Senate Committee Advances FMCSA Safety Grants Bill

www.ttnews.com, Eugene Mulero, May 20, 2020, 4:30 PM

Legislation aimed at facilitating financial assistance from the Federal Motor Carrier Safety Administration was easily approved by a Senate panel on May 20.

The Motor Carrier Safety Grant Relief Act of 2020 would provide FMCSA the authority to reallocate unspent grants from fiscal 2019 and 2020 to the Motor Carrier Safety Assistance Program, or MCSAP.

Committee Chairman Roger Wicker (R-Miss.), a sponsor, explained the bill gives states an extra year to spend certain funds awarded for fiscal 2019 and 2020. He added it would allow the U.S. Department of Transportation to distribute unallocated funds.

Safety Fmcsa by Transport Topics on Scribd

“This would ensure that state and local law enforcement do not lose funding unnecessarily as they continue their frontline work responding to this pandemic,” the chairman said during the bill’s consideration.

Added Sen. Maria Cantwell (D-Wash.), the panel’s ranking member, “This legislation would provide more flexibility for states to spend grant money designated for commercial vehicle enforcement.”

Other sponsors include Republican Sens. John Thune of South Dakota and Deb Fischer of Nebraska, as well as Sen. Tammy Duckworth (D-Ill.).

The committee also advanced legislation that would require a joint task force to examine safety and efficiency of air travel during and after the COVID-19 pandemic. Specifically, the bill states the task force “shall develop plans, guidelines and recommended requirements to address the logistical, health, safety and security issues relating to the continued operation of air travel.”

Senate Republican leaders who manage legislation on the floor have yet to announce when they would take up the bills. They have signaled the potential for including such policy measures in either coronavirus economic aid legislation or must-pass government funding bills. A focus on the coronavirus response has dominated debates on Capitol Hill.

The Trump administration’s fiscal 2021 budget request proposes allocating $403 million for Motor Carrier Safety Grants. According to background from the administration, the grants are designed to dedicate funding to “eligible states to conduct compliance reviews, identify and apprehend traffic violators, conduct roadside inspections and support safety audits on new entrant carriers.”

On the House side, policymakers have yet to consider their version. Pertaining to the safety of the supply chain, the House Energy and Commerce Committee announced they would continue to explore the administration’s efforts to procure and coordinate shipments of personal protective equipment where there are high or increased cases of COVID-19.

House policymakers also indicated they would examine “how the administration is working with commercial distributors, and the extent to which the federal government is relying on private supply chains versus playing a more proactive role in decisions related to distribution of supplies.”

On May 14, FMCSA announced a final rule to allow more flexibility for the 30-minute rest break rule by requiring a break after eight hours of consecutive driving and allowing the break to be satisfied by a driver using “on-duty, not driving” status, rather than “off-duty” status.

“America’s truckers have been on the front lines in fighting the coronavirus pandemic, and these regulatory improvements to help them do their jobs as effectively and safely as possible come at a critical time. These improvements to hours-of-service rules won’t increase driving time, but they recognize that a one-size-fits-all approach does not give drivers the necessary flexibility to make the right decisions to safely operate their vehicles,” said Rep. Sam Graves (R-Mo.), ranking member of the House Transportation and Infrastructure Committee. “I applaud [Transportation] Secretary [Elaine] Chao and the Trump administration’s continued commitment to improving the regulations in a manner that benefits workers, the flow of commerce, and the safety of our transportation system.”

Truck Stops Providing Essential Services to Truckers, Navigating the Downturn

www.ttnews.com, Eric Miller, May 14, 2020, 6:00 PM

The employees at the Iowa 80 Truckstop have a motto that serves as reminder of their mission: “Without trucks, America stops. Without truck stops, trucks stop.” As the nation continues to struggle with the COVID-19 pandemic, those words are taking on new relevance.

While drivers are facing challenges amid the crisis, so, too are the businesses that provide them respite along the nation’s highways. As in most sectors of the economy, business is down. But truck stops are working to ensure drivers have the essentials they need.

At Iowa 80, the nation’s largest truck stop, showers and restrooms remain open, diesel fuel flows at the pump, impact wrenches spin in the service center, 900 truck parking spaces are available, take-out food is being delivered, scales are open, and the chiropractor and the dentist are seeing patients. But truck stop employees are adjusting to a new normal as it relates to customers, while the company itself confronts a drop-off in business brought on by a steep decline in traffic.

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“We still see trucks, but we don’t see many cars,” Heather DeBaillie, vice president of marketing for I-80 Group, told Transport Topics. “We normally get about 5,000 customers a day.” These days, vehicle traffic is down by more than half, she said.

