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Trucking Industry

COVID-19 Drives Trucking Industry to Focus on Risk Management and Efficiency

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“The health risk wasn’t as high up on the list pre-pandemic as it is now,” said Brad Jacobs, CEO of XPO Logistics in a panel discussion at the SMC3 Jump Start 2021 conference. “There was no emphasis on wipes, and on washing hands, and not breathing on each other, [or on] distancing [or] paying attention to one’s health. If anybody in the organization is feeling sick or has any symptoms, please stay home. These are all new. These are mainly new in the industry. That’s not going to go back. That’s going to stay.”

The discussion among industry leaders at the panel conversation focused on trucking industry efficiency in the wake of the coronavirus pandemic, especially in regards to new technology implementation and enhanced methods of risk management.

Ramona Hood had just gotten comfortable in her new position as CEO of Custom Critical for FedEx right at the start of the pandemic. She had to quickly learn the best ways to make fast and efficient decisions, handle incoming data, and leverage business strategies during the most tumultuous time the industry has ever seen.

“The last year, for all of us, has been quite a year,” said Hood. “There certainly have been things that we’ve learned that we can move forward with into 2021. And one of those things is our ability to respond to what’s going on. Being quick to bring either value or bring decisions forward that allow the business to progress.”

On top of new decision-making abilities and a wide understanding of technology innovation, Hood also noted that shutdown policies, which continued to change during the pandemic, made her newly-boosted versatility abilities vitally important.

“When you incorporate business agility into the framework of your strategy and how you move through your initiatives…it brings a new level of value to the organization, your employees, as well as your customers,” she explained. “It’s a way that you can improve your business and be quick to adapt to any new environment–more quickly than if you thought about it in a traditional annual plan environment.”

Technology upgrades can also boost profit margins in a huge way, Jacobs said, with companies able to route their trucks as efficiently as possible and create density in LTL. He’s done so with his company, and expects many other trucking professionals to follow suit.

“It may take them a couple of years to do,” he said. “We’ve taken the smart labor technology, smart labor tools, and workforce automation tools that we have in our contract logistics business [and use them] in order to staff up our warehouses accurately to match demand. We’ve taken those and applied them to LTL.”

By using specific algorithms to predict freight numbers from customers, these technologies were also able to be used to bring on new employees accordingly, as well as create a 5% improvement in overall productivity for the company, according to Jacobs.

“The top 10 LTL carriers probably run 20 million miles a day or something like that,” he explained. “As we use more intelligent technology to route those trucks on the highways, we can probably take out a very significant portion of that, like 10% or 15%. I’m not sure what the limit is. [It] could be more than that.”

LTL carriers have also been steadily lowering their operating ratios, Jacobs noted, also detailing that the trucking industry has been working within the less-than-truckload sector for more precise and accurate probabilities and prices.

“I think the long-term trend for LTL is to have more profitable operations,” said Jacobs. “I think technology is the underlying motivation of growth in LTL profits and all kinds of different technologies, [especially regarding] technology on [pickup and delivery] optimization.”

Additionally, new intelligent technology could have major effects on a trucking company’s bottom line. It could also bring in better overall pricing systems and improve current issues regarding overpricing and underpricing, which lead to either a loss of business or a loss of money.

“The pricing system in LTL is archaic,” said Jacobs. “It’s not going to last. It’s not efficient, and things that aren’t efficient don’t last. It’s surprising it’s lasted this long. Eventually, we’ll sell LTL based on space and on dimensions, because that’s what we have.”

Still, Jacobs remains hopeful.

“It’s not just on weight and it’s not on these arbitrary classifications, either, that aren’t always accurate,” he continued. “So, I think the way freight is priced will be more automated, [and] more [often] done by algorithms. I think it’ll be more accurate.”

Independent Contractors Can Maintain Status and Still Receive Safety Training and Equipment

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Truck drivers working as independent contractors can receive safety equipment and technology from motor carriers without creating any conflict in regards to their statuses as independent contractors, according to a new opinion letter released by the U.S. Department of Labor. 

This safety equipment can include innovative resources like driver monitor systems, dash cams, and speed limiters. Additionally, the letter stipulates that independent contractor truck drivers must take specific safety training–an act that would allow these drivers to maintain their current statuses deeming them independent from any particular trucking company.

“We conclude that the safety measures do not constitute control for purposes of determining independent contractor status, and that the owner-operators are likely independent contractors,” explained the Department of Labor’s Wage and Hour Division within the letter, which spanned a total of eight pages.

