• I believe shippers need to step up and have their voices heard. In the transportation industry, no man is an island and it is only through working together can we achieve our mutual goals of efficient supply chains and transportation networks. Through NASSTRAC’s Education and Advocacy efforts, we help shippers look beyond their offices and docks to learn about what they can do to improve their operations today.
  
  
• Additionally, it’s important to not be “surprised” by any regulatory or legislative changes that will impact your operations. There any many shippers out there who are not aware of the impact HOS has on their operation or how the new Driver Coercion regulation will affect how they manage their carrier/3PL relationships.
  
  
• The friends I’ve made and the network that I have developed through my NASSTRAC membership has afforded me not only with life- long friends, but access to the best and brightest in our industry. To be able to pick up the phone or email another member for help has been my best membership benefit. And now, with the NASSTRAC View I can join the conversation with my fellow shipper members every month.
  
  

Finally, NASSTRAC’s upcoming Annual Shipper Conference & Transportation Expo is one of the best educational events in our industry. Join us this April 24-27 at the Rosen Shingle Creek Resort in Orlando, FL. There is still time to register at www.nasstrac.org/conference.

Well I’ve told you why I’m passionate about why you should be a member of a professional association and hope that I expressed the importance of an association like NASSTRAC can have in developing your career and your operation. Now I want to hear from our members: Be proud to be a NASSTRAC member, shout it from the rooftops and educate others about us. What do you value about your NASSTRAC membership? Let us hear from you today!

See you in Orlando!

• 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!

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?

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?

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.

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.

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.

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.

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.  

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. 

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.

For the second year in a row, we are seeing more than just increases to list rate schedules and accessorials/surcharges.  Like the changes to Ground DIM logic implemented with the 2015 GRI, broader changes are being made to the infrastructural rating logic of the carriers’ Service Guides.

The Rates

UPS announced an average increase of 4.9% for Ground, and 5.2% for domestic US Air services.  FedEx announced a 4.9% average increase for both Ground and Express services.  Predictably, these announced increases tell, at best, part of the story.

With exceptions of Next Day AM / First Overnight, 3-Day / Express Saver, and Ground Residential / Home Delivery 70+ lbs. list rates have become homogenous.  UPS has merged their Standard and Daily list rates into a single rate base which, with the exceptions noted above, aligns with FedEx’s Standard list rates [1].  This continues a multi-year trend toward rate homogeneity. 

If we look at the transportation charge increases in more detail, we see that low-weight packages (where the bulk of the package volume lies) increase to a greater degree than do higher-weight packages.  This is also largely true across the air services, particularly in the next day services.  Surprisingly the zone 2, 1 lb. packages, the basis for most minimum package charges, generally increase to a lesser degree than do the majority on the other weights and zones.  However, the increases here are still higher than the announced increases by and large.

Third Party Charges

The most interesting, and potentially with the most long-term impact to shippers, is a 2.5% surcharge on total net package charges for third party (3P) shipments.  For shippers with large drop ship or 3PL volumes, this will be a non-trivial change in UPS’ pricing logic.  While 2.5% may seem like a small number, we must bear in mind that the carriers have a history of introducing new charges at low cost, and then increasing them dramatically in future years.  Also, we face a multiplier effect here, where list rates are increasing by X%.  But, because we have multiple stacking multipliers (fuel and 3P in particular), the true, landed impact is X+Y%.  See the example at the end of this article for more information on this.

Fuel

In recent years both UPS and FedEx have announced reductions to their fuel surcharge (FSC) indices in conjunction with their GRIs.  Those reductions were often, though not always erased by mid-year increases.  Neither UPS nor FedEx reduced their FSC indices in 2014 or 2015.  What we’re seeing this year is completely different.  Both UPS and FedEx are increasing their FSC indices beginning in November 2015, the second such increase this year.  UPS’ FSC has been higher than FedEx for the last few years.  FedEx announced their increase first, which would have brought them very close to UPS.  Subsequently, UPS announced a November increase as well, thereby widening the gap again.  There are three things to consider relative to fuel:

1. The increase itself – Understand that you are going to pay more for fuel, all else being equal.
   
   
2. Both UPS and FedEx are increasing FSCs in a falling fuel price environment.
   
   
3. By announcing the fuel increases in November, both carriers avoid having to make it part of their GRI announcement.  Many shippers focus primarily on the annual increases, and pay little to no attention to mid-year changes, believing them to be less consequential or immaterial.

