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Transportation News Bulletins - LTL and TL

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Monthly freight index unchanged, year-over-year down 4.1%
Friday, 19 February 2010 00:00

The Freight Transportation Services Index was unchanged in December from its November level after one monthly increase, the U.S. Department of Transportation’s Bureau of Transportation Statistics reported Thursday, Feb. 18. BTS, a part of the Research and Innovative Technology Administration, reported that though the Freight TSI declined 4.1 percent during 2009, the index increased 2.9 percent over the last seven months of the year, beginning in June.

The December Freight TSI of 96.2 is a 2.9 percent increase from the recent low of 93.5 reached in May, when the index was at its lowest level since June 1997. However, the Freight TSI is down 14.8 percent from its historic peak of 112.9 reached in May 2006. With the 4.1 percent decline in 2009 following an 8.7 percent decline in 2008, the Freight TSI has declined 12.4 percent in two years. The freight index is also down 13.2 percent in the five years from December 2004, and down 8.4 percent in the 10 years from December 1999.

The December Freight TSI of 96.2 is the lowest for December since December 1996 when it was 89.1. The 4.1 percent decline in the Freight TSI from December 2008 to December 2009 was the fourth-largest annual decline in the 20 years for which the TSI is calculated. It was the third largest decline in the past decade, exceeded by declines in 2000 and 2008.

The Freight TSI is a seasonally adjusted index that measures the month-to-month output of the for-hire freight transportation industry and consists of data from for-hire trucking, rail, inland waterways, pipelines and air freight. It includes historic data from 1990 to the present. The baseline year is 2000.

Commercial Carrier Journal, 2/19/2010

US labor enforcers scrutinize 'independent' workers, truckers
Thursday, 18 February 2010 00:00

WASHINGTON—The Obama administration plans to crack down on companies that blur the lines between employees as independent contractors, including owner-operators in the trucking industry.

Facing significant budget shortfalls, officials could soon increase enforcement of misclassified workers in an attempt to uncover additional sources of revenue while also appealing to unions that oppose independent worker status in some sectors.

According to a report today from the N.Y. Times, President Obama's 2010 budget estimates that such measures would yield at least $7 billion over 10 years.

The administration will hire 100 more enforcement personnel and the IRS has begun auditing 6,000 companies.

Meanwhile, more than two dozen states have already stepped up enforcement, by enacting stricter penalties, according to the paper.

The Labor Department estimates that up to 30 percent of companies misclassify employees, many of which are in the trucking or construction industries.

In many of these cases, companies treat independent contractors the same as payroll employees, who perform many of the same functions. Both types of workers are frequently given similar instructions and duties and have access to the same equipment and facilities.

Companies that pass off employees as independent contractors may do so to avoid paying Social Security, Medicare and unemployment insurance taxes.

The attention federal and state officials are now paying to the issue is significant on another front, as it could bolster unions that are attempting to collectively bargain for owner-operators contracted to for-hire fleets.

FedEx, for example, has spent years fending off large-scale unionization efforts by the Teamsters.

In that campaign (which has since expanded to Canada), the Teamsters are lobbying Congress to change how the carrier is governed under federal law and force FedEx's independent drivers to be recognized as company employees.

The Teamsters, interestingly, are backed by FedEx's main competitor, UPS, whose workforce is represented nationwide by the same union.

FedEx's argument—one often made by trucking companies in similar situations—is that owner-operators own or lease their own equipment and can choose which lanes to take.

But if Canadian precedent is anything to go by, that argument could be a tough sell to officials sympathetic to union interests if the company exercises any degree of control or direction on nonemployee drivers.

As Today's Trucking has documented over the last few years, the Canada Industrial Relations Board and independent arbitrators have routinely certified unions to collectively bargain for owner-ops—whether the truckers wanted it or not.

Issuing uniforms or company mailboxes to owner-ops; or allowing them to share facilities with company workers and inviting them to company functions are all actions that have been cited to define the carrier as the "true employer" of an independent worker or agency driver.

Whether auditors and labor tribunals in the U.S. interpret things as arbitrarily remains to be seen.

Although, according to the Times, White House and state officials deny they are doing it as a favor to the unions., 2/18/2010

Bill to increase Virginia speeds to 70 mph moves to governor
Wednesday, 17 February 2010 00:00

A bill to allow all vehicles to travel faster along some highways throughout Virginia has completed its trek through the legislature.

