Werner’s Derek Leathers on the Industry Outlook

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Slowly but steadily, freight demand is growing, says Derek Leathers, president and COO of truckload carrier Werner Enterprises. More demand is good, he says, but the risk is that it brings the truckload industry closer to an imbalance that could disrupt distribution.

Leathers, speaking at the ALK Transportation Technology Summit in Princeton, N.J., Wednesday, said that the supply-demand equilibrium has been tightening in recent months but not enough to expose how close the balance is.

We’re at the point where small variances in the supply chain can make a big difference, Leathers said.

For instance, the demand for beverages and snacks for Memorial Day could bounce up against demand for yard tools that has been delayed by cool April weather, he said. That may explain why Werner is seeing strong increases in its measurements of pending near-term demand.

It’s a situation that’s been created by a long-term downward trend in truckload capacity. Industry capacity is down 9.6% since the first period of 2008, and 17.6% since the fourth period of 2006, he said.

Truckload companies are not positioned to dramatically expand their fleets any time soon. Even replacing aging trucks is a problem, Leathers said.

The fleet now averages 6.6 years in age, compared to a normal age of 5.5. Leathers said the cost of rejuvenation would be $54 billion over two years.

“Where will the money come from?” Leathers asked. Interest rates are low but banks are not willing to lend.

The solution will involve making the most of in-house productivity with new technology tools to manage freight, and using other modes to move freight where it makes sense, he said.

Technology is not a solution by itself, he added.

“You need the proper blend between technology and human interaction,” he said. “If you have a broken process or broken strategy, all the technology in the world ain’t gonna fix that, it’s just going to make it very efficiently wrong.”

The fleets that survive will be the ones that can offset rate increases with innovation, he said.

“The secret sauce is to find a way to move less loads. You need to have the optimization and collaboration that is required to thread the needle to get the rate you need while respecting the customer’s need to lower costs.”

Intermodal opportunities will be another key to success, he said.

“We are in midst of a renaissance in intermodal.”

The opportunity is limited by the nature of rail versus freight: 77% of all freight moves by truck in ways that are not competitive with rails, and 15% of rail freight is not competitive with trucks.

But 5% of trucking could go by rail, and 3% of rail freight could go on the highway.

“Our job as logistics providers is to look every day for increased opportunities to save our customers money and one of the lowest hanging fruits is in that small sliver to maximize the conversion opportunity.”

That means putting the best intermodal freight on rail.

“We must continuously look for the best combined efforts of all modes. It’s where technology can make a difference,” he said.

“Absent that, we will have a freight capacity tightness that will be a net negative for the economy.”

Leathers also said that “nearshoring” to Mexico is growing rapidly, referring to manufacturing work that is being relocated from Asia to Mexico.

Manufacturers are not shutting down their Asian plants but are moving their incremental growth back to Mexico, in part to balance fuel costs.

Leathers is not optimistic about the possibility of improving trucking productivity by increasing sizes and weights.

He would like to see a change that allows 88,000-pound, 5-axle trucks, rather than current legislation that would allow states to permit 97,000-pound, 6-axle units.

The 88,000-pound trucks can stop as well as the current 80,000-pound standard, and the industry would not have to buy new trailers and axles.

He also would like for states to be able to establish regional corridors where certain types of operations could run heavier vehicles.

“(But) there’s very little chance of success,” he said. “I just don’t think it’s going to happen.”

Leathers is not pleased with the way federal safety regulations are being implemented. 

“Hours of service, CSA…regardless of how clearly you demonstrate how the regulation has missed the mark, it takes too long to fix.”

One problem with the HOS rule is that mandatory electronic logging is not yet in place, so there’s no way to ensure that the rules are being obeyed.

“We missed the mark on this one,” he said. “We need to focus on electronic logs to ensure that we are compliant.”

CSA brought the driver to the table, a good thing, but it is flawed by a lack of correlation between scores and safety performance. Under CSA, 329,000 carriers have been inspected but only 89,134 have enough inspections to generate a Safety Management System score, he said.


FMCSA Unveils More Medical Examiner Rule Changes

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The Federal Motor Carrier Safety Administration has unveiled a second round of changes to the Medical Examiner rule. In a request for comments, the Agency revealed a plan to require same day reporting of medical results to the Federal government.

