We’ve all experienced it. You’ve been driving 70 mph for a while. Suddenly, you’re forced to slow down to 45 mph. It feels like you are crawling, even though a part of you knows if you were going this fast on a residential street, you’d feel like you were blazing.
Bob Costello, chief economist and senior vice president of international trade policy and cross-border operations for the American Trucking Associations, has noticed that a lot of people in trucking are having a similar sensation when they look at the economic health of the industry.
Costello was in Little Rock, Arkansas, May 15 for the annual Arkansas Trucking Association For Business Conference and Vendor Showcase to give his perspective on the current state of the economy and the industry.
Everywhere he goes these days, Costello told the crowd, everyone keeps asking, “Are we headed to a recession?” After all, things definitely slowing down.
“I don’t believe that, folks,” Costello said flatly. “However, we have to reset our expectations. What I say is, we’re slowing, but we’re still growing. We have some reduced momentum. We are headed back to trend.”
The biggest problem about 2019 is it came after 2018, and 2018 was a hard act to follow.
“The big mistake is to look at year-over-year comps,” Costello said. “Those are not going to be good because 2018 was so good.
“Instead, take a more long-term look at where we were compared to several years ago and what direction we are heading. We may not be skyrocketing like we did for about a year and a half, but we are still moving upward, albeit at a more normal pace.
“Really, we’re in a decent spot. It’s not going to be 2018. But it’s certainly not going to be terrible, either.”
Costello said he wouldn’t expect a recession until 2021, at the earliest. Part of that is because the Federal Reserve has said they were going to put interest rate hikes on pause.
“Economic expansions do not die of old age,” Costello said. “They’re usually murdered.” And the Fed is often the culprit, but this time their restraint has come in time to hold off a recession.
That’s not to say there’s nothing to worry about, he added. Gross domestic product took an upswing in the first quarter of 2019, Costello said, up 3.2%. That sounds good, until you consider that it was inflated by retailers stockpiling inventories at the time because of the threat of tariffs against China.
“I talk to retailers all the time,” Costello said. “They were bringing in as much stuff as they could.”
The term gets thrown around a lot, but Costello fears the U.S. is getting dangerously close to a genuine trade war with China. With tariffs going up, everything is going to get more expensive, and you don’t have to be an economic whiz to know what that will do to consumer spending.
Costello expects we’ll see consistent growth in the 2% range for the foreseeable future. Not spectacular, “but it’s still growth.”
Consumer sales is one of the key factors to look at that affects trucking. And one of the key factors in assessing the health of the consumer is to look at the job market. Here, the numbers are so good as to be almost inexplicable, Costello said.
For the past year, the American Job market has added an average of 212,000 a month.
“I don’t know where these people are coming from,” Costello said. You can expect an increase of about 60,000 simply from population growth, he said, “anything above that and you’re finding folks from somewhere.”
Some say it’s people returning to the job market from the recession, Costello said, but that was 10 years ago. Could immigration account for some of it? Maybe a little. But wherever they’re coming from, he doesn’t expect it can continue at this pace. The thing to remember, once again, is once it does, it only means it’s getting closer to normal.
The same could be said for the unemployment rate. It’s now at the lowest it’s been since December 1969. “Do you know we now have more job openings than we have unemployed people?” he said. “It’s been that way for almost two years now.”
Of course, when the job market’s good, salaries go up. And when incomes go up, spending goes up.
Another key indicator for trucking is the housing market. With 1.23 million new homes expected to be built, this is one of the less spectacular aspects of the economic picture, Costello said, but sometimes you have to adjust how you look at the numbers. For starters, millennials are not as concerned about home ownership as previous generations. Also, in a lot of desirable areas, there just isn’t any space left to build.
Another area where the industry needs to look at the numbers differently is inventories. Costello said. With the rise in eCommerce and quicker delivery guarantees, more merchandise has to be out there in the supply chain for local delivery, no matter where “local” happens to be.
“This is the change in the supply chain right here, and it has all sorts of ramifications,” Costello said.
