trucking laws

Navistar Cuts 1,300 Jobs and Recalls More Than 12,000 Trucks

January 22, 2020 by Levinson and Stefani Leave a Comment

Navistar is in hot water after it has reported a low 2019 net income and revenue as well as a need to recall 12,539 of its trucks for safety issues.

On December 17th, Navistar International Corp. of Lisle, Illinois announced it will reduce its global employment rate by at least 10% after low revenue numbers in its fiscal year fourth quarter. Corporate factors such as 2018 chargeouts have caused a decrease in demand for heavy-duty trucks in the industry.

According to Navistar, chargeouts are the trucks invoiced out to customers, while units in dealer inventory show the difference between retail deliveries and chargeouts themselves.

In its forecast for 2020 revenue, Navistar cut its estimates so much that they are now among the lowest of all manufacturers surveyed by Bloomberg. Shares proceeded to plummet 10%, the largest decline since October 2018

“We are taking actions to adjust our business to current market conditions, including reducing production rates and selling, general and administrative expenses while restructuring our global and export operations,” said Navistar president and CEO, Troy Clarke, in a release. “Building on the strong gains achieved over the last several years, Navistar has a clear road map in place for sustained growth that will set it apart from the industry.”

As of now, the majority of the 1,300 jobs being cut out completely are due to North American Production cuts. For the period beginning in November, Navistar’s net income dropped to $102 million ($1.02 per diluted share), after having been at $188 million ($1.89 per diluted share) the year before.

Revenue in this fourth quarter fell to $2.78 billion, down 16% from its $3.27 billion revenue in the same quarter of last year. To be sure, that quarter of 2018 was a particularly strong one, and the drop was caused in part by vehicle chargeouts following supplier production constraints in 2018’s third quarter, lower industry demand, and the sale of Navistar Defense’s in December 2018.

An 18% core chargeout decline for Navistar lead to a profit drop of $86 million from $197 million in 2018, as well.

2020 revenue is predicted to drop to between $9.25 billion and $9.75 billion, especially after a net income decline of 53.8%–from $340 million to $221 million.

Additionally, as its holding company’s new fiscal year began in November of this year, Navistar issued a recall for more than 12,500 of its International brand medium-duty work trucks due to a risk of unintended movement while the parking brake is applied.

The safety recall report from November 21st explained that the defect has the potential to cause serious injury and damage to property. While the parking brake is in use, automatic transmission is in the drive or reverse position, and the stationary power takeoff switch is on, the engine’s RPM accelerates rapidly and can override the parking brake’s function.

This defect comes from the trucks’ programming lacking PTO neutral interlock in their powertrain databases.

Currently, the recall applies to the 2019-20 International MV, 2018-20 International WorkStar, 2019-20 International HV, and 2018-19 International DuraStar. These four truck models are medium-duty work trucks used for deliveries, towing, and dumping.

Recalled trucks were built exclusively between February 2017 and September 2019–trucks without power takeoff are exempt from the recall.

The company first learned of the problems in these models over the summer of 2019. A field service representative was able to speed up the engine throttle with the steering wheel switches while the transmission was in gear, even when the parking brake was applied, on HV model trucks. In September, Navistar began its investigation.

The next month, Navistar determined a potential number of defective vehicle models, and finalized the suspect population on November 7th. The safety recall was put into place a week later on November 14th.

Customers will receive a recall notification by January 20th, and can have a recalibration performed for free.

As the notifications begin their delivery, Navistar must keep the National Highway Traffic Safety Administration up-to-date. According to the NHTSA Office of Defects Investigations’ letter to Navistar on December 10th, the company will need to submit copies of all bulletins, as well as all draft owner and agency notification letters.

Additionally, Navistar will update its parameters in the Cummins’ engine control module for feature codes enabling a neutral interlock for the PTO.

