries–is creating a highly dangerous and unsustainable dynamic on U.S. Highways,” said the family’s co-lead counsel, Eric Penn of the Penn Law Firm.

What Spear also fails to mention is that the jury had heard the extent of the evidence and made what they believed to be a fair verdict. Of course, juries can make an incorrect judgment, but even when they do make a verdict against the trucking industry, tort reform comes into play.

Tort reform limits the recoveries awarded to those harmed by trucking industry dangers. This turns out to be nonsensical, as no two cases are the same and should always be judged on their own merits, not by limits on recovery.

The American Trucking Associations feels differently. Spear says verdicts like the one in the pickup truck case have made him decide to pledge to actively work with government leaders on tort reform efforts, even though he knows the overall view on the topic may not be in his favor.

“On the federal level, the votes may not be there for federal tort reform. In fact, I know that.”

If these limits weren’t enough, we have the trucking industry going to extreme lengths to avoid admitting fault in accidents. Not only is Utility Trailer Manufacturing Company working to appeal the $19 million it had to pay for its part in the verdict of Riley’s case, but it offered the Hein family a $14 million settlement if they kept all internal documents quiet.

In another case against Werner, court documents showed the trucking company staying quiet about its disregard for safety policies in regards to new student drivers–Werner hires 4,000 new drivers a year without any previous truck driving experience.

What Spear also doesn’t mention is the fact that trucking companies and their insurers hire as expensive and prestigious law firms for their cases as possible–so, not only are jurors always making decisions based on information from both sides, but these law firms are powerful and know how to swing a case in their favor–whether or not their techniques are ethical.

If verdicts like the ones Spear mentions are so unfair, what does that say about the trucking industry’s position and their lawyers’ abilities to make a compelling argument? 

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