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US drug clearinghouse predicted to launch 2020 capacity shakeout

When electronic logging devices (ELDs) became the law of the land in the United States two years ago, trucking rates edged up as capacity left the market after drivers used to cheating the system were sidelined by stricter enforcement of hours-of-service rules.

But the federal Drug & Alcohol Clearinghouse, set to launch on Jan. 6, will have an even greater effect on capacity, according to top industry executives, because of the number of drivers who will no longer be eligible for a job.

“I think a 3% capacity reduction within the first six months of the year is realistic and will have a material impact on what the supply-demand dynamic looks like in 2020,” Derek Leathers, president and CEO of Werner Enterprises [NASDAQ: WERN], told FreightWaves.

“A winter storm that lasts one or two days and covers a four- to five-state area is plenty big enough to cause capacity constraints that ripple through the entire network and take multiple weeks to work out of. So even at a time where capacity has been looser in 2019 than in 2018, it is still within a point or two of equilibrium. And it doesn’t take much to affect that balance.”

The clearinghouse, to be administered by the Federal Motor Carrier Safety Administration (FMCSA), will close a loophole that currently allows drivers who are fired for failing a drug test to get hired by another trucking company by lying about failing the test. Driver consent records will be retained in the database for three years, which means it will take at least that long to fully populate the system. Once that happens, the industry could see an even bigger shakeout.

“It won’t be a Day One [capacity] fallout, but once [the clearinghouse] gets populated, I think you’re going to have up to 10% of the driver population being excluded” based on current drug test failure rates, predicted Eric Fuller, president and CEO of U.S. Xpress [NYSE: USX].

Tighter capacity immediately followed strict enforcement of ELDs in April 2018. Source: SONAR

 

“That’s not only going to affect the current pool of drivers, but also greatly minimize the pool of people available to come into the industry. So there’s going to be some significant headwinds on a go-forward basis as it relates to getting the numbers of drivers that we need in our market. But we also don’t need someone actively using drugs driving an 80,000-pound truck down the road at 65 mph.”

While he agrees that the FMCSA clearinghouse will likely have an even bigger effect on trucking capacity as did ELDs, Dean Newell, vice president of safety and training at Maverick Transportation, also views the new regime as a positive for safety.

“I think it’s probably going to take people off the road, so from a capacity standpoint I think there could be more trucks sitting empty,” Newell said. “But it’s also going to make it much more difficult to hide” positive test results, he said.

Unseated trucks

While trucking rates tend to shift upward when capacity exits the market – a good thing for carriers – there’s a downside to having cabs sitting idle. “The cost of equipment is more expensive than ever, and if you have unseated tractors, it’s difficult to survive for very long,” Leathers said. “Depreciation doesn’t stop, and the bills don’t stop coming in for that equipment.”

Fuller pointed out that to avoid the expense of unseated trucks, many carriers will resort to hauling inferior freight or participating in less desirable lanes. “The next step would be to sell that piece of equipment to avoid that fixed cost,” he said. “Strategically you wouldn’t see a lot of people parking trucks and keeping them in their fleet. They’d want to divest of them or do whatever they had to do to keep that truck operating and producing revenue.”

Enforcement snag?

To give state motor vehicle agencies more time to work out how their IT systems will interact securely with the clearinghouse to ensure privacy, the FMCSA recently extended the compliance date for state agencies by three years, until Jan. 6, 2023.

“The compliance date extension allows FMCSA the time needed to complete its work on a forthcoming rulemaking to address the states’ use of driver-specific information from the clearinghouse and time to develop the information technology platform through which states will electronically request and receive clearinghouse information,” the agency affirmed in its Dec. 12 rulemaking.

But Dave Osiecki, president and CEO of Scopelitis Transportation Consulting, cautioned that delaying the deadline for state agencies weakens the ability of the clearinghouse to be effectively enforced – which could mitigate the constricting effect on capacity.

“There are three enforcement mechanisms with regard to the clearinghouse – the employer, law enforcement using roadside checks, and the state law enforcement agencies,” Osiecki told FreightWaves. “If the state agencies aren’t part of the equation, it becomes, for the most part, an industry-based enforcement system. The state agencies are a major cog in the wheel, and when that’s taken out, the wheel doesn’t turn as smoothly as it should.”

