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Chart of the Week: Logistics Managers Index – Inventory Levels, Warehouse Capacity SONAR: LMI.INVC, LMI.WHCP

Inventory costs are growing at the fastest rate in years while warehouse capacity continues to shrink at a near record pace, according to the Logistics Managers Index (LMI). In 2019 shippers crammed warehouses with imports to get around tariffs, coinciding with a slowdown in the freight market. Could rapidly increasing warehousing costs and shrinking warehouse capacity push shippers to keep their freight moving? 

The LMI is a diffusion index that measures expansion and contraction rates — anything showing a value over 50 is expanding, with sub-50 values indicating contraction. Right now inventory costs are increasing as fast as they have since the index was created in 2016 with a record value of 84.58 in April. 

The warehouse capacity measure has been below 50 since the summer of 2020 and has dropped in each of the first four months of this year — meaning shippers have less space to store their stuff. 

Inventory management has become a much bigger deal over the past few years as suppliers experience shortfalls in production for a wide range of reasons. Unexpected demand has been at the heart of most inventory crises. 

Forecasting what people will want when they want it is hardly a perfect science — a hard lesson learned in 2020 for many companies. Missing a peak time in the economy for either a business-to-business-driven expansion (2017-18) or a consumer-focused one (2020-21) can put a company back for years — if it ever recovers at all. 

Peloton knows the value of having inventory when needed and is willing to invest millions of dollars in transporting its bikes to ensure it maximizes its market share in the at-home fitness space while demand is peaking. Peloton has some of the stickiest customers in the industry and knows rapid growth will be less possible once the pandemic ends as people leave their homes more often.

The easy solution to all this is to stockpile raw materials and finished products in a giant warehouse and wait. Many companies utilized this strategy in 2019 to avoid increasing tariffs. Freight poured into the country and sat in warehouses for months. Trucking volumes stagnated until March of 2020, when the pandemic hit. 

The beginning of the pandemic may have been much worse had we not had a relatively decent amount of goods stored — one reason trucking recovered faster than many other parts of the economy last year. Warehousing costs are on the rise and space is becoming less available, making this a less financially viable option. So what about keeping a low inventory level?

A just-in-time or low-inventory operation takes years to set up and the financial risks are extreme for most businesses. The pandemic displayed the worst-case scenario for companies utilizing this strategy thanks to commodity and production shortages of inputs. A consistent and predictable supply chain is needed for this to be effective. Dedicated trucking and private fleets thrive in this space. 

That leaves something in the middle — a solution that does not require a stockpile but can flex up when needed. This is the sweet spot for the for-hire trucking market. The current truckload capacity situation is an argument against this strategy, however.  

This topic was addressed on this past week’s Freightonomics episode in which Zachary Rogers, an assistant professor of supply chain management at Colorado State University and one of the authors of the LMI, stated that “supply chain management has never gotten as much attention as it did this year” because of the massive impact on businesses. 

He went on to say that “people are coming up with different solutions … how to deal with the balance between how much you want to pay to hold [the freight] or move it. And a lot of it is being dictated by the OTRI.”

OTRI is the Outbound Tender Rejection Index that measures the percentage of loads electronically tendered that are being rejected by carriers for a variety of reasons. OTRI is currently around 24%, meaning that one in four loads is being rejected. This is historically high and very disruptive to supply chains. 

Many of the people surveyed do not believe transportation costs will ease over the next year, according to the forward-looking aspect of the LMI survey. This means companies will probably be exploring multiple solutions to gain more control over the logistics of their business while keeping costs predictable. 

Private fleets are extremely expensive and are not well suited for emerging businesses. The for-hire trucking space is still the simplest solution, even as costs are elevated. Increasing warehouse prices will support more freight movement as shippers look for optimal solutions. In the absence of control, visibility is the cheapest and next best option in a chaotic market.

About the Chart of the Week

The FreightWaves Chart of the Week is a chart selection from SONAR that provides an interesting data point to describe the state of the freight markets. A chart is chosen from thousands of potential charts on SONAR to help participants visualize the freight market in real time. Each week a Market Expert will post a chart, along with commentary, live on the front page. After that, the Chart of the Week will be archived on FreightWaves.com for future reference.

SONAR aggregates data from hundreds of sources, presenting the data in charts and maps and providing commentary on what freight market experts want to know about the industry in real time.

The FreightWaves data science and product teams are releasing new data sets each week and enhancing the client experience.

To request a SONAR demo, click here.

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Nice to know when I become too fat to pass my DOT that I can become a tow truck driver

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A Visit with DriverCheck’s Jeremy Thiel

We learn about Jeremy Thiel who is the marketing manager for DriverCheck in Ontario Canada. This interview is a little more unique in that the host is going to also draws his caricature while he learns about Jeremy and his career. lots of laughs in this episode which was done before the pandemic began.

DriverCheck is a leader in drug and alcohol, cognitive, and workplace testing helping employers have a safe workplace for their staff. Learn how DriverCheck can help you be safe at www.drivercheck.ca

About the Show

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

LISTEN TO LEAD PEDAL RADIO at www.LeadPedalRadio.com

The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

Join The Lead Pedal Podcast Fan Club where are loyal fans get first chance at specials, discounts on merchandise and much more.The club is free to join and you can learn more at www.theleadpedalpodcastfanclub.com

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Featured Truck of the Week Earl Paddock Kenworth

Today’s truck is a cool Kenworth from the Big Rigs Truck Show. Each week Bruce picks a cool truck from the many truck shows he attends. Hearing about them is one thing, seeing them is another. Check out this cool ride!

Check out the video on this featured truck by clicking here

This episode is sponsored by Bison Transport with many opportunities for truck drivers in their fleet across Canada. You can learn more about Bison and the opportunities available http://fuelyourjourney.ca/  or call 1-800-527-5781 #fuelyourjourney @BisonTransport

About the Show

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

LISTEN TO LEAD PEDAL RADIO at www.LeadPedalRadio.com

The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

Join The Lead Pedal Podcast Fan Club where are loyal fans get first chance at specials, discounts on merchandise and much more.The club is free to join and you can learn more at www.theleadpedalpodcastfanclub.com

 

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[caption caption="Optimal Dynamics contends that truckload and dedicated fleets rely too much on optimization built around known constraints and not enough around the ability to adapt to unknown variables. Photo credit: Shutterstock.com."][/caption]A logistics technology startup aiming to improve the coordination of supply chain assets announced on Thursday an $18.4 million round of venture...

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[caption caption="Trucker Tools has access to a network of 1.3 million drivers through an app it provides free to independent drivers and small fleets. Photo credit: Shutterstock.com."][/caption]Brokerage software provider Trucker Tools has integrated its instant truckload booking feature into MercuryGate’s transportation management system (TMS), yet another example of brokers and TMSs combining...

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[caption caption="sennder has consolidated a number of European brokers to create a digitally-oriented freight platform connecting carriers with shippers. Photo credit: Shutterstock.com."][/caption]Fast-growing European freight broker sennder has acquired Dutch competitor Cars&Cargo, a broker that manages a fleet of 240 dedicated trucks in France and Benelux region. Berlin-based sennder is a digitally native broker, analogous to Convoy or Uber Freight in North...

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The Colonial Pipeline said Wednesday it is resuming full operations but may take several days to get back to normal.

The restart began at 5 p.m. Wednesday, it said, a little more than five full days after the company first announced it was the target of a cyberattack and was shutting down. The line carries more than 2 million barrels per day of petroleum products, including gasoline and diesel, from the Gulf Coast area to the Southeast, Mid-Atlantic and Northeast.

“Some markets served by Colonial Pipeline may experience, or continue to experience, intermittent service interruptions during the start-up period,” Colonial said in its statement. “Colonial will move as much gasoline, diesel and jet fuel as is safely possible and will continue to do so until markets return to normal.”

The announcement Wednesday marks the beginning of the end of the Colonial saga that saw gasoline lines pop up, stations close and the federal government taking steps to alleviate problems caused by the shutdown, including granting an hours-of-service waiver to drivers involved in moving emergency fuel supplies.

Colonial’s announcement was something of a surprise. Earlier in the week, it had said it might be able to resume operations Friday. On Tuesday, Secretary of Energy Jennifer Granholm said at a White House press briefing that Colonial had told her it would be in a position to confirm the Friday reopening by Wednesday. Instead, it not only confirmed the reopening; it moved it up two days.  

The announcement came after an eventful day in market reaction to the pipeline shutdown. Some of the developments may turn out to be moot, but others may continue to be a factor until supplies start getting back into the system.

— While information on the number of diesel outages has been more difficult to come by than data on gasoline shortages — thanks mostly to the widely watched information coming out of the Twitter feed of GasBuddy — Racetrac is providing a detailed list of what supplies are available through its network of almost 750 gasoline stations and convenience stores. At approximately 3:30 p.m. Eastern time, the company’s station-by-station breakdown listed more than 100 outlets with no diesel availability. At the beginning of the day, it was about 65. In a midday update published by Pilot Flying J, it listed five truck stops as having no diesel and two that did not have gasoline or diesel. Those same numbers were in place Tuesday evening. But in the fluid nature of this supply squeeze, the lists of truck stops that were out had partially changed overnight, with some outlets that had no supply Tuesday no longer on the list, replaced by new ones that had run out. At Love’s, a list of outlets with no diesel that stood at three Wednesday morning had risen to eight by midafternoon Wednesday. Additionally, a list of outlets that were at risk of running out of supplies of gasoline or diesel — which fuel was at risk was not specified — had grown considerably since the morning.

— At a press briefing pulled together Wednesday afternoon by key trade groups in the petroleum supply chain, Rob Underwood, the president of the Energy Marketers of America, said a request has been submitted by the groups to widen the HOS waiver to a nationwide waiver for those involved in the transport of fuel. “This is a severe issue across the country, and the best thing the Biden administration could do is a national hours-of-service waiver,” Underwood said.

— One of the more featured individuals on the call was Ryan Streblow, interim president of the National Tank Truck Carriers. It is his member companies that are taking fuel from terminals to retail outlets and are now being called upon to move fuel even greater distances than normal. The Tank Truck Carriers made news several weeks ago when it chimed in on the issue of an inadequate number of drivers, specifically in his group’s area of activity. The Colonial shutdown has only exacerbated the situation, he said. Tank truck drivers previously might do a “turn” of roughly 120 miles in length. “But now they’re being asked to do 200- or 300-mile turns, so we have delays,” Streblow said. He said the group’s petroleum carriers are “doing everything they can,” but “safety comes first.” Earlier in the day, Patrick DeHaan, the head of petroleum analysis at research firm GasBuddy, said he had not seen significant drops in supply at the wholesale depots, known as the rack. “This seems to be turning into a not-enough-truck-drivers-to-get-it-there story,” he tweeted.

Streblow recapped the situation with tank truck drivers, which reflects what is going on in all driver categories. Fuel sales are about where they were in 2019, he said. In between, “as we went through 2020, we had an exit of petroleum truck drivers from the industry as the American people stopped traveling,” Streblow said. Some were furloughed; others retired early. CDL schools stopped producing new hazmat drivers. The number of petroleum drivers is down about 10% compared to two years ago, carrying roughly the same amount of fuel as 2019 before the Colonial shutdown. 

But the demand for their services has soared in recent days. Ryan McNutt, the CEO of the Society of Independent Gasoline Marketers of America, said many of SIGMA’s locations might only get a delivery every two days in the past. “But now you’re seeing several days worth of product move in a couple of hours, and to try and refill the tanks becomes extremely challenging,” McNutt said. 

— Whether commodity market prices are being impacted by the shutdown is not easy to determine. The price of ultra low sulfur diesel on the CME commodity exchange rose Wednesday by 1.36% to $2.0695 a gallon. But if that was being driven by the Colonial shutdown, the price of RBOB gasoline should have been up by roughly the same amount. It wasn’t; the price of RBOB was up just under 1%. The price of global benchmark Brent crude was up more than 1.1%, and its market would be weakened by the shutdown should refineries start to cut runs with no place to take their product. ULSD prices Wednesday were impacted by the weekly Energy Information Administration inventory report, which showed ULSD inventories at their lowest level in a year. However, the weekly inventory numbers were not far off their five-year average for the first report of May.

More articles by John Kingston

Diesel outages starting to rise in Southeast on back of Colonial closure

Renewable fuel requirements threaten to play bigger role in diesel price

Jobs report shows getting drivers into the pool remains a struggle

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DrivrzXchange, an online car marketplace platform, has reached an agreement with ACERTUS to facilitate the pickup and delivery of all cars bought and sold on DrivrzXchange.

Under the agreement, ACERTUS will pick up vehicles acquired or sold on DrivrzXchange and deliver them directly to the purchasers’ destination, anywhere in the United States. ACERTUS will also deliver vehicles to auto dealerships that use DrivrzXchange.

DrivrzXchange, launched at the end of March, is the online marketplace for Burlington, Canada-based PowerBand Solutions (TSXV: PBX).

“ACERTUS is excited to partner with the PowerBand team,” Trent Broberg, ACERTUS CEO, said in a statement. “We not only share the same vision of simplifying and streamlining automotive logistics through powerful technology solutions but have a strong desire to help move inventory faster, particularly at a time when buyers and sellers need it the most.”

St. Louis-based ACERTUS is a technology-enabled automotive logistics and services provider.

“This partnership lets DrivrzXchange expand across the U.S. with facilitating locations in all 50 states,” said Darrin Swenson, COO of PowerBand Solutions and D2D Auto Auction.

D2D Auto Auction is co-owned by PowerBand Solutions and Arkansas-based financier Bryan Hunt, director of J.B. Hunt Transport, in a 50-50 partnership.

DrivrzXchange aims to be a simple, transparent platform to assist consumers with selling or buying a vehicle. DrivrzXchange is being piloted in northwest Arkansas. It will be strategically rolled out across the U.S. in the second half of 2021, according to a release.

Through the partnership, ACERTUS will connect DrivrzXchange users to a network of preapproved, vetted carriers representing 20,000 tractor-trailers and more than 1,000 truck drivers across North America.

ACERTUS offers automotive logistics services, including vehicle transport, title and registration, vehicle storage, care and maintenance, and compliance. Pickup and delivery services are expected to begin July 15.

“This collaboration builds upon several other recent efforts in our digital transformation journey to enable more automotive sellers with the ability to offer a seamless home delivery experience, which is timely given shifts in customer needs and expectations during this unprecedented time,” Broberg said.

Click for more FreightWaves articles by Noi Mahoney.

More articles by Noi Mahoney

First USMCA labor complaint filed against Mexican auto parts supplier

New report sheds light on USMCA impact on cross-border trade

Hemispheric globalization could boost El Paso trade

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The German shipping line Hapag-Lloyd is not one to bandy about words like “whopping” or “skyrocketed” or “best ever” when describing bottom-line financial results. But the bottom line is Hapag-Lloyd’s first-quarter 2021 earnings before interest and taxes of $1.5 billion equaled the EBIT for all four quarters of 2020. 

For Q1 alone, EBIT was up by $1.36 billion — that’s billion with a B — from $176 million in 2020 to the $1.53 billion this year. 

Earnings before interest, taxes, depreciation and amortization (EBITDA) totaled about $1.9 billion, nearly a $1.4 billion improvement from $517 million in the first quarter of 2020

Hapag-Lloyd said in its earnings release that Q1 net profit “improved” to approximately $1.45 billion. It improved by $1.42 billion from the $27 million profit reported in the first quarter of 2020.

“Group profit of $1.45 billion was already significantly above the full-year 2020 figure” of $1.06 billion, CFO Mark Frese acknowledged on the earnings call Wednesday morning. 

“Q1 in 2021 was really a truly outstanding quarter. We were once again able to improve profitability, strengthen our balance sheet and our cost of capital,” Frese said.

First-quarter revenue improved by about 33% to $4.9 billion, largely due to a higher freight rate, which was up on average by some 38% to $1,509 per twenty-foot equivalent unit (TEU), compared to $1,094 per TEU in Q1 2020, Hapag-Lloyd said.  

CEO Rolf Habben Jansen said on the call that Q1 was driven by “continued strong demand, high freight rates but also operational bottlenecks.” As a result, transport volume was “somewhat unsatisfactory,” down roughly 2.6% to about 3 million TEUs and blamed in large part on port congestion and a lack of available ships and containers.  

He said regarding “increased container usage, it takes 20% more days to get a container back. That means in reality we need 20% more boxes to carry the same amount of cargo. And we also see voyage delays on average have tripled in the first quarter compared to a year ago for every single ship. So what have we done? We did charter some additional vessels. We also deployed extra loaders” and ordered 150,000 TEU of additional container capacity

“Schedule reliability was at an absolute low in the first quarter. I think we’re going to start seeing some improvement there. We’ve seen some first indications that schedule reliability is up a little bit. I would expect that in Q3 we would not be back to normal but we will have made a significant step ahead,” Habben Jansen said. 

He said the orderbook has been “unsustainably low” and Hapag-Lloyd will be in the market for new container ships.  

“There is simply no slack in the global fleet,” Habben Jansen said. “Scrapping has been at a ridiculously low rate. … When we look toward 2030 and 2035, a lot of ships will have to be replaced, and to be a little bit ahead of that curve I don’t think is entirely wrong.” 

Looking ahead, Habben Jansen said that “the second quarter will again be very strong and not so dissimilar to what we have seen in the first quarter. After that we expect a gradual normalization of the results in the second half of the year and how quickly that will go at the moment is very difficult to say. … There is certainly a considerable amount of uncertainty around freight rates, around how quickly some of these operational challenges will be resolved and of course some of the impacts from the pandemic.”  

Demand is difficult to estimate in these times, he said. 

“I think we’ve certainly learned that over the last year, year and a half. I would think that as the congestion eases, then all of us will be able to produce more allocation — or more space. That should help the market to settle down. I hope that we can do it sooner rather than later because I believe it’s in everybody’s interest,” Habben Jansen said.  

Hapag-Lloyd shelling out more than half a billion dollars for containers 

Hapag-Lloyd profit skyrockets with ‘stellar performance’

Hapag-Lloyd CEO: COVID, congestion, container shortage form ‘perfect storm’

Click here for more American Shipper/FreightWaves stories by Senior Editor Kim Link-Wills.

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1966 Footage of Big Red Turbine Truck from Ford Archives

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Man, people are dumb. This happened a few hours ago on the KY/IL border. This job is never boring.

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Bitch, I’m a train!!!

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These are the fun roads.

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Tractor-trailer stuck on side of road on a rainy day.

Periods of relentless torrential rainfall Wednesday will continue to drench parts of the Deep South and Gulf Coast. The region has been getting slammed most of the week so far, resulting in flash flooding.

New Orleans International Airport (ICAO code: MSY) received a daily record 4.1 inches of rain Monday. Daily records of 1.78 and 3.22 inches were set Tuesday in Pensacola, Florida, and Shreveport, Louisiana, respectively. Additional records could be set Wednesday.

A frontal boundary will remain stalled across the South for at least one more day. Waves of energy will travel along the front and, with plenty of moisture and energy in the atmosphere, they will produce showers and thunderstorms. The rain may be heavy enough at times to stop truckers in their tracks due to low visibility. There’s potential for additional flash flooding and road closures, and a few storms may also produce severe winds, large hail or an isolated tornado.

This won’t be a widespread flooding event that would virtually shut down freight flows and supply chains for days or weeks, but temporary delays are likely.

Flash flood watches from the National Weather Service (NWS) remain in place from Beaumont, Texas, to Pensacola. These are the areas most prone to flooding based on forecast precipitation totals and their proximity to sea level. Travel will be messy along the I-10 corridor, as well as sections of Interstates 55, 59 and 65. The watches are set to expire at various times Wednesday afternoon.

Some parts of the region, including the Florida Peninsula and southern Georgia, could see heavy rain Thursday. Two-day totals could exceed 3 inches again in some places. Most of the South should get a chance to dry out this weekend.

Click here for more FreightWaves articles by Nick Austin.

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The American Trucking Associations (ATA) and the Teamsters union agree that truck driver fatigue is an issue, but the two organizations disagree on how to solve the problem.

Testifying on Tuesday at a Senate Commerce committee hearing on freight transportation issues, Lamont Byrd, director of the union’s safety and health department, told lawmakers that a big part of the problem are the changes made to the hours-of-service (HOS) regulations last year, which he says is resulting in drivers working more than 60 hours a week and often more than 14 hours per day.

The Teamsters are appealing the HOS changes in federal court but in the meantime would like to see a suspension of the changes included in the next surface transportation reauthorization.

“I think we need to revisit the hours-of-service regulation, and we need to look at this from the perspective of the impact that it makes on driver health and the ability to get restorative rest,” Byrd said. “They allow too many hours for drivers to work each week.”

ATA President and CEO Chris Spear acknowledged that while driver fatigue is a problem, “we’re not out there pounding the pavement for an hours-of-service suspension. We have a driver shortage, and to have a suspension of hours of service and work our drivers even harder is going to exacerbate the problem.”

Spear pointed out that two-thirds of accidents involving trucks are actually caused by passenger vehicles, according to federal statistics, with speeding and texting the leading causes.

“So as we look at this panoramically, you have to deal with tired drivers, you have to deal with keeping the hours in check,” he said, noting that the federal mandate of electronic logging devices does that by making certain drivers stay within their legal hours. However, “we have a long way to go in terms of really bringing the overall fatalities down.”

The hearing was a chance for the freight transportation industry to lay out priorities and concerns as lawmakers debate the Biden administration’s multi-trillion-dollar infrastructure package. In addition to trucking, witnesses included representatives from the port and rail sectors.

“We’re getting beat on infrastructure spending, particularly by China,” testified Chris Connor, president and CEO of the American Association of Port Authorities (AAPA). Connor said that his association was in the early stages of producing a white paper called “Staying a Superpower.”

“Our early analysis shows that when it comes to public spending on all things related to waterborne transportation, China outspends the U.S. by a measure of 2-to-1. I think all the problems we’re experiencing right now are a function of decades of underinvestment in port and intermodal connections to move freight.”

Railroad Rehabilitation and Investment Financing (RRIF) loans, developed to help railroads with financing rail projects, have “never quite gotten there” in working out for smaller railroads, testified Chuck Baker, president of the American Short Line & Regional Railroad Association.

Baker said he supported a bill introduced by Sen. John Thune, R-South Dakota, to help short lines participate in RRIF loans, including streamlining the application process, extending the length of the loan terms and increasing flexibility on collateral requirements.

Baker also underscored railroad opposition to any legislation that increases current truck size or weight limits.

“Any increases and exceptions to current federal limits would further subsidize freight highway transportation, alter the economics of freight shipping and would result in a shift from freight rail to highway transportation, which would impact the environment and the public infrastructure paid for with taxpayer dollars,” Baker testified in written comments.

Click for more FreightWaves articles by John Gallagher.

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Story by: John Gallagher, Washington Correspondent at Freightwaves   Jones Act waiver process underway to assess availability of US ships for pipeline replacement cargos   The U.S. Department of Transportation (DOT) is assessing if American tankers can meet emergency fuel demands caused by the Colonial Pipeline shutdown or if foreign ships will be needed to help fill […]

The post US considering foreign tankers to move domestic fuel supplies in a wake of Colonial Pipeline shutdown appeared first on iTrucker | Transforming Trucking.

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Derek Leathers new chairman at Werner

Transportation and logistics provider Werner Enterprises (NASDAQ: WERN) announced Tuesday after the market close that its board has approved a planned transition in leadership.

The company’s founder and former chairman, Clarence L. “CL” Werner, has been named chairman emeritus “in recognition of his longstanding leadership.”

Derek Leathers, CEO and president, has been appointed chairman of the board. He took on the role of vice chairman when the succession plan was announced nearly a year ago.

Leathers has a 30-year career in transportation and logistics, logging more than 20 years with Werner. He took the helm, running daily operations at Werner, in 2016.

“I created this company when I was 19, with just one truck, and I’ve watched as Derek has continued to grow Werner Enterprises,” said CL Werner. “Hiring Derek was one of the smartest decisions I’ve ever made, and I know the company will continue to thrive and flourish under his leadership, along with the entire management team.”

Today, the Omaha, Nebraska-based company is one of the nation’s largest truckload carriers, with 7,800 trucks generating nearly $2.5 billion in annual revenue.

“Werner Enterprises was a company built by a driver, for drivers, and I’m honored to continue CL’s legacy,” said Leathers. “One of the reasons the company has remained successful is because of CL’s respect for professional drivers. We couldn’t keep America moving without them, and he understands their importance. His integrity and his ability to connect with our drivers is why he is admired by so many.”

Click for more FreightWaves articles by Todd Maiden.

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A tractor-trailer from Canadian trucking company Titanium Transportation Group

Titanium Transportation Group (TSX-V:TTR) reported record revenue in the first quarter on Tuesday as the Canadian firm’s U.S. brokerage business and newly expanded cross-border trucking fleet delivered growth on two fronts. 

The Ontario-based company brought in CA$85.7 million ($70.8 million) in revenue during the quarter — an increase of over 93% from a year ago. Net income rose by over 80% to CA$1.17 million, or 3 cents per share, while earnings before interest, taxes, depreciation and amortization (EBITDA) rose by over 65% to CA$7.5 million.

Titanium’s U.S. brokerage business continued its standout performance. It was largely responsible for the revenue in its logistics segment increasing by over 164% to CA$47.5 million, while EBITDA jumped by over 600%. 