The Virginia Senate voted 30-10 Tuesday, Feb. 16, to advance a bill to Gov. Bob McDonnell that would increase the 65 mph speed limit to 70 mph for all vehicles on rural sections of interstates where engineers deemed it safe. The change would also apply to other multilane, divided, limited-access highways and high-occupancy vehicle lanes.

House lawmakers have already endorsed the measure—HB856—on a 71-26 vote.

The pursuit of higher speeds has the backing of McDonnell. He pledged during his run for governor to pursue faster travel on rural stretches of highway statewide. During his recent State of the Commonwealth Address, he reiterated his desire to see 70 mph speeds implemented on stretches of I- 95, I-64, I-77 and I-81. McDonnell pointed out that 32 states already have 70 mph speed limits, and 13 states have speeds set at 75 mph.

McDonnell has said that the modest increase in the speed limit not only will be safe for travelers to arrive at their destinations in a timelier manner, but will also benefit transportation.

“This is an important early step towards our common goal of improving transportation in the Commonwealth,”McDonnell said in a statement.

Owner-operator and OOIDA Life Member John Taylor of Cross Junction, VA, said a change to 70 mph makes sense because traffic is already traveling at that speed.

“You have to be realistic with speed limits, and the interstate highway system at 70 mph is absolutely not out of line whatsoever,” Taylor told Land Line.

Delegate Bill Carrico, R-Galax, shares the same view. As the bill’s House sponsor, he pointed out the change would help enable all vehicles to drive along at speeds they are accustomed to traveling.

“This is a common-sense reform that will make sure highway traffic moves at a more uniform speed on Virginia’s highways,” Carrico said in a statement.

Taylor is glad to see that Virginia lawmakers have decided to keep all vehicles at the same speed. He referred to the tireless efforts by the Owner-Operator Independent Drivers Association to have uniform speeds in all states.

“OOIDA has fought for years against split speed limits. It’s a proven fact that having differential speed limits for cars and trucks is detrimental to safety,” he said.

Once the bill is signed into law, it will take effect July 1.

Land Line Magazine, 2/17/2010

Four rest areas along I-81 reopen in Virginia
Wednesday, 17 February 2010 00:00

As promised, four rest areas and the critical parking these sites provide for truckers officially reopened in Virginia on Wednesday, Feb. 17.

The reopened facilities include:

  • I-81 North Rural Retreat, mile marker 61;
  • I-81 South Smyth (Atkins), mile marker 53;
  • I-81 South New Market, mile marker 262; and
  • I-81 North Radford, mile marker 108.

Another 15 rest areas are scheduled to reopen in the state by mid-April.

The 19 rest areas were originally shuttered by former Gov. Tim Kaine, who closed the sites in an effort to save $9 million from an expected $4.6 billion revenue shortfall in the state’s transportation budget over a six-year period.

Virginia’s new governor, Robert F. McDonnell, vowed that if elected he would reopen the shuttered rest areas within 90 days of taking office. He announced plans to reopen the 19 sites just four days after he was sworn in as governor.

Jeff Caldwell, chief of communications for the Virginia Department of Transportation, told Land Line on Tuesday, Feb. 16, that “everything is on track” to reopen the 19 sites.

Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association, told Land Line recently that this is great news for truckers and motorists traveling through the state of Virginia.

“Obviously, Gov. McDonnell has recognized the importance of reopening these rest areas,” Spencer said. “This is absolutely great news and shows the new governor is committed to promoting highway safety.”

Land Line Magazine, 2/17/2010

OOIDA calls on trade rep to battle tariffs
Wednesday, 17 February 2010 00:00

Mexico continues to take aim at more than 90 U.S. goods with pricey retaliatory tariffs. After the plug was pulled on the cross-border program with Mexico nearly a year ago, the tariffs were levied and have yet to meet with intervention from the Office of the U.S. Trade Representative.

To make matters worse, the U.S. Trade Representative Ron Kirk has publicly stated that the easiest way to put an end to the tariffs is to start yet another cross-border trucking program.

The Owner-Operator Independent Drivers Association issued a Call-to-Action on Wednesday urging members to press Kirk to stand up to Mexico rather than caving on the cross-border issue.

“Instead of bowing to Mexico, the U.S. Trade Representative needs to be standing up for U.S. jobs and American interests,” OOIDA leadership wrote in the Call-to-Action. “Congressional leaders whose constituents were targeted by the Mexican tariffs have repeatedly called on (Trade Representative) Kirk to fight back and challenge those tariffs, but so far (he) has refused to do so.”

