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Trucking Industry Faces Serious Driver Shortage, Higher Pay

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The current shortfall will double in a year to about 300,000 full-time positions, or 10 percent of the workforce.

By Natalie Doss
Bloomberg News


NEW YORK — Trucking companies may face a 30 percent surge in wages by 2014 as rising demand for freight shipments threatens to push the industry's driver shortage to the longest on record.

The current shortfall will double in a year to about 300,000 full-time positions, or 10 percent of the workforce, said Noel Perry, managing director at consultant FTR Associates in Nashville, Ind. A three-year deficiency would top the 300,000 vacancies lasting for about a year in 2004, he said.

A gap between cargo demand and the driver supply adds to evidence that the freight industry is recovering.

This year's gains in cargo tonnage fit "with an economy that is growing very slowly," the American Trucking Associations trade group said last week.

"The truck-driver population is growing at less than 1 percent a year," said Jeff Kauffman, a Sterne Agee & Leach analyst in New York who follows truck and railroad stocks. "Freight's growing at closer to 4 percent."

The shortfalls seen in previous freight rebounds are getting a new twist, according to Perry. Federal safety regulations curbing drivers' work hours mean companies must have more employees. Also now in place are rules helping companies assess applicants' driving histories — weeding out bad risks while also shrinking the pool of applicants.

Rising wages would add to the cost pressures from a bigger workforce and higher prices for new trucks required by federal emissions rules.

Truckers also are paying more for diesel fuel, which averaged 30 percent more a gallon this year through Aug. 23 than the same period in 2010, putting them at a competitive disadvantage to railroads' superior efficiency.

"Truck is more expensive than rail already," Kauffman said. "If it was purely a decision based on price, I probably already have moved to rail. But the flip side is, there's a service difference" favoring truckers because of their greater speed.

Drivers are in short supply even as joblessness exceeds 9 percent. Company-employed drivers, who don't own their rigs, earn average salaries in the mid-$40,000 range, based on figures from the Owner-Operator Independent Driver Association. FTR's Perry estimated a driver's typical tenure at one year.

"If I get laid off, I'm not going to immediately go drive a truck," said Bob Costello, the trucking association's chief economist. "I'm going to try to get another job in my field, something where I'm home every night."

Trucking-labor costs declined during the recession, so some of the projected wage increases will be "catch-up," according to Perry, who predicted the 30 percent boost in wages by 2014.

"If we decide to raise rates for drivers, conversely we're going to raise rates for customers," Con-way's Johnson said.

That may affect consumers through higher prices, according to the National Industrial Transportation League, a trade group for large shippers.

At Con-way's truckload unit, some routes are being limited to only four to five states so drivers can be home once a week. A new "lifestyle" program allows drivers to alternate between two weeks of driving and time off.

"Young drivers get in and sometimes they're not aware of what it takes to be a driver, especially if they have got kids at home," said Miles Verhoef, an independent owner-operator from Tomah, Wis., who worked as a company driver for 16 years. "It's very hard on family life."

Shippers and truckers also are shifting some loads to railroads to avoid long highway drives. Revenue from so-called intermodal cargos, which can move by road, rail and ship, rose last quarter at each of the four biggest publicly traded U.S. railroads.

For a permanent fix to the industry's shortages, Perry estimated that long-haul novices earning $40,000 annually and experienced drivers at $70,000 would need to see increases that might top his projection of a 30 percent boost by 2014.

"What does it take to make a normal person happy with being away from home two straight weeks?" Perry said. "The rule of thumb is we'll probably have to pay these guys between $60,000 and $90,000."
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Driver Shortage Shows Gain in U.S. Truck Cargo: Freight Markets

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By Natalie Doss - Aug 25, 2011 1:26 PM ET
Bloomberg.com
Source: bloomberg.com/news/2011-08-25/driver-shortage-shows-gain-in-u-s-truck-cargo-freight-markets.html

U.S. trucking companies may face a 30 percent surge in wage bills by 2014 as rising demand for freight shipments threatens to push the industry’s driver shortage to the longest on record.