She also noted that interactions with shoppers have changed. “Everything that we’ve always trained our employees to do, which is take the customers to it, show it to the customer, has changed,” DeBaillie said. Now, she said, staffers are instructed to simply point to the items.

“Patience is probably the biggest thing we’ve learned,” she said.

“Truck stops have been hit very hard,” said Lisa Mullings, president of Natso, a trade association representing truck stop owners and operators, noting that in recent months, many have seen about a 50% decline in business. That’s especially true, she said, as it relates to full-service restaurants that, in most cases, are either shutting down or doing take-out only.

“That was a big hit for our industry, just like the entire restaurant association members have been hit really hard, too,” Mullings said. “Especially when you consider the time of year, because when this all started, we were in the height of spring break traffic. That pretty much stopped.”

Pilot Flying J CEO Jimmy Haslam said gasoline sales at his company’s facilities initially fell about 50% but are now trending down about 30%. Diesel sales are down about 15% to 17%, he added. While sales inside the stores are down about 10%, he noted that some goods — like tobacco — are showing an uptick.

Haslam said he’s pleased with how his staffers have responded amid the crisis.

“I think we’ve learned that we can work virtually,” Haslam told TT. “We’re in 44 states, and we’ve been able to do the basic things like billable, payables, collections, close our financial books once a month. I think there are some positions that can probably work at home just as well, if not better, than they do at the support centers.”

Longer-term, he also sees benefit in giving his customers more ways to access services.

“The more we can offer technology to truck drivers or trucking companies, the better off we’re going to be,” he said. “I think you’ll see a big investment in technology to makes things more efficient.”

He also believes the pandemic response has helped the company prioritize. “Rather than having 12 things going on, let’s pick out four or five big ones and really focus on those,” he said.

Mullings has been impressed with the willingness of members to cooperate on common goals. “We all have learned the importance of sharing information,” she said. “I’ve been impressed by our members sharing information with their competitors on things like where to find suppliers that can provide hand sanitizer, or masks for their employees and sharing resources and information about what to do if you have a positive test for COVID-19 within one of your facilities.”

At Love’s Travel Stops, the company’s operations have been adjusted to account for the virus, spokeswoman Caitlin Campbell said. “We have taken proactive steps to help limit exposure and spreading of the virus by changing our food and beverage options and by practicing social distancing with our customers,” Campbell said, noting that the company has installed Plexiglas at all of its stores, restaurants and truck care registers. And all employees are required to wear a face covering.

“Our travel centers have always remained open for business during COVID-19,” Travel Centers of America-Petro spokeswoman Tina Arundel said. She noted that in addition to carryout options at select locations, the company’s convenience store foods are being packaged in a way that prioritizes customer safety.

While all of these measures are necessary, Iowa 80’s DeBaillie said her staffers are trying to keep customers’ spirits high with humorous messages on digital billboards. “We’re trying to lighten the mood a little bit,” she said. “We know it’s starting to wear on people. After all, the truck stop is the place where drivers socialize.”

Ports Laying Groundwork for Post-Coronavirus Business

American Shipper, Kim Link-Wills, May 13, 2020

Ports around the globe will have to change the way they do business in a post-pandemic world.

Port officials already are changing the way they interact. The World Ports Conference was to have taken place in March in Antwerp, Belgium, but the spread of the coronavirus foiled that plan. So on Wednesday, industry thought leaders conducted the first in a series of webinars, this one titled “Business as Usual: Adapting Port Business Models to Survive and Thrive in the Post-COVID-19 Era.”

Port of Los Angeles Executive Director Gene Seroka said the Western Hemisphere’s largest seaport has suffered “two horrible shocks to the supply chain. One were the ill-advised trade policies out of Washington and second COVID-19. The knock-on effects of both will be felt for the rest of this year and into 2021. We simply don’t have the demand in our economy today to support any notion of recovery in our industry for the United States and its major markets — 70% of the U.S. economy is driven by consumer sales products and consumption. That simply is not happening today.”

Seroka predicts “a very slow reemergence of the American economy at the national, state, county and local levels over time.”

The webinar sponsors — the International Association of Ports and Harbors and IHS Markit — also believe that over time industry leaders will gather in person again and noted that the World Ports Conference has been moved to June 23-25, 2021, in Antwerp. 

“In the end, I believe we will lose 15% of our imports because of the trade policies, but what it gives us is the opportunity to reinvent ourselves — how we go to market, the fact that we will overinvest in our export segment of the business to help this reemerging economy whenever it takes place,” he said. “We will help American companies get back to the markets overseas they once enjoyed, and those great partnerships will help them explore new markets. And maybe if we have a better balance of trade coming through the Los Angeles gateway, we may have an opportunity to reduce our cost to serve and be more attractive to people who want to participate in the supply chain through Southern California. So there’s some huge upside here.”