Average length of haul for truckload has gone from nearly 800 miles to 507 miles last year, he said. “And what does that mean for driver pay and how we pay them?” The raises companies have given aren’t making up for those lost miles. How will that affect driver retention and the driver shortage?
“Let’s be honest, the driver shortage is an over-the-road for-hire truckload problem, it’s not the entire industry,” Costello said.
So, there are challenges the industry needs to address, but the overall state of the industry and the economy are still strong.
“If I have to summarize, 2018 was the best year ever, post-deregulation,” Costello said. “I think if you took out last year and historically compared it, we’d be in a lot better mood.”
Report says raising fuel tax won’t adequately, fairly pay for future road needs
WASHINGTON — Raising the federal fuel tax won’t adequately and fairly pay for future roadway infrastructure needs, argues a new Competitive Enterprise Institute report released Tuesday.
“Our interstate highway system is crucial to promoting commerce and Americans’ quality of life, and lawmakers must decide how to direct $1 trillion in needed rehabilitation and enhancement of that system over the next two decades,” said Marc Scribner, CEI senior fellow and author of the report. “With rising vehicle fuel economy and declining fuel tax revenue per mile traveled, a new approach is needed to support roadway investments.”
The report also highlights the fact that motor fuel taxes are regressive, because lower-income Americans tend to drive older, less fuel-efficient vehicles and thus pay more to drive the same distances.
“Instead, Congress should eliminate barriers to state, local, and private investment, re-evaluate what transportation infrastructure projects truly merit federal support, and transition away from per-gallon taxation toward per-mile road usage fees,” Scribner said.
The report urges Congress and the administration to support crucial reforms for the next federal surface transportation reauthorization, also known as the highway bill. The current law is set to expire at the end of September 2020.
- Reconsider federal priorities. Continue funding highway freight corridors — major roadways used by heavy trucks — but stop funding roadways that are used mostly by state and local residents not engaged in interstate commerce.
- Change how roadways are funded. Instead of a federal fuel tax, switch to a system of mileage-based user fees whereby users are directly charged based on the distances (and perhaps weight of the vehicle) they drive.
- Promote local self-help. Give states increased procurement and operating flexibility by eliminating federal restrictions on tolling state-owned Interstate Highway System segments.
- Harness private investment. Empower states and localities to seek private partners by eliminating the $15 billion lifetime volume cap on private activity bonds used in surface transportation.
- Remove red tape. Take a hard look at procurement, labor, and environmental rules, and eliminate the policies that drive up costs and create delays for no or trivial public benefit.
CEI recommendations are counter to the beliefs of the American Trucking Associations, the Truckload Carriers Association and the Owner-Operator Independent Drivers Association that an increase in the fuel tax is needed to sustain the Highway Trust Fund.
The report drew the immediate praise of Patrick D. Jones, executive director and CEO of the International Bridge, Tunnel and Turnpike Association, the worldwide association representing toll facility owners and operators and the businesses that serve them.
“The CEI’s report calling on Congress to embrace alternative sources of transportation funding like tolling and a mileage-based user fee is a welcome addition to the growing chorus of voices speaking out in support of new ways to invest and fund our nation’s infrastructure,” Jones said. “The Highway Trust Fund is insolvent, and Congress continues to use billions of dollars in general purpose funds to keep it limping along. The gas tax is unsustainable and continues to fall well short in paying for our roads, bridges and tunnels. Our underfunding and under investment in our nation’s infrastructure is showing in degraded roadways, deteriorating bridges on the 60-year-old interstate system and other highways across America. If we continue to do nothing, or do not properly invest in our infrastructure, the U.S. economy and drivers will continue to suffer, slipping further behind as a world leader.”
According to the organization’s website, CEI is a non-profit public policy organization dedicated to advancing the principles of limited government, free enterprise and individual liberty. CEI said its mission is to promote both freedom and fairness by making good policy good politics.