The Surcharges

As is typical, most surcharges and accessorials are increasing to a greater degree than transportation charges.  The 2016 increase has an emphasis on large bulky packages, with large increases on Additional Handling, Oversize / Large Package, and especially Unauthorized [2] (over limit) surcharges.  In a sense, this extends the change made to Ground DIM logic in 2015.  The fact that the increased fuel surcharges, and the new UPS third party surcharges will apply to the bulk of these surcharges, only increases the total impact.

Although both UPS and FedEx are applying heavy increases to Indirect Signature / Delivery Confirmation surcharges, FedEx has increased their already-higher surcharge by a greater percentage, bringing Indirect and Direct to parity at $4.25.

The Bottom Line

UPS and FedEx are masters at structuring their GRIs, and marketing them as well, in a way that downplays the real impact on shippers.  We are in the midst of what we believe will be a multi-year trend of applying heavy cost increases based not on weight, but on cube.  We saw the beginnings of this last year, and the changes coming in 2016 bear out the theory.  Moreover, by announcing a straight-line average of all services, weight, and zone combinations for Ground and for Air, the carriers effectively mask the fact that the most commonly shipped combinations are impacted more heavily.  Finally, by stacking cost multipliers, the carriers are able to apply a much higher increase than what the individual increases portray.

For example, UPS announced an increase of 5.2% for Air services.  But the example at right shows that the list rate for a 2-Day package is going up 8.7%, and the landed (total) increase is going up 9.3%.  The implication is obvious.

For these reasons, it is a matter of best practice to evaluate the impact of the upcoming GRIs on your parcel spend.  This is not only a matter of budgeting, but of exploring proactive steps you can take to mitigate the upcoming increases before they hit your bottom line.

Joe Wilkinson is Director of Consulting within the Transportation Solutions Group at enVista.  He has more than 17 years of experience across all modes of transportation including parcel, LTL, rail, ocean and air freight.  Joe works with clients to advance profitability and corporate objectives, optimize and increase efficiencies of transportation and logistics activities, and communicate financial and strategic concepts within the organization.  He is a leading expert in parcel shipping and pricing practices and has negotiated hundreds of parcel agreements for both shippers and carriers.  His areas of expertise include transportation rating and analysis, shipping best practices, parcel market trends and developments, mode optimization, and transportation network and practice optimization.

Now we all know that cheaper isn’t always better and often times its worse.  When it comes to purchasing transportation services is cheaper the way to go?  Today more than ever the pressure on transportation managers to reduce costs never lets up.  No matter how much you squeeze your carriers your management keeps asking for more.  The end result is that relationships are strained, carriers put your business at the bottom of the pile, and you continually struggle to find carriers and/or brokers who will haul your freight.   While you may achieve some short term successes, being able to establish a sustainable transportation network will continue to elude you. 

We read every day that carriers are becoming more selective in choosing customers to do business with.  Of primary concerns to carriers when allocating capacity is how difficult the load is to handle and the amount of time it takes for drivers to load and unload.  How Carrier friendly are you?  There are a number of things shippers can do to become a Shipper of Choice.  Here are a few suggestions:

• Plan Ahead – being able to give carriers advance notice of shipments goes a long way to help them schedule equipment and puts you at the front of the line.
• Flexibility – Bunching up shipments at the end of the week/month/quarter or only loading between peak working hours makes it difficult to supply equipment.
• Relationships – How well do you communicate with your carriers?  Do they have visibility into your operation?  Do they know what is expected and where resources need to be allocated?

