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Transportation News Bulletins - LTL and TL

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We Want Our VMT
Monday, 03 August 2009 00:00

Oregon hopes to expand test on mileage tax after pilot shows promise for infrastructure revenue

Taxing drivers by the number of miles they travel instead of the amount of fuel they buy has become a popular alternative for lawmakers as they look for ways to pay for the highway infrastructure of the future.

The need for a new revenue source is apparent as the Highway Trust Fund again teeters on the edge of bankruptcy, and as highway infrastructure, especially around major markets, can appear to be a pockmarked parking lot.

Although fuel taxes have kept the trust fund solvent for a half-century, cars are using less fuel today, and the recession has kept drivers off the roads. Now the government is looking to Congress for a billiondollar cash infusion for the second consecutive year.

Enter the vehicle miles traveled tax. Supporters say technology makes it feasible to track a car or truck’s mileage and assess a fee for each mile driven.

The VMT has had few practical applications, and even many proponents say it may be five to 10 years before it can be widely used. But the Oregon Department of Transportation started testing the VMT concept with 300 volunteers in 2006 and 2007. The results were encouraging, they say.

“Ninety-one percent of the volunteers said they’d be willing to keep the devices in their cars if the system were extended to every service station statewide,” said James M. Whitty, director of the VMT project.

Now the state is applying to the U.S. Department of Transportation for an $11 million grant to launch a larger pilot, with 5,000 drivers. The VMT also has congressional support. Rep. Earl Blumenauer, D-Ore., introduced a bill July 23 to provide up to $150 million in grants to develop mileage-based revenue programs in all states. 

“We want to extend the pilot project to every state in the union, so people will feel comfortable with it. They’ll understand how it works, and they will benefit from it,” Blumenauer told a House Ways and Means subcommittee.

Whitty said the Oregon pilot was eight years in the making. It is based on an in car recorder that uses satellite data to compute the number of miles a car travels. Whenever the driver buys gas, the box is to transmit the mileage to a receiver at the gas pump, where the mileage fee is determined, added to the bill and deducted from the state fuel tax.

The rate of 1.2 cents per mile was calculated to be about equal to what a driver would pay in fuel taxes. “This was designed not to raise additional revenue, or any less,” Whitty said. It was a pilot test and we promised the Legislature we’d be at zero on revenue.”

Using passive satellite technology addressed the question of privacy, one major concern, Whitty said. Because the vehicle transmitted no location data to the satellite, there was no way the government could track where the driver was going.

“Depending on the age of the motorist, their attitudes are different,” Whitty said. “The younger the motorist, generally they don’t understand what the privacy issue is all about.”

For the next test, the ODOT hopes to develop an open system where drivers may choose a variety of recorders with different features. “People are nervous about government-imposed technology. If they can choose the vendor who sells it to them, and the capabilities of the device, that might be something that’s more acceptable.”

There were two exceptions to drivers’ absolute privacy. A driver going out of state was not charged the VMT. If the driver was in rush-hour traffic in a zone around Portland, congestion pricing kicked in. For rush hours, the system charged 10 cents per mile.

Trucks were not included in the pilot, but the Oregon Trucking Associations is watching the results, President Bob Russell said. Truckers today pay Oregon taxes based on weight and mileage in lieu of fuel taxes.

“We’re looking at all of the options that can help reduce traffic congestion and keep traffic flowing more smoothly,” Russell said. “If this is something that can accomplish that goal, we would support it. I don’t think we support it today.”

But the national American Trucking Associations calls the VMT “an elegant, expensive solution in search of a problem.”

“There is nothing a VMT could do that the fuel tax does not do now, and the fuel tax does it for about 30 cents on the dollar less than a VMT,” ATA spokesman Clayton Boyce said.

Russell said. “It’s a long-term solution, and I don’t know what ‘long term’ means.”

Journal of Commerce, 8/3/2009

DOT drug testing rules back in action
Friday, 31 July 2009 00:00

WASHINGTON—The Department of Transportation has reinstated the requirements for observation collection of urine samples for all return-to-duty and follow-up drug tests, effective August 31.

The original regulation, which was enacted in 2008 as a way to prevent employees from cheating on drug tests, was put on hold after BNSF Railway Co. and nine other groups sued the Department over the new rule, according to published reports. The DOT issued a stay until the court came to a decision.