The hair-test effect

Industry executives emphasize that an even larger capacity shakeout is lurking – the effects of which could begin as early as the fourth quarter of 2020 – once hair follicle testing becomes a federal requirement.

A survey released earlier this year by the Trucking Alliance (of which U.S. Xpress is a member) projected with a 99% confidence level that more than 300,000 truck drivers currently on the road would fail or refuse a hair analysis, effectively knocking them out of industry.

Top 10 states with highest controlled substance violations by latest month (November 2019), including year-over-year percent change. Source: SONAR

David Heller, vice president of government affairs for the Truckload Carriers Association, considers a 10% hit on capacity using hair testing “fairly conservative and has the potential to be higher, considering what some of the fleets that already are using hair follicle testing have reported,” he said.

Draft guidelines for government-wide hair testing “have been distributed to all federal agencies for a second round of comment and review, and the length of time for review will be determined by the Office of Management and Budget,” the U.S. Department of Health and Human Services confirmed in early December. After OMB approval, the FMCSA would be required to propose a rulemaking on how a hair follicle testing regime would apply to motor carriers.

Filling the driver gap

The American Trucking Associations (ATA) stepped up efforts this year to crack down on drug use in the trucking industry, particularly marijuana and opioids, by creating a Controlled Substances, Health and Wellness subcommittee, with the goal of better informing lawmakers and regulators about the safety implications of drug use on the nation’s highways.

A big proponent of hair testing, ATA President Chris Spear acknowledges the effect on trucking capacity if hair testing were to be incorporated into the Drug & Alcohol Clearinghouse.

“That’s why I think being able to hire under-21 drivers is extraordinarily important,” Spear said. “Driver retention is important. Urban hiring is important. Veteran and existing military service people is important. These are all key things we need to be doing collectively in order to supplement the effects of the clearinghouse. I’m not too concerned about the capacity question so long as we’re doing these other things.”

The carriers least concerned about a capacity shakeout once the FMCSA’s clearinghouse gets rolling are those that have already put themselves in position to take advantage of the supply-demand changes that the new system is expected to bring.

“You have to have your trucks seated and ready and then realize the opportunity for rate relief that is required and needed right now,” Leathers emphasized. “Those will be the companies that will come out winners.”

Major Post-Christmas Winter Storm Could Bring Blizzard Conditions, Ice to Plains, Upper Midwest

  • A major winter storm is shaping up this weekend in the nation’s mid-section.
  • Heavy snow and strong winds may produce blizzard conditions in the Northern Plains.
  • Some freezing rain may lead to icy roads, as well.
  • Heavy snow will also pummel the mountains of the Southwest.
  • Some snow and ice will also spread to the Northeast, but should be confined to northern New England.

A major winter storm will bring heavy snow, some ice and potentially blizzard conditions to parts of the Plains this weekend, potentially snarling post-Christmas holiday travel.

This storm system is currently bringing rain and heavy mountain snow to Southern California, southern Nevada and much of Arizona.

Portions of interstates 5, 8 and 15 in southern California were closed due to heavy snow on Thursday, standing vehicles for hours in the higher elevations of those interstates.

Strong winds downed trees in Lynwood, California, in the Los Angeles metro area, early Thursday morning.

More than a foot of snow has fallen in Flagstaff, Arizona, as of early Thursday.

 

 

Once the system pivots out of the Southwest, low pressure is expected to intensify in the Plains this weekend.

The air mass ahead of the storm will remain very warm for late December, so some areas that are used to seeing snow this time of year may end up seeing predominantly rain.

However, some cold air will be pulled in behind the intensifying storm, so wind-driven snow and some freezing rain is expected in other areas from the Northern Plains to northern New England.

So, this storm may resemble one you might expect in November or March, rather than late December.

A number of winter storm watches, warnings and winter weather advisories have been issued by the National Weather Service from Southern California into the Plains states.

In general, the worst conditions are expected where winter storm warnings are in effect. Strong wind gusts, blowing and drifting snow and icy conditions may make travel impossible, especially in the northern Plains.

Western Forecast

The bulk of rain and higher-elevation snow is moving into Arizona, southern Utah, New Mexico and southern Colorado where it will continue through Friday. Some lingering snow is possible in these higher elevations into Saturday, before the storm’s precipitation finally moves away.