There also are huge obstacles, according to Theo Notteboom, an authority on seaports.

Notteboom, a professor at the Shanghai Maritime University, Ghent University and the University of Antwerp, said there is an “avalanche of things that are hitting the ports.”

“We see a huge drop in the exports from Asia — a 15 to 20% drop to Europe and North America,” Notteboom said. “Of course we’ve seen a lot of blanked sailings, about 20% of the network capacity on average of the container shipping lines is now inactive. We have a lot of idle ships, between 2.5 to 3 million TEU of capacity is now idle.”

Notteboom said although he does not expect any bankruptcies among the major shipping lines, they have gone into “survival mode” as flow patterns have been severely disrupted during the pandemic.

Port operations, however, have not had the kind of disruptions that have plagued other parts of the maritime industry, Notteboom said, referring to the crisis of crew members scheduled to be relieved from duty but prohibited from disembarking ships around the world.

“Only a few ports refer to shortages of dockworkers or shortages of truck drivers. It seems that despite these limits that we have right now in terms of how to perform work, things are close to normal at many ports around the world,” he said. 

Jan Hoffmann, chief of the trade logistics branch of the United Nations Conference on Trade and Development, agreed port operators are weathering the crisis and also criticized “the fact that seafarers are stuck on the ships and cannot change and cannot fly home. I’m not sure if all port workers are really in solidarity as they could or should be with their colleagues on the ships.” 

Seroka said U.S. West Coast ports had help making sure operations were as close to normal as possible.

“I would like to thank International Longshore President Willie Adams and [Pacific Maritime Association President] Jim McKenna for the work that they did to get coastwide rules on safety for our workers during this unprecedented pandemic. There was meeting after meeting, discussions with leadership on both sides to make sure that we had a plan through all 29 ports up and down the west coast of the Pacific,” he said.

“In particular, early on, before we knew a lot about what was happening, we were called by one of our local officials at the ILWU who told us point-blank that our terminals ‘do not have the proper cleaning solution and materials to get the longshoremen and women feeling safe when they hand off equipment.’ 

“We immediately jumped into action and with our partner agency here in Los Angeles, the Department of Water and Power, we secured 700 gallons of industrial bleach that were quickly diluted by our hazmat team, poured into 32-ounce bottles that staff and myself went out to our local home improvement stores to buy, and distributed to all terminals at the ports of Long Beach and Los Angeles,” Seroka said. “All of that happened within hours, but it set the tone for what we wanted to do on the safety front with our workforce on the waterfront.”

Hoffmann looked at differences between the COVID-19 pandemic and the financial crisis of 2008-09, saying then there was a problem of less demand. Today the problem is with a lack of supply.

“The factories are closing down. The planes are no longer flying, there’s no space in the belly for cargo,” he said, pointing to U.N. figures that estimate global trade will be down 27% in the second quarter of 2020.

Notteboom also sees differences between 2008 and 2020.

“We see much more optimism on how to get out of this situation. Although this is a very serious disease, I think we have more control of how we can get out and how we pick up where we left off. I think overall also, the 2008-2009 crisis was different in the sense that this was something unexpected, at a time when people thought the sky was the limit. … There was a very good market situation just before the crisis,” Notteboom said.

The 2008-09 financial crisis “hit and it led to a lot of pessimism among people,” he continued. “Now I see a lot of optimism. I see people are very anxious to work hard to make sure we can pick up where we left off.

“We also learned from the previous crisis that we have to be resilient, that we have to prepare for sudden shocks. In 2008-2009, nobody was prepared on how to deal with such shocks. Another thing which is quite different from 2008-2009 is that we now have digital tools to help us,” Notteboom said.

Seroka said, “We have to accelerate technology. We’ve been working on this port community system, the only one in the United States, for four years now and I’ve called on the federal government to adopt a nationwide port community system. We’ve learned so much from our colleagues in Europe, Asia and the Middle East. It’s time to enable that technology here now.

“The one thing that I am convinced of, because we spent the time and the expertise and the study to implement our system here, it allowed us to invent and plug in what I now call the Medical Port Optimizer, which has allowed us to save lives. We have the ability to see product before it gets into a normal pipeline, speed it through our port and our LAX airport, and bring that product directly to the front-line hospitals. It has been a difference maker and we need to have ports in the U.S. adopt this method because if we’re going to reemerge as an economy, data is going to drive us and our companies toward that success,” he said.