Partially Self-Driving Truck Tested in Illinois While Policymakers Draft Autonomous Vehicles Bill

January 20, 2020 by Levinson and Stefani Leave a Comment

Technology company Autobon AI is now testing its partially autonomous truck in regular traffic on the Jane Addams Tollway.

After successful tests by the Lisle, Illinois company’s co-founder, Krystian Gebis, on the Chicagoland Speedway track in Joliet, Autobon believes its innovative vehicle is ready for the main roadway. Still, a driver will stay behind the wheel.

“The driver still has full control,” said Gebis. “We want to make sure the truck isn’t weaving in the lane and it maintains a safe following distance. We want to make sure it’s very precisely driving.”

Transportation experts are saying tests like these will become more and more common in the near future, as trucks that are at least partially self-driving will hit the road in hopes of countering the current truck driver shortage in the freight industry.

The trucking industry is expected to be a top early implementer of autonomous technology for this very reason.

“There’s a significant shortage of drivers,” said director of the University of Illinois at Chicago’s Urban Transportation Center, P.S. Sriraj. “If you have a shortage of drivers, you have drivers working long hours and compromising their safety.”

According to Gebis, autonomous technology won’t be completely replacing truck drivers any time soon, but will provide an avenue for drivers to feel safer and at ease while on the road.

“You want to not have fatigue or stress be a factor in driving,” Gebis sad. “We are thinking of every possible way we can to make the job more enjoyable for drivers.”

However, how exactly these developments will come into play is still in question. Although autonomous driving tech engineers are staying busy, federal regulatory frameworks for automated vehicles is being drafted by transportation leaders as we speak.

Chairman Roger Wicker (R-Mississippi) confirmed in a hearing with safety agencies that the Senate Commerce Committee is currently collaborating with their House counterparts on the Energy and Commerce Committee to draft a new measure governing automated technology.

“As we continue to develop a regulatory framework, the discussion should also be driven by the potential benefits of [automated vehicles] to improve the country’s transportation systems,” said Wicker. “As technology continues to improve, AVs will be increasingly part of our daily lives. Therefore, it is up to us to ensure that the safety benefits of these vehicles are fully realized.”

Wicker also notes that without a national regulatory framework, other countries may have the opportunity to lead in the AV field.

Still, panel members stress that ensuring the safety of all roadway commuters is the top priority and is what will guide the legislative process this bill. Senators noted that over 36,000 people were killed in roadway crashes last year, according to the National Highway Traffic Safety Administration.

“Over the past three years, more companies have been putting automated vehicles out on the road, and sometimes ending in fatal consequences,” said Sen. Maria Cantwell (D-Washington). “In several of these accidents, the drivers were not paying attention to the roadway and [were] unable to intervene to avoid the crash. What we need to do is continue to learn from these lessons and make sure that we’re putting safeguards in place.”

One of the accidents to which Cantwell refers is 2018’s fatal accident involving Uber Technologies, Inc.’s developmental Automated Driving System and a pedestrian in Tempe, Arizona.

Autobon’s Gebis said he has many of his own family members working in the trucking industry, which is what led him to learn about crash-related issues. Because of this, he was able to combine his knowledge of trucking with his passion for robotics and start his company.

Now, Autobon AI has new technology that is able to replace a truck’s wind visor with one equipped with multidirectional cameras, sensors and GPS to aid the truck in responding to road conditions.

The truck’s steering wheel, accelerator, and brakes react to the incoming information from this equipment. The company also has an in-cab sun visor in the works that will have a camera to monitor drivers and make sure they aren’t distracted by fatigue or texting. Then, a remote control operator can check driver behavior and pull a truck over into an emergency lane if necessary.

According to Gebis, Autobon plans to sell this automated technology equipment for installation in trucks, as well as to sell the accompanying services, such as tools for delivery improvement and driver monitoring methods.

“We’re engaging with Autobon to develop a better understanding of emerging vehicle technologies and the way these advances could be used to increase safety on our roads,” said Jose Alvarez, Executive Director of the Illinois Tollway.

