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Michigan lifts weight restrictions below Mackinac Bridge

Still in effect for the U.P.

Michigan lifts weight restrictions below Mackinac Bridge

Truckers News Staff Truckers News 2020 04 02

Effective noon today, April 2, the Michigan Department of Transportation lifts spring weight restrictions on state roads from the southern Michigan border north to the Mackinac Bridge.

Frost restrictions are still in effect for all state trunkline highways north of the Mackinac Bridge. State routes typically carry M, I, or US designations.

(Michigan DOT)

On March 16, Gov. Gretchen Whitmer signed an executive order temporarily lifting seasonal weight and other delivery-related restrictions for vehicles on state and local roads carrying essential supplies to mitigate the spread of the COVID-19 coronavirus. The executive order extends until 11:59 p.m. Monday, April 13. This spring weight restriction update does not alter the direction given in the governor’s order. Permits will still be required for loads exceeding the normal legal limits.

In areas with seasonal weight restrictions still in effect, MDOT says the following apply:

  • On routes designated as “all-season” (designated in green and gold on the MDOT Truck Operators Map), there will be no reduction in legal axle weights.
  • On routes designated as “seasonal” (designated in solid or dashed red on the MDOT Truck Operators Map), there will be a posted weight reduction of 25 percent for rigid (concrete) pavements and 35 percent for flexible (asphalt) pavements.
  • All extended permits will be valid for oversize loads in the weight-restricted area on the restricted routes. Single-trip permits will not be issued for any overweight loads or loads exceeding 14 feet in width, 11 axles and 150 feet in overall length on the restricted routes.

MDOT reminds truckers county road commissions and city public works departments can put in place their own seasonal weight restrictions, which usually, but not always, coincide with state highway weight restrictions. Signs are generally posted to indicate which routes have weight restrictions in effect, according to the agency.

For weight restriction information and updates, call 800-787-8960, or you can access this information on MDOT’s website at www.Michigan.gov/Truckers, under “Restrictions.”

All-season routes are designated in green and gold on the MDOT Truck Operators Map, which is available online. You also may sign up to receive e-mail alerts.

Trucking companies located in New Jersey and Canada can obtain information by calling 517-373-6256.

https://www.truckersnews.com/michigan-lifts-weight-restrictions-below-mackinac-bridge/

Small trucking companies see federal loans as bridge to better days

Jimmy NevarezTrucking companies have different takes on seeking Small Business Administration loans. Some would prefer financial help go to those that most need it.

Small trucking companies see federal loans as bridge to better days

Alan Adler FreightWaves 2020 04 02

Jimmy Nevarez

The opportunity to borrow federal money that may convert to a grant is enticing for small trucking companies, but some would rather see it go to those that most need it.

“At the present time, it’s not something we absolutely need to get by,” Jimmy Nevarez, owner of Angus Transportation Inc., told FreightWaves on Wednesday. “That’s why I’ve been on the fence about applying. I’d like to be able to save the money for people who are being impacted more.”

Small to medium-size trucking companies and owner-operators are among businesses eligible to apply for Small Business Administration (SBA) loans created through the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Loan forgiveness

In some cases, the loans could be forgiven if employers retain their workers during the economic downturn caused by the pandemic.

Details of the SBA program are still being finalized, but it has several provisions that could make it “free money,” according to Randy Hooper, a partner with Katz, Sapper & Miller, a certified public accounting and tax firm.

“It allows companies with less than 500 employees to get a loan from the government that’s based on 2½ months of their payroll,” Hooper told FreightWaves. “Then, in theory, if you go through this analysis on your [full-time equivalent employees] compared to some prior period, then that loan, at least in part if not fully, will be forgiven.”

In addition to covering payroll, borrowing can be used for rent, mortgage, interest and utilities. Hooper has 22 trucking company clients ranging in annual revenue from $25 million to $600 million. Each has called him inquiring about the loan program.

“The ones that are over 500 [employees] have asked what can they do to try to be a part of it, and everyone under 500 across the board has said, ‘Yeah, we want to make sure that we take advantage of it,’” Hooper said.

Independent operators

Owner-operators previously had no access to SBA money. That changed with the CARES Act.

