HOS driving trucking rate increases, carriers say
By John D. Schulz, Contributing EditorMay 17, 2013
The pending changes in truck driver hours-of-service1 (HOS) regulations will help drive trucking rates up between 4 and 10 percent in the coming year, analysts and trucking executives predict. John G. Larkin, the long-time respected transportation analyst for Stifel Nicolaus, Baltimore, says the truckload sector appears to be right on the cusp of a capacity shortfall, thanks in part to HOS changes coming on July 1. Those changes, the fifth such tweak to HOS regs since 2003, will require drivers to take at least a 30-minute break within eight hours of coming on duty. It also limits the 34-hour restart provision, unless that time off includes two such breaks between 1 a.m. and 5 a.m. It may not sound like much and Washington bureaucrats within the Federal Motor Carrier Safety Administration say the change is both necessary and slight, but truckers and operations personnel working the day-to-day matrix of building full truckloads with sufficient numbers of drivers say the change is meaningful and costly. Todd Spencer, executive director of the Owner-Operator Independent Driver Association (OOIDA) said recently that HOS changes could cost the industry between 5 and 10 percent in lost productivity. Schneider National, the nation s second-largest TL carrier, is privately forecasting HOS will cost the company between 2 and 4 percent in productivity. Truth is, nobody knows for certain until the impact of the July 1 HOS changes are fully digested by the carriers and shipper community. The changes are coming despite a united front of opposition to the new regs. In a rare show of trucking unity, OOIDA joined forces with the likes of American Trucking Associations, NASSTRAC and the National Industrial Transportation League, among others, in opposing the rules. The ATA recently lost a legal challenge as it sought to delay implementation of the new rules, which it estimated would cost the industry in excess of $350 million just in preparation compliance costs, such as reprogramming computers and load matching software in the industry. Some things will have to change, said Mark Rourke, president of transportation services for Schneider National. Depending on city pairs and destination, some freight will have no impact. There are a lot of different numbers. I would put this at between 2 and 4 percent rate increases. It s still another rock in ruck set. It s a big deal, Rourke concluded. It changes our work configurations. Long-haul carriers with lengths of haul in excess of 1,000 miles will see more impact from the HOS changes than carriers with more regional freight in their accounts. Dedicated freight operations might suffer slightly more because they were designed with the idea of maximizing the drivers 11 hours of driving within a 15-hour work day. Effective July 1, that work day becomes effectively 14 and a-half hours or less.
Some truckload executives say privately the loss of productivity will mean more than simply a half-hour lost in on duty time. The 30-minute breaks are a mandated minimum; it s entirely possible some drivers may take longer breaks costing carriers and shippers even more lost productivity. Richard Mikes, managing general partner of Transport Capital Partners and former executive for Ruan Transport, a leading Iowa-based TL carrier, said recently there is no question rate increases will accelerate, at least partially because of the HOS changes. I look for a bump (in rates), Mikes said recently. If there s going to be a pop in rates, it will come sooner rather than later. The reason is tight capacity, Mikes added. Whether the lost productivity costs is 2 or 4 percent, That s a big number when you in as close a balance as we are. In July and August when the normal seasonal pattern kicks up in during the third quarter, we re going to have more than that normal bump-up. Mikes said other new regulations coming out of Washington including FMCSA s Compliance, Safety Accountability initiative is causing carriers to pay more for drivers if they can find them
Drivers are scarce independent contractors are scarcer, Mikes said. There s no two ways around that. But Mikes says it s more than a driver shortage. The trucking industry, he said, is short of mechanics, operations and front office people. HOS is just exacerbating the driver shortage. When the rate increases start is anyone s guess. Carriers had trouble with costs outstripping pricing last year. Analysts say if HOS affects the industry as they believe it will, costs will sharply rise for the second half of 2013. FMCSA rule impacts are already noticeable with respect to shrinking the pool of acceptable quality, compliant drivers. The HOS rule changes may not have teeth until electronic onboard recorders (EOBRs) are mandated next year. That will make enforcement of HOS that much easier and tough to cheat. That in turn will affect capacity, which already is basically at full. On any given day, it s pretty close to equilibrium, Scheider s Rourke says.