Last year, the DOT decided to reinstate the old language of the rule until the stay was lifted, making direct observation collection an option for the employer, rather than mandatory. On July 1, the court ruled against the groups, lifting the stay on the regulation.

In May 2008, the court determined that direct observation was not arbitrary and capricious, taking into account the vast availability of cheating devices.

"We view this to be important in light of the fact that there has been a good deal of conflicting information in the transportation and drug testing industries about the requirements and because of the complexities of the various petitions, court actions, and rule changes on the matter," the DOT's final rule posting said.

Today’, 7/31/2009

Trade rep: cross-border program with Mexico would end tariff dispute
Friday, 31 July 2009 00:00

If the U.S. is looking for an easy quick fix to the tariff dispute with Mexico, it may mean launching yet another cross-border trucking program, according to the U.S. Trade Representative.

U.S. Trade Representative Ronald Kirk delivered that message July 1 in a letter to Rep. Brad Sherman, D-CA, who is the chair of the House Foreign Affairs Subcommittee.

The letter was in response to Sherman’s urge for action by the Trade Representative Office on the tariffs Mexico slapped on $2.3 billion worth of U.S. goods because the cross-border program had been shut down.

Sherman questioned the Trade Office on whether the tariffs themselves were legal under NAFTA—since in Sherman’s assessment the revenue generated from the tariffs far exceeded the financial impact to Mexico in shutting down the cross-border program.

Kirk, in his response, did not answer whether the $427 million in tariff revenue was legal under NAFTA per se, but rather said the easiest way to end the tariff dispute was to kick off another program.

“I believe that working with Mexico and Congress to implement a new trucking program and ensure the continued safety of our roads will provide the quickest and surest way to end Mexico’s trade retaliation against U.S. exports,” Kirk wrote.

He does, however, acknowledge that his department is “examining” whether Mexico’s retaliation is greater than allowed.

He went on to caution Sherman that if the Trade Representative’s Office were successful in challenging the tariffs, the only success would be in reducing the tariffs and not eliminating them.

“To that end, we believe pursuing with Mexico a new cross-border trucking program—one that in no way compromises the high safety standards we require for trucks and truck drivers operating in the United States—presents the best hope for quick restoration of our free access to Mexico’s market for highquality, competitive U.S. products,” Kirk wrote.

The Owner-Operator Independent Drivers Association has long opposed opening the border with any program in place that jeopardizes highway safety in the U.S.

That is a point that was reinforced by a NAFTA tribunal decision in 2001—the same decision on which Mexico is currently hanging its ability to levy tariffs.

As far as the tribunal decision goes, it essentially gave the U.S. more latitude in structuring any sort of cross-border program with Mexico.

“Even though a NAFTA Arbitral Panel decided in 2001 that the U.S. was in violation of NAFTA for failing to process the applications of motor carriers to operate within the United States, it affirmed the right of the U.S. to ‘set the level of protection that they consider appropriate in pursuit of legitimate regulatory objectives,’ including the ‘safety of trucking services,’ ” OOIDA President and CEO Jim Johnston pointed out in a letter to President Barack Obama.

OOIDA remains strong on its position that the safety of U.S. highway users cannot be sold or compromised by throwing a program together to appease Mexico.

Johnston also stressed in his letter to Obama that the U.S. is not under any sort of obligation to lower safety standards or regulatory compliance for Mexican trucks.

Johnston wrote in the letter that NAFTA gives the U.S. “the right to ‘adopt, maintain or apply any standards-related measure, including any such measure relating to safety, the protection of human, animal or plant life or health, the environment or consumers, and any measure to ensure its enforcement or implementation’ provided that such measures must be applied in a non-discriminatory manner.”

“Whether or not Mexico-domiciled trucks and drivers can meet our standards is the Mexican government’s responsibility, just as it would be our responsibility to comply with any reasonable safety and environmental regulation Mexico may impose,” Johnston wrote.

Land Line Magazine, 7/31/2009

Skimming fuel surcharges on DOD loads ends
Friday, 31 July 2009 00:00

Brokers and middlemen who made a quick buck by taking all or some of fuel surcharges paid by the Department of Defense will have to end the skimming.