The company opened its third U.S. brokerage office in February, in Chicago. The lean operations, which include locations in Nashville, Tennessee, and Charlotte, North Carolina, have allowed Titanium to tap into the much larger domestic U.S. freight market with relatively small investments. 

“We are excited about the significant growth opportunities in the U.S. where we can apply our proven business model, technology and expertise to deliver enhanced, sustainable performance and create long-term shareholder value,” CEO Ted Daniel said in a statement.

The trucking side also had a strong quarter from a revenue perspective, increasing by nearly 42% to CA$39.2 million. CA$12 million of that revenue came from its CA$60.5 million acquisition of ITS Group, which closed during the quarter. 

However, the trucking segment posted a small operating loss for the quarter of CA$600,00 on the lower margins connected with the ITS acquisition. The deal added over 300 power units to Titanium’s fleet, which is now within striking distance of the 10 largest in Canada. 

Titanium is integrating ITS and expects that margins will normalize during the second half of the year. 

Daniel will discuss the results in a conference call with financial analysts on Wednesday morning.

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The trucking industry faces numerous regulatory challenges as it conducts daily operations to move cargo across the country. Many of these regulations are designed to establish safety standards, while others focus on employment-related aspects of the transportation sector. During the Trump Administration, rules governing worker classifications were adopted; under the new Biden Administration, two of these rules may be reversed. Just as trucking insurance protects transportation companies against certain operational and liability risks, understanding the ramifications of the rule reversal can help protect truckers from expensive penalties.

U.S. Department of Labor Rules

Published in the Federal Register at the end of the Trump Administration, the U.S. Department of Labor (DOL) created two new rules governing worker classifications. The two rules are:

  • The Joint Employer Rule – governing joint employer status when an employee works for an individual employer but his/her work also benefits another individual or entity.
  • The Independent Contractor Rule – determining when an employee can be classified as an independent contractor.

Both of the Trump-era rules fall under the Fair Labor Standards Act, which is one of the primary employment practices laws in the United States. These two rules are important to the trucking sector because many truck drivers fall into certain employee classification categories, such as truckers working jointly for two or more entities or who are owner/operators who contract independently with other companies such as freight forwarders or cargo brokers. Classification of employees may necessitate additional or revised coverages by trucking insurance, which can mean unexpected costs for trucking companies.

The Joint Employer Rule

In January 2020, the DOL issued the Joint Employer Rule, which went into effect two months later in March. Immediately, the validity of the rule was challenged by state attorneys general, and the U.S. District Court for the Southern District of New York invalidated much of the rule in September 2020. The District Court’s decision is currently under appeal.

The Biden Administration has moved to rescind the rule, arguing that it goes against both the Fair Labor Standards Act (FLSA) and the DOL’s prior guidance on joint employer classifications. In April 2021, public comment on the proposed rule reversal closed. It is unclear whether the District Court decision and subsequent appeal will affect the rule’s future.

The Independent Contractor Rule

January 2021 saw the publication of another Trump-supported DOL rule, this time one that would reclassify certain employees as independent contractors. The rule was supposed to take effect at the beginning of March 2021. Within hours of Biden’s inauguration in January, the White House Chief of Staff Ron Klain issued a memorandum freezing pending regulatory actions until March 21. Just a few weeks later, the DOL published a notice delaying the effective date of the Independent Contractor Rule until May while inviting public comment about the proposed rule. Comments were varied, but many business owners came out in support of the rule, which they believed would help establish clear delineations between employees and independent contractors. Despite these objections, the DOL moved to withdraw the rule.

What the Rule Reversal Means for Truckers

Trucking companies have long been in limbo as state and federal laws evolve. Employment laws that aim to change employee classifications can have long-term ramifications for the sector, potentially costing companies more money in licensing and in trucking insurance expenses. For now, the Biden Administration’s push to reverse the DOL rules proposed under Trump are on hold. To better manage the risks associated with these rules or their reversal, truckers must maintain awareness about pending court decisions. Trucking insurance protects against a broad range of risks. By understanding the rules governing employee classifications, trucking companies can enhance the protections of that insurance by avoiding costly regulatory penalties.

About Western Truck Insurance Services

Western Truck Insurance Services is a commercial truck insurance agency with roots dating back to 1954. We have evolved into a highly respected, professionally managed, truck and transportation insurance brokerage. The hallmark of our organization is our desire to provide unparalleled service. We go way beyond what you expect to receive from an insurance brokerage. Equipped with state of the art automation, Western Truck Insurance can provide you with lightning fast truck insurance quotes, customer service, Insurance certificates, and coverage changes. Contact us today at (800) 937-8785 to learn more!

The post President Biden to Rescind Trump’s DOL Classification Laws appeared first on Western Truck Insurance Services.

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On the Road with Bison’s Carrin Cabral

Bruce chats with Bison Transport driver Carrin Cabral about her career behind the wheel and why she got involved in the industry. What’s it like to be a women driver and over the road instructor with Bison Transport. Bison Transport has many opportunities for truck drivers in their fleet across Canada. You can learn more about Bison and the opportunities available http://fuelyourjourney.ca/  or call 1-800-527-5781 #fuelyourjourney @BisonTransport

About the Show

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

LISTEN TO LEAD PEDAL RADIO at www.LeadPedalRadio.com

The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com 

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

Join The Lead Pedal Podcast Fan Club where are loyal fans get first chance at specials, discounts on merchandise and much more.The club is free to join and you can learn more at www.theleadpedalpodcastfanclub.com

 

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OMG OMG OMG #METOO

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A forklift driver with a pallet, airfreight containers in a row and an aircraft in the background.

The airfreight market is so saturated that companies without precommitments, or the stomach to pay premiums, are having difficulty finding aircraft to move their goods. And import cargo keeps coming, on top of record volumes for air and ocean shipping, further straining an air logistics system stretched by a shortage of equipment and airport labor.

Logistics professionals and analysts say capacity is rapidly tightening as more shippers turn to air for cross-border transport, sending air cargo rates sharply higher. The market is already running at peak levels five months before peak season normally starts. 

Shipping demand is high across the board, from manufacturing and pharmaceuticals to e-commerce, electronics and food products. The IHS Purchasing Managers’ Index for the U.S. reached 63.7 before ticking down last week, showing the steepest expansion for the manufacturing sector since 2007. On a global basis, manufacturing reached a 10-year high in March of 55 (readings above 50 signal growth) and global export orders rose to 53.4 from 51 in February. 

The PMI is a leading indicator for airfreight tonnage, which means that more manufactured goods are likely to be moved by air during the second quarter. 

The International Air Transport Association now forecasts air cargo demand for 2021 will increase 13% from last year and be 2.8% above the 2019 total.

“There has been a big bounce back from the slowdown we saw in March with prices strengthening, driven by demand outstripping capacity in several markets, with some lanes recording higher pricing levels versus the highs seen in 2020,” said Gareth Sinclair, a revenue management adviser at price data provider TAC Index, in a monthly industry update.

The sticking point is the limited number of international passenger flights as travel remains muted over COVID concerns. Long-haul routes typically use widebody aircraft that collectively carry more than 50% of global volumes in their holds. But international travel demand through March was 88% below precrisis levels, with little improvement from the fourth quarter of last year, IATA reported last week. Even though there are about 1,100 pure freighters flying today — about 240 more than at the start of 2020 — it’s not enough to make up for the 39% loss of cargo capacity in passenger aircraft. 

High load factors are a direct indicator of the constrained space for air cargo. Aircraft are 71% filled with cargo, based on a dimensional weight calculation, 10 points higher than in 2019 and 4 points above last year’s level, according to a new report from CLIVE Data Services.

Air cargo volumes grew 1% in April compared to 2019 after dipping 3% in March and was up 84% year-over-year. Growth accelerated in the second half of the month, with demand 6% above the same period two years ago, it said.

Most analysts are normalizing results against the two-year benchmark because 2020 was distorted by a rare pandemic that caused global trade to shrivel when economies shut down for public safety.

Although cargo throughput is nearly the same as in 2019, overall capacity is 18% lower. 

And the capacity gap could widen because international airlines won’t augment their fleets as they normally do for the busy summer season, said CLIVE Managing Director Niall van de Wouw.

For its part, IATA said March air cargo demand exceeded pre-COVID levels by 4.4%, a slowdown from the heady 9% growth in February against the 2019 benchmark, but the highest March demand since measurements began in 1990. IATA also measured capacity at negative 12%. In North America, demand increased 17.5% from two years ago with only a 3.8% in capacity.

The air cargo sector completed its recovery from the depths of the pandemic in January amid a surge in COVID medical and e-commerce shipments. It’s a big difference from the passenger side of the business, which remains depressed notwithstanding pockets of domestic travel resurgence in large domestic markets like the U.S. and China.

IATA’s analysis broadly validates the strength of the air cargo market, but lags CLIVE by a month and uses a different methodology. CLIVE reports on cargo tons sold, while IATA reports on cargo tons flown. The former approach counts each ton once, while the latter does so each time the shipment is transshipped through an intermediate airport and reloaded on another airplane. IATA also calculates volume with a distance component — cargo ton kilometers — so if the share of the long-distance route increases the IATA numbers increase even if the same amount of tons are moved. 

Supply chain challenges are particularly pronounced on major trade lanes. 

Demand from Asia to the U.S. is 44% higher year-over-year, according to freight forwarder Flexport.

Volumes from China to Europe were 18% higher in April than in 2019, with load factors of 95% demonstrating aircraft are completely full. The outbound air flows were influenced by a 32% increase in Chinese exports, by value. Throughput dropped 10% from Europe to North America, but a 40% capacity shortage still resulted in an 87% load factor — 21 points higher than two years ago. In reverse, volumes fell 4% versus 2019, producing a load factor of 69%, or 19% points higher than in 2019, CLIVE Data said. 

The trans-Atlantic routes are especially dependent on the large twin-aisle airplanes used on passenger networks because all-cargo operators tend to focus more on Asia trade lanes.

Rates shoot higher

Shipping rates are steadily climbing with demand outstripping supply in many areas. The China and Hong Kong markets are leading the way on price strength, while others are more dynamic. In some cases, prices are even higher than during the PPE rush of spring 2020 when air cargo capacity worldwide contracted more than 40%. 

The Baltic Air Freight Indices showed an increase of almost 17% in April from March largely driven by China and Hong Kong exports. 

By the end of April, shipments from China/Hong Kong to the U.S. jumped 60% from March to $8.56 per kilo, according to the TAC Index. Prices are up 8% versus last year and 153% versus 2019. The Hong Kong rate is $8.65/kilo compared to $4.91 on March 1 and is approaching the highest level seen last year of $8.81 in May. 

WebCargo data shows rates from Asia to the U.S. climbed as much as 25% last month.

To Europe, airlines are charging $4.89 — nearing the high for the year, but down 92% from 2019. Trans-Atlantic outbound rates to Europe recovered at the end of April, but are still below the March high of $2.13. The Europe-to-U.S. trade lane is more volatile and varies by origin-destination pairs, the TAC Index reported. 

The rate environment is producing large cash flows for airlines, including United Airlines (NASDAQ: UAL) and all-cargo carrier Atlas Air (NASDAQ: AAWW), which generated 74% and 34% higher cargo revenue, respectively, in the first quarter than in 2019.

Some airlines are taking advantage of the big scramble for container space by forcing companies to trade up from basic service to priority, similar to how business class is sometimes expanded at the expense of economy class on passenger flights, the TAC Index said in a regular notice. 

Freighter operators are exacerbating the tight capacity on the trans-Pacific westbound by light-loading aircraft in the U.S. to get them back to China as quickly as possible because of the high rates there, said Edward DeMartini, vice president for North American airfreight development at logistics provider Kuehne + Nagel, during a recent virtual briefing for customers. Normally, all-cargo aircraft load up as much as possible and make a technical stop in Anchorage, Alaska, to refuel. Now, many carriers are only taking 40% of their normal capacity so they can make a direct flight from the mainland to China, he said.

“This has led to less actual capacity available in the U.S.-China lane than is reported in some of the third-party capacity reports and data,” he said in a follow-up email.

Persistent demand imbalances and higher rates will likely encourage carriers to allocate more airlift to the North American market, where yields are higher, and enable passenger airlines to offer more cargo-only flights because the higher operating costs would be covered, Bruce Chan, vice president of global logistics at Stifel investment bank, wrote in a monthly note.

Domino effect

The pressure on supply chains is expected to increase in the coming weeks as more cargo shipments line up to move through an air logistics funnel that’s very narrow. 

Experts are predicting a surge of inbound ocean volumes for the remainder of the year as U.S. companies continue to dig out from last year’s inventory hole created when the global economy shut down for COVID while consumers, flush with cash from federal stimulus checks and savings accumulated during the pandemic, keep spending on merchandise. 

Inventory levels are at their lowest level since 1997 and the inventory-to-sales ratio is near all-time lows. Forward bookings for container shipments are reaching all-time highs, businesses have to reserve slots weeks in advance because there aren’t enough containers and vessels to move all the cargo, carriers are skipping some port rotations and it can take containers a week to clear congested terminals after arrival. 

Transit time for cargo moving from Asia to Chicago is 18 weeks, experts say, and some companies are already locking in orders for holiday purchases to make sure they arrive in time.

Imports at U.S. container ports hit a new record this spring and volumes are on track to beat 2020’s full-year total of 22 million twenty-foot equivalent units (TEUs), which was up 1.9% over 2019, despite the pandemic, according to the monthly Global Port Tracker report released Friday by the National Retail Federation and Hackett Associates. 

The maritime mishap that blocked the Suez Canal for six days and a weeklong strike by dockworkers at the Port of Montreal added to shipping delays. 

What is happening in the ocean space is spilling into airfreight. Automakers and other shippers are converting some shipments normally moved by ocean to air in an effort to avoid the massive backlogs so they can keep assembly lines open and store shelves stocked.

And airfreight capacity is threatening to tighten even more.

Airlines are starting to devote more space to COVID vaccine shipments. Seabury Consulting, part of Accenture, forecasts vaccine shipments moving by air will peak in mid-to-late summer.

Warnings that the air cargo system would be overwhelmed after COVID vaccines were approved for use late last year didn’t materialize because most initial distribution occurred within regions producing the drugs, such as the U.S. and Europe, where truck transport plays a large role. Any exports were in small batches. But as immunization levels rise, more vaccines are being designated for less developed countries. China has recently increased exports of domestically produced COVID vaccines and Reuters reported last week that Pfizer (NYSE: PFE) has begun exporting U.S. vaccines to Mexico.

“We always foresaw that as the distribution in the U.S. [neared its peak] the focus would move internationally. That’s exactly what’s happening and certainly through the balance of the second quarter, and particularly into the third quarter, the volume ramp of vaccine export out of the U.S. will be significant,” Robert Walpole, vice president of cargo at Delta Air Lines (NYSE: DAL), said in an interview.

Delta, he added, expects to be particularly busy supporting vaccine distribution to markets in South America.

This week marks the start of export season for perishables produced in the U.S. Fresh produce is yet another commodity that will now try to squeeze into limited aircraft holds, especially with shippers having difficulty securing outbound ocean containers. And seasonal shipments of corn, soybean and other seeds from South America to North America are in full swing. 

Another potential drain on airlift is the U.S. troop and equipment withdrawal from Afghanistan scheduled to be completed by Sept. 11. Equipment, material and infrastructure is being moved to bases in Europe and the U.S. The military will rely on its own fleet for the majority of the airlift, but in past withdrawals has used commercial partners to supplement their capabilities. Kuehne + Nagel’s DeMartini said Defense officials could  secure Russian-built Antonov An-124 superfreighters operated by Volga-Dnepr Airlines and Antonov Airlines, or possibly specialized 747s, because they can lift heavy pieces of equipment such as tanks and armored vehicles. 

“That is going to have an impact on other project-related capital goods movement around the world and it could mean that those people who would normally use an Antonov, perhaps to move a crane, are going to have to shift their focus to Boeing 747s with nose-load capability, and therefore take some of that 747 freighter fleet out of the normal air market,” he said.

Humanitarian flights pouring into India to deliver relief supplies, such as oxygen machines, for overwhelmed hospitals combating a huge COVID outbreak killing thousands of people per day also represent another draw on capacity. Some flights from Asia are being shifted to India.

Hopeful signs?

Experts say global cargo capacity won’t be restored until international traffic, especially business travel, comes back. European carriers IAG Group (CXE: IAG) and Lufthansa (DXE: LHA) are currently dialing back capacity projections to only 25% and 40% of pre-pandemic levels, respectively because of the limited progress in reopening.

But there are some promising signs the situation could soon improve.

The European Union said it sees the potential to open travel this summer to U.S. tourists that have been vaccinated and officials might even accept paper vaccination cards as proof. EU officials also recommended that vaccinated travelers from low-incidence countries to Europe be welcomed within its borders by the end of May, but no final decision has been made. The U.K. reopened travel for nationals to 12 different locations starting on May 17. The U.S. and the United Kingdom are also discussing how to implement a no-quarantine travel corridor for people who test negative like the one that opened between Australia and New Zealand but was quickly suspended when case counts increased. Italian officials say they want to open borders by the end of May and France has set June 9 as the day for resuming cross-border travel for people with a health pass. 

Hong Kong authorities last month ended quarantine requirements for fully vaccinated local aircrews returning from overseas trips and quarantine exemptions for returning cargo crews have been extended to six countries. The new rules should help Cathay Pacific, a large combination carrier, put more aircraft in the sky after two months of having limited numbers of pilots.

Rail option

Some third-party logistics companies are increasingly using multimodal options and block trains from Asia to get around bottlenecks. 

U-Freight Group said its intermodal rail service between China and Europe, which offers a competitive alternative to airfreight in terms of price and is considerably faster than ocean, 

has picked up volume since the Ever Given was stuck in the Suez Canal. The logistics provider consolidates cargo in Zhengzhou and Shanghai for daily service that operates to and from Malaszewicze, Poland; Hamburg, Germany; and Liege, Belgium.

CEVA Logistics is experimenting with a new train-ferry service from Xi’an, China, to Immingham, U.K., via Kaliningrad, Russia, where the cargo is reloaded on a vessel. The company is aiming for port-to-port delivery times of 18 to 20 days, with final delivery in 25 days. 

CEVA, a division of shipping line CMA-CGM, said it also added a premium express block train from Xi’an to Duisburg, Germany, and continues to develop block train connections from there to other parts of Germany, Spain, Italy and France.

Click here for more American Shipper/FreightWaves stories by Eric Kulisch.

RELATED NEWS:

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😍 😍 😍

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Story by: Alan Adler at FreightWaves   Plant in Joliet will convert from warehouse to manufacturing   On its first day of public trading, Canada’s Lion Electric Co. made good on a pledge to expand manufacturing in the U.S., investing  $70 million to convert a partially finished warehouse in Joliet, Illinois, into a plant to […]

The post Lion Electric will build electric trucks in Joliet, Illinois appeared first on iTrucker | Transforming Trucking.

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The second part of Monday’s two-event diesel price day saw the weekly Department of Energy’s Energy Information Administration average retail diesel price rise 4.4 cents per gallon to $3.186.

That is less than half of what commodity and wholesale diesel prices rose during the past week.

The timing of the shutdown of Colonial Pipeline and the weekly survey of diesel prices Monday makes it unlikely that there was any market impact from the line’s closure. Even if there was, by the end of the trading day, the price of ultra low sulfur diesel on the CME commodity exchange rose just 0.3%, to $2.0166 a gallon, following a midday report that the line was likely to come back by the end of the week, at least partially.

However, the increase Monday did complete a six-day increase in that benchmark price of 8.7 cents from the April 30 settlement of $1.9211 a gallon.

The price of wholesale diesel fuel as measured by the ULSDR.USA data feed in SONAR was up 9.5 cents in the past week, increasing to $2.19 a gallon Monday from $2.103 a week ago.

To learn more about FreightWaves SONAR, please go here.

Diesel prices are moving higher as part of the broader wave of commodity prices that has made lumber prices a national story, brought copper to levels never seen before and created fears of a broader inflationary trend. 

However, diesel prices have been strengthening at a rate more than that of crude. Although U.S. inventories of ultra low sulfur diesel are near their five-year average for this time of year, according to the EIA, there are other signs of diesel tightness. The spread between global crude benchmark Brent crude and the ULSD price on CME stood Monday at $16.37 a barrel, the highest level since the end of March 2020.  

The premium of front month diesel over the price 12 months out, a number that is heavily influenced by inventories, remains at levels that suggest some tightness in stocks.

Following two weeks of increases and one week of an unchanged DOE/EIA number, the DOE/EIA price is just 0.8 cents a gallon less than where it was when it completed its record-breaking 20-week run of increases.

More articles by John Kingston

Jobs report shows getting drivers into the pool remains a struggle

CTA will appeal AB5 decision impacting when injunction will be lifted

PPP’s 2021 funds exhausted; transportation got bigger share this year

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Over the Road with Jeffrey Ford

Truck Driver Jeffrey Ford joins Bruce on the podcast today to talk about his career over the road hauling specialty vehicles across the country. We caught up with Jeffrey in a stop out in Arizona to catch up on his acting career and his life trucking across the country. Jeff was on the podcast before back in episode 346 which you can listen to here. https://theleadpedalpodcast.com/lp346-trucking-while-acting-with-jeffrey-ford

This episode is sponsored by Groupe Trans West is looking for professional teams to operate out of their Mississauga terminal with excellent employment benefits between Toronto Ontario and California. Find out more at www.groupetranswest.com  or call recruiter Mike Hahn at 416-606-8296

This episode is also sponsored by Chrome Supply Warehouse offering custom parts for trucks and many specials for truckers. You can learn more at www.chromesupplywarehouse.com

About the Show

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

LISTEN TO LEAD PEDAL RADIO at www.LeadPedalRadio.com

The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

Join The Lead Pedal Podcast Fan Club where are loyal fans get first chance at specials, discounts on merchandise and much more.The club is free to join and you can learn more at www.theleadpedalpodcastfanclub.com 

 

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Haha! Some asshole made the other asshole move

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Judges for the Jesse H. Neal Awards, the most distinguished editorial honors for specialized journalism, have named FreightWaves a finalist in five categories in this year’s contest, among them Best Media Brand (Overall Editorial Excellence) and Best Website.

Finalists for the Neals, considered the Pulitzer Prize of business journalism, were announced Monday, and winners will be named during a virtual presentation June 9.

In addition to Best Media Brand and Best Website, FreightWaves is a finalist for Best New Product for its smooth pivot to virtual events after the COVID-19 pandemic struck, as well as Best Use of Video/Webcast and Best Infographics.

“The Neal Awards recognize the best of the best in business media, and FreightWaves takes great pride in the work of our editorial, technical and production staff, as well as our market analysts,” said FreightWaves founder and CEO Craig Fuller. “Being named a finalist in five categories in this highly competitive contest speaks to the professionalism, dedication and industry expertise that our team brings to the job every day.”

For Best Media Brand, the company’s entry notes, “FreightWaves and its American Shipper sister brand report supply chain news and provide expert perspective on the world of freight across a broad spectrum of media platforms.” Those include traditional news articles, webcasts, podcasts, newsletters, social media, virtual events, apps and email.

FreightWaves’ entry in the Best Website category states, “freightwaves.com prioritizes immediacy with a regularly updated news feed and offers an intuitive, visually appealing format that guides visitors seamlessly to their areas of interest. In addition to the most in-depth national and international news from the world of supply chain logistics, subcategories on freightwaves.com zero in on freight-related technology; industry closings and layoffs; earnings reports; the maritime, trucking, rail and air cargo sectors; infographics; wide-ranging podcasts and webcasts; and advice on industry best practices.”

In the Best New Product entry, FreightWaves spotlighted its rapid transition from in-person gatherings to industry standard-setting virtual events in the wake of the pandemic.

“FreightWaves not only made this pivot but created a best-in-class virtual conference experience,” the entry states. “FreightWaves decided early in the process that its virtual events were not going to be a pale imitation of in-person events; they would be a completely new user experience. FreightWaves adhered to television-quality production values, which became a waterfall effect drawing the highest-quality speakers and further enhancing the user experience. The results? Total video impressions for FreightWaves’ 2020 virtual events exceeded 500,000, and total views came to more than 400,000.”

FreightWaves’ webcasts have built a robust following in a few short years since the company’s founding. Among other topics, the company’s Neal Awards entry for Best Use of Video/Webcast highlights in-depth interviews with top-ranking officials from NASA who were eager to share their expert points of view during FreightWaves’ inaugural SpaceWaves virtual forum.

“Livestreamed webcasts adhering to high production values build on the expansive news coverage at freightwaves.com by bringing in additional industry perspectives, as well as insights from FreightWaves’ team of journalists and market analysts,” the entry notes.

For the Best Infographics category, FreightWaves submitted graphics that “harvested the essential elements of a story to present them in a concise, easily understood way by distilling the most compelling facts” from both research and articles in FreightWaves and American Shipper.

Established in 1955, the Neal Awards named FreightWaves a winner in multiple categories last year.

FreightWaves is the leading source for information about the trucking, maritime, air, rail and intermodal freight markets. In 2021, FreightWaves publishes content that drives over 3 million page views and 1 million unique visitors each month.

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Peterbilt Motors Company is excited to unveil today alongside the new Medium Duty Model 535, Model 536, Model 537 and

The post PETERBILT UNVEILS ALL-NEW PACCAR TX-8 TRANSMISSION appeared first on NextTruck Blog & Industry News - Trucker Information.

