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Transportation News Bulletins - LTL and TL

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Freight availability up 9%, TransCore index shows
Tuesday, 24 November 2009 00:00

Spot market freight availability increased by 9 percent in October when compared to October 2008, according to the TransCore Freight Index, a measure of truckload freight volume found on load boards supported by the company’s DAT Network, including 3sixty Freight Match and

TransCore says the positive year-over-year comparison represents the first such result in 2009 and is due to a combination of factors: an improving freight volume trend in the second half of 2009, and volume weakness in October 2008 following the financial market crisis.

On a month-to-month basis, October freight volume was down 2.3 percent compared to September, according to TransCore; the modest decline from September compares favorably to last year’s decline of 23 percent in the same period. October’s results continue a four-month trend of better-than-seasonal improvement, TransCore says.

Brokers, 3PLs, carriers and owner-operators in North America list more than 50 million loads and trucks per year across a variety of services feeding TransCore’s DAT Network. As a result of this high volume, TransCore says its Freight Index is representative of the ups and downs in U.S. spot market freight availability.

Commercial Carrier Journal, 11/24/2009

ATA Tonnage Index Continues Downward Trend
Tuesday, 24 November 2009 00:00

The American Trucking Associations' advance seasonally adjusted For-Hire Truck Tonnage Index fell 0.2 percent in October, its second consecutive monthly drop. Prior to September's 0.3 percent fall, the index had increased 2.1 percent in both July and August.

The latest reading lands the index at 103.6, down from September's 103.8. (The year 2000 is the base year at 100).

While tonnage was down 5.2 percent from the year-ago month, this is best year-over-year showing since November 2008. In September, the index was down 7.3 percent from a year earlier.

The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, was up 1.6 percent from September, to 109.6.

According to Bob Costello, ATA chief economist, the latest reading indicates that the recovery is still trying to gain balance, although it is on more solid ground than a year ago.

"Repeating what I said last month, the trucking industry should not be alarmed by the small decreases in September and October," Costello said. "The economy is behaving as expected, with starts and stops. This is being reflected in truck tonnage, as well as most economic indicators."

The industry will experience ups and down in the months ahead, he said, but we should expect to see modest improvement. "Since consumer spending and manufacturing are not surging, trucking shouldn't expect robust growth either. However, both retail sales and manufacturing output are exhibiting mild upward trend lines, which are the path I expect truck freight to take.", 11/24/2009

Freight, rate outlook improves for trucks in 2010
Monday, 23 November 2009 00:00

Nashville, IN—Too many trucks continue to compete for too little freight, but truckers can expect gradual increases in the amount of goods to be hauled next year, according to the latest market analysis by FTR Associates.

The good news is that 2010 is just around the calendar corner. The reason that’s not great news is that the American consumer, whose desire for stuff drives the nation’s economy, will continue to spend cautiously.

“Freight has not recovered at the same rate gross domestic product has because people have been slow to rebuild inventories,” said Noël Perry, senior consultant at FTR, during a Nov. 20 Web presentation. “However, we’re hopeful freight will grow more rapidly later in the recovery because the fall in the dollar has helped U.S. exports.”

FTR projects GDP to grow at a 4.5 percent rate in the first half of 2010, while freight growth continues to lag, though climbing from 2.5 percent growth early to 4 percent by midyear. But as GDP growth slows to 3.5 percent by year’s end, freight volumes will climb, approaching 7 percent growth.

The indicator to keep an eye on, he explained, is industrial production.

Perry anticipates that trucking should “get back to equilibrium” by June 2011, which means that’s when industry capacity will finally be just enough to meet freight demand. There are currently about 300,000 more trucks than there should be for the freight volume.

“Translating that into rates, we can see a relatively rapid year-over-year recovery beginning in the first half of next year,” he said, but cautioned that rates won’t get back to 2004-05 levels until at least 2012. “It’s good news that we expect rates to recover next year, but they’ll not recover to anywhere near the levels people got accustomed to last time.”

For drivers, the economic downturn has meant a downturn in traffic as well. The run-up in oil prices last year especially took a lot of cars off the highway.

“People drive less when the price of fuel goes up. Since we fully expect another fuel shock in the next upturn, we’ll probably get that again,” Perry said, and he noted that for the first time since 1980 total vehicle miles are going down. He expects vehicle miles to stay below the record high reached in 2006 for ten years. “That’s a good thing for trucks. The less congestion, the higher the productivity. This is a radical change from the trends in the 1990s and the early 2000s.”

The expected increase in the cost of fuel also will be the final blow to a lot of carriers who are still in business only because banks aren’t shutting them down, Perry explained. Lenders haven’t been coming to get trucks if they’re not worth what’s owed on them. Oil companies, however, tend to cut off the pumps when they don’t get paid—which is why trucking bankruptcies spiked in the middle of 2008.