The Department of Defense published an interim final rule in the Federal Register on July 29 that mandates pass-through of fuel surcharges paid on defense loads to the trucker or motor carrier who actually bought the fuel.

The interim rule is in response to legislative language in the National Defense Authorization Act for Fiscal Year 2009 that directed the agency to mandate pass-through of surcharges paid on fuel.

Rep. Peter DeFazio, D-OR, originally introduced the amendment, which sought to mandate the passthrough to the National Defense Authorization Act.

It was an amendment that the Owner-Operator Independent Drivers Association supported from its inception.

The Association worked closely with lawmakers on the development of this amendment, a measure that was sponsored and championed by DeFazio. OOIDA also worked with U.S. Rep. Ike Skelton, D-MO, and U.S. Rep. Duncan Hunter, R-CA, who were the chairman and ranking member of the Armed Services Committee and who supported the measure—helping to ensure the amendment’s success.

The interim rule—which went into effect on July 29—mandates that “the contractor shall pass through any motor carrier fuel-related surcharge adjustments to the person, corporation, or entity that directly bears the cost of the fuel for shipment(s) transported.”

Defense contracts are to include a clause mandating that pass-through.

OOIDA Executive Vice President Todd Spencer called the mandatory provision a “big shot in the arm for truckers who haul military shipments.”

Spencer said it was also a testament to how advocacy works and the effectiveness of OOIDA’s Washington, DC, lobbyists.

Does OOIDA see getting the pass-through into law for those military shipments as a big step in it being mandated for all trucking transactions?

“We think the full pass-through of fuel surcharges is just good business ethics,” said Spencer. “It should be the norm rather than the exception.”

Land Line Magazine, 7/31/2009

Bill looks to give truckers tax break on APU purchases
Thursday, 30 July 2009 00:00

Truck drivers could save up to $3,000 on the purchase of some idling-reduction equipment, if one recently introduced congressional measure is approved.

Introduced on Wednesday, July 29, by U.S. Reps. Earl Blumenauer, D-OR, and Kay Granger, R-TX, the Idling Reduction Tax Credit Act—HR 3383—would provide a 50 percent tax credit of up to $3,000 for any truck owner purchasing an idling-reduction unit.

“Idling can increase engine maintenance costs, shorten engine life, adversely affect driver well-being, and create elevated noise levels,” Blumenauer said on the House floor Wednesday. “This legislation provides an important incentive to protect our environment, reduce fuel consumption, and ease the burden of compliance on the trucking community.”

Granger agreed.

“I think focusing on idling reduction is a commonsense way to not only cut down on the amount of fuel trucks use, but to reduce the amount of truck pollution,” Granger said. “It may seem like a small step, but when you add up the amount of time an average truck idles in a year, this tax credit will benefit both the trucking community and the environment in a very big way.”

The proposed credit was met with enthusiasm at OOIDA headquarters Wednesday.

“Nearly 90 percent of the trucking industry is made up of motor carriers that have fewer than six trucks in their fleets,” said Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association.

“These small business truckers literally drive our economy, but rarely have the disposable income to make large, up-front purchases for idle reduction technologies. A tax credit would go a long way to create a real incentive to purchase idle-reduction technologies, and it is a win for the environment, a win for lower fuel consumption, a win for hardworking truckers, and a win for safety on our highways.”

Mike Joyce, OOIDA’s director of legislative affairs, said the bill’s timing couldn’t be better.

“When the worlds of transportation policy and environmental stewardship and our national economy collide, this is a perfect bill that addresses all three of those concerns,” Joyce said.

APUs and other idling-reduction technologies have gained in popularity as many states, counties and cities have limited and outright banned diesel truck idling. The cost of purchasing the technologies combined with the down economy, however, has made the push for idling restrictions difficult for small trucking businesses to deal with.

Blumenauer said the measure could help truckers pay for the expensive price of APUs.

“Unfortunately, these units can cost up to $8,500.” he said. “While there are loan programs available for some truckers to help defray this cost, most are unable to take advantage of those programs. The Idling Reduction Tax Credit Act would make the federal government a full partner in this effort. I look forward to working with my colleagues to pass this important legislation.”

The bill has been referred to the House Committee on Ways and Means.

Land Line Magazine, 7/30/2009

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