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Story by:  John Gallagher, Washington Correspondent at FreightWaves, Monday, May 10, 2021   TIA may seek clarification of broker regulations as part of highway bill   The nation’s largest advocate for truck brokers (TIA) is looking to Congress to help clarify regulations with the goal of eliminating illegal dispatching – potential changes that have riled […]

The post Freight brokers want Congress to call out illegal dispatching services appeared first on iTrucker | Transforming Trucking.

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I've got one of them Pixar mom butt's today!

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Proud owners of Mack® trucks will have the chance to be featured in the upcoming 2022 Mack Trucks Calendar. Nominations are

The post Mack Trucks Announces Entry Period for 2022 Mack Calendar Contest appeared first on NextTruck Blog & Industry News - Trucker Information.

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Empty parking lot and this fuckin guy...

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Someone posted this to the FB group created by our company (mega)... they're brave I'll give them that lmao

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Ran into one of googles self driving trucks in Tucson AZ

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Federal regulators issued on Sunday an emergency work-rule exemption for truck drivers and motor carriers as a result of the Colonial Pipeline shutdown.

The shutdown that occurred on Friday and was caused by a cybersecurity ransomware attack warrants a Regional Emergency Declaration and an exemption from Parts 390 through 399 of federal motor carrier safety regulations, according to the Federal Motor Carrier Safety Administration (FMCSA). Those regulations include hours-of-service rules.

“This declaration addresses the emergency conditions creating a need for immediate transportation of gasoline, diesel, jet fuel, and other refined petroleum products and provides necessary relief” for carriers and drivers in 17 states and the District of Columbia that are providing direct assistance, according to the exemption.

“USDOT’s top priority is safety, and while current circumstances dictate providing industry flexibility, FMCSA will work closely with its state and industry partners to monitor driver work hours and conditions for the duration of the exemption,” FMCSA said in a statement.

In addition to the District of Columbia, FMCSA’s waiver applies to the following states: Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas and Virginia.

This exemption is in effect until June 8 or until the emergency is declared over, whichever is earlier.

Colonial Pipeline Co.’s operations team is developing a system restart plan, the company said in a statement Sunday evening. “While our mainlines (Lines 1, 2, 3 and 4) remain offline, some smaller lateral lines between terminals and delivery points are now operational,” according to the company’s latest update.

“We are in the process of restoring service to other laterals and will bring our full system back online only when we believe it is safe to do so, and in full compliance with the approval of all federal regulations.”

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Kenworth’s Chillicothe, Ohio and Renton, Washington assembly plants recently received prestigious 2021 Manufacturing Leadership Awards in Engineering & Production Technology.

The post Kenworth Chillicothe and Renton Assembly Plants Capture NAM Manufacturing Leadership Awards appeared first on NextTruck Blog & Industry News - Trucker Information.

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Same gig, new rig. She's a '22, but I miss my 680 already

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This week’s DHL Supply Chain Pricing Power Index: 70 (Carriers)

Last week’s DHL Supply Chain Pricing Power Index: 70 (Carriers) 

Three-month DHL Supply Chain Pricing Power Index Outlook: 70 (Carriers)

The DHL Supply Chain Pricing Power Index uses the analytics and data in FreightWaves SONAR to analyze the market and estimate the negotiating power for rates between shippers and carriers. v

The Pricing Power Index is based on the following indicators:

Load volumes: Absolute levels positive for carriers, momentum neutral

The Outbound Tender Volume Index (OTVI) slid a few hundred points this week to 15, 049. Volumes are pumping across the country, but it seems routing guides have finally shown signs of improvement. Pair the declining electronic tenders with declining tender rejections, fewer spot volumes, and both contract and spot rates headed lower, the picture of an improving environment can be visualized. 

Declining tender volumes this week may also be a function of the Commercial Vehicle Safety Alliance’s 72-hour safety blitz, a time when many drivers take off and shippers respond accordingly by pushing or pulling freight away from this week. 

Reefer volumes have been tumbling since the index’s all-time high in early March, post-winter vortex. Since the first week of March, ROTVI.USA is down 24% and is currently at its lowest point since mid-February. The decline in dry van volumes over the same period has been less drastic, with VOTVI.USA shedding 6% since mid-March. 

Dry van volumes, driven by consumer demand, remain extremely strong, and the decline this week is more of a combination of Roadcheck Week and routing guide fortification, rather than lower demand. This is evidenced by materially lower spot market volumes in the SONAR data provided by Truckstop.com and anecdotally supported by earnings reports such as ArcBest, which this week announced its seeing double-digit declines in spot volumes flowing through its network. 

Although there are improvements over the road, bottlenecks and disruptions from the oceans will soon impact freight networks once again. The Global Port Tracker from Hackett Associates and the National Retail Federation has revised its already record-high import volume estimates over the next quarter. The freight will keep coming, and it will be fun to watch if carriers’ can keep on keeping up. 

SONAR: OTVI.USA (2021 – Blue; 2020 – Purple; 2019 – Green; 2018 –  Orange)

Tender rejections: Absolute levels positive for carriers, momentum positive for shippers

Carriers are rejecting fewer loads than they were at the beginning of the quarter, but the national average remains just under 25%. It is clear that carriers have made progress over the past six weeks, with each of the trailer types rejection rates falling considerably. Relative reefer capacity has loosened greatly since the polar vortex surged demand for temperature- controlled freight. After topping out above 50% in the first week of March, ROTRI has steadily declined to 40% currently. 

SONAR: ROTRI.USA (Blue); VOTRI.USA (Green)

Nearly every market west of Utah saw relative capacity loosen this week, including the freight-heavy southern California markets. The southeastern markets, including Savannah, Georgia, Atlanta, and Carolina markets also saw tender rejections fall this week. 

SONAR: MAPS

When viewing the MAPS function in SONAR, it seems carrier networks shifted toward the coast this week, with many coastal markets, especially large port cities, seeing capacity relatively loosen over the past week. There is an influx of ocean freight volumes that will be entering truckload networks over the next several months from nearly every port in the country. Carriers that are prioritizing the coasts are setting themselves up for reliable volumes for the foreseeable future. 

SONAR: VOTRI.USA (Blue): ROTRI.USA (Green)

Despite OTRI falling meaningfully for the first time in weeks, I don’t believe it’s due to capacity being added to the market. Rather, it’s because contract prices continue to be rebid up. This is evidenced by spot prices falling considerably over the past several weeks, while overall freight demand has not. Freight demand is not going to abate in the next few months, and there will not be any meaningful addition to fleet capacity in the meantime. This is a carriers’ market and will stay such throughout the summer. 

SONAR: OTRI.USA (2020/21 – Blue; 2020 – Purple; 2019 – Green; 2018 – Orange)

Freight rates: Absolute level positive for carriers, momentum positive for shippers

Both contract and spot rates have peaked for this cycle-within-a-cycle that was induced by severe winter weather. From mid-February to early March, the Truckstop.com national dry van spot rate average popped ~10%, but has given back about half of that handle in the weeks since. As contract rates have been marked up towards spot, rejection rates, and subsequently spot rates, have slid meaningfully. 

SONAR: VCRPM1.USA (Blue); TSTOPVRPM.USA (Green)

The Truckstop.com dry van average did break a streak of consecutive down weeks, rising 1 cent per mile this week to $3.05/mile, inclusive of fuel. Although rates have peaked, I don’t see any indications of strong downward pressure. Spot rates will remain elevated from a historical standpoint for several months, possibly several quarters. Amit Mehrotra of Deutsche Bank is one of the most bullish analysts in the transportation industry. He believes the elevated freight demand and a very strong pricing environment may last throughout 2022 and into 2023.  

SONAR: TSTOPVRPM.USA (Blue 2021; Green 2020; Orange 2019)

Economic stats: Momentum and absolute level neutral

Several economic releases this week are worth noting.

Weekly jobless claims were released Thursday and give us one of the best close-to-real-time indicators of the overall economy.  This week, the data was excellent with initial claims tumbling below 500,000 for the first time amid the global pandemic. This is nearly 100,000 fewer than the previous week, and well below the 527,000 Dow Jones estimate. 

While the jobs market still has a long way to go before it fully heals from the pandemic damage, improvement has accelerated in recent weeks as restrictions on activity continue to be lifted.

Initial jobless claims (weekly in 2020-21)

Source: FRED

Turning to consumer spending, as measured by Bank of America weekly card (both debit and credit) spending data, total card spending (TCS) in the latest week grew 14% over 2019, which is a moderation from last week’s 20% growth rate, but in line with the average over the past three weeks. 

The BofA team released its monthly data ahead of the Census Bureau’s report: Retail sales ex-autos fell 1.9% from March to April, seasonally adjusted. 

There is substantial weekly volatility in the spending data, so it is helpful to further smooth the data and consider the 14 and 28-day moving averages which are currently running at 16.7% and 14.6%, respectively, for the 2-year growth rate. To put this into historical perspective, the average 2-year growth rate from 2012 to 2019 was 7.8%, which means the current pace is well above the historical trend. 

Source: Bank of America

The large disparity in growth rates between income levels is beginning to converge. Since early March, the outperformance has been decidedly amongst lower income households: Households earnings less than $50k are spending 23% more than 2019, while spending among high income earners ($125k+) is up 8.3%.  The outperformance of low income spending is apparent across categories, including leisure such as travel, restaurants and entertainment and durable goods such as furniture and home improvement spending. BofA analysts expect a convergence ahead where higher income households accelerate spending and low income spending moderates. 

Source: Bank of America

For more information on the FreightWaves Freight Intel Group, please contact Kevin Hill at khill@freightwaves.com or Andrew Cox at acox@freightwaves.com.

Check out the newest episodes of our podcast, Great Quarter, Guys, here.

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Truck drivers and fleets have two months to prepare for the Commercial Vehicle Safety Alliance’s (CVSA) annual Operation Safe Driver Week, which is set for July 11-17.

CVSA said inspectors throughout North America will focus on speeding and unsafe driving, including distracted driving, making improper lane changes, failing to use a seat belt and driving while impaired.

“Data shows that traffic stops and interactions with law enforcement help reduce problematic driving behaviors,” CVSA President Sgt. John Samis of the Delaware State Police said in the release. “By making contact with drivers during Operation Safe Driver Week, law enforcement personnel aim to make our roadways safer by targeting high-risk driving behaviors.”

Despite the drop in traffic on roadways in 2020 because of the COVID-19 global pandemic, nationally, traffic fatalities increased, CVSA said.

According to the National Safety Council’s (NSC) preliminary estimates, the estimated rate of death on the roads last year increased 24% over the previous 12-month period, despite miles driven, which dropped 13%. 

The increase in the rate of death is the highest estimated year-over-year jump NSC has calculated in 96 years, according to the CVSA release.

Inspectors will also be tracking reckless or aggressive driving, distracted driving, following too closely, improper lane change, failure to obey traffic control devices, failure to use a seat belt, evidence of drunk or drugged driving during Operation Safe Driver Week.

Speeding, which is the focus of this year’s Operation Safe Driver Week, was the top traffic enforcement violation for both types of drivers. Commercial motor vehicle drivers were issued 2,339 speed-related citations and 3,423 warnings. Passenger vehicle drivers received 14,378 citations and 11,456 warnings for speed-related offenses. 

2020 Safe Driver Week results

The top five traffic enforcement citations given to commercial motor vehicle drivers were:

  1. Speeding/violation of basic speed law/driving too fast for the conditions – 2,339
  2. Failure to use seat belt while operating commercial motor vehicle – 1,003
  3. Failure to obey traffic control device – 617
  4. Using a hand-held phone/texting – 269
  5. Improper lane change – 122

Speeding was the most cited traffic enforcement violation for commercial motor vehicle drivers, according to CVSA. 

During last year’s Operation Safe Driver Week, officers issued 71,343 warnings and citations and 28,486 state or local driver enforcement violations, ranging from speeding to failure to wear a seat belt.

Of that number, truck drivers received 10,736 warnings and citations for traffic enforcement violations. Passenger vehicle drivers received 17,329 citations and 14,792 warnings for traffic enforcement violations, totaling 32,121 warnings and citations. 

Altogether, passenger vehicle drivers and commercial motor vehicle drivers received a total of 21,988 traffic enforcement citations and 20,869 warnings during 2020 Operation Safe Driver Week.

This is part of FreightWaves’ AskWaves series. If you have a question for our editorial team to explore, click here. For more AskWaves articles, click here.

Click for more FreightWaves articles by Clarissa Hawes

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trucking insurance for owner operators

There is no one size fits all solution when it comes to trucking insurance for owner operators. You’ll have different insurance options available based on your haul type, range, level of experience, and driving record. Also, insurance requirements vary by state, so be sure to review your state’s regulations for your specific haul type and needs. We spoke with several trucking insurance experts, and they shared their top tips for choosing insurance as an owner operator.

What Types of Insurance Do Owner Operators Need?

The exact trucking insurance that you will need as an owner operator will vary. The best thing to do is talk to an insurance retailer that specializes in trucking insurance. They will be able to give you details on your specific situation. That said, here are a few basic insurance types to know:

Liability Insurance

Primary liability insurance covers damage to the tractor or trailer, and most owner operators need a minimum of $750,000 in coverage. That number will go up if you’re hauling hazmat or other riskier loads. Adding physical damage coverage to liability coverage can protect against potholes, weather conditions, and similar damage.

Cargo Coverage

Cargo coverage protects the goods that you haul. In the event of an accident, you need to know that the load you’re carrying is covered. Cargo coverage is specific to owner operators who are running under their own authority.

Non-Trucking-Liability (NTL) & Bobtail Coverage

If you are an owner operator who is running under a company’s authority, you will need NTL and Bobtail coverage. NTL covers drivers when they use their truck for non-businesses purposes such as a stop at the grocery store or an outing with friends. Bobtail policies also cover drivers who are returning from a deadhead load while still under dispatch.

David Zahm, Director of New Business at Robley Insurance

If you are partnering with a specific company, David Zahm, Director of New Business at Robley Insurance, encourages owner operators to do their research:

“I would encourage an owner operator to vet a company they’re going to work with. …Ask the trucking company directly, ‘I’d like to see a copy of your CAB report.’”

That information is powerful for drivers. You have to protect your own safety record, and a company with a poor CAB report is a huge red flag.

Passenger Accident Coverage

Passenger accident coverage provides insurance protection for guest passengers in your vehicle. While your passengers may not be part of the nuts and bolts of operating your truck, people are one of the most valuable assets in life. Passenger Accident Coverage helps give you peace of mind when you have someone else in the truck with you.

What Factors Affect Insurance Prices?

Trucking insurance for owner operators varies greatly. The level of insurance coverage that you need will affect pricing, but there are several other factors as well.

Joy LaFrance, Chief Underwriting Officer for One80 Intermediaries

CDL experience plays a big role in being approved for trucking insurance and pricing. According to One80 Intermediaries’ Chief Underwriting Officer, Joy LaFrance, underwriters want to see a minimum of 3 years of CDL experience and a CDL license in the state that you operate. Drivers with less than 3 years of experience may have a hard time finding insurance from a retailer that specializes in transportation. Underwriters and insurance retailers need evidence of a clean driving record and good business management.

One80 Intermediaries’ Chief Underwriting Officer, Joy LaFrance, noted:

“Preferred programs don’t typically take anyone that’s new in business less than 3 years unless they have 5 years prior experience. So the pricing for the first 2 to 3 years could be astronomical until they have proof that their loss history is good, that they are maintaining driver files, and that they are maintaining their vehicle.”

Jeff Ice, Transportation Practice Leader for Risk Strategies

Jeff Ice, the retired Transportation Practice Leader for Risk Strategies, confirmed:

“The only thing that really gives an underwriter some comfort as to what they’re going to insure is experience. So, if there’s no experience, yes there are places you can get insurance, but you’re going to pay the piper.”

An owner operator’s driving record is another factor. A good safety record is critical. Insurance carriers will look at inspection records, hours of service violations, driver fitness tests, logbook violations, and truck maintenance records among other things. They may also look for proper signage and safety features on your vehicle like fog lamps or deer guards.

A final determining factor on insurance price is down payment. If you are able to pay the insurance premium in full, insurance carriers may discount the total cost. The full lump sum is a big upfront cost, but it’s usually cheaper overall.

What Will Your Carrier Provide?

If you are an owner operator partnering with a single carrier or are a lease purchase driver, that carrier may offer insurance. If they do, read the fine print closely to decide whether it is the best option for you.

Ask questions to understand what is and is not covered. The insurance may not cover you while you are not operating under that company’s authority. That includes the time you may be working with other companies or traveling home when you are off duty. In addition, make sure that the carrier offers coverage levels that meet your specific insurance needs. Insufficient coverage will impact your eligibility to haul certain types of freight and can affect your bottom line. When asked about carrier insurance, Chief Underwriting Officer Joy LaFrance shared this:

“When they’re operating under the authority of someone else, what happens is, if [owner operators] leave and decide ‘I’m going to go on my own now,’ they have no history. So they basically are starting over. Unless I can get the data from that motor carrier, with all the claims, by driver, there’s no way to actually assess [owner operator] history.”

LaFrance added that when drivers use a carrier’s equipment and, “are only asked to get a non-trucking liability or bobtail liability, that does not count as primary insurance. We can’t use your non-trucking or bobtail liability for proof that you had no incidents.”

To decide if insurance through a carrier is right for you, think about your future goals. Will you keep expanding your business? Will you eventually run under your own authority and need a good insurance record? If so, you may do better with an insurance plan that is independent of any carriers so you can prove your record.

Where Can You Find Providers?

The best insurance retailers for owner operators specialize in transportation. A generalist won’t necessarily understand all the nuances that you need for the job. Shop around for both price and good coverage. If you are a new owner operator, you may have to rely on generalized national insurance carriers. When possible though, look for specific trucking insurance retailers.

Risk Strategies’ Jeff Ice offered this suggestion:

“As an owner operator just getting into the business, my first phone call would probably be to [OOIDA]. They would be able to turn you on to how to get your authority, do you need your own authority…[They] will be able to give you a lot of direction.”

One of the best ways to find a top trucking insurance policy is to ask owner operators! Find out where they get insurance and what they like or don’t like. There’s nothing better than a firsthand account, and other drivers aren’t trying to sell you on anything. An experienced owner operator is one of the best places to get suggestions.

Robley Insurance’s David Zahm left us with this advice for sustainable growth:

“You’ve got to start one [truck] at a time, and build slowly. … [If you try to grow too quickly,] you’ll end up with a distressed insurance company, and their rates are astronomical, which shrink your margins down…If somebody wants to run a trucking company the right way, then there’s a way to do it, and they have a chance to be very successful.”

Becoming an owner operator is an exciting step, and trucking insurance is a key part of that transition. Successful owner operators build slowly toward long-term goals and focus on sustainable growth. That’s an investment in yourself worth making.

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Chart of the Week: Flatbed Outbound Tender Reject Index – USA, Institute of Supply Chain Management – Purchasing Managers Index  SONAR: FOTRI.USA, ISM.PMI

The transportation sector responsible for moving raw materials and manufactured goods throughout the U.S. has hit the proverbial ceiling, meaning the freight market cannot get much tighter than it already has without a structural expansion. The national Flatbed Outbound Tender Reject Index (FOTRI) that measures flatbed truck capacity plateaued through April — hovering around 25% after averaging below 15% through most of the first quarter. 

Last week the Institute of Supply Chain Management (ISM) reported a sequential decline in the Purchasing Managers Index (PMI), falling well short of expectation. The PMI largely measures manufacturing activity and was expected to expand above a 65 in April, but thanks to supply chain limitations and challenges with employment levels it fell to 60.7. 

Flatbed operations are largely centered around but not limited to industrial production and construction activity. The former of which has had a slow and steady recovery, while the latter has had a bifurcation between residential and commercial activity.

As manufacturers come back online, they are finding it more difficult to source raw materials for production. Looking at the components of the PMI, the inventory levels have been contracting at a faster pace through each of the first four months of this year. This component is at the lowest level in index history. Other than surging demand, supply chain constraints upstream have been a big contributing factor. 

Imports and deliveries also slowed this past month. Both of these components have a direct connection to transportation and its limitations at the present time. Essentially, manufacturers cannot keep up with demand because their suppliers are not able to get the materials to them.

Another major component in all of this is that employment growth slowed in April. The most recent jobs report showed a huge gap between openings and applications in the workforce. It is difficult to get anything done if the labor is not available.

In the meantime, the backlog of unfulfilled orders continues to grow at a record pace. This is a good sign for transportation providers expecting to see activity over the coming months, but the longer orders go unfulfilled the higher the chances are for cancellations. 

Capacity and supply chain expansion do not come quickly. Truck orders are a good example of how hard it is to expand infrastructure. Lengthy order cycles and decision processes mean it will be more than a year in many cases before capacity is added, making rapid responses to expanding markets difficult. 

In this circumstance, growth is not just limited by transportation capacity but also goods production. They are connected, though, with one depending on the other in a paradoxical relationship.

The national Outbound Tender Volume Index (OTVI) reflects this ceiling, which appears to be right around a value of 15,700. Tender rejection rates increase at a faster pace closer to this level, meaning that carriers simply cannot keep up with demand. Subsequently shippers do not request much more once it is attained.  

The economic recovery could be much more robust, but it is limited by capacity, production and a population that is reluctant to return to work.

About the Chart of the Week

The FreightWaves Chart of the Week is a chart selection from SONAR that provides an interesting data point to describe the state of the freight markets. A chart is chosen from thousands of potential charts on SONAR to help participants visualize the freight market in real time. Each week a Market Expert will post a chart, along with commentary, live on the front page. After that, the Chart of the Week will be archived on FreightWaves.com for future reference.

SONAR aggregates data from hundreds of sources, presenting the data in charts and maps and providing commentary on what freight market experts want to know about the industry in real time.

The FreightWaves data science and product teams are releasing new data sets each week and enhancing the client experience.

To request a SONAR demo, click here.

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Featured Truck Of the Week Rims Western Star

Today’s truck is a cool Western Star from Dan Milinovic of Rims Transport. Each week Bruce picks a cool truck from the many truck shows or from fans that send their trucks in to the show. Check out Dan’s sweet ride. Hearing about them is one thing, seeing them is another.

Check out the video on this featured truck by clicking here

This episode is sponsored by RIMS Transport who is looking for owner operators and drivers to work cross border operations out of Hamilton Ontario. You can learn more about the opportunities at www.rimstransport.com

About the Show

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

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The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

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After a long day of driving, Lakeesha Martin, a veteran long-haul truck driver, decided it was time to end her day at a nearby truck stop and take a shower before finishing up the 1,000-mile trip she had left to deliver her load.

Martin, an owner-operator from Woodbury, New Jersey, told FreightWaves that she secured her truck and headed into the truck stop to purchase her shower. After the loud speaker announced her shower was ready, she said she made her way to her shower door. 

That’s when Martin said she heard whimpering from the shower stall next door. 

Martin, a 26-year trucking veteran, said she pushed the door open to find a beaten woman on the floor, whom she later found had been there for three hours. The woman was covered in blood, her clothes were ripped, her face was badly bruised and her once-blonde hair was stained red. The truck driver said she held the woman and screamed for help.

That moment inspired Martin to write her book, The H.E.R. Method: You Are Precious Cargo, a personal protection guide for truck drivers.

In an interview with FreightWaves, Martin explained why it was important for her to write this book and share the training she received with others in the industry.

“Growing up, I never had a fear of being unsafe because I was taught [personal protection] skills from being the baby sister of five older brothers,” Martin said. “I eventually took martial arts and became a weapons specialist. Because of this training, it was easy for me to be aware of my surroundings, but not all people are competent in self protection. Having to travel the highways and deliver freight makes this book even more needed as drivers can become targets for assault and attacks by predators.”

In this industry, women in particular can be easy targets, Martin said,  but she wanted to create a system for self protection that could help all women, no matter what situation they may face.

“Everything that women face in the trucking industry will also be obstacles that they will face in every aspect of life,” Martin told FreightWaves. “Women are still considered to be the weaker sex and are vulnerable in all industries.”

Her systematic approach, called the H.E.R Method, is a simple way to remember how to be mindful and to approach situations that may become dangerous. The method is named after:

  • HEED: Pay attention to your surroundings and survey the scene
  • EXECUTE: Mentally prepare and plan a route of escape
  • RESPOND: Defend yourself and find a safe place

Martin’s book describes these actions in greater detail and can help women learn self-defense lessons that she developed over her 26-year trucking career. She said there are ways the industry can still improve to help protect drivers on the road.

“[The] pressing issues would definitely be better armed security and proper lighting that covers all of the parking areas, paying special attention to the rear,” Martin told FreightWaves. “[Also] I would implement the option for the showers to be announced inside an app instead of announcing them over the PA system.”

Even with those improvements, she said it is up to every person to learn these life skills.

“At the end of the day, the ultimate responsibility for our protection lies with the individual,” Martin said. “It is the main reason why I took my many years of experience and created this tool to assist others.”

Click here for more articles by Grace Sharkey.

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Diesel markets could be on the verge of a significant upward move when trading kicks off Sunday evening in the U.S. following the closure of the Colonial Pipeline.