Deadline for top military vet rookie driver set June 25
KIRKLAND, Wash. — As the June 25 deadline for nomination approaches, Kenworth, the U.S. Chamber of Commerce Foundation’s Hiring our Heroes Program and FASTPORT will look to find America’s top rookie military veteran who is driving for a commercial fleet after retiring from the U.S. Armed Forces.
Under the “Transition Trucking: Driving for Excellence” recognition program, Kenworth will again provide the top award – a Kenworth T680 fully loaded with a 76-inch sleeper and the PACCAR Powertrain, which includes the PACCAR MX-13 engine, PACCAR 12-speed automated transmission, and PACCAR 40K tandem rear axles.
“This is a wonderful opportunity for fleets to recognize and nominate veterans that have excelled in their transition to working in the trucking industry,” said Kurt Swihart, Kenworth marketing director. “A well-deserving veteran will receive the keys to a Kenworth T680 as America’s top rookie military veteran in the industry.”
The program is entering its fourth year of providing military veterans, now driving for a commercial fleet the opportunity to become an independent contractor.
To be eligible to win the Transition Trucking: Driving for Excellence Award, candidates must meet all of the following criteria:
- Military veteran or current or former member of the Newsal Guard or Reserves.
- Graduate of a PTDI-certified, NAPFTDS or CVTA member driver training school, and a current CDL holder.
- Employed by any for-hire carrier or private fleet trucking company that has pledged to hire veterans through the Trucking Track Mentoring Program (https://truckingtrack.org).
- First employed as a CDL driver in trucking between January 1, 2018 and June 25, 2019.
- Legal resident of the continental United States.
Full criteria and online nomination forms can be found on the “Transition Trucking: Driving for Excellence” website (www.transitiontrucking.org).
An expert panel of judges will determine the top rookie based on criteria in the contest rules, including availability of loads, on time delivery, highway safety performance, customer relations, work record, military service record, and non-job related activities/community service.
The Hiring our Heroes program runs throughout the year, with hiring fairs slated at military bases, truck industry events, and at venues near military bases.
For more information, visit the websites of FASTPORT (www.fastport.com) and Hiring Our Heroes (www.uschamberfoundation.org/hiring-our-heroes).
Past Transition Trucking: Driving for Excellence Award Winners: Where They Are Now
2016 Winner: Troy Davidson
For Troy Davidson, the inaugural “Transition Trucking: Driving for Excellence Award top military rookie driver in 2016, earning the honor has completely changed his life. Davidson, who was nominated by Werner Enterprises for the award, now has 350,000 miles under his belt in his truck. Davidson is currently leased on with Wenger Truck Lines.
“I’m having a great time. It’s incredible how many opportunities have opened up for me,” said Davidson, a former crew chief with the famed Blue Angels. “I’ve visited all the states in the continental U.S. I constantly meet people on the road who recognize me from the Transition Trucking program, which helps me build connections in the industry.”
2017 Winner: Gregg Softy
For Gregg Softy, retired U.S. Army lieutenant colonel and the 2017 Transition Trucking: Driving for Excellence Award winner, life on the road has never been better. Since being nominated for the award by Stevens Transport, Softy continues to work with the company as an owner-operator. On average, Softy will tack on 10,000 to 12,000 miles a month.
Transitioning to life after the military can often be a difficult time for veterans as they seek out what to do in the next stage of life. After retiring from the military, Softy knew he wanted to pursue a career in the trucking industry, since he had experience operating heavy equipment.
“I have always been fascinated by heavy machinery. I thought becoming a truck driver would be a natural transition. Many veterans believe they can do well in the trucking industry. If you work hard, you can excel as a driver. Of course, I wouldn’t be where I am today without the great support from my family, friends, and those I’ve met in the industry. I feel fortunate to have won the Transition Trucking: Driving for Excellence Award,” said Softy.
“I can’t speak highly enough about the support from Stevens Transport. Winning this award opened so many doors for me in my career. The people I’ve met and the connections I’ve made, as well as the financial opportunity I have working as an owner-operator, is something I only dreamed of when I first started in the industry. The Transition Trucking: Driving for Excellence recognition program provides an incredible opportunity for us new drivers in the industry, as well as to share the stories of amazing veterans,” Softy said.