“That is one of the significant changes,” said Prasad Sharma, a partner with the Scopelitis Garvin Light Hanson & Feary transportation law firm. “When you dig into the language, Congress did expand it to cover independent operators.”

Nevarez said that could help two owner-operators he contracts with to haul bottled water and styrofoam food containers from Southern California to Las Vegas. Phelan, California-based Angus also transports PECO Pallets to Bakersfield, California, and Las Vegas.

“No matter what, all small businesses are going to be impacted,” he said.

Stephen Halsted and Sandy Goche, who operate a two-person expedited trucking company based in southern Ohio, applied for a loan because they are refusing loads destined for coronavirus hot spots. Halsted said they have turned down “five or six” loads since last Friday.

“Our safety is the most important thing,” Halsted told FreightWaves.

Bigger firms waiting

The 500-employee limit for loans is standard for SBA loans, Hooper said. As soon as next week, the U.S. Treasury may expand eligibility to companies with more employees.

With 520 employees, Nussbaum Transportation Services Inc. is just over the current application threshold. CEO Brent Nussbaum said the company does not need a loan. If that changes, he would likely tap its banking relationships.

Like Nevarez, Nussbaum would prefer loan money go to financially strapped trucking companies.

“The money ultimately ought to go to those that need it. There is such a huge need. I don’t want to take advantage of federal government money that I don’t need,” Nussbaum said. “It’s debt this country can’t afford in the first place.”

So far, load volumes are holding up from Nussbaum’s largest customers, including Caterpillar and Case New Holland industrial equipment, several major tiremakers, and Pella Windows. All but eight of his 410 drivers are working. Nussbaum said that could change in the next few weeks as the supply chain develops more kinks, but he prefers a different focus.

“What kind of a positive message can we send to the people?” Nussbaum asked. “Can we focus on an upturn? It’s going to come back. We’ll survive and we’ll all come out of it better than we went into it.”

Paper Transport Inc. in De Pere, Wisconsin, hauls that most precious commodity — toilet paper — among its loads. Business is strong for all of the consumer products it hauls.

“As of right now, we’re able to keep everybody,” PTI President Jeff Shefchik told FreightWaves of his 1,100 employees. “We’re not sitting around waiting for the government to do anything. As of right now, we don’t need a bailout.”

Nontrucking needs

Stay Metrics, which conducts driver retention surveys and consults trucking firms, sees the loans as a bridge to the industry’s recovery.

“I lost six customers in three hours last Monday,” said Tim Hindes, Stay Metrics co-founder and CEO. “In a normal economy, we only have 12% customer churn annually.”

An SBA loan will prevent Hindes from laying off any of his two dozen employees.

“What that means for us is I can take a loan out to pay for my labor costs while I’m building up my business to the point it was before,” Hindes said. “Even when the pandemic passes, I should still have cash available. I think that was the design of that program, which was really smart. We see ourselves coming out the other end of this very bright.”

https://www.freightwaves.com/news/small-trucking-companies-see-federal-loans-as-bridge-to-better-days

Everything you need to know about securing an Arkansas oversized permit

Arkansas is home to six national park sites, 2.5 million acres of national forests, seven national scenic byways, three state scenic byways and 50 state parks. But to drive an oversized load through The Natural State, you’ll need to secure an Arkansas oversized permit. At The Permit Company, we help you obtain oversize and overweight…

The post Everything you need to know about securing an Arkansas oversized permit appeared first on The Permit Company.

Everything you need to know about securing an Arkansas oversized permit

M The Permit Company 2020 03 21

Arkansas is home to six national park sites, 2.5 million acres of national forests, seven national scenic byways, three state scenic byways and 50 state parks. But to drive an oversized load through The Natural State, you’ll need to secure an Arkansas oversized permit.

At The Permit Company, we help you obtain oversize and overweight truck permits by working directly with state and local agencies on your behalf. If you have any questions about moving oversized loads through Arkansas or securing a permit, we have the answers.

 

1. How long are oversize permits valid for in Arkansas? 

Oversize permits are valid for three days.

 

What are the legal dimensions for loads in Arkansas? 