The letter was written in response to a series of different hypothetical but realistic scenarios outlined by the American Trucking Associations and another anonymous transportation and logistics company.

In ATA’s request, the agency inquired about whether or not motor carriers should be able to exert any particular control over tractor-trailer truck drivers in regards to safety measures that the carrier would prefer be implemented, and whether or not this interferes with the drivers’ statuses as independent contractors. ATA asked if carriers could, by law, have this control over their drivers under the Fair Labor Standards Act, depending on their statuses as independent contractors or as employees.

In the second, anonymous request, the questioning party asked if specific owner-operators are properly classified as being independent contractors in a certain, detailed scenario.

“Based on the facts provided in the first request, we conclude that the requirements to comply with certain legal, health, and safety obligations are not a factor in determining whether a driver is an employee or an independent contractor under the FLSA,” the letter explained. “Based on the facts provided in the second request, we conclude that the owner-operators are likely independent contractors.”

Motor carriers can indeed offer or require specific kinds of safety equipment or safety training to truck drivers without interfering with their independent contractor statuses, the letter continued.

“Today’s letter is a victor for highway safety and for the thousands of truck drivers who choose to be independent contractors,” said Chris Spear, President of ATA. “This opinion will make it easier for motor carriers to utilize owner-operators, while maintaining important safety standards, without risking those drivers’ independent contractor status.”

Still, policy makers in individual states will need to heed the opinions expressed in this letter, which, technically, will only be applicable in regards to federal law and regulation, Spear noted.

“This opinion letter applies only to federal law, but many states rely on federal law and letters like this to make policy,” he said. “Going forward, state policymakers and the courts should value this opinion, and in doing so, encourage motor carriers and owner-operators to enhance training and technology, improving highway safety for all Americans while also allowing drivers to maintain their independent status.”

Regarding the ability for independent contractors’ ability to operate as safely as possible, federal regulators and Congress have designated this responsibility to motor carriers alone, the letter explained. Other industries and businesses do not face these kinds of challenges, which seem unique to the trucking industry.

“This translates to a strong incentive for motor carriers to pursue safety measures and improve regulatory compliance with respect to all of their drivers, employees, and independent contractors alike,” the letter noted.

Additionally, the letter made clear that required training should educate drivers thoroughly on their legal obligations to operate their vehicles as safely as possible; that camera-based and sensor-based safety technology should be able to properly monitor the driver, external conditions, and some internal aspects of the vehicle; and that a truck’s speed-limiter can only prevent a truck driver form operating in an illegal manner.

“A contractual obligation to comply with safety requirements requires no particular action except what the law already requires,” the letter said. “Each of these are the types of legal, health, and safety standards that do not suggest control indicative of employee status.”

Medical Examiner Qualifications Not Up To Par, DOT Audit Says

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We recently reported on the dangers of sleep apnea in truck drivers and the lack of federal oversight regarding the testing and treatment of truckers who may have have obstructive sleep apnea–subsequently impacting their job performances.

Now, a new audit from the Department of Transportation Inspector General has discovered particular weaknesses regarding the federal monitoring of medical examiner qualifications–the examiners that determine whether or not a truck driver can properly and safely operate a commercial motor vehicle based on the driver’s physical qualifications.

“The Federal Motor Carrier Safety Administration’s ability to oversee whether drivers meet physical qualification standards to safely operate a commercial vehicle is limited because of a lengthy outage of the [Medical Examiners] National Registry and a resulting backlog of driver examination reports that were not entered into the Registry,” said the audit released by the Inspector General. “Furthermore, FMCSA has not fully implemented requirements for random periodic monitoring of medical examiners’ eligibility and performance.”

Additionally, “data-quality issues, including missing records,” along with other data accuracy holes and mistakes “limit the effectiveness of FMCSA’s oversight,” the audit continued, explaining that this weakness was a result of driver examination reports not being documented properly, leading to a seven-month registry outage beginning at the tail end of 2017.

“Because of the outage and technical issues in relaunching the National Registry, we estimate that approximately 780,000 driver examinations could be missing from the database,” said the document. “FMCSA is building a new National Registry, but it is unclear when it will be complete.”

To become certified in conducting examinations of truck drivers, physicians and other medical professionals have to begin the certification process by registering, and also must be already licensed in the state in which they will be performing examinations. Additionally, they must meet testing and training requirements.