Some TL executives say privately the loss of productivity will mean more than simply a half-hour lost in on duty time. The 30-minute breaks are a mandated minimum; it s entirely possible some drivers may take longer breaks costing carriers and shippers even more lost productivity. Richard Mikes, managing general partner of Transport Capital Partners and former executive for Ruan Transport, a leading Iowa-based TL carrier, said recently there is no question rate increases will accelerate, at least partially because of the HOS changes. I look for a bump (in rates), Mikes said recently. If there s going to be a pop in rates, it will come sooner rather than later. The reason is tight capacity, Mikes added. Whether the lost productivity costs is 2 or 4 percent, That s a big number when you in as close a balance as we are. In July and August when the normal seasonal pattern kicks up in during the third quarter, we re going to have more than that normal bump-up. Mikes said other new regulations coming out of Washington including FMCSA s Compliance, Safety Accountability initiative is causing carriers to pay more for drivers if they can find them
Drivers are scarce independent contractors are scarcer, Mikes said. There s no two ways around that. But Mikes says it s more than a driver shortage. The trucking industry, he said, is short of mechanics, operations and front office people. HOS is just exacerbating the driver shortage. When the rate increases start is anyone s guess. Carriers had trouble with costs outstripping pricing last year. Analysts say if HOS affects the industry as they believe it will, then costs will sharply rise for the second half of 2013. FMCSA rule impacts are already noticeable with respect to shrinking the pool of acceptable quality, compliant drivers. The HOS rule changes may not have teeth until electronic onboard recorders (EOBRs) are mandated next year. That will make enforcement of HOS that much easier and tough to cheat. That in turn will affect capacity, which already is basically at full. On any given day, it s pretty close to equilibrium, Scheider s Rourke says. Rourke admitted because there have been so many changes to HOS in the past decade there is some fatigue on this issue. A lot of shippers are saying, `I ll just wait and see what happens and figure out from there. But all the carriers are assuming it s going into effect (on July 1). We re spending the money. We re all there. Carrier officials say shippers have to be prepared to eliminate or reduce as much wasteful freight within a carriers network. Because time is literally money, few carriers will have the luxury of wasting time at a shippers dock once the new HOS regs come on line. Shippers are being very receptive, Rourke said. That s because they re finding if it s wasteful, we re not going to haul it. I can t speak for community at large, but others would say the same thing. That mitigates driver availability. Shippers requiring more time to handle their freight ought to be prepared to may even higher than normal rate increases, carriers say. The market place will penalize those who don t change, they say. John White, executive vice president sales and marketing for U.S. Xpress, the nation s fifth-largest TL carrier, said he was hoping the new HOS changes would be halted by either the courts or Congress. But he conceded recently, It will probably go through. We have some concerns about impact but it s difficult to emphatically state what the overall impact will be, White told LM. We ll be ready to go July 1. We re running test fleets to see what impact will be. But there isn t anyone who can say what certain activities will become more expensive after July 1. A good guess would be that multi-stop freight and that which requires drivers to unload the truck will see the biggest percentage rate increases after July 1. The biggest issue educating the customer and teaching them how to have empty trailer for us when we arrive, he said. Sometimes a trailer is not unloaded in timely fashion. So we have to leave that dock with no trailer. I can t afford that activity any longer. We can t afford that on July 2. Time becomes more critical because we have less of it, White concluded.
References
- ^ hours-of-service (www.logisticsmgmt.com)
Former FBI Director Working With Trucking Cos. vs. Pilot Flying J
KNOXVILLE, Tenn. – Attorney Mark Tate of Savannah, Ga., law firm the Tate Law Group, which has filed a class action suit in Knoxville, Tenn., on behalf of Atlantic Coast Carriers, said former FBI Director Louis Freeh and his Freeh Group has agreed to work with trucking companies that claim they were cheated out of fuel rebates by Pilot Flying J, said The Tennessean.