A survey by Transplace, Inc. identified four key areas shippers should prioritize when striving to become a shipper of choice:

• Economics – nearly all respondents indicated the market competitive rates and fair fuel surcharges as “critical” or “important” factors when choosing a shipper.  Payment terms and average time until payment are also key areas of focus.
• Driver Productivity. 97% of carriers consider dwell time as an “important” or “critical” factor in determining a shipper’s status.  The ability to drop trailers and offering 24/7 freight is extremely desirable, as is no-touch, efficient freight.
• Driver Friendly Facilities.  Carriers ranked on-site parking and available bathrooms for drivers highest.  Carriers will reject freight from shippers who do not treat their drivers with respect.
• Relationships.  Here it is again.  Recent history has shown that outcomes sometimes can be disastrous when long-term relationships are sacrificed over price.  During economic downturns many shippers often allowed savings opportunities to pass by in favor of maintaining preferred partnerships that afforded the assurance that capacity would be met reliably and consistently.

Shippers need to understand a carrier’s costs in relation to equipment and driver productivity as well as a willingness to discuss issues the carrier may be facing.  Bringing carriers as many opportunities as possible can also be a significant factor.

Where does your company stand?  As more shippers vie for less equipment carriers are becoming more selective about whom they will work with.  When two shippers pay the same rate and one makes them wait for hours to unload and one who unloads within 30 minutes of arrival…they will choose the more efficient shipper every time.

“Whenever you build a highway you create an economic corridor where jobs are created. Investing in infrastructure is a win-win” according to Secretary LaHood.

Unfortunately, he also shared that there was no talk of this in Washington today. The Highway bill is on life support and the lack of leadership, vision, and courage are hampering efforts to get a long term fully funds bill passed. There is no funding and no program. To date, 14 states have raised their gas tax for infrastructure funding and no one has been thrown out of office. Raising the gas tax and indexing it to inflation is our best hope of gaining funding for the Highway Trust Fund.

As most of you know, that federal tax has not been raised since 1993 under President Clinton. He shared with us the difficulties of working with the current Congress and of the very real possibility that the can will be kicked down the road for the 35^th time since we last had a long term Highway Bill. He urged the crowd to make sure their voices are heard by contacting their representatives and asking for their support of a fully funded, long term Highway Bill.

“The answer to getting us moving is the American people. We need a six year bill. Transportation is a bi-partisan issue” said LaHood. The Secretary graciously answered questions and stayed on for after dinner drinks on the terrace overlooking downtown Chicago with Buckingham Fountain in the background.

We were also pleased to hear from Jack Holmes, President of UPS Freight who was interviewed by Mike Regan, NASSTRAC’s Advocacy Chairman about UPS’ recent acquisition of Coyote Logistics and the current state of the LTL industry. Jack echoed LaHood’s comments by saying that “infrastructure is everyone’s issue.” UPS Freight was our sponsor for the dinner that evening.

NASSTRAC wants to thank everyone for their support and attendance at the event. For those of you who were unable to join us, we have a complete video of Secretary LaHood’s comments and the Jack Holmes interview, courtesy of TranzAct Technologies, available on the NASSTRAC website on the Members Only webpage.

For those of you who may not be familiar with this legislation, it was introduced in the House by Rep. Jimmy Duncan (R-TN) in 2014.  Currently, a National Motor Carrier Hiring Standard does not exist.  While Congress has recognized the importance of a national hiring standard for the truck renting and leasing industries, it has not addressed the same need for motor carriers. This lack has caused state courts to take different approaches in interpreting FMCSA causing confusion in the marketplace and wasting valuable State resources.  For example, a manufacturer or logistics company in California hires a motor carrier based in Ohio to move a load from Texas to New York.  If that truck has an accident in Pennsylvania, the courts of any one of those states could have a different standard for what constitutes a safe motor carrier beyond that established by the U. S Department of Transportation.

