Recession Leads to Oversupply of Drivers

Recession Leads to Oversupply of Drivers
Sunday Jan 4, 2009

Green Bay firm Schneider National Inc., one of the largest trucking companies in the US, has announced that it will stop training new truck drivers.

Schneider has not limited itself to hiring exclusively experienced drivers since the mid-1980s.

Before the current economic downturn, a nationwide driver shortage prevailed. There was high turnover that drove up pay; thus leaving trucks idle regardless of demand.
This has all changed now as large numbers of trucking companies fail and a greater amount of trucks sit idle. So with fewer options, more truckers are deciding to stay where they are.

According to the American Trucking Association and the Owner-Operator Independent Drivers Association, there is no longer a driver shortage but in fact an oversupply. For Schneider, though, due to the low freight volume, it is hardly worth it to spend approximately $8,000 and 45 days to train new drivers vs. $1,500 and 4 days to orient an experienced driver to their company.

Despite being on a downward trend, however,the American Trucking Association reported an increase in monthly freight tonnage for November 2008. Until the economic tide changes, companies can look forward to greater savings and their pick of
experienced drivers looking for work.

Doubt Cast Over Mexican Truckers' English Proficiency

Doubt Cast over Mexican Truckers’ English Proficiency
Friday, April 04, 2008

Mexican truck drivers, traveling throughout the United States under the patronage of a pilot program created to test how safe Mexican trucks are on U.S. roads, are required by law to demonstrate their English-language proficiency. However, according to a testimony on March 11th at a Senate hearing, U.S. Department of Transportation regulations allow those drivers to answer questions in any language other than English when proving they recognize U.S. highway signs.

Senator Bryan Dorgan, who has always been an opponent of the program, has expressed his concern over such a clear disparity between the legal requirement and that particular regulation, arguing that the Mexican truckers’ English proficiency is an integral component of the safety issue. In addition, he has accused the Bush administration of not requiring Mexican truck drivers to meet the same level of safety standards that U.S. truck drivers meet. Chairing the Senate Commerce, Science and Transportation Committee hearing, which was called to examine the six-month-old pilot program, Dorgan demanded an explanation from Transportation Secretary Mary Peters.

Peters admitted that during border inspections Mexican truck drivers are allowed to use any language that a U.S. inspector understands when answering questions to prove they recognize U.S. signs. However, she proceeded that inspectors determine the drivers’ English proficiency through other questions, such as asking them their names, what their trucks are carrying, and where they are going.

The Transportation Department's inspector general Calvin L. Scovel III told the panel that the road-sign test is only one factor that inspectors take into account while determining the Mexican truck drivers’ English-language proficiency. However, he acknowledged in an issued assessment report that the pilot program still suffers from some serious defects.

William Quade, associate administrator at the Federal Motor Carrier Safety Administration, said after the hearing that inspectors normally wait until Mexican truck drivers have demonstrated their English-language proficiency before they begin to ask them to identify signs. He adds that once the Mexican drivers’ English proficiency has been proven, the inspection needs to be carried on in any language that inspectors and drivers understand.

While opponents of the program have sought to shut it down through legislation and litigation, U.S. transportation officials state that a comprehensive inspection process confirms that Mexican trucks allowed in the program are just as safe as American trucks.

The Bush administration regards the program as a step forward toward more north-south trade between the U.S. and Mexico, a trade which would benefit the economies of both countries.

Plow Truck Drivers Benefit from Snow Season

Plow Truck Drivers Benefit from Snow Season
Sunday, March 30, 2008

Snowing relentlessly, this winter has been one of the snowiest on record. While most people are fed up with the snow, independent plow drivers have another say; they really enjoy the snowy winter.

For plow truck drivers, the more the snow comes down the more money they make. Although snow plow drivers and plow business owners do acknowledge that the snow damages and wears their trucks down, they say that it is very financially rewarding, and its benefits far outweigh its risks.

City snow plow drivers keep streets clear and traffic flowing; independent snow plow drivers keep parking lots and driveways safe.

O&S Trucking Inc. to Open in Ohio

O&S Trucking Inc. to Open in Ohio
March 24, 2008

O&S Trucking Inc., a worker-owned firm based in Springfield, Missouri, said that plans of opening its first branch hub in Springfield, Ohio are afoot, and the company is expected to be fully operational in Ohio by the 1st April.

Brian Underhill, vice president of Ohio operations for O&S Trucking Inc., spoke in a release of the company’s initial plan of opening a branch in Columbus. The company said that such a plan was later ruled out due to the 11-hour dispatch time from headquarters, which, if the law limiting 11 hours of driving in a 14-hour time period changes, could prevent a driver from reaching Columbus in one shift.

Underhill and a fleet manager will take charge of Ohio operations. By the end of the year, a third employee will possibly be hired along with 50 drivers.

O&S Trucking Inc., which currently has 100 employees in Missouri and 300 company drivers, owner-operators and lease-purchase drivers, hauls refrigerated trailers. Its business extends from Oklahoma City in the west to Maine in the east and from North Carolina in the south to the Great Lakes states in the north. Its clients include Dole Food Company Inc., Kraft Foods Inc., Tyson Foods Inc., and Reckitt Benckiser PLC.

Owner-operators Struggle to Keep Business Afloat

Owner-operators Struggle to Keep Business Afloat
Wednesday, March 19, 2008

Trucking’s owner-operators have been hit with high diesel prices, cut loads, and lower shipping rates. The self-employed drivers are almost going bankrupt and seem to be at the risk of losing their jobs.

The housing decline and less consumer spending have cut into loads, and the extra trucking capacity at hand is causing freight rates to spiral downward. In addition, diesel prices, which are always higher in winter, have experienced an astronomical spike, doubling over the past four years.

