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Will Changes in Regulations Lead to Higher Operating Costs & Lower Productivity?

Posted By Gail Rutkowski, Friday, March 18, 2016

Trucking regulations are once again front and center for carriers and shippers and are making an immediate impact on carrier costs, capacity, rates, and relations between shippers and carriers. Will new changes in regulations lead to higher operating costs and lower productivity?

Find out during this upcoming webcast “Trucking Regulations 2016 Update” co-presented by Logistics Management and NASSTRAC on Thursday, March 24, 2016 at 2:00 p.m. EDT.

John Cutler, General Counsel for NASSTRAC along with two NASSTRAC members, Tom Wenzinger of Polaris Industries and Gregg Sayers of GNC as they discuss the impact recent regulations are having on carrier costs, capacity and rates and what shippers are doing in response. The discussion will be moderated by Jeff Berman.

Topics include:

  • Details behind changes to HOS and CSA
  • When and how to prepare for the electronic logging device (ELD) mandate
  • FMCSA's final ruling on driver coercion and what it means for shippers, carriers, receivers and 3PLs
  • What the FMCSA has planned over the next year

You don’t want to miss this important webinar and learn what change you may need to make in your operations how to protect your company from penalties for non-compliance.

Register for Trucking Regulations 2016 Update webinar today!

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Where are Smokey and the Bandit When You Need Them?

Posted By Gail Rutkowski, Thursday, March 10, 2016

At last year’s NASSTRAC Annual Shippers Conference & Transportation Expo, we enjoyed a presentation from the ATA about their “Trucking Moves America Forward” initiative. The mission of Trucking Moves America Forward is to establish a long-term industry-wide movement to create a positive image for the industry, to ensure that policymakers and the public understand the importance of the trucking industry to the nation’s economy, and to build the political and grassroots support necessary to strengthen and grow the industry in the future.  This would be a monumental task for any group, but currently, public opinion of the industry hasn’t been in our favor.


Every day millions of trucks travel across our highways bringing goods to markets throughout the US.  More than 80 percent of U.S. communities rely solely on trucking for delivery of goods. But very few Americans realize the importance trucking plays in our economy and our lives. They only notice when the store shelves are empty or weather interrupts normal transportation. Even worse, they only notice trucks when they are cut off in traffic, or involved in an accident, or hear on the news about the latest big bad truck that caused a problem. The reality is markedly different from these isolated incidents.

 

Truck drivers are skilled professionals who are required to follow stringent safety regulations and willingly work with the public to educate them on how to drive with tractor-trailers on the road.  Many trucking organizations regularly recognize drivers for accident-free driving records. The trucking industry strives for safer highways and has seen overall declines in truck-related crashes and fatalities over the past decade. So why all the negativity?

 

I believe we need another feel good movie about the trucking industry.  Remember Smokey and the Bandit?  That movie made trucking (and CB radios) cool. Since Hollywood loves to jump on bandwagons I’m sure they would be up to the challenge. They also love sequels too. Heck, maybe we can even do a movie about driverless trucks taking over a city…how cool would that be? It could beat Fast and Furious, whatever number they’re at now, at the box office.

 

The word needs to get out that Trucking stimulates economic activity in every sector of our economy…including health care, fuel and transportation, waste removal, retail, food and agriculture, manufacturing, banking and finance and many others. Trucks drive economic growth and jobs in America—in fact, the industry currently supports almost 7 million jobs, including just over 3 million professional drivers. 

 

The reality is that in today’s environment few people take the time to thoroughly understand complex issues.  They want to “learn” quickly in 140 character bits or 30 second sound bites and be entertained in the process.  So let’s entertain them…anyone in Hollywood listening?

