ATA Presses for a Cap on Diesel Fuel Prices

ATA Presses for a Cap on Diesel Fuel Prices
Sunday, April 6, 2008

On March 27th, the American Trucking Associations (ATA) urged the Bush administration to quickly take measures to ensure that affordable supply of oil is available to the 3.5 million truck drivers and consumers in the U.S. The ATA said as truckers currently face the highest prolonged fuel prices in history, and some motor carriers believe fuel has surpassed labor as their largest expense, the federal government must step in to help bring the price of diesel fuel down.

The ATA recommended the federal government to: stop filling and instead release oil from the Strategic Petroleum Reserve, work with the states’ attorneys general to fight the likelihood of any fuel price overcharge, require all new trucks to install electronic speed limiters set at no more than 68 mph, and set a national maximum speed limit of 65 mph. ATA President and CEO Bill Graves expressed his concern over how increased fuel prices affect the trucking industry as well as the nation’s economy as a whole. Although the trucking industry is doing its best to conserve fuel and limit its consumption, the federal government’s help is still very much needed.

Pressing for immediate action for what is described as a crisis situation, the ATA said it issued letters of late to President Bush, the Department of Energy, U.S. Environmental Protection Agency (EPA), the Federal Motor Carrier Safety Administration, Department of Transportation (DOT), the National Highway Traffic Safety Administration, and the Treasury Department.

The ATA, which represents more than 37,000 member motor carriers, said that the trucking industry is expected to spend a record-high $135 billion on diesel fuel this year, some $22 billion more than last year.

Will the Tax Stimulus Package Uplift the Trucking Industry?

Will the Tax Stimulus Package Uplift the Trucking Industry?
Monday, March 24, 2008

Starting in May, U.S. taxpayers will begin receiving stimulus checks from the U.S. government worth $100 billion in total. Congressionally mandated, the tax stimulus package aims at pushing the economy forward by encouraging consumers to indulge themselves in shopping sprees for clothes, travel, home appliances, and other luxuries. Trucking executives hope that the $100 billion economic stimulus package will improve the overall economy and break the deadlock of the supply chain caused by the increased cost of fuel.

Bob Costello, an economist for the American Trucking Associations, believes that the stimulus package will boost the overall economy, and consequently the trucking industry will see modest growth by the second half of the year. Based on Costello’s calculations, freight tonnage will see an increase of over 2 percent in the second quarter, 1.5 percent in the third, and nearly 3 percent in the fourth. Costello believes that this tax stimulus package is different from the $38 billion tax rebate enacted in 2001 in part due to its obviously much larger number and its built-in income caps, which ensure that it will go to those who are most likely to spend it.

On the other hand, Chaz Jones, Morgan Keegan & Company Inc. analyst, questions whether the stimulus package will ever boost the U.S. economy, believing that, in a $12 trillion economy, it will not have any noticeable effect. With more than half of the freight hauled by U.S. trucking companies coming from the construction, automotive, and retail industries, Jones believes that by next summer these sectors will not see any upturn in business. Jones states that inventories run short out there, and retailers are well aware of the prospects of the consumer and overall economy; a tax stimulus will simply not give much of a boost to sales.

While air freight may get some boost as consumers spend their tax rebate on line, the truckload and less-than-truckload sectors are expected to see big gains that could last up to three or four months at least.

Fuel prices, which as of March 10th saw an increase of 42% over last year, along with concurrent freight slowdown, which is hitting the trucking industry, are putting truck drivers out of work and at a near risk of losing their jobs. Mike Bruns, a Comtrak Logistics president, says what is likely to happen in the days ahead is that freight levels will increase, and drivers will continue to go out of business, resulting in a condition in which drivers are less than freight, and eventually an excess of goods will be out there with no one to haul it.

Facing increased fuel prices, shippers try to use fuel-efficient modes whenever they can. Truckloads are being diverted to the railroads, which are three times more fuel-efficient. Last week, Con-Way Inc. limited its trucks speed from 65 mph to 62 mph in an attempt to save both fuel and the environment. In this sense, the fuel savings will add up, and the trucking industry will be more sustainable and environmentally conscious.

Clean Truck Program Requested Agreement Opposed by the IMCC

Clean Truck Program Requested Agreement Opposed by the IMCC
Sunday, March 16, 2008

An agreement being sought after by the ports of Los Angeles and Long Beach and their terminal operators, aiming at implementing the ports' Clean Truck Programs, has been opposed by the American Trucking Associations' Intermodal Motor Carriers Conference (IMCC), which has filed written comments before the Federal Maritime Commission (FMC) calling for the rejection of such an agreement. The agreement would grant anti-trust immunities to both parties, which would enable them to discuss and settle on the criteria and procedures upon which they determine whether trucks, cargos, and equipment are to be admitted or not to any terminal at the port.

The IMCC has opposed the agreement on the basis that it would be unreasonable under the Shipping Act to let port tenants abuse such a “blockade provision”, which would leave the door open for them to enforce an unlawful concession on passers-by. The IMCC has further stated that such an agreement between the ports and their terminal operators should also be rejected on the foundation that it fails to include or mention motor carriers with a lawful right to access the port by authorizing terminal operators to unlawfully block port drayage operators.

On February 19th, the Port of Long Beach approved its own version of the Clean Truck Program, which does not require port trucking companies to use only employee-drivers. On the other hand, the Port of Los Angeles has been on behalf of the idea that port trucking companies should use only employee-drivers, and the IMCC says that including such a requirement in the Clean Truck Program of the Port of Los Angeles is not out of the question. With its own Clean Trucks plan, the California Air Resources Board is already taking certain measures to ban high-polluting trucks.

The IMCC believes that the ports may claim their role as sole proprietors in an attempt to be exempted from preemption by federal law. The IMCC has argued against such a claim stating that the goals of the ports' Clean Truck Programs are not proprietary in nature as they do not take into account the ports’ obtainment of goods, but instead seek to affect broader social regulation such as the income, health, and well-being of truck drivers.

The above comments filed by the IMCC only seek to convince the FMC to reject the requested agreement between the ports and terminal operators. However, they also provide a further insight into the kind of argument to which IMCC can resort in case of any future litigation.