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Legislative Report - 3.16.2013 - House passed H.R. 803 – The SKILLS Act

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On Friday March 15 the U.S. House of Representatives passed H.R. 803 – The Supporting Knowledge and Investing in Lifelong Skills (SKILLS) Act reauthorizing the Workforce Investment Act of 1998 by a vote of 215-202.
 
The bill proposes the consolidation of 35 programs used in support of job training into a single Workforce Investment Fund, places a premium on job education and training as the means to provide greater access to the workforce, and revises the responsibilities of the state and local Workforce Investment Boards and eliminates the mandatory inclusion on the WIBs of community colleges representation, labor representation, and others – replacing these individuals with a required 2/3 majority of the new boards to be comprised of business and industry representation.

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CSA Update: Safety Management Cycle for Unsafe Driving BASIC Now Available!

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Unsafe driving includes risky behavior such as speeding, improper lane change, aggressive driving, and other types of  dangerous activity. Safe driving starts with a safe driver. The Safety Management Cycle (SMC) for the Unsafe Driving Behavior Analysis and Safety Improvement Category (BASIC) helps carriers and drivers evaluate existing processes—including policies and procedures, training and communication, and meaningful action, among others—to determine where gaps may exist that either encourage unsafe driving behavior or leave this behavior unaddressed. 

For example, does the company have a policy that prohibits dispatchers from assigning drivers a load that cannot be completed without speeding? Take a look at the SMC for the Unsafe Driving BASIC today and make sure all necessary processes, management, and controls are in place to prevent and address unsafe driving practices. Also, make sure you review the Federal Motor Carrier Safety Regulations to ensure you operate in full compliance of all current safety standards.

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Jobs for Truck Drivers Grow 20%

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Source: truckinginfo.com/channel/fleet-management/news/story/2013/03/jobs-for-truck-drivers-grow-20.aspx

Over the past 90 days, more than 230,000 jobs were advertised online for truck drivers in the United States, according to Wanted Analytics, a source of real-time business intelligence for the talent marketplace. As demand for goods increases, more truck drivers will be needed to keep freight and the supply chain moving. Hiring for this occupation has increased more than 20% compared to the same 90-day period in 2012.

The metropolitan areas with the most demand for Truck Drivers during the past 90 days were New York, Chicago, Dallas, Los Angeles, and Houston.

Employers in the New York metro area not only placed the most job ads of any U.S. area, but also saw one of the highest year-over-year increases in demand. More than 6,600 ads were available online in the past 90 days, representing a 41% growth compared to the same time period last year. Of these five metro areas, Dallas had the second highest growth, up 34% from 2012.

As hiring demand for truck drivers continues, it is likely to become increasingly difficult to source enough potential candidates. However, conditions will depend on each position and the specific skills required in the job.

According to the Hiring Scale, Drivers are likely to be the most difficult-to-recruit in Bismarck, N.D., Hinesville, Ga., and Bowling Green, Ky.

The Hiring Scale scores truck drivers as a 93 (out of a possible 99, where 99 would represent the most difficult situation). With increased competition from employers to attract candidates, recruiters and hiring managers are likely to also experience a longer time-to-fill. For example, the average posting period for a truck driver ad in Bowling Green, Ky., is more than 8 weeks. The national average is about 6.5 weeks.

On the other hand, the Hiring Scale also shows that truck drivers are likely to be the least difficult to recruit in Salisbury, Md., Morristown, Tenn. , and Sebastian-Vero Beach, Fla. These three cities score a 5 on the Hiring Scale and average a 4.5 week posting period, meaning that employers are likely to fill jobs faster and with less difficulty.

The Hiring Scale measures conditions in local job markets by comparing hiring demand and labor supply. The Hiring Scale is part of the Wanted Analytics platform that offers business intelligence for the talent marketplace.

Source: truckinginfo.com/channel/fleet-management/news/story/2013/03/jobs-for-truck-drivers-grow-20.aspx

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Legislative Report - 3.11.2013 - Congressman Mullin (OK-2) is Submitting Bill - Preserving Jobs in the 5 Oilfield

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Congressman Markwayne Mullin (OK-2) is submitting bill  “Preserving Jobs in the 5 Oilfield Act of 2013” on the floor on Monday, March 11, 2013.

