Year in Review: Freight Level Rises Despite Uncertainty

This story appears in the Dec. 23 & 30 print edition of Transport Topics.

A year that saw steady improvement in demand for freight hauling also brought uncertainties in the form of a partial government shutdown, a fumbled rollout of a new health-care law and regulatory changes, including new rules on driver hours of service and an increase in the surety bond requirement for freight brokers and forwarders.

Political gridlock in Washington weighed heavily on the minds of trucking executives and prompted Bill Graves, president of American Trucking Associations, to urge industry leaders to reassess their long-standing support of Republican candidates.

Speaking at the federation’s Management Conference & Exhibition in October, Graves said Republicans “seriously mishandled” events leading to a 16-day shutdown of the federal government. He also criticized lawmakers for not taking action, including raising fuel taxes, to fund needed transportation infrastructure.

“Every elected official in Washington knows what needs to be done,” said Philip Byrd Sr., who took over as chairman of ATA and is president of Bulldog Hiway Express in Charleston, S.C. “They just don’t know how to do it and get re-elected, and that’s a tragedy.”

Most economic indicators remained positive in 2013, with tonnage levels rising 5.5% through the first 10 months and national unemployment rates declining, but the slow rate of growth and rising costs created financial challenges for many trucking operations.

The number of for-hire carriers closing their doors rose throughout the first three quarters of 2013, according to surveys conducted by Donald Broughton of Avondale Partners in St. Louis.

“Underlying conditions are getting more difficult,” Broughton said.

At issue for many trucking companies is the cost of complying with federal regulations, including a change in hours-of-service rules for drivers that took effect July 1, an increase in the minimum bond requirement for freight brokers and forwarders, and new health-insurance benefit requirements under the Affordable Care Act.

In August, a federal appeals court upheld most of the HOS rule promulgated by the Federal Motor Carrier Safety Administration, including the requirement that drivers take a 30-minute break before driving eight consecutive hours.

The court rejected arguments from American Trucking Associations against new restrictions on when drivers can reset their weekly work schedules following 34 hours off. It also turned aside arguments from Public Citizen that wanted limits on daily driving hours to be cut to 10 hours from 11.

Since the rules took effect July 1, many trucking companies — mostly longhaul, over-the-road truckload carriers — have had to restructure operations and hire more drivers to compensate for lost productivity.

Legal challenges continued on other fronts as well.

Pilot Flying J Inc., the nation’s largest truck-stop operator, became embroiled in a cheating scandal as a federal investigation uncovered evidence that the company had not paid promised rebates to thousands of customers.

ATA challenged several aspects of FMCSA’s, Compliance, Safety Accountability program on the basis that certain categories of safety violations — such as drug, alcohol and substance abuse and driver fitness — show little or no correlation between CSA scores and crashes for certain kinds of fleets.

FMCSA did scrap a proposed regulation setting minimum training standards for truck drivers after failing to find enough evidence linking driver training methods to the risk of crashes.

The U.S. Supreme Court overturned portions of the Port of Los Angeles’ Clean Truck Program related to parking and placarding, and a lower court judge issued an injunction permanently barring the port from enforcing its 2008 move to force drivers who enter the port to be company employees.

ATA contended that such provisions are unrelated to the port’s objective of improving air quality.

A federal appeals court also ruled that a trucking pilot program with Mexico could go ahead. It had been challenged by the Owner-Operator Independent Drivers Association and the Teamsters union.