The legal limits in Arkansas are as follows:

  • Gross weight: 80,000 lbs.*
  • Width: 8’6” on all roads
  • Height: 13’6” on all roads
  • Length: 45’ for single units and buses on all roads; 53’6” for semi-trailers on all roads, 28’ for twins and doubles on all roads (semi-trailers or trailers 28’6″ in length, that were in lawful use on or before December 1, 1982, are allowed); 65’ for autotransporters on all roads; 75’ for stinger steered on all roads; Rocky Mountain doubles, turnpike doubles and triples not allowed on any roads; and 90’ for saddle mounts (power unit and three saddle mounts) on all roads.

Federal Bridge Formula applies.

 

3. What are the permit limits for loads in Arkansas?

The routine-issue permit limits in Arkansas are as follows:

  • Weight
    • Steering axle: 12,000 lbs.
      • Single: 20,000 lbs.
      • Tandem: 34,000 lbs.
    • Load-carrying axle*:
      • Single: 20,000 lbs.
      • Tandem: 46,000 lbs.
      • Tridem: 60,000 lbs.
      • Quad: 68,000 lbs.

*No additional weight for trunnions.

  • Length: No set maximums
  • Width: 20’, 16’ on interstate system. A maximum overall width of 24′ may be allowed for short moves only in cases of an emergency.
  • Height: 17′. If the overall height exceeds 17′, the move must be accompanied by public utilities personnel.

If load exceeds any of these dimensions or weights, refer to the section on superloads.

 

4. Is continuous travel allowed for oversize permits in Arkansas?

Normally, permits are only valid during daylight hours as established by the U.S. Weather Bureau. Permits may be issued for the movement of overweight vehicles on Arkansas highways on holidays and during the night when all dimensions are legal. Loads not exceeding 90′ long may travel 24 hours a day, 7 days a week. Loads that are only overweight may travel 24 hours a day.

Permits may be issued for movement of loads on Arkansas highways on Saturday and Sunday, unless it’s a holiday weekend. Mobile homes are prohibited from moving on Sundays.

Travel is restricted on the following holidays: New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas Day.

 

5. When are escorts needed in Arkansas?

On two-lane highways:

  • 1 front escort is needed for widths 12’-14’
  • 1 front and 1 rear escort (2 total) needed for widths more than 14’
  • 1 escort with height pole is needed for heights of 15’-16’
  • 1 escort with height pole (as stated on permit) and special approval is needed for heights more than 16’
  • 1 public utility escort is needed for heights more than 17’
  • 1 front and 1 rear escort (2 total) with height pole needed for vehicles more than 12’ wide and 13’6” high
  • 1 front escort is needed for lengths 100’-130’
  • 1 front and 1 rear escort (2 total) needed for lengths 130’ or more

On four-lane or interstate highways:

  • 1 rear escort is needed for widths more than 14’
  • 1 front escort with height pole is needed for heights of 15’-16’
  • 1 escort with height pole (as stated on permit) and special approval is needed for heights more than 16’
  • 1 public utility escort is needed for heights more than 17’
  • 1 front and 1 rear escort (2 total) with height pole needed for vehicles more than 12’ wide and 15’ high
  • 1 rear escort is needed for lengths 100’-130’
  • 1 front and 1 rear escort (2 total) needed for lengths 130’ or more

NOTE: The maximum width for highway movement is usually 20’ (based on routes, distance and traffic volume or type).

NOTE: Height poles should be run at 6” above load height on all highways.

Mobile homes

  • 1 escort is needed for widths up to 14’ on certain highways near the Little Rock area and on two-lane highways
  • No escorts are needed for widths up to 14’ on interstate or fully controlled access facilities.
  • 1 or 2 escorts are needed for widths more than 14’ depending on the route

 

6. What is a superload in Arkansas?

Any vehicles more than 16’6” wide, 100′ long, 15’6″ high or weighing more than 180,000 lbs. are considered superloads. Three copies of the applications for extra heavy load permits must be submitted along with a detailed sketch of vehicles including all tire sizes, the distance between axles and the overall length of the vehicle. If a load exceeds 17’ high, it must be escorted by public utilities personnel. This application should be submitted at least two days in advance of the expected move.

An additional $250 fee will be assessed on loads weighing more than 180,000 lbs.

 

If you need help in getting an oversize permit in Arkansas or have a question about permits in any other states, give us a call at (800) 359-9407 or send us an email.  