The pipeline, which carries diesel, gasoline and jet fuel from the U.S. Gulf Coast area through the Southeast and Mid-Atlantic on their way to a terminus in New York, was closed Friday because of a cyberattack, according to media reports.

A statement released midday Saturday, updating an earlier statement released Friday, said the pipeline had been the “victim of a cybersecurity attack. 

“We have since determined that this incident involves ransomware,” the company said in a statement.

Colonial is a pipeline system with four major parts. According to S&P Global Platts, it carries 1.5 million barrels/day of gasoline on line 1 between Pasadena, Texas, outside of Houston, and Greensboro, North Carolina. Line 2 traverses the same route and carries 1.16 million b/d of distillates, including diesel, heating oil and jet fuel. At Greensboro, line 3 is a mixed line that goes up to the New York area and can carry 885,000 b/d of a mixture of products. Line 4 is a mixed line also, and takes the product to terminals in Virginia and Maryland. 

Source: Colonial Pipeline

Both gasoline and diesel rose more sharply on the CME commodity exchange on Friday, though the news of the cyberattack and shutdown broke relatively late in the trading day and the upward trends had already been in place. The petroleum products moved up more sharply than crude, which would be expected given the possibility of regional short supplies of gasoline and diesel should the closure persist.

While benchmark U.S. crude West Texas Intermediate was up just 0.18%, and international benchmark crude Brent was up 0.28%, ultra low sulfur diesel was up 2.11% to $2.0106/gallon. RBOB gasoline was up 0.75%.

The strength in diesel relative to crude continues a trend in the market that has been occurring for several weeks. The spread between Brent crude and ULSD stood at about $12.40/barrel on April 20. On Friday, it was up to about $15.45/barrel.

If the pipeline outage goes on for any extended period of time, it could create a situation where diesel markets in the Houston area will plummet as supply backs up. But diesel for the huge swath of the nation’s population that resides along the pipeline will be driven higher. That includes cities such as Atlanta, Washington, Philadelphia and New York.

Closing that arbitrage between the Gulf Coast and other parts of the country without a working Colonial Pipeline can be challenging. The economics of trucking fuel elsewhere can turn negative quickly. Shipment by sea on a Jones Act ship can not happen rapidly, with probably too long a timeline to make any impact, barring an extended shutdown.

The Plantation Pipeline begins in Louisiana and runs a course similar to Colonial, though it does not go north of Washington.

Diesel markets already have been trending higher after a period of stability. After settling at $1.89/g on April 14, ULSD on CME has moved up more than 12 cents to its Friday settlement of $2.0106. When it settled above $2/g two days earlier, it marked the first settlement above that level since January 2020.

More articles by John Kingston 

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It is no secret that the coronavirus pandemic of 2020 has created significant economic hurdles felt across industries. The commercial trucking sector, deemed essential for transporting medical supplies and consumer goods, fared better than most but still faced driver shortages, supply chain interruptions, and economic downturns. The role of trucking insurance in protecting against business-related risks cannot be overstated. Now, as pandemic restrictions are lifted and the economy begins its slow recovery, a new risk is emerging: the threat of gas shortages. Truckers must understand the factors leading to fuel shortages, supplementing the risk management practices that trucking insurance supports.

A Looming Gas Crunch?

For over a year, travel has been restricted across large parts of the United States. People were not allowed to travel or were hesitant to hit the road for fears of viral infection. As COVID-19 vaccines have become available and infection rates are slowing, travel restrictions have been lifted for millions of people.

Transportation industry analysts suggest that travel plans may be hampered this summer due to a looming gas crunch. Gas stations across the country are bracing for supply shortages, potentially putting an end to the travel plans for millions of Americans. The reason behind gas shortages is not a lack of petroleum production, but one of available truckers to haul fuel.

According to National Tank Truck Carriers, the tank truck industry’s advocacy group, driver shortages range from 20-25%. While other transportation sectors have experienced driver shortages due to infection, attrition, and economic factors, qualified tank truck drivers are in short supply. Not every trucker can operate a tanker; tank truck drivers must undergo rigorous training and certification. These additional regulatory hurdles have contributed to shortages of qualified drivers, thus exacerbating the potential for fuel shortages. As the pandemic took hold of the American workforce, driver training schools were closed. The drivers who would now be completing their training and certification are simply not materializing to ease the strain on fuel supply chains.

Trucking insurance is another factor in the driver equation; tank trucking companies are often required to carry additional liability insurance protections, and the costs of those policies are increasing. As a result, many tank truck companies are dialing back services until more drivers are able to transport fuel and insurance issues are resolved.

Fewer Drivers, Higher Prices

One of the ripple effects of a fuel truck driver shortage is the possibility of cost increases at the pump. Demand for gasoline has already reached near pre-pandemic levels, and with the summer travel season fast approaching, demand will skyrocket. Hotel and airline booking are down nearly 20% from the same time in 2019, suggesting that travelers are planning to drive this summer.

These factors can potentially contribute to localized fuel outages. As fuel outages are reported, industry watchers fear this could lead to fuel hoarding, much as the toilet paper shortage in the early part of the pandemic led to panic buying on the part of consumers. With fewer drivers available to transport fuel, and with more people planning to travel this summer, this “perfect storm” may very well lead to a serious fuel crisis.

Federal Help on the Way?

The Federal Motor Carrier Safety Administration (FMCSA) issued a declaration in May 2020 easing regulatory restrictions on essential truck drivers, particularly those who were directly involved in pandemic recovery. These emergency actions do not apply to tank truck drivers, however. At the same time, a federally-managed driver clearinghouse that went active in 2020 identified truck drivers with drug and alcohol violations on their records, effectively negating a potential driver pool of up to 60,000 individuals.

Fuel industry analysts hope that the federal government will step in to streamline new driver certifications. For now, it is unclear which, if any, restrictions on hauling fuel will be lifted. In the meantime, tank truck operators are relying on trucking insurance to protect their interests. In addition, these companies are raising driver wages to encourage recruitment of qualified drivers. The tank truck industry is a critical part of the recovering economy. Without the intervention of the federal government, fuel shortages that occur in the summer months could affect further economic growth well into the fall if industry analysts are correct.

About Western Truck Insurance Services

Western Truck Insurance Services is a commercial truck insurance agency with roots dating back to 1954. We have evolved into a highly respected, professionally managed, truck and transportation insurance brokerage. The hallmark of our organization is our desire to provide unparalleled service. We go way beyond what you expect to receive from an insurance brokerage. Equipped with state of the art automation, Western Truck Insurance can provide you with lightning fast truck insurance quotes, customer service, Insurance certificates, and coverage changes. Contact us today at (800) 937-8785 to learn more!

The post Gas Shortages Predicted Summer 2021 appeared first on Western Truck Insurance Services.

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On its first day of public trading, Canada’s Lion Electric Co. made good on a pledge to expand manufacturing in the U.S., investing  $70 million to convert a partially finished warehouse in Joliet, Illinois, into a plant to build electric trucks and buses.

At least 745 new jobs are expected to be created over the next three years.

Lion, based in St. Jerome, Quebec, is expected to receive about $490 million after expenses in a business combination completed Thursday with Northern Genesis Acquisition Corp., a special purpose acquisition company (SPAC). Lion is using $90 million of the proceeds to retire debt.

The company began trading Friday on the New York and Toronto stock exchanges under the symbol LEV.

Becoming a player in the electric trucking space after building mostly electric buses, Lion’s customers include Amazon and CN. It purchases battery cells from Los Angeles-based Romeo Power Technologies (NYSE: RMO), another de-SPACed startup.

Investment could grow to $130M

Lion’s three-year investment is part of an agreement with the state. Lion spokesman Patrick Gervias told FreightWaves the total investment could rise to $130 million. 

Vehicle manufacturing in the 900,000-square-foot facility is expected to begin in the second half of the year. The first vehicles are expected in the second half of 2022.  

Annual capacity is 20,000 electric trucks and buses. Lion competes in electric buses with  SPAC-backed Proterra, which this week delivered its 50th Saf-T-Liner C2 Jouley electric school bus for Daimler Trucks North America’s Thomas Built Buses subsidiary. Lion has delivered more than 390 electric vehicles — 90% school buses — since its founding as Lion Bus in 2011.

The additional production capacity will help Lion scale electric bus production as the U.S. expands electric vehicle manufacturing urged by President Joe Biden. Additional incentives for electric vehicles are expected to put them on more consumer and corporate shopping lists.

Lion’s purpose-built electric vehicles have accumulated more than 7 million miles since 2016, the company said.

Lion Electric SPAC wins shareholder approval

IKEA to electrify last-mile delivery in Canada with Lion Electric

Ready to roar: Lion Electric delivers first trucks next month

Click for more FreightWaves articles by Alan Adler.

 

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Saia LTL Freight, a leading national transportation and logistics provider founded in 1924, recently took delivery of two Volvo VNR

The post Volvo Trucks’ Customer Saia Takes Delivery of Two Volvo VNR Electrics appeared first on NextTruck Blog & Industry News - Trucker Information.

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Cyberly thumb

Recruiting drivers is a problem and that has marketers planning to spend MORE on channels like social media and email. So why hasn’t the trucking industry started harnessing the power of its own drivers’ social media presence?

On this episode of Cyberly, Blythe Brumleve talks with Tom Augenthaler of The Influence Marketer about how trucking companies can start working with influencers to help solve a recruiting problem that isn’t going away anytime soon. 

This plus the logistics of delivering flowers on Mother’s Day — how giving flowers got started and how they arrive on your doorstep. 

You can find more Cyberly episodes and recaps of all our live podcasts here.

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I love this job

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Medically Necessary is a podcast by Matt Blois about the health care supply chain — how we get drugs, devices and medical supplies to health care providers and patients.

This podcast is brought to you by Ryder, the only fully integrated logistics & transportation provider in the industry. Ryder’s solutions cover the entire supply chain including warehousing, transportation logistics, e-commerce fulfillment, & last mile. Discover how Ryder can make you ever better at ryder.com.

Many hospital systems saw telehealth visits skyrocket during 2020, and some providers are expecting telehealth appointments to remain well above pre-pandemic levels. That means health care supply chain professionals will need to adjust to the changing ways of seeing patients. 

On this episode of Medically Necessary, Matt Blois looks at what it will take to develop a supply chain that is functional for doctors practicing in hospitals and at home. 

Blois welcomes Teresa Dail, Vanderbilt University Medical Center’s chief supply chain officer, to discuss how she saw her hospital adjust during the pandemic. 

Dail recently started a new company under the Vanderbilt umbrella called CareFluent Connect, which provides medical devices and equipment that patients need after a procedure. 

A big focus of the company is making sure patients can give their doctor feedback about whether the equipment they received is working well. But the company’s focus on providing medical products to patients once they leave a hospital also offers a preview of how the health care supply chain could work for patients using telemedicine as a primary way of seeking care. 

You can find more Medically Necessary episodes and recaps for all our live podcasts here

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Story by:  Clarissa Hawes, Senior Editor, Investigations and Enterprise at FreightWaves     A coalition of trucking companies filed a petition on Monday to force an Indianapolis-based freight brokerage into Chapter 7 bankruptcy proceedings for unpaid transportation services. The involuntary Chapter 7 bankruptcy petition, filed in U.S. Bankruptcy Court for the Southern District of Indiana, […]

The post Trucking companies trying to force freight brokerage into bankruptcy appeared first on iTrucker | Transforming Trucking.

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[caption caption="Shippers' use of less-than-truckload capacity has increased over the last year, but technology options to procure and manage those shipments has lagged behind that demand. Photo credit: Shutterstock.com."][/caption]Widely-used transportation management system (TMS) provider AscendTMS is partnering with US less-than-truckload (LTL) marketplace uShip to give Ascend users direct access to LTL capacity, the companies said Tuesday. The tie-up is another...

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Benefits of Driving with C.A.T. from the Eye of the Driver

Wonder what benefits there are driving for C.A.T. Transport? We outline 10 benefits for driving with the carrier and how you can get involved. Learn why drivers are happy with C.A.T. and how you can also be part of the team. C.A.T. Transport offering flexible work options, pet friendly programs, and is one of the Best Managed Carriers in Canada. Learn more at www.cat.ca  or call 1-800-363-5313

About the Show

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

LISTEN TO LEAD PEDAL RADIO at www.LeadPedalRadio.com

The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

Join The Lead Pedal Podcast Fan Club where are loyal fans get first chance at specials, discounts on merchandise and much more.The club is free to join and you can learn more at www.theleadpedalpodcastfanclub.com

 

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Clean Energy announced several renewable natural gas fueling agreements.

Los Angeles-based port drayage company Pac Anchor Transportation recently added 23 natural gas trucks to its fleet, and they are expected to use 2.5 million gallons of renewable natural gas (RNG) from Clean Energy Fuels (NASDAQ: CLNE).

Clean Energy’s RNG, which the company said reduces greenhouse gas emissions 70% to 300% depending on the source, is sweeping across North America.

After a recent agreement to provide Amazon with RNG for fleets and a stock warrant for up to 53.14 million shares of Clean Energy common stock, Clean Energy shared several new fueling agreements in trucking, transit and solid waste operations Wednesday.

“At Pac Anchor, we’re committed to finding innovative solutions for lowering our carbon footprint,” said Alfredo Barajas, president of Pac Anchor, in a statement. “That’s why we chose RNG trucks, a tried-and-true technology that helps us deliver results in real time for our communities and clients.” 

RNG is a zero-carbon renewable fuel that has the necessary infrastructure, technology, maintenance and trained technicians available today, Chad Lindholm, vice president at Clean Energy, told FreightWaves.

Fueling agreements with Clean Energy identified in the release:

  • Cal Portland: 1 million gallons of RNG will fuel its 150 natural gas truck fleet.
  • Biagi Bros.: 900,000 gallons of RNG will fuel 12 new trucks.
  • Ecology Auto Parts: 420,000 gallons of RNG will fuel 35 new vehicles.
  • EVO Transportation & Energy Services Inc.: Clean Energy stations will be co-branded with EVO Transportation over five years to expand RNG growth.
  • Republic Transportation Group: 200,000 gallons of RNG will fuel its fleet annually.
  • Matheson Trucking Co.: 200,000 gallons of RNG will fuel 16 new tractors.

“While refuse fleets were earlier adopters of RNG as a zero-carbon fuel source following the introduction of the Cummins 9L engine, trucking fleets have taken notice and are now seeing the viability of RNG as a clean and cost-effective solution to [achieve] their environmental goals,” Lindholm said.

RNG is commonly produced from biogas at landfills, so it seems only fitting that solid waste trucks are increasingly being powered by the garbage they move. 

Clean Energy’s expansions into solid waste:

  • City of Pasadena, California: 1.5 million gallons of RNG will fuel more than 50 natural gas refuse trucks and transit busses over a multiyear agreement.
  • Mission Trails Waste Systems: An upgraded station will extend maintenance and operations over multiple years and provide fuel for more than 50 natural gas refuse trucks.
  • Salt Lake County Sanitation: Operations and maintenance services will be provided by Clean Energy, along with a station upgrade to accommodate 60 garbage trucks.
  • Garden City Sanitation: A Clean Energy station will be upgraded to fuel, maintain and service more than 80 solid waste trucks.
  • Atlas Refuel: A station expansion will accommodate 50 natural gas trucks.

Lindholm predicted that all construction contracts for builds and upgrades would be completed by the end of the year.

“Fleets are learning that RNG, together with natural gas engine technology, is a proven solution that can significantly decrease the impact of harmful emissions and reduce greenhouse gas emissions,” Lindholm said.

Click here for more FreightWaves articles by Alyssa Sporrer.

Is Amazon getting into the renewable natural gas business?

GSCW: Is RNG the fuel of the future? — WHAT THE TRUCK?!?

How much carbon does the transportation industry emit annually?

Study: Biodiesel packs major health and economic benefits

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I think I'm gonna need an armed escort for this load.

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[caption caption="Perishable shippers frequently rely on brokers to connect them to carriers, but a former Walmart executive wants to provide them direct access without an intermediary. Photo credit: Shutterstock.com."][/caption]A startup that connects produce shippers directly with refrigerated (reefer) truckload carriers has raised a $10 million series A round of funding...

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Waiting for the Globetrotters to come piling out

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2022 Cascadia with new panel from Mercedes Actros

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A photograph of intermodal containers double stacked on a train.

Hub Group (NASDAQ: HUBG) expects intermodal growth to persist in 2021, and the company sees itself working well with its partners to take advantage of growth opportunities.

TIght truck capacity, escalating fuel prices, a driver shortage and companies’ focus on lowering their carbon footprint are all factors that bode well for intermodal growth in 2021, according to Hub Group President and COO Phil Yeager. These factors also will support Hub Group’s investments in intermodal, he said.

Capital expenditures for 2021 are expected to range from $165 million to $175 million, consisting primarily of investments in areas such as containers, tractors and technology. 

The company plans to add 3,000 containers in 2021, resulting in a net growth of approximately 2,750 after it has retired containers that have reached the end of their life. Hub Group also plans to add approximately 700 tractors to replace old units and support growth in its drayage and dedicated fleets, the company said. 

“All the quantitative and qualitative factors point to growth in intermodal,” Phil Yeager said to investors during the company’s earnings call on Wednesday to discuss first-quarter 2021 financial results.

Company executives are supportive of efforts by its partners, such as Union Pacific (NYSE: UNP), to boost intermodal capacity in places such as Minneapolis and Southern California. Hub Group has a “constructive” contractual framework with Union Pacific, which helps to provide cost visibility and enables both parties to work collaboratively. 

Executives also expect network congestion to continue to ease and capacity to continue to grow as the railroads improve their transit times and chassis become more available.

We anticipate heading into the peak season in a better position, Phil Yeager said.

Hub Group is also watching how AB5 in California plays out. AB5 is California’s law governing the use of independent contractors. An injunction that shielded the California trucking industry from the law was overturned in April.

The company is watching closely how events unfold, said Hub Group CEO David P. Yeager. Since the company uses a fair number of contractors, it is considering different plans, he said. However, although Hub Group has a large company driver fleet in California, it doesn’t support 100% of the company’s needs.

First-quarter 2021 financial results

A “strong freight market” and a 10% increase in revenue contributed to a 30% jump in first-quarter net profit for Hub Group.

Net income for the first quarter of 2021 was $17.2 million, or 51 cents per diluted share, compared with $13.2 million, or 40 cents per diluted share, for the first quarter of 2020.

“Strong freight market conditions, growth with our strategic customers, and our focus on providing a world-class customer experience resulted in 10% revenue growth in the quarter,” David P. Yeager said. “Hub Group is well positioned for 2021 and beyond due to demand in the marketplace for high service levels and cost-effective solutions.”

First-quarter operating income was $24 million, compared with $20 million a year ago. 

First-quarter revenue rose 10% to $920 milion, compared with $840 million in the first quarter of 2020. 

Hub Group’s revenue grew across all its business segments. Intermodal revenue rose 6% to $506 million amid a 2% increase in volume and 4% increase in revenue load. 

Logistics revenue rose 8% to $217 million on growth in the company’s retail supplier solutions services and the addition of NonstopDelivery, offset partly by the loss of some customers.

Truck brokerage revenue rose 30% to $127 million despite a 6% decline in volume. Contractual freight represented 51% of total brokerage volume in the first quarter, down from 64% year-over-year.

Dedicated revenue grew 11% to $69 million on growth from existing and new customers and partially offset by the impact of business that the company exited in the first quarter, according to Hub Group.

Meanwhile, costs and expenses in the first quarter fell slightly to $85 million on lower professional fees, higher gains on the sale of equipment and a reduction in travel expense, partially offset by increased costs resulting from the NSD acquisition and an increase in salaries and benefits related to variable compensation, Hub Group said.

Capital expenditures were $10 million in the first quarter of 2021.

Looking ahead, Hub Group expects diluted earnings per share to be between $3.20 and $3.40 for 2021, with revenue growth in the midteens percentage range and gross margin as a percentage of revenue ranging between 12.5% and 13%. Hub Group also anticipates costs and expenses in 2021 to range from $365 million to $380 million. 

Subscribe to FreightWaves’ e-newsletters and get the latest insights on freight right in your inbox.

Click here for more FreightWaves articles by Joanna Marsh.

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Where am I?

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A Look at Equipment with Groupe Trans-West

Groupe Trans-West has some of the best equipment on the road and we find out why it is ordered the way it is and the science behind it to keep drivers comfortable and safe. Groupe Trans West is looking for professional teams to operate out of their Mississauga terminal with excellent employment benefits between Toronto Ontario and California. Find out more at www.groupetranswest.com  or call recruiter Mike Hahn at 416-606-8296

About the Show

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

LISTEN TO LEAD PEDAL RADIO at www.LeadPedalRadio.com

The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

Join The Lead Pedal Podcast Fan Club where are loyal fans get first chance at specials, discounts on merchandise and much more.The club is free to join and you can learn more at www.theleadpedalpodcastfanclub.com 

 

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Demand for logistics space surges

Results of a quarterly industrial real estate survey conducted by Prologis (NYSE: PLD) showed a surge in activity in response to “strong retail sales and inventory restocking.”

After steadily increasing from a reading of 56 in the fourth quarter to 59 in the first quarter, Prologis’ Industrial Business Indicator jumped to a late-April reading of 68, “reflecting increased throughput and indicating strong future demand growth,” the report stated.

The 68 reading was the highest level reached on the index since late 2018.

Chart: Prologis

Utilization was almost 85%, which the report attributed to strong retail sales and inventory replenishment. “Restocking is underway, as seen in elevated port volumes. Retail sales are also up as stimulus efforts and job growth are boosting consumer confidence,” the report added.

“Although strong sales, lengthening delivery times and port congestion continue to drive historically low inventory-to-sales ratios, utilization is on the rise as goods make their way through the supply chain.”

The most recent Federal Reserve data showed the retailers’ inventories-to-sales ratio improved only slightly in February to 1.23x from the all-time low set in January of 1.19x. The inventory dataset remains well below levels seen prior to the pandemic of roughly 1.45x, indicating that merchandise restocking will continue at least in the near term.

The Prologis Research report said demand, across several industries and building sizes, exceeded supply for the second consecutive quarter. Demand equaled 93 million square feet during the first quarter after exceeding 100 million square feet in the fourth quarter, which was a record.

Demand strength was seen across a variety of tenants, namely those engaged in parcel delivery, third-party logistics, and food and beverage products. “Outsized demand relative to new supply is prompting significant competition for new space, with customers placing a premium on quickly securing prime logistics space,” the report continued.

Vacancy dipped 10 basis points to 4.7%, a level not seen since before the pandemic, and market rents were up 2.4%.

The improvement in trends resulted in Prologis raising its forecast for demand and supply to 300 million square feet of leased industrial real estate in 2021. Demand is expected to keep pace with new construction resulting in vacancy of 4.7%, which is close to a historic low. Increased replacement costs and the current supply-demand dynamic will drive rent increases of 6.5%, according to the report.

Construction starts increased 25% year-over-year in the quarter to the highest levels on record. Speculative starts moved into the 80% range after hovering around 70% in 2020. Prologis’ customers were also pre-leasing space ahead of completion given the lack of supply. Prologis said half of its current construction projects have already been pre-leased, which is 10 percentage points higher compared to 2020.

“Strong demand fueled a rise in speculative construction and robust pre-leasing. With completions lagging demand and growing investor interest in logistics real estate, developers are working fast to monetize zoned and entitled land — if they have it,” the report read.

The report cautioned that prohibitive replacement and land costs along with delays procuring steel and timber have lengthened project timelines, “possibly limiting future deliveries.”

“Despite increased starts in recent quarters, robust demand could lead to an acute lack of logistics space in 2021,” the report concluded.

Prologis Ventures is an investor in FreightWaves.

Click for more FreightWaves articles by Todd Maiden.

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Chart of the Week: Logistics Managers Index – Inventory Levels, Warehouse Capacity SONAR: LMI.INVC, LMI.WHCP

Inventory costs are growing at the fastest rate in years while warehouse capacity continues to shrink at a near record pace, according to the Logistics Managers Index (LMI). In 2019 shippers crammed warehouses with imports to get around tariffs, coinciding with a slowdown in the freight market. Could rapidly increasing warehousing costs and shrinking warehouse capacity push shippers to keep their freight moving? 

The LMI is a diffusion index that measures expansion and contraction rates — anything showing a value over 50 is expanding, with sub-50 values indicating contraction. Right now inventory costs are increasing as fast as they have since the index was created in 2016 with a record value of 84.58 in April. 

The warehouse capacity measure has been below 50 since the summer of 2020 and has dropped in each of the first four months of this year — meaning shippers have less space to store their stuff. 

Inventory management has become a much bigger deal over the past few years as suppliers experience shortfalls in production for a wide range of reasons. Unexpected demand has been at the heart of most inventory crises. 

Forecasting what people will want when they want it is hardly a perfect science — a hard lesson learned in 2020 for many companies. Missing a peak time in the economy for either a business-to-business-driven expansion (2017-18) or a consumer-focused one (2020-21) can put a company back for years — if it ever recovers at all. 

Peloton knows the value of having inventory when needed and is willing to invest millions of dollars in transporting its bikes to ensure it maximizes its market share in the at-home fitness space while demand is peaking. Peloton has some of the stickiest customers in the industry and knows rapid growth will be less possible once the pandemic ends as people leave their homes more often.