But if rising diesel prices don’t drive out excess truck capacity, the need to replace old equipment—with credit hard to come by—will.

On the intermodal side, FTR noted that with rail traffic down considerably, rail service levels are better than ever—an unusual selling point for the railroads. Additionally, the railroads are making substantial investments in infrastructure.

“I’m optimistic that while they will not be able to maintain the current levels of service, it will not go back down to where it was before the downturn,” said FTR senior consultant Larry Gross.

But even with a “rail renaissance,” the market share taken from trucks will not be significant, both Gross and Perry explained.

“We’ve had a very mature transportation market for about 30 years. What that market has done is to apportion freight out to the modes based on their sweet spots,” Perry said. “In the absence of a dramatic change in railroad capability, it’s unlikely that they will gain share.”

Which isn’t to say that rails, with substantial capital to invest, won’t make such an attempt.

“The catch is they have to provide pick up and delivery services for a new segment,” Perry said., 11/23/2009

NTSB’s Hersman Urges EOBRs For All Commercial Trucks
Monday, 23 November 2009 00:00

WASHINGTON—The nation’s top transportation safety investigator said all commercial trucks should be outfitted with electronic onboard recorders to monitor driver hours.

Speaking at the National Press Club here Nov. 16, Debbie Hersman, chairwoman of the National Transportation Safety Board, said the use of EOBRs would help monitor fatigue, which contributes to many truck-involved accidents.

“At this point, the safety board continues to see fatigue in truck and bus accidents,” Hersman told Transport Topics after her speech. “One thing that we feel very strongly about is that they ought to have electronic onboard recorders in all trucks.”

The Federal Motor Carrier Safety Administration proposed a rule in 2007 to require some carriers, but not all, to use the equipment. Hersman called that proposal “de minimus”—minimal.

The rule, she said, “would really only get to a small fraction of the industry, and those people would be chronic violators—people who had two successive compliance reviews that were poor.

“We think that if you want to raise the standard for the industry and level the playing field for all drivers, that you’ve got to have an honest way of accounting the hours that people are working,” Hersman said. “We investigate accidents on a regular basis where we find two sets of logbooks.”

Hersman also weighed in on FMCSA’s ongoing review and possible revision of the hours-of-service rule for truck drivers, telling TT, “The safety board believes that hours-of-service revisions need to be based on scientific principles and what we’ve learned in our years of research.”

During her remarks, she said fatigue is “multifaceted” and a difficult challenge to address.

“Fatigue is actually one of the most insidious issues in the transportation industry. Transportation is a 24/7 operation and fatigue has been on our most-wanted list of transportation safety improvements,” Hersman said.

When the NTSB studies an accident, Hersman said, the board’s investigators set up a “72-hour history for the operators who were involved to try to determine if they were fatigued.”

“Unfortunately, we find fatigue in more accidents than you would think,” she said. “I think the very nature of the work that people do, the schedules that they work in some industries, the unpredictability of the schedule, the lack of addressing issues like sleep apnea or other medical conditions and not having good procedures to allow people to call in fatigued in a nonpunitive way.”

NTSB has no regulatory authority, so Hersman said the board relies on agencies adopting its safety recommendations.

“By and large, they agree with our recommended actions, but they may be constrained to implement them because they must consider factors other than safety in their decision-making process,” she said, noting that some changes “require societal and budgetary choices.”

Hersman was sworn in as chairwoman of the NTSB in July, but she has been a member of the board since 2004.

Transport Topics, 11/23/2009

Fleets Turn to New Protective Measures as Thieves Become More Sophisticated
Monday, 23 November 2009 00:00

Security experts say cargo thieves are becoming more selective and organized, which is resulting in a more substantial average loss per incident. Now, fleets are fighting back with anti-theft devices, diligent drivers and increased collaboration.

“Cargo theft isn’t just a couple of people who have fallen on hard times. The real challenge is the organized crews that are out there. They work very hard and are very diligent,” said Walt Fountain, director of enterprise security for truckload carrier Schneider National Inc.

Security provider FreightWatch International, Austin, Texas, said there were 74 reported major cargo theft incidents during June—the most recent data available—well beyond the average of 48 to 50 thefts per month recorded throughout the prior two years. It also said the average loss per incident has risen to $2.1 million in 2009, from $1.1 million last year.

“There is a lot of targeting by cargo thieves of specific name-brand products. They don’t just want a cell phone. They want a Blackberry or an iPhone,” said Dan Burges, FreightWatch’s director.

The FBI estimates cargo theft in the United States accounts for about $10 billion in direct merchandise losses annually.