FMCSA — already shaking up the industry by restricting Medi­cal Examiner status to a select few — has now proposed that driver medical results be report­ed to the Federal government. Under proposed new rules, Medical Examiners would be re­quired to send in the results of a DOT physical on the same day that it was performed.

To provide for the complicated logistics of this, FMCSA would create a new electronic report­ing system for doctors to use. FMCSA has also released a new Medical Examination Report Form for use during a DOT Physi­cal.

In a move that carriers may be pleased by, FMCSA has said that if this system is put in place, they would stop the requirement for a driver to provide a Medical Certificate to his or her employ­er and State Licencing Authority. The state would be able to look up the driver in an online regis­try.

Same Day Reporting

Under the proposed rule, a driver would visit a doctor (reg­istered on the National Registry of Certified Medical Examiners) and undergo a standard DOT Physical. The doctor would then be required to send the results of all the physicals done in a day to FMCSA via the online system.

This would include physicals that were failed as well as pass­es. FMCSA would then send the information to the appropriate state.

Essentially, this would take the burden of providing a Medi­cal Examiner’s Certificate off of the driver and onto the doctor. FMCSA would thereby remove the ability of a driver to go to another doctor if they don’t pass the physical.

This is a sign of the level of part­nership that FMCSA is trying to build with the National Registry of Certified Medical Examiners. These doctors will have received training on the safety implica­tions of the physical and the im­portance of driver fitness.

Online Reporting System

In the Notice of Proposed Rule­making, FMCSA has estimated that that electronic reporting system would save states and drivers $10.1 million every year. Interestingly, however, they cit­ed only a vague improvement in roadway safety:

“Although the safety benefits of this rule are difficult to fully quantify, the agency believes that the fraud prevention in electronic transmission of [med­ical certificates] will continue to improve safety on public roads,” FMCSA said in the NPRM.

Medical Examiners

This is the second wave in changes to the Medical Exami­nation process, however, FMCSA is far from ready with the first round of changes. Under that plan, drivers would no longer be able to visit any doctor to receive a DOT Physical. Instead, they would have to visit doctors who have received additional training on commercial driver requirements and have passed an examination.

This will dramatically reduce the number of doctors available to perform physicals. FMCSA has said that it expects about 40,000 registered doctors by the May, 2014 implementation date. As of April of this year, however, only 800 doctors had taken part. Reg­istration has been open since summer of 2012.


Your comments are encouraged. This is your opportunity to make your voice heard. FMCSA does read all comments and responds to commonly cited complaints or concerns during the rulemak­ing process. You may submit comments identified by Docket Number FMCSA- 2012-0178 us­ing any of the following meth­ods:

  • Web:
  • Mail: Docket Management Fa­cility, U.S. Department of Trans­portation, 1200 New Jersey Av­enue SE., West Building, Ground Floor, Room W12-140, Washing­ton, DC 20590-0001.
  • Hand Delivery or Courier: Same address, between 9 a.m. and 5 p.m. E.T., Monday through Fri­day, except Federal holidays.
  • Fax: 202-493-2251.

Trucking adds 11,700 jobs in April

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A month after the for-hire trucking industry cut a revised 6,300 payroll jobs on a seasonally adjusted basis it added back 11,700 jobs in April, according to preliminary estimates released by the U.S. Bureau of Labor Statistics. That is the largest month-to-month increase since trucking added 12,700 jobs in February 2012.

Meanwhile, the overall national employment picture improved in April, especially considering upward revisions to March figures. The economy added 165,000 nonfarm jobs in April on top of a revised 138,000 added in March, according to the preliminary BLS figures. BLS had initially reported a gain of only 88,000 jobs in March. The national unemployment rate dipped to 7.5% — the lowest since December 2008. All of the net gains in jobs came from the service sector as the key goods-producing sectors were weak. Construction and mining shed 6,000 and 3,000 jobs, respectively, and manufacturing was flat.

Trucking payroll employment in April totaled 1.386 million jobs — up 45,300 jobs, or 3.4%, from April 2012. Trucking employment is up by 151,600 jobs, or 12.3%, from the bottom in March 2010, but it remains 67,800 jobs, or 4.7%, below the peak in January 2007.

The BLS numbers for trucking reflect all payroll employment in for-hire trucking, but they don’t include trucking-related jobs in other industries, such as a truck driver for a private fleet. Nor do the numbers reflect the total amount of hiring since they only reflect the number of employees paid during a specified payroll period during the month. Due to high turnover rates, the BLS estimates may overstate the number of job positions due to the methodology used in the agency’s Current Employment Survey.