The easy solution to all this is to stockpile raw materials and finished products in a giant warehouse and wait. Many companies utilized this strategy in 2019 to avoid increasing tariffs. Freight poured into the country and sat in warehouses for months. Trucking volumes stagnated until March of 2020, when the pandemic hit. 

The beginning of the pandemic may have been much worse had we not had a relatively decent amount of goods stored — one reason trucking recovered faster than many other parts of the economy last year. Warehousing costs are on the rise and space is becoming less available, making this a less financially viable option. So what about keeping a low inventory level?

A just-in-time or low-inventory operation takes years to set up and the financial risks are extreme for most businesses. The pandemic displayed the worst-case scenario for companies utilizing this strategy thanks to commodity and production shortages of inputs. A consistent and predictable supply chain is needed for this to be effective. Dedicated trucking and private fleets thrive in this space. 

That leaves something in the middle — a solution that does not require a stockpile but can flex up when needed. This is the sweet spot for the for-hire trucking market. The current truckload capacity situation is an argument against this strategy, however.  

This topic was addressed on this past week’s Freightonomics episode in which Zachary Rogers, an assistant professor of supply chain management at Colorado State University and one of the authors of the LMI, stated that “supply chain management has never gotten as much attention as it did this year” because of the massive impact on businesses. 

He went on to say that “people are coming up with different solutions … how to deal with the balance between how much you want to pay to hold [the freight] or move it. And a lot of it is being dictated by the OTRI.”

OTRI is the Outbound Tender Rejection Index that measures the percentage of loads electronically tendered that are being rejected by carriers for a variety of reasons. OTRI is currently around 24%, meaning that one in four loads is being rejected. This is historically high and very disruptive to supply chains. 

Many of the people surveyed do not believe transportation costs will ease over the next year, according to the forward-looking aspect of the LMI survey. This means companies will probably be exploring multiple solutions to gain more control over the logistics of their business while keeping costs predictable. 

Private fleets are extremely expensive and are not well suited for emerging businesses. The for-hire trucking space is still the simplest solution, even as costs are elevated. Increasing warehouse prices will support more freight movement as shippers look for optimal solutions. In the absence of control, visibility is the cheapest and next best option in a chaotic market.

About the Chart of the Week

The FreightWaves Chart of the Week is a chart selection from SONAR that provides an interesting data point to describe the state of the freight markets. A chart is chosen from thousands of potential charts on SONAR to help participants visualize the freight market in real time. Each week a Market Expert will post a chart, along with commentary, live on the front page. After that, the Chart of the Week will be archived on FreightWaves.com for future reference.

SONAR aggregates data from hundreds of sources, presenting the data in charts and maps and providing commentary on what freight market experts want to know about the industry in real time.

The FreightWaves data science and product teams are releasing new data sets each week and enhancing the client experience.

To request a SONAR demo, click here.

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Volvo Trucks expands its North American training footprint with the addition of a 9,600-square-foot location in Hayward, California, conveniently located

The post Volvo Trucks Opens New Training Facility in California to Support More Customers and New VNR Electric Model appeared first on NextTruck Blog & Industry News - Trucker Information.

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Nice to know when I become too fat to pass my DOT that I can become a tow truck driver

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With the launch of Kenworth’s new T680 Next Generation truck model, also comes the 2021 PACCAR MX-11 and PACCAR MX-13

The post 2021 PACCAR MX Engines Unveiled: Gives Operators Better MPGs, New HP Rating, and More Durability appeared first on NextTruck Blog & Industry News - Trucker Information.

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These sheets ain't goin anywhere

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A Visit with DriverCheck’s Jeremy Thiel

We learn about Jeremy Thiel who is the marketing manager for DriverCheck in Ontario Canada. This interview is a little more unique in that the host is going to also draws his caricature while he learns about Jeremy and his career. lots of laughs in this episode which was done before the pandemic began.

DriverCheck is a leader in drug and alcohol, cognitive, and workplace testing helping employers have a safe workplace for their staff. Learn how DriverCheck can help you be safe at www.drivercheck.ca

About the Show

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

LISTEN TO LEAD PEDAL RADIO at www.LeadPedalRadio.com

The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

Join The Lead Pedal Podcast Fan Club where are loyal fans get first chance at specials, discounts on merchandise and much more.The club is free to join and you can learn more at www.theleadpedalpodcastfanclub.com

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Story by:  Alan Adler at FreigtWaves       Scaling is a priority but not thinking about going public — yet   Sweden-based Einride, whose driverless and cab-less freight pods (trucks) run on electricity, has raised $110 million in a Series B funding round. First-time investors include Soros Fund Management LLC; Singapore’s Temasek Holdings Ltd.; […]

The post Driverless, cab-less truck builder Einride raises $110M to expand in the US and Europe appeared first on iTrucker | Transforming Trucking.

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Sunset on the Atchafalaya Swamp (Did I spell it right?)

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Featured Truck of the Week Earl Paddock Kenworth

Today’s truck is a cool Kenworth from the Big Rigs Truck Show. Each week Bruce picks a cool truck from the many truck shows he attends. Hearing about them is one thing, seeing them is another. Check out this cool ride!

Check out the video on this featured truck by clicking here

This episode is sponsored by Bison Transport with many opportunities for truck drivers in their fleet across Canada. You can learn more about Bison and the opportunities available http://fuelyourjourney.ca/  or call 1-800-527-5781 #fuelyourjourney @BisonTransport

About the Show

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

LISTEN TO LEAD PEDAL RADIO at www.LeadPedalRadio.com

The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

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My first rig from 7 years ago.

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Story by:  Clarissa Hawes, Senior Editor, Investigations and Enterprise at FreightWaves.com     A former trucking company owner was recently indicted by a federal grand jury in New York in an alleged conspiracy to defraud the Federal Motor Carrier Safety Administration (FMCSA) about the company he controlled and affiliated entities. Tony “Anatoliy” Kirik, 39, of […]

The post Former trucking company owner indicted in an alleged conspiracy to defraud the FMCSA appeared first on iTrucker | Transforming Trucking.

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Pro tip: holding any of these light buttons down in newer Freightliners will make them work like dimmers.

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Colonial Pipeline’s operations are getting back to normal rapidly, with the company saying Thursday morning that deliveries of petroleum products have “commenced in a majority of the markets we service.” The reaction in commodity markets undercuts the suggestion of recent days that the Colonial outage was not having a bullish impact on ultra-low sulfur diesel […]

The post Colonial pipeline starts returning to normal, $5 million ransom was paid to hackers according to sources appeared first on iTrucker | Transforming Trucking.

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Everyone asking about GPS's reminded me to upgrade mine. The display was getting a bit rough.

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[caption caption="Optimal Dynamics contends that truckload and dedicated fleets rely too much on optimization built around known constraints and not enough around the ability to adapt to unknown variables. Photo credit: Shutterstock.com."][/caption]A logistics technology startup aiming to improve the coordination of supply chain assets announced on Thursday an $18.4 million round of venture...

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Onboard technology from Lytx®, a leading provider of machine vision and artificial intelligence-powered video telematics, is now available on all model-year

The post Volvo Trucks and Lytx Partner to Boost Safety and Performance with State-of-the-Art Video Telematics appeared first on NextTruck Blog & Industry News - Trucker Information.

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Story by: John Kingston at FreightWaves   Racetrac, Love’s and Pilot Flying J release list of stations with gasoline and diesel outages due to Colonial Pipeline shutdown   Major fuel suppliers in the Southeast are starting to list an increasing number of outlets with no diesel supplies as the shutdown of Colonial Pipeline heads into […]

The post Diesel shortages starting to rise in Southeast after Colonial Pipeline closure appeared first on iTrucker | Transforming Trucking.

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[caption caption="Trucker Tools has access to a network of 1.3 million drivers through an app it provides free to independent drivers and small fleets. Photo credit: Shutterstock.com."][/caption]Brokerage software provider Trucker Tools has integrated its instant truckload booking feature into MercuryGate’s transportation management system (TMS), yet another example of brokers and TMSs combining...

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[caption caption="sennder has consolidated a number of European brokers to create a digitally-oriented freight platform connecting carriers with shippers. Photo credit: Shutterstock.com."][/caption]Fast-growing European freight broker sennder has acquired Dutch competitor Cars&Cargo, a broker that manages a fleet of 240 dedicated trucks in France and Benelux region. Berlin-based sennder is a digitally native broker, analogous to Convoy or Uber Freight in North...

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Story by:  Clarissa Hawes, Senior Editor, Investigations and Enterprise at FreightWaves     Part 1 of a two-part investigation into an alleged double-brokering scheme from Southern California Frustrated with freight brokers and carriers being looted by a sophisticated network of load-board scammers posing as legitimate companies, Joe Howard created a spreadsheet to track a list […]

The post Freight fraud: Burgeoning double-brokering scheme appeared first on iTrucker | Transforming Trucking.

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The Colonial Pipeline said Wednesday it is resuming full operations but may take several days to get back to normal.

The restart began at 5 p.m. Wednesday, it said, a little more than five full days after the company first announced it was the target of a cyberattack and was shutting down. The line carries more than 2 million barrels per day of petroleum products, including gasoline and diesel, from the Gulf Coast area to the Southeast, Mid-Atlantic and Northeast.

“Some markets served by Colonial Pipeline may experience, or continue to experience, intermittent service interruptions during the start-up period,” Colonial said in its statement. “Colonial will move as much gasoline, diesel and jet fuel as is safely possible and will continue to do so until markets return to normal.”

The announcement Wednesday marks the beginning of the end of the Colonial saga that saw gasoline lines pop up, stations close and the federal government taking steps to alleviate problems caused by the shutdown, including granting an hours-of-service waiver to drivers involved in moving emergency fuel supplies.

Colonial’s announcement was something of a surprise. Earlier in the week, it had said it might be able to resume operations Friday. On Tuesday, Secretary of Energy Jennifer Granholm said at a White House press briefing that Colonial had told her it would be in a position to confirm the Friday reopening by Wednesday. Instead, it not only confirmed the reopening; it moved it up two days.  

The announcement came after an eventful day in market reaction to the pipeline shutdown. Some of the developments may turn out to be moot, but others may continue to be a factor until supplies start getting back into the system.

— While information on the number of diesel outages has been more difficult to come by than data on gasoline shortages — thanks mostly to the widely watched information coming out of the Twitter feed of GasBuddy — Racetrac is providing a detailed list of what supplies are available through its network of almost 750 gasoline stations and convenience stores. At approximately 3:30 p.m. Eastern time, the company’s station-by-station breakdown listed more than 100 outlets with no diesel availability. At the beginning of the day, it was about 65. In a midday update published by Pilot Flying J, it listed five truck stops as having no diesel and two that did not have gasoline or diesel. Those same numbers were in place Tuesday evening. But in the fluid nature of this supply squeeze, the lists of truck stops that were out had partially changed overnight, with some outlets that had no supply Tuesday no longer on the list, replaced by new ones that had run out. At Love’s, a list of outlets with no diesel that stood at three Wednesday morning had risen to eight by midafternoon Wednesday. Additionally, a list of outlets that were at risk of running out of supplies of gasoline or diesel — which fuel was at risk was not specified — had grown considerably since the morning.

— At a press briefing pulled together Wednesday afternoon by key trade groups in the petroleum supply chain, Rob Underwood, the president of the Energy Marketers of America, said a request has been submitted by the groups to widen the HOS waiver to a nationwide waiver for those involved in the transport of fuel. “This is a severe issue across the country, and the best thing the Biden administration could do is a national hours-of-service waiver,” Underwood said.

— One of the more featured individuals on the call was Ryan Streblow, interim president of the National Tank Truck Carriers. It is his member companies that are taking fuel from terminals to retail outlets and are now being called upon to move fuel even greater distances than normal. The Tank Truck Carriers made news several weeks ago when it chimed in on the issue of an inadequate number of drivers, specifically in his group’s area of activity. The Colonial shutdown has only exacerbated the situation, he said. Tank truck drivers previously might do a “turn” of roughly 120 miles in length. “But now they’re being asked to do 200- or 300-mile turns, so we have delays,” Streblow said. He said the group’s petroleum carriers are “doing everything they can,” but “safety comes first.” Earlier in the day, Patrick DeHaan, the head of petroleum analysis at research firm GasBuddy, said he had not seen significant drops in supply at the wholesale depots, known as the rack. “This seems to be turning into a not-enough-truck-drivers-to-get-it-there story,” he tweeted.

Streblow recapped the situation with tank truck drivers, which reflects what is going on in all driver categories. Fuel sales are about where they were in 2019, he said. In between, “as we went through 2020, we had an exit of petroleum truck drivers from the industry as the American people stopped traveling,” Streblow said. Some were furloughed; others retired early. CDL schools stopped producing new hazmat drivers. The number of petroleum drivers is down about 10% compared to two years ago, carrying roughly the same amount of fuel as 2019 before the Colonial shutdown. 

But the demand for their services has soared in recent days. Ryan McNutt, the CEO of the Society of Independent Gasoline Marketers of America, said many of SIGMA’s locations might only get a delivery every two days in the past. “But now you’re seeing several days worth of product move in a couple of hours, and to try and refill the tanks becomes extremely challenging,” McNutt said. 

— Whether commodity market prices are being impacted by the shutdown is not easy to determine. The price of ultra low sulfur diesel on the CME commodity exchange rose Wednesday by 1.36% to $2.0695 a gallon. But if that was being driven by the Colonial shutdown, the price of RBOB gasoline should have been up by roughly the same amount. It wasn’t; the price of RBOB was up just under 1%. The price of global benchmark Brent crude was up more than 1.1%, and its market would be weakened by the shutdown should refineries start to cut runs with no place to take their product. ULSD prices Wednesday were impacted by the weekly Energy Information Administration inventory report, which showed ULSD inventories at their lowest level in a year. However, the weekly inventory numbers were not far off their five-year average for the first report of May.

More articles by John Kingston

Diesel outages starting to rise in Southeast on back of Colonial closure

Renewable fuel requirements threaten to play bigger role in diesel price

Jobs report shows getting drivers into the pool remains a struggle

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DrivrzXchange, an online car marketplace platform, has reached an agreement with ACERTUS to facilitate the pickup and delivery of all cars bought and sold on DrivrzXchange.

Under the agreement, ACERTUS will pick up vehicles acquired or sold on DrivrzXchange and deliver them directly to the purchasers’ destination, anywhere in the United States. ACERTUS will also deliver vehicles to auto dealerships that use DrivrzXchange.

DrivrzXchange, launched at the end of March, is the online marketplace for Burlington, Canada-based PowerBand Solutions (TSXV: PBX).

“ACERTUS is excited to partner with the PowerBand team,” Trent Broberg, ACERTUS CEO, said in a statement. “We not only share the same vision of simplifying and streamlining automotive logistics through powerful technology solutions but have a strong desire to help move inventory faster, particularly at a time when buyers and sellers need it the most.”

St. Louis-based ACERTUS is a technology-enabled automotive logistics and services provider.

“This partnership lets DrivrzXchange expand across the U.S. with facilitating locations in all 50 states,” said Darrin Swenson, COO of PowerBand Solutions and D2D Auto Auction.

D2D Auto Auction is co-owned by PowerBand Solutions and Arkansas-based financier Bryan Hunt, director of J.B. Hunt Transport, in a 50-50 partnership.

DrivrzXchange aims to be a simple, transparent platform to assist consumers with selling or buying a vehicle. DrivrzXchange is being piloted in northwest Arkansas. It will be strategically rolled out across the U.S. in the second half of 2021, according to a release.

Through the partnership, ACERTUS will connect DrivrzXchange users to a network of preapproved, vetted carriers representing 20,000 tractor-trailers and more than 1,000 truck drivers across North America.

ACERTUS offers automotive logistics services, including vehicle transport, title and registration, vehicle storage, care and maintenance, and compliance. Pickup and delivery services are expected to begin July 15.

“This collaboration builds upon several other recent efforts in our digital transformation journey to enable more automotive sellers with the ability to offer a seamless home delivery experience, which is timely given shifts in customer needs and expectations during this unprecedented time,” Broberg said.

Click for more FreightWaves articles by Noi Mahoney.

More articles by Noi Mahoney

First USMCA labor complaint filed against Mexican auto parts supplier

New report sheds light on USMCA impact on cross-border trade

Hemispheric globalization could boost El Paso trade

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The German shipping line Hapag-Lloyd is not one to bandy about words like “whopping” or “skyrocketed” or “best ever” when describing bottom-line financial results. But the bottom line is Hapag-Lloyd’s first-quarter 2021 earnings before interest and taxes of $1.5 billion equaled the EBIT for all four quarters of 2020. 

For Q1 alone, EBIT was up by $1.36 billion — that’s billion with a B — from $176 million in 2020 to the $1.53 billion this year. 

Earnings before interest, taxes, depreciation and amortization (EBITDA) totaled about $1.9 billion, nearly a $1.4 billion improvement from $517 million in the first quarter of 2020

Hapag-Lloyd said in its earnings release that Q1 net profit “improved” to approximately $1.45 billion. It improved by $1.42 billion from the $27 million profit reported in the first quarter of 2020.

“Group profit of $1.45 billion was already significantly above the full-year 2020 figure” of $1.06 billion, CFO Mark Frese acknowledged on the earnings call Wednesday morning. 

“Q1 in 2021 was really a truly outstanding quarter. We were once again able to improve profitability, strengthen our balance sheet and our cost of capital,” Frese said.

First-quarter revenue improved by about 33% to $4.9 billion, largely due to a higher freight rate, which was up on average by some 38% to $1,509 per twenty-foot equivalent unit (TEU), compared to $1,094 per TEU in Q1 2020, Hapag-Lloyd said.  

CEO Rolf Habben Jansen said on the call that Q1 was driven by “continued strong demand, high freight rates but also operational bottlenecks.” As a result, transport volume was “somewhat unsatisfactory,” down roughly 2.6% to about 3 million TEUs and blamed in large part on port congestion and a lack of available ships and containers.  

He said regarding “increased container usage, it takes 20% more days to get a container back. That means in reality we need 20% more boxes to carry the same amount of cargo. And we also see voyage delays on average have tripled in the first quarter compared to a year ago for every single ship. So what have we done? We did charter some additional vessels. We also deployed extra loaders” and ordered 150,000 TEU of additional container capacity

“Schedule reliability was at an absolute low in the first quarter. I think we’re going to start seeing some improvement there. We’ve seen some first indications that schedule reliability is up a little bit. I would expect that in Q3 we would not be back to normal but we will have made a significant step ahead,” Habben Jansen said. 

He said the orderbook has been “unsustainably low” and Hapag-Lloyd will be in the market for new container ships.  

“There is simply no slack in the global fleet,” Habben Jansen said. “Scrapping has been at a ridiculously low rate. … When we look toward 2030 and 2035, a lot of ships will have to be replaced, and to be a little bit ahead of that curve I don’t think is entirely wrong.” 

Looking ahead, Habben Jansen said that “the second quarter will again be very strong and not so dissimilar to what we have seen in the first quarter. After that we expect a gradual normalization of the results in the second half of the year and how quickly that will go at the moment is very difficult to say. … There is certainly a considerable amount of uncertainty around freight rates, around how quickly some of these operational challenges will be resolved and of course some of the impacts from the pandemic.”  

Demand is difficult to estimate in these times, he said. 

“I think we’ve certainly learned that over the last year, year and a half. I would think that as the congestion eases, then all of us will be able to produce more allocation — or more space. That should help the market to settle down. I hope that we can do it sooner rather than later because I believe it’s in everybody’s interest,” Habben Jansen said.  

Hapag-Lloyd shelling out more than half a billion dollars for containers 

Hapag-Lloyd profit skyrockets with ‘stellar performance’

Hapag-Lloyd CEO: COVID, congestion, container shortage form ‘perfect storm’

Click here for more American Shipper/FreightWaves stories by Senior Editor Kim Link-Wills.

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1966 Footage of Big Red Turbine Truck from Ford Archives

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Man, people are dumb. This happened a few hours ago on the KY/IL border. This job is never boring.

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Bitch, I’m a train!!!

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These are the fun roads.

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Tractor-trailer stuck on side of road on a rainy day.

Periods of relentless torrential rainfall Wednesday will continue to drench parts of the Deep South and Gulf Coast. The region has been getting slammed most of the week so far, resulting in flash flooding.

New Orleans International Airport (ICAO code: MSY) received a daily record 4.1 inches of rain Monday. Daily records of 1.78 and 3.22 inches were set Tuesday in Pensacola, Florida, and Shreveport, Louisiana, respectively. Additional records could be set Wednesday.

A frontal boundary will remain stalled across the South for at least one more day. Waves of energy will travel along the front and, with plenty of moisture and energy in the atmosphere, they will produce showers and thunderstorms. The rain may be heavy enough at times to stop truckers in their tracks due to low visibility. There’s potential for additional flash flooding and road closures, and a few storms may also produce severe winds, large hail or an isolated tornado.

This won’t be a widespread flooding event that would virtually shut down freight flows and supply chains for days or weeks, but temporary delays are likely.

Flash flood watches from the National Weather Service (NWS) remain in place from Beaumont, Texas, to Pensacola. These are the areas most prone to flooding based on forecast precipitation totals and their proximity to sea level. Travel will be messy along the I-10 corridor, as well as sections of Interstates 55, 59 and 65. The watches are set to expire at various times Wednesday afternoon.

Some parts of the region, including the Florida Peninsula and southern Georgia, could see heavy rain Thursday. Two-day totals could exceed 3 inches again in some places. Most of the South should get a chance to dry out this weekend.

Click here for more FreightWaves articles by Nick Austin.

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NOAA uses drones for first time to see remote tornado damage

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Logistics groups ready to help during potentially busy hurricane season

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The American Trucking Associations (ATA) and the Teamsters union agree that truck driver fatigue is an issue, but the two organizations disagree on how to solve the problem.

Testifying on Tuesday at a Senate Commerce committee hearing on freight transportation issues, Lamont Byrd, director of the union’s safety and health department, told lawmakers that a big part of the problem are the changes made to the hours-of-service (HOS) regulations last year, which he says is resulting in drivers working more than 60 hours a week and often more than 14 hours per day.

The Teamsters are appealing the HOS changes in federal court but in the meantime would like to see a suspension of the changes included in the next surface transportation reauthorization.

“I think we need to revisit the hours-of-service regulation, and we need to look at this from the perspective of the impact that it makes on driver health and the ability to get restorative rest,” Byrd said. “They allow too many hours for drivers to work each week.”

ATA President and CEO Chris Spear acknowledged that while driver fatigue is a problem, “we’re not out there pounding the pavement for an hours-of-service suspension. We have a driver shortage, and to have a suspension of hours of service and work our drivers even harder is going to exacerbate the problem.”

Spear pointed out that two-thirds of accidents involving trucks are actually caused by passenger vehicles, according to federal statistics, with speeding and texting the leading causes.

“So as we look at this panoramically, you have to deal with tired drivers, you have to deal with keeping the hours in check,” he said, noting that the federal mandate of electronic logging devices does that by making certain drivers stay within their legal hours. However, “we have a long way to go in terms of really bringing the overall fatalities down.”

The hearing was a chance for the freight transportation industry to lay out priorities and concerns as lawmakers debate the Biden administration’s multi-trillion-dollar infrastructure package. In addition to trucking, witnesses included representatives from the port and rail sectors.

“We’re getting beat on infrastructure spending, particularly by China,” testified Chris Connor, president and CEO of the American Association of Port Authorities (AAPA). Connor said that his association was in the early stages of producing a white paper called “Staying a Superpower.”

“Our early analysis shows that when it comes to public spending on all things related to waterborne transportation, China outspends the U.S. by a measure of 2-to-1. I think all the problems we’re experiencing right now are a function of decades of underinvestment in port and intermodal connections to move freight.”

Railroad Rehabilitation and Investment Financing (RRIF) loans, developed to help railroads with financing rail projects, have “never quite gotten there” in working out for smaller railroads, testified Chuck Baker, president of the American Short Line & Regional Railroad Association.

Baker said he supported a bill introduced by Sen. John Thune, R-South Dakota, to help short lines participate in RRIF loans, including streamlining the application process, extending the length of the loan terms and increasing flexibility on collateral requirements.

Baker also underscored railroad opposition to any legislation that increases current truck size or weight limits.

“Any increases and exceptions to current federal limits would further subsidize freight highway transportation, alter the economics of freight shipping and would result in a shift from freight rail to highway transportation, which would impact the environment and the public infrastructure paid for with taxpayer dollars,” Baker testified in written comments.

Click for more FreightWaves articles by John Gallagher.

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Story by: John Gallagher, Washington Correspondent at Freightwaves   Jones Act waiver process underway to assess availability of US ships for pipeline replacement cargos   The U.S. Department of Transportation (DOT) is assessing if American tankers can meet emergency fuel demands caused by the Colonial Pipeline shutdown or if foreign ships will be needed to help fill […]

The post US considering foreign tankers to move domestic fuel supplies in a wake of Colonial Pipeline shutdown appeared first on iTrucker | Transforming Trucking.

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Derek Leathers new chairman at Werner

Transportation and logistics provider Werner Enterprises (NASDAQ: WERN) announced Tuesday after the market close that its board has approved a planned transition in leadership.

The company’s founder and former chairman, Clarence L. “CL” Werner, has been named chairman emeritus “in recognition of his longstanding leadership.”

Derek Leathers, CEO and president, has been appointed chairman of the board. He took on the role of vice chairman when the succession plan was announced nearly a year ago.