Chairman of the National Transportation Safety Board, Robert Sumwalt is wary of past ADS-related accidents, but acknowledges the potential for this technology to help decrease the number of crashes overall.

“A promise of the upcoming ADSes is that such systems will be safer than a human driver,” he said. “Until that promise is realized, the testing of developmental ADS–with all its expected failures and limitations–requires appropriate safeguards when conducted on public roads.”

A timeline for the measure to be put in place has not yet been announced.

Convoy Trucking Proving the Industry Must Adapt

December 18, 2019 by Levinson and Stefani Leave a Comment

2019 has been a tough one for the trucking industry. Through continuous storylines covering the driver shortage to serious concerns regarding the overall business prospects for trucking companies, the industry has truly been struggling. Despite all the noise, there have been several companies who have been able to cut through the tension and make a name for themselves. Recently, it was announced that Convoy, an on-demand digital trucking platform, has raised $400 million in funding, which will help it escalate its business model and bring it to market. What exactly is a digital trucking platform? For starters, Convoy’s intention is to cut shipping costs by creating a streamlined alternative to the large amount of wasted space that occurs in most long-haul trucks. The goal is to digitally connect shippers with trucking companies. Think Uber for truck drivers; something we have already seen in the market with Uber Freight.

While the news of Convoy’s new round of funding may not appear monumental, it really is a sign that the industry could seriously pivot within the next decade. For instance, back in August of 2019, The New York Times wrote a piece about Convoy’s emergence within the industry and had the opportunity to speak with Silpa Paul, a commercial vehicle analyst for Frost and Sullivan, a prominent research company specializing in consulting for companies. In that piece, The New York Times stated that “Ms. Paul estimated that services like Convoy’s were expected to grow rapidly, from posting $210 million in broker fees in North America in 2017 to $6.7 billion in 2025.” Further, Paul had determined that the streamlined efficiency would likely not bear on a loss of trucking jobs, because there was already such a severe shortage, as announced by the American Trucking Association. For an industry struggling as much as the trucking industry is, companies finding the potential to garner billions of dollars certainly provides a few bright spots.

Moving forward, Convoy understands that although it has produced the necessary funding to evolve its business model and become a national brand for many shippers, it also faces competition from the likes of Uber Freight. That’s why it is fascinating to see where this brand goes next. According to Tech Crunch, “the company launched in 2019 an automated reloads feature that allows truckers to book multiple loads at a time. It also added Convoy Go, which allows drivers to bring their truck cab and hook up to a trailer pre-filled with cargo.” These advancements are really where we will see how profitable and transformative these digital freight shipping apps will be. While long-haul freight is likely to be where the money is for Convoy, the reality is that there are drivers throughout the industry looking to independently move freight. Allowing for drivers to bring their truck cabs to pre-filled cargo shipments truly changes how the industry functions.

Changing Industry May Bring More Challenges than Previously Believed

There is much to be said about Convoy’s business model and how it; coupled with Uber Freight, will have a tremendous impact on the industry as a whole. Unfortunately, it seems to go unnoticed that some of Convoy’s investors happen to singlehandedly turn the industry on its head already. Currently, Jeff Bezos serves as a primary investor for the company, being that both Amazon and Convoy are located in the same city and largely have the ability to overlap their business models; it’s a genius move by the billionaire. Unfortunately, we have already written about how Amazon is threatening the industry by bringing its shipping and delivery in-house to save on costs. With Class 8 tractors now on the roads for the company, a start-up with the ability to handle the “spot market” with the click of a button seriously threatens small companies. Sure, there is already a driver shortage and Convoy argues that it won’t be taking jobs, but rather rendering shipping more efficient by ensuring that freight is carrying up to its capacity. The issue is that there are many small trucking companies throughout the United States and a majority of their business relies on the “spot market” to turn a profit. In 2019, the spot market has been down. Some may argue that these new apps will help alleviate this issue; however, the long-term ramifications due to who actually has a “say” within companies such as Convoy may present far more issues for the industry and its ability to support small and medium size trucking companies in the next decade.