“Our analysis of National Registry data indicated that 46% of its 70,208 records of certified medical examiners as of May 2019 had outdated medical license information,” said the audit. “Additionally, our analysis of two separate samples totaling 452 driver examinations from three state driver’s licensing agencies we visited found that 21% were not recorded in the National Registry.”

Currently, a Department of Transportation physical examination for a trucker is valid for up to two years, and a trucker may also be given a medical examiner’s certificate for less than the two-year period if the examiner aims to monitor a particular condition.

“Of critical importance, certified medical examiners must submit to the National Registry reports of the results of driver examinations they perform and the medical certificates they issue to qualified drivers,” continued the audit, which also indicated that FMCSA has yet to implement yearly eligibility audits following certification, although it has conducted these initial certification reviews in regards to the eligibility and certification qualifications of medical examiners.

“Without these oversight reviews, FMCSA may be missing fraud indicators or other risks that may require mitigation and has less assurance that drivers are physically qualified to safely operate a commercial vehicle,” said the document.

Over the last six and half years, 14 fraudulent medical certificate convictions have come from Office of Inspector general investigations, and the IG claims that finding and preventing medical certificate fraud is still a top priority.

For example, a Georgia medical examiner’s record falsifications caused more than 600 drivers to have to renew their medical certificates in August 2017. In January 2019, a scheme to enter fake driver examinations to the Registry resulted in an Alabama medical examiner being sentenced to more than three years in prison and fined $10,000, with two workers sentenced to a total of five years of probation for their participation in the scam. From that fraud, FMCSA required more than 2,100 drivers to renew their medical certificates, as well.

Some technical updates are set to be completed by the end of March, the agency assured, and all IG audit recommendations are estimated to be implemented by June 30th, 2023.

“A fully-functional National Registry is a priority under the FMCSA IT Modernization Plan,” said the agency, noting that its interim Registry system can only currently offer partial functionality. “FMCSA plans to award a contract to rebuild the National Registry in the second quarter of fiscal-year 2021.”

Trucking Business Strategies See Major Changes Following Pandemic

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The trucking industry is facing some major innovations this year due to the effects of the coronavirus pandemic on e-commerce and new technology implementation, as discussed by industry experts during the 2021 GlobalTranz Agent Conference.

The conference’s participants discussed subjects like changes in consumer behavior, market volatility, volume shifts within e-commerce, and the overall impacts of the pandemic on the industry.

“It’s very exciting, said Roadrunner Transportation Systems vice president of corporate sales, Dave Black. “We’re back to talking about technology. We’re talking about advancement. We know some of the enormous challenges that all of us on this panel are fighting right now in terms of capacity and in terms of driver resources.”

Still, Black notes that consumer demand is the most pressing issue that has risen in the midst of this pandemic.

“I think we all know that as we move forward, we’re going to have to do something different to make sure that we keep pace and accommodate the demand.”

Contract negotiations with carriers have also seen many changes–in fact, customers are often asking for shorter deals due to the pandemic’s economic turbulence.

“We tend to have one-year agreements in place with most of our accounts base,” said Black. “Now, when you take a look at just the unprecedented changes within the industry, what a variety of the different vertical markets are going through right now, we’re finding that there’s just too much uncertainty.”

The kinds of trends in consumer demand that shippers and carriers alike have had to accommodate throughout the last year has been a main area of focus, as made clear by the conference’s speakers. A major topic that many have had to acclimate to, specifically, is that of market volatility.

“We saw freight all over the board,” explained Ward Transport and Logistics’ corporate account executive, Steve Clagg, at the event. “Pre-COVID, I would say, [freight] was [falling] flat compared to 2019 and 2020. Then, you get into the first COVID month, which was in the latter part of March, [when] we saw the immediate drop-off of business, and then April continued suit.”

Early on in the pandemic, many carriers and shippers had to quickly learn to identify the differences between essential and non-essential work, while also adapting to new shifts in regulations for the industry as a whole, Clagg said.

Ward’s business numbers declined by nearly 30 percent within that time frame, although that challenge dissipated nearly as quickly as it had arrived.

“I think the thing that caught us by surprise–I think it probably did [for] all of us on the panel–was the fact that the industry recovered very quickly,” Clagg explained. “We got into May and June, and that drop-off really began to lessen dramatically. Then, we got into the second half of 2021, [and] our numbers started increasing precipitously.”