Leathers has a 30-year career in transportation and logistics, logging more than 20 years with Werner. He took the helm, running daily operations at Werner, in 2016.

“I created this company when I was 19, with just one truck, and I’ve watched as Derek has continued to grow Werner Enterprises,” said CL Werner. “Hiring Derek was one of the smartest decisions I’ve ever made, and I know the company will continue to thrive and flourish under his leadership, along with the entire management team.”

Today, the Omaha, Nebraska-based company is one of the nation’s largest truckload carriers, with 7,800 trucks generating nearly $2.5 billion in annual revenue.

“Werner Enterprises was a company built by a driver, for drivers, and I’m honored to continue CL’s legacy,” said Leathers. “One of the reasons the company has remained successful is because of CL’s respect for professional drivers. We couldn’t keep America moving without them, and he understands their importance. His integrity and his ability to connect with our drivers is why he is admired by so many.”

Click for more FreightWaves articles by Todd Maiden.

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A tractor-trailer from Canadian trucking company Titanium Transportation Group

Titanium Transportation Group (TSX-V:TTR) reported record revenue in the first quarter on Tuesday as the Canadian firm’s U.S. brokerage business and newly expanded cross-border trucking fleet delivered growth on two fronts. 

The Ontario-based company brought in CA$85.7 million ($70.8 million) in revenue during the quarter — an increase of over 93% from a year ago. Net income rose by over 80% to CA$1.17 million, or 3 cents per share, while earnings before interest, taxes, depreciation and amortization (EBITDA) rose by over 65% to CA$7.5 million.

Titanium’s U.S. brokerage business continued its standout performance. It was largely responsible for the revenue in its logistics segment increasing by over 164% to CA$47.5 million, while EBITDA jumped by over 600%. 

The company opened its third U.S. brokerage office in February, in Chicago. The lean operations, which include locations in Nashville, Tennessee, and Charlotte, North Carolina, have allowed Titanium to tap into the much larger domestic U.S. freight market with relatively small investments. 

“We are excited about the significant growth opportunities in the U.S. where we can apply our proven business model, technology and expertise to deliver enhanced, sustainable performance and create long-term shareholder value,” CEO Ted Daniel said in a statement.

The trucking side also had a strong quarter from a revenue perspective, increasing by nearly 42% to CA$39.2 million. CA$12 million of that revenue came from its CA$60.5 million acquisition of ITS Group, which closed during the quarter. 

However, the trucking segment posted a small operating loss for the quarter of CA$600,00 on the lower margins connected with the ITS acquisition. The deal added over 300 power units to Titanium’s fleet, which is now within striking distance of the 10 largest in Canada. 

Titanium is integrating ITS and expects that margins will normalize during the second half of the year. 

Daniel will discuss the results in a conference call with financial analysts on Wednesday morning.

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The trucking industry faces numerous regulatory challenges as it conducts daily operations to move cargo across the country. Many of these regulations are designed to establish safety standards, while others focus on employment-related aspects of the transportation sector. During the Trump Administration, rules governing worker classifications were adopted; under the new Biden Administration, two of these rules may be reversed. Just as trucking insurance protects transportation companies against certain operational and liability risks, understanding the ramifications of the rule reversal can help protect truckers from expensive penalties.

U.S. Department of Labor Rules

Published in the Federal Register at the end of the Trump Administration, the U.S. Department of Labor (DOL) created two new rules governing worker classifications. The two rules are:

  • The Joint Employer Rule – governing joint employer status when an employee works for an individual employer but his/her work also benefits another individual or entity.
  • The Independent Contractor Rule – determining when an employee can be classified as an independent contractor.

Both of the Trump-era rules fall under the Fair Labor Standards Act, which is one of the primary employment practices laws in the United States. These two rules are important to the trucking sector because many truck drivers fall into certain employee classification categories, such as truckers working jointly for two or more entities or who are owner/operators who contract independently with other companies such as freight forwarders or cargo brokers. Classification of employees may necessitate additional or revised coverages by trucking insurance, which can mean unexpected costs for trucking companies.

The Joint Employer Rule

In January 2020, the DOL issued the Joint Employer Rule, which went into effect two months later in March. Immediately, the validity of the rule was challenged by state attorneys general, and the U.S. District Court for the Southern District of New York invalidated much of the rule in September 2020. The District Court’s decision is currently under appeal.

The Biden Administration has moved to rescind the rule, arguing that it goes against both the Fair Labor Standards Act (FLSA) and the DOL’s prior guidance on joint employer classifications. In April 2021, public comment on the proposed rule reversal closed. It is unclear whether the District Court decision and subsequent appeal will affect the rule’s future.

The Independent Contractor Rule

January 2021 saw the publication of another Trump-supported DOL rule, this time one that would reclassify certain employees as independent contractors. The rule was supposed to take effect at the beginning of March 2021. Within hours of Biden’s inauguration in January, the White House Chief of Staff Ron Klain issued a memorandum freezing pending regulatory actions until March 21. Just a few weeks later, the DOL published a notice delaying the effective date of the Independent Contractor Rule until May while inviting public comment about the proposed rule. Comments were varied, but many business owners came out in support of the rule, which they believed would help establish clear delineations between employees and independent contractors. Despite these objections, the DOL moved to withdraw the rule.

What the Rule Reversal Means for Truckers

Trucking companies have long been in limbo as state and federal laws evolve. Employment laws that aim to change employee classifications can have long-term ramifications for the sector, potentially costing companies more money in licensing and in trucking insurance expenses. For now, the Biden Administration’s push to reverse the DOL rules proposed under Trump are on hold. To better manage the risks associated with these rules or their reversal, truckers must maintain awareness about pending court decisions. Trucking insurance protects against a broad range of risks. By understanding the rules governing employee classifications, trucking companies can enhance the protections of that insurance by avoiding costly regulatory penalties.

About Western Truck Insurance Services

Western Truck Insurance Services is a commercial truck insurance agency with roots dating back to 1954. We have evolved into a highly respected, professionally managed, truck and transportation insurance brokerage. The hallmark of our organization is our desire to provide unparalleled service. We go way beyond what you expect to receive from an insurance brokerage. Equipped with state of the art automation, Western Truck Insurance can provide you with lightning fast truck insurance quotes, customer service, Insurance certificates, and coverage changes. Contact us today at (800) 937-8785 to learn more!

The post President Biden to Rescind Trump’s DOL Classification Laws appeared first on Western Truck Insurance Services.

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On the Road with Bison’s Carrin Cabral

Bruce chats with Bison Transport driver Carrin Cabral about her career behind the wheel and why she got involved in the industry. What’s it like to be a women driver and over the road instructor with Bison Transport. Bison Transport has many opportunities for truck drivers in their fleet across Canada. You can learn more about Bison and the opportunities available http://fuelyourjourney.ca/  or call 1-800-527-5781 #fuelyourjourney @BisonTransport

About the Show

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The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com 

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

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OMG OMG OMG #METOO

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A forklift driver with a pallet, airfreight containers in a row and an aircraft in the background.

The airfreight market is so saturated that companies without precommitments, or the stomach to pay premiums, are having difficulty finding aircraft to move their goods. And import cargo keeps coming, on top of record volumes for air and ocean shipping, further straining an air logistics system stretched by a shortage of equipment and airport labor.

Logistics professionals and analysts say capacity is rapidly tightening as more shippers turn to air for cross-border transport, sending air cargo rates sharply higher. The market is already running at peak levels five months before peak season normally starts. 

Shipping demand is high across the board, from manufacturing and pharmaceuticals to e-commerce, electronics and food products. The IHS Purchasing Managers’ Index for the U.S. reached 63.7 before ticking down last week, showing the steepest expansion for the manufacturing sector since 2007. On a global basis, manufacturing reached a 10-year high in March of 55 (readings above 50 signal growth) and global export orders rose to 53.4 from 51 in February. 

The PMI is a leading indicator for airfreight tonnage, which means that more manufactured goods are likely to be moved by air during the second quarter. 

The International Air Transport Association now forecasts air cargo demand for 2021 will increase 13% from last year and be 2.8% above the 2019 total.

“There has been a big bounce back from the slowdown we saw in March with prices strengthening, driven by demand outstripping capacity in several markets, with some lanes recording higher pricing levels versus the highs seen in 2020,” said Gareth Sinclair, a revenue management adviser at price data provider TAC Index, in a monthly industry update.

The sticking point is the limited number of international passenger flights as travel remains muted over COVID concerns. Long-haul routes typically use widebody aircraft that collectively carry more than 50% of global volumes in their holds. But international travel demand through March was 88% below precrisis levels, with little improvement from the fourth quarter of last year, IATA reported last week. Even though there are about 1,100 pure freighters flying today — about 240 more than at the start of 2020 — it’s not enough to make up for the 39% loss of cargo capacity in passenger aircraft. 

High load factors are a direct indicator of the constrained space for air cargo. Aircraft are 71% filled with cargo, based on a dimensional weight calculation, 10 points higher than in 2019 and 4 points above last year’s level, according to a new report from CLIVE Data Services.

Air cargo volumes grew 1% in April compared to 2019 after dipping 3% in March and was up 84% year-over-year. Growth accelerated in the second half of the month, with demand 6% above the same period two years ago, it said.

Most analysts are normalizing results against the two-year benchmark because 2020 was distorted by a rare pandemic that caused global trade to shrivel when economies shut down for public safety.

Although cargo throughput is nearly the same as in 2019, overall capacity is 18% lower. 

And the capacity gap could widen because international airlines won’t augment their fleets as they normally do for the busy summer season, said CLIVE Managing Director Niall van de Wouw.

For its part, IATA said March air cargo demand exceeded pre-COVID levels by 4.4%, a slowdown from the heady 9% growth in February against the 2019 benchmark, but the highest March demand since measurements began in 1990. IATA also measured capacity at negative 12%. In North America, demand increased 17.5% from two years ago with only a 3.8% in capacity.

The air cargo sector completed its recovery from the depths of the pandemic in January amid a surge in COVID medical and e-commerce shipments. It’s a big difference from the passenger side of the business, which remains depressed notwithstanding pockets of domestic travel resurgence in large domestic markets like the U.S. and China.

IATA’s analysis broadly validates the strength of the air cargo market, but lags CLIVE by a month and uses a different methodology. CLIVE reports on cargo tons sold, while IATA reports on cargo tons flown. The former approach counts each ton once, while the latter does so each time the shipment is transshipped through an intermediate airport and reloaded on another airplane. IATA also calculates volume with a distance component — cargo ton kilometers — so if the share of the long-distance route increases the IATA numbers increase even if the same amount of tons are moved. 

Supply chain challenges are particularly pronounced on major trade lanes. 

Demand from Asia to the U.S. is 44% higher year-over-year, according to freight forwarder Flexport.

Volumes from China to Europe were 18% higher in April than in 2019, with load factors of 95% demonstrating aircraft are completely full. The outbound air flows were influenced by a 32% increase in Chinese exports, by value. Throughput dropped 10% from Europe to North America, but a 40% capacity shortage still resulted in an 87% load factor — 21 points higher than two years ago. In reverse, volumes fell 4% versus 2019, producing a load factor of 69%, or 19% points higher than in 2019, CLIVE Data said. 

The trans-Atlantic routes are especially dependent on the large twin-aisle airplanes used on passenger networks because all-cargo operators tend to focus more on Asia trade lanes.

Rates shoot higher

Shipping rates are steadily climbing with demand outstripping supply in many areas. The China and Hong Kong markets are leading the way on price strength, while others are more dynamic. In some cases, prices are even higher than during the PPE rush of spring 2020 when air cargo capacity worldwide contracted more than 40%. 

The Baltic Air Freight Indices showed an increase of almost 17% in April from March largely driven by China and Hong Kong exports. 

By the end of April, shipments from China/Hong Kong to the U.S. jumped 60% from March to $8.56 per kilo, according to the TAC Index. Prices are up 8% versus last year and 153% versus 2019. The Hong Kong rate is $8.65/kilo compared to $4.91 on March 1 and is approaching the highest level seen last year of $8.81 in May. 

WebCargo data shows rates from Asia to the U.S. climbed as much as 25% last month.

To Europe, airlines are charging $4.89 — nearing the high for the year, but down 92% from 2019. Trans-Atlantic outbound rates to Europe recovered at the end of April, but are still below the March high of $2.13. The Europe-to-U.S. trade lane is more volatile and varies by origin-destination pairs, the TAC Index reported. 

The rate environment is producing large cash flows for airlines, including United Airlines (NASDAQ: UAL) and all-cargo carrier Atlas Air (NASDAQ: AAWW), which generated 74% and 34% higher cargo revenue, respectively, in the first quarter than in 2019.

Some airlines are taking advantage of the big scramble for container space by forcing companies to trade up from basic service to priority, similar to how business class is sometimes expanded at the expense of economy class on passenger flights, the TAC Index said in a regular notice. 

Freighter operators are exacerbating the tight capacity on the trans-Pacific westbound by light-loading aircraft in the U.S. to get them back to China as quickly as possible because of the high rates there, said Edward DeMartini, vice president for North American airfreight development at logistics provider Kuehne + Nagel, during a recent virtual briefing for customers. Normally, all-cargo aircraft load up as much as possible and make a technical stop in Anchorage, Alaska, to refuel. Now, many carriers are only taking 40% of their normal capacity so they can make a direct flight from the mainland to China, he said.

“This has led to less actual capacity available in the U.S.-China lane than is reported in some of the third-party capacity reports and data,” he said in a follow-up email.

Persistent demand imbalances and higher rates will likely encourage carriers to allocate more airlift to the North American market, where yields are higher, and enable passenger airlines to offer more cargo-only flights because the higher operating costs would be covered, Bruce Chan, vice president of global logistics at Stifel investment bank, wrote in a monthly note.

Domino effect

The pressure on supply chains is expected to increase in the coming weeks as more cargo shipments line up to move through an air logistics funnel that’s very narrow. 

Experts are predicting a surge of inbound ocean volumes for the remainder of the year as U.S. companies continue to dig out from last year’s inventory hole created when the global economy shut down for COVID while consumers, flush with cash from federal stimulus checks and savings accumulated during the pandemic, keep spending on merchandise. 

Inventory levels are at their lowest level since 1997 and the inventory-to-sales ratio is near all-time lows. Forward bookings for container shipments are reaching all-time highs, businesses have to reserve slots weeks in advance because there aren’t enough containers and vessels to move all the cargo, carriers are skipping some port rotations and it can take containers a week to clear congested terminals after arrival. 

Transit time for cargo moving from Asia to Chicago is 18 weeks, experts say, and some companies are already locking in orders for holiday purchases to make sure they arrive in time.

Imports at U.S. container ports hit a new record this spring and volumes are on track to beat 2020’s full-year total of 22 million twenty-foot equivalent units (TEUs), which was up 1.9% over 2019, despite the pandemic, according to the monthly Global Port Tracker report released Friday by the National Retail Federation and Hackett Associates. 

The maritime mishap that blocked the Suez Canal for six days and a weeklong strike by dockworkers at the Port of Montreal added to shipping delays. 

What is happening in the ocean space is spilling into airfreight. Automakers and other shippers are converting some shipments normally moved by ocean to air in an effort to avoid the massive backlogs so they can keep assembly lines open and store shelves stocked.

And airfreight capacity is threatening to tighten even more.

Airlines are starting to devote more space to COVID vaccine shipments. Seabury Consulting, part of Accenture, forecasts vaccine shipments moving by air will peak in mid-to-late summer.

Warnings that the air cargo system would be overwhelmed after COVID vaccines were approved for use late last year didn’t materialize because most initial distribution occurred within regions producing the drugs, such as the U.S. and Europe, where truck transport plays a large role. Any exports were in small batches. But as immunization levels rise, more vaccines are being designated for less developed countries. China has recently increased exports of domestically produced COVID vaccines and Reuters reported last week that Pfizer (NYSE: PFE) has begun exporting U.S. vaccines to Mexico.

“We always foresaw that as the distribution in the U.S. [neared its peak] the focus would move internationally. That’s exactly what’s happening and certainly through the balance of the second quarter, and particularly into the third quarter, the volume ramp of vaccine export out of the U.S. will be significant,” Robert Walpole, vice president of cargo at Delta Air Lines (NYSE: DAL), said in an interview.

Delta, he added, expects to be particularly busy supporting vaccine distribution to markets in South America.

This week marks the start of export season for perishables produced in the U.S. Fresh produce is yet another commodity that will now try to squeeze into limited aircraft holds, especially with shippers having difficulty securing outbound ocean containers. And seasonal shipments of corn, soybean and other seeds from South America to North America are in full swing. 

Another potential drain on airlift is the U.S. troop and equipment withdrawal from Afghanistan scheduled to be completed by Sept. 11. Equipment, material and infrastructure is being moved to bases in Europe and the U.S. The military will rely on its own fleet for the majority of the airlift, but in past withdrawals has used commercial partners to supplement their capabilities. Kuehne + Nagel’s DeMartini said Defense officials could  secure Russian-built Antonov An-124 superfreighters operated by Volga-Dnepr Airlines and Antonov Airlines, or possibly specialized 747s, because they can lift heavy pieces of equipment such as tanks and armored vehicles. 

“That is going to have an impact on other project-related capital goods movement around the world and it could mean that those people who would normally use an Antonov, perhaps to move a crane, are going to have to shift their focus to Boeing 747s with nose-load capability, and therefore take some of that 747 freighter fleet out of the normal air market,” he said.

Humanitarian flights pouring into India to deliver relief supplies, such as oxygen machines, for overwhelmed hospitals combating a huge COVID outbreak killing thousands of people per day also represent another draw on capacity. Some flights from Asia are being shifted to India.

Hopeful signs?

Experts say global cargo capacity won’t be restored until international traffic, especially business travel, comes back. European carriers IAG Group (CXE: IAG) and Lufthansa (DXE: LHA) are currently dialing back capacity projections to only 25% and 40% of pre-pandemic levels, respectively because of the limited progress in reopening.

But there are some promising signs the situation could soon improve.

The European Union said it sees the potential to open travel this summer to U.S. tourists that have been vaccinated and officials might even accept paper vaccination cards as proof. EU officials also recommended that vaccinated travelers from low-incidence countries to Europe be welcomed within its borders by the end of May, but no final decision has been made. The U.K. reopened travel for nationals to 12 different locations starting on May 17. The U.S. and the United Kingdom are also discussing how to implement a no-quarantine travel corridor for people who test negative like the one that opened between Australia and New Zealand but was quickly suspended when case counts increased. Italian officials say they want to open borders by the end of May and France has set June 9 as the day for resuming cross-border travel for people with a health pass. 

Hong Kong authorities last month ended quarantine requirements for fully vaccinated local aircrews returning from overseas trips and quarantine exemptions for returning cargo crews have been extended to six countries. The new rules should help Cathay Pacific, a large combination carrier, put more aircraft in the sky after two months of having limited numbers of pilots.

Rail option

Some third-party logistics companies are increasingly using multimodal options and block trains from Asia to get around bottlenecks. 

U-Freight Group said its intermodal rail service between China and Europe, which offers a competitive alternative to airfreight in terms of price and is considerably faster than ocean, 

has picked up volume since the Ever Given was stuck in the Suez Canal. The logistics provider consolidates cargo in Zhengzhou and Shanghai for daily service that operates to and from Malaszewicze, Poland; Hamburg, Germany; and Liege, Belgium.

CEVA Logistics is experimenting with a new train-ferry service from Xi’an, China, to Immingham, U.K., via Kaliningrad, Russia, where the cargo is reloaded on a vessel. The company is aiming for port-to-port delivery times of 18 to 20 days, with final delivery in 25 days. 

CEVA, a division of shipping line CMA-CGM, said it also added a premium express block train from Xi’an to Duisburg, Germany, and continues to develop block train connections from there to other parts of Germany, Spain, Italy and France.

Click here for more American Shipper/FreightWaves stories by Eric Kulisch.

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😍 😍 😍

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Story by: Alan Adler at FreightWaves   Plant in Joliet will convert from warehouse to manufacturing   On its first day of public trading, Canada’s Lion Electric Co. made good on a pledge to expand manufacturing in the U.S., investing  $70 million to convert a partially finished warehouse in Joliet, Illinois, into a plant to […]

The post Lion Electric will build electric trucks in Joliet, Illinois appeared first on iTrucker | Transforming Trucking.

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The second part of Monday’s two-event diesel price day saw the weekly Department of Energy’s Energy Information Administration average retail diesel price rise 4.4 cents per gallon to $3.186.

That is less than half of what commodity and wholesale diesel prices rose during the past week.

The timing of the shutdown of Colonial Pipeline and the weekly survey of diesel prices Monday makes it unlikely that there was any market impact from the line’s closure. Even if there was, by the end of the trading day, the price of ultra low sulfur diesel on the CME commodity exchange rose just 0.3%, to $2.0166 a gallon, following a midday report that the line was likely to come back by the end of the week, at least partially.

However, the increase Monday did complete a six-day increase in that benchmark price of 8.7 cents from the April 30 settlement of $1.9211 a gallon.

The price of wholesale diesel fuel as measured by the ULSDR.USA data feed in SONAR was up 9.5 cents in the past week, increasing to $2.19 a gallon Monday from $2.103 a week ago.

To learn more about FreightWaves SONAR, please go here.

Diesel prices are moving higher as part of the broader wave of commodity prices that has made lumber prices a national story, brought copper to levels never seen before and created fears of a broader inflationary trend. 

However, diesel prices have been strengthening at a rate more than that of crude. Although U.S. inventories of ultra low sulfur diesel are near their five-year average for this time of year, according to the EIA, there are other signs of diesel tightness. The spread between global crude benchmark Brent crude and the ULSD price on CME stood Monday at $16.37 a barrel, the highest level since the end of March 2020.  

The premium of front month diesel over the price 12 months out, a number that is heavily influenced by inventories, remains at levels that suggest some tightness in stocks.

Following two weeks of increases and one week of an unchanged DOE/EIA number, the DOE/EIA price is just 0.8 cents a gallon less than where it was when it completed its record-breaking 20-week run of increases.

More articles by John Kingston

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Over the Road with Jeffrey Ford

Truck Driver Jeffrey Ford joins Bruce on the podcast today to talk about his career over the road hauling specialty vehicles across the country. We caught up with Jeffrey in a stop out in Arizona to catch up on his acting career and his life trucking across the country. Jeff was on the podcast before back in episode 346 which you can listen to here. https://theleadpedalpodcast.com/lp346-trucking-while-acting-with-jeffrey-ford

This episode is sponsored by Groupe Trans West is looking for professional teams to operate out of their Mississauga terminal with excellent employment benefits between Toronto Ontario and California. Find out more at www.groupetranswest.com  or call recruiter Mike Hahn at 416-606-8296

This episode is also sponsored by Chrome Supply Warehouse offering custom parts for trucks and many specials for truckers. You can learn more at www.chromesupplywarehouse.com

About the Show

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

LISTEN TO LEAD PEDAL RADIO at www.LeadPedalRadio.com

The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

Join The Lead Pedal Podcast Fan Club where are loyal fans get first chance at specials, discounts on merchandise and much more.The club is free to join and you can learn more at www.theleadpedalpodcastfanclub.com 

 

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Haha! Some asshole made the other asshole move

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Judges for the Jesse H. Neal Awards, the most distinguished editorial honors for specialized journalism, have named FreightWaves a finalist in five categories in this year’s contest, among them Best Media Brand (Overall Editorial Excellence) and Best Website.

Finalists for the Neals, considered the Pulitzer Prize of business journalism, were announced Monday, and winners will be named during a virtual presentation June 9.

In addition to Best Media Brand and Best Website, FreightWaves is a finalist for Best New Product for its smooth pivot to virtual events after the COVID-19 pandemic struck, as well as Best Use of Video/Webcast and Best Infographics.

“The Neal Awards recognize the best of the best in business media, and FreightWaves takes great pride in the work of our editorial, technical and production staff, as well as our market analysts,” said FreightWaves founder and CEO Craig Fuller. “Being named a finalist in five categories in this highly competitive contest speaks to the professionalism, dedication and industry expertise that our team brings to the job every day.”

For Best Media Brand, the company’s entry notes, “FreightWaves and its American Shipper sister brand report supply chain news and provide expert perspective on the world of freight across a broad spectrum of media platforms.” Those include traditional news articles, webcasts, podcasts, newsletters, social media, virtual events, apps and email.

FreightWaves’ entry in the Best Website category states, “freightwaves.com prioritizes immediacy with a regularly updated news feed and offers an intuitive, visually appealing format that guides visitors seamlessly to their areas of interest. In addition to the most in-depth national and international news from the world of supply chain logistics, subcategories on freightwaves.com zero in on freight-related technology; industry closings and layoffs; earnings reports; the maritime, trucking, rail and air cargo sectors; infographics; wide-ranging podcasts and webcasts; and advice on industry best practices.”

In the Best New Product entry, FreightWaves spotlighted its rapid transition from in-person gatherings to industry standard-setting virtual events in the wake of the pandemic.

“FreightWaves not only made this pivot but created a best-in-class virtual conference experience,” the entry states. “FreightWaves decided early in the process that its virtual events were not going to be a pale imitation of in-person events; they would be a completely new user experience. FreightWaves adhered to television-quality production values, which became a waterfall effect drawing the highest-quality speakers and further enhancing the user experience. The results? Total video impressions for FreightWaves’ 2020 virtual events exceeded 500,000, and total views came to more than 400,000.”

