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Transportation News Bulletins - LTL and TL

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Registration Fees to Rise
Monday, 07 September 2009 00:00
FMCSA Proposes Steep UCR Hike in 2010

Registration fees that trucking companies and freight brokers must pay will more than double to as much as $83,000 in 2010 under a plan put forward by the Federal Motor Carrier Safety Administration last week.

The fees, collected through the Unified Carrier Registration agreement, will rise more than they would have under a proposal made earlier this year by the board that oversees the registration program. Industry groups protested those fees, arguing they punished companies that voluntarily complied with the rules rather than having states step up collection efforts.

Currently, the UCR fees range from $39 for the smallest companies to $37,500 for the largest firms. States use the fee revenue to fund law enforcement programs.

“To my view, they’ve taken the side of the states in this,” said Bob Pitcher, American Trucking Associations vice president for state laws and vice chairman of the UCR board. “The states have said, ‘We’re short of money here and we’re not obliged to do any work for it.’ And FMCSA has nodded and said, ‘We see that you’re short of money; we’ll raise the fees.’”

In its proposal, FMCSA said that without an increase, given the number of companies states can reasonably expect to register, UCR would generate only $51 million, less than half the roughly $113 million the program is required to collect under federal law.

“I still look at it as a compromise in many respects because in order for states to get the entitlement, the 113 [million dollars], we’re going to have to register a lot more carriers than we’re currently registering today,” said Bill Leonard, director of the New York State Department of Transportation’s motor-carrier compliance bureau, and member of the UCR board.

The program has yet to generate the mandated revenue targets to fully replace the now-defunct Single- State Registration System, which, along with a change removing trailers from the count of commercial vehicles for registration purposes, led to the proposed fee increase.

Congress created UCR in 2005 as a replacement for SSRS, which taxed only for-hire carriers. ATA and other groups backed the UCR system because it was intended to reduce fees by broadening the base, by requiring private fleets and freight brokers and forwarders to pay.

To calculate the 2010 increase, FMCSA said it divided the revenue goal of $113 million by the $51 million it expected to generate without a fee increase, to calculate a “shortfall adjustment factor of 2.22432;” it multiplied current fees by that factor to calculate the new levels.

So, for the smallest bracket—for companies with two or fewer trucks—the fee increases to $87 from $39; for moderate-sized fleets of 21 to 100 trucks, the fee rises to $1,793 from $806.

At the high end, fleets of more than 1,000 trucks would see annual fees rise to $83,412 from $37,500.

FMCSA said the 2010 structure, which is roughly in line with what the board recommended earlier this year “meet[s] the statutory requirements” for the registration program.

Leonard said for 2009, states have registered roughly 307,000 carriers, or between 70% and 75% of the companies in the federal database used to calculate the fees.

FMCSA assumes that compliance rate will go up to 86.4%, a figure Pitcher called “purely arbitrary.”

“They haven’t looked to see the level of state compliance efforts now,” he said. “They haven’t looked to see how much of what they call bracket shift is due to noncompliance and how much to problems with the underlying data and so forth.”

Bracket shift refers to fleets moving to a lower-cost bracket by registering fewer vehicles than listed in the database.

Rick Schweitzer, general counsel for the National Private Truck Council and a UCR board member, said it was “pretty clear” that FMCSA wants “to ram this through with a 15-day comment period.”

Schweitzer and NPTC, along with ATA, proposed ending UCR earlier this year in favor of more direct aid to states.

“This is not the time to more than double the fees on motor carriers and it just seems that they are trying to subsidize the noncompliant by increasing the fees on those who voluntarily comply,” Schweitzer said of the proposed increase.

Pitcher said the proposed increase “tends to confirm us in our earlier views” about the need for UCR, adding that ATA was “certainly contemplating potential congressional action to get rid of the program.” But with the passage of a new highway bill this year looking doubtful, he said, “it is very unlikely there’s another vehicle” for changing UCR.

ATA could also sue over the fees, he said, noting that “we always think about the courts.”

However, Schweitzer told Transport Topics that probably nothing, short of a change in the law, could reverse the fee increase.

