Trucking

Amazon Threatening the Trucking Industry Once Again

November 14, 2019 by Levinson and Stefani Leave a Comment

Over the years, Amazon has slowly but surely built an entire fleet of delivery and transportation vehicles to maintain its foothold on the behemoth of a business it has created. According to Business Insider, Amazon reportedly has an incredible number of vans used for the “last mile” of delivery, bringing product from the company’s warehouses to our doorsteps, with over 100,000 vans nationwide. As one could clearly understand, one company maintaining as much volume and control over the delivery of its own product certainly effects the ability for drivers to gain valuable work from a multitude of manufacturers and retailers. However, up until this point, there has been one key aspect of Amazon’s business that has allowed for drivers and the trucking industry to breath easy; the company has long welcomed third parties for shipping its product that goes beyond that “last mile.” Unfortunately, the trucking industry now may be facing a harsh reality, one that sees Amazon bringing all of its delivery resources in-house and creating a fleet that handles the entire delivery process for its business.

As we recently wrote, the trucking industry is already facing a steep drop-off of its own workforce due to retirement and an overall lack of incentives to take on the grueling job. Additionally, the industry has found it much more difficult to keep large fleets of trucks on the roads for trucking companies as retailers and manufacturers continue to consolidate and tighten their grip on shipping costs. That’s why the most recent sightings and word of Amazon’s branded Class 8 tractors are certainly cause for concern. Just last year Business Insider wrote an article on how Amazon was playing a significant role in the driver shortage. At the time of that piece being written, the online publication noted that “Amazon only operates 300 semi-trucks – FedEx, by contrast, operates more than 20,000 semi-trucks.” Additionally, in 2017 it had then been reported that the company was also reportedly attempting to bring 30,000 drivers into its company for solely its “last mile” services. Fast forward two years and we are not only seeing the driver shortage as be far more of an issue, but the trucking industry as a whole has been negatively affected. Most importantly, this is all prior to Amazon actually using the thousands of semi-trucks it has now purchased in 2019.

Amazon’s past decision to lure trucking industry drivers to its company has clearly had an impact on the industry as a whole. Unfortunately, the driver shortage is likely the least of trucking companies’ concerns at the moment. For example, in its article from 2018, Business Insider noted that the move by Amazon led some trucking companies to “primarily target the ‘spot market,’ which is for shipping agreements made only a few days before goods are shipped.” The reason for the trucking fleets to move to the spot market was primarily because this area in the market was far more lucrative than signing a third-party contract that could result in the manufacturer spending far more than is necessary over a longer period of time. At this time, the industry is suffering due to “spot market” rates crashing, not necessarily due to a driver shortage. Overall, while there have only been a few sightings of Amazon’s new tractors, the reality is that one of the world’s largest retailers is about to take the next step to maintain complete control over all of its business.

It cannot go without being said that the ramifications of Amazon bringing its delivery in-house will hinder much more than just the trucking industry. Large decisions such as these have ripple effects that will ultimately affect us all. Earlier in 2019 we wrote about how the trucking industry is losing many drivers, thus forcing older drivers to continue past retirement and potentially hiring drivers who may not actually be all that qualified or properly trained for the job. Such instances then potentially lead to older, overworked, and improperly trained drivers that are asked to drive thousands of miles across the country. Clearly there are circumstances that lead to traffic collisions and fatalities on the road, but decisions such as this, although rightfully made, certainly don’t make them any less likely to occur.

Automated Trucking Startup Offers More Questions Than Answers With New Announcement

November 13, 2019 by Levinson and Stefani Leave a Comment

Ike Robotics, Inc. has been using a unique approach to developing and preparing its self-driving commercial trucks for market; however, there are growing concerns that such testing may be far too little to prove truly “safe.” Many have heard the horror stories of self-driving vehicles being tested on the road and the severe risks associated with such tests. The reality is that the companies releasing self-driving functions in their vehicles are doing so at a slow pace as they already know the roads are not quite ready to handle fully autonomous vehicles. For instance, what happens when a vehicle quickly cuts off another driver, or happens to try and dodge a pothole causing them to swerve slightly over the lane? While it is clear that self-driving vehicles have the ability to learn from simulations and situations that occur on the road while the vehicles are driving, there seems to be an issue as to whether testing such vehicles on public roadways is the proper thing to do. These are the exact factors these companies are having to consider to ensure that another Tesla mishap or uber autonomous car incident does not occur. Instead, we have seen auto manufacturers releasing impressive high-tech safety functions for their vehicles, including commercial trucks. Recently, Volvo announced it would be implementing a new driver assistance system that has the ability to automatically press a vehicle’s brakes at a much higher speed under circumstances that would have typically led to a collision. And that’s where the news of Ike’s safety tests for its state-of-the-art trucks comes into play.