“Sand and water are critical components of drilling operations within the oil and gas industry.  Subsequently, those who transport these elements to and from a well site are imperative to keeping production on schedule and operating safely, often on a moment’s notice. These drivers often have extended periods of down time waiting in the queue where they can sleep, eat, and watch TV.  Due to this downtime, water and sand drivers for over 50 years did not have to record this “waiting time” against their hours of “on duty” driving time.

On June 6, 2012, the Federal Motor Carriers Safety Administration (FMCSA) issued regulatory guidance removing this long standing precedent, stating that these drivers would no longer qualify for the waiting time exemption.

FMCSA’s action has resulted in an increase of traffic coming in and out of well sites, causing added wear and tear to the roads.  An increase in the number of trucks needed to do the work put a sudden, extra demand on the number of drivers needed.  This has led to the use of less qualified drivers just to keep operations going.  In turn, industry has experienced a 225% jump in payroll costs as well as an increase in insurance premiums, fuel costs and transportation costs.

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Unemployment Drops to Four-Year Low, Trucking Adds Jobs

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Source: truckinginfo.com/channel/fleet-management/news/story/
2013/03/unemployment-drops-to-four-year-low-trucking-adds-jobs.aspx

March 11, 2013
By Evan Lockridge

The nation’s unemployment rate fell slightly in February according to the U.S. Labor Department.

It decreased from a 7.9% rate in January to 7.7% in February, as the nation’s non-farm payroll added 236,000 thousand jobs, pushing the rate to a four-year low. The increase was led by a pickup of jobs in the construction sector, which showed its strongest increase in hiring in six years.

The better overall rate was due to a combination of the unemployed finding work with the other half no longer looking for employment.

Trucking added the most jobs of any transportation sector in February, increasing by 5,600 jobs in February brining the new hiring level the past 12 months to 42,500 jobs.

The number may have been higher for last month, but some fleets executives at the recent meeting of the Truckload Carriers Association said they are seeing fewer driver applicants. The number of trucking jobs added reflects those only in the for-hire sector and not those with private fleets or trucking jobs in other fields such as construction.

Despite the pickup for trucking, total transportation jobs added fell for the third month in a row.

Despite the uptick in overall employment the number of jobs added is still below a monthly level of 250,000 that many economists say is needed to significantly cut the number of unemployed people.

President Obama warned Saturday that automatic spending cuts, known as the sequester, could reduce the overall job gains seen in February.

Source: truckinginfo.com/channel/fleet-management/news/story/2013/03/unemployment-drops-to-four-year-low-trucking-adds-jobs.aspx

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Legislative Report - 3.8.2013 - Military Education Funding Suspended for U.S. Army, U.S. Marine Corps

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Internal Memo from DoD to Service Branches Says to Consider Cutting Program Funding

Citing the “current fiscal challenges,” the U.S. Army (USA) announced that effective March 8, 2013 new U.S. Department of Defense (DoD) voluntary education Tuition Assistance (TA) enrollments will be suspended until “the fiscal situation matures.” Servicemembers who are currently enrolled and participating in courses approved for TA will not be impacted, however. This decision follows the March 2, 2013 announcement by Secretary of the Navy Ray Mabus that the U.S. Navy (USN) will cease new U.S. MarineCorps (USMC) enrollments in TA. According to today’s Air Force Times article DoD urges ‘significant’ tuition assistance cuts, the U.S. Air Force (USAF) is contemplating a similar suspension of TA enrollments apparently in response to an internal DoD memo to the services, which told them to consider cutting funding for the program. These recommended cuts are a byproduct of sequestration, a process that triggers automatic, across-the-board cuts from most government departments and agencies, which went into effect on March 1, 2013 when Congress and the Administration were unable to reach agreement on deficit reduction legislation.

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Drop in Driver Applications, But Positive Signs on Economy, Freight, Rates

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Source: truckinginfo.com/news/story/2013/03/tca-fleet-panel-sees-drop-in-driver-applications-but-positive-signs-on-economy-freight-rates.aspx

The driver shortage is already intensifying, with the number of both new and experienced driver applicants down over the last couple of months, as economic signs lead to improved optimism about increases in freight and rates this year, according to a panel discussion of three major truckload executives Tuesday at the Truckload Carriers Conference annual convention in Las Vegas.

