Freight volume through the first two weeks of July was “sluggish,” and that continues a trend that has been ongoing since February as talks of a freight recession manifest, analysts said.

In a recent update on the transportation industry, senior research analyst Benjamin Hartford and research analyst Andrew Reed, both of Baird, said the volume across all freight modes, including spot truckload, less-than-truckload, rail and international airfreight, has fallen in the second quarter of and into the third quarter, from the same periods in 2018.

Spot rates for dry van truckload fell 18.5% in June, according to DAT Solutions. The decline in rates has put pressure on contract rates for truckload and domestic intermodal pricing, Hartford and Reed said. In P.A.M. Transportation Services’ second-quarter earnings report, President Daniel Cushman said the Tontitown-based carrier has been challenged to retain existing customer rates to cover increased driver wages and other costs. The company has yet to reduce rates on existing lanes, but it’s not been able to add new business at margins similar to 2018, he said.

Contract rates rose in the 2019 bid season, but they face the risk of a decline in the 2020 bid season, during which Hartford and Reed expect rates to fall 5%.

Rail volumes have fallen 4.4% so far in 2019, and Hartford and Reed noted the tough comparisons start to ease in the second half of the year as rail volume rose 4.2% in the third quarter of 2018 and 2.6% in the fourth quarter of 2018. Since January, intermodal volume has fallen 3.5% to 7.69 million intermodal units, according to the Association of American Railroads. In J.B. Hunt Transport Services’ second-quarter earnings report, revenue in the Lowell-based carrier’s intermodal segment fell 1% to $1.15 billion, from the same period in 2018. Volume fell 8% in the second quarter, with transcontinental loads declining 5% and Eastern network volumes down 11%. The intermodal segment accounted for more than half of the company’s total revenue and 64% of income in the second quarter.

Increased levels of inventories have contributed to the soft industrial and intermodal volumes, according to Hartford and Reed. Also, lower temperatures late in the first quarter and throughout the second quarter have impacted volumes. Inventory levels rose at a higher rate than sales in the second quarter, leading to an increase in inventory/sales ratios. The ratio was 1.32 in May, up from 1.28 in 2018, but the May levels were below five-year averages.

Capacity has started to leave the market with the closure of carriers, and net orders of Class 8 trucks, the largest class, have been falling. In a recent report, Tim Denoyer, vice president and senior analyst for ACT Research, said the market is in a freight recession and expects spot rates to continue to fall in the short-term. “The good news is that for the first time in this cycle, we see evidence on the horizon for an eventual bottoming and upturn in spot truckload rates, thanks to low new truck orders and improving capital discipline from the trucking industry,” Denoyer said. “The Truckload Rate Gauge is currently signaling significant overcapacity, favoring shippers in rate negotiations. But based on our expectation for a decline in U.S. Class 8 tractor build rates later in the year, the supply side should begin to improve.”

Donald Broughton, the author of the Cass Freight Index, noted in the June report that the declines in the shipments index have been significant enough to ask, “Will the (second-quarter 2019) GDP be negative?” In June the shipments index fell 5.3%, while the expenditures index rose 0.9%.

With regard to the upcoming peak season, carriers expect a more average season, according to Hartford and Reed. Volume outlooks for the second half of the year have been reduced as demand has been weaker and truckload capacity has limited domestic intermodal demand. But outlooks have been stable.

This article was first found at Talk Business, and written by Jeff Della Rosa

Motor carriers that have long been pleading for more flexibility in the federal government’s truck driver hours-of-service (HOS) rules may finally be getting their wish…maybe.

That was the key takeaway from a recent Associated Press report published last week that stated the United States Department of Transportation is taking steps to “relax” the current HOS rules, which many view as another example of the Trump administration’s de-regulation efforts, which are viewed favorably by business interests, if not safety interests.

This part is perhaps the key working thesis of the AP report, one that clearly is viewed as music to the ears of motor carriers and trucking circles around the United States: “Though no specific proposal has been released, the rules believed to be up for repeal involve daily limits on the number of hours a truck driver can be behind the wheel and a requirement for a 30-minute break during an eight-hour stretch of driving.”