According to the Department of Labor, nearly 9% of the nation’s 3.4 million truck drivers are independent owner-operators. John Saldanha, who teaches logistics at Ohio State University, said that trucking will be deeply affected if owner-operators ever lose their jobs; the trucking scene will turn into a group of regional and national oligopolies that, once the economy revives, would send shipping prices higher.

On the other hand, business looks far more promising for the large public trucking companies as they have had their stocks climb since January. Big trucking companies, like J.B. Hunt Transport Services Inc. and YRC Worldwide Inc., tend to buy everything from fuel to tractors in bulk; as such, thousands of gallons of diesel are bought at a time on the commodities market to be stored later on.

In the end, owner-operators are left feeling neglected and on the fringe more than ever. In order to survive in the business, truckers call for caps on diesel prices, or tax credits for them and further constraint for intermediaries who broker truck loads.

Annually, rumors of a nationwide truck strike circulate. In January, some truckers kept their trucks off the road for a week in the hope that a week’s strike might be what they need to not ultimately lose their jobs.

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.

Truck Driving No Longer Canadian Males’ Top Drawing Job

Truck Driving No Longer Canadian Males’ Top Drawing Job
Sunday, March 16, 2008

Over the five-year period between 2001 and 2006, a number of changes in Canada’s labor force took place. According to Statistics Canada's 2006 census report on Canada's labor force, trucking, for the first time in decades, is no longer Canada’s largest employer for Canadian males. Replacing truck driving as the most common occupation among males was being a retail sales clerk with reportedly 285,800 men working as retail salesmen. Truck driving came in second with 276,200 men working as truck drivers.

In terms of absolute numbers, the retail sector was the fastest-growing occupation as it saw its numbers increase by 132,300, the largest increase of all occupations. The second fastest-growing occupation belonged to construction and health care industries. Coming in second place, construction trades helpers and laborers saw an increase of 52,300 in their number, with much of the growth coming from British Columbia and Alberta, the former of which is experiencing a hot real estate market due to the preparation for the upcoming 2010 Olympic Winter Games. Cashiers increased by 43,300, a number which, according to Statistics Canada, reflects the growth in consumer spending in retail stores.

In terms of percentage, the oil and gas industry in Alberta, though still relatively small in numbers compared to other sectors, saw an increase of 78% in its numbers of oil and gas well drillers, testers, and related workers to 11,500, the largest percentage increase of all occupations.

On the other hand, a number of occupations showed depreciation. For instance, textile manufacturing saw sewing machine operators decline by 18,300 or 32.7%. Declining as well, over the past five years, was the number of metal fabricators and steel workers.

Data on labor mobility showed that 563,000 people, or 3.4% of the total labor force, moved to a different province between 2001 and 2006, with the highest mobility rates coming from the territories and Alberta.

Due to the increased tendency for older workers to continue working, data showed that, in 2006, those aged 55 and older constituted 15.3% of the total labor force as opposed to the 11.7% they represented back in 2001. Additionally, for the very first time, the median age - the middle value in a sequence of numbers - of the labor force surpassed 40 years, rising from 39.5 years in 2001 to 41.2 years in 2006.

Trucking Companies Hit by Elevated Diesel Fuel Prices

Trucking Companies Hit by Elevated Diesel Fuel Prices
March 13, 2008

Local trucking companies are faced with the ordeal of having to adapt to the constantly fast-climbing fuel prices across the nation.

Rich Ferguson, terminal manager of Brilliant-based Fraley & Schilling Inc., conceded that, with elevated diesel fuel prices, the company’s ability to profit has been deeply affected. However, he said that his company has not resorted to cutting down the number of available trucks like other companies in the tri-state area have. Actually, the company is enjoying a very strong run in business in the area and is actively seeking more drivers.

Still, with diesel prices rising, it has become increasingly difficult for his company to recover those costs. Ferguson added that recent economic conditions are to blame for the decreased demand for trucking services in the Midwest. He expressed his concern over how the weak dollar makes imported goods more expensive and consequently how it is getting in the way of importing more goods from other countries.

Ferguson pointed out that Fraley & Schilling Inc. is indeed facing two problems when it comes to demand. The first of which is owing to the fact that the trucking service is not in high demand as it was before, and this subsequently affects the company’s ability to fix the prices of its services. The second is that the demand for trucking service is usually Truckingsubstandard in some areas around this time of year. The demand for transporting building products, for instance, has waned off at this time of year.

Facing a battle of his own is Joe Stenger, chief executive officer of Barnesville-based J.W. Stenger Trucking, who mentioned that the elevated price of diesel fuel has hit his company. A key component of the company’s variable cost of operation, diesel fuel’s increased cost can be passed along as fuel surcharges. However, erratically fluctuating fuel prices are causing this once stable system to spin out of control. He added that with the fuel surcharge often being lower than it should be, the company’s profits have diminished. Still, the company does not make any fewer deliveries as it transports a wide variety of goods.

Besides passing along fuel surcharges, Stenger is actively conserving fuel. New ways of preserving fuel are being examined, and with no-idle systems and satellites having been set up in each of the company’s trucks, drivers will not have to run their trucks while resting overnight and their performance will be closely monitored as well.

Stenger and Ferguson share the same point of view regarding the fact that elevated diesel costs will not cause shortage of goods, and consumers, they believe, should not be concerned about rationing products. There are still many trucks available to transport goods, and the supply will always be there. Stenger also acknowledged the fact that consumers will have to pay considerably higher prices for living necessities and goods delivered by his company, and these higher prices may prove to be a hurdle for them. Consumers will resort to rationing only when they are unable to pay the goods’ higher prices, and rationing will eventually be common for most families once credit card companies do not step in for help.