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Can You be Accused of Driver Coercion? What You Need to Know Now

Posted By Gail Rutkowski, Friday, March 4, 2016

On January 29, 2016, the Federal Motor Carrier Safety Administration’s (FMCSA) driver coercion rule, known as the “Prohibiting Coercion of Commercial Motor Vehicles became effective. This regulation prohibits motor carriers, shippers, receivers or brokers from coercing drivers to operate motor vehicles in violation of FMCSA regulations that include hours of service, CDL regulations, drug and alcohol testing rules, and HAZ MAT regulations. The rule also prohibits anyone who operates a commercial motor vehicle in interstate commerce from coercing a driver to violate the commercial regulations.

 

Ever since the FMCSA issued a notice of proposed rulemaking request for comments in May of 2014 there has been a lot of confusion as to how this rule would work. While the final rule clarified some of the questions, much of that confusion still exists. As John Cutler, NASSTRAC’s legal counsel noted: “We are pleased to see that the agency dropped several of the worst features of the rule,” said Cutler. “The final rule no longer imposes on shippers, intermediaries or receivers a ‘duty to inquire’ whether drivers can comply with all safety requirements (HOS, safe tractors and trailers, working brake lights, etc., etc.) for the services requested. In addition, the final rule drops the ‘respondeat superior’ legal theory under which shippers, intermediaries and receivers might have been considered ‘employers’ of the drivers who work for the motor carriers. That theory could have caused a great deal of trouble for defendants in ‘negligent hiring’ lawsuits. These are positive developments, and the comments that NASSTRAC and others filed seem to have done some good.”

 

While NASSTRAC, along with many industry groups endorse the intent of the rulemaking…no one defends coercing drivers to violate safety rules, FMCSA clarified in response to a NASSTRAC comment that there is nothing wrong with a shipper saying it will stop using a trucking company that sends in a driver with 4 hours of driving time left on the clock when the haul will require 7 hours. It is legal to decide not to use a carrier that does not dispatch drivers who can meet the agreed upon delivery schedule. Further clarifications include:

  • Brokers are not allowed to directly communicate with drivers and are not employees of a motor carrier, and if a broker communicates directly with a driver, they could be held liable for vicarious liability and coercion; and
  • The deadline to file coercion complaints will work off of a 90-day filing deadline to ensure drivers have a sufficient time to prepare and submit a coercion complaint 

Unfortunately, these clarifications are not contained in the rule itself, but in the explanatory text which means shippers need to either remember what the explanatory text says or keep a copy of the Federal Register notice handy. This rule also carries stiff penalties up to $16,000 per occurrence if a shipper, receiver or intermediary makes threats to a driver.

 

According to John Cutler, “The exposure to penalties is there whether or not the driver actually violates any regulations. In addition, what does it mean for the driver to have “stated’ that the service called for could not be provided in compliance with regulations? Stated how, and to whom? A night watchman or a yard jockey? FMCSA refused to require documentation.”

 

So, where do we stand now? We don’t know how the rule will be applied or who will be believed when a driver says one thing and the shipper says another. Shippers, receivers and brokers may need to consider adding no-coercion sign-offs from truck drivers to their shipment documentation.

 

What else should shippers do? Make sure you have good procedures in place; don’t talk directly to drivers to avoid vicarious liability; and if there is an issue, work with the motor carrier.

 

NASSTRAC will be watching how enforcement is done, particularly in resolving “he said, she said” issues. No one in the industry believes drivers should be coerced into doing anything illegal, but creating a situation where shippers or brokers get unfairly put into a situation resulting in a $16,000 fine over something they had no control over isn’t good regulation…or good business.

 

What are you doing to protect your company?

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CSA Scores Removed from FMCSA Website – What Do We Do Now?

Posted By Gail Rutkowski, Thursday, February 18, 2016

As many of your know, CSA (Compliance, Safety & Accountability) scores were taken down from the Federal Motor Carrier Safety Administration’s (FMCSA) website shortly after President Obama signed the FAST Act into law in December 4th. Congress instructed the agency to oversee an extensive review of the scores and prepare for Congress an overhaul strategy for the CSA program. NASSTRAC, along with many other industry associations voiced opposition to CSA’s scores claiming they misrepresented most carriers’ safety records. Motor carriers, however, can still view their scores.