E-commerce may be to thank for these rapid boosts of shipment numbers for carriers across the globe. A survey conducted by XPO Logistics Inc. found that 94% of consumers throughout the United States, United Kingdom, Spain, and France are more likely to shop online than in person, and 51% of those consumers prefer to shop online overall. Additionally, according to the survey, 91% of retailers consider themselves fully prepared to properly handle the spike in online orders that arose during 2020.

“So, our thought on e-commerce is that it’s here to stay,” said XPO’s vice president of national 3PL sales, Marissa Christenesen. “Overall, consumers want speed and they want availability, and retailers are turning to experts for more support to get it done.”

E-commerce also led to the surge in orders for ABF Freight System, a subsidiary of ArcBest.

“Since [the second quarter of 2020] and through the third quarter, we’ve experienced sequential increases in monthly revenue and tonnage almost every month, which is certainly encouraging,” said ABF’s director of enterprise sales, Phil Atwell. “Through the third quarter, we saw our average weight per shipment increase over that same period versus 2019. We’re starting to see some positives there.”

This also led to companies like ABF needing to learn–rapidly–how best to navigate the new need of employees working remotely.

“Fortunately, we adapted rather quickly to our virtual interactions and social selling,” Atwell said. “Earlier [in 2020], we successfully transitioned nearly 90% of our employees to work from home. The productivity levels of our employees have remained high through this transition, which is certainly encouraging.”

Sleep Apnea is Major Concern for Trucking Industry as New Study Finds Nearly Half of Drivers May Be Affected

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Almost half of all truck drivers may be at risk for obstructive sleep apnea, according to a new study of 20,000 commercial motor vehicle drivers.

Obstructive sleep apnea, a medical condition that can cause severe drowsiness while driving, was studied by Virginia Tech Transportation Institute researchers who presented their findings at a Transportation Research Board committee meeting last month. They explained that although various studies on sleep apnea have been conducted previously, the number of truck drivers with either diagnosed or undiagnosed sleep apnea may have been heavily underreported. Earlier studies found that between 7.2 and 30% of truckers may have sleep apnea, whereas the latest research shows that this number may be as high as 49%.

As explained by the study, obstructive sleep apnea is a disorder causing the collapse or repeated blockage of the upper airway for at least 10 seconds at a time. When the airway is closed repeatedly in this manner, varying periods of low amounts of oxygen and high amounts of carbon monoxide in the blood will lead to the individual waking up during the night to gasp for air, therefore causing extremely interrupted sleep.

Using the STOP-Band method, 9,382 of the 20,000 truck drivers tested were found to have apnea “potential,” and 9,639 were found not to have apnea. These numbers differ greatly from a previous study that found only 6.4% of 13,724 drivers had potential sleep apnea, with 86% expected not to be affected by the disorder.

The STOP-Bang method assesses OSA risk factors like snoring, fatigue, hypertension, age, body mass index, gender, neck circumference, and observed apnea using an eight-part screening tool that incorporates these objective risks with subjective symptoms.

Drivers who participated in the study and who had undiagnosed and untreated sleep apnea were found to be at much greater risk of being involved in or responsible for moving violations and preventable crashes.

“The goal of the new study is really to get an accurate estimate of potential OSA,” said VTTI researcher Jeffrey Hickman, who worked on the study. “We’re not trying to diagnose people. We’re just screening them.”

Because long-haul truckers spend many consecutive hours on the road, they often are unable to find healthy food options or opportunities to exercise while on duty. This allows for potentially health issues to come into play, such as diabetes, obesity, and other conditions, like apnea.

“Beyond the health consequences, there are also safety consequences that are well-established in the literature that those diagnosed with OSA that is not treated increases [their] crash risk because [they’re] not getting sleep,” said Hickman at a virtual presentation with the TRB Truck and Bus Operators Health and Wellness Subcommittee. “If you’re not getting sleep, you’re tired when you’re driving, and so that results in a lot of inattention that increases your crash risk.”

Diagnosed drivers can, luckily, reduce their risk of involvement in a crash–even bringing it as low as the risk for those without apnea–by undergoing treatment. These treatment methods include C-PAP masks (positive airway pressure) or surgery, and can have very helpful and impactful effects.

“Although several studies have estimated the prevalence of obstructive sleep apnea in the commercial motor vehicle driver population, limitations such as small sample sizes and study samples that are not representative of the industry have limited the generalizability of these study findings to the general CMV population,” the study explained.

Additionally, screening methods allowing medical examiners to easily diagnose sleep apnea aren’t yet effective or common enough, Hickman noted.

“It’s not something that people raise their hands and say, ‘Yes, I want a C-PAP machine,’” he said. “There is some incentive to be less-than-truthful because drivers just don’t want that treatment.”

