#logistics

Consumer Spending Up Solid 0.4% in June

Transport Topics(www.ttnews.com), Marcio Jose Sanchez – July 31, 2018 10:30 AM

WASHINGTON — Consumer spending rose by a solid 0.4% in June, while a key gauge of inflation increased at an annual pace of 2.2% for a second straight month — the strongest back-to-back gains in six years.

The gain in spending followed an even better 0.5% rise in May, which was revised from a 0.2% initial estimate, the Commerce Department reported July 31. Incomes rose a solid 0.4% in June, matching the May increase.

Inflation over the past four months has been at 2% or slightly above 2%, which is the target the Federal Reserve seeks to achieve for price gains.

The central bank has been raising interest rates to make sure that inflation pressures, which have been low since the last recession, don’t get out of hand. Fed officials have said they are willing to allow inflation to rise at levels slightly higher than its target for a time, given that inflation undershot that level for six years.

Donald Trump

President Donald Trump. (Olivier Douliery/Abaca Press/TNS)

The Fed raised rates three times last year and has hiked rates twice so far this year. Analysts don’t expect another rate hike at this week’s Fed meeting but are forecasting hikes in September and probably December. President Donald Trump has criticized the Fed’s recent rate hikes, warning they could dampen strong economic growth.

The economy grew at a 4.1% annual rate in the April-June quarter, the fastest pace in nearly four years, and nearly double the 2.2% gain seen in the first quarter. Much of the boost came from a rebound in consumer spending as consumers began to spend the extra income they received from the $1.5 trillion tax cut Trump pushed through Congress in December.

Consumer spending, which accounts for 70% of economic activity, grew at an annual rate of 4% in the April-June quarter after a lackluster gain of just 0.5% in the first quarter.

The Trump administration is counting on strong growth to continue in coming quarters, but analysts caution that the 4.1% growth spurt in the spring reflected temporary gains. However, they believe there is enough momentum to keep the economy growing at a solid 3% rate in the second half of this year.

The saving rate stood at 6.8% in June. The May level also stood at 6.8%, though that figure was more than double the previous estimate of a saving rate of 3.2%.

The big upward revision reflected the annual benchmarking of the data, which pushed saving higher because of an IRS report that found billions of dollars in unreported income. That finding caused the government to sharply boost its previous estimates of the saving rate.

DAT Freight Broker Benchmark: 41% More Load Volume Yields 78% Higher Revenue

DAT (https://www.dat.com), Steve Blair – July 10, 2018

Monthly revenue rose 78% for freight brokers in May on a 41% increase in load volume, to set new records for those two metrics. Brokers achieved 23% net operating profit, a solid outcome that beat May 2017 results but fell short of April’s record levels.

Gross margins averaged 12.7% in May, down from 13.6% in April and 13.2% in May 2017. High demand and tight capacity continue push truckload rates higher, so margin compression could be an ongoing factor in the coming months.

Sign up for the monthly Broker Benchmark report to see how your business compares to the competition. 

Brokers moved 41% more loads in May, compared to the same month last year, to set a new record. Load volume rose 10% month over month.

 

This benchmark report draws data from an aggregate of more than 100 freight brokerage companies, whose 2017 average annual revenue of $19.5 million grew 26% compared to 2016. Average revenues for the group were 69% higher in the first five months of 2018, compared to the same period last year. To receive monthly updates in your inbox, subscribe to the DAT Broker Benchmark Report.

 

DAT Keypoint, the TMS created exclusively for freight brokers, keeps track of all your business-critical data

White House Reduces Trucking Rules, but Doesn’t Ease Enforcement, Attorneys Say

Transport Topics (www.ttnews.com), Eric Miller – June 6, 2018 09:45 AM

INDIANAPOLIS ­­— The deregulatory nature of the Trump administration threatens delay or elimination of several Obama-era trucking-related regulations, but those that remain on the books will continue to be aggressively enforced, panelists said at a law seminar here.

RELATED: ATA’s Chris Spear cautions against further ELD exemptions

“That’s what I’m seeing in representing carriers all across the country in dealing with DOT audits,” Tim Wiseman, an attorney with law firm Scopelitis, Garvin, Light, Hanson & Feary, told nearly 600 attendees at a regulatory update session at the 2018 Scopelitis Transportation Law Seminar on June 4.