2018 Winner: Quinton Ward
Quinton Ward, former U.S. Army mechanic, instructor, career counselor, and top military rookie driver in 2018, appreciates the opportunity the Transition Trucking: Driving for Excellence program offers veterans.
“Transitioning into any new career field can be difficult and for veterans coming out of the service, that challenge can be even greater,” said Ward. “Nominating military rookie drivers not only shows a company’s dedication to its service members, but it also allows those military rookies the opportunities to network within the industry.”
According to Ward, the truck he was awarded has tacked on more than 47,000 miles since he received the truck in December 2018. The truck operates under Werner Enterprises and is a part of the Operation Freedom fleet, which consists of nine military themed trucks, piloted by veterans – used to honor and recruit military members. Ward’s truck honors military service dogs with his special commemorative wrap.
“My service dog, Kirra really helped me in my recovery process after medically retiring from the military due to injury,” said Ward. “The truck is a big hit on the road. The Kenworth T680 garners a lot of attention from drivers at truck stops who like to take photos and chat about the meaning behind the service dog wrap.”
FMCSA seeks driver, carrier comments on delays loading, unloading
WASHINGTON — The Federal Motor Carriers Safety Administration is seeking comments from carriers and driver on how much time is spent at shippers and receivers loading and unloading.
In a notice to published in the Federal Record Monday, the FMCSA said a number of studies have examined the issue of CMV driver delays in the loading and unloading process, and what their potential impact may be on roadway safety and the economy.
The agency noted that the Government Accountability Office (GAO), in its report “More Could Be Done to Determine Impact of Excessive Loading and Unloading Wait Times on Hours of Service Violations, recommended that “FMCSA examine the extent to which detention
time contributes to hours of service violations in its future studies on driver fatigue and detention time.”
In response to the GAO report, FMCSA sponsored a study among a sample of carriers which generated estimates of driver delay times.
Among the sampled carriers, the study found that drivers experienced detention time during approximately 10 percent of their stops for an average duration of 1.4 hours beyond a commonly accepted two-hour loading and unloading time.
Most recently, in a 2018 report titled “Estimates Show Commercial Driver Detention Increases Crash Risks and Costs, but Current Data Limit Further Analysis,” the Department of Transportation’s Office of Inspector General recommended that FMCSA collaborate with industry stakeholders to develop and implement a plan to collect and analyze reliable, accurate, and representative data on the frequency and severity of driver detention.
“Although the above referenced studies estimated overall wait times, they were not able to separate normal loading and unloading times (e.g., the time it would usually take to load and unload a CMV under typical schedules) from detention time (delays in the start of the loading and unloading process which disrupt the driver’s available driving and/or on-duty time). This is a critical data gap in our understanding of the detention issue,” the FMCSA said.
Specifically, FMCSA requests information that addresses the following questions:
- Are data currently available that can accurately record loading, unloading, and delay times?
- Is there technology available that could record and delineate prompt loading and unloading times versus the extended delays sometimes experienced by drivers?
- How can delay times be captured and recorded in a systematic, comparable manner?
- Could systematic collection and publication of loading, unloading, and delay times be useful in driver or carrier business decisions and help to reduce loading, unloading, and delay times?
- What should FMCSA use as an estimate of reasonable loading/unloading time? Please provide a basis for your response.
- How do contract arrangements between carriers and shippers address acceptable wait times? Do these arrangements include penalties for delays attributable to a carrier or shipper?
- What actions by FMCSA, within its current statutory authority, would help to reduce loading, unloading, and delay times?
To submit a comment online, go to , put the docket number, FMCSA-2019-0054, in the “Keyword” box, and click “Search.” When the new screen appears, click on the “Comment Now!” button and type your comment into the text box on the following screen. Choose whether you are submitting your comment as an individual or on behalf of a third party and then submit.