Freeh’s most recent high-profile job was with Penn State University, which hired him to investigate the Jerry Sandusky child sex abuse scandal, the report said.
The Freeh Group, Wilmington, Del., declined to comment to CSP Daily News.
Louis FreehAtlantic Coast Carriers Inc., Hazlehurst, Ga., filed a lawsuit on April 20 against Pilot Flying J in Knox County Circuit Court in Knoxville. Attorneys charged that Haslam was trying to short circuit Atlantic Coast Carriers’ class-action lawsuit and asked a Knoxville judge to order Haslam to cease contacting trucking firms that may be victims of the alleged rebate scheme. The judge has denied the charge of witness tampering and a request for a restraining order that would have prevented Pilot Flying J from contacting customers.
Tate filed a lawsuit in Knox County (Tenn.) Circuit Court on behalf of Atlantic Coast Carriers against Pilot Flying J.
In a statement posted on its website, Tate Law Group said:
“Over the course of an investigation beginning in May 2011, the FBI determined that Pilot employees had been intentionally defrauding some of its customers by deliberately charging a higher price than what had been contractually agreed upon. According to recordings from inside informants, sales representatives were advised to commit rebate fraud by sending its customers less than they were owed and trained on how to determine which customers would have difficulty discovering the discrepancies. These same informants stated that the company maintained spreadsheets showing the amount owed to customers under their rebate agreements versus the amount actually paid. Federal agents searched the Knoxville headquarters last week looking for such evidence.
“The same recordings revealed that these actions were taken with the awareness and consent of Pilot executives, including CEO James A. “Jimmy” Haslam, III, president Mark Hazelwood, and CFO Mitch Steenrod.
“Atlantic Coast Carriers states through the complaint that they have been damaged because they were induced to purchase diesel fuel at a rate different than what was promised, and paid substantially more than the agreed-upon rate.”
Click here to view court documents1.
A lawsuit filed by Osborn Transportation, Gadsden, Ala., marked the sixth such case2 since federal agents raided3 Pilot’s corporate headquarters in Knoxville, Tenn., on April 15.
Meanwhile, Haslam told a gathering of trucking company executives in Indianapolis on Thursday he had no knowledge of a scheme to withhold rebates, reported WATE-TV.
“Absolutely not. I will say absolutely not,” Haslam said, according to a separate report by The Plain Dealer. “I was not aware of any of this.”
Haslam was in Indianapolis for the 2013 Scopelitis Transportation Seminar, attended by approximately 400 trucking industry executives.
Haslam said his short-term goal is to make any wrongs against trucking companies right and to pay back money owed with interest.
He said there are 5,000 trucking companies involved in contracts with Pilot, and of those only 400 were involved with manual rebates. Of those, 250 saw an adjustment made.
“We are going to have a chief compliance officer. I take the blame for us not,” said Haslam.
He said though the company’s reputation has been damaged, oil companies continue to work closely with Pilot and the company is assuring customers they will continue to have the same high supply of fuel.
Pilot business is down 3%, Haslam said, but he blames that on a shrinking market.
Pilot Flying J has more than 650 retail locations and is the largest operator of travel centers and travel plazas in North America. Its network provides customers with access to more than 60,000 parking spaces for trucks, more than 4,400 showers and more than 4,000 diesel lanes, of which more than 2,800 offer diesel exhaust fluid (DEF) at the pump.
