Tagged: regulations

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How will the ELD mandate impact pricing?

BLOOMINGTON, Ind. — When the U.S. electronic logging device (ELD) mandate is fully implemented, trucking productivity could take a 2.5% hit, requiring the hiring of 60,000 additional drivers.

Such a scenario, outlined by industry forecaster FTR, would push truck utilization to about 100%, potentially driving up trucking rates. In a State of Freight Webinar called Preparing for the ELD future, FTR transportation economist Noel Perry expressed doubts that the industry, already struggling to find drivers, would be able to find 60,000 more in addition to the 300,000 it already needs to hire per quarter just to keep pace, especially since additional regulations in the works could further hit productivity and require the hiring of another 20,000 additional drivers.

“Can we hire 80,000 extra people in a single quarter? Normal sources of hiring demand about 300,000, and it will climb to about 375,000 in the first quarter of 2018. That’s a 26% increase. We believe we can’t, so there’s going to be pressure on capacity until they catch up, some time late in the year,” Perry said.

Such hiring spikes have been required before, most notably in 2004 and 2014, when capacity utilization reached nearly 100%. What happened then? Trucking prices spiked.

In 2004, spot market prices rose 15% and contract prices climbed 10%, thanks to a productivity hit incurred by new hours-of-service rules coupled with strong freight demand. In 2014, spot market prices rose 11% and contract rates 4%. One week in 2014 saw spot market prices rise 20% as capacity utilization was at its max.

Already, trucking capacity on the spot market is “scary tight,” Perry said, citing data from Truckstop.com and its loads-to-trucks ratio.

“A 20% increase in spot rates is not outside the realms of possibility,” Perry said, looking ahead to the impact the ELD mandate will have on pricing. “Our conservative numbers are, if anything, underreporting what’s beginning to show in the marketplace.”

But, predicting the impact of the ELD mandate on trucking productivity is an inexact science. Perry said an over-the-road truck that’s maximizing its hours could see a 5-8% productivity hit, while other trucks that don’t run a full 70 hours a week may not be affected. Perry also noted about 40% of U.S. fleets are currently already using ELDs and will have worked through any hit to their productivity. And of course, there’s no chart that shows how many fleets are running paper logs and egregiously violating hours-of-service regulations, and how many of them will be unable to continue operating in an ELD environment.

But all those factors taken into account, Perry said the maximum effect of the regulation will occur sometime in late 2018, “assuming reasonable enforcement” of the law.

“The effect at the peak, we think will be 2.5-2.7%, which doesn’t seem like much, but when you consider 3-3.5 million trucks and you take 2.5% of that, it equals somewhere around 60,000-70,000 trucks using crude math.”

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Super singles approved in Alberta

CALGARY, Alta. – As of July 1, the Government of Alberta has given the green light to the use of wide-base single tires on provincial roadways.

Following in the recent footsteps of Saskatchewan, trucks in Alberta will now be permitted to use the new generation single tire at at-par weights – single axle (9,100kg); tandem axle (17,000kg); tandem axle with spread 2.4 meters or more but less than three meters (21,000kg); and tandem axle with spread three meters or more but not more than 3.7 meters (24,000kg).

With Manitoba also allowing the use of wide-base single tires, B.C. is the lone Western Canadian province that has not yet given the thumbs up to the new tire.

Alberta Motor Transport Association (AMTA) president Lorraine Card received the news from the Minister of Transportation and Infrastructure Brian Mason, and is relieved the ongoing effort has finally come to fruition.

“This file has been open for over 10 years, so we are very pleased that we’ve been able to come to a successful conclusion,” said Card.

Trucking companies in Ontario and Quebec have long been able to use the new generation tire, but in Western Canada the process has been much slower.

Alberta Transportation, along with the AMTA, conducted a pilot project to determine if wide-base single tires would be a viable alternative to the traditional dual tire in an effort to save fuel and help the Government of Alberta make future decisions on the new generation tire. And during the yearlong pilot, super singles showed an average of 8% fuel savings compared to duals.

