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Transportation News Bulletins - LTL and TL

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Execs Ask FMCSA to Change Several Steps Before Chassis Safety Rule Takes Effect
Monday, 15 February 2010 00:00

Trucking and intermodal leaders are pressing the Federal Motor Carrier Safety Administration to change two key safety reporting steps before the agency’s delayed chassis safety rule finally takes effect on June 30.

The Intermodal Association of North America, American Trucking Associations’ Intermodal Motor Carriers Conference and the Ocean Carrier Equipment Management Association told agency officials why pre-trip and post-trip equipment condition reports must be revised, during a Feb. 3 meeting with Administrator Anne Ferro.

Late in December, FMCSA granted the request by trucking and ocean carriers to come up with new procedures for handling equipment condition reports and moved the effective date to June 30. The reports are important because they record the condition of chassis used for tens of millions of intermodal truck trips annually among ocean terminals, rail yards, warehouses and customers.

Intermodal interests “are trying to speak with one voice,” said David Manning, president of Tennessee Express, Nashville, Tenn. “That’s the best chance we have to get the rules aligned with what we need. FMCSA is anxious to get the regulations right before they roll them out.” 

Truckers want mandatory pre-trip inspection by drivers before they leave an ocean or rail terminal, said Curtis Whalen, director of ATA’s intermodal conference.

“We still believe very fervently that the pre-trip inspection needs to be the focus of safety,” he said. “If you don’t have it, you are losing the first and best measure of whether a provider’s equipment is roadable.”

The other issue is the need to simplify inspection reports when chassis are being returned to the ocean and rail terminals, said Manning, who is chairman of the intermodal conference and a member of IANA’s board.

One problem, Manning said, is that ocean carriers typically want the document called a driver vehicle inspection report, or DVIR, to be submitted in paper form. But railroads moving toward automated procedures for processing trucks through terminal entry gates want electronic submission of the DVIR.

Another key issue, Manning noted, is the ocean carriers’ preference to retain only DVIR reports that note defects such as a problem with brakes, tires or lights.

Whalen said there is no point in accumulating reports when the returned chassis has no problems because all that does is increase the administrative burden on the ocean or rail carrier that provided the chassis.

FMCSA didn’t return calls and e-mails requesting comment on the meeting last week, when the federal government was closed from Monday through Thursday because of heavy snow.

The ocean carrier group, which represents steamship lines that own or lease 85% of the chassis used for intermodal service, also didn’t respond to requests for comment.

Whalen said he intends to develop a formal document to present to the agency showing an intermodal industry consensus that pre-trip reports should be required and an end to requirements for retaining DVIR reports even if they show no defects.

No further meetings have been scheduled, and the agency gave no date when it would respond to the intermodal industry’s concerns, Manning said.

Industry officials praised the agency for listening to the industry’s concerns as they await a response.

“Any time there is a dialogue about the best way for all stakeholders to understand and comply with the regulations, that is a solid development, particularly when it is facilitated by FMCSA,” Tom Malloy, an IANA vice president, told Transport Topics.

“That shows they are interested in understanding the intermodal business from the perspective of all of the stakeholders in implementing new regulations,” Malloy said.

“It was helpful to have everyone at the table,” Manning said. “The FMCSA doesn’t understand everything about intermodal. One of things we hope to do is reiterate in writing what we need.”

“The forum was great,” Manning told TT. “Was a lot accomplished? We’ll have to wait and see what we hear from FMCSA.”

“I believe the FMCSA meeting yesterday served to provide the agency with a candid discussion on the implementation obstacles that the regulations are generating,” IMCC Director Whalen said.

Transport Topics, 2/15/2010

 
Medical Exam Changes to Affect Carriers
Monday, 15 February 2010 00:00

The final rule for the Federal Motor Carrier Safety Administration’s National Registry of Certified Medical Examiners is expected late this summer and is causing concern about rising prices and availability among drivers and motor carriers.

When the final rule takes effect, medical and osteopathic doctors, nurse practitioners, physician assistants and chiropractic physicians who currently perform the commercial motor vehicle driver medical exam will be required to attend training classes and pass a certification test.