Wiseman

Wiseman

Wiseman said he believes there are indications that federal regulators are still “coming down hard” on motor carriers, truck drivers and executives of companies.

“I think that’s a good thing if they’re truly targeting unsafe motor carriers,” Wiseman said. “Unfortunately, for a dozen different reasons, trying to replace the current paperwork-driven audit system with Compliance, Safety, Accountability program data just doesn’t work the way the Safety Management System and CSA is currently structured.”

The 2016 Federal Motor Carrier Safety Administration’s Safety Fitness Determination proposal — which has since been withdrawn — likely will not resurface any time soon, he said.

“So we’re left with the antiquated paper-driven audit process that we’ve had for decades,” Wiseman added. “Because it relies so heavily on carrier safety scores to initiate audits, when auditors arrive they’re looking to find the paperwork to support what the SMS is telling them. So there’s a little bit of bias now in the audit process.”

“We’re supposed to be talking about what’s going on at FMCSA,” Richard Pianka, deputy general counsel for American Trucking Associations, told attendees. “But as several other speakers have alluded to, it’s almost easier to talk about what’s not going on at FMCSA.

Pianka

Pianka

“This administration, it’s no secret, is committed to reducing the regulatory burden on industry,” Pianka said.

So far, the Trump administration has put the brakes on the safety fitness determination rule and speed limiter rule, but also has been working to study requested exemptions for the electronic logging device rule that went into full effect April 1, Pianka said.

“A lot of the hostility toward ELDs really is about the hours of service,” Pianka said. “As a result of all the hostility, there is some appetite in Congress and the FMCSA to take some of the pressure off by adding some additional flexibility to hours-of-service rules.”

Pianka said he sees a few possible changes on the horizon. For example, relief on supporting documents, bringing the 100-air-mile CDL driver exemption into line with the 150-air-mile non-CDL exemption, and getting FMCSA’s split sleeper berth pilot program off the ground.

Jennifer Hall, ATA’s general counsel, said that the Department of Health and Human Services has been slow to respond to a congressional mandate to set a standard for hair-based drug testing of truck drivers. She added that Congress in recent weeks has been encouraging HHS to complete the mandate.

Hall

Hall

Hall said FMCSA has rescinded plans for adopting a plan for obstructive sleep apnea guidelines, and has been moving slowly on a rule to make it easier for diabetic drivers to get behind the wheel.

David Osiecki, president of Scopelitis Transportation Consulting, said one thing that has not changed with the new administration is the number of audits, adding that violations of carriers has remained about the same. But even though the number of audits aren’t increasing, the number of closed enforcement cases being generated is on the rise, he said.

“What’s not clear is why is this happening,” Osiecki said.

Scopelitis attorney Annette Sandberg, a former FMCSA administrator, said the ELD rule has gotten off to a “rocky start.”

“There’s been a real lack of training on behalf of drivers and on behalf of the enforcement officers out there,” Sandberg said. “Since January of this year, we’ve had over 35,000 violations cited on drivers for not having a device that’s registered.

“The reality of it is, drivers are getting cited for having an automatic on-board recording device, the old system. Those are not required to be registered, and enforcement doesn’t understand that.”

Sandberg said two regulations that have not been nixed by the Trump administration include the Entry Level Driver Training rule and the Drug and Alcohol Clearinghouse rule, both set to go into effect in 2020.

As directed by the 2015 FAST Act, CSA scores for property carriers have been kept out of public view since late 2015, Sandberg said, and they haven’t gone back up.

FMCSA officials currently are studying several recommendations of a special academic panel but have yet to announce any changes to CSA methodology.

Truck rules help produce with haulers hours-of-service, ELDs

The Packer (www.thepacker.com), Tom Karst – June 7, 2018 04:13 PM

In a relief to produce haulers and the industry in general, the federal government has said hours-of-service rules don’t kick in until a driver goes 150 miles from the original pickup.

The Department of Transportation’s Federal Motor Carrier Safety Administration on June 7 published clarifications to trucking regulations that defined when electronic logging devices (ELDs) should start the clock on hours-of-service deadlines. Since a federal mandate to use the ELDs went into effect in December, questions about the 150-mile rule for ag haulers were rife in the transportation industry. The FMCSA on May 31 cleared the air with two documents clarifying the rules.

Following a 90-day waiver from the electronic logging device mandate issued in March (set to expire June 18), the FMCSA released its final guidance containing definitions and clarifications under the 150 air-mile hours-of-service exemption for agriculture. The guidance is effective for five years.

