Industry News

Released: July 29, 2010

FMCSA Sends HOS Proposal To White House
The Federal Motor Carrier Safety Administration sent its proposal for a new hours-of-service rule to the White House Office of Management and Budget for review Monday, meeting the first of its court-appointed deadlines for issuing the rule. According to OMB, the notice of proposed rulemaking was filed by FMCSA on July 26 – nine months after the agency entered into a settlement agreement with a coalition of groups led by Public Citizen and the Teamsters union. Under that agreement, FMCSA said it would review the rule and within nine months send the White House a new proposal. The agency now has until July 2011 to publish that proposal, collect comments and issue a new final rule. Since agreeing to issue the new rule, FMCSA has opened a docket seeking information about the HOS rule and held several listening sessions around the country collecting input from drivers, fleet executives and advocacy groups (including NASSTRAC) about the regulation.
> View NASSTRAC's Position Paper on HOS.

Truck Tonnage Rises 7.6 Percent in June
Truck tonnage rose 7.6 percent in June from a year ago, the seventh straight year-over-year increase, according to the American Trucking Associations. However, tonnage dropped 1.4 percent in June from May, the second consecutive month-to-month drop, ATA reported in its monthly seasonally adjusted for-hire truck tonnage index. This is the first back-to-back decrease since March and April 2009. The seasonally adjusted index was 108.5 in June. The year-to-year gain followed a 7.7 percent rise in May. The not seasonally adjusted index — the change in tonnage actually hauled by the fleets before any seasonal adjustment — was 115.9 in June, up 6.5 percent from May. Some industry observers suggest that the two consecutive month-to-month drops shows that the economy is slowing, but note that tonnage does not need to grow much since capacity is tight.

Earnings Improve for Several Publicly Held Motor Carriers
Improved performance on Wall Street is boding well for the motor carrier industry. Seven out of eight publicly traded motor carriers, several of which participate in NASSTRAC, reported second-quarter earnings last week that reinforce the trend of improved financial results driven by tight capacity, along with modest rate, volume and utilization improvements. Werner Enterprises' earnings rose 65 percent from a year ago to $20.9 million, Knight Transportation boosted net income 26 percent to $15.8 million, and Marten Transport rose 15% to $5.2 million. Arkansas Best Corp. reported it cut its net loss by more than half. LTL carrier Vitran and truckload fleet Covenant Transportation Group experienced the most dramatic improvements. Vitran's profit more than tripled to $1.7 million, and Covenant and USA Truck reversed losses in the 2009 second quarter. Covenant earned $2.9 million and USA Truck's net income was $900,000.

"The fundamentals of the truckload market remained favorable for pricing as demand continued to strengthen and capacity remained very tight," said Dahlman Rose analyst Jason Seidl, a notable industry analyst who has periodically reported to NASSTRAC. (Source: Transport Topics)

Diesel Sees First Increase in Six Weeks
Diesel increased after five straight weeks of decline, rising 2 cents to $2.919 a gallon, the U.S. Department of Energy reported on Monday to NASSTRAC. The price is still lower than it was at the beginning of July, when it averaged $2.924 on July 5. However, trucking's main fuel is still 39.1 cents higher per gallon than it was a year ago. During the five-week decline, diesel had fallen 6.2 cents. Gasoline, meanwhile, experienced a bigger increase, rising 2.7 cents to $2.749 per gallon. It was gasoline's second consecutive increase, after three consecutive weeks of decline, DOE said following its weekly survey of filling stations. Each week, DOE surveys about 350 diesel filling stations to compile a national snapshot average price.
> View NASSTRAC's Regional Chart of Fuel Prices