FMCSA Plans to Delay Implementation of Entry-Level Driver Training Rule

December 17, 2019 by Levinson and Stefani Leave a Comment

The Entry-Level Driver Training rule, which was originally set to be implemented on February 7th, 2020, will now be delayed another two years.

The ELDT will eventually mandate that commercial driver applicants finish a particular section of training (required in 49 CFR part 380) before obtaining a Class A or B commercial driver’s license, an upgrade to a class B or Class A CDL, or adding a hazardous materials (H), passenger (P), or school bus (S) endorsement.

This rule comes in response to the “Moving Ahead for Progress in the 21st Century Act,” or MAP-21, a federal transportation reauthorization bill which plans to aid the Federal Motor Carrier Safety Administration in reducing crashes and injuries that involve large trucks and buses.

These changes are meant to further standardize driver training, as well as ensure school districts are complying with federal laws to keep students, staff, and other drivers safer on the road.

In a recent announcement of extension at the National Association of State Directors of Pupil Transportation Services conference, FMCSA Administrator Larry Minor explained that the new intended deadline to comply with MAP-21 regulations is now February 7th, 2022.

The official notice is “in the pipeline,” according to an anonymous DOT official. “The whole thing is going to be delayed. It’s mostly due to the failure of the states aligning their systems with the federal system.”

The formal announcement of the delay is expected by mid-December.

The delay is “disappointing,” says vice president of training program development for Instruction Technologies Inc., Laura McMillan. “Our reaction is that, my goodness, the industry has been waiting for standards and a professional-level curriculum for over 20 years. If this industry wants to raise the professional image of truck driving, it begins with how we educate new drivers and prepare them for the field.”

However, Don Lefeve, Commercial Vehicle Training Association President, remains optimistic.

“We do believe, based on conversations, that the Federal Motor Carrier Safety has a grasp of the problem, and we’re hopeful that they can implement it before the two-year delay period,” he said. “But we’re very disappointed that this is not going to be rolled out on time…There are still a lot of substandard programs that will remain in existence (until then).”

As of now, the ELDT has general training guidelines in place, but doesn’t quite specify how exactly to train drivers or even the number of training hours required. The overall intention is to standardize these topics at a national level in order to increase road safety.

The original implementation outline explained that ELDT would create a baseline for training requirements for new Class A and Class B CDL license holders, but changes would not apply to existing drivers. Any driver who was not changing their license or adding an endorsement, and who had completed training before February 7th, 2020, would be grandfathered into the rule and would not need to meet MAP-21 training baselines. After February 7th, new trainees would have needed to comply with the ELDT requirements.

Instructional Technologies Inc.’s McMillan, who has been working on an ELDT curriculum subcommittee, says the current system problems are not limited to the state’s individual regulations.

“The reality is that the training provider registry is not even available,” she explained. “It’s interesting that federal regulators would characterize that this is a state problem and that the states can’t comply when the federal system is not up and available. There seems to be a lack of ownership for this entire issue.”

McMillan also says schools and carriers were supposed to be able to self-certify by October 1st, but that registry, which was set to be the first aspect of completion for the required curriculum, is still not up and running.

Director of safety policy for American Trucking Associations, Dan Horvath, said he is not particularly surprised by any of this.

“We felt that to not delay the whole thing, to at least go forward with the requirements for training the driver [was something that] needed to go through,” he said. “We felt [that] that’s the whole point of the ELDT rule to begin with. We understand that the verification process on the back end would be a nuisance, but not enough to delay the whole rule. However, having said that, we did see that the majority of the comments on the delay were [saying] to delay the whole thing.”

Out of the 1,200 comments made on the rule over the summer, the majority of those who weighed in–comprised of people from state trucking associations, state police, state departments of motor vehicles, and school officials–wanted a delay of full compliance until 2022.