The current shortfall will double in a year to about 300,000 full-time positions, or 10 percent of the workforce, said Noel Perry, managing director at consultant FTR Associates in Nashville, Indiana. A three-year deficiency would top the 300,000 vacancies lasting for about a year in 2004, he said.

A gap between cargo demand and the driver supply adds to evidence that the freight industry is recovering. While the stock-market slump since July weighs on truckers such as J.B. Hunt Transport Services Inc., 2011’s gains in cargo tonnage fit “with an economy that is growing very slowly,” the American Trucking Associations trade group said this week.

“The truck-driver population is growing at less than 1 percent a year,” said Jeff Kauffman, a Sterne Agee & Leach Inc. analyst in New York who follows truck and railroad stocks. “Freight’s growing at closer to 4 percent.”

Truckers’ shipping volume, a barometer of the broader economy, was up 11 percent in July from a year earlier, according to Cass Information Systems. Echo Global Logistics Inc. (ECHO), a Chicago-based provider of freight services, said last month it’s “very optimistic about continued growth in the second half.”

U.S. Regulations

The shortfalls seen in previous freight rebounds are getting a new twist, according to Perry. U.S. safety regulations curbing drivers’ work hours mean companies must have more employees. Also now in place are rules helping companies assess applicants’ driving histories -- weeding out bad risks while also shrinking the pool of applicants.

Rising wages would add to the cost pressures from a bigger workforce and higher prices for new trucks required by federal emissions rules.

Truckers also are paying more for diesel fuel, which averaged 30 percent more a gallon this year through Aug. 23 than the same period in 2010, putting them at a competitive disadvantage to railroads’ superior efficiency.

“Truck is more expensive than rail already,” Kauffman said in an interview. “If it was purely a decision based on price, I probably already have moved to rail. But the flip side is, there’s a service difference” favoring truckers because of their greater speed.
Index Drops

The Standard & Poor’s Midcap Trucking Index slid 11 percent in 2011 before today, and remains 53 percent below its peak in 2007, before the last U.S. recession. J.B. Hunt, the biggest trucker by market value, has dropped 4.3 percent this year. The S&P 500 Railroads Index (S5RAIL) was down 1.6 percent.

Revenue per mile driven excluding fuel surcharges for dry van shipments has advanced 13 percent to $1.55 since the low reached in 2009 as freight demand plunged in the recession, according to industry researcher Truckloadrate.com. Trucks carry about 29 percent of domestic cargo, as measured by revenue ton- miles, compared with about 39 percent... Continue Reading...

Source: bloomberg.com/news/2011-08-25/driver-shortage-shows-gain-in-u-s-truck-cargo-freight-markets.html

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FORECAST: DRIVER PAY RISING

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By MAX KVIDERA
Published August 16, 2011
Source:  CCJ Digital

Over the next 12 months, company driver pay will rise 3 to 5 cents a mile and owner-operator pay 4 to 6 cents a mile as carriers compete for a diminished supply of quality candidates, a forecast pay specialist predicted. The lower end of those ranges will occur even if the national economy continues in the doldrums, while the higher numbers will be achieved if manufacturing improves, said Gordon Klemp, president of National Transportation Institute.

Klemp – participating in a Monday, Aug. 15 webinar produced by Overdrive and Truckers News magazines and sponsored by Freightliner Trucks – said sign-on bonuses, which have re-emerged in the past couple years, will continue. He also forecast increased use of productivity pay programs.

Based on a second-quarter survey of 350 carriers, Klemp offered the following observations:
  • Quality of available driver candidates is “marginal at best”;
  • Driver demand and supply is out of balance; and
  • Wages have moved up in the last year and should go higher.

Factors such as the underground economy, part-time jobs and regulatory hurdles such as Compliance Safety Accountability and potential hours-of-service changes are reducing the pool of qualified drivers.

Klemp said he’s seen innovative pay programs emerge in the last six to nine months, and all revolve around five key components: regionalization, equipment utilization, fuel, customer service and safety. “We’ve seen a number of programs that carriers think are working really well,” he said. “All of those put money in the carriers’ pockets, so they’ve got dollars to spend on the driver side.”