The documents also state truckers whose clocks run out while waiting to be loaded or unloaded can use “personal conveyance” time (counted as off-duty) while seeking a place to sleep without violating the hours-of-service rules.

“It clarifies quite a bit, which we were glad to see,” said Ken Gilliland, director of international trade and transportation for Western Growers.

He said the FMCSA confirmed that even if a load is a long-distance shipment of fruits and vegetables, hours-of-service (HOS) rules kick in only after the truck passes a 150-mile air radius. Then the ELD starts counting.

The federal guidance also gives a broad definition of the “source” of agricultural commodities, including fields, coolers and packing sheds, Gilliland said. Processing facilities are not considered a source; packing facilities for whole produce are, he said.

For truckers hauling whole produce, the HOS clock won’t start while they wait to be loaded at a “source” location. The rules don’t give HOS relief to the time truckers spend waiting to unload at destination, however.

Gilliland said empty trucks driving to a loading spot qualify for the 150-mile air-radius exemption.

The FMCSA seems to have addressed industry concerns but some questions remain, said Dante Galeazzi, president and CEO of the Mission-based Texas International Produce Association.

“We’re really trying to digest what we’ve received and we’re asking questions,” he said.

For example, he said June 6 that the association wants to make sure that the locations along the border that are the first point of entry for fresh produce from Mexico fall under the definition of “source.”

“We don’t want to get ahead of ourselves and disseminate information without first clarifying that the way we read it is the intent of FMCSA in their guidance.”

Galeazzi said his association is working with United Fresh Produce Association and other industry groups to contact regulatory officials with questions.

“It does feel like the guidance is in support of a lot of the flexibility needs that we had shared with FMCSA, but again, we just want to make sure that we are interpreting their guidance correctly.”

Rate bump

The government’s rule clarifications come at a time of fast-rising rates for fresh produce shippers and predictions of firm rates through the summer shipping season.

Truck rates for produce loads rose more than $1,000, or up as much as 25% compared with week-ago numbers for some destinations May 29 to June 5, according to U.S. Department of Agriculture statistics.

USDA reported truck rates for produce shipped from Southern California to Boston rose from a range of $8,100 to $9,100 on May 29 to a range of $9,400 to $12,000 June 5.

Truck rates from Salinas, Calif. to Chicago for strawberries rose from $5,800 to $6,800 May 29 to $7,100 a week later.

In south Texas, the USDA reported loads sent to Atlanta rose from $3,600 to $4,000 on May 29 to $5,000 to $5,400 June 5.
Beyond seasonally increasing produce shipments, industry reports said some independent truckers pulled their rigs from the road for several days in response to the June 5-7 International Roadcheck, which is organized by the Commercial Vehicle Safety Alliance.

During that 72-hour period, commercial motor vehicle inspectors throughout North America intensify inspections of commercial motor vehicles and drivers, according to the group.

The date of the Roadcheck is publicized in advance and some companies shut down because the heightened inspections can create delays and long lines for truckers, said Kenny Lund, vice president of operations at Allen Lund Co., La Cañada Flintridge, Calif.

“If a trucker has a load of strawberries and is held up in line for eight hours, it screws up customer service,” he said.

Produce and trucking industry leaders say the June timing of Roadcheck is problematic because it comes at a time when there is seasonally high demand for trucks.

“It creates a spike every year they do it,” Lund said.

The effect of Roadcheck on freight rates may be overestimated, said Joe Rajkovacz, director of governmental affairs and communications for Western States Trucking Association. While some truckers park their trucks, he said many continue to run.

“Some states really amp (enforcement) up but in California, for instance, it’s no different than any other day,” he said.

He said truck rate increases may more have to do with volumes going up seasonally, in addition to a reflection of the electronic logging device mandate and the capacity crunch.

“ELD is slowing down the supply chain and volumes are going up,” he said.

While the Roadcheck-related spike in rates may ease somewhat by mid-June, industry leaders say seasonally increasing produce volume is likely to put upward pressure on truck rates through July.

Industry-wide adoption of blockchain

The fascination of blockchain is heavily rooted in the freight and logistics industry now. And so is the fear of missing out (FOMO) anxiety, as nearly every major company in the segment is looking to be an early adopter of the technology. Blockchain without question is futuristic, and raises a lot of exciting possibilities with a myriad of use cases that promise transparency and trustworthiness in an industry that has remained shrouded and chaotic for decades.