This legislation asks Congress to establish a national hiring standard for motor carriers rather than allowing a patchwork of state court decisions to determine the hiring standard for motor carriers. Our interstate transportation system, part of the global supply chain, needs a national hiring standard. The language in the bill does not set a standard for gross negligence or criminal wrong-doing; it only establishes a national standard for carrier selection.

Important things to note: 

First: In the bill, of the three items required for carrier verification (insurance coverage, valid MC/DOT number and DOT safety rating not “Unsatisfactory”) the committee changed the last one to read that the carrier must have a DOT safety rating of “Satisfactory” which represents only 13% of the truckload carrier population. 

Second: to satisfy the Democrats, an additional provision was added to state that the carrier must not have been issued an “out of service” order prohibiting them from conducting motor carrier operations. 

TIA said that Rep. Jimmy Duncan is planning on offering an alternative to the DOT Satisfactory requirement by adding that a carrier can either have a “Satisfactory” rating or be unrated (83% of motor carriers). If a carrier is unrated, it is generally an indication that FMCSA hasn’t needed to visit them for violations. 

Third: TIA needs our help and support on this important legislation. Please email the members of the T&I Committee and let them know you support Rep. Duncan’s amendment and the National Motor Carrier Hiring Standard. 

Many of you may be reading this wondering how does it impact me? Anyone who is a transportation decision maker can be subjecting their companies to untold risk by not properly vetting their transportation providers.  The problem is how does the law define “due diligence?” Currently, it is up to the states and each state can provide their own interpretation. Given that the FMCSA has the authority to license and regulate motor carrier safety in order to protect the public and reduce commercial motor vehicle accidents, they should be setting guidelines but have failed to do so.

 Let the shipper’s voice be heard on this important issue.  Visit www.nasstrac.org and take action today.

Now, transportation wasn’t my first choice for a career path. I’ve often said, "Mamas don’t want their babies to grow up to be truck drivers." Nor did my parents expect their daughter to be working with them. When I was young, I wanted to be a U.S. senator (of course that was after wanting to be a nun, and then wanting to go live on a kibbutz in Israel…like I said I was really young). I thought I could change the world and make things better from the pulpit of the U.S. Senate. When I was 17, I made my first trip to Washington D.C. and was able to get access to the Senate gallery. I sat there for over four hours until they kicked me out, fascinated by the action on the floor below my seat. There was Senator Goldwater, and Humphrey and Ted Kennedy all talking and working together. I felt privileged to be a citizen of the United States and to be part of this democratic process.

Of course, any of you who know me, know I didn’t run for office. Finances, family issues and life generally interceded to knock me off my course. But once I started working in transportation and realized what a great industry this was, I jumped in and never left.

Through the years I’ve done just about every job in transportation on the shipper, carrier, and 3PL side. I’ve worked with small start-up companies, Fortune 500 companies, and large private companies. I know how easy it is to get caught up in the day-to-day fire-fighting many transportation managers face. It’s hard to see the forest for the trees and to pull back and make the strategic moves to help you, your company, and your industry become stronger.

That brings me to my message for today. Why I became Executive Director of NASSTRAC. Now, many years later I am able to marry my two passions, transportation and politics. It’s been enlightening, frustrating, and enjoyable. I also learned a few things that I’d like to share with you:

1)You CAN make a difference.

2) It isn’t that hard.

3) “Never believe that a few caring people can’t change the world. For, indeed, that’s all who ever have”…Margaret Mead

So, you can sit there and read this little missive, close it and never think about it again, or you can join us.

“Change will not come if we wait for some other person or some other time. We are the ones we’ve been waiting for. We are the change that we seek”…Barrack Obama

In the coming weeks I will be sharing with you some of the issues NASSTRAC is supporting and working on with other groups that will bring much needed productivity gains to our industry. I’d like you to join us to talk about these issues and how we, as shippers, can help make things happen.

Let your voice be heard. Join the conversation. Join NASSTRAC.