Heavy snow will continue above 2,000 feet in southern California into the overnight hours going into Friday.

Parts of Arizona’s Mogollon Rim and the mountains of New Mexico and southern Colorado should easily pick up over 6 inches of snow through Saturday.

This may lead to significant travel difficulty through the passes of Southern California and along Interstate 40 in northern Arizona and Interstate 25 north of Albuquerque.

Plains/Midwest Snow and Ice

Here is a general timeline for the storm in the Plains and Midwest:

Friday: The low pressure system will move northeastward through the Southwest. Snow will continue across the Four Corners region, while expanding into western Nebraska, southeastern Wyoming and western Kansas. Rain spreads into the central and southern Plains during the day. A few thunderstorms are possible in parts of Texas or Oklahoma. Friday night, snow expands into the Northern Plains, possibly as far north as central Minnesota. Freezing rain is possible from parts of northern Kansas into central Nebraska, southeast South Dakota, northern Iowa and southern Minnesota.

Saturday: The low pressure system will cross through the Central Plains while intensifying. Heavy snow will pound areas from the central High Plains into the Northern Plains and Upper Midwest. Some freezing rain is possible in parts of northern Michigan, Minnesota and northern Wisconsin, though that may change to rain from south to north.

Increasing wind may lead to blizzard conditions from the eastern Dakotas into western Minnesota.

Sunday and Monday: Snow will linger while winds may actually increase in the Northern Plains, with precipitation eventually changing to snow across much of the upper Mississippi Valley. Areas of lingering light snow and gusty winds may last in the western Great Lakes Monday.

(MAPS: Daily U.S. Rain, Snow, Ice Forecast)

Parts of the Northern Plains from the eastern Dakotas to western and northern Minnesota have the best chance of seeing heavy snow, with at least 6 inches of snow likely. Over a foot of snow is at least possible in this general area.

Strong winds could lead to blizzard conditions this weekend, perhaps lasting into at least early Monday in the Plains. You need to make alternate plans if you have travel plans this weekend in this area. Road closures, including stretches of interstate highways, are probable in this zone of heaviest snow.

Some ice accumulation is possible from central Nebraska into central Wisconsin that may lead to hazardous roads, particularly overpasses and may trigger some power outages, at least for a time. However, this forecast is particularly tricky in that precipitation in at least parts of this may change to rain, then back to snow.

Northeast Forecast

By Sunday, precipitation should spread into the East. Warmer air on southerly winds should keep precipitation mainly in the form of rain for most in the Northeast Sunday and Sunday night, with the exception of upstate New York and northern New England, where stubborn cold air may allow areas of freezing rain, sleet and snow to persist.

Monday, colder air and the potential of at least weak low pressure forming off the New England seaboard should allow precipitation to change to snow in parts of central and upstate New York into New England. Some snow may linger in the interior Northeast into New Year’s Eve (Tuesday).

The majority of computer forecast models suggest the Interstate 95 Boston-to-Washington, D.C., corridor should see predominantly rain, rather than ice or snow.

Parts of northern New England and upstate New York may pick up moderate snow accumulations, and some ice accumulations in northern New England may lead to slippery roads and potentially some power outages, in spots.

Diesel Dips 0.5¢ to $3.041 Per Gallon; Oil Price Creeps Higher

Trucking’s main fuel costs 3.6 cents less than it did a year ago, according to the Department of Energy.

The U.S. average retail price of diesel dipped 0.5 cent to $3.041 a gallon, the Department of Energy reported Dec. 23.

The price of a barrel of oil barely moved higher compared with a week earlier.

Trucking’s main fuel costs 3.6 cents less than it did a year ago, when it was $3.077 a gallon, according to DOE.

Regional average diesel prices fell in seven areas, were flat in the Gulf Coast and rose in New England and the Central Atlantic.

The U.S. average price of a gallon of gasoline fell 0.4 cent to $2.532 a gallon, according to DOE’s Energy Information Administration.

The price is 21.1 cents higher than it was a year ago.

Average gasoline prices fell in five regions, were unchanged in the Lower Atlantic and rose in three others. Gasoline fell the most, 4.6 cents per gallon, in the West Coast region. It rose the most, 1.6 cents, in the Central Atlantic.