References
- ^ Click here to view court documents (tatelawgroup.com)
- ^ marked the sixth such case (www.cspnet.com)
- ^ federal agents raided (www.cspnet.com)
Deep Sea Export Clerk job at Headford Consulting in Runcorn
Headford Consulting is at present looking to employ Deep Sea Export Clerk on Thu, 16 May 2013 11:30:36 GMT. Job Title: Deep Sea Export Operator Location: Preston Brook/Runcorn Salary: ‘ 18,000 – ‘ 24,000 We are currently recruiting for an experienced Sea Freight Export Clerk in the Preston Brook area to work for a well established medium sized Freight Forwarder. The candidate we are looking for will be joining a small and friendly team handling a mixture of Sea Freight shipments worldwide covering both…
Location: Runcorn, England Description: Headford Consulting is at present looking to employ Deep Sea Export Clerk right now, this job will be situated in England. Further informations about this job opportunity kindly see the descriptions. Job Title: Deep Sea Export Operator Location: Preston Brook/Runcorn Salary: ‘ 18,000 – ‘ 24,000 We are currently recruiting for an experienced Sea Freight Export ! Clerk in the Preston Brook area to work for a well established medium sized Freight Forwarder. The candidate we are looking for will be joining a small and friendly team handling a mixture of Sea Freight shipments worldwide covering both imports. Duties will include: This is a fast paced role and will require a candidate willing to learn and adapt with the role. A candidate who possesses a strong backgrou! nd in Ocean Freight operations able to hit the ground running.! Previous experience of working for an NVOCC freight forwarder is essential for this role.- .If you were eligible to this job, please give us your resume, with salary requirements and a resume to Headford Consulting.
Interested on this job, just click on the Apply button, you will be redirected to the official website
This job will be started on: Thu, 16 May 2013 11:30:36 GMT
Apply Deep Sea Export Clerk Here1
References
- ^ Apply Deep Sea Export Clerk Here (www.indeed.com)
Road Haulage Association backs oil price investigation
The Road Haulage Association is backing an investigation into the price of oil
By Jamie White Head of Communications
The Road Haulage Association (RHA)1 has said it is delighted that an investigation into the issue of oil price fixing has begun.
Last year the RHA raised the issue with the Office of Fair Trading but was told there was insufficient evidence to support an investigation.
However, that decision has now changed and the European Competition Commission have announced a formal investigation is underway.
RHA2 Chief Executive, Geoff Dunning, said: Since the original fuel protests way back in 2000, we have been of the opinion that there should be far more transparency among the oil companies. Yet every time we raised the issue our concerns were dismissed out of hand.
Today s news that is tremendously encouraging; for the motorist in general, the haulage industry in particular and the UK economy as a whole.
At a time when the businesses are desperately trying to get back on their feet after several very difficult years, there finally appears to be a light at the end of the oil pricing tunnel.
Follow mystery shopping and performance improvement company, Douglas Stafford3:
on Twitter @DouglasStafford4
on Facebook facebook.com/douglasstafforduk5
References
- ^ Road Haulage Association (RHA) (www.rha.uk.net)
- ^ RHA (www.rha.uk.net)
- ^ Douglas Stafford (douglasstafford.com)
- ^ @DouglasStafford (twitter.com)
- ^ facebook.com/douglasstafforduk (facebook.com)
the Loadstar EC backs down on road haulage cabotage …
EC transport commissioner Siim Kallas has bowed to pressure from road haulage federations and shelved plans to introduce a cabotage scheme without restrictions across the EU from 2014.
Last December, France s leading road haulage federation, the FNTR, teamed up with its counterpart in Scandinavia, the Nordic Logistics Association (NLA), to oppose the move. The Netherlands transport and logistics federation, TLN, had also come out against the total liberalisation of cabotage the movement of goods within a national state from 2014.
The FNTR s efforts have paid off following active lobbying in Paris and Brussels to block the transport commissioner s commitment to liberalising cabotage at all costs in 2014, the trade body said.
The creation of a coalition of European road haulage federations against the proposed cabotage legislation had proved its worth, it added.
At a time of deep economic crisis and in the absence of harmonisation in the European Union on employment and tax regulations, the liberalisation of cabotage was utter folly. It would have cost France and other European countries thousands of jobs.