As things currently stand now, the current HOS rules, which took effect in July 2013, are as follows:

• the maximum number of hours a truck driver can work within a week was reduced by 12 hours from 82 to 70; 
• truck drivers cannot drive after working eight hours without first taking a break of at least 30 minutes, and drivers can take the 30-minute break whenever they need rest during the eight-hour window; 
• the final rule retains the current 11-hour daily driving limit (the FMCSA was considering lowering it to 10 hours) and will continue to conduct data analysis and research to further examine any risks associated with the 11 hours of driving time; 
• truckers who maximize their weekly work hours to take at least two nights’ rest when their 24-hour body clock demands sleep the most—from 1:00 a.m. to 5:00 a.m. This rest requirement is part of the rule’s “34-hour restart” provision that allows drivers to restart the clock on their work week by taking at least 34 consecutive hours off-duty. The final rule allows drivers to use the restart provision only once during a seven-day period; and 
• carriers that allow drivers to exceed the 11-hour driving limit by 3 or more hours could be fined $11,000 per offense, and drivers could face civil penalties of up to $2,750 for each offense

While motor carriers yearn for more flexibility in current HOS rules, in order to be more efficient, the report made it clear that safety concerns remain paramount, citing a May report issued by the Federal Motor Carrier Safety Administration (FMCSA), which said there were 4,657 large trucks involved in fatal crashes in 2017, a 10% increase over 2016.  

Those numbers don’t lie, that is obvious. But, at the same time, many carriers view them as so onerous that by following them to the letter of the law can make things unsafe, too. That said, it makes for a difficult situation on all sides.

It is unknown what the clear next steps are until more visibility is provided. But one thing for sure is that this situation is far from over. When the Electronic Logging Device (ELD) mandate took effect in late 2017, it did remove some capacity from the market, but not as much as was originally expected. And with the “boom” year that 2018 was in trucking, capacity was as tight as it has been, maybe ever.

In mid-2019, market conditions have changed as capacity has loosened and demand is not at the heightened levels of a year ago. But things can change quickly, especially in this market, and regulations often play a part in the reasons why. Will they again? We will have to see.

This article was first found at Logistics Management and written by Jeff Berman

One of the largest sources of climate pollution is the transportation sector, which is responsible for about a quarter of our nation’s greenhouse gas pollution. It is clear that to reach our climate goals, we must reduce car and truck emissions.

One way to reduce harmful air and climate pollution is by electrifying the transportation sector, especially long-haul trucks, buses, delivery vehicles, garbage trucks and regional “day cab” tractors used at ports. Heavy-duty vehicles are not only responsible for significant climate pollution, they are also responsible for about 30% of Nitrogen oxide pollution. These emissions can increase cancer risk, neurological and metabolic diseases, and cause respiratory and cardiovascular damage.

Toxic air pollutants like these are often hyper-localized, disproportionately impacting low-income communities and communities of color who are more likely to live near major highways, ports, and distribution centers. A recent EDF study of Oakland’s air pollution, for example, observed residents living near one particular freeway (home to much of the city’s diesel fueled traffic) were exposed to concentrations of black carbon 80% higher than a similar road.

Electrifying these medium and heavy-duty vehicles therefore reduces both pollution that harms human health and reduces greenhouse gas emissions from the combustion of the fuel. But making this win-win transition will require significant technological and political support to succeed. Fortunately, a growing number of innovators are adopting and/or developing tools to expand the number of medium- and heavy-duty electric vehicles on the road — ultimately reducing harmful pollution and preserving a clean, reliable and equitable electric grid.

A smarter way to access energy

The cost of charging an electric vehicle can be high, especially for commercial customers who manage large fleets. As an illustration, the battery capacity of an electric bus is typically about 200-300 kilowatts (kWh), versus the Chevy Bolt, which has a capacity of 60 kWh. To adequately charge a heavy-duty vehicle in a reasonable amount of time, rapid chargers are needed, which can cause spikes in demand and lead to high energy costs for customers.

Fortunately, some utilities have developed a solution: a pricing mechanism that charges customers less for energy when demand is lowest – typically around midday, when there is abundant solar energy generation. Therefore, companies that charge vehicles when energy rates are lowest can reap huge economic and environmental benefits.