The post Everything you need to know about securing an Arkansas oversized permit appeared first on The Permit Company.

https://www.permitcompany.com/news/everything-you-need-to-know-about-securing-an-arkansas-oversized-permit/

Troopers say truck was 96,300 pounds overweight

Overweight IndianaIndiana State Police say that they handed out a whopping citation following a truck inspection that turned up numerous violations this morning.

Troopers say truck was 96,300 pounds overweight

Ashley CDLLife 2020 01 16

Overweight Indiana

Indiana State Police say that they handed out a whopping citation following a truck inspection that turned up numerous violations this morning.

The truck inspection happened in Rushville, Indiana, on the morning of January 16.

From a news release from Indiana State Police:

A truck inspection this morning by Commercial Vehicle Enforcement Division (CVED) Trooper Eric Thumb, led to the discovery of a semi-tractor pulling double trailers that was 96,300 pounds overweight.  CVED Trooper Eric Thumb was driving through Rushville just before 11 a.m. this morning when he noticed a southbound semi pulling double trailers known as a “Michigan Train” south bound on Main St. at Park Blvd.

From his training and experience Thumb knew that the trailer set up is often used to haul overweight loads, with special overweight permits, across northern Indiana. Trooper Thumb got the truck stopped to do an inspection and discovered the driver, Gene Maag, age 36 of Waterloo, Indiana, was driving a truck with no registration plate and no federally required company markings or federal tax numbers on the side of the vehicle.. 

The maximum allowable weight for a commercial motor vehicle in Indiana, without a special permit, is 80,000 pounds. As part of his vehicle inspection Trooper Thumb weighed the truck and its steel coil cargo, discovering a combined weight of 176,300 pounds, or 96,300 pounds over the maximum allowable weight, without a special permit.

The fines for the overweight violation alone are just under $14,000.

Troopers say that the truck was impounded and that Maag was cited for the overweight violation and no truck registration in addition to a warning for no federally required markings or numbers on the sides of the truck.

Troopers say that the steel coils will also be impounded until they can be legally loaded onto other trucks to continue their journey to their final destination in Madison, Indiana.

https://cdllife.com/2020/troopers-say-truck-was-96300-pounds-overweight/

Colorado trucking company to cease operations after 39 years, employees say

Family-owned H.H. Williams Trucking of Greeley, Colorado, told employees on Thursday it will close its doors by the end of January.

Colorado trucking company to cease operations after 39 years, employees say

Clarissa Hawes FreightWaves 2020 01 16

Family-owned H.H. Williams Trucking of Greeley, Colorado, told employees on Thursday it will close its doors by the end of January.

An employee of H.H. Williams told FreightWaves that one of the company’s owners, Howard Williams, told office personnel on Thursday that he and his wife, Cheryl, both in their 70s, have decided to retire.

“I think we were all surprised and stunned by the news,” the employee, who didn’t want to be named, told FreightWaves. “He gave no other explanation other than he is retiring and the company will start winding down business operations.”

Howard Williams did not respond to FreightWaves’ telephone calls seeking comment.

Rumors started swirling on social media on Wednesday that the company was closing its doors, but it was news to the small fleet’s employees and drivers until mid-morning Thursday, the employee said.

Since early Thursday morning, a dispatcher has been fielding phone calls from concerned brokers about the company’s possible closure. He will stay on until the end of the month to ensure all of the trucks are back in the yard. 

Other employees have not been given a date as to when their employment will end.

The 39-year-old company, known for its green and white Mack trucks, has 23 trucks and drivers, according to the Federal Motor Carrier Safety Administration’s SAFER website.

“The owner told us that we still have trucks and equipment out on the road so it will take us until the end of the month to get everybody in and collect the keys,” the employee said.

The company had a dedicated account with Walmart for over 34 years, hauling drop and hook freight to stores in Colorado, Wyoming, the Dakotas and Montana, according to H.H. Williams’ website.

The website also stated that it had a reefer division with loads going to the West Coast and the Northwest.

This is a developing story.

Read more articles by FreightWaves’ Clarissa Hawes

https://www.freightwaves.com/news/colorado-trucking-company-to-cease-operations-after-39-years-employees-say

Five truck trend takeaways from December

The biggest stories from December focused on the latest truck trends, all in one place.