West Texas Intermediate crude futures on the New York Mercantile Exchange closed at $60.63 Dec. 23 compared with $60.21 per barrel Dec. 16.

Oil is having one of its best months of the year after the U.S. and China struck a preliminary trade pact, and as the Organization of Petroleum Exporting Countries and its allies agreed to deepen output cuts in the face of growing supplies from their rivals, Bloomberg News reported.

In the meantime, the weekly U.S. oil rig count was 813 during the week of Dec. 20, 14 rigs more than the week before and 267 less than a year earlier, oil field services firm Baker Hughes Inc. reported.

Houston-based Baker Hughes, a GE company, ranks No. 73 on the Transport Topics Top 100 list of the largest private carriers in North America.

In related news, TravelCenters of America Inc. announced the U.S. government biodiesel tax credit was retroactively reinstated for 2018 and 2019 in congressional legislation passed Dec. 20. TA expects to recognize about $72 million related to the biodiesel tax credit reinstatement for 2018 and 2019 in its fourth-quarter 2019 financial statements as a reduction to TA’s fuel cost of goods sold. In addition to reinstating the federal biodiesel tax credit for 2018 and 2019, the legislation extended the tax credit through 2022.

Based in Westlake, Ohio, TA has more than 21,000 employees in over 260 locations in 44 states and Canada, operating principally under the TA, Petro Stopping Centers and TA Express brands. It is the only publicly traded truck stop chain.

FMCSA doubles the random drug test rate for truck drivers

The FMCSA estimates that this move will cost the trucking industry $50 to $70 million in 2020.

The Federal Motor Carrier Safety Administration (FMCSA) will be dramatically increasing the number of random drug tests that will be administered to Commercial Drivers License (CDL) holders in 2020.

In a December 26 notice, the FMCSA announced that it would increase the minimum annual rate for random drug tests for truck drivers from the current 25% to 50%, effective January 1, 2020.

According to the FMCSA, the increased drug testing rate will mean that 2.1 million random controlled substances tests will need to be conducted in calendar year 2020.

Doubling the random drug test rate is expected to cost the trucking industry an additional $50 to $70 million in 2020.

The FMCSA is required to increase the random drug test rate from 25% to 50% following any calendar year during which the reported positive drug test rate is equal to or greater than 1.0%. This requirement was laid out in a 2001 FMCSA Final Rule entitled “Controlled Substances and Alcohol Use and Testing.”

The FMCSA says that the positive rate for controlled substances random testing in 2018 is 1%, up from an estimated positive drug usage rate of 0.7% in 2016 and 0.8% in 2017.

The minimum annual percentage rate for random alcohol testing will remain at 10%, the FMCSA says.

Truckers warned about DOT number scam.

The Wisconsin Better Business Bureau is warning truck drivers to keep an eye out for scam letters arriving via postal mail that claim their U.S. Department of Transportation number is “past due.”

The fraudulent letters say “PAST DUE” and insist the trucking company needs to finish its “biennial update” and that “failure to do so may result (in) civil penalties of up to $1,000 per day.”

This scam was brought to the attention of the Wisconsin BBB by a trucker who had received such a letter but knew that his DOT license was up to date and nothing was due. However, it is not the first such scam of its kind. The letters have been traced back to a business called Compliance Educators, located in Princeton, Louisiana. Its website – DotService.com – asks truckers for their DOT number and credit card information, according to a news release from the Wisconsin BBB.

The BBB Serving Northeast and Central Louisiana, the Iowa Department of Justice and Office of the Attorney General issued a settlement action in August 2018 against Compliance Educators after an investigation into a complaint by an Iowa trucker who had received a warning letter threatening past due fines.

As part of the settlement, the company and its owner, Ray Scott Rister, agreed to refund the money to the owners of Iowa trucking companies who had been targeted and had paid a filing fee. Compliance Educators also paid $7,000 to the state’s consumer fraud enforcement fund and agreed to refrain from doing business in Iowa. The BBB Serving Northwest and Central Louisiana says it has received 20 complaints against Compliance Educators within a three-year reporting period.

If you receive such a letter, the BBB recommends contacting the Department of Transportation directly to verify your status with them.

“This is nothing but a scare tactic to get money, and we’re thankful to the trucker that brought his letter into our office so we could warn other truckers,” said Jim Temmer, CEO and president of the BBB Serving Wisconsin.