FreightWaves’ webcasts have built a robust following in a few short years since the company’s founding. Among other topics, the company’s Neal Awards entry for Best Use of Video/Webcast highlights in-depth interviews with top-ranking officials from NASA who were eager to share their expert points of view during FreightWaves’ inaugural SpaceWaves virtual forum.

“Livestreamed webcasts adhering to high production values build on the expansive news coverage at freightwaves.com by bringing in additional industry perspectives, as well as insights from FreightWaves’ team of journalists and market analysts,” the entry notes.

For the Best Infographics category, FreightWaves submitted graphics that “harvested the essential elements of a story to present them in a concise, easily understood way by distilling the most compelling facts” from both research and articles in FreightWaves and American Shipper.

Established in 1955, the Neal Awards named FreightWaves a winner in multiple categories last year.

FreightWaves is the leading source for information about the trucking, maritime, air, rail and intermodal freight markets. In 2021, FreightWaves publishes content that drives over 3 million page views and 1 million unique visitors each month.

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Peterbilt Motors Company is excited to unveil today alongside the new Medium Duty Model 535, Model 536, Model 537 and

The post PETERBILT UNVEILS ALL-NEW PACCAR TX-8 TRANSMISSION appeared first on NextTruck Blog & Industry News - Trucker Information.

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Story by:  John Gallagher, Washington Correspondent at FreightWaves, Monday, May 10, 2021   TIA may seek clarification of broker regulations as part of highway bill   The nation’s largest advocate for truck brokers (TIA) is looking to Congress to help clarify regulations with the goal of eliminating illegal dispatching – potential changes that have riled […]

The post Freight brokers want Congress to call out illegal dispatching services appeared first on iTrucker | Transforming Trucking.

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I've got one of them Pixar mom butt's today!

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Proud owners of Mack® trucks will have the chance to be featured in the upcoming 2022 Mack Trucks Calendar. Nominations are

The post Mack Trucks Announces Entry Period for 2022 Mack Calendar Contest appeared first on NextTruck Blog & Industry News - Trucker Information.

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Empty parking lot and this fuckin guy...

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Someone posted this to the FB group created by our company (mega)... they're brave I'll give them that lmao

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Ran into one of googles self driving trucks in Tucson AZ

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Federal regulators issued on Sunday an emergency work-rule exemption for truck drivers and motor carriers as a result of the Colonial Pipeline shutdown.

The shutdown that occurred on Friday and was caused by a cybersecurity ransomware attack warrants a Regional Emergency Declaration and an exemption from Parts 390 through 399 of federal motor carrier safety regulations, according to the Federal Motor Carrier Safety Administration (FMCSA). Those regulations include hours-of-service rules.

“This declaration addresses the emergency conditions creating a need for immediate transportation of gasoline, diesel, jet fuel, and other refined petroleum products and provides necessary relief” for carriers and drivers in 17 states and the District of Columbia that are providing direct assistance, according to the exemption.

“USDOT’s top priority is safety, and while current circumstances dictate providing industry flexibility, FMCSA will work closely with its state and industry partners to monitor driver work hours and conditions for the duration of the exemption,” FMCSA said in a statement.

In addition to the District of Columbia, FMCSA’s waiver applies to the following states: Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas and Virginia.

This exemption is in effect until June 8 or until the emergency is declared over, whichever is earlier.

Colonial Pipeline Co.’s operations team is developing a system restart plan, the company said in a statement Sunday evening. “While our mainlines (Lines 1, 2, 3 and 4) remain offline, some smaller lateral lines between terminals and delivery points are now operational,” according to the company’s latest update.

“We are in the process of restoring service to other laterals and will bring our full system back online only when we believe it is safe to do so, and in full compliance with the approval of all federal regulations.”

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Kenworth’s Chillicothe, Ohio and Renton, Washington assembly plants recently received prestigious 2021 Manufacturing Leadership Awards in Engineering & Production Technology.

The post Kenworth Chillicothe and Renton Assembly Plants Capture NAM Manufacturing Leadership Awards appeared first on NextTruck Blog & Industry News - Trucker Information.

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Same gig, new rig. She's a '22, but I miss my 680 already

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This week’s DHL Supply Chain Pricing Power Index: 70 (Carriers)

Last week’s DHL Supply Chain Pricing Power Index: 70 (Carriers) 

Three-month DHL Supply Chain Pricing Power Index Outlook: 70 (Carriers)

The DHL Supply Chain Pricing Power Index uses the analytics and data in FreightWaves SONAR to analyze the market and estimate the negotiating power for rates between shippers and carriers. v

The Pricing Power Index is based on the following indicators:

Load volumes: Absolute levels positive for carriers, momentum neutral

The Outbound Tender Volume Index (OTVI) slid a few hundred points this week to 15, 049. Volumes are pumping across the country, but it seems routing guides have finally shown signs of improvement. Pair the declining electronic tenders with declining tender rejections, fewer spot volumes, and both contract and spot rates headed lower, the picture of an improving environment can be visualized. 

Declining tender volumes this week may also be a function of the Commercial Vehicle Safety Alliance’s 72-hour safety blitz, a time when many drivers take off and shippers respond accordingly by pushing or pulling freight away from this week. 

Reefer volumes have been tumbling since the index’s all-time high in early March, post-winter vortex. Since the first week of March, ROTVI.USA is down 24% and is currently at its lowest point since mid-February. The decline in dry van volumes over the same period has been less drastic, with VOTVI.USA shedding 6% since mid-March. 

Dry van volumes, driven by consumer demand, remain extremely strong, and the decline this week is more of a combination of Roadcheck Week and routing guide fortification, rather than lower demand. This is evidenced by materially lower spot market volumes in the SONAR data provided by Truckstop.com and anecdotally supported by earnings reports such as ArcBest, which this week announced its seeing double-digit declines in spot volumes flowing through its network. 

Although there are improvements over the road, bottlenecks and disruptions from the oceans will soon impact freight networks once again. The Global Port Tracker from Hackett Associates and the National Retail Federation has revised its already record-high import volume estimates over the next quarter. The freight will keep coming, and it will be fun to watch if carriers’ can keep on keeping up. 

SONAR: OTVI.USA (2021 – Blue; 2020 – Purple; 2019 – Green; 2018 –  Orange)

Tender rejections: Absolute levels positive for carriers, momentum positive for shippers

Carriers are rejecting fewer loads than they were at the beginning of the quarter, but the national average remains just under 25%. It is clear that carriers have made progress over the past six weeks, with each of the trailer types rejection rates falling considerably. Relative reefer capacity has loosened greatly since the polar vortex surged demand for temperature- controlled freight. After topping out above 50% in the first week of March, ROTRI has steadily declined to 40% currently. 

SONAR: ROTRI.USA (Blue); VOTRI.USA (Green)

Nearly every market west of Utah saw relative capacity loosen this week, including the freight-heavy southern California markets. The southeastern markets, including Savannah, Georgia, Atlanta, and Carolina markets also saw tender rejections fall this week. 

SONAR: MAPS

When viewing the MAPS function in SONAR, it seems carrier networks shifted toward the coast this week, with many coastal markets, especially large port cities, seeing capacity relatively loosen over the past week. There is an influx of ocean freight volumes that will be entering truckload networks over the next several months from nearly every port in the country. Carriers that are prioritizing the coasts are setting themselves up for reliable volumes for the foreseeable future. 

SONAR: VOTRI.USA (Blue): ROTRI.USA (Green)

Despite OTRI falling meaningfully for the first time in weeks, I don’t believe it’s due to capacity being added to the market. Rather, it’s because contract prices continue to be rebid up. This is evidenced by spot prices falling considerably over the past several weeks, while overall freight demand has not. Freight demand is not going to abate in the next few months, and there will not be any meaningful addition to fleet capacity in the meantime. This is a carriers’ market and will stay such throughout the summer. 

SONAR: OTRI.USA (2020/21 – Blue; 2020 – Purple; 2019 – Green; 2018 – Orange)

Freight rates: Absolute level positive for carriers, momentum positive for shippers

Both contract and spot rates have peaked for this cycle-within-a-cycle that was induced by severe winter weather. From mid-February to early March, the Truckstop.com national dry van spot rate average popped ~10%, but has given back about half of that handle in the weeks since. As contract rates have been marked up towards spot, rejection rates, and subsequently spot rates, have slid meaningfully. 

SONAR: VCRPM1.USA (Blue); TSTOPVRPM.USA (Green)

The Truckstop.com dry van average did break a streak of consecutive down weeks, rising 1 cent per mile this week to $3.05/mile, inclusive of fuel. Although rates have peaked, I don’t see any indications of strong downward pressure. Spot rates will remain elevated from a historical standpoint for several months, possibly several quarters. Amit Mehrotra of Deutsche Bank is one of the most bullish analysts in the transportation industry. He believes the elevated freight demand and a very strong pricing environment may last throughout 2022 and into 2023.  

SONAR: TSTOPVRPM.USA (Blue 2021; Green 2020; Orange 2019)

Economic stats: Momentum and absolute level neutral

Several economic releases this week are worth noting.

Weekly jobless claims were released Thursday and give us one of the best close-to-real-time indicators of the overall economy.  This week, the data was excellent with initial claims tumbling below 500,000 for the first time amid the global pandemic. This is nearly 100,000 fewer than the previous week, and well below the 527,000 Dow Jones estimate. 

While the jobs market still has a long way to go before it fully heals from the pandemic damage, improvement has accelerated in recent weeks as restrictions on activity continue to be lifted.

Initial jobless claims (weekly in 2020-21)

Source: FRED

Turning to consumer spending, as measured by Bank of America weekly card (both debit and credit) spending data, total card spending (TCS) in the latest week grew 14% over 2019, which is a moderation from last week’s 20% growth rate, but in line with the average over the past three weeks. 

The BofA team released its monthly data ahead of the Census Bureau’s report: Retail sales ex-autos fell 1.9% from March to April, seasonally adjusted. 

There is substantial weekly volatility in the spending data, so it is helpful to further smooth the data and consider the 14 and 28-day moving averages which are currently running at 16.7% and 14.6%, respectively, for the 2-year growth rate. To put this into historical perspective, the average 2-year growth rate from 2012 to 2019 was 7.8%, which means the current pace is well above the historical trend. 

Source: Bank of America

The large disparity in growth rates between income levels is beginning to converge. Since early March, the outperformance has been decidedly amongst lower income households: Households earnings less than $50k are spending 23% more than 2019, while spending among high income earners ($125k+) is up 8.3%.  The outperformance of low income spending is apparent across categories, including leisure such as travel, restaurants and entertainment and durable goods such as furniture and home improvement spending. BofA analysts expect a convergence ahead where higher income households accelerate spending and low income spending moderates. 

Source: Bank of America

For more information on the FreightWaves Freight Intel Group, please contact Kevin Hill at khill@freightwaves.com or Andrew Cox at acox@freightwaves.com.

Check out the newest episodes of our podcast, Great Quarter, Guys, here.

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Truck drivers and fleets have two months to prepare for the Commercial Vehicle Safety Alliance’s (CVSA) annual Operation Safe Driver Week, which is set for July 11-17.

CVSA said inspectors throughout North America will focus on speeding and unsafe driving, including distracted driving, making improper lane changes, failing to use a seat belt and driving while impaired.

“Data shows that traffic stops and interactions with law enforcement help reduce problematic driving behaviors,” CVSA President Sgt. John Samis of the Delaware State Police said in the release. “By making contact with drivers during Operation Safe Driver Week, law enforcement personnel aim to make our roadways safer by targeting high-risk driving behaviors.”

Despite the drop in traffic on roadways in 2020 because of the COVID-19 global pandemic, nationally, traffic fatalities increased, CVSA said.

According to the National Safety Council’s (NSC) preliminary estimates, the estimated rate of death on the roads last year increased 24% over the previous 12-month period, despite miles driven, which dropped 13%. 

The increase in the rate of death is the highest estimated year-over-year jump NSC has calculated in 96 years, according to the CVSA release.

Inspectors will also be tracking reckless or aggressive driving, distracted driving, following too closely, improper lane change, failure to obey traffic control devices, failure to use a seat belt, evidence of drunk or drugged driving during Operation Safe Driver Week.

Speeding, which is the focus of this year’s Operation Safe Driver Week, was the top traffic enforcement violation for both types of drivers. Commercial motor vehicle drivers were issued 2,339 speed-related citations and 3,423 warnings. Passenger vehicle drivers received 14,378 citations and 11,456 warnings for speed-related offenses. 

2020 Safe Driver Week results

The top five traffic enforcement citations given to commercial motor vehicle drivers were:

  1. Speeding/violation of basic speed law/driving too fast for the conditions – 2,339
  2. Failure to use seat belt while operating commercial motor vehicle – 1,003
  3. Failure to obey traffic control device – 617
  4. Using a hand-held phone/texting – 269
  5. Improper lane change – 122

Speeding was the most cited traffic enforcement violation for commercial motor vehicle drivers, according to CVSA. 

During last year’s Operation Safe Driver Week, officers issued 71,343 warnings and citations and 28,486 state or local driver enforcement violations, ranging from speeding to failure to wear a seat belt.

Of that number, truck drivers received 10,736 warnings and citations for traffic enforcement violations. Passenger vehicle drivers received 17,329 citations and 14,792 warnings for traffic enforcement violations, totaling 32,121 warnings and citations. 

Altogether, passenger vehicle drivers and commercial motor vehicle drivers received a total of 21,988 traffic enforcement citations and 20,869 warnings during 2020 Operation Safe Driver Week.

This is part of FreightWaves’ AskWaves series. If you have a question for our editorial team to explore, click here. For more AskWaves articles, click here.

Click for more FreightWaves articles by Clarissa Hawes

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trucking insurance for owner operators

There is no one size fits all solution when it comes to trucking insurance for owner operators. You’ll have different insurance options available based on your haul type, range, level of experience, and driving record. Also, insurance requirements vary by state, so be sure to review your state’s regulations for your specific haul type and needs. We spoke with several trucking insurance experts, and they shared their top tips for choosing insurance as an owner operator.

What Types of Insurance Do Owner Operators Need?

The exact trucking insurance that you will need as an owner operator will vary. The best thing to do is talk to an insurance retailer that specializes in trucking insurance. They will be able to give you details on your specific situation. That said, here are a few basic insurance types to know:

Liability Insurance

Primary liability insurance covers damage to the tractor or trailer, and most owner operators need a minimum of $750,000 in coverage. That number will go up if you’re hauling hazmat or other riskier loads. Adding physical damage coverage to liability coverage can protect against potholes, weather conditions, and similar damage.

Cargo Coverage

Cargo coverage protects the goods that you haul. In the event of an accident, you need to know that the load you’re carrying is covered. Cargo coverage is specific to owner operators who are running under their own authority.

Non-Trucking-Liability (NTL) & Bobtail Coverage

If you are an owner operator who is running under a company’s authority, you will need NTL and Bobtail coverage. NTL covers drivers when they use their truck for non-businesses purposes such as a stop at the grocery store or an outing with friends. Bobtail policies also cover drivers who are returning from a deadhead load while still under dispatch.

David Zahm, Director of New Business at Robley Insurance

If you are partnering with a specific company, David Zahm, Director of New Business at Robley Insurance, encourages owner operators to do their research:

“I would encourage an owner operator to vet a company they’re going to work with. …Ask the trucking company directly, ‘I’d like to see a copy of your CAB report.’”

That information is powerful for drivers. You have to protect your own safety record, and a company with a poor CAB report is a huge red flag.

Passenger Accident Coverage

Passenger accident coverage provides insurance protection for guest passengers in your vehicle. While your passengers may not be part of the nuts and bolts of operating your truck, people are one of the most valuable assets in life. Passenger Accident Coverage helps give you peace of mind when you have someone else in the truck with you.

What Factors Affect Insurance Prices?

Trucking insurance for owner operators varies greatly. The level of insurance coverage that you need will affect pricing, but there are several other factors as well.

Joy LaFrance, Chief Underwriting Officer for One80 Intermediaries

CDL experience plays a big role in being approved for trucking insurance and pricing. According to One80 Intermediaries’ Chief Underwriting Officer, Joy LaFrance, underwriters want to see a minimum of 3 years of CDL experience and a CDL license in the state that you operate. Drivers with less than 3 years of experience may have a hard time finding insurance from a retailer that specializes in transportation. Underwriters and insurance retailers need evidence of a clean driving record and good business management.

One80 Intermediaries’ Chief Underwriting Officer, Joy LaFrance, noted:

“Preferred programs don’t typically take anyone that’s new in business less than 3 years unless they have 5 years prior experience. So the pricing for the first 2 to 3 years could be astronomical until they have proof that their loss history is good, that they are maintaining driver files, and that they are maintaining their vehicle.”

Jeff Ice, Transportation Practice Leader for Risk Strategies

Jeff Ice, the retired Transportation Practice Leader for Risk Strategies, confirmed:

“The only thing that really gives an underwriter some comfort as to what they’re going to insure is experience. So, if there’s no experience, yes there are places you can get insurance, but you’re going to pay the piper.”

An owner operator’s driving record is another factor. A good safety record is critical. Insurance carriers will look at inspection records, hours of service violations, driver fitness tests, logbook violations, and truck maintenance records among other things. They may also look for proper signage and safety features on your vehicle like fog lamps or deer guards.

A final determining factor on insurance price is down payment. If you are able to pay the insurance premium in full, insurance carriers may discount the total cost. The full lump sum is a big upfront cost, but it’s usually cheaper overall.

What Will Your Carrier Provide?

If you are an owner operator partnering with a single carrier or are a lease purchase driver, that carrier may offer insurance. If they do, read the fine print closely to decide whether it is the best option for you.

Ask questions to understand what is and is not covered. The insurance may not cover you while you are not operating under that company’s authority. That includes the time you may be working with other companies or traveling home when you are off duty. In addition, make sure that the carrier offers coverage levels that meet your specific insurance needs. Insufficient coverage will impact your eligibility to haul certain types of freight and can affect your bottom line. When asked about carrier insurance, Chief Underwriting Officer Joy LaFrance shared this:

“When they’re operating under the authority of someone else, what happens is, if [owner operators] leave and decide ‘I’m going to go on my own now,’ they have no history. So they basically are starting over. Unless I can get the data from that motor carrier, with all the claims, by driver, there’s no way to actually assess [owner operator] history.”

LaFrance added that when drivers use a carrier’s equipment and, “are only asked to get a non-trucking liability or bobtail liability, that does not count as primary insurance. We can’t use your non-trucking or bobtail liability for proof that you had no incidents.”

To decide if insurance through a carrier is right for you, think about your future goals. Will you keep expanding your business? Will you eventually run under your own authority and need a good insurance record? If so, you may do better with an insurance plan that is independent of any carriers so you can prove your record.

Where Can You Find Providers?

The best insurance retailers for owner operators specialize in transportation. A generalist won’t necessarily understand all the nuances that you need for the job. Shop around for both price and good coverage. If you are a new owner operator, you may have to rely on generalized national insurance carriers. When possible though, look for specific trucking insurance retailers.

Risk Strategies’ Jeff Ice offered this suggestion:

“As an owner operator just getting into the business, my first phone call would probably be to [OOIDA]. They would be able to turn you on to how to get your authority, do you need your own authority…[They] will be able to give you a lot of direction.”

One of the best ways to find a top trucking insurance policy is to ask owner operators! Find out where they get insurance and what they like or don’t like. There’s nothing better than a firsthand account, and other drivers aren’t trying to sell you on anything. An experienced owner operator is one of the best places to get suggestions.

Robley Insurance’s David Zahm left us with this advice for sustainable growth:

“You’ve got to start one [truck] at a time, and build slowly. … [If you try to grow too quickly,] you’ll end up with a distressed insurance company, and their rates are astronomical, which shrink your margins down…If somebody wants to run a trucking company the right way, then there’s a way to do it, and they have a chance to be very successful.”

Becoming an owner operator is an exciting step, and trucking insurance is a key part of that transition. Successful owner operators build slowly toward long-term goals and focus on sustainable growth. That’s an investment in yourself worth making.

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The post Trucking Insurance for Owner Operators: 4 Tips to Know appeared first on Drive My Way.

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Chart of the Week: Flatbed Outbound Tender Reject Index – USA, Institute of Supply Chain Management – Purchasing Managers Index  SONAR: FOTRI.USA, ISM.PMI

The transportation sector responsible for moving raw materials and manufactured goods throughout the U.S. has hit the proverbial ceiling, meaning the freight market cannot get much tighter than it already has without a structural expansion. The national Flatbed Outbound Tender Reject Index (FOTRI) that measures flatbed truck capacity plateaued through April — hovering around 25% after averaging below 15% through most of the first quarter. 

Last week the Institute of Supply Chain Management (ISM) reported a sequential decline in the Purchasing Managers Index (PMI), falling well short of expectation. The PMI largely measures manufacturing activity and was expected to expand above a 65 in April, but thanks to supply chain limitations and challenges with employment levels it fell to 60.7. 

Flatbed operations are largely centered around but not limited to industrial production and construction activity. The former of which has had a slow and steady recovery, while the latter has had a bifurcation between residential and commercial activity.

As manufacturers come back online, they are finding it more difficult to source raw materials for production. Looking at the components of the PMI, the inventory levels have been contracting at a faster pace through each of the first four months of this year. This component is at the lowest level in index history. Other than surging demand, supply chain constraints upstream have been a big contributing factor. 

Imports and deliveries also slowed this past month. Both of these components have a direct connection to transportation and its limitations at the present time. Essentially, manufacturers cannot keep up with demand because their suppliers are not able to get the materials to them.

Another major component in all of this is that employment growth slowed in April. The most recent jobs report showed a huge gap between openings and applications in the workforce. It is difficult to get anything done if the labor is not available.

In the meantime, the backlog of unfulfilled orders continues to grow at a record pace. This is a good sign for transportation providers expecting to see activity over the coming months, but the longer orders go unfulfilled the higher the chances are for cancellations. 

Capacity and supply chain expansion do not come quickly. Truck orders are a good example of how hard it is to expand infrastructure. Lengthy order cycles and decision processes mean it will be more than a year in many cases before capacity is added, making rapid responses to expanding markets difficult. 

In this circumstance, growth is not just limited by transportation capacity but also goods production. They are connected, though, with one depending on the other in a paradoxical relationship.

The national Outbound Tender Volume Index (OTVI) reflects this ceiling, which appears to be right around a value of 15,700. Tender rejection rates increase at a faster pace closer to this level, meaning that carriers simply cannot keep up with demand. Subsequently shippers do not request much more once it is attained.  

The economic recovery could be much more robust, but it is limited by capacity, production and a population that is reluctant to return to work.

About the Chart of the Week

The FreightWaves Chart of the Week is a chart selection from SONAR that provides an interesting data point to describe the state of the freight markets. A chart is chosen from thousands of potential charts on SONAR to help participants visualize the freight market in real time. Each week a Market Expert will post a chart, along with commentary, live on the front page. After that, the Chart of the Week will be archived on FreightWaves.com for future reference.

SONAR aggregates data from hundreds of sources, presenting the data in charts and maps and providing commentary on what freight market experts want to know about the industry in real time.

The FreightWaves data science and product teams are releasing new data sets each week and enhancing the client experience.

To request a SONAR demo, click here.

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Featured Truck Of the Week Rims Western Star

Today’s truck is a cool Western Star from Dan Milinovic of Rims Transport. Each week Bruce picks a cool truck from the many truck shows or from fans that send their trucks in to the show. Check out Dan’s sweet ride. Hearing about them is one thing, seeing them is another.

Check out the video on this featured truck by clicking here

This episode is sponsored by RIMS Transport who is looking for owner operators and drivers to work cross border operations out of Hamilton Ontario. You can learn more about the opportunities at www.rimstransport.com

About the Show

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

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The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

Join The Lead Pedal Podcast Fan Club where are loyal fans get first chance at specials, discounts on merchandise and much more.The club is free to join and you can learn more at www.theleadpedalpodcastfanclub.com

 

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After a long day of driving, Lakeesha Martin, a veteran long-haul truck driver, decided it was time to end her day at a nearby truck stop and take a shower before finishing up the 1,000-mile trip she had left to deliver her load.

Martin, an owner-operator from Woodbury, New Jersey, told FreightWaves that she secured her truck and headed into the truck stop to purchase her shower. After the loud speaker announced her shower was ready, she said she made her way to her shower door. 

That’s when Martin said she heard whimpering from the shower stall next door. 

Martin, a 26-year trucking veteran, said she pushed the door open to find a beaten woman on the floor, whom she later found had been there for three hours. The woman was covered in blood, her clothes were ripped, her face was badly bruised and her once-blonde hair was stained red. The truck driver said she held the woman and screamed for help.

That moment inspired Martin to write her book, The H.E.R. Method: You Are Precious Cargo, a personal protection guide for truck drivers.

In an interview with FreightWaves, Martin explained why it was important for her to write this book and share the training she received with others in the industry.

“Growing up, I never had a fear of being unsafe because I was taught [personal protection] skills from being the baby sister of five older brothers,” Martin said. “I eventually took martial arts and became a weapons specialist. Because of this training, it was easy for me to be aware of my surroundings, but not all people are competent in self protection. Having to travel the highways and deliver freight makes this book even more needed as drivers can become targets for assault and attacks by predators.”