The session, titled "Repaving Truckload's Road to Success," was hosted by Lana Batts, co-president of Driver iQ and a former head of TCA, featured:

  • Dan England, chairman of C.R. England Inc.
  • Max Fuller, chairman and CEO of U.S. Xpress Enterprises Inc.
  • Derek Leathers, president and chief operating officer, Werner Enterprises.

Driver Applications Dropping

The driver shortage situation "is going to be probably the worst situation we've seen," Fuller said. "If you look at the last year it's continued to tighten. In the last four weeks, we've seen number of applicants drop by 20% to 25%." Calls to other carriers confirmed similar trends, he said. "We think with housing improving, a number of drivers have left the industry to go into construction."

Leathers said while Werner hasn't seen that much of a drop, its applicant count has been down on both new and experienced drivers, at double digit levels, and it started at the end of last year.

As always when discussing the issue of the driver shortage, the issue of pay came up.

"We've been a TCA member 35 years," England pointed out, "And the first convention I went to we had a panel discussion on driver turnover. It has worsened, no question about it, but we have talked for so many years about trying to get more money for our drivers and I think we've largely failed."

Leathers said in conversations with shippers about the need to get rates up to pay drivers more, "I'd like to say we see a sense of urgency in their eyes," but that's not often the case. "You often hear that other carrier aren't telling them about need to raise driver wages. But when you ask them what they pay drivers in their own private fleets, it's almost universally 20% to 30% higher. We have those very uncomfortable dialogues and we push them on that perspective."

England says compared to what we were paying drivers in 1980, if you adjust for inflation, drivers aren't even making as much money as they were then, yet drivers today are faced with far more regulations and responsibilities.

"We've failed on that front and haven't succeeded in pushing through enough increases to pass on increased compensation to drivers, so we're trying to find ways to make the jobs we have better, more compatible with home life, get them home more often," he said.

Leathers, similarly, said Werner works to develop better pay packages that are more specific to the type of work drivers are doing, and to get them home more often.

Fuller and Leathers both said they are seeing longtime, experienced drivers throw up their hands and leave the business because they are fed up with the increasing number of regulations.

Hours of Service Uncertainty

One of those regulatory frustrations, of course, is the uncertainty over the new hours of service regulations scheduled to go into effect July 1, if a court challenge being heard between now and then doesn't affect the start date.

"We're planning on the impression that it may very well be implemented July 1," Leathers said. Werner has been running a portion of its fleet under the new rules and trying to determine what the impact will be. He is expecting a productivity hit in the high single digits or worse.

The good news, Leathers said, it that HOS "will be the last nail in the capacity coffin" and will give carriers more leverage to raise rates.

Looking ahead, the three were fairly optimistic.

"I think the next couple of years are going to be pretty exciting," Fuller said. "When you look at the truckload industry, we're really subject to the stocking, restocking, consumption that our country has. We've gone through the destocking cycle, and if you look at inventory to sales ratio, it's pretty low. You look at housing improving, unemployment improving, that's probably going to help the consumption side. I think in 2013 and 2014 we're all going to be a lot more excited about our industry and freight volumes."

England said there are some mixed signals out there. "If you look at year over year new truck sales, we've had 13 consecutive months of sales being down, and that obviously causes some alarm," he said. "However, if you look at new home sales, retail sales, consumer confidence, we're optimistic, and we're seeing some improvement in demand. It hasn't reflected itself in strong rate increase yet, but we're very optimistic."

"I think the market is tightening as we speak," Leathers added. "We're seeing more and more of that in conversations with customers."

Rates need to go up, Leathers said, because costs have gone up. "Even without a tonnage increase, this is a conversation we have to be having with our customers. When you look at new truck prices, we estimate on average you're purchasing those trucks at a 40% higher price. To not be out talking to customers about rates would be a difficult position to put your company in."

Fuller agreed. "I think you have to see rate increases. We've seen costs go up about 6% per year while rates have gone up about 3% per year the last couple of years. With capacity tightening the way we anticipate the rest of the year, we are going to see the ability to increase rates more so than at any point in the last three years."

Source: truckinginfo.com/news/story/2013/03/tca-fleet-panel-sees-drop-in-driver-applications-but-positive-signs-on-economy-freight-rates.aspx