Complicated Regulations Challenge Heavy Specialized Carriers, Fleet Execs Say

This story appears in the Jan. 28 print edition of Transport Topics.

Fleets that haul the nation’s largest and heaviest freight — such as bridge girders, huge generators or industrial tires that can weigh 30,000 pounds each — first have to master a challenging regulatory environment unlike any other in trucking, according to fleet executives.

Many states, counties or local jurisdictions can have a hand in deciding how, when and where a single oversize or overweight load must travel. These requirements often differ in neighboring jurisdictions, adding cost and complexity to loads from the cyclical construction, energy and mining industries that require especially skilled drivers to haul the freight.

“Maybe more than other segments of the trucking industry, heavy-haul does deviate from highs to lows, and things are always changing,” said Michael Card, president of Combined Transport Inc., Central Point, Ore. “You have to be a flexible trucking company to be in this market. You can’t set up systems that are kind of automatic. You have to be able to deal with each individual state and each load uniquely.”

Card also is the current chairman of American Trucking Associations.

Industry officials said the lack of state-to-state uniformity involves axle-group weights, trailer configurations and travel-time provisions covering curfews, weekends and nighttime movements. That lack of uniformity also includes: rules for the size and location of signs; lights; the color, size and number of the flags; and differences in fees and the processing of applications.

There is also a hodgepodge of rules involving escort policy, such as: whether escorts for the load must be certified with a state; the number of escorts, including police escorts; and reliable notification of changes in the status of roads, much of which is Web-based.

“Every carrier that is in this industry has suffered through those types of issues,” said Jay Folladori, the vice president who oversees the oversize/overweight division of Landstar System, Jacksonville, Fla., the nation’s largest heavy-hauler based on revenue and number of trucks. “We face pitfalls because of lack of uniformity.”

Mike Roberts, heavy-haul manager at Greatwide Truckload Management LLC, Langhorne, Pa., said that in most situations, a typical heavy-haul isn’t just an exceptional dimension or weight but a combination of these factors.

“And that is usually where the challenge comes, finding the correct vehicle recognized by all the states for that combination of oversize/overweight,” he said. “People outside the heavy-haul realm have a hard time comprehending what’s involved in one of these moves.”

Adding to the difficulty of moving these loads, said Doug Ball, vice president of the Specialized Carriers & Rigging Association, Centreville, Va., is the condition of the nation’s infrastructure.

“We have serious issues with our bridges and roads, and that’s no secret. It’s a documented fact, and we need desperately to do something about it,” Ball said.

Avoiding trouble spots can turn what should have been a move of 200 miles into one of 500 miles, he added, because of routing restrictions and the condition of roads and bridges.

While improving the nation’s infrastructure will require massive amounts of new funding, an effort is taking shape now that could make some regulations uniform among various states.

In November, the board of directors at the American Association of State Highway and Transportation Officials, based in Washington, D.C., approved a resolution to begin harmonizing some easy-to-agree-on regulations, such as the required signage and lighting on oversize/overweight loads, and then pursue additional opportunities for uniformity.

Leo Penne, AASHTO’s program director for intermodal and industry activities, said that a progress report is due in October.

In the meantime, complying with the different restrictions is “nightmarish,” said John McTyre Sr., chief operating officer of McTyre Trucking Co., Orlando, Fla.

“We hire the brightest people we can find, and then top management has to sit over them and continue to monitor the details because of the amount of regulation we have hovering over us, plus the permitting process. Every state is different,” he said.

While the challenges are big, the rewards for hauling this type of freight have increased lately.

In the Transport Topics Top 100 list of for-hire carriers, the flatbed/heavy specialized carriers segment showed the strongest growth for 2011 as revenue jumped 21.4% to $5.3 billion from $4.3 billion in 2010.

Greatwide’s revenue soared to $284 million in 2011, up from $217 million a year earlier. Its 31% increase lifted the carrier to No. 8 in the flatbed/heavy specialized segment of the for-hire TT 100.

The company is a unit of Greatwide Logistics Services.

“Construction already is coming back,” Roberts said. “You are hearing that housing starts are increasing. You are hearing that manufacturing is starting to insource jobs. It’s just going to form that snowball, and I think, as it goes down the hill, we all are going to benefit from the increase in demand.”

Roberts said his division of 130 owner-operators primarily moved construction equipment, with typical loads 10 to 12 feet wide, 14 to 15 feet high and with a gross weight of 80,000 to 100,000 pounds. But Greatwide handles the “oddball” shipments, too. In November, it completed the move of a C-130 aircraft from Key West, Fla., to British Columbia. The main piece was about 100 feet long, 17 feet wide and 15 feet high.

Landstar System topped the 2012 flatbed/heavy specialized carriers list, with revenue of $931 million, up from $744 million in 2010.

“Every year since 2009, we have grown because the industry has grown,” Folladori said. His division, which handles loads up to 80 tons, can include up to 3,000 owner-operators handling permitted, overdimensional freight. Overall, Landstar has about 8,500 owner-operators, to whom it refers as its business-capacity owners.

Folladori said his customers come from the power-generation industry, including wind, hydro-thermal, solar and gas-turbine manufacturing. The carrier also caters to manufacturers of construction and farm machinery, moving from manufacturing locations to dealers; and the military, sending supplies that are oversize and overweight.

The U.S. dollar’s favorable position against other currencies, Folladori said, also has led to the export of heavy machinery at the ports.

“If you look at our bread and butter area [of 115,000 to 120,000 pounds], our competition has basically been the same for the last 10 years,” Folladori said, partially because of the aging of the driver force and the challenge of finding the correct drivers to be able to handle these large loads.

Signaling continued consolidation within the segment, Unified Logistics, Bethesda, Md., acquired McTyre Trucking in July 2012 as part of what Unified said was its plan to build itself into a premier logistics provider of urgent and overdimensional freight. The carrier transports large bridge steel, power-grid equipment, and highway and airport structures. It also moves “mega-heavy” shipments in the nuclear and electrical power industries, including industrial machinery and processing equipment, Unified said.

Besides McTyre Trucking, Unified includes four other specialized rigging and hauling companies acquired since 2008, including two in Michigan, one in Minnesota and one in Texas.

McTyre said his fleet of 40 company-owned tractors and 150 trailers experienced a dramatic downturn in the second half of 2009, “and 2010 was pretty much a disaster for us revenue-wise. But in 2011, we picked back up pretty good.”

And 2012 was even better, with revenue in the $10 million to $15 million range, he added.

“That has helped us somewhat,” McTyre said.

Combined Transport, which Card’s father founded and still helps out as an escort-vehicle driver, has a fleet of 400 trucks, 50 of which belong to owner-operators.

Card said that in 2012, his business benefited from an increase in the construction of towering wind-energy farms made up of rows of multistory columns and huge spinning blades, and that surge led to “a lot more” oversize/overweight loads.

Card has estimated 2012 revenue at $125 million.

“It’s really a good business to be in because the rates are better. We have better relationships with customers.”