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Jury awards trucker $80M from former employer after fatigue-induced crash

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EDINBURG, Texas — In a case that proves “going the extra mile” isn’t always a good thing, for anyone involved, a Texas jury awarded a professional truck driver $80 million Wednesday after it decided a 2015 crash in which the driver was severely injured was due to his employer having coerced him into falsifying his log book and driving beyond what federal Hours of Service regulations allow.

The jury in the case, held in 93rd District Court in Edinburg, Texas, awarded Lauro Lorenzo Jr. $5 million in compensatory damages for the loss of income as well as the injuries and the ensuing pain and suffering he sustained from the accident, which occurred when he fell asleep at the wheel and rear-ended another truck on Interstate 59 in Alabama. The jury also ordered three companies: JNM Express, LLC; Anca Transport Inc.; and Omega Freight Logistics, LLC to each pay $25 million in punitive damages.

All three companies are owned by Jorge and Silvia Marin under the umbrella Marin Enterprise.

According to the original court petition, on May 3, 2015, Lozano had finished a run to San Antonio and had returned to McAllen, Texas. Lozano was due to take a 34-hour reset, per HOS regulations.

Lozano said that a few hours after he got home, Jorge Marin called him and told him he needed to make another run, that he should adjust his log to make it look as though he had taken his 34-hour reset.

According to Lorenzo’s lead attorney, Ray Thomas, “This was not an isolated deal.” Several drivers testified that this was a common practice at the Marins’ companies, that they were frequently pushed to drive beyond HOS limits.

According to Thomas, evidence showed that Lorenzo drove an average of almost 5,000 miles a week.

According to the petition, although Lozano was tired and initially objected, he feared for his job and went along with Marin’s demand. South Texas is not an affluent part of the country, Thomas said. Lorenzo has a special-needs son, and he couldn’t afford to miss even a week’s pay.

Lorenzo went to San Antonio and picked up his load at 5 a.m. the next day and set off to Maryland. On May 6, the accident occurred, in which Lozano sustained a traumatic brain injury, as well a crushed pelvis, a crushed foot and broken ribs.

“He was off work for several months,” Thomas said. In fact, he added, Lorenzo started dispatching for the Marins from his bed, before eventually trying to drive again.

Thomas said that in January Lorenzo reinjured his foot, which had six pins in it. He’s working for another carrier now, but with wire and pins holding his hip together, he has to pull up to a loading dock to get in and out of his cab. He’s planning within the next year or so to switch to dispatching full time.

“He’s a hard worker, he has a strong work ethic,” Thomas said. Despite the verdict, with appeals and other legal wrangling, it may still be some time before Lorenzo sees any money, and he’d rather earn a living than try to collect disability benefits.

Actually, Thomas said, this case is unusual, and it only came to be because the Marin Enterprise was not subscribed to the Workman’s Compensation Act.

“In Texas, the workman’s compensation system is voluntary,” Thomas said, but the vast majority of businesses subscribe to it, because if a worker gets hurt, they get benefits, or in cases of extreme injury, they can get a lump-sum payment. In exchange, the employer is protected from being sued by the employee.

When an employer is not subscribed and is sued by an employee, Thomas said, the employer cannot try to claim comparative responsibility or contributary negligence on the employee’s part. In other words, the employer can’t turn around and say the employee knew it wasn’t the right thing to do but they went along with it.

“The jury has sent a clear message that putting profit over the safety of not only their drivers but all drivers on public roadways will not stand,” Thomas said.

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July trailer sales up slight;y, but below last year; used Class 8 sales fall again

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Both ACT Research and FTR reported trailer sales in July as being up slightly over June, but still far below the same month one year ago. (Courtesy: GREAT DANE)

The nation’s two organizations that track and analyze data about the commercial motor vehicle market both note that trailer orders were up in July as compared to June but were still far below when compared with the same month last year.

One of the two organizations reported used Class 8 sales fell for the fourth consecutive month.

ACT Research said preliminary estimate for July 2019 net trailer orders is 9,900 units. Final volume will be available later this month. This preliminary market estimate should be within +/- 3% of the final order tally.

FTR reported preliminary trailer orders for July at 9,000 units, up 61% from dismal June numbers but 68% below July 2018. FTR said trailer orders continue to show weakness during the summer months after experiencing a record run in the second half of last year, noting that van fleets already have their orders in for 2019 and have not started ordering yet for 2020. Although currently, production remains robust at near-record levels, some easing of build rates is expected as backlogs fall significantly to where they were at the start of 2018, FTR said. Trailer orders for the past 12 months now total 324,000 units.