Step Up and Be Counted as TAT Certified

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Have you been trained with materials from Truckers Against Trafficking (TAT)? Have you watched our training DVD? Are you equipped with the number for the National Human Trafficking Resource Center (1-888-3737-888), so you can call and report what you know when you suspect a human trafficking situation?

In an effort to show the pro-active effort and enthusiastic response the trucking industry is making to fight human trafficking-and to demonstrate their leadership in this endeavor among all members of the transportation industry-TAT has created a place on our website for you to register as a "trucker against trafficking."

Whether you're a driver, a truck stop or travel plaza employee, a company or fleet owner, a manufacturing employee, an administrator, manager, trainer, policy maker-any member of the trucking industry whatsoever-please go to and click on the TAT Certified section on the home page.

TravelCenters of America Honors Professional Women Drivers On Mother’s Day

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Women Holding Commercial Driver’s Licenses Eat Free
May 12 at TA and Petro Full-Service Restaurants

WESTLAKE, Ohio, May 1, 2013 – TravelCenters of America (TravelCenters), operator of the TA® and Petro Stopping Centers® travel center brands, invites all professional driving women to enjoy a complimentary meal on Mother’s Day, Sunday, May 12, 2013, at any participating TA and Petro Stopping Centers full-service, sit-down restaurant across the U.S. TA and Petro will be honoring the service of women who make a living out on the road on the day dedicated to appreciating mothers and women everywhere.

Tom O’Brien, President and CEO of TravelCenters said, “This is just one more way that we can show drivers -- specifically moms, sisters, daughters, grandmothers, and all professional women drivers -- how much we respect them and the job they do to keep America moving. We know many drivers will be away from their home and families on Mother’s Day; this is just a small gesture to help them celebrate at their home away from home, with their on-the-road families in one of our friendly restaurants.”

On May 12, women simply need to show their valid commercial driver’s license (CDL) to their restaurant server prior to ordering to receive one free meal (up to $15 value) at more than 170 participating Iron Skillet®, Country Pride® and other full-service, home style restaurants within TA and Petro Stopping Centers locations.

FMCSA Recognizes Date Discrepancy in Commercial Driver's License Testing and Permit Standards Rule

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On March 25th AAMVA published a notice regarding the FMCSA amendment to its Commercial Driver's License Testing and Commercial Learner's Permit Standards rule. AAMVA noted that there was a discrepancy between the actual compliance date of July 8, 2015 and the requirement for standardized endorsement and restriction codes on Commercial Learner's Permits and CDLs of July 8, 2014. FMCSA has since noted this error and has indicated that all aspects of the final rule have a compliance date of July 8, 2015. FMCSA has decided not to do a stand-alone correction rule for this single issue, but instead plans to include it as part of an agency-wide corrections rule to be issued later this year. FMCSA wants to ensure jurisdictions know they are aware of this technical error and that the compliance date for all new requirements in the May 9, 2011 and March 25, 2013 final rules is July 8, 2015.

Obama to Nominate Charlotte Mayor Foxx to DOT Secretary

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President Obama will nominate Charlotte, N.C., Mayor Anthony Foxx to be Secretary of Transportation, news sources are reporting.

Foxx would replace Ray LaHood, who has said he would serve until a successor is confirmed.

Foxx, 41, is considered a rising political star. Politico named him one of “50 to watch” after his successful bid to bring the 2012 Democratic National Convention to Charlotte.

Foxx was elected mayor in 2009. Since then he has pushed to expand public transit, helped develop a new inland port and worked on a new runway at Charlotte/Douglas International Airport.

“As mayor of one of America’s most vibrant cities, Anthony Foxx knows firsthand that investing in world-class infrastructure is vital to creating good jobs and ensuring American businesses can grow and compete in the global economy,” said a White House official cited in The Washington Post.

Foxx was born and raised in Charlotte by his single mother and grandparents. He graduated from Davidson College, where he was the first African-American student body president, and from the New York University School of Law.

He worked as an appellate court clerk, as a staffer in the U.S. House and as a practicing attorney in Charlotte before moving full time into politics.

He was elected to the Charlotte City Council in 2005, serving two terms before being elected mayor in 2009.