Transport Topics, 9/7/2009

More Software Sales to Trucking Firms Suggest They Are Preparing for Economic Recovery
Monday, 07 September 2009 00:00

Technology vendors said sales of enterprise-level software have remained strong in 2009, propelled by carriers’ desire to cut costs now while preparing for the influx of new business that will accompany an economic recovery.

In particular, “larger carriers, larger private fleets and larger logistics companies look at this year as an opportunity to invest in [information technology] infrastructure so that when the market recovers, they’re well-prepared to take advantage of it,” said David Wangler, president of TMW Systems, Beachwood, Ohio.

Smaller carriers are not investing as much in technology as their large counterparts, he said, but fuel optimization software remains popular among all carriers.

“The real hard data that we’ve got shows our carriers this year are saving . . . about 10 cents a gallon,” he said. That saving is net of discounts carriers may receive through agreements with truck-stop chains or other methods.

In recent years, TMW has acquired several companies, including Maddocks Systems, TMT Software and Integrated Decision Support Corp. Wangler said TMW expanded the client base of each of these products once they were integrated into TMW operations.

Rick Halbrooks, vice president of sales and marketing for McLeod Software, Birmingham, Ala., told Transport Topics that some carriers that “had put off their decisions until the economy got better have come back to us.”

Carriers “are looking to preserve their profits by cutting out some of their wasted costs . . . which drives a lot of technology, frankly,” Halbrooks said. “There’s been a lot of talk lately about dumping unprofitable customers, and that’s hard to do if you don’t know who they are.”

Halbrooks also said July had been “the best July in the company’s 24-year history.” Much of the growth, he said, has come from McLeod’s bread-and-butter customer, the mid-size carrier with 200 to 800 trucks.

McLeod’s acquisition of Integrated Logistics Execution Network Systems, announced at the end of April, was going well, Halbrooks said. That company’s iLens product, which features software for shippers and third-party logistics companies, came into the fold when “everybody is wanting everybody to rebid everything because of the economy,” he said.

“iLens is getting us even further into the 3PL world and lets us get involved with the shippers, which we hadn’t done too much before,” Halbrooks said.

Meanwhile, Innovative Computing Corp., Brentwood, Tenn., also has registered an uptick in business from carriers interested in greater cost control.

“Some of the small and midsize carriers have delayed the commitment to technology,” said Ernie Betancourt, CEO of ICC, “and now, with a need to manage costs, they are exploring new technology aggressively.”

Betancourt said ICC’s “software as a service” product, AccessPlus, is attracting more interest, in particular from smaller carriers.

Also known as “software on demand,” SaaS outsources physical IT infrastructure such as servers to the software vendor and allows users to access needed applications over the Internet.

Revenue during the first quarter was the strongest in the past decade, ICC said. However, Betancourt said training activity has been down in 2009, which he chalked up to tighter travel budgets.

“Attendance in our Nashville classrooms is slightly down this year when compared to 2008, but our telephone training sessions are up,” Betancourt said. “The customer does incur travel expense to send an employee to Nashville, so that is probably the reason for the slightly down attendance in 2009.”

Transport Topics, 9/7/2009

FTR: Truck orders rise in August
Friday, 04 September 2009 00:00

FTR Associates today, Sept. 4, released preliminary data showing Class 8 net orders for all major North American OEMs totaling 10,758 units in August, the strongest showing since November 2008. The figure includes orders for the United States, Canada, Mexico and exports.

Order activity for August was 19.9 percent better than the previous month and represents an annualized rate of 129,096 units.

“FTR is cautiously optimistic about the increased August preliminary Class 8 net orders," says Eric Starks, president of FTR, based in Nashville, Ind. "However, we believe some of the orders being placed are in response to 2010 EPA emissions requirements. We still expect any recovery in the transportation industry to be slow and bumpy through next year.”, 9/04/2009

Trucking job losses slow in August
Friday, 04 September 2009 00:00

Employment among for-hire trucking companies in August dropped 0.3 percent on a seasonally adjusted basis from July levels— the smallest decline in a year. Payroll employment is down 9.5 percent from August 2008, according to preliminary figures released today, Sept. 4, by the U.S. Department of Labor’s Bureau of Labor Statistics.