In the last 12 months, 48 percent more carriers have begun offering regional pay packages to meet demands for higher pay in some markets, Klemp said; the spread now averages 11 cents a mile. Klemp said one carrier he monitors offered no regional pay differences in 1995; today that carrier offers 17 different regional pay packages for owner-operators based on type of hauling and road time, and seven packages for drivers.

Higher compensation also accrues to drivers willing to forego home time and stay on the road longer in time increments that range from six days up to 45 days and longer. Teams will continue to attract higher bonuses, with several carriers offering $6,000, Klemp said. In the last year, the top bonus hit $10,000. Continue Reading...

Source: CCJ Digital

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A shortage of drivers has trucking companies offering to pay recruits...

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A shortage of drivers has trucking companies offering to pay recruits while they're training

By Mark Puente, Times Staff Writer
In Print Saturday, August 13, 2011
Source: tampabay.com/news/business/workinglife/article1185804.ece

Gary Jones lost his job in December after working in construction for nearly 30 years. At 55 and retirement still years away, he needed a new career and a steady paycheck. He got his wish.

Jones recently juggled six job offers and expects to earn $40,000 over the next year by joining the ranks of the 3.5 million truckers who shuttle freight on American roads. The transportation industry needs a lot more people like Jones to fill a nationwide shortage of truckers that may hit 300,000 next year.

"People can't find jobs in Florida," said Jones of Wesley Chapel. "This is an avenue to pursue."

It sure is, although it seems odd there would be a shortage of truck drivers with a national unemployment rate of 9.1 per cent (10.6 percent in Florida) and the economy just stumbling along.

New standards enacted by the Federal Motor Carrier Safety Administration forced carriers to scrutinize the employment, driving and criminal histories of applicants — weeding out many problem drivers. That, coupled with carriers gutting recruiting departments and downsizing fleets during the Great Recession, triggered the shortage.

The new rules have caused an operational hardship, although safer drivers on the road are better for the public, said Bob Costello, chief economist at the American Trucking Association.

He calls the shortage "a quality issue, not a quantity issue." On the flip side, "drivers who have good records are in high demand," he said. The shortage has prompted the group to launch a nationwide recruiting campaign.

Many jobs have starting wages higher than $35,000. Advertisements litter billboards, the Internet and print publications. Still, to the bafflement of the trucking industry, the calls go unanswered.

"The pool of applicants just isn't there to fill these jobs," said Mary Lou Rajchel, president of the Florida Trucking Association. "The doors are open to hire professional truckers."

The days of people wanting to grab a CB radio while steering 80,000-pound rigs across the freeways are waning as baby boomers approach the twilight of their careers.

"The younger generation is not willing to do this work," said Doc Hyder, president of Rowland Transportation in Dade City.

Hyder is seeing more turnover among his 91 drivers as they test the waters at other firms. Shipping costs will rise as carriers battle for drivers, he said.

"It will lead to higher wages for drivers," he said. "It's what they deserve."

For years, the industry battled negative stereotypes made famous by movies like Smokey and the Bandit and news stories about problem drivers moving between carriers in the same week... Continue Reading...

Source: tampabay.com/news/business/workinglife/article1185804.ece

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White House to unveil efficiency standards for heavy-duty trucks

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By Andrew Restuccia - 08/09/11 06:00 AM ET
TheHill.com/blogs/e2-wire/677-e2-wire/175983-obama-unveils-first-ever-efficiency-standards-for-heavy-duty-trucks

The White House on Tuesday will unveil the first-ever federal fuel efficiency standards for a range of heavy-duty trucks, a move the administration is casting as a key part of its plan to cut foreign oil imports and slash harmful air pollution.

The planned announcement comes amid growing economic uncertainty and increasing jitters on Wall Street. The Obama administration is expected to argue that the standards will result in major benefits to the ailing economy.