Hoffmann agreed now is the time for ports to invest in automation and optimization.

“Ports are challenged to reassess their revenue models and business models. They’re also looking at digital transformation. These are two areas where ports and port authorities in particular can take up a very important role and at the same time can start thinking about how they can add to the existing revenue streams,” Hoffmann said. “Even small ports can have a role to play in digital transformation and in the greening of the supply chains.”

Decarbonization efforts should not be set aside during the coronavirus crisis, he said.

“It’s a good thing to accept realities and not wishful thinking and accept that climate change is a real threat and it’s growing exponentially, it’s getting worse,” Hoffmann said.

Notteboom agreed work must continue to meet International Maritime Organization targets for reducing carbon emissions.

“COVID-19 cannot be an excuse to slow down … on green shipping targets,” he said. “We have to make sure that we continue on the path we set out years ago.” 

Seroka believes the path ahead will look very different — greener — in a post-coronavirus world.

“In California there will be an emergence of green machinery at our ports and in our trucks and our automobiles that we drive, and we’re going to have to get skilled people around that industry. That means we need to upskill and reskill our workforce,” Seroka said. “We have 30% of our working population [in California] in the transportation sector today. We’re going to need to make sure that those folks and their successors have a pathway to good work in the future as well. And that’s going to come through our decarbonization plan.

“Like many other ports around the world, we’re going to try and accelerate that technology. That workforce development also will be in big play. And I have marveled every time I’ve visited the Port of Antwerp. … The workforce development and training center is a model for all ports to follow around the world,” Seroka said.

“The new economy is going to look very different,” he continued. “We’re going to have to be as nimble as possible to hit the ground running.”

Average Price of Diesel Falls Another 3.8 cents to $2.399 a Gallon

ttnew.com, Don Ronan and Connor D. Wolf, May 4, 2020 6:00 PM

The national average price of diesel fuel continued its steady slide, falling 3.8 cents to $2.399 a gallon, the Energy Information Administration reported May 4.

Trucking’s primary fuel is 77.2 cents per gallon cheaper than a year ago.

Meanwhile, the national average of a price of gasoline rose for the first time since Feb. 24. Gas increased 1.6 cents to $1.789, though that still is $1.108 cheaper than a year ago at this time.

Diesel prices fell in all regions. The Rocky Mountain area saw the most significant decrease, 6.4 cents from the previous week, to $2.37. California and the Central Atlantic region saw the smallest decline at 2.3 cents. In California, the price of diesel is $3.191 per gallon, 90.6 cents less expensive than a year ago, making it the largest 12-month variance of any region in the nation.

The smallest year-over-year difference is 59.3 cents in New England, where diesel fell 2.5 cents to $2.652 per gallon this past week.

In the Central Atlantic, the price of diesel is $2.688 a gallon, 69.1 cents less than this time in 2019.

Nine of the 10 EIA regions have fallen below $3 a gallon for diesel, with California’s price still being above that.

The last time diesel was this affordable was early October 2016.

The cost of oil mainly dictates the sliding price of diesel. According to EIA, 29% of the price of a gallon of diesel is tied to oil, while 12% comes from refining. Distribution and marketing make up 39%, and 21% goes to local, state and federal taxes.

West Texas Intermediate oil, the industry benchmark, closed at $21.15 a barrel May 4. A year ago, it was $61.66.

The coronavirus sweeping across the globe has had a massive impact on the world economy, including fuel prices. Phil Flynn, a senior energy analyst at The Price Futures Group, is starting to see those disruptions become more stable.

“I think the word is stabilization,” Flynn told Transport Topics. “We saw high volatility, and obviously there has been a return to sub-zero prices, but those fears seem to be easing a little bit.”

Fuel prices throughout the pandemic have steadily dropped as lockdowns and business closings resulted in far less consumption. China, being the epicenter of the coronavirus, played a significant role early on as it is a major fuel consumer.

“We’re starting to see parts of the U.S. economy open up, and the demand situation is getting a little better,” Flynn said. “So, it looks like we’re turning the corner in terms of demand, and that’s going to give us some stability.”

He also noted that even with an abundant supply of oil, supplies could tighten if demand resumes.

“We probably will see the prices of gasoline and diesel rise a little bit. So we’ll see them creep up maybe 10 cents a gallon for both, and that means people are getting back on the road. The reason why gas prices are down now is because no one is driving. If they’re driving that would be a positive thing.”

Mark Anderson is CEO of United Road Services Inc., a Romulus, Mich.-based auto transporter.

United Road

“Diesel impacts us most, and while clearly the prices are at levels none of us thought possible even a few months ago, the transportation industry is propelled by several variables.”