Hauliers in the 27 EU member states are at present restricted to carrying out a maximum of three domestic transport operations in fellow member states over a seven-day period, immediately following an international operation. But in 2014 cabotage would have been free of any restrictions.
The current cabotage restrictions go against the spirit of a European Single Market which guarantees the rights of all citizens to work, travel and trade freely. Nonetheless, they exist because of fears of possible abuse and lowering social standards, said EC spokesperson for Transport, Helen Kearns.
For this reason, we have commissioned a number of studies on the issue. Vice-President Kallas has also established a high level group to look into this issue.
It is clear that cabotage rules must evolve over the long term, but it needs to be done properly and in consultation with all stakeholders. That process is complex and it takes time making it difficult to deal with this issue in the lifetime of this Commission.
Shipping groupage to France? Call the experts!
Groupage is the consolidation of cargo into a mixed load. We collate groupage shipments at our depots across Britain for export to our neighbours across the channel in France.
Groupage to France1 can be anything from one carton upwards but generally it is most cost effective over 75 kilos or 0.75m3. Smaller shipments are generally cheaper on a parcel service like DHL, UPS or TNT.
We make collections every day throughout Britain and plan shared cargo deliveries directly to our regional depots in places like Calais, Paris, Rouen, Nantes, Lyon, Marseill, Bordeaux and Toulouse.
Pro-rata groupage shipments to France are much cheaper than sending a dedicated van the whole way to France, cargo shares space on a truck and this spreads the cost.
If you have a shipment to France, try our groupage services today, call +Matt Everard2 for a groupage quote.
Call us now on 01268 525444 or click here3 to email us
Labels: dedicated van to france, groupage quote, groupage services, groupage shipments, groupage to france45678
References
- ^ Groupage to France (www.barringtonfreight.com)
- ^ +Matt Everard (plus.google.com)
- ^ click here (freight-blog.barringtonfreight.com)
- ^ dedicated van to france (freight-blog.barringtonfreight.com)
- ^ groupage quote (freight-blog.barringtonfreight.com)
- ^ groupage services (freight-blog.barringtonfreight.com)
- ^ groupage shipments (freight-blog.barringtonfreight.com)
- ^ groupage to france (freight-blog.barringtonfreight.com)
Architects of transport Freight forwarders
Houston s transportation solutions – freight forwarder Houston
Carriers such as freight forwarders help people in transporting goods from one place to another in a hassle free way. The client is relieved of all the troubles thanks to these people. They can be referred to as conciliator between the person who transports goods and the company which does the work.
How they help
A forwarding agency has to transport goods from place to place, ensuring that they reach the place in good condition without time delay. There are agencies to carry out the task in all carriers say train, airplanes, ship and truck. This is carried out in all countries but with slight variations.
Freight forwarding Methods involved in Houston U.S.
Carriers who are involved in domestic transfer of goods should register themselves with Department of Transportation’s Federal Motor Carrier Safety Administration. When it comes to international business involving the sea route, the registration has to be made with Federal Maritime commission of the United states. Maritime freight forwarder Houston is referred to as Non vessel operating common carrier (NVOCC). There are so many companies in Houston which carry out this job effectively; In general the objective of any freight forwarding company is to provide a trouble free service to the end user. Services offered by the companies include taking responsibility till the goods reach destination in time and without damage. People who take up this task are professionally trained in all areas to avoid any problems. Goods can be tracked down online, to get the status of the shipment. All freight forwarding companies work round the clock to get the job done. There is also an option called quick form, wherein details can be sent online and processed. The port of Houston plays a major role in the economic development of the state.
Freight forwarders Association
Freight forwarder Houston has an association which is popularly known as Houston Customhouse Brokers & Freight Forwarders Association HCBFFA. This association plays a vital role in the trade and economy of the state. Any problems which are encountered by the shipper and the shipping line are sorted out by this association. The members of this association are primarily freight forwarders and customs brokers.