Still, guidance from the Federal Motor Carrier Safety Administration for certified medical examiners has had improvement, although FMCSA has not given any particular regulatory standards regarding the condition. This perpetuates the allowance of sleep apnea continuing to be a problem in the industry, explained Natalie Hartenbaum, an occupational fitness and truck driver health expert and medical doctor.

In 2017, federal regulators announced plans to withdraw a notice of proposed rule-making requesting information on ways to better assess OSA risks for transportation workers, which initially focused on those already diagnosed working within safety-sensitive roles. Therefore, the dangerous risks of obstructive sleep apnea for industry workers continues to be a major concern for the industry itself, and for everyone else on the road.

Trucking Companies Reaping Benefits of ELD Utilization

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We recently reported on the effects of the latest ELD mandates on road safety and hours-of-service regulation compliance. But, how can ELDs also help fleets themselves better manage their businesses and employees?

“These devices help with understanding behaviors like speeding, hard braking, and over-accelerating,” said KeepTruckin vice president of product, Jai Ranganathan.

Dispatchers can even dispatch more quickly and efficiently with real-time location tracking through ELDs, which allows freight transportation to move as swiftly as possible.

“Dispatching has become the gold standard for efficiency, even in smaller fleets,”  Ranganathan said.

“[ELD data] is straightforward and really leaves no room for interpretation, which is a good thing,” agreed Cargo Transporters vice president of safety, Shawn Brown, in regards to ELDs’ helpfulness with driver training.

Additionally, dispatching actions can also be improved by ELDs, explained vice president of product management at Trimble Transportation, Glenn Williams.

“By electronically capturing key hours-of-service data, fleets are also able to more readily pair available capacity with freight to reduce empty miles and backhauls, improve driver efficiency, and connect the entire supply chain to make it easier for shippers and carriers to work together,” he said, noting that supply chain transparency, vehicle utilization maximization, freight coverage boosts, and shipper-carrier communication have also seen major improvements with ELDs’ abilities to bring much higher levels of driver data access and vehicle connectivity to fleets.

ELD data can also help fleets lower overall detention time, fuel usage, and vehicle breakdowns by allowing them to better identify the best times at which certain vehicles can be properly dispatched, according to Michael Ahart, Omnitracs’ vice president of regulatory affairs.

“It can also be used to set realistic performance expectations with customers, allowing fleets to better predict arrival times based on HOS data,” he explained.

In fact, an overall decrease in delays has become a key focus in the use of ELDs, said director of operations at Grand Island Express, Deen Albert.

“It forced our driver managers to be very actively involved in the drivers’ hours, understanding where the drivers were, how much time they had left on the clock, and being able to maximize that,” he said.

For example, driver managers can track how long drivers are spending at home on their days off, explained Garner Trucking Inc. chief operating officer, Tim Chrulski.

“The data allows us, at a quick snapshot, to separate our data and look at hours,” he said. “Then, we track that weekly, so we’re fair and balanced for everyone.”

Fleets can also improve their overall route efficiency with ELDs, said Orbcomm’s director of fleet safety and compliance, Scott Stofer.

“They’re utilizing the system to the fullest to manage violations, manage fuel efficiencies, and make better decisions for dispatching,” he said.

J.J. Keller & Associates transport industry business adviser, Rick Malchow, added that fleets can track out-of-route miles and equipment-use efficiency with ELDs, as well as reduce shipper facility driver detention. If detention does occur, ELDs make it easier for drivers to get paid for that time.

Fuel consumption and vehicle idling tracking is also a helpful usage of ELDs, Ranganathan noted.

“This common-use case is helping to drive up the efficiency of trucks on the road while reducing carbon footprints across the country as more fleets utilize technology,” he said. “Data from ELDs helps eliminate the administrative burden of collecting state mileage and fuel receipts and automatically calculates this information instead.”

Driver education is another bonus of ELD implementation, said Cargo Transporters’ Brown. 

“One big factor for a driver is trip planning and taking the time to think about not only your next stop, but the stop after that and where you’ll be parking for the next HOS break, etc.,” he explained. “Knowledge is power, and the ELDs provide much-needed real-time data that is very helpful in maximizing a compliant workday.”

ELDs may even be the launching-off point for further safety technology adoption, Orbcomm’s Stofer noted.

“In a lot of ways, the ELD mandate has accelerated the adoption not only from the provider side, but also from the carrier side,” he said.