 

So, where does that leave shippers and brokers who are required to provide “due diligence” in vetting motor carriers and avoid negligent hiring lawsuits?

NASSTRAC agrees with TIA’s (and the Federal government’s) position that a motor carrier’s DOT safety rating is the sole determination of whether or not a motor carrier is safe to operate or not. There is no clear evidence that exists to support the view that a motor carrier’s BASICs scores will or could indicate, whether a particular carrier is more or less likely than any other carrier to be involved in a crash.


NASSTRAC, along with other industry associations, further supported TIA led legislation calling for a National Motor Carrier Hiring Standard. This bill called for the establishment of a national hiring standard for motor carriers rather than allowing a patchwork of state court decisions to determine the hiring standard for motor carriers. State courts are all taking a different approach to interpreting FMCSA, causing confusion in the marketplace and wasting valuable state resources. Our interstate transportation system…part of the global supply chain…needs a national hiring standard. The proposed national standard did not set a standard for gross negligence or criminal wrong-doing, it only called for the establishment a national standard for carrier selection. Unfortunately, this much needed legislation was pulled from the recent FAST Act at the eleventh hour.
Until the corrective actions are taken and implemented as mandated by Congress in the FAST Act, all CSA data related to alerts and the “relative” percentage rankings are removed from the public view and cannot be allowed to be used in determining a motor carrier’s safety fitness. I would urge all shippers to ensure that the carriers they do business with all have valid operating authority, a current certificate of insurance at amounts adequate to cover your needs, and a DOT Safety Rating that is “Satisfactory”, or “Not Rated”. Confirm that brokers have valid authority and their surety bond is at the required $75,000.

Until the dust settles, make sure you are protecting your company ensuring you do business with credible, safe transportation providers.

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An Update on the NASTRAC View

Posted By Gail Rutkowski, Thursday, February 11, 2016

For those of you who may have missed it, one of the best learning tools available today is the NASSTRAC View. Launched in December, the View meets the First Friday of every month. Each month a different topic is selected. Recent topics discussed were: “Behind the Curtain: A Look at the Internal Issues Facing Shippers” and “Beyond the Dock: How Carrier Issues Impact Transportation Operations”. Only NASSTRAC regular members are invited to a limited number of slots. The folks who have attended the sessions have commented that it is a great place to learn. One of the attendees commented: “where else can you sit at the table with some of the largest shippers in the country and share issues, concerns, and ideas?”

 

New topics are generated by attendee suggestions. To keep the discussion flowing, we have guest moderators who make sure every voice is heard and all issues are brought forward. Topics under consideration for future Views are: “Why Those Fuel Surcharges Will Never Go Away” and “Digital Disruptions in Freight Transportation”. You don’t want to miss these!

 

We know how difficult your job can be. The day to day pull of urgent requests and problems can be overwhelming. We don’t want to add to that burden…but think…what if you carve out an hour once a month to join us during lunch? You will be able to talk with your colleagues about issues that are affecting your operation, share solutions and ideas, without ever leaving your desk. You don’t have to pay anything or travel anywhere. The only price of admission is your willingness to join the conversation. The rewards could be enormous. You may find a solution to an issue that has been challenging you for months, or you may be able to help a colleague with a solution that has worked for you. If recent topics aren’t of interest, you can suggest a future topic that does concern you. It’s in your hands.

 

NASSTRAC provides the forum, you can provide the voice. Sign up for the next NASSTRAC View and join the conversation.

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The Future’s So Bright, I’ve Got to Wear Shades

Posted By Gail Rutkowski, Thursday, January 28, 2016

At the risk of sounding overly optimistic, I’d like to share a recent experience with you. We all have heard the comments about Millennials, their work ethic (or lack of), no ambition, things that are all pretty much what any older generation thinks of younger generations.