Challenges faced by freight forwarders
Some general problems faced by freight forwarder Houston are varying cargo and shipping line tariff on a daily basis and linguistic problems in case of International business. The policies in terms of shipment also vary from country to country, which makes the process of forwarding goods a slightly complicated one.
For more information about freight forwarder Houston visit here
Contact Company: Galaxy Freight Services
Address: Galaxy Freight Services 2700 Greens Rd., Bldg. K Suite 300 Houston, TX 7703
Phone No: 281-870-2592
Website: http://www.houstonfreightservices.com/testimonials/
Freight Forwarding Customs Clearance for Importing to the UK
If you are importing goods into the UK for the first time, you will need to understand customs clearance and your responsibilities with regards to paying VAT & Duty on your import. As freight forwarders, we can handle your customs clearance for you.
If you do not yet have an EORI Number (Economic Operator Registration and Identification) then you will need to contact HMRC to obtain one. This number will be used as a reference when dealing with any customs matters relating to your shipments. It is a requirement to have an EORI number when importing goods into the UK, and it is fairly straight forward to obtain one (generally it takes less than a week to obtain this through HMRC).
I have my EORI number, what else do I need to know? The following list details some other aspects you will need to know/have before you import your goods:
- Your EORI number for imports;
- C3 form (if your goods are not commercial i.e. personal effects);
- Deferment Number (if you already have one existing with HMRC);
- A full description of your goods and a Customs Tariff Code (we can assist you with this).
What do I actually need on the day of import? In order for your goods to clear customs, you will need to have the following sent to us in advance of the import:
- The commercial invoice from the shipper of the goods;
- Certificate of Origin of the goods;
- Generalised System of Preference (if applicable).
These documents will not only allow us to proceed with customs clearance, but will also allow us to calculate the amount of VAT and duty payable (this can be worked out in advance if required).
If you choose us as your freight forwarder to handle your import into the UK, and decide for us to handle your VAT & duty payment to HMRC, we will require the cleared funds to be able to release your shipment.
If this sounds intimidating, then please do not despair! As experienced freight forwarders we are here to guide our customers through this process, and are happy to provide a hand holding service for those new to the process.
Give us a call today if you have any questions about your import shipment with us Tel. 02392 756 575. Email: sales@mercatorcargo.co.uk.1
Tags: customs clearance, customs duty, customs vat and duty, eori number, first time importer, freight forwarder, freight forwarder uk, freight forwarders, freight forwarding, freight forwarding uk, import goods into uk, import into uk, import shipment, import shipping, import uk2345678910111213141516
References
- ^ sales@mercatorcargo.co.uk. (www.mercatorcargo.co.uk)
- ^ customs clearance (www.mercatorcargo.co.uk)
- ^ customs duty (www.mercatorcargo.co.uk)
- ^ customs vat and duty (www.mercatorcargo.co.uk)
- ^ eori number (www.mercatorcargo.co.uk)
- ^ first time importer (www.mercatorcargo.co.uk)
- ^ freight forwarder (www.mercatorcargo.co.uk)
- ^ freight forwarder uk (www.mercatorcargo.co.uk)
- ^ freight forwarders (www.mercatorcargo.co.uk)
- ^ freight forwarding (www.mercatorcargo.co.uk)
- ^ freight forwarding uk (www.mercatorcargo.co.uk)
- ^ import goods into uk (www.mercatorcargo.co.uk)
- ^ import into uk (www.mercatorcargo.co.uk)
- ^ import shipment (www.mercatorcargo.co.uk)
- ^ import shipping (www.mercatorcargo.co.uk)
- ^ import uk (www.mercatorcargo.co.uk)
Financial Controller Freight Forwarding / Airfreight Consolidator …
Our client is a Leading International Freight Forwarder / Airfreight Consolidator; currently they have a position available for an experienced Financial Controller / Financial Accountant.
You will be responsible for the financial and monthly management of accounts budgets, forecasts, business plans, secretarial duties, insurance, fixed assets and operating equipment.