Ike recently produced a 90-page safety report it provided to the National Highway Traffic Safety Administration (NHTSA) which outlined that its process for testing was done solely on “simulation and private-track testing,” wrote Automotive News, a newspaper covering the trends of the industry. In addition, the publication reported that Ike’s safety report was the “16^th the federal agency has received from industry players and perhaps the first from a company that has yet to test its technology on public roads.” What this shows is that the self-driving technology we continue to hear about in the news from the likes of Tesla and other manufacturers is quickly becoming widespread even though there are already a growing number of concerns surrounding its use. Although Ike’s belief and decision to not test vehicles on the road is understandable and will likely prevent more collisions from occurring in the testing phase, how much “safer” is it to actually withhold testing on roads? It appears that at this time, unfortunately no one really knows, with Volvo’s own executive claiming in July that “measuring progress by miles was ‘a myth,’” stated Automotive News. Although an automobile manufacturing giant such as Volvo certainly has a track record of success in the industry, the reality is that many of the companies involved in actually testing these vehicles happen to be startups similar to Ike. The key word there is “startup.” Unfortunately, while Ike may believe that it is safer for its company to test on a track and under a variety of simulations, it could also be the fact that the company and other startups in this industry do not have the proper amount of funding to actually place a fleet of trucks on the roads for testing. The technology alone for these trucks costs millions of dollars, so for a startup banking on huge success and having to prove themselves to continue gaining the proper funding, this may be something the industry needs to keep a close eye on.

One good sign that startups like Ike may actually be close to bringing safe commercial trucks to the road is the fact that prominent manufacturers of vehicle safety equipment are entering agreements to be suppliers for their trucks. As of October 30, 2019, Ike announced it had selected Ouster, a leading manufacturer of high-resolution lidar sensors used in autonomous vehicles, to be its primary supplier for its fleet of autonomous trucks it plans to roll out. The press release went on to state, “Ouster and Ike share a commitment to commercializing safe, impactful technology by focusing on practically-minded product development.” The hope is that the more autonomous vehicles become a regularity on the road, clearly beginning with non-commercial vehicles, the easier it will be for more companies to continue become the suppliers of these up-and-coming automotive manufacturers. The issue that we clearly see at this time; however, is the reality that these startups are unlike anything we have ever seen. Sure, we often hear about new tech startups in Silicon Valley, but does function potentially place millions of individuals at a physical safety risk like an autonomous vehicle would? This is not to say that autonomous vehicles, especially trucks are not a possibility, but the reality is that there are millions of miles of roads in the United States and each one is going to offer a different scenario for these autonomous trucks to respond to. All in all, safety and ensuring that this next step in technology doesn’t hinder other drivers on the road should be our absolute worry in this stage of the evolution of the trucking industry.

New Federal Rules Will Help Trucking Companies Hire Safe Drivers

November 6, 2019 by Levinson and Stefani Leave a Comment

The Federal government has adopted new policies aimed at taking unqualified truck drivers off the road. Registration is now open for the Drug and Alcohol Clearinghouse, a new substance abuse screening system for truckers that is scheduled to be operational early in 2020 . The Clearinghouse is a database that will keep track of drivers who have violated drug and alcohol policies in order to stop them from operating commercial vehicles. The Federal Motor Carrier Safety Administration anticipates that the implementation of this database will substantially reduce motor vehicle crashes involving heavy trucks.

The federal rules regarding professional truck drivers already prohibit drivers from getting behind the wheel when they test positive for illegal drugs. Of course, everyone knows that drunk driving is illegal. The Clearinghouse database will allow trucking companies to screen drivers applying for jobs to see if they have previously tested positive for drugs and are looking to get hired at a new place. Drivers can also lookup their own information once they have registered with the Clearinghouse themselves. Once registered, drivers can search for their own information for free. The database will include information about whether a professional driver has any drug or alcohol program violations and, if applicable, the status of their petitions to return to duty.

The new system is meant to act as a check on drivers who violate substance abuse rules follow the proper protocol to get back in to good standing, if possible, before they are allowed to keep driving. Drivers with commercial driver’s licenses, employers, law enforcement, medical review officers, and substance abuse processionals will be among the groups who will be authorized to access the Clearinghouse.

As for what should be reported to the database – Federal Statutes cover that:

Employers will report a driver’s drug and alcohol program violations. Medical review officers will do this as well. A driver does not need to register him or herself into the system for a medical review officer to enter a violation in the system. In fact, it is not mandatory for a driver to register. But, if an employer needs to conduct a full check on a driver, that driver will have to register. This means, drivers who don’t want to take part may not be able to get hired for certain jobs because perspective or current employers will not be able to conduct a full search on the database for their information. After January 6, 2019 a driver will have to be registered with the Clearinghouse in order for an employer to be able to conduct a full search on their record for new hires. Drivers who are registered will be able to give their consent to release drug and alcohol program information to employers. Also, when new information is added to their profile, drivers will receive notifications from the Clearinghouse in the mail or electronically.