The Federal Motor Carrier Safety Administration pulled the plug March 11, 2009, on a pilot program that had allowed Mexico-based motor carriers long-haul access to the U.S.

The highly contentious program lost its funding when President Barack Obama signed the 2009 transportation appropriations bill into law on March 10, 2009. The next day, FMCSA started the process of shutting down the program.

One week later, Mexico struck back hard, implementing tariffs on some 90 U.S. goods—tariffs carrying a price tag of approximately $2.3 to $2.4 billion.

Mexico officials claimed to have imposed the tariffs because ending the cross-border program would cost Mexico potentially up to $2 billion.

U.S. lawmakers called foul on Mexico’s tariffs, claiming the tariffs were everything from “inappropriate” to downright “illegal.”

The U.S. agency charged with resolving just such disputes is the Office of the U.S. Trade Representative. U.S. Trade Representative Ron Kirk and the entire Obama administration were repeatedly called on by lawmakers to look into the tariffs and take action.

Rep. Peter DeFazio, a Democrat from Oregon and a vocal opponent of the program, sent a letter to President Barack Obama urging him to take action against Mexico’s “illegal” tariffs.

In a press release issued by his office on March 20, 2009, DeFazio pointed out that several of the tariffs were aimed at products produced in DeFazio’s home state and the home states of various other lawmakers who actively sought to shut down the program. “These tariffs are illegal and should be treated as nothing more than political gamesmanship. Mexico has no legal grounds to implement any of these tariffs. Even if there was a legal basis for the tariffs, the $2.4 billion price tag is a disproportionate response, and the 90 U.S. products targeted for tariffs were illegally selected,” DeFazio wrote in his letter to Obama.

Rep. Brad Sherman, D-CA, wrote a letter to Kirk asking what actions his office would be taking to rectify these lopsided, “inappropriate” tariffs imposed by Mexico.

Sherman pointed out that the North American Free Trade Agreement limits maximum “sanctions” to pre- NAFTA levels. The tariffs imposed, according to research collected by Sherman from groups such as Public Citizen, would generate nearly $427 million in revenue.

However, he pointed out, Mexico’s losses because of the conclusion of the cross-border program were actually somewhere between $69 million and $227.6 million.

“That is to say that Mexico’s real losses are 16 to 53 percent of what is being imposed,” Sherman wrote to Kirk.

“It has been nearly three months since Mexico slapped these sanctions against U.S. trade. If Mexico has imposed tariffs that greatly exceed the actual damages in this matter, I would assume that the USTR is working to seek immediate relief for U.S. producers,” Sherman wrote.

Now 11 months into the tariffs, Kirk has not taken any action.

“The USTR seems to be more interested in placating the Mexican government than in standing up for U.S. jobs and American small businesses,” said Todd Spencer, OOIDA executive vice president. “Who the hell does he think he works for?”

Rather, the trade representative has repeatedly indicated that the simplest way to get the tariffs dropped is to simply initiate another cross-border program. He’s even gone so far as to indicate that congressional limitations on cross-border programs had been eliminated.

Recently, following a meeting with Mexican trade officials, Kirk said that the prohibition on cross-border trucking had been “removed” from the 2010 transportation appropriations bill.

Yet, clearly, there remains language in Section 135 of the 2010 appropriations bill that puts numerous restrictions on any cross-border program between the U.S. and Mexico.

The section reads:

“Sec. 135. Funds appropriated or limited in this Act shall be subject to the terms and conditions stipulated in section 350 of Public Law 107-87 and section 6901 of Public Law 110-28, including that the Secretary submit a report to the House and Senate Appropriations Committees annually on the safety and security of transportation into the United States by Mexico-domiciled motor carriers.”

Between Section 350 and Section 6901, the laundry list of safety and regulatory compliance items that Mexico has yet to address is lengthy, to say the least.

There has been little in the way of information from FMCSA or Mexican officials as to what strides Mexico has made to comply with the limitations—like comparable drug and alcohol testing, CDL licensing and tracking, etc.

On March 18 of this year, the existing tariffs will expire. And, in addition to lack of information on Mexico’s intent to comply with the outlined check-off points for a cross-border program, there has been no indication from Kirk or the Mexican government that the expiration of the current tariffs will mark the end of Mexico’s retaliation to the end of the cross-border program.

“The safety and security issues haven't been resolved, and they certainly haven’t gotten better in the past year. Those are the issues that officials from Mexico should be focused on, and our U.S. trade rep should not be bashful about telling it exactly that way,” Spencer said.

Land Line Magazine, 2/17/2010

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