“While net trailer order volume improved significantly from June’s dramatically disappointing results, the industry’s year-over-year performance continued to be extremely weak. While net orders jumped 65% versus an amazingly weak June, they were 66%  below this point last year, a tough comparison to the first month of the record-setting order run-up of last summer and fall,” said Frank Maly, ACT’s director of CV transportation analysis and research. “While some fleets made investment commitments in response to the opening of some 2020 order boards, their overall response was lackluster. A few months ago, there was strong interest to push commitments into next year, but uncertainty over the economy, freight volumes, and capacity has now caused many fleets to move to the sidelines as they re-assess their true needs for either replacement of older equipment or additions to fleet capacity next year.”

On a positive note, Maly said the cancellation pressures of recent months appeared to ease a bit in July. However, any cancels are likely impacting fourth quarter production slots, so there is still some churn in order board occurring before year-end.

“That results in a fairly soft foundation for early next year. Also worth noting is that production continued at a solid pace in July, although OEMs definitely slid back from June’s frantic pace,” he said.

Don Ake, FTR vice president of commercial vehicles, said trailer orders should stay subdued in August but start to revive in September, as fleets determine their needs for next year. The environment remains uncertain, with freight growth slowing and the tariff situation in flux.

“The July order volumes continue to demonstrate a possible return to normalcy in the equipment markets. The low total is representative of a typical slow summer order month, and is very close to the July 2016 number,” he said.

As for the used truck market, Steve Tam, ACT’s vice president of research, said preliminary used truck sales fell 2% month-over-month, the fourth consecutive sequential drop.

Other data released in ACT’s preliminary report included sequential comparisons for July 2019, which showed that average prices fell 4%, while average miles climbed 2%, and average age was up 4%.

“Used truck prices are the hottest topic in the industry right now,” Tam said. “Many dealers are experiencing significant softening in prices, but the erosion is not uniform. Depending on a host of factors, experiences vary and a few factors that impact prices include customer, equipment specifications, location, and vehicle condition.”

ACT’s Classes 3-8 Used Truck Report provides data on the average selling price, miles, and age based on a sample of industry data. In addition, the report provides the average selling price for top-selling Class 8 models for each of the major truck OEMs – Freightliner (Daimler); Kenworth and Peterbilt (Paccar); International (Navistar); and Volvo and Mack (Volvo).

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ACT Research: Key risk to CV market forecasts is China trade wars

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This chart showing the U.S. dollar to Chinese yen (RMB), illustrates why trade wars are neither good, nor easy to win, an ACT Research official said, (Courtesy: ACT RESEARCH)

COLUMBUS, Ind. — According to ACT Research’s (ACT) latest release of the North American Commercial Vehicle OUTLOOK, the key risk to all commercial vehicle market forecasts remains the on-again trade war with China.

“This month’s chart, the U.S. dollar to Chinese yuan (RMB) illustrates why trade wars are neither good, nor easy to win,” said Kenny Vieth, ACT’s president and senior analyst. “As can be seen, after the U.S. fired the latest salvo in the trade war on August 1, the Chinese responded with in-kind tariffs and a 3% currency devaluation — so far. Since the first ‘shots’ of the trade war were fired on March 1, 2018, the RMB has fallen 12% versus the U.S. dollar.

“So, tariffs imposed by the U.S. have been met with in-kind tariffs from China, and the Chinese government has allowed the yuan to devalue, thereby offsetting the U.S. tariff impact, while simultaneously making US goods even more expensive in China.”

Vieth said the bigger risk, especially to emerging economies is that in order to compete with China, they will have to devalue their currencies, making US goods more expensive in more countries and raising the risk of a deeper global downturn.

ACT Research is a publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasting services for the North American and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies.

More information can be found at www.actresearch.net.

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ACT Research: Heavy duty markets at the edge of the precipice

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This graph by ACT Research shows freight growth will decline in 2020 and 2021 before accelerating in 2022, Class 8 truck productivity will remain in the negative through 2022 but will become less each year. (Courtesy: ACT RESEARCH)

COLUMBUS, Ind.  – According to ACT Research’s latest release of the North American Commercial Vehicle OUTLOOK, current data and anecdotes make a strong case that the heavy-duty vehicle markets are at the edge of the precipice.

“Since the start of this demand up-cycle in late 2017, we have targeted this year’s third quarter as the point at which the industry was likely to see production rollover,” said Kenny Vieth, ACT’s president and senior analyst. “That targeting was largely derived from historical precedent, with historical peak-level build lasting between 13 and 15 months. For the current cycle, we date peak build rates to June 2018, so August represents the 15th month of peak-level production.”

Regarding heavy vehicle demand, Vieth said, “At the heart of our cycle duration prediction, carrier profitability and production peaks always lag the freight cycle, so capacity building always accelerates relative to freight growth at exactly the wrong time, every time.

“Large new inventories and deteriorating freight and rate conditions suggest erring on the side of caution remains the right call, and we are warning those in the industry to be prepared for down weeks starting as early as fourth quarter.”

ACT Research is a publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasting services for the North American and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies.

More information can be found at www.actresearch.net.

 

 

 

 

 

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