SAP, the enterprise software major recently conducted a survey with its clients who are looking to partake in blockchain-related activities in the hope of understanding the inherent value companies perceive with blockchain. “84% of the companies we spoke to are engaged in doing something around blockchain,” said Gil Perez, Senior VP of Product and Innovation at SAP.

Though a majority of the companies view blockchain as an opportunity, only a fraction of them are using the technology in production. “But the ones who are into production are not doing production at scale, but more like a very advanced pilot,” said Perez. “I think in reality, there is no real production of blockchain in the enterprise section. We might be seeing a gradual adoption and implementation over the next 12 to 18 months.”

Though blockchain looks to be a perfect solution to a lot of the industry’s owes, Perez is of the opinion that a mutual consensus on adopting standards between companies would take some time to materialize. “Blockchain is a tool, and it needs to be used in the context of a business process that multiple parties are a part of,” he said. “For example, if I give you a cheque, you need to agree that it is a cheque and the systems behind it also need to agree that I’m transferring money to you. If there isn’t an agreement and trust behind that cheque, then what I gave you is just a piece of paper.”

Then again, the potential of blockchain is endless. Major corporations like Maersk, Samsung, and IBM have already started working on pilot projects by securing documents like BOL through blockchain. The documents are put in an immutable decentralized ledger, through which sellers, buyers, banks and authorities can share, review and sign documents electronically and track the statuses from initiation to completion.

Perez spoke about the emergence of consortiums across different niches, with focusses ranging between industries to region-specific alliances. SAP is a member of a few such consortiums, quite notable amongst them being BiTA where Perez is a board member. Consortiums go a long way in organizing and funneling intent, the absence of which would lead the technology into a black hole.

For instance, the technology behind digital signatures have existed for many years now, and yet a lot of companies mandate paper copies of essential documents. This is because these are specific requirements of regulatory audits or sometimes is dictated by the law of the land. Though these issues look trivial on the veneer, it is vital to circumvent such problems for blockchain to be adopted widely across any industry.

“Blockchain is one of those technologies that everybody could benefit from. There are so many use cases in here. It can help with tracking of goods, be it containers or packages – almost any physical product,” said Perez. “If you are a taking a pill, you would want to know if that is an authentic one and not counterfeit. It is the same with food, where if there is a problem we can trace it back to the origin and contain an outbreak if any.”

Perez stressed that the future of blockchain is dependent on industrial cluster adoption and that its value depends on its use cases. He also stressed on the need to stay away from complacency with regard to the ‘absolute security’ that blockchain promises to provide. “I’m sure that in the next couple of years someone would come up with a way that could perhaps compromise blockchain,” he said. “Blockchain is a very secure way of keeping data right now, but we can’t rest on our laurels. We have to keep pushing forward and improving the trust and the security – because at the end of the day, that is the oil that makes this engine run.”

Integrity Named to the Tampa Bay Journal 2018 Best Places To Work List

Tampa Bay Business Journal names Integrity Express Logistics as 2018’s BEST PLACE TO WORK – LARGE CATEGORY!  Integrity Express Logistics first opened its’ doors in 2007 with three employees and an aspiration to do logistics a bit differently – placing a strong emphasis on what has become their core values: High Performance, Team Effectiveness, Passion for Excellence, Sharing Ideas and, you guessed it, Integrity!  Over the past 11 years, IEL’s growth has flourished to include 300 employees across five different locations including home office located in Blue Ash of Cincinnati, Ohio .  The largest satellite office, located in Tampa, Florida, opened in 2014 and in just four years has earned the number one spot in Tampa’s Best Place to Work – Large Category (between 50-99 employees) according to the Tampa Bay Business Journal!  The Tampa office, led by Sales Manager Kevin McCaig, is comprised of about 70 employees and earned a Quantum Score of 96.4334 according to the Tampa Bay Business Journal.  IEL has also previously been recognized as Cincinnati’s Fastest Growing Company, one of the Best Places to Work in Greater Cincinnati, and one of the Top Work Places in Greater Cincinnati.  All IEL locations live and breathe the company motto “WORK HARD, PLAY HARD” and honor each individual employee’s contribution to the overall success of the team.  We congratulate our Tampa office on their continued success and thank the Tampa Bay Business Journal for this incredible recognition!