The post Five truck trend takeaways from December appeared first on Fleet Equipment Magazine.

Five truck trend takeaways from December

David Sickels Fleet Equipment Magazine 2020 01 13

We know it’s not easy to keep up with everything that happens in the world of trucking. So here are the biggest stories from December focused on the latest truck trends, all in one place.

5. The industry is hitting the next mile marker on the road to predictive truck maintenance

One of the latest indications of maintenance recommendation innovation is Volvo Trucks’ recently-announced Dynamic Maintenance. By partnering with Noregon, the new service uses existing connected technologies and data analytics, namely Volvo ASIST, combined with Noregon’s TripVision vehicle health monitoring system, to enable customized service plans to an individual-vehicle level.

Click here to find out more.

4. Realizing the importance of tire sidewalls

One of the three functions of a tire is to cushion the vehicle, and this function is primarily handled by the sidewall; however, this is counterintuitive to the idea of achieving the ever-expanding need for fuel savings. The more elasticity built into a tire, the more energy that is consumed as the tire goes through the process of deforming and returning to its original shape.

Read the full story here.

3. The present and future of electric axles

Axle manufacturers have been working on eAxle solutions for years, but in the time since these products came about, engineering innovation has only increased. FE decided to check in with the makers of electric axles to see where these axles are now, and where they are going.

Click here to read the story and find out.

2. Executive Interview: Hino stretches into new markets

The rollout of Hino’s new XL Series provided the platform for the extended cab and crew cab configurations for both the XL and L Series—which the company showed off in its booth at this year’s NACV show.

Read the full story here.

1. The 2019 Truck Equipment Trend of the Year

2019’s Fleet Equipment Trucking Trend of the Year is the new innovations and products being put forward by the trucking industry’s suppliers. Managing Editor Alex Crissey investigates how 2019 has shown us a glimpse into what the trucks of the future will look like.

The post Five truck trend takeaways from December appeared first on Fleet Equipment Magazine.

https://www.fleetequipmentmag.com/five-truck-trend-takeaways-december-2/

Loadsmart Expands Leadership Team

Loadsmart, a digital freight technology company, announced the addition of Jim Nicholson as vice president of carrier sales and operations.

Loadsmart Expands Leadership Team

Staff 
Work Truck Online 
2020 01 13

With API integration directly to both the carrier and the shipper TMS, Smart Match uses the location of trucks to instantly connect available capacity with shipper demand which can maximize revenue per loaded mile for fleets. - Photo: Loadsmart

With API integration directly to both the carrier and the shipper TMS, Smart Match uses the location of trucks to instantly connect available capacity with shipper demand which can maximize revenue per loaded mile for fleets.

Photo: Loadsmart

Loadsmart, a digital freight technology company, announced the addition of Jim Nicholson as vice president of carrier sales and operations.

Nicholson’s appointment further underscores Loadsmart’s continued growth following a $19 million funding round it closed in September, according to the company. 

“Jim is an invaluable addition to our incredibly talented team with a proven track record of developing and nurturing relationships with customers, and an uncanny ability to see the big picture,” said Ricardo Salgado, CEO and co-founder of Loadsmart. “Driving meaningful partnerships that enable carriers and shippers to move more with less is the crux of what we do at Loadsmart, and we’re thrilled to welcome a well-respected trucking industry veteran to help guide our efforts.”

With 14 years of experience in the commercial transportation sector, Nicholson previously served as director of carrier sales and operations at truckload, intermodal, and logistics company Schneider National. He will now lend his deep-seated industry knowhow to the continued enhancement of Loadsmart’s relationships with leading carriers.

“Loadsmart is at the vanguard of the evolution that’s happening in transportation and logistics, and the company is innovating new approaches to address longstanding challenges and reshape the movement of goods,” said Nicholson. “It’s a pivotal time in the company’s development and I look forward to working alongside carriers as a partner in streamlining their business operations with the very best digital freight solutions available.”

After more than a decade at Schneider, Nicholson joins Loadsmart at the intersection of trucking and technology, bringing with him a first-hand carrier perspective. His addition strengthens Loadsmart’s insight into industry challenges and equips the company with the experiences necessary to better help shippers and carriers mature their legacy processes.