Rebates, incentives and lower costs

Currently, there are multitude of other programs that can help offset the cost of vehicles and infrastructure. For example, all of the major utilities in California now have programs and proposals that help ensure the state is developing charging stations to guarantee fleets can charge at their existing depots and have sufficient access to public charging stations. Another California program provides rebates to vehicle purchasers at the time of sale.

The New York utility Con Edison also recently expanded their SmartCharge program in order to encourage the purchase and strategic use of medium and heavy-duty vehicles. Fleet owners who take advantage of these programs, and the policy makers who develop them both play critical roles in reducing the up-front costs associated with electric vehicles.

Embracing technological innovations

A number of emerging technologies can also save companies money and ensure a clean, reliable grid. Some tech can help vehicles dispatch energy they have charged, but are not using, back to the grid and generate new revenue streams for companies. Others, like mobile apps and smart charging stations, can help ease the complexities of charging vehicles in off-peak hours. Embracing these innovative tools can give fleet owners a competitive edge when switching to electric vehicles.

The smartest, most innovative trucking companies successfully manage their fleets as a form of energy storage, take advantage of rebates and incentives, embrace innovation, and provide benefits where they are needed most. As we strive to transition to a much-needed, electrified transportation sector, companies and policy makers are increasingly proving that they are finding ways to make this shift work financially and environmentally.

Over the next several months, we will be profiling the innovators – ranging from small technology developers to long-haul national trucking companies — who are taking advantage of these tools to make the transition to cleaner energy possible.

This article was first found at the Environmental Defence Fund and written By Larissa Koehler

Spot truckload rates for van and refrigerated freight hit their highest national averages since January during the week ending June 23 despite lower load-to-truck ratios, said DAT Solutions, which operates the industry’s largest load board network.

The number of truck posts on the DAT network of load boards increased 3.5% while the number of loads declined 2% compared to the previous week.

National average spot rates for the month, through June 23:

• Van: $1.90/mile, 11 cents above the May average
• Reefer: $2.25/mile, 10 cents higher
• Flatbed: $2.30/mile, 2 cents higher

Van trends: The national average van load-to-truck ratio fell from 3.0 to 2.6 although freight availability on the Top 100 van lanes on DAT RateView remained solid last week. Combined volume on these lanes is up 22% compared to the same period a year ago, although spot rates are lower year over year: indeed, the spread between truckload contract rates and spot rates is near a historic high.

Where van rates are rising: The average spot van rate strengthened out of Los Angeles ($2.35/mile, up 5 cents) and Stockton, Calif. ($2.06/mile, up 5 cents), compared to the previous week but volumes were softer, perhaps signaling a winding down of supply chain managers moving freight to beat potential tariff increases. Key van-lane rates on the spot market:

• Stockton to Seattle, up 16 cents to $2.79/mile
• Los Angeles to Phoenix, up 11 cents to $2.80/mile
• Atlanta to Miami, up 12 cents to $2.65/mile

Flatbed trends: Spot flatbed freight volumes increased 3% last week and, at 19.0, the national average flatbed load-to-truck ratio was marginally higher compared to the previous week.ADVERTISING

Where rates are rising: Raleigh, N.C., stands out for having gained 11.6% in the average outbound rate during the last month and hitting $2.94/mile last week. Outbound flatbed volumes were up 41% there as well.

In Las Vegas, flatbed volumes surged 51% last week and several key lanes saw rates jump:

• Las Vegas to Sacramento, up 55 cents to $2.92/mile
• Las Vegas to Phoenix, up 44 cents to $3.15/mile
• Las Vegas to Los Angeles, up 30 cents to $2.91/mile

Photo: DAT Solutions

DAT Trendlines is a weekly snapshot of month-to-date national average rates from DAT RateView, which provides real-time reports on spot market and contract rates, as well as historical rate and capacity trends. The RateView database is comprised of more than $60 billion in freight payments. DAT load boards average 1.2 million load posts searched per business day.

This article was first found at FleetOwner.Com and written by Fleet Owner Staff 

COLUMBUS, Ind. — The latest release of ACT’s For-Hire Trucking Index showed nearly across-the-board declines, with capacity being the lone exception.

The Pricing Index fell considerably to 38.8, in May on a seasonally adjusted (SA) basis, the lowest in survey history, from 45.4 in April.