The standards mark the latest effort by the Obama administration to ratchet up vehicle fuel-economy rules. Late last month, Obama announced a plan to set an average standard of 54.5 miles per gallon by 2025 for cars and light-duty trucks. The standard builds on rules finalized last year for model-year 2012-2016 cars and light-duty trucks.

Obama initially was to travel to Interstate Moving Services in Springfield, Va., to unveil the efficiency standards, but the White House on Tuesday canceled the trip. A White House aide told The Hill the truck efficiency standards will still be released on Tuesday.

Similar to how previous fuel-efficiency rules were made, the Obama administration worked closely with industry groups to develop the heavy-duty truck standards. Navistar, Volvo, Chrysler, Conway and others all support the standards, the official said.... Continue reading...

Source: TheHill.com/blogs/e2-wire/677-e2-wire/175983-obama-unveils-first-ever-efficiency-standards-for-heavy-duty-trucks

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Obama To Offer Tax Credit For Hiring Vets

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From the UP

WASHINGTON, Aug. 5 (UPI) -- Spurring U.S. companies to hire veterans can help men and women returning from war zones move into routine civilian jobs, a senior White House adviser said.

"The president feels that our veterans ... deserve all the support that we as a country can give them to find new careers," a White House economic adviser told The Washington Examiner as President Barack Obama was to unveil a plan that offers tax credits to companies that hire veterans.

The proposal, which Obama was to make at the Washington Navy Yard at 11 a.m. EDT Friday, will call for a

$4,800 "Returning Heroes" tax credit to companies that hire veterans unemployed for six months or more and a

$2,400 tax credit if they hire one without a job for less than six months, the adviser told the Examiner.

Companies would get a $9,600 "Wounded Warriors" tax credit -- an extension of an existing program -- if they hired a disabled vet who was unemployed for six months or more or $4,800 if the vet was without a job for less  than six months, the adviser said.

The administration estimates the cost of the tax credits will be $120 million over two years and will be funded from the existing budget.

Obama was expected to order the Defense and Veterans Affairs departments to head up a task force on
reforms, including a "reverse boot camp" to help veterans make the transition to civilian careers.

The U.S. Office of Personnel Management would be directed to publish a manual showing business managers how they can locate veterans with skills and training that match open positions, CNN reported. And the U.S. Labor Department would unroll an "enhanced career development and job search service package."

Obama planned to challenge private-sector businesses to hire or train 100,000 unemployed veterans or their spouses during the next two years.

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Shortage of Drivers Looms for U.S. Trucking Industry

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Federal agency predicts shortage will hit 200,000 next year.

MIDDLETOWN — As the trucking industry prepares to face a shortage of hundreds of thousands of drivers, local transport industries are confronting more than just a shortage of manpower.

The U.S. Department of Transportation says the current shortage will grow to 200,000 drivers by next year, and two million truck driving positions will need to be filled by 2018. The industry employs close to 3.5 million drivers each year. “There’s no doubt there’s a shortage,” said Ken Henderson, president of JP Transport in Middletown. “The average driver is 51 years old, but we’re not getting people to replace them.”

Henderson said as prospective truckers graduate from academies and get certified, they are put into a precarious position.

Transport companies that deliver regionally — which may allow for relatively normal hours and weekends off — are not always self-insured and regulations put on by insurance companies may require certain years of experience before being hired onto a regional transport company. The larger freight movers, however, operate on different hours and have people away from home longer, which creates a situation Henderson calls a “Catch-22”: recent graduates need experience to get the job they want but cannot get it unless they “pay their dues” working for companies that may have them out for longer periods of time — something many new truckers want to avoid.

Dennis Bailey, director of the Ohio Business College Truck Driving in Middletown, said that truck driving in its essence is a job that is unique in many ways.

“The trucking industry is the first to see any downturn of the economy and the first to see the upturn,” Bailey said. “But the economy’s changed (the industry).”

The problem is one that may be unique to only a select few industries, Bailey said.

“It’s not a nine-to-five job,” he said. “It’s just a different lifestyle.”