Nicholson’s onboarding comes during an industry crossroads when, now more than ever, businesses are seeking options to improve operational efficiency and guarantee a simplified, more profitable movement of freight to thrive.

https://www.worktruckonline.com/348587/loadsmart-expands-leadership-team

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What is Total Cost Per Mile for truckload carriers?

Chris Henry runs fleet profitability benchmarking and analytics for FreightWaves and facilitates the TCA’s TPP program. If you are interested in benchmarking your fleet’s performance with the best operators, join TCA’s TPP. The data presented in this article come from analytics of over 230 truckload for-hire fleets, representing more than 70,000 trucks.  A wise trucker …

What is Total Cost Per Mile for truckload carriers?

Chris Henry FreightWaves 2020 01 13

Chris Henry runs fleet profitability benchmarking and analytics for FreightWaves and facilitates the TCA’s TPP program. If you are interested in benchmarking your fleet’s performance with the best operators, join TCA’s TPP.

The data presented in this article come from analytics of over 230 truckload for-hire fleets, representing more than 70,000 trucks. 

A wise trucker once said, “The only way to make money in trucking is to not spend it.” Truer words have never been spoken. This business is a game of razor-thin margins, and an infinite (and growing) number of risks and curveballs. This article is the first of two that will: 1) breakdown the cost components of operating a truck (and a trucking company); and 2) establish a financial framework for improved margins and bottom lines.

It’s very difficult for trucking companies to achieve higher than average rates per mile, per hour and per week. Due to low barriers to market entry, fleets and operators of all sizes are able to add capacity very easily to the market. As a result, shippers benefit from these hyper-competitive effects with rates that don’t typically capture the expense realities of trucking. 

Source: FreightWaves SONAR – NETREV.VCFOO, NETREV.RCFOO, NETREV.FCFOO

Total operating expenses in trucking (excluding very specialized operating models), range from extremes of $1.16 to $3.05 per mile when you simply take the best and worst from each of the categories below. Realistically, no trucking company could achieve an average total operating cost per total mile of $1.16, nor would they survive at $3.05 per mile. However, this article will illustrate the wide variances, and opportunity costs that operators realize on a day-to-day basis.

As the main pricing mechanism for trucking is the mile, it is important that industry participants understand their expenses relative to the miles generated by their trucks in a given week or month. Doing so provides an easier methodology to match  operating expenses with pricing decisions. 

Source: FreightWaves SONAR – MILTR.VCFOO, MILTR.RCFOO, MILTR.FCFOO

Total operating cost per mile summary table

According to the Truckload Carrier Association’s TPP fleet data (available to TPP members and SONAR subscribers), a for-hire truckload carrier will average between 1,700-1,900 miles per truck per week throughout the year, except for December. 

Average operating expenses for a carrier on a per mile basis: 

Expense Category Low Range High Range
Driver Compensation $0.48 per Mile $0.83 per Mile
Fuel  $0.40 per Mile $0.55 per Mile
Equipment Financing $0.00 per Mile $0.40 per Mile
Maintenance  $0.09 per Mile $0.40 per Mile
Insurance  $0.06 per Mile $0.18 per Mile
Variable Driving Expenses $0.01 per Mile $0.09 per Mile
Non-Driver Compensation $0.06 per Mile $0.30 per Mile
Fixed Overhead $0.06 per Mile $0.30 per Mile

Source: Truckload Carriers Association TPP Program for all carriers in the program. Data is available in SONAR. 

Driver compensation ($0.48-$0.83 per mile)

A disclaimer for independent contractors (ICs), driving labor does not equal ‘profit.’ The most successful ICs pay themselves a market wage in addition to projected profit. Whether the amount is actually ‘paid out’ as wages is another issue unique to the personal tax situation, and state/provincial residency of each IC.  Driving labor expense is the single largest expense for trucking companies. Depending on the geographic region, operating mode and length of haul, the combination of driving compensation, benefits and payroll taxes ranges from 28% to 50% of revenue. Industry averages for total driving labor expense per mile range from $0.49 to $0.83 ($0.67 per mile on average). This amount includes base wages, incentive compensation, per diem, accessorial pay, workers comp, health insurance and retirement benefits.