The Volume Index dropped further into negative territory hitting 46.7 (SA), from 49.5 in April. Fleet productivity/utilization slipped to 46.0 in May on a seasonally adjusted basis down from 49.4 in April, and capacity growth increased to 54.6, from April’s 54.3 reading.

“May’s Pricing Index was the fourth consecutive negative number after 30 straight months of expansion. This confirms our expectation that the annual bid season is not going well for truckers,” said Tim Denoyer, ACT Research’s vice president and senior analyst. “We continue to believe rates are under pressure from weak freight volumes and strong capacity growth.”

Volume in May fell for the sixth time in the past seven months, Denover said.

“The softness coincides with several other recent freight metrics, with the drop likely due in part to rapid growth of private fleets and the slowdown in the industrial sector of the economy,” he said. “The supply-demand balance reading loosened to 42.1, from 45.3 in April. The past seven consecutive readings have shown a deterioration in the supply-demand balance, with May the largest yet.”

The ACT Freight Forecast provides quarterly forecasts for the direction of volumes and contract rates through 2020 and annual forecasts through 2021 for the truckload, less-than-truckload and intermodal segments of the transportation industry.

For the truckload spot market, the report provides forecasts for the next 12 months.

ACT is a publisher of new and used commercial vehicle (CV) industry data, market analysis and forecasting services for the North American market, as well as the U.S. tractor-trailer market and the China CV market. ACT’s CV services are used by all major North American truck and trailer manufacturers and their suppliers, major trucking and logistics firms, as well as the banking and investment community in North America, Europe, and China.

This article was first found at TheTrucker.Com, and written by The Trucker News Staff 

• Amazon leased 10,000 branded trailers to haul your Prime deliveries.
• It launched its own freight brokerage service in late 2016 or early 2017, according to a recent FreightWaves report. Freight brokers match shipments with truckers who can move the goods.
• But the truckers who are driving your Amazon packages across the country told Business Insider that Amazon pays too little for them to justify working with the company.
• And trucking executives told FreightWaves that contracts with Amazon are “heavily one-sided” towards the e-commerce company.
• Visit Business Insider’s homepage for more stories.

In April, Amazon launched a website that allowed truckers to take jobs driving Amazon packages in Prime-branded trailers across the country. Scott Leckliter, an Iowa-based independent trucker, checked it out.

And he was surprised at how low the rates were.

“As long as you pay me market value, I’m good. I don’t need astronomical numbers,” Leckliter told Business Insider. “But they were lower than that and it was considerable.”

According to a recent report from FreightWaves , Amazon’s rates in the spot market which is whenretailers and manufacturers buy trucking capacity as they need it, rather than through a contract are on average 18.4% lower than rates posted on DAT , one of the largest broker boards in the country.

“It was just not gonna work for me,” Leckliter said. “It was not as profitable as working with a different broker who is going to pay market value.”

Trucking companies are wary of Amazon, too.Daniel Lacroix, who is the director of safety and compliance at Franklin, Massachusetts-based Regency Transportation, told Business Insider that he wasn’t interested in working with Amazon after seeing the rates offered.

“We didn’t make it past the initial bid process because the rates were just ridiculous,” Lacroix said. “I love Amazon.I get all of my stuff off of Amazon, but I don’t want to do business with them.”

Amazon declined to comment.

Amazon’s low freight rates are happening amid a serious dip in trucking prices industry-wide.

The amount of loads on the spot market fell by 62.6% in May year over year , and ratesfor van loads sank 20% in May year over year, according to DAT .Lexington, Kentucky-based owner-operator Chad Boblett said some truck drivers are seeing a “bloodbath.”

“We cannot continue driving shipping costs down,” one trucking company said in the FreightWaves report. “Where are the antitrust laws? Amazon is becoming a monopoly. Small companies will not be able to compete.”

Trucking executives are wary of working too closely with Amazon

Outside of picking up quick loads on the company’s new freight board, many trucking executives don’t like entering into contracts with Amazon. They say contracts with Amazon are “heavily one-sided” towards the e-commerce behemoth, according to the FreightWaves report.

That means rates can be too low to turn a profit, but it can also mean that the company demands so much capacity that it overwhelms a company’s network.

