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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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Scammer Alert August 26, 2011 Third Notice

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From Todd Hyland,  Placement Director, Smith and Solomon

USA Truck called me this morning to make me aware of a scammer posing as a USA Truck employee.  He is using two aliases, James Hayes or Joe Tucker.  The number he is giving out is 615-975-9326.

He is calling schools asking for names/numbers of graduates.  He is then calling these grads and telling them he has a job for them at USA Truck.  Students just need to wire him money via Western Union.

If you get a call from someone claiming to be with USA Truck you can call 479-471-6671.  That is their recruiting department.  They will be able to verify whether the person is a USA Truck employee or not.
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FMCSA Swings the Ax to Old Regulations

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DOT Safety Regulation Update Fast-Fax™
Week of August 22, 2011
Foley Services Your Single Source for DOT Compliance

The Obama Administration is waging war against regulations deemed harmful to small businesses; every agency is taking the ax to out dated or harmful regulations and the Federal Motor Carrier Safety Administration is no exception.

In an effort to kick-start the struggling economy, President Obama has ordered every Federal agency to review the regulations that it enforces and to trim the fat. Any regulations deemed harmful to small businesses in particular as well as those that are out dated or serve no current purpose are to be withdrawn.

The Department of Transportation is no exception; every agency of the department has submitted regulations for review. This issue will focus on the regulations identified by FMCSA as being ax-able.

So These Regulations Are Gone?

No. Not yet at least. FMCSA (as well as the other agencies) have consulted with industry insiders to identify regulations that can be gotten rid of. The regulations will now have to be reviewed before they are entirely axed. Quite what the percentage of those that were highlighted that will be axed remains to be seen.

Which Regulations Are Up for Review?

Below is a complete list of the regulations that are up for review. Beneath each regulation is an excerpt from the explanation issued by FMCSA as to why the regulation could be cut or changed.

49 CFR 383.31:

FMCSA acknowledges [the American Trucking Associations] concerns given that 49 CFR 384.209 requires the licensing agency for the State in which the conviction took place to notify the State licensing Agency that issued the CDL. Both sections 383.31 and 384.209 require that the notifications take place within 30 days of the conviction.

49 CFR 395.1(g):

The statutory exemption from the HOS requirements provided for certain motor carriers transporting grapes in New York expired on September 30, 2009, and that the implementing regulation under 49 CFR 395 should be removed.

49 CFR 392.7 and 396.13:

Two regulations concerning driver vehicle inspections should be reviewed to eliminate redundancies. The pretrip review doesn’t require any documentation or paperwork. [FMCSA] will review these requirements to consider whether they could be streamlined to reduce burden without reducing safety.

49 CFR Part 395:

FMCSA will soon issue a final rule to codify the statutory exemption provided by the Rail Safety Improvement Act of 2008 (RSIA of 2008). The Act provides that employees of railroad contractors and subcontractors who are engaged in installing, repairing, or maintaining signal systems are now governed exclusively by the HOS laws administered by FRA.

49 CFR Parts 390, 391, 395 and 396:

ATA and some of its key members have expressed an interest in the use of electronic signatures. However, the current safety regulations require traditional signatures. These options would provide significant paperwork reductions and be less burdensome to the industry than the paper records we currently require.

49 CFR Part 369:

FMCSA would rescind the requirement for certain for-hire motor carriers of property to file the annual Form M concerning their revenues, profits and losses

49 CFR Part 393:

The FMCSA received a petition for rulemaking to amend its brake system requirements for commercial motor vehicles. The rulemaking would allow carriers to disconnect the brakes on the last axle of a truck tractor being transported as the 3rd unit in a saddlemount arrangement.

Complete Listings

If you would like to know more about the process by which FMCSA chose these regulations — or if you would like to read the full reasoning behind each regulation chosen — the DOT has issued complete documentation. If you would like to a free copy, please email This email address is being protected from spambots. You need JavaScript enabled to view it. .


Transportation Ticker


FMCSA Tweaks Intervention Thresholds for Certain Carriers. Fewer carriers are subject to stringent hazardous materials intervention thresholds after recent changes to FMCSA’s Compliance, Safety, Accountability (CSA) safety measurement system. This week, FMCSA announced that only carriers that transport placardable quantities of hazardous materials are subject to CSA’s hazmat intervention thresholds. Previously, any carrier that indicated that it transported hazmat during registration was prioritized for intervention based on the stricter hazmat threshold.

With the recent changes, carriers that transport hazardous materials in amounts that do not require placarding are held to the general intervention thresholds of 65% and 80% instead of the hazmat thresholds of 60% and 75%.

Visit www.FoleySer vicesBlog.com for more information.

Editor: Roxanne Swidrak, Vice President, Operations • 1-800-253-5506 • www.FoleyServices.com • Vol. 111, No. 701 • © Foley Carrier Services, LLC. 2011

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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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Scammer Alert - August 26, 2011 Second of the Day

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Amber with USA Truck called Brad Ball to let us know that there is a gentleman that is calling schools around the country and asking for names and phone numbers of students looking for employment.  He is promising them a job, all they have to do is wire him money so he can get them into orientation.

So far he goes by either James Hayes or Joe Tucker.

Amber said that USA Truck is calling as many schools as possible, Brad just wanted to make sure that we were informed.

Remember to NEVER give out student information to anyone.  Let’s protect our schools

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Scammer Alert - August 26, 2011

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From: Jamie Sather, National Tractor Trailer:

He just received a call from Tyler at USA Truck stating that there is another scammer out there stating that he is with USA Truck (Which he is not) and is asking for students names and numbers and then asking them to Western Union him money to set up orientation. He goes by the name's of James Hayes or Joe Tucker. He gives out the number 615-975-9326.

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National Truck Driver Appreciation Week

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American Trucking Associations Announces:

National Truck Driver Appreciation Week is September 11 - 17. During this week, America takes the time to honor all professional truck drivers for their hard work and commitment in tackling one of our economy’s most demanding and important jobs.

Join us in celebrating the men and women across the country who work hard every day to deliver Life's Essentials.

NTDAW MATERIALS:

For updated Industry Fact & Safety Fact Sheets, click here and download from the right hand column.

If you would like to receive the 2011 NTDAW logo or sample press releases and more, please let us know! This email address is being protected from spambots. You need JavaScript enabled to view it. or 703-838-7935.

NTDAW VIDEO CONTEST:

The American Trucking Associations is holding its Third Annual Video Contest to celebrate. For more information on the contest, click here.

To view the National Truck Driver Appreciation Week 2011 Video Contest Flyer with the full list of rules, click here.

DRIVER APPRECIATION GIFTS:

National Truck Driver Appreciation Week is the perfect time to show your drivers how much you appreciate their hard work, commitment and safe driving. Driver gifts are affordable, available right now and can be customized with your company logo.

Click here for 2011 NTDAW Merchandise!