Your day to day duties will consist of (however this list is not restricted);
- Maintaining the financial records including general ledger, accounts payable, accounts receivable, inventories and other accruals, payroll journal, and general journal using generally accepted accounting principles and practices;
- Preparing Company and its subsidiaries financial statements;
- Preparing and filing Companies and its subsidiaries annual tax returns (BAS/GST etc);
- Receiving and recording all requests for disbursements that have been approved by the authorized person(s) and documented by appropriate invoices and/or receipts;
- Assisting the Director and/or General Manager in preparing annual budgets
- Review and implement changes to financial reporting systems including budgeting to assist Managers in achieving their objectives
- To provide advice, with regard to contract management, financial and related issues.
- Ensure that the Company conforms with its statutory and legal obligations
- Provide leadership, promote effective team working and ensure staff motivation:
- Manage the work of the Assistant Accountant in charge of the Group Sales Reports, Accounts Receivable debt collection, fall offs, Weekly Debtors Reports and commission payments
- Manage the work of the Finance Officer in charge of payroll, AP, AR and Margin reports
- Set objectives for the staff and conduct performance appraisals.
- Identify training and development needs of staff and organising relevant training and coaching to meet these needs
The successful candidate should possess the following;
- Business and/or Accounting degree and CA or CPA qualification
- Extensive Cargowise Edi experience is a MUST
- Previous experience in Financial/Management Accounting
- Previous experience in managing/mentoring junior staff team members
- Excellent organisational skills to effectively manage multiple tasks
- Excellent time management skills are required to ensure that deadlines are met and enquiries from the business are actioned accordingly.
- Advance written and communication skills to prepare written responses and communications to the business and to document finance policies.
- Minimum of 3 5 years experience.
This position is offering a package of $110k + as a starting figure. This company prides itself on staff retention and the package will be renegotiated on a regular basis.
IDEALLY The applicant will have FREIGHT FORWARDING KNOWLEDGE
FTR's Trucking Conditions Index shows continued signs of …
Freight transportation consultancy FTR Associates reported today that there are signs of improvement in the trucking market, which continues to show gradual signs of improvement.
In its Trucking Conditions Index (TCI) report, FTR said its reading for March was 13.12. The TCI reflects tightening conditions for hauling capacity and is comprised of various metrics, including capacity, fuel, bankruptcies, cost of capital, and freight.
According to FTR, a TCI reading above zero represents an adequate trucking environment, with readings above ten indicating that volumes, prices, and margin are in a good range for carriers. March marks the third straight month that the TCI has been above ten, with February coming in at 12.9 and January at 10.6.
With enforcement of the revised Hours of Service regulations now less than 60 days away, shippers and carriers need to be preparing for the change, said Larry Gross, FTR senior consultant, in a statement. Although there is still a chance that the court will issue an injunction, this becomes less likely with each passing day. FTR estimates an overall productivity reduction of about 3 percent from the changes in Hours of Service, but this will vary widely depending on the characteristics of each carrier and shipper. Removal of 3 percent of trucking capacity should be enough to start rates on a solid upward trajectory. If regulators continue to roll out the additional regulatory changes already in the pipeline and freight continues to grow at even a moderate pace, tight conditions could continue for several years.
FTR officials added that the TCI includes what it describes as a forward-looking component, which is pushing the TCI level up. And they said that continued moderate growth in conjunction with HOS and other regulations, will cause trucking rates to firm up in the coming months and improve carrier profitability.
Similar thoughts have been echoed throughout the industry in recent months. At last month s National Shippers Strategic Council (NASSTRAC) Annual Conference, various carriers cited capacity cuts of 3 percent or more due to HOS, coupled with the vast majority of carriers noting they have no plans to increase assets or related equipment, other than on a replacement basis.
FTR s Gross recently told LM that even with mild economic growth, overall conditions are likely to be tempered for shippers, adding that if the recent spate of good economic news translates into more robust economic growth, capacity would tighten significantly and greater upward pressure on freight rates will come as a result.
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