The company moved more than 4 million vehicles last year throughout the United States and Canada. United Road ranks No. 54 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.

Even as an essential services provider, business is down with U.S. automotive manufacturing stalled due to COVID-19.

Anderson added that United Road’s operational costs have increased due to longer waiting times and personal protective equipment expenses, so the ability to take advantage of the lower rates for now is limited. He is optimistic the company will be in a good place once the economy rebounds, customers resume operations and OEMs restart production.

“When this occurs, we’re hopeful fuel prices will remain lower,” Anderson said. “Importantly, returning to near-normal demand levels is of most importance to our customers, car and truck haulers, and independent contractors.”

Commentary: How Will Technology reshape the industry for COVID-19?

www.freightwaves.com, John Mannes, March 28, 2020

The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates. 

In the wake of 9/11, 11,000 U.S trucking companies folded. Outside of hurricanes and earthquakes, the attacks on the Twin Towers and the Pentagon were the largest insured losses in history. In an effort to regain control, insurance companies raised premiums across industries with trucking taking a direct hit. The notoriously slim margins of the trucking industry meant that anyone who couldn’t get costs under control went under. 

Today, the trucking industry is facing a similar vulnerability as a result of COVID-19. This time, it’s unlikely cost cutting alone will steady the industry. The current pandemic is exacerbating driver shortages and putting a strain on the aging drivers holding up the world’s supply chains. When the trucking industry rebounds, technology stands to play a critical role in its recovery.

The next few weeks are going to be hard — really hard. Most big enterprises are in crisis evaluation mode, working overtime to assure shareholders that everything is under control while taking steps to increase employee safety.

Few CEOs had a pandemic preparedness guide sitting in their top desk drawer. Companies are doing the best they can to respond with the resources on-hand. Optional pilots and POCs are on hold in the most affected industries. Innovation teams in some cases have been repurposed entirely to serve as COVID response teams — searching for thermal scanners instead of RPA tools. Their most immediate need is for solutions that can keep drivers safe and help manage cash flow risks.

In the longer term, COVID-19 is forcing conversations around autonomous trucking and remote work to the forefront of the industry. While glitzy tech companies have been preparing for years with Zoom, Tandem and Dropbox, trucking companies are for the first time grappling with what ‘remote’ means for drivers that already operate in the field.

“When a truck driver makes a delivery, he often gets out of his cab and goes into a room to talk to the individual responsible for that unloading facility,” explains Jeff McCaig, owner of Trimac Transportation, the third largest tanker and dry bulk trucking company in North America. “We’re saying don’t do that, do it through the window, do it through your phone but avoid the contact.”

Remote technologies for industries like trucking need to be able to effectively bridge the physical and digital worlds. This means better communications technologies so trucking companies can do more with fewer field resources. It also means better connecting stakeholders so more planning and coordination can happen back at the office and less has to be done ad-hoc by drivers.

“Truck stops that have formerly been available to a driver as he goes on longer haul, some of them are closing down,” McCaig adds. “How do we make sure our drivers have places to rest, to eat and to use hygienic facilities?”

Autonomous technologies are also moving from nice to have to need to have. Trucking companies need options in the event that sick drivers are unable to work. A successful response to COVID-19 hinges on keeping supply chains functioning. We’re already allowing drivers to exceed federally mandated driving time limits in cases where they’re carrying medical supplies. It’s not infeasible to imagine autonomous trucks running some routes in areas where normal traffic has been prohibited.

“The most tactical and strategic issue for trucking is the availability of truck drivers,” explains Trevor Adey, vice president of Trimac Digital. “Truck driver is the largest employer in Canada and one of the largest in the U.S., but the role is not as appealing as it has been in the past.”

As trucking tech continues to grow hotter with recent rounds for companies like Convoy, Flock, Emerge, CloudTrucks and Ike (among many others), hundreds of new startups working on everything from autonomous trucks to digital carriers need to be thoughtful about how their operations and value propositions will evolve as COVID-19 reshapes the industry.

The next few weeks may appear bleak, with churn and sales cycles moving in the wrong direction. Fortunately, demand for trucking is nearly constant. There’s more than enough demand for food and pharmaceuticals to keep the industry humming. Many of the costs in trucking are variable, so while companies are seizing this opportunity to tighten their belts, it’s likely that trucking will emerge as one of the industries best equipped to ramp-up with technology coming out of this pandemic.

If you’re interested in learning more, check out the first episode of Future Proof which features both Jeff and Trevor from Trimac speaking at length about the themes presented above. 

John Mannes is an investor at Basis Set Ventures, an early-stage venture capital fund in San Francisco focused on artificial intelligence and automation.