“Amazon contracts are pretty demanding,” Satish Jindel, the SJ Consulting Group’s principal consultant, previously told Business Insider . “Because they’re growing so rapidly, they can suck up a lot more of your capacity that you planned to make available to them.”

And, when Amazon suddenly shifts its logistics strategies, the company is at risk of losing a major customer that it may have grown dependent on.

“Amazon is really trying to monopolize the transportation side and dictate their own terms,” Lacroix of Regency told Business Insider. “People can choose if they want to work with them or not. But some people are going into the (trucking) business (to work with Amazon), thenthey realize there’s not enough money to operate with them.”

XPO Logistics, which is among the country’s largest logistics players, said in Feb. that the company will lose some $600 million in revenues as its “largest customer” (believed to be Amazon) begins to in-house some trucking and logistics operations.

Amazon has been shifting more and more packages to its in-house delivery network of trains, planes, delivery vans, trucks, and ocean freighters.Amazon’s worldwide shipping costs have grown fifteenfold from 2009 to 2018. Net sales increased by sevenfold in the same time.

Amazon says its in-house network is better and more cost-efficient. Many observers say Amazon is also building a third-party logistics company that will someday compete against FedEx and UPS.

“Amazon is making a shrewd move here in saying, ‘Look, I can build this myself and I have the capability to deliver this myself,'” AT Kearney vice president Joshua Brogan previously told Business Insider of Amazon’s logistics moves.

But for most truckers, the e-commerce company isn’t the ideal partner. Leckliter said most other truckers he knows tend to stay away.

“There are a few that work with them,” Leckliter said. “Then they go whine when something doesn’t work with them.”

This article was first at Business Insider

A large trucking company based in Pennsylvania recently was hit by a ransomware attack that impacted network communication systems.

On Monday, June 17, trucking company A. Duie Pyle announced that the company had been targeted by a ransomware attack. Ransomeware is a type of malware that typically threatens to prevent a company from accessing their data unless they pay a certain amount of money.

The company said that its core operating systems and backups were not invaded or compromised, and that there was no data extracted from these systems.

The company issued a statement on their team’s response to the attack:

While all businesses in our country are at risk for these type of attacks, and our turn came this weekend, we are very proud of our Pyle Team’s around the clock response to this intrusion. We thank you for your past and continuing support, and while we expect there may be some competitive attempts to exploit this occurrence, we trust we can count on your on-going support of our Pyle Team.

The company also said that the attack had minimal impact on operations: “All Pyle LTL, Dedicated, Warehousing and Brokerage Services are up and operating and conducting business effectively.”

A. Duie Pyle reported on Wednesday afternoon that their team had restored email services. As of Wednesday afternoon, several features on the company’s website remained down.

This article was first found at CDLLIFE

Navistar announced a $125 million investment in its Huntsville, Alabama, engine plant as part of a plan to begin producing next-generation big-bore diesel engines developed with its European partner, Traton, in the future.

Navistar makes International brand diesel engines at the plant, and plans to make the new investments over the next three years.

The principal engine currently built at Navistar’s Huntsville plant is the International A26, a 12.4L big-bore engine offered in Class 8 on-highway trucks such as the International LT Series and RH Series, as well as in vocational trucks such as the International HV Series and HX Series.

According to local news reports, part of the expansion is relocating to Huntsville a gear box assembly line.

In 2017, Navistar and VW told reporters that the two companies would collaborate on a fully integrated, next-generation diesel big bore powertrains for North America, launching in 2021. It also said at the time that it expects to be in a position to launch its first medium-duty electric powered vehicle for the U.S. and Canadian markets in late 2019 or early 2020. 

“Over the last two decades, the state of Alabama has been a wonderful partner for Navistar as we have developed and produced big-bore engines and other products in the state,” said Persio Lisboa, Navistar’s executive vice president and chief operating officer. “Today, we are excited to have the opportunity to expand our presence in Alabama, while adding to our array of next-generation products.”

In 2014, as part of its turnaround efforts, the company announced it was moving its mid-range engine production from Huntsville to its Melrose Park, Illinois, plant.

This article was first found at Trucking Info, and was written by HDT Staff