Christmas Travel Weather Forecast: Systems in West and South Could Cause Delays

Christmas Travel Weather Forecast: Systems in West and South Could Cause Delays

At a Glance
  • Travelers this weekend could encounter wet roads in the South and West.
  • Most areas from the interior West into the Midwest and Northeast should be dry.
  • Weather conditions early next week into Christmas Day could also be good for many travelers in the central and eastern U.S.
  • Unsettled weather might persist in parts of the West next week.

Delays for pre-Christmas travel could happen in the West and South, but many other parts of the country should be dry and mild.

More than 115 million people are expected to travel 50 miles or more from their homes for the holiday period spanning Dec. 21 through Jan. 1, according to AAA. That’s the highest travel volume for the end-of-year holiday season since AAA began tracking in 2000.

Friday

Possible Trouble Spots

1. Hit-or-miss showers are possible in central and southern Texas and along Florida’s Atlantic coast.

2. Heavy rain and mountain snow could slow down travel in the Pacific Northwest, mainly in northwest Oregon and western Washington.

Likely No Delays

Most areas from the Southwest into the Plains, Midwest and the East should have good travel weather as high pressure dominates.

Saturday

Possible Trouble Spots

1. Rain and mountain snow will continue to impact travel in the Pacific Northwest, spreading into Northern California.

2. Rain from a developing storm system will begin to soak the Deep South. This rain could be heavy in spots, especially from New Orleans to Tallahassee.

Likely No Delays

Much of the interior West, Plains, Midwest and Northeast should have good weather for traveling.

Sunday

Possible Trouble Spots

1. Rain and mountain snow will linger along the West Coast, but the bulk of the wet weather should shift south to California. This rain could extend as far south as Southern California.

2. Rain and brisk winds will spread across much of the Southeast from the Tennessee Valley to Florida. This rain could be heavy at times. Significant flight delays are possible at major Southeast air hubs.

Likely No Delays

Areas from the interior West to the Plains, Midwest and Northeast will once again enjoy good travel conditions.

Monday

Possible Trouble Spots

1. Rain could slow down travel in parts of the Southeast as a low-pressure system begins to slowly move away from the region. Winds will remain gusty, as well. Some coastal and inland flooding may be possible.

2. There could also be some areas of rain and mountain snow in California, but this precipitation doesn’t appear to be heavy at this time.

Likely No Delays

Most areas from the Rockies to the Plains, Midwest and Northeast should enjoy good conditions for traveling.

Christmas Eve (Tuesday)

Possible Trouble Spots

1. Areas of rain and mountain snow should shift into the Rockies and Southwest.

Likely No Delays

Much of the central and eastern U.S. should have no major travel concerns. We expect the slow-moving Southeast rain and wind storm to have finally moved offshore by Christmas Eve.

Christmas Day (Wednesday)

Possible Trouble Spots

1. A southward plunge of the jet stream in the West will continue to produce scattered areas of rain and mountain snow from California to the Rockies. Most of this precipitation should be light, with the possible exception of some more soaking rain and mountain snow possible in parts of California.

2. An area of light snow, cold rain, or mixed precipitation may develop from the Northern Plains to the Great Lakes.

Likely No Delays

Initial indications are that Christmas Day should be free of major travel headaches in a majority of the country, including the South and East.

Thursday , Dec. 26

Possible Trouble Spots

1. Rain, possibly heavy, is expected in Southern California with some snow possible in the San Gabriel mountains that may lead to some tricky travel in the high country.

2. More rain and mountain snow is possible in the Pacific Northwest. Snow levels could be relatively low, so travel over the passes could be affected.

3. Some areas of light snow are possible in parts of the upper Midwest and Great Lakes.

Likely No Delays

For now, much of the rest of the nation from the mid-Atlantic and Southeast to the Plains appears to have quiet weather in store for the day after Christmas.

Source

5 coming regulations that threaten trucking

There are a number of new regulations coming soon that have the potential to hit the trucking industry hard. Individually, each regulation may not move the needle much, but combined, they could turn the trucking environment from one of excess capacity to situation where trucks are hard to find.