Until now, few requirements have been imposed on physicians conducting CMV medical exams, so it’s no surprise that the upcoming change is expected to decrease the ranks of those providing this service.

For carriers, much of the concern centers on the medical examiners they now use. No physician wants to take a federally mandated training course, much less have to pass a national certification test, which makes the new procedure an unavoidable deterrent for providers.

The training also will cost some money, but physicians might view their time attending the training and studying for the certification test as the larger deterrent: The busier the medical practice, the less interested the physician will be in performing the CMV exams.

An insidious consideration is how the fee for a medical exam compares with the fee for other office procedures. Clinics prefer to perform the procedures that pay the best. With the amount that patients pay for a typical office visit soaring, the prospect of providing the less lucrative medical exams becomes less attractive.

However, for certain providers—chiropractors, for example—the fee for a driver medical exam is more than the fee they receive for most other procedures. This incentive already has significantly increased the number of chiropractic physicians performing the medical exams.

The concern over price and availability is fueled by the law of supply and demand. As demand increases or supply decreases, prices tend to go up. The U.S. Department of Transportation already has predicted that increased truck use over the next five years will cause an increase in the number of CMV drivers. This increase alone would tend to push prices higher. Combined with the expected decrease in providers, a price increase would seem all but guaranteed.

Back in 1999, when the DOT proposed mandatory training for its medical review officers, I made that same supply-and-demand argument. Armed as I was with this irrefutable law of economics, how could I have been so wrong?

Sometime ago, the going rate for the services of a DOT medical review officer was $7; today our companies pay only half that amount. Why? The answer is “economy of scale”—methods of mass production lower the cost per unit, resulting in a lower price.

Unfortunately, to benefit from the economy of scale, large numbers of exams must be funneled into fewer clinics, which is counterproductive to having providers widely available.

Nationwide availability is a concern with no easy answer. In large cities, medical and osteopathic clinics and hospitals that specialize in occupational health will continue the exams, but medical providers in private practice are less certain.

However, keep in mind that the medical exam can be performed by any of these health-care professionals:

  • Medical doctors
  • Osteopaths
  • Nurse practitioners
  • Physician assistants
  • Chiropractors

Every medical examiner will complete the same training course and certification test, so there should be little difference between providers in their ability or judgment.

One bit of good news is the renewed interest in establishing clinics based at truck stops.

New developments include nationwide networks of medical examiners, urgent care clinics and hospitalbased facilities, and many of them use tools such as the Internet to broadcast their availability.

More chiropractic physicians, nurse practitioners and physician assistants have joined the ranks of the medical and osteopathic doctors who, before 1992, were the only ones conducting medical exams.

Motor carriers can prepare by consulting their current provider, who, in fact, might be unaware of the upcoming changes. Large motor carriers have the advantage here, because they can offer clinics for large numbers of medical exams. Smaller motor carriers may benefit by acting now to find providers who are aware of the upcoming requirement and intend to continue the exams.

Owner-operators who use their own primary-care physicians are among the most likely to be looking for a new provider because they can’t offer economies of scale.

We can look back to 2000 to see the effects of mandatory training on drug-testing costs and availability, and I think most would agree the outcome has been positive.

The National Register of Certified Medical Examiners likely will have a similar result.

Transport Topics, 2/15/2010

 
Trucking Adds 2,500 Jobs in January, Second Jump in 3 Months, Labor Says
Monday, 15 February 2010 00:00

The trucking industry added 2,500 jobs during January, the second monthly rise in the past three months, as the national unemployment rate dropped to 9.7% from 10% in December, the Labor Department reported Feb. 5.

Labor’s monthly employment report said the economy lost 20,000 jobs in January, with much of the employment decline tallied in construction, transportation and warehousing, while temporary help services and retail trade added jobs.

In January, transportation and warehousing lost 19,000 jobs, mainly because of large employment losses among couriers and messengers, U.S. Bureau of Labor Statistics said. Jobs in “truck transportation,” however, increased to 1,232,900 in January from 1,230,400 in December.

“The fact that for-hire carriers added any jobs in January is a good sign,” Bob Costello, chief economist of American Trucking Associations, told Transport Topics. “However, the increase must be put into context. Specifically, it doesn’t even come close to offsetting December’s cut . . . of 12,900.” Trucking added 2,500 jobs in November.