This week I traveled to Brigham Young University and had the opportunity to speak to a group of young women considering a career in Global Supply Chain. BYU is working to attract more women into their program and asked me to share with them my experience and thoughts about a career in supply chain. The first two speakers were women who had already graduated from the program and were already working in the supply chain field. My first impression of both of them was their enthusiasm and passion about their work. They shared the challenges and opportunities they have experienced and the on the job education that no textbook can replicate. The three things that both ladies shared that I think are common among supply chain professionals are:

  1. A desire for organization – a little OCD is a good thing for supply chain professionals.
  2. The importance of building a strong network – who are you going to call when you need help (and you will need help)
  3. On the job training is the best teacher – experience and hands on training stays with you forever.

When it was my turn to speak, I have to admit to being a little uneasy. As I’ve written before, I’m a transportation geek which seems to be at the bottom rung of the supply chain ladder and the most overlooked when it comes to education programming. But I plunged right in, sharing with them a little bit about my career, but more importantly about the importance of mentors, and learning to push past the fear in order fulfill your goals. I spoke about the transportation industry and its vital role in the supply chain and the fact that it is the one discipline within the supply chain that is the most affected by outside factors (weather, regulatory, and legislative issues). I attempted to make the connection between developments in Washington and the impact of our government’s actions on transportation and the supply chain in general. We talked about how disruptions in the supply chain (i.e. weather or manmade disruptions) can affect a company’s stock price. Exciting stuff to be sure…but was it enough to convince these bright young women to sign on to a life in supply chain?

During the Q&A I received a number of questions about the possibility of working for a non-profit or some humanitarian project in the supply chain field. This is one of the really great things I love about Millennials, their desire to give back and to make a difference. I was able to share with them some of my experiences working on humanitarian projects and told them about ALAN (American Logistics Aid Network) which was founded by several professional and trade associations who came together after Hurricane Katrina to help provide humanitarian relief. Today, ALAN comprises hundreds of supply-chain businesses who stand poised to respond in the event of disasters. This information was by far the most interesting to these young women. I even think I got a few of them to actually consider transportation as a career.

I came away from this experience with a renewed optimism about our future. If these are the folks who will be taking over from us old geezers, we are in good hands my friends.

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The “Do Nothing” Congress Finally Did Something…

Posted By Gail Rutkowski, Thursday, December 17, 2015

On December 4, 2015, the FAST Act became law. The new Highway Bill called the Fixing American’s Surface Transportation Act provides for $305 billion over five years for highways, transit, etc. At over 1,300 pages, the FAST Act deals with subjects ranging from AMTRAK to HazMat, distracted driving, and used car lots selling recalled cars. Congress passed over 30 short-term extensions before reaching agreement on this bill. Thanks to John Cutler, NASSTRAC’s General Counsel, here is a recap of some of the key provisions:

 

Funding: The FAST Act provides for $305 billion over five years, with about $50 billion dedicated for highways programs. Though funding for five years is welcome, the amount falls short of needed investment and there is no stable long-term source of funding as there could be if fuel taxes were raised and indexed for inflation. So, when the FAST Act expires (along with the short-term extensions that Congress uses to kick the can down the road), funding issues will have to be faced again. Congress provided for grants to states to explore user fee options for highway infrastructure funding. This could lead to more research on approached like a Vehicle Miles Traveled (VMT) fee.

 

Red Tape: The FAST Act, like MAP-21, calls for faster permitting and approval of infrastructure projects.

 

Port Performance: The FAST Act calls for collection of port performance statistics at the largest US ports (the top 25 by tonnage, by TEUs, and for dry bulk). A working group will be established to help determine appropriate performance measures.

 

Truck Sizes and Weights: Efforts to relax the federal freeze preventing large trucks on interstate highways from exceeding 80,000 lbs. gross vehicle weight were unsuccessful, though several localized exceptions, e.g. for logging trucks, were approved. The effort led by FedEx and UPS to be allowed to use twin 33 foot trailers was not addressed in the FAST Act, but may be covered by separate appropriations legislation.