In this industry, women in particular can be easy targets, Martin said,  but she wanted to create a system for self protection that could help all women, no matter what situation they may face.

“Everything that women face in the trucking industry will also be obstacles that they will face in every aspect of life,” Martin told FreightWaves. “Women are still considered to be the weaker sex and are vulnerable in all industries.”

Her systematic approach, called the H.E.R Method, is a simple way to remember how to be mindful and to approach situations that may become dangerous. The method is named after:

  • HEED: Pay attention to your surroundings and survey the scene
  • EXECUTE: Mentally prepare and plan a route of escape
  • RESPOND: Defend yourself and find a safe place

Martin’s book describes these actions in greater detail and can help women learn self-defense lessons that she developed over her 26-year trucking career. She said there are ways the industry can still improve to help protect drivers on the road.

“[The] pressing issues would definitely be better armed security and proper lighting that covers all of the parking areas, paying special attention to the rear,” Martin told FreightWaves. “[Also] I would implement the option for the showers to be announced inside an app instead of announcing them over the PA system.”

Even with those improvements, she said it is up to every person to learn these life skills.

“At the end of the day, the ultimate responsibility for our protection lies with the individual,” Martin said. “It is the main reason why I took my many years of experience and created this tool to assist others.”

Click here for more articles by Grace Sharkey.

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Diesel markets could be on the verge of a significant upward move when trading kicks off Sunday evening in the U.S. following the closure of the Colonial Pipeline.

The pipeline, which carries diesel, gasoline and jet fuel from the U.S. Gulf Coast area through the Southeast and Mid-Atlantic on their way to a terminus in New York, was closed Friday because of a cyberattack, according to media reports.

A statement released midday Saturday, updating an earlier statement released Friday, said the pipeline had been the “victim of a cybersecurity attack. 

“We have since determined that this incident involves ransomware,” the company said in a statement.

Colonial is a pipeline system with four major parts. According to S&P Global Platts, it carries 1.5 million barrels/day of gasoline on line 1 between Pasadena, Texas, outside of Houston, and Greensboro, North Carolina. Line 2 traverses the same route and carries 1.16 million b/d of distillates, including diesel, heating oil and jet fuel. At Greensboro, line 3 is a mixed line that goes up to the New York area and can carry 885,000 b/d of a mixture of products. Line 4 is a mixed line also, and takes the product to terminals in Virginia and Maryland. 

Source: Colonial Pipeline

Both gasoline and diesel rose more sharply on the CME commodity exchange on Friday, though the news of the cyberattack and shutdown broke relatively late in the trading day and the upward trends had already been in place. The petroleum products moved up more sharply than crude, which would be expected given the possibility of regional short supplies of gasoline and diesel should the closure persist.

While benchmark U.S. crude West Texas Intermediate was up just 0.18%, and international benchmark crude Brent was up 0.28%, ultra low sulfur diesel was up 2.11% to $2.0106/gallon. RBOB gasoline was up 0.75%.

The strength in diesel relative to crude continues a trend in the market that has been occurring for several weeks. The spread between Brent crude and ULSD stood at about $12.40/barrel on April 20. On Friday, it was up to about $15.45/barrel.

If the pipeline outage goes on for any extended period of time, it could create a situation where diesel markets in the Houston area will plummet as supply backs up. But diesel for the huge swath of the nation’s population that resides along the pipeline will be driven higher. That includes cities such as Atlanta, Washington, Philadelphia and New York.

Closing that arbitrage between the Gulf Coast and other parts of the country without a working Colonial Pipeline can be challenging. The economics of trucking fuel elsewhere can turn negative quickly. Shipment by sea on a Jones Act ship can not happen rapidly, with probably too long a timeline to make any impact, barring an extended shutdown.

The Plantation Pipeline begins in Louisiana and runs a course similar to Colonial, though it does not go north of Washington.

Diesel markets already have been trending higher after a period of stability. After settling at $1.89/g on April 14, ULSD on CME has moved up more than 12 cents to its Friday settlement of $2.0106. When it settled above $2/g two days earlier, it marked the first settlement above that level since January 2020.

More articles by John Kingston 

Jobs report shows getting drivers into the pool remains a struggle

Biden administration formally withdraws Trump rule on independent contractors

TA lost money in the quarter but most measurements were improved

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It is no secret that the coronavirus pandemic of 2020 has created significant economic hurdles felt across industries. The commercial trucking sector, deemed essential for transporting medical supplies and consumer goods, fared better than most but still faced driver shortages, supply chain interruptions, and economic downturns. The role of trucking insurance in protecting against business-related risks cannot be overstated. Now, as pandemic restrictions are lifted and the economy begins its slow recovery, a new risk is emerging: the threat of gas shortages. Truckers must understand the factors leading to fuel shortages, supplementing the risk management practices that trucking insurance supports.

A Looming Gas Crunch?

For over a year, travel has been restricted across large parts of the United States. People were not allowed to travel or were hesitant to hit the road for fears of viral infection. As COVID-19 vaccines have become available and infection rates are slowing, travel restrictions have been lifted for millions of people.

Transportation industry analysts suggest that travel plans may be hampered this summer due to a looming gas crunch. Gas stations across the country are bracing for supply shortages, potentially putting an end to the travel plans for millions of Americans. The reason behind gas shortages is not a lack of petroleum production, but one of available truckers to haul fuel.

According to National Tank Truck Carriers, the tank truck industry’s advocacy group, driver shortages range from 20-25%. While other transportation sectors have experienced driver shortages due to infection, attrition, and economic factors, qualified tank truck drivers are in short supply. Not every trucker can operate a tanker; tank truck drivers must undergo rigorous training and certification. These additional regulatory hurdles have contributed to shortages of qualified drivers, thus exacerbating the potential for fuel shortages. As the pandemic took hold of the American workforce, driver training schools were closed. The drivers who would now be completing their training and certification are simply not materializing to ease the strain on fuel supply chains.

Trucking insurance is another factor in the driver equation; tank trucking companies are often required to carry additional liability insurance protections, and the costs of those policies are increasing. As a result, many tank truck companies are dialing back services until more drivers are able to transport fuel and insurance issues are resolved.

Fewer Drivers, Higher Prices

One of the ripple effects of a fuel truck driver shortage is the possibility of cost increases at the pump. Demand for gasoline has already reached near pre-pandemic levels, and with the summer travel season fast approaching, demand will skyrocket. Hotel and airline booking are down nearly 20% from the same time in 2019, suggesting that travelers are planning to drive this summer.

These factors can potentially contribute to localized fuel outages. As fuel outages are reported, industry watchers fear this could lead to fuel hoarding, much as the toilet paper shortage in the early part of the pandemic led to panic buying on the part of consumers. With fewer drivers available to transport fuel, and with more people planning to travel this summer, this “perfect storm” may very well lead to a serious fuel crisis.

Federal Help on the Way?

The Federal Motor Carrier Safety Administration (FMCSA) issued a declaration in May 2020 easing regulatory restrictions on essential truck drivers, particularly those who were directly involved in pandemic recovery. These emergency actions do not apply to tank truck drivers, however. At the same time, a federally-managed driver clearinghouse that went active in 2020 identified truck drivers with drug and alcohol violations on their records, effectively negating a potential driver pool of up to 60,000 individuals.

Fuel industry analysts hope that the federal government will step in to streamline new driver certifications. For now, it is unclear which, if any, restrictions on hauling fuel will be lifted. In the meantime, tank truck operators are relying on trucking insurance to protect their interests. In addition, these companies are raising driver wages to encourage recruitment of qualified drivers. The tank truck industry is a critical part of the recovering economy. Without the intervention of the federal government, fuel shortages that occur in the summer months could affect further economic growth well into the fall if industry analysts are correct.

About Western Truck Insurance Services

Western Truck Insurance Services is a commercial truck insurance agency with roots dating back to 1954. We have evolved into a highly respected, professionally managed, truck and transportation insurance brokerage. The hallmark of our organization is our desire to provide unparalleled service. We go way beyond what you expect to receive from an insurance brokerage. Equipped with state of the art automation, Western Truck Insurance can provide you with lightning fast truck insurance quotes, customer service, Insurance certificates, and coverage changes. Contact us today at (800) 937-8785 to learn more!

The post Gas Shortages Predicted Summer 2021 appeared first on Western Truck Insurance Services.

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On its first day of public trading, Canada’s Lion Electric Co. made good on a pledge to expand manufacturing in the U.S., investing  $70 million to convert a partially finished warehouse in Joliet, Illinois, into a plant to build electric trucks and buses.

At least 745 new jobs are expected to be created over the next three years.

Lion, based in St. Jerome, Quebec, is expected to receive about $490 million after expenses in a business combination completed Thursday with Northern Genesis Acquisition Corp., a special purpose acquisition company (SPAC). Lion is using $90 million of the proceeds to retire debt.

The company began trading Friday on the New York and Toronto stock exchanges under the symbol LEV.

Becoming a player in the electric trucking space after building mostly electric buses, Lion’s customers include Amazon and CN. It purchases battery cells from Los Angeles-based Romeo Power Technologies (NYSE: RMO), another de-SPACed startup.

Investment could grow to $130M

Lion’s three-year investment is part of an agreement with the state. Lion spokesman Patrick Gervias told FreightWaves the total investment could rise to $130 million. 

Vehicle manufacturing in the 900,000-square-foot facility is expected to begin in the second half of the year. The first vehicles are expected in the second half of 2022.  

Annual capacity is 20,000 electric trucks and buses. Lion competes in electric buses with  SPAC-backed Proterra, which this week delivered its 50th Saf-T-Liner C2 Jouley electric school bus for Daimler Trucks North America’s Thomas Built Buses subsidiary. Lion has delivered more than 390 electric vehicles — 90% school buses — since its founding as Lion Bus in 2011.

The additional production capacity will help Lion scale electric bus production as the U.S. expands electric vehicle manufacturing urged by President Joe Biden. Additional incentives for electric vehicles are expected to put them on more consumer and corporate shopping lists.

Lion’s purpose-built electric vehicles have accumulated more than 7 million miles since 2016, the company said.

Lion Electric SPAC wins shareholder approval

IKEA to electrify last-mile delivery in Canada with Lion Electric

Ready to roar: Lion Electric delivers first trucks next month

Click for more FreightWaves articles by Alan Adler.

 

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Saia LTL Freight, a leading national transportation and logistics provider founded in 1924, recently took delivery of two Volvo VNR

The post Volvo Trucks’ Customer Saia Takes Delivery of Two Volvo VNR Electrics appeared first on NextTruck Blog & Industry News - Trucker Information.

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Cyberly thumb

Recruiting drivers is a problem and that has marketers planning to spend MORE on channels like social media and email. So why hasn’t the trucking industry started harnessing the power of its own drivers’ social media presence?

On this episode of Cyberly, Blythe Brumleve talks with Tom Augenthaler of The Influence Marketer about how trucking companies can start working with influencers to help solve a recruiting problem that isn’t going away anytime soon. 

This plus the logistics of delivering flowers on Mother’s Day — how giving flowers got started and how they arrive on your doorstep. 

You can find more Cyberly episodes and recaps of all our live podcasts here.

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Medically Necessary is a podcast by Matt Blois about the health care supply chain — how we get drugs, devices and medical supplies to health care providers and patients.

This podcast is brought to you by Ryder, the only fully integrated logistics & transportation provider in the industry. Ryder’s solutions cover the entire supply chain including warehousing, transportation logistics, e-commerce fulfillment, & last mile. Discover how Ryder can make you ever better at ryder.com.

Many hospital systems saw telehealth visits skyrocket during 2020, and some providers are expecting telehealth appointments to remain well above pre-pandemic levels. That means health care supply chain professionals will need to adjust to the changing ways of seeing patients. 

On this episode of Medically Necessary, Matt Blois looks at what it will take to develop a supply chain that is functional for doctors practicing in hospitals and at home. 

Blois welcomes Teresa Dail, Vanderbilt University Medical Center’s chief supply chain officer, to discuss how she saw her hospital adjust during the pandemic. 

Dail recently started a new company under the Vanderbilt umbrella called CareFluent Connect, which provides medical devices and equipment that patients need after a procedure. 

A big focus of the company is making sure patients can give their doctor feedback about whether the equipment they received is working well. But the company’s focus on providing medical products to patients once they leave a hospital also offers a preview of how the health care supply chain could work for patients using telemedicine as a primary way of seeking care. 

You can find more Medically Necessary episodes and recaps for all our live podcasts here

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Story by:  Clarissa Hawes, Senior Editor, Investigations and Enterprise at FreightWaves     A coalition of trucking companies filed a petition on Monday to force an Indianapolis-based freight brokerage into Chapter 7 bankruptcy proceedings for unpaid transportation services. The involuntary Chapter 7 bankruptcy petition, filed in U.S. Bankruptcy Court for the Southern District of Indiana, […]

The post Trucking companies trying to force freight brokerage into bankruptcy appeared first on iTrucker | Transforming Trucking.

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[caption caption="Shippers' use of less-than-truckload capacity has increased over the last year, but technology options to procure and manage those shipments has lagged behind that demand. Photo credit: Shutterstock.com."][/caption]Widely-used transportation management system (TMS) provider AscendTMS is partnering with US less-than-truckload (LTL) marketplace uShip to give Ascend users direct access to LTL capacity, the companies said Tuesday. The tie-up is another...

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Benefits of Driving with C.A.T. from the Eye of the Driver

Wonder what benefits there are driving for C.A.T. Transport? We outline 10 benefits for driving with the carrier and how you can get involved. Learn why drivers are happy with C.A.T. and how you can also be part of the team. C.A.T. Transport offering flexible work options, pet friendly programs, and is one of the Best Managed Carriers in Canada. Learn more at www.cat.ca  or call 1-800-363-5313

About the Show

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

LISTEN TO LEAD PEDAL RADIO at www.LeadPedalRadio.com

The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

Join The Lead Pedal Podcast Fan Club where are loyal fans get first chance at specials, discounts on merchandise and much more.The club is free to join and you can learn more at www.theleadpedalpodcastfanclub.com

 

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Clean Energy announced several renewable natural gas fueling agreements.

Los Angeles-based port drayage company Pac Anchor Transportation recently added 23 natural gas trucks to its fleet, and they are expected to use 2.5 million gallons of renewable natural gas (RNG) from Clean Energy Fuels (NASDAQ: CLNE).

Clean Energy’s RNG, which the company said reduces greenhouse gas emissions 70% to 300% depending on the source, is sweeping across North America.

After a recent agreement to provide Amazon with RNG for fleets and a stock warrant for up to 53.14 million shares of Clean Energy common stock, Clean Energy shared several new fueling agreements in trucking, transit and solid waste operations Wednesday.

“At Pac Anchor, we’re committed to finding innovative solutions for lowering our carbon footprint,” said Alfredo Barajas, president of Pac Anchor, in a statement. “That’s why we chose RNG trucks, a tried-and-true technology that helps us deliver results in real time for our communities and clients.” 

RNG is a zero-carbon renewable fuel that has the necessary infrastructure, technology, maintenance and trained technicians available today, Chad Lindholm, vice president at Clean Energy, told FreightWaves.

Fueling agreements with Clean Energy identified in the release:

  • Cal Portland: 1 million gallons of RNG will fuel its 150 natural gas truck fleet.
  • Biagi Bros.: 900,000 gallons of RNG will fuel 12 new trucks.
  • Ecology Auto Parts: 420,000 gallons of RNG will fuel 35 new vehicles.
  • EVO Transportation & Energy Services Inc.: Clean Energy stations will be co-branded with EVO Transportation over five years to expand RNG growth.
  • Republic Transportation Group: 200,000 gallons of RNG will fuel its fleet annually.
  • Matheson Trucking Co.: 200,000 gallons of RNG will fuel 16 new tractors.

“While refuse fleets were earlier adopters of RNG as a zero-carbon fuel source following the introduction of the Cummins 9L engine, trucking fleets have taken notice and are now seeing the viability of RNG as a clean and cost-effective solution to [achieve] their environmental goals,” Lindholm said.

RNG is commonly produced from biogas at landfills, so it seems only fitting that solid waste trucks are increasingly being powered by the garbage they move. 

Clean Energy’s expansions into solid waste:

  • City of Pasadena, California: 1.5 million gallons of RNG will fuel more than 50 natural gas refuse trucks and transit busses over a multiyear agreement.
  • Mission Trails Waste Systems: An upgraded station will extend maintenance and operations over multiple years and provide fuel for more than 50 natural gas refuse trucks.
  • Salt Lake County Sanitation: Operations and maintenance services will be provided by Clean Energy, along with a station upgrade to accommodate 60 garbage trucks.
  • Garden City Sanitation: A Clean Energy station will be upgraded to fuel, maintain and service more than 80 solid waste trucks.
  • Atlas Refuel: A station expansion will accommodate 50 natural gas trucks.

Lindholm predicted that all construction contracts for builds and upgrades would be completed by the end of the year.

“Fleets are learning that RNG, together with natural gas engine technology, is a proven solution that can significantly decrease the impact of harmful emissions and reduce greenhouse gas emissions,” Lindholm said.

Click here for more FreightWaves articles by Alyssa Sporrer.

Is Amazon getting into the renewable natural gas business?

GSCW: Is RNG the fuel of the future? — WHAT THE TRUCK?!?

How much carbon does the transportation industry emit annually?

Study: Biodiesel packs major health and economic benefits

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Reddit

I think I'm gonna need an armed escort for this load.

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[caption caption="Perishable shippers frequently rely on brokers to connect them to carriers, but a former Walmart executive wants to provide them direct access without an intermediary. Photo credit: Shutterstock.com."][/caption]A startup that connects produce shippers directly with refrigerated (reefer) truckload carriers has raised a $10 million series A round of funding...

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Reddit

Waiting for the Globetrotters to come piling out

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Reddit

2022 Cascadia with new panel from Mercedes Actros

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A photograph of intermodal containers double stacked on a train.

Hub Group (NASDAQ: HUBG) expects intermodal growth to persist in 2021, and the company sees itself working well with its partners to take advantage of growth opportunities.

TIght truck capacity, escalating fuel prices, a driver shortage and companies’ focus on lowering their carbon footprint are all factors that bode well for intermodal growth in 2021, according to Hub Group President and COO Phil Yeager. These factors also will support Hub Group’s investments in intermodal, he said.

Capital expenditures for 2021 are expected to range from $165 million to $175 million, consisting primarily of investments in areas such as containers, tractors and technology. 

The company plans to add 3,000 containers in 2021, resulting in a net growth of approximately 2,750 after it has retired containers that have reached the end of their life. Hub Group also plans to add approximately 700 tractors to replace old units and support growth in its drayage and dedicated fleets, the company said. 

“All the quantitative and qualitative factors point to growth in intermodal,” Phil Yeager said to investors during the company’s earnings call on Wednesday to discuss first-quarter 2021 financial results.

Company executives are supportive of efforts by its partners, such as Union Pacific (NYSE: UNP), to boost intermodal capacity in places such as Minneapolis and Southern California. Hub Group has a “constructive” contractual framework with Union Pacific, which helps to provide cost visibility and enables both parties to work collaboratively. 

Executives also expect network congestion to continue to ease and capacity to continue to grow as the railroads improve their transit times and chassis become more available.

We anticipate heading into the peak season in a better position, Phil Yeager said.

Hub Group is also watching how AB5 in California plays out. AB5 is California’s law governing the use of independent contractors. An injunction that shielded the California trucking industry from the law was overturned in April.

The company is watching closely how events unfold, said Hub Group CEO David P. Yeager. Since the company uses a fair number of contractors, it is considering different plans, he said. However, although Hub Group has a large company driver fleet in California, it doesn’t support 100% of the company’s needs.

First-quarter 2021 financial results

A “strong freight market” and a 10% increase in revenue contributed to a 30% jump in first-quarter net profit for Hub Group.

Net income for the first quarter of 2021 was $17.2 million, or 51 cents per diluted share, compared with $13.2 million, or 40 cents per diluted share, for the first quarter of 2020.

“Strong freight market conditions, growth with our strategic customers, and our focus on providing a world-class customer experience resulted in 10% revenue growth in the quarter,” David P. Yeager said. “Hub Group is well positioned for 2021 and beyond due to demand in the marketplace for high service levels and cost-effective solutions.”

First-quarter operating income was $24 million, compared with $20 million a year ago. 

First-quarter revenue rose 10% to $920 milion, compared with $840 million in the first quarter of 2020. 

Hub Group’s revenue grew across all its business segments. Intermodal revenue rose 6% to $506 million amid a 2% increase in volume and 4% increase in revenue load. 

Logistics revenue rose 8% to $217 million on growth in the company’s retail supplier solutions services and the addition of NonstopDelivery, offset partly by the loss of some customers.

Truck brokerage revenue rose 30% to $127 million despite a 6% decline in volume. Contractual freight represented 51% of total brokerage volume in the first quarter, down from 64% year-over-year.

Dedicated revenue grew 11% to $69 million on growth from existing and new customers and partially offset by the impact of business that the company exited in the first quarter, according to Hub Group.

Meanwhile, costs and expenses in the first quarter fell slightly to $85 million on lower professional fees, higher gains on the sale of equipment and a reduction in travel expense, partially offset by increased costs resulting from the NSD acquisition and an increase in salaries and benefits related to variable compensation, Hub Group said.

Capital expenditures were $10 million in the first quarter of 2021.

Looking ahead, Hub Group expects diluted earnings per share to be between $3.20 and $3.40 for 2021, with revenue growth in the midteens percentage range and gross margin as a percentage of revenue ranging between 12.5% and 13%. Hub Group also anticipates costs and expenses in 2021 to range from $365 million to $380 million. 

Subscribe to FreightWaves’ e-newsletters and get the latest insights on freight right in your inbox.

Click here for more FreightWaves articles by Joanna Marsh.

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A Look at Equipment with Groupe Trans-West

Groupe Trans-West has some of the best equipment on the road and we find out why it is ordered the way it is and the science behind it to keep drivers comfortable and safe. Groupe Trans West is looking for professional teams to operate out of their Mississauga terminal with excellent employment benefits between Toronto Ontario and California. Find out more at www.groupetranswest.com  or call recruiter Mike Hahn at 416-606-8296

About the Show

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

LISTEN TO LEAD PEDAL RADIO at www.LeadPedalRadio.com

The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

Join The Lead Pedal Podcast Fan Club where are loyal fans get first chance at specials, discounts on merchandise and much more.The club is free to join and you can learn more at www.theleadpedalpodcastfanclub.com 

 

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Demand for logistics space surges

Results of a quarterly industrial real estate survey conducted by Prologis (NYSE: PLD) showed a surge in activity in response to “strong retail sales and inventory restocking.”

After steadily increasing from a reading of 56 in the fourth quarter to 59 in the first quarter, Prologis’ Industrial Business Indicator jumped to a late-April reading of 68, “reflecting increased throughput and indicating strong future demand growth,” the report stated.

The 68 reading was the highest level reached on the index since late 2018.

Chart: Prologis

Utilization was almost 85%, which the report attributed to strong retail sales and inventory replenishment. “Restocking is underway, as seen in elevated port volumes. Retail sales are also up as stimulus efforts and job growth are boosting consumer confidence,” the report added.

“Although strong sales, lengthening delivery times and port congestion continue to drive historically low inventory-to-sales ratios, utilization is on the rise as goods make their way through the supply chain.”

The most recent Federal Reserve data showed the retailers’ inventories-to-sales ratio improved only slightly in February to 1.23x from the all-time low set in January of 1.19x. The inventory dataset remains well below levels seen prior to the pandemic of roughly 1.45x, indicating that merchandise restocking will continue at least in the near term.

The Prologis Research report said demand, across several industries and building sizes, exceeded supply for the second consecutive quarter. Demand equaled 93 million square feet during the first quarter after exceeding 100 million square feet in the fourth quarter, which was a record.

Demand strength was seen across a variety of tenants, namely those engaged in parcel delivery, third-party logistics, and food and beverage products. “Outsized demand relative to new supply is prompting significant competition for new space, with customers placing a premium on quickly securing prime logistics space,” the report continued.

Vacancy dipped 10 basis points to 4.7%, a level not seen since before the pandemic, and market rents were up 2.4%.

The improvement in trends resulted in Prologis raising its forecast for demand and supply to 300 million square feet of leased industrial real estate in 2021. Demand is expected to keep pace with new construction resulting in vacancy of 4.7%, which is close to a historic low. Increased replacement costs and the current supply-demand dynamic will drive rent increases of 6.5%, according to the report.

Construction starts increased 25% year-over-year in the quarter to the highest levels on record. Speculative starts moved into the 80% range after hovering around 70% in 2020. Prologis’ customers were also pre-leasing space ahead of completion given the lack of supply. Prologis said half of its current construction projects have already been pre-leased, which is 10 percentage points higher compared to 2020.

“Strong demand fueled a rise in speculative construction and robust pre-leasing. With completions lagging demand and growing investor interest in logistics real estate, developers are working fast to monetize zoned and entitled land — if they have it,” the report read.

The report cautioned that prohibitive replacement and land costs along with delays procuring steel and timber have lengthened project timelines, “possibly limiting future deliveries.”

“Despite increased starts in recent quarters, robust demand could lead to an acute lack of logistics space in 2021,” the report concluded.

Prologis Ventures is an investor in FreightWaves.

Click for more FreightWaves articles by Todd Maiden.