Drug abuse is a problem that needs to be addressed with treatment and counseling. Allowing drivers to keep working when they have a substance abuse problem by slipping through bureaucratic cracks doesn’t help drivers who may need help to get sober. It obviously makes roads less safe.

In the computer age with so much information going digital, this just makes sense. Professional truck drivers have a difficult job. They have to work long hours, often by themselves, away from their families. They have to keep alert on the road and get enough rest to do so. Drug use is a problem that poses a great risk to the health and safety of, not only professional drivers, but also everyone else who shares the road with them. Safety is on the roads is imperative. This database is likely the least intrusive way to keep records of drug and alcohol program violations so that employers know if they are sending a driver out on the road with the proper credentials.

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

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.

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.

Big Improvements with Volvo Driver Assist System

October 19, 2019 by Levinson and Stefani Leave a Comment

VIRGINIA – Volvo Trucks North America is implementing a new, improved driver assistance system with recognition of lane switches to avoid other vehicles, as well as an update that allows brakes to stop at a much higher speed without driver action.

Volvo Active Driver Assist 2.0 is a new collision mitigation system which utilizes both camera and radar technology to sense traffic conditions around the vehicle, maintain safe following distance, and give visual and audio alerts for the driver to take immediate action in the case of a hazard. If there is no input from the driver, active emergency braking is able to stop the truck on its own.

The safety system is now able to stop a truck–completely–at speeds up to 50 miles an hour, and will be the new standard on Volvo’s VNL and VNR series as well as an optional system on its VNX lines.

The primary version of this system, implemented in 2017, was only able to bring a truck to a stop from up to 35 miles per hour. Now, even if the truck is traveling faster than 50 miles per hour and must be brought to an emergency stop, the updated system can reduce the truck’s speed by 50 miles per hour overall, and reduce the potential damage of impact in a collision.

“If the truck is going 65 mph, it can shave 50 mph off that speed, so it is a 15 mpf crash,” said Allison Athey, VTNA’s product marketing manager for the VNL truck line.

She also said the improved driver assistance system includes an updated version of multi-lane braking with an even better ability to detect when a truck leaves its lane in order to avoid a nearby vehicle. “It always detected vehicles in both lanes, but when the truck would change lanes, it would have to take a second to recalculate and then begin to automatically emergency brake again if it was required,” Athey explained.

Now, there is no longer a need for any recalculation.

Additionally, the system now includes adjustable volume overrides for its lane-change warning capabilities, along with a new feature which allows the driver to, in particular situations, turn the system off for up to 10 minutes.

A new Highway Departure Warning and Braking function will also slow down the truck to a pre-selected speed if there is no corrective action by the driver after a lane-departure safety warning has been given, and if the system senses that the vehicle may be moving away from the drivable highway.

The system also takes advantage of new safety technology for driver awareness support, with a driver-facing camera with easy data capture, and adaptive cruise control that now includes an “auto resume” feature, also known as “slow and go.”

In other new developments, Volvo has also introduced a new steering system of its Class 8 trucks, which aims to reduce steering force up to 85% in order to help reduce driver fatigue and its dangerous effects.

This system is called Volvo Dynamic Steering, and includes an electric motor set above the truck’s steering gear. Trucks will have sensors that can measure input of over 2,000 times per second to determine steering wheel response, while also monitoring driver behavior, road conditions and environmental obstacles in order to make necessary safety adjustments.

VTNA says VDS is designed to help drivers in their ability to work around obstacles in road conditions, on everything from rugged terrain to difficult, tight maneuvers in urban areas. VDS will also include a return-to-center function, which will allow the steering wheel to return to center and help drivers better handle maneuvering in narrow spots or while in reverse. It will also have a new “lead/pull compensation” capability, which will provide a torque offset in its steering system to help navigate crowned roads, crosswinds, and other tricky conditions that can temporarily negatively impact driving.

These new features went into production in mid-September, and, according to Athey, will continue undergoing improvements until the end of next year. VDS will be available in early 2020 and Active Driver Assist 2.0 will become standard on 2021 VNL and VNR models.

Volvo plans to work toward a goal of having zero Volvo truck-related collisions, but is counting on customer cooperation, according to Ash Makki, VTNA’s product marketing manager for technology. “This is something we have been working on diligently for years, but it is a goal that we can reach by ourselves,” he explained. “We can build the best active safety features, but if my customers don’t buy into it–see the value–is that going to work? So we have been pushing hard to our customers right now.”

Makki also says all of Volvo’s safety features are standard, but not mandated. “So the customer has an option,” he assured. “But, we have been telling our customers, ‘Why would you even think about doing that?’”

“Providing state-of-the-art features that improve drivers’ physical working conditions and comfort is an important aspect of driver satisfaction,” added Chris Stadler, VTNA product marketing manager, “as well as increasing overall productivity and road safety.”