 

Studies: Various studies are called for. Two involve loading/unloading detention and motor carrier insurance. DOT’s Inspector General is given one year to report on delays experienced by truck drivers waiting to load or unload, and the impact of such delays on safety, driver pay, and the efficiency of the transportation system and the economy. Also provided for is if the FMCSA conducts a rulemaking proceeding to consider whether motor carriers should carry more insurance, certain issues must be addressed, including the sufficiency of current insurance levels, the ability of the insurance industry to provide more insurance, and impacts on safety.

 

National Hiring Standard: It was hoped that provisions on this issue would help limit exposure to negligent hiring lawsuits for shippers and brokers using carriers that are properly registered and insured, and which do not have an Unsatisfactory DOT safety rating. Unfortunately, at the eleventh hour, the “Duncan Act” was pulled from the bill.

 

CSA: Congress clearly signaled its unhappiness with FMCSA’s Compliance, Safety, Accountability program, which incorporates the Safety Measurement System with its BASICs scores and “golden triangles”. Numerous government studies have criticized these FMCSA programs, and in the FAST Act, Congress called for a study looking into problems with these programs. FMCSA must then adopt and implement corrective action, and until it does, it cannot post BASICS information. These scores have already been removed from the FMCSA website. (This may help a little in reducing shippers’ exposure to negligent hiring lawsuits, since tort lawyers may have more trouble arguing that carriers known to be unsafe were hired.)

 

Driver Shortage: The Act helps facilitate the hiring of veterans as truck drivers by setting up a pilot program to look into whether veterans between 18 and 21 years old should be able to operate CMVs in interstate commerce (many such veterans are already operating in intrastate commerce).

 

Multimodal Freight Transportation: In a nod to freight (and to multi-modalism), the FAST Act calls for development of a National Freight Strategic Plan and a National Freight Multimodal Freight Network, and also encourages similar efforts by the states. Major gateways and bottlenecks are to be identified, in hopes of improving efficiency and performance. Also provided for and funded are the Nationally Significant Freight and Highway Projects Program and the National Highway Freight Program.

 

FMCSA Rulemaking: For too long, FMCSA has avoided rulemaking proceedings in which stakeholders like NASSTRAC can be heard, and it has ignored many Congressionally imposed deadlines. In an extraordinary vote of no confidence, Congress ordered FMCSA to have more rulemakings, including advance rulemakings for major rules. FMCSA must consider alternatives to its preferred outcome, and the best available science, and give more consideration to impacts on carriers of all sizes. Better Regulatory Impact Analyses are required, and regulations are subject to review every five years.

 

While not a perfect bill, it’s a start. We still have more work to do, particularly in the area of evaluating funding options for highway infrastructure improvements in the future.

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Have We Set the Bar Too High?

Posted By Brian Damiani, Thursday, December 10, 2015

In today’s world of “just in time” logistics and the “I got to have it now” mentality of American buyers, have we pushed the bar so high that the trucking companies are unable to achieve realistic service capabilities?  While shippers have gotten smarter and implemented policies to help them streamline their processes such as appointment deliveries, routing restrictions, and service requirements, these stricter requirements have put more and more pressure on carriers to deliver.

 

Over the years, many carriers have responded by shortening their transit times to meet the ever increasing demand of customers to get their products quicker. In my environment as a consultant, my company services over 100 customers and we track the on-time performance of carriers across our entire customer base. I have seen a decreasing percentage in on-time performance over the past 18 months.  Having worked with most of these carriers for over 20 years I can honestly say that these drops in on-time percentages are not attributed to poor management or weak service capabilities.  

 

To elaborate on the increasing demands upon carriers to improve service times, these times are affected by many outside factors. One particular factor is the driver shortage. We have been hearing of a driver shortage in the LTL industry for the past 15-20 years and it is finally here. Since the country has not fully recovered from the recession of 2008-2010, most carriers have not built their networks back up to pre-recession levels. Drivers have continued to age out and the attrition rate is higher than that of new drivers entering the industry. This puts pressure on their service capabilities. Another factor is the requirements that shippers put on their carriers. With delivery appointments becoming more commonplace, carrier windows of opportunity for on-time delivery are further strained as the metrics involved putting delivery schedules together become more intricate thus lowering delivery capabilities per truck. 