Last year, Schneider National, its supply chain partners and law enforcement met to deal with security theft. As a result, the company implemented several initiatives to prevent losses. Year-to-date, Schneider said it has cut overall cargo theft 33% and reduced consumer electronic thefts 67%.

Fountain said as a result of the meeting, the company realized thieves were identifying cargo by how trailers and containers were sealed, so they changed the process.

“We recognized clearly that the thieves weren’t browsing. You had over a mile-long train with several hundred boxes or containers and you have three that got hit and the only three were [loaded with] consumer electronics,” he said.

Schneider also encourages drivers to back against fixed barriers when parking.

“That is the No. 1 thing a driver can do to prevent a partial theft,” Fountain said.

Curt Shewchuk, senior director and chief security officer of global security for Con-way Inc., said, “Criminals want truckloads of what they know.”

Fifteen regional security managers at Con-way, No. 6 on the Transport Topics 100 list of the largest forhire carriers in the United States and Canada, visit each facility annually to assess risks and develop customized security programs. Programs could include conducting employee training and hardening supply chains, warehouses or service centers.

Barry Tarnef, a marine loss control specialist for Chubb Marine Underwriters, said covert tracking devices placed in the trailer or cargo are one of the most effective tools for minimizing loss. They are about the size of a cell phone and use Global Positioning System or advanced cell phone technology to track location.

“As long as drivers find out quickly that the load has been lost, they can set something into play,” Tarnef said.

FreightWatch sells covert devices for about $500 each and has a 24-hour monitoring service to track the units, which can be reused.

The covert devices sold by Transport Security, Waconia, Minn., run $300 to $600 depending on the lifespan of the batteries in the units. Batteries last anywhere from 10 to 30 days and can be recharged. Users define routes and receive alerts if trucks leave them.

FreightWatch said it has recovered each of the 18 customer loads that have been stolen, usually within an hour and half.

Len Gangi, vice president of Comodo Enterprise Security Solutions, Jersey City, N.J., advises fleets to protect their electronic communications as well.

“A lot of people don’t really appreciate how unsecure e-mail really is,” he said. “Can you imagine if someone intercepted at the highest level information on a shipment?”

Even low-tech options are gaining in popularity. Tony Shupin, president of security tape and label manufacturer Allied Security Innovations Inc., said tamper evident tape sales have increase as more shippers seal and identify their packages.

The tape, which starts at $25 for a 180-foot roll, can be customized for identification purposes.

“We create and design the product so it is bottom printed, so the writing or logos can’t be wiped off or altered,” Shupin said.

Sales of locks at Transport Security are increasing as well.

“We tell our customers to take a layered approach. There is nothing that is 100% foolproof, so it is good to have a mix and match of technology and hardware,” said Nick Erdmann, business development manager for Transport Security. The locks start at $40 and are resistant to physical attacks.

Con-way goes back to the basics and asks drivers to take certain precautions, such as not stopping for at least 100 miles after picking up a high-value load and not leaving a truck idling. Randy Mullett, Con-way’s vice president of government affairs, said the vast majority of thefts are a result of drivers not following procedures.

Statistics compiled throughout the past four years by the Chubb Group of Insurance Cos. identified truck stops and rest areas as the most targeted locations for cargo thefts, accounting for more than one-third of all incidents. Modal yards and unsecured locations—such as drop lots and motel and restaurant parking lots—are next.

Most losses occur over the weekend, which Tarnef attributed to shippers that request Monday morning deliveries.

“The trucking company has to pick it up on Friday and now they have to figure out where they store it,” he said. Tarnef recommends fleets and shippers work together to reduce dwell times.

In examining its processes, Schneider decided to grant greater visibility to all members of the supply chain, including manufacturers, truckers and rail operators.

“If the load is sitting, waiting for the next player to pick it up, the longer it sits and the greater target it becomes,” Fountain said.

Burges told TT that unattended trailers are prime targets, but said that it is more common for thieves to steal a tractor and a trailer.

Christina Dukeman, a spokesman for Love’s Travel Stops and Country Stores, said fleets rarely request additional security measures.

“The No. 1 request we get, in fact, is anti-cargo security, which is, can they drop their trailer and leave it,” she said.

Love’s tracks thefts and notifies management and law enforcement of any high-frequency areas. “In many cases, we are in a position to know if there’s a potential theft ring, and we can work with area truck stops and law enforcement to assist them in their investigations,” Dukeman said.

Con-way’s Shewchuk and Schneider’s Fountain both said they share theft information with competitors to help deter and solve thefts.

Shewchuk said, “We realize that even though we’re competitors in the market, we benefit from sharing risk.”

Cargo thieves are very mobile, which adds to the need for good communication. “It is important to collaborate, because where the cargo is stolen isn’t where it ends up,” Tarnef added.

Transport Topics, 11/23/2009

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