1. AOBRD to ELD switchover may reduce productivity
(Implementation date: Dec. 17, 2019)

The regulation requiring Electronic Logging Devices (ELDs) for tracking a driver’s hours of service (HOS) took effect on Dec. 17, 2017. However, trucks using the older  Automatic Onboard Recording Devices (AOBRDs) were given 2 more years to switch over to ELDs.

While few expect the switchover to be as disruptive as the ELD mandate in 2017, it could be enough to decrease productivity and tighten capacity, especially because it hits at one of the busiest times of the year for freight. The December 2017 mandate contributed to a spike in rates, which stayed elevated throughout 2018.

Carriers using AOBRDs are more likely to be the larger carriers, so that’s a lot of trucks. And those who wait till the last minute to switch may encounter glitches running new software or hardware. According to John Seidl, Vice President of Risk Services for Reliance Partners and a former FMCSA investigator, the biggest challenge is training drivers properly in the use of ELDs so carriers can avoid hits to their CSA scores.

2. IMO 2020 could cause a spike in diesel prices
(Implementation date: Jan. 1, 2020)

Starting Jan. 1, 2020 ocean vessels are required to switch to ultra low sulfur fuels. The distillate used to create these fuels is the same that is used for diesel fuel. That means that distillates normally dedicated to diesel will be diverted to marine fuels. According to current estimates, this could cause diesel prices to spike 25 cents per gallon or more.

Besides labor costs, fuel is the second biggest expense for a carrier, and a sudden sharp rise in diesel prices could drive some carriers out of business. A report issued this past summer by FreightWaves and Michigan State University professor Jason Miller examined 30 years of truck failure data. The report noted: “The biggest surprise to most outside of trucking industry professionals would be that failures are not primarily caused by spot and contract rates falling steeply in a recession. Instead, failures are primarily due to huge spikes in diesel prices that smaller carriers cannot pass on.”

3. Drug and Alcohol Clearinghouse will weed out drivers
(Implementation date: Jan. 6, 2020)

Beginning Jan. 6, 2020, trucking companies are required to use the FMCSA’s Drug and Alcohol Clearinghouse, a new online database that gives employers access to information about CDL driver drug and alcohol violations. Currently, a driver who is fired from a job for drug use can often obtain a job with a different carrier in a different state. The clearinghouse is intended to prevent that by making it easier to identify drivers with prior violations.

The clearinghouse could weed out even more drivers if the FMCSA decides to permit hair follicle testing as an acceptable alternative to urine testing. Urine samples can detect drug use in the past few days, but hair follicle testing can detect drugs for up to 2-3 months. In June, the Trucking Alliance testified to Congress that they estimate that more than 300,000 CDL holders would either fail or refuse to take a hair analysis test. That would dramatically reduce the number of qualified drivers.

4. New overtime laws will lead to higher labor costs
(Implementation date: Jan. 1, 2020)

New overtime rules take effect in 2020, which the U.S.Department of Labor says will make an additional 1.3 million Americans newly eligible for overtime pay.

While the new rules likely won’t be an issue for most truck drivers, who are paid by the mile, they may affect both carriers and brokerages with back-office staff. The new rules increase the salary threshold for employees to be exempt from overtime, rising from the current $23,660 to $35,568.

In addition, only 10% of commissions and bonuses can be counted as part of an employee’s salary. For example, if an employee earns $20,000 in salary and $30,000 in commissions, the employer would only be able to count $23,000 as the employee’s salary and would therefore be required to pay overtime.

5. New California law limits use of independent contractors
(Implementation date: Jan. 1, 2020)

n the trucking industry, it’s common for carriers to “lease on” owner-operators as independent contractors and brokers to take on “agents” as independent contractors. That practice will be severely curtailed in California with the implementation of Assembly Bill 5, which starts Jan. 1, 2020.

AB5 states that workers must meet three criteria to be classified as independent contractors, commonly referred to as the “ABC test.”

A. The worker must be free from control and direction of the hiring entity.

B. The work performed must be outside the usual course of the hiring entity’s business.

C. The worker must be engaged in an independently established trade, occupation or business.

That second requirement is virtually impossible for a trucking company to meet because driving trucks is part of a trucking company’s core business. News outlets have reported that trucking companies are sending out notices to their California-based leased-on drivers notifying them they have a few choices, including becoming a company driver, getting their own operating authority, or moving out of California.