For example, the Minnesota Trucking Association said the rule should be postponed until all systems “from top to bottom” can fully comply with implementation.

“The MTA believes that partial implementation increases the odds for errors and unintentional non-compliance,” said the association. “Motor carriers are concerned that despite their best efforts to comply, state and federal information technology systems will miss information and place the carrier at risk.”

New Bill Introduced to Support Female Truckers

November 28, 2019 by Levinson and Stefani Leave a Comment

Lawmakers are introducing new legislation that will aim to support women working in trucking.

The Promoting Women in Trucking Workforce Act would work toward directing the Federal Motor Carrier Safety Administration to create a Women of Trucking Advisory Board, which would potentially break down the obstacles many women face while entering the industry. It would also work to collaborate with trucking companies, trucking associations, and other organizations in order to put into place new education and training techniques, as well as to develop mentorship and outreach programs for female-identifying employees in the trucking world.

Senators Jerry Moran (R-Kan.) and Tammy Baldwin (D-Wis.), who both serve on the Senate Committee on Commerce, Science, and Transportation, introduced the act on November 14th.

According to the Department of Labor, women made up about 47% of the civilian labor force in 2016. However, the Women in Trucking Association’s data show that less than 8% of truck drivers are women.

The bill would make sure the FMCSA administrator submits a report to Congress in full detail of the board’s findings and proposals.

“In Wisconsin, we make things, and we need to ensure we have a strong workforce to transport our goods to market,” said Sen. Baldwin. “Women currently make up less than 10% of the truck driving workforce, and removing the barriers that get in the way of women pursuing and retaining careers in trucking is key.”

Sen. Moran explained that the current truck driver shortage not only highlights a strong need to find new ways to recruit and retain drivers, but that there is a specific need to motivate more women to jump into the industry.

“Because women are substantially underrepresented in the trucking industry,” he said, “Congress should explore every opportunity to encourage and support the pursuit of careers in trucking by women.”

Moran has also helped lead a method of promoting women in aviation, which was included in the FAA Reauthorization Act of 2018.

The American Trucking Associations and the Women In Trucking Association are supporting the new legislation. ATA President Chris Spear said in a letter to the senators who introduced the bill, that although women are still underrepresented in trucking, the overall number of female truck drivers has increased by 68% since 2010.

Spear also noted that women tend to work more safely as truck drivers in comparison to their male counterparts. For example, the American Transportation Research Institute’s Crash Predictor Model was updated to show that men are 88% more likely to have a reckless driving conviction. Additionally, the research showed that men are 20% more likely to be involved in a crash.

The Women In Trucking Association’s president, Ellen Voie, was able to offer her own input on the new legislation, and said she was beyond happy to have her voice heard.

“By creating an advisory board to utilize the expertise and resources of the [FMCSA] and the members of the board, we can increase the opportunities for women as drivers, technicians, owners, trainers, and in other relevant career roles,” she said. “This’ll help us at a much higher level. It’ll also get other people involved.”

This bill comes soon after the FMCSA announced in July its plan to research violent crimes against women and minority truck drivers in the U.S., an assessment which the agency says will help to increase the number of qualified potential drivers.

“FMCSA needs to explore and validate the problem of harassment- and assault-related crimes, especially against female and minority male truckers for two reasons,” said the agency in its July 23rd announcement. “First, there seems to be a perception among these sub-populations of truckers that they are more vulnerable than others. Second, there is a critical shortage of truckers, and helping these sub-populations of tuckers protect themselves from crimes could draw more truckers from these sub-populations, while stemming turnover, to alleviate the shortage.”

The FMCSA is currently seeking White House approval to begin assessing the scope of this issue, and has since started collaborating with nonprofit research group Battelle to execute the study. As of now, the agency cites documentary and anecdotal evidence of these crimes, but does not yet provide methods of how women can protect themselves.

