All posts tagged 'trucking'

Put Your Best Foot Forward

by Cliff Lynch
16. October 2013 10:47

Put Your Best Foot Forward

Although the situation in some areas has improved slightly, there are still thousands of people willing, able, and qualified to work, who do not have jobs. Ironically, there are jobs available for many of them, but matching the supply and the demand is often a difficult task. First of all, hiring firms must weed out those who are not qualified, reliable, substance free, or truly motivated. Secondly, unfortunately many applicants at all levels have forgotten how to dress! I realize U.S. workplaces have gotten more casual, and the definition of “business casual” has become elusive to many. But when one is applying for a position, he or she should be at their best. Remember you are dressing for an interview – not the workplace. You can revert to your casual attire when you get the job.

Recently, I helped an organization hire truck drivers. About half of the interviewees wore coats and ties. Half looked as if they had just pushed the lawnmower back into the garage. Coincidentally, in today’s local newspaper there was a nostalgic 1940’s photo of men waiting in a long line to apply for Works Progress Administration jobs. The WPA was created by President Franklin D. Roosevelt during the Great Depression to create jobs through the building of public facilities. Every man in the photo had on a suit and tie even though most of them hardly knew where their next meal was coming from. Remember, regardless of the position for which you are being interviewed, if you do not show respect for yourself by dressing as well as you can afford, you should not expect others to respect you. The next time you have a job interview, reflect on which tattoos, piercings, jewelry, and whiskers you might hide, and dress appropriately. It will be a good investment in your self worth.

Employee or Independent Contractor

by Cliff Lynch
30. September 2013 11:58

Several years ago, Intuit predicted that by 2020, 40% of the U.S. workforce would consist of independent contractors rather than company employees. This trend is evident in the supply chain industry where we have seen firms such as FedEx Ground classify its drivers as independent contractors rather than employees of the company. This has not been a universally popular business model, and the courts have tried to curtail it somewhat. Also a number of states have jumped into the fray with legislation seeking to force employees to classify drayage and parcel delivery drivers and employees rather than independent contractors.

New Jersey provides an interesting example. Recently, the passage of the Truck Operator Independent Contractor Act established the presumption that all such drivers were to be classified as employees. With what I think was extremely good judgment, however, Governor Chris Christie vetoed the bill. His concern was that this legislation could drive truckers from the state. This could even divert traffic away from New Jersey ports if there is not an adequate network of trucking companies to provide drayage service. In addition, criminal penalties for misclassification, even if unintentional, would be significant.

I believe it is inappropriate to enact this type of “one size fits all” legislation, particularly in the supply chain industry. While it is true that a firm can eliminate benefit and some other personnel costs, that doesn’t make the independent contractor model inherently bad. These are business decisions that should be left to the firms, not the legislature. Interference with these decisions by any state could encourage a departure from the area, thereby eliminating both jobs and resources.

Thumbs Up to Governor Christie.

Impact of HOS Still Unclear

by Cliff Lynch
22. August 2013 10:52

Impact of Hours of Service Still Unclear

The long awaited revisions to the trucker hours of service rules became effective July 1, and the industry is watching closely to see what impact they will have on drivers, carriers, and shippers. FTR Associates has predicted that the changes will result in a shortage of 60,000 drivers, or 3% of capacity. If this comes to pass, carrier rates are almost certain to increase.

After only one month it is difficult to gauge the impact, but both ATA and FTR reported slight decreases in volume. Both indices fell slightly which no doubt negated any effect of the new rules. Class 8 truck orders also declined 7% from June. But looking ahead, it seems clear that any significant improvement in the economy or truck volume will cause problems. Keep in mind also; there is more to the driver shortage than HOS. CSA 2010 has also taken a toll on drivers and carriers, plus when the economy improves, drivers jump ship for higher paying, more "family friendly" jobs.

Already, driver turnover for the first quarter of 2013 was 97%; and as the economy improves, it will be necessary to pay more for competent, trained drivers.

For shippers, alternatives to truck transportation are few and far between. Some are able to switch to intermodal (which continues to be the fastest growing mode) but trucks are still the mainstay of the transportation industry, hauling almost 69% of total tonnage. ATA predicts this will rise to almost 71% by 2024 when truckers will also capture 81% of revenues. Most carriers are making significant efforts to improve the quality of life for drivers; but in the final analysis, it will be primarily about salary – increased salary to be precise.

In the final analysis, one thing is very clear. There will be no way to escape higher capacity related truck rates.


Trucking Redux

by Cliff Lynch
3. June 2013 16:37

For the past several years, a considerable amount of research has been conducted on the probable impact of larger trucks on the nation's highway system. All the results have been positive, and it has been clearly demonstrated that the addition of a sixth axle would enable a truck to carry a heavier load with no negative impact on safety, fuel costs, the environment, or highway infrastructure. Last year, John Mica, the chairman of the House Transportation and Infrastructure Committee, included in the new transportation funding bill a provision allowing the states to increase maximum weights from 80,000 to 97,000 pounds for trucks with a sixth axle.

Unfortunately, this provision did not make the final cut when the bill was passed; and instead, the new legislation, known as MAP-21, directed the Secretary of Transportation to conduct still another study with a report due to Congress in two years.

The first public information session was held last Wednesday, with three additional sessions planned. Once again the Owner-Operator Independent Drivers Association stepped forward to object and this time used the recent collapse of a bridge on Interstate 5 in Washington State as ammunition for their argument (even though it is pretty clear the bridge collapsed because a truck struck the overhead structure). More objections are sure to follow.

In the meantime, Senator Frank Lautenberg has introduced legislation that would extend the current truck weight limits to the entire 220,000 mile national highway system. If passed, this bill would of course preclude the 97,000 pound loads. The ATA objects to this legislation, and the Coalition for Transportation Productivity, a proponent of larger trucks, blames the railroad lobby, accusing them of waging war on truck productivity. Other organizations support the bill, but on the surface it appears that most of the supporters ignore the sixth axle which is a key factor in assuring the trucks would have no negative impact.

Considering the confusion and controversy that is sure to follow, as well as the lack of urgency we often see in Congress and the DOT, I am afraid it will be a long time before we see these more efficient trucks on the highways – if ever.

Footnote: Unfortunately, on June 3, Senator Lautenberg passed away. Presumably, his legislation will move forward under the auspices of the co-sponsors of the bill, Senators Menendez, Feinstein, and McCaskill.

Keep on Trucking

by Cliff Lynch
2. April 2013 08:00

Keep on Trucking

There is a continuing stream of press about the shortage of over-the-road truck drivers in the country today. Right now, the shortage is estimated at 125,000 fewer drivers than are necessary to meet demand. According to the Department of Labor and FTR Associates, this shortage will more than double by the end of 2013, the largest deficit in nine years. In 2012, turnover averaged 98% at the large carriers and 82% at the smaller operations.

Depending on which side of the fence you are sitting, the shortage is blamed on such things as CSA 2010 activity, reduced hours-of-service rules, and traffic delays caused by infrastructure. However, the most recent data shows that the average salary for an over-the-road driver in 2011 was $39,830. This is not exactly an overwhelming amount when you consider the hours, working conditions, bad food, and the impact on personal and family life. If the economy continues to improve, I suspect even more drivers will turn to other occupations where they can make an increased salary and be more like normal people.

While some carriers are trying to deal with the salary situation, it will take an industry-wide effort to make a significant impact. The carriers must be prepared to face cost increases; but more importantly, shippers must recognize that to get the service they need, they must pay more.