Time’s up! Tips for the AOBRD-to-ELD transition

What you need to know (and do) to stay on the right side of the regulations

Starting Tuesday, Dec. 17, only electronic logging devices (ELDs) that are registered with the U.S. Federal Motor Carrier Safety Administration (FMCSA) can be used for records of driver duty status. Automatic Onboard Recording Devices (AOBRD) will no longer be allowed.

“Unlike paper and electronic logs, the differences between compliant ELDs and other onboard recorders aren’t necessarily apparent,” said Doug Schrier, vice president of product and innovation at Transflo, a provider of ELDs and mobile business-management technology to the transportation industry. “As the deadline for full ELD compliance nears, it’s important to make sure you’re using a device that meets all the requirements.”

Transflo offers the following tips to help fleets and drivers comply with ELD-related inspections at the roadside:

Check the FMCSA’s list of registered ELDs. The FMCSA does not endorse specific ELDs. However, the agency maintains a list of self-certified and registered devices here: csa.fmcsa.dot.gov/ELD/List. Search and make sure your ELD is on it, including the device name, model number, and important details like data transfer methods, where to download the user manual, and the ELD supplier’s certifying statement.

Don’t expect soft enforcement. The Commercial Vehicle Safety Alliance confirmed that there will be no period of “soft enforcement” after Dec. 16, when the two-year grace period to transition from AOBRDs to ELDs ends. Expect officers to look closely at whether your logging device complies with federal requirements for ELDs.

If you’re a last-minute ELD shopper, look for more than hardware. For the thousands of truckers who have not yet upgraded to ELDs from AOBRDs, technical support and training are more important than ever. “Choose an ELD vendor that will make sure your installation and telematics connections are working properly, and has resources to help you train drivers and other personnel,” Schrier said. “There are dozens of ELDs on the FMCSA’s list of registered devices and they all have to produce the same basic set of data. The difference among vendors is in service, support, and your ability to use that data to run your business.”

Make sure your drivers are ready at the roadside. 

Prepare your drivers for added scrutiny at the roadside. Remind them that by rule, an ELD must be designed so that a safety official can read the display without having to enter the vehicle. If the ELD uses a mobile device, the driver doesn’t have to hand it to the inspector; he can handle it on the inspector’s behalf as long as the display is visible.

 

Drivers should also have access to paper logs as a backup to their ELD, and know where to find clear instructions about how to enter, retrieve, and transfer data.
These tips can help drivers and carriers successfully make it through the ELD portion of any roadside inspection.

Truckload giant Celadon Group to shut down

 

Celadon Group Inc. announced it has filed for Chapter 11 bankruptcy protection and was shutting down all of its business operations as of Dec. 9.

This has left 3,800 workers unemployed, with up to 2,500 drivers on the road trying to figure out how to get home at the time of the announcement. The 1,300 office employees lost all accrued vacation time and their health and dental benefits were suspended as of midnight on Dec. 8, according to Business Insider.

Founded in 1985, the Indianapolis-based truckload carrier was No. 27 on the 2019 Fleet Owner 500 list of the largest for-hire carriers in the United States and Canada. This is believed to be the largest truckload bankruptcy filing in history.

The company said in a statement that the shutdown does not include the Taylor Express business as it explores a sale.

“We have diligently explored all possible options to restructure Celadon and keep business operations ongoing; however, a number of legacy and market headwinds made this impossible to achieve.” said Paul Svindland, CEO of Celadon. “Celadon has faced significant costs associated with a multi-year investigation into the actions of former management, including the restatement of financial statements.

“When combined with the enormous challenges in the industry, and our significant debt obligations, Celadon was unable to address our significant liquidity constraints through asset sales or other restructuring strategies,” he added. “Therefore, in conjunction with our lenders, we concluded that Celadon had no choice but to cease all operations and proceed with the orderly and safe wind-down of our operations through the Chapter 11 process.”

To support the wind-down of operations, Celadon’s lenders have agreed to provide incremental debtor-in-possession financing.

Celadon was one of the first U.S.-based trucking companies to take trailers into Mexico. It began trading on the New York State Exchange in 1984.

It was founded by Stephen Russell, who died in 2017 at age 76. The company has struggled in recent years due to a financial scandal. Last week two former executives were charged with fraud by the U.S. Dept. of Justice.

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