The Women in Trucking Association is now working with FMSCA to help the study get up and running, and is offering an anti-harassment employment guide to carriers that are working to address these issues among driver teams of all genders.

October Trucking Conference Tackles Marijuana Legalization, Cybersecurity

November 24, 2019 by Levinson and Stefani Leave a Comment

SAN DIEGO — We recently reported on the American Trucking Associations’ 86th annual Management Conference and Exhibition, which took place at the San Diego Convention Center in early October.

A main topic of discussion was of course the upcoming changes proposed in regards to the Federal Motor Carrier Safety Administration’s hours-of-service rules, which the ATA fully supports.

Another big issue at hand included the legalization of recreational marijuana as more and more states are hopping on board–which continues to push the trucking industry and its current challenges to their limits.

In response, the ATA recently endorsed a set of policies related to marijuana, such as relaxing federal regulations on cannabis studies.

A working group from the ATA, which researched state legalization efforts and their impact on impaired driving and road safety has inspired the association’s Board of Directors to support the increase of marijuana research, especially regarding drug testing technology. According its recommendations, the group has said it aligns with “lifting federal restrictions on marijuana research” in order to continue this kind of research.

At the management conference, the American Trucking Associations explained that it also supports maintaining employers’ rights to test employees for marijuana usage, and that it advocates for the improvement of testing methods, investigation into impairment standards, and further research on the drug’s effects.

Although it is currently unclear what actions the ATA is pushing for in regards to lifting blocks to research, there is an understanding that rescheduling cannabis under the Controlled Substances Act will be an important tool in reaching that goal.

However, ATA’s Controlled Substances and Driver Health and Wellness Working Group do have a few recommendations, such as developing a policy that ensures employers can test all drivers for marijuana, implementing legislation changes to permit drug testing using “alternative specimens” like hair and saliva as opposed to just urine samples, as well as the use of oral fluid testing.

“ATA has long been an advocate for reducing impaired driving–in all its forms–so it only makes sense that we would call upon state and federal governments to consider the impact of increased use of marijuana on our roadways,” said ATA President Chris Spear in a press release. “As an industry that operates in all 50 states and across national borders, we need all levels of government to help us keep our roads and drivers drug-free.”

Spear also mentioned cannabis policy in his conference keynote speech, giving a look into the ATA’s reasoning around establishing such a working group.

“Eleven states, D.C. and Canada have now legalized the recreational use of marijuana, all while our federal government turns a blind eye,” he said. “And guess who gets caught in the middle?”

The ATA has even more controversial endorsements, such as the establishment of a “marijuana victim’s compensation fund,” which would be funded completely by dispensaries, manufacturers and growers. It also recommends the adoption of both state and federal legislation that would “require that each time marijuana is dispensed to an individual, it is reported to the state.” However, these policies do not explain who would qualify for compensation, how the funding would be sourced, or how prescription drug monitoring could legally be put into place.

An additional attention-grabbing topic of conversation at the event included that of cybersecurity, as transportation organizations have become a major target for ransomware attacks.

“This is why we’re doing a session on cybersecurity,” said Ken Craig, vice president of special projects at McLeod Software, as he referenced Forbes’ data showing that the transportation industry currently ranks fifth on the list of the most cyber-attacked industries.

Sharon Reynolds, chief information security officer for Omnitracs, said that small trucking companies are often the biggest targets for hackers as they typically have unsophisticated protection software. Larger companies who do have high-quality protection are still a large target, though, as they often pay hackers highly to disable their computer systems.

Saunders said motor carriers need to start conducting annual assessments of their systems, as well as to begin applying software patches and implementing an incident response plan.

CEO of RunSafe Security Inc., Joseph Saunders, also weighed in, recommending truckers initially protect personal information on both employees and customers, and start educating their employees about phishing scam threats and protecting accounts payable information.

As for computer protection quality right now, “by the time you get the notice, you’re in deep yogurt,” said panel moderator Craig.