Recruiting and keeping drivers remains a difficult task for carriers, but several experts said that a strong social media approach improves both tasks. ( Photo: Jim Allen/FreightWaves )

Fuel ($0.40-$0.55 per mile)

Fuel represents the second-largest variable operating expense for any company or owner-operator. However, the difference between a top and bottom performer in trucking is directly correlated to the ‘net fuel expense’ calculation. Net fuel expense is simply the sum of gross fuel receipts, including taxes and additives minus fuel surcharge generated for the same time period. Top-performing trucking companies and ICs focus on some of these items and practices to reduce the gross fuel spend:

  1. Reducing speed and idle time, and maintaining proper shifting patterns
  2. Implementing fuel-saving technologies, equipment and practices (e.g. APUs, truck and trailer fairings, etc.)
  3. Reduce empty miles (unless it is more advantageous from a margin/yield perspective)
  4. Maximize ‘in network’ fuel spend. This one occurs when economies of scale really take hold, as fuel discounts are directly related to the volume of fuel purchased – the more fuel purchased, the lower the net fuel per gallon/litre.

Typically, gross fuel expense averages between $0.40-$0.55 per mile. However, when you factor in fuel surcharge and some or all the practices above, the net fuel spend can be dramatically less. Some trucking companies go further than most, utilizing financial instruments to ‘hedge’ their fuel expense from changes in the cost of diesel.

Trucks loading up on diesel. (Photo credit: Jim Allen/FreightWaves)

Equipment financing expense ($0.00-$0.40 per mile)

To be a trucker, you need a truck. Being mechanically inclined provides a distinct advantage for independent contractors and fleets alike. Being able to properly maintain equipment allows ICs and trucking companies to extend the average age of their trucks, and thereby reduce the large expense related to financing both trucks and trailers. In recent years, tax law changes have permitted accelerated capital equipment depreciation rates, meaning if a trucking company still owes money on its trucks and trailers, it is likely able to net more dollars after tax than before these changes. In recent years, fleets have reduced the average age of trucks to 2.3 years (on average). This trend is based on a growing school of thought that younger equipment reduces total tractor lifecycle expense (although this may be debatable based on original equipment manufacturer, specifications and operating conditions). In addition to traditional note financing, fleets and ICs alike have standard lease options available to them, along with Fair Market and Full-Service leases (the former taking care of the majority of maintenance expenses for a premium charge). As a percentage of revenue, due to the wide variety of financing strategies implemented by fleets and ICs, the cost of financing trucks and trailers ranges from 0%-30%.

Maintenance ($0.09-$0.40 per mile)

Based on my observations of over 200 trucking companies throughout North America, maintenance represents the largest margin opportunity for most companies. To be clear, maintenance expenses should capture all labor, parts, tires, supplies, oil, lube and fixed overhead (e.g. tools, shop rent, utilities, etc.). The difference between the top performers on maintenance and the bottom performers range from a low of $0.09 per mile to over $0.40 per mile! You read that right, that’s a $0.29 swing from top to bottom – think of the money going out the door! For many smaller fleets, especially those that do not use traditional accrual accounting, I suggest capturing the total maintenance spend over the past six months and keep rolling that average forward as each month unfolds. This reduces swings in large repairs from month to month and provides a clear picture of your maintenance expense.

Using VMRS codes can help fleets track down problems and reduce maintenance costs. (hoto credit: Shutterstock)

Insurance ($0.06-$0.18 per mile)

Insurance, for the purposes of this article and exercise, is the total cost of liability, physical damage and cargo insurance premiums and deductibles, plus the expense of any other accident-related damages. The latter item is one which sometimes gets ignored or is inappropriately categorized as a maintenance expense. In recent years the cost of insurance has been dramatically affected by the growing trend of nuclear verdicts in multiple jurisdictions and continued general accident repair expenses. This trend has led more companies and single truck operators to shoulder more of the burden of insurance themselves through higher deductibles and captive insurance arrangements. Increasing the deductible per incident (retention) also raises the risk of financial harm in the event of an accident. As such, a prudent operator should invest any insurance expense savings in practices and technologies to reduce the probability of accidents in the future, such as in-cab event recorders, collision mitigation tech and enhanced entry-level driver driving.