Trucking could be a boost in income for some. Drivers of heavy loads and tractor trailers earned $19.55 per hour at the end of 2010 and made an average of $40,664 per year, according to the latest Ohio Department of Jobs and Family Services statistics available... Continue reading...

Source: middletownjournal.com/news/middletown-news/shortage-of-drivers-looms-for-u-s-trucking-industry--1217966.html

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Trucking Industry Needs More Drivers

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200,000 drivers needed by year's end



PHOENIX - A boost in the economy and a jump in job orders means that if you're looking for work, you might want to take your search on the road.

The U.S. trucking industry is experiencing a nationwide shortage of workers. The industry will need to hire 200,000 drivers by the end of 2011, according to several nationwide trucking associations.

With record high unemployment rates, FOX 10 asked local truckers why they think applicants aren't more enthusiastic about the job.

“Right now there are plenty of loads. I’m an owner operator, so there's plenty of freight. If there was too many drivers, everybody would be skuttling for it,” said truck driver Tom Hockett.

Hockett has been on the road for 24 years and says while there's plenty of work, there's a shortage of quality drivers.

An aging workforce means more skilled truckers are retiring, and the transportation industry today has stricter requirements and guidelines than in previous years.

“We’re allowed to work 14 hours a day, and out of that 14 hours a day, we can drive 11 of it,” said truck driver Junior Bashor.

Bashor's truck is equipped with a GPS system that tracks his hours, so the days... Continue reading...


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Industry Groups Challenge Provision of New Licensing Rule

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A coalition of industry groups is challenging a provision of the recent federal rule that sets tough new testing standards for commercial licenses.

The Federal Motor Carrier Safety Administration rule, posted last month, contains a provision that prohibits third parties from administering skills tests to the applicants they have trained. The agency put in the prohibition as protection against a possible conflict of interest arising from a trainer at a commercial training school also acting as a state-certified test examiner.

But the industry coalition, in a petition filed yesterday at the agency, said this will cause problems for the industry and the states. It will "greatly exacerbate" the driver shortage by limiting entry-level drivers and will impose burdens on states that allow third-party testing.

The coalition members are American Trucking Associations, the Commercial Vehicle Training Association, the National Association of Publicly Funded Truck Driving Schools, the Truckload Carriers Association and the Professional Truck Driver Institute, an arm of TCA.

They complain in their petition that this provision was not included in earlier versions of the rule. "Had it been included, there would have been a great outcry from both trucking interests, and the entry-level commercial driver training industry," the coalition said.

The provision evidently got into the final rule after Oregon and the Owner-Operator Independent Drivers Association suggested it in their comments on the proposed rule, the coalition said. It added that the suggestion should have been noticed for comment by other parties before it was adopted.

The coalition also said that the final rule already contains safeguards against fraud, such as background checks and training for third-party testers. And, the July 8 effective date of the rule means that training schools and motor carriers will have just a month to implement significant changes in their business practices, the coalition said.
... Continue reading...


Source: truckinginfo.com/news/news-detail.asp?news_id=73873&news_category_id=3

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Compliance, Safety, Accountability (CSA) and Drivers - Separating Fact from Fiction

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With the launch of the CSA Safety Measurement System (SMS) in December 2010, the Federal Motor Carrier Safety Administration (FMCSA) continues to receive questions from drivers. Below is a slightly updated reprint of an earlier What’s New entry separating fact from fiction regarding CSA and drivers.

FMCSA is committed to providing all stakeholders with factual and timely information on CSA. As part of this commitment, it is important that commercial motor vehicle (CMV) drivers are aware of how CSA affects them.

Drivers, we have heard and appreciate your questions on issues ranging from the Driver Safety Measurement System (DSMS) to the Pre-Employment Screening Program (PSP). Here are the FACTS:

What is the DSMS?