 

Many shippers continue to put more and more emphasis on on-time performance while continuing to twist the delivery standards to a point that these on-time performance numbers become unattainable. At some point this levee will break. With the continued consolidation going on in our industry, we may reach a point where we will not have enough carriers to serve our needs due to increased service levels by shippers causing carriers to re-evaluate the way they do business. Perhaps the time has come when we may have to ask the question that as shippers, “Have we set the bar too high?”

 

About our Guest Blogger

Author: Brian Damiani, Vice President of Carrier Partnerships at Simplified Logistics. Brian is currently on the board of directors of NASSTRAC and has served on the Provider Relations Committee. He also volunteers his services in coordinating the golf outing at NASSTRAC annual conference.  

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MC Numbers are Going Away…What Does that Mean for Shippers?

Posted By Gail Rutkowski, Thursday, December 3, 2015

For years transportation professionals have relied on docket numbers — primarily MC numbers — to identify companies in our industry. MC numbers were a handy way to search for trucking companies on public and proprietary web sites, including load boards and government web sites. These numbers have provided clues to the age of a company and access to records of its legal authority to conduct business.

The disappearance of docket numbers is a feature of a new Unified Registration System (URS) for all companies regulated by the US Department of Transportation (DOT.  The Federal Motor Carrier Safety Administration (FMCSA) passed a final rule in August 2013 to establish the URS.  Its purpose was to reduce paperwork and create a single clearinghouse for information on motor carriers, brokers, and freight forwarders.  That rule states that “FMCSA will use the USDOT Number as its sole unique identifier for motor carriers, brokers, and freight forwarders subject to its regulations” and “…discontinue issuance of MC, MX, and FF Numbers to those entities who register with FMCSA”.

The docket numbers were scheduled to go away by October 23, 2015.  However, two days before the scheduled start date of the new Unified Registration System (URS), the FMCSA announced that it will delay implementation of key elements of the program by nearly a year. Originally set to take effect October 23, 2015, FMCSA has pushed ahead most of the effective dates to September 30, 2016.

Once in place, the URS will do away with MC, FF and MX numbers, and will use only the USDOT number to identify carriers, brokers, and freight forwarders.  All entities regulated by FMCSA will be required to update their information in the URS system every two years.

Here are some common FAQ’s Shippers will need to know

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What do Shipper’s Want?

Posted By Gail Rutkowski, Tuesday, November 24, 2015

Do you remember that old Mel Gibson movie “What do Woman Want?”  Mel played a man who, when struck by lightening, suddenly began hearing all women’s thoughts that provided the tough alpha male some sensitive insight into the female psyche.

 

I was recently placed in Mel’s position (minus the tough alpha male past). In preparing a presentation for a recent speaking engagement, I reached out to a few of our shipper members and asked “What are the things that are keeping you up at night?”  Within the course of a few hours, just about every shipper I queried responded with his or her list of concerns. The amount and content of information was enlightening and I came away with a few observations:

 

1.      Shippers aren’t that complicated

2.      Shippers are looking for help in addressing these issues

3.      That help will not necessarily come from internal sources

 

So, the question now is, how can NASSTRAC help? NASSTRAC’s purpose “to be the voice of the Shipper” makes us uniquely positioned to give you your voice, providing shippers a platform for discussion on issues of importance to them.

 

This new platform will be called “The NASSTRAC View” and launches on the first Friday of December, 2015.  It will continue on the First Friday of every month featuring a different topic for discussion.  Participation will be for NASSTRAC members only and attendance will be limited to allow everyone an opportunity to be heard.

 

We will start by using an initial list of Shipper’s concerns to begin these conversations, but will welcome new topics and requests for deeper dives into some topics. Sessions will last one hour and have a guest moderator/industry expert to keep the conversation on track. 

 

For those folks unable to attend, we will be tweeting significant points from the session on our NASSTRAC Twitter account, so if you aren’t following us, now would be a good time to sign up. 

 

We look forward to you joining the conversation.

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