(Image credit: Shutterstock)

Variable driving expenses ($0.01-$0.09 per mile)

This category is the most nuanced of the expense categories, and the last of the ‘variable’ operating expenses. This group captures all the permits, tolls, fines, along with motels, lumper fees and driver orientation/screening and recruiting expenses (which can be significant depending on the size of operator/company). As such, it is a bit of a ‘catchall’ for those items that don’t fit cleanly into one of the other large buckets. Top performers keep an eye on the above items to ensure that they aren’t a symptom of inefficient dispatch (layovers), unsafe practices (fines), poor routing decisions (tolls) and bad culture (increased turnover).

Non-driver wages & benefits ($0.06-$0.30 per mile)

This is an area in which independent contractors have an advantage, as they handle all sales, administrative and operating activities themselves. However, they are very susceptible to spot market changes, and the reliance on brokers or load boards for freight. For those that seek to grow their fleet, you need to start hiring people for sales, dispatch, finance and safety roles. Depending on the operating mode (trailer type) and length of haul, a trucking company will have three to six drivers for every one non-driver. For smaller fleets, the expense of non-driving positions represents as much as 15% of revenue. As a company grows, and implements software and standard processes, the cost of non-driving activities can be reduced significantly (by 4-7% of revenue).

Fixed overhead ($0.06-$0.30 per mile)

The last of all operating expense categories is fixed overhead expense. This category will capture all rent, office supplies, software, utilities and communications expenses (among many other possible expenses). Generally speaking, from a percentage of revenue perspective, the cost associated with this category should closely approximate the cost of non-driver wages and benefits.

Truck drivers. (Photo credit: Shutterstock)

Summary

You cannot simply take the sum of the lowest values and highest values for each of the above categories to establish total operating expense per mile range for trucking. This industry has an endless number of modes and operating models, not to mention people and aptitudes. Being a top performer in one category doesn’t necessarily equate to top performance in multiple categories. However, understanding the numbers and their place in your margin equation can be the difference between survival and realizing the American (and Canadian) dream. 

https://www.freightwaves.com/news/understanding-total-operating-cost-per-mile

Ike Garners Spot On FreightTech 25 For Seeking To Blend The Old With The New

Ike Garners Spot On FreightTech 25 For Seeking To Blend The Old With The New  Yahoo Finance

Ike Garners Spot On FreightTech 25 For Seeking To Blend The Old With The New

 
“techcrunch AND freight” – Google News 
2020 01 03

The mission of technology startup Ike is to develop automated trucking technology tools that build upon the expertise of experienced truck drivers, and that’s why the firm has been named to FreightWaves’ list of the top 25 innovative and disruptive freight transportation companies. Ike garnered the 24th spot.

“We have much more to do and to learn, but we know that if we are going to succeed, we need to build technology that the trucking industry wants to use — technology that helps truck drivers, not replaces them,” a company spokesperson told FreightWaves.

Although Ike is a young company, its leadership has been involved in the development of autonomous trucking for years. The founders of the company came from Uber Freight and self-driving trucking startup Otto, according to a February 2019 TechCrunch article. As a result, the leadership has experience incorporating technology with trucking operations and  infrastructure such as trailers and maintenance facilities.

Ike is developing technology that allows Class 8 tractor-trailer trucks to drive safely and reliably without a driver, the company said. Ike’s assets include a fleet of prototype vehicles equipped with its technology, including Class 8 tractors and a Toyota Prius for mapping and data collection. The fleet has been operating on interstate highways through northern California, the Central Valley of California, the Los Angeles Basin and in Arizona. 

“By focusing our product on safe and reliable highway transportation of freight, we think it’s possible to build automated trucking that creates better truck driving jobs so more drivers can sleep in their own beds at night and use their skills and expertise where it matters,” Ike said. 

The company continued, “In the future, some truckers will move loads to and from the highway and hand off to a driverless automated truck for the long haul. That’s a great match between human skills and new technology that can also help make the industry safer and more productive.”

Ike is named after former U.S. President Dwight Eisenhowser, who himself helped to create the U.S. highway interstate system. To build the company, Ike raised $52 million in a Series A funding round led by Bain Capital Ventures, FreightWaves reported in February.

As companies such as Ike develop autonomous trucking technologies, they consider factors such as who is going to deploy the technology and how that technology will work with a potential customer’s existing operations. A company