Initially, Westcan Bulk Transport was the lone company participating in the pilot, making runs between Edmonton and Calgary from July 1 to Aug. 31, 2016, carrying the maximum allowable axle loads as permitted on a two-tire configuration. Westcan made 98 trips per week (14 per day) on this run, which the government said would limit the number of variables to measure, making the data easy to interpret.

Rosenau Transport eventually came into the fold, testing the wide-base single tire and ending Phase 2 of the project at the end of January.

Rosenau Transport did the same run as Westcan between Edmonton and Calgary with full weights on the super singles, but also included trips on Highway 63 to Fort McMurray and Highway 43 to Grande Prairie.

Card said the AMTA had attempted to get approval for higher weights for the pilot project, but ultimately did concede to lower weight limits to what was tested during the pilot and has now been approved by the provincial government.

Initial concerns over the use of wide-base single tires were focused around potential road damage, but Card said studies on the 455 super single were telling.

“Speaking to our counterparts in Ontario and Quebec,” she said, “they have not seen any noticeable pavement damage. For example, if a road was scheduled to be done in 20 years, it might now have to be done in 19.98 years. There has been no noticeable pavement damage with the use of these tires.”

Drivers who have used the new generation tire have also relayed to the AMTA that they offer a nice ride and superior handling during all seasons.

The pilot program is now complete, running from July 2016 to this past June.

However, because the Government of Alberta’s authority is limited to provincial highways, the use of super singles is limited, and is still not permitted within municipalities.

“We still need to continue working with the various municipalities to get approval for those roads,” Card said, adding that there are 340 municipalities in Alberta. “The province only has authority over provincial highways, and anything in municipalities goes back to the individual municipalities.”

This poses some challenges to companies looking to pick up and drop of freight in a city or town, but Card is confident municipalities will hop on board.

“We’re hopeful that all of the municipalities will buy into the process and will allow the tires,” said Card. “The provincial government is working on getting information and communication out there to (municipalities) to let them know of the minister’s announcement.”

Card admitted that there is a cost to companies looking to change over to wide-base single tires, and now that they have been approved, she expects the new technology to take a bit of time to become commonplace.

“I think it will be a slow process,” Card said. “Any discussions we have had with our membership was wait-and-see what’s going to happen. We’re not expecting every truck to start running new generation tires in the province. We hope to see that there will be more of an uptake with these tires going forward.”

Card did point out that trucks coming from the east will now be allowed to run super singles right through to the Alberta-B.C. border.

“It’s just another way to break down some of the barriers,” she said.

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ATA implores FMCSA to keep e-log rollout on schedule

ARLINGTON, Va. – The American Trucking Associations (ATA) is urging the U.S. Federal Motor Carrier Safety Administration (FMCSA) not to delay the implementation deadline for electronic logging devices (ELDs).

“Over the past week we have heard from our members, loudly and clearly, that they are vehemently opposed to these attempts to delay this important regulation,” said Bill Sullivan, ATA’s executive vice-president of advocacy. “The industry stands ready and is prepared to implement ELDs.  As our letter explains, it is incumbent on regulators and on Congress to dismiss this last-ditch try by some to evade critically important safety laws.”

The ATA wrote, in part: “With the December deadline approaching, opponents of electronic logging are making one last attempt to influence policymakers to reconsider the impending implementation deadline. These efforts are misguided, are supported by misinformation, and are simply an attempt to evade compliance with the existing laws and regulations governing duty hours and driver fatigue.”

It cited research that found carriers using an ELD saw an 11.7% reduction in crashes and a 50% drop in hours-of-service violations over those using traditional paper logs.

“This and other evidence has convinced ATA and many other industry supporters, along with law enforcement, Congress, FMCSA and numerous federal courts, including the U.S. Court of Appeals for the Seventh Circuit, which became the most recent court to reject arguments opposing the ELD mandate, to support the ELD final rule,” the ATA wrote in its letter.

“Supporters of a delay are attempting to accomplish, almost at the 11th hour, what they’ve been unable to do in the courts, Congress or with the agency: roll back this common sense, data-supported regulation based on at best specious and at worst outright dishonest arguments.”