The SMS assesses a carrier’s safety performance based on its roadside violations and crashes. The DSMS is a tool within the SMS used by enforcement staff only. Its primary purpose is to help enforcement staff assess driver safety as part of motor carrier investigations. The DSMS does this by identifying which of a motor carrier’s drivers to examine during that carrier’s compliance review.  This enforcement tool uses a subset of violations to evaluate an individual driver’s safety performance across employers. Appendix A in the SMS Methodology Report shows the violations used in the DSMS.

Who can see the DSMS?

Only enforcement staff have access to the DSMS for use during motor carrier safety investigations. Neither drivers nor employing motor carriers have access to the DSMS. While some third party vendors are developing and marketing CSA driver scorecards, these companies do not have access to full driver violation histories in FMCSA databases. FMCSA has not and will not validate any vendors’ scorecards or data.

What is the Pre-Employment Screening Program (PSP) and how does it impact CSA?

PSP is a new, voluntary FMCSA program mandated by Congress that is designed to assist the motor carrier industry in assessing individual drivers’ safety performance as part of the hiring process. PSP is a completely separate program from CSA. Additionally, PSP contains 3 years of inspection reports and 5 years of crash reports; however,  it does not provide a rating, score, or formal assessment of any kind. Drivers are encouraged to obtain and review their PSP report before applying for new jobs and request a review of any potentially inaccurate data through FMCSA’s DataQs program. While the PSP is not part of CSA, the safety data accessible through PSP is the same data that the DSMS and enforcement staff use during motor carrier investigations. For more information about PSP, visit FMCSA’s PSP Website at psp.fmcsa.dot.gov. For more information about DataQs, visit dataqs.fmcsa.dot.gov.

Will FMCSA use CSA to remove CMV drivers from their jobs?

NO CSA does not give FMCSA new authority to remove drivers from their jobs and DSMS information is not publicly shared in the way that motor carrier safety data is today. Other important facts related to driver employment are outlined below.

  • Carriers will not inherit any of a newly hired driver’s past violations. Only those inspections and crashes that a driver is involved in while operating under a carrier’s authority can be applied to a carrier’s SMS data.
  • Similar to the previous system, SafeStat, tickets or warnings that drivers receive while operating their personal vehicles do not count in the new SMS.
  • Neither FMCSA nor CSA restricts drivers based on BMI, weight, or neck size.
  • Drivers should review current and potential motor carrier employers’ SMS data which is located at http://ai.fmcsa.dot.gov/sms. Drivers and carriers with strong safety histories stand to benefit from the new compliance and enforcement program.

Can FMCSA use CSA to revoke a driver’s commercial driver’s license (CDL)?

NOCSA does not give FMCSA the authority to revoke a CDL. Only state agencies responsible for issuing CDLs have the authority to suspend or revoke them.

The CDL Program is completely separate from CSA. FMCSA has developed and issued standards for the testing and licensing of CDL holders. These standards require states to issue CDLs only after the driver has passed knowledge and skills tests related to the type of vehicle the driver expects to operate.

The data kept by a state (i.e. tickets, citations, written warnings, convictions) and the data that are kept by the Federal government and used in the DSMS (i.e. violations from roadside inspections and crash reports) are separate.  Drivers can review their state data by requesting their Motor Vehicle Record (MVR). Drivers may review the data kept by the Federal government through the PSP program referenced above and may request a review of the Federal data through FMCSA’s DataQs system (dataqs.fmcsa.dot.gov/login.asp).

How does CSA affect a motor carriers’ employment of CMV drivers?

Under CSA, FMCSA continues to hold motor carriers responsible for the safety performance of the drivers they employ. This is a longstanding FMCSA position and is not unique to CSA. All inspections and crashes that a driver receives while under the authority of a carrier will remain part of the carrier’s SMS data for two years unless overturned through the DataQs system, even if the carrier terminates the driver.

FMCSA’s CSA website is the official resource for information about this new safety program. We encourage drivers and all stakeholders to visit the CSA Website http://csa.fmcsa.dot.gov and sign up to receive regular updates by email at csa.fmcsa.dot.gov/stay_connected.aspx.
Know the facts, be prepared.

Thank You,
CSA Web Team
USDOT/Federal Motor Carrier Safety Administration