Costello also cautioned that the government data are “highly volatile and subject to substantial revisions—which means, I’ll wait to see if the January increase ‘sticks,’ so to speak.”

He said the improvement in trucking jobs, even if the growth remains unchanged, does not yet indicate trucking is on its way to large jumps in employment.

“Certainly volumes are moving in the right direction, but we believe utilization has to rise before the industry needs to boost employment significantly,” Costello said.

Construction employment declined by 75,000 in January, with “nonresidential specialty trade contractors,” accounting for the majority of the decline.

Since December 2007, employment in construction has fallen by 1.9 million jobs, according to BLS, which compiles the monthly unemployment report.

Employment in manufacturing changed little in January, with 11,000 jobs lost, BLS said.

“After experiencing steep job losses earlier in the recession, employment declines [in manufacturing] moderated considerably in the second half of 2009,” BLS said. “In January, job gains in motor vehicles and parts, at 23,000, and plastics and rubber products, at 6,000, offset small job losses elsewhere in the industry.”

BLS this month released a separate report on trucking employment titled, “Recession Leads to Lackluster Employment in the Trucking Industry.”

“A dramatic slowdown in consumer demand has been crippling the nation’s trucking firms, making job losses during the current recession worse than at any time since. . . . 1990,” BLS said in the report.

The agency said that, as in the economic downturn in 2000-01, employment in trucking peaked nearly a year before the official start of the recession, but with far more jobs lost this time than the 91,000 trucking positions cut 10 years ago.

“The most recent employment peak occurred in January 2007, 11 months prior to the official starting point of the current recession,” the report said. “Since then, employment within the industry has declined for 35 months, resulting in the loss of 208,000 jobs, or 14.3% of employment.”

BLS Commissioner Keith Hall pointed out that other January statistics showed weaknesses in the overall economy.

“With revisions released today, job losses since the start of the recession in December 2007 totaled 8.4 million, substantially more than previously reported,” Hall said in remarks prepared for the Joint Economic Committee of Congress on Feb 5.

“The share of those jobless for 27 weeks and over continued to rise,” Hall added.

“Since the start of the recession in December 2007, the number of long-term unemployed has risen by 5 million,” BLS said in the report.

“In January, the number of persons unemployed due to job loss decreased by 378,000 to 9.3 million,” the report said. “Nearly all of this decline occurred among permanent job losers.”

Transport Topics, 2/15/2010

 
Cross-Border Trucking: Debate Heats up on Anniversary of Tariffs
Friday, 12 February 2010 00:00

The wrangling over opening the U.S.-Mexico border to long-haul trucking operations is picking up steam as the one-year anniversary of the end of the Bush administration’s pilot program nears. 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 to $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, 2/12/2010

 
Truckers Benefit from Factory Activity; Analysts
Friday, 12 February 2010 00:00

KANSAS CITY, MO—A U.S.-based transportation consultancy says the recent rise in factory utilization and industrial production is causing increased activity among full load (TL) carriers south of the border.

Analysts with TranSystems say haulers carrying steel, copper, plastic resins, and other materials critical to industrial manufacturing are seeing upticks in activity as more and more companies gear up to fill reorders of merchandise.

Players in the LTL arena, on the other hand, are reporting worse than average seasonality in January.

The most recent TranSystems Transportation Activity Index (TTAI) shows economic recovery is largely benefiting the air cargo industry, marine carriers, and certain elements of the trucking industry. Rail activity has been soft in recent months.

A TranSystems release points out that dray operators are seeing some impact from the flow of goods to and from the nation's ports.

“Exports from the U.S. continued to be generally better as the U.S. dollar and improving Asian economies spurred demand. And, there is also some improving import activity being reported—especially on the West Coast,” the release states.

TranSystems says the full impact of inventory rebuilding activity has not yet been felt. It believes transportation activity will pick up further throughout February and March.

“If there is a threat of a double-dip in transportation activity, it will likely come at the end of the first quarter and early into the second,” TranSystems analysts say.

TodaysTrucking.com, 2/12/2010

 
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