With the estimated 4,000 jobs lost in July, the trucking industry has lost more than 81,000 jobs since the end of 2008—a decline of 6 percent. Job cuts since July 2008—just before the current decline—total 131,500. The BLS numbers reflect all payroll employment in for-hire trucking, but they don’t include trucking-related jobs in other industries, such as a truck driver for a private fleet.

Seasonally adjusted trucking employment peaked in January 2007 at more than 1.45 million, according to BLS figures. Since then, for-hire trucking companies have shed 194,900 jobs, or 13.4 percent.

In July, the decline in trucking employment only slightly outpaced that in the entire U.S. economy. Nonfarm payroll employment fell by 216,000 jobs or 0.2 percent from July to August on a seasonally adjusted basis. Compared to August 2008, nonfarm payroll employment is down 4.3 percent., 9/04/2009

Cross-border trucking program critiqued
Friday, 04 September 2009 00:00

The Federal Motor Carrier Safety Administration has satisfied much of the safety recommendations made for the Mexico cross-border trucking program, but needs better traffic conviction data, its oversight office reported.

The agency’s Office of Inspector General’s recently released its Aug. 17 audit of the program that ended in March after President Obama signed a bill barring project funding. The office was required to annually review the program, which began in 2007 and allowed a limited number of Mexican and U.S. fleets to do business beyond the border zone.

The FMCSA fully met six of the eight congressionally required criteria. It also substantially met the criteria to have “adequate capacity at southern border to conduct meaningful inspections,” as well as “having sufficient databases to allow safety monitoring of Mexican carriers and drivers.”

The FMCSA noted that program Mexican carriers had a driver out-of-service rate of 0.5 percent and a vehicle out-of-service rate of 7.2 percent during the first year of the project. U.S. carriers had driver and vehicle out-of-service rates of 7.2 percent and 22.6 percent, respectively, during 2007.

But the OIG reported that for 2007, the percentage of Mexican vehicles placed out-of-service for safety or regulation violations was 21.6 percent, and the percentage of drivers placed out-of-service for license violation was 1 percent.

The audit also listed ’07 data for Central American-Domiciled Motor Carriers inspections, which appeared to be not included in DOT data. The FMCSA declined clarification on this and other audit findings.

Of these 775 inspections on Central American carriers, 33.6 percent of vehicles were placed out-ofservice for safety or regulation violation. More than 49 percent of drivers were placed out of service for license violations. In ’08, there were 878 inspections in this group, with 38.4 percent of vehicles placed out-of-service for safety or regulation violations and 63.2 percent of drivers placed out-of-service for license violations.

The auditors said the Mexican Conviction Database data needed to be improved because states inconsistently report traffic convictions by Mexican CDL holders to the Mexican Convictions Data Base.

The FMCSA responded that in December, it entered a memorandum of understanding with Mexico to provide safety data exchange.

Mexican driver safety is evaluated identically to United U.S. and Canadian drivers and disqualifying violations on drivers is the same for the three countries, it said.

The agency stated that not having an operating authority is not considered a disqualifying offense for individual driver licensing purposes and is not on a Mexican driver’s license record or in the Mexican Convictions Data Base. However, this information is included in the FMCSA’s Motor Carrier Management Information System.

Further, states are not required to report Mexican CDL holder convictions to the MCDB, the agency said. While this data can be useful, MCDB trends “are not necessarily indicative of the quality or uniformity of enforcement action,” it wrote. The FMCSA is bettering MCDB data quality, it added.

The OIG concluded that agency officials should consider information as it moves forward, along with other federal U.S. and Mexican entities, to propose legislation for a new cross-border trucking project that meets congressional concerns and North American Free Trade Agreement commitments.

This spring, Mexico responded to the project’s end by imposing $2.4 billion in tariffs on U.S. products, which some congressional representatives say is beyond the limit allowed by NAFTA. In June, Mexico's National Cargo Transportation Association sued the United States for $6 billion because the program was discontinued.

Teamsters General President Jim Hoffa said "this report shows without a doubt that opening the border to Mexican trucks and buses puts an unacceptable strain on our border resources.

"Federal officials couldn't keep up with inspections when there were only 118 trucks in the pilot program,” Hoffa said. “If the border were opened to all Mexican trucks, border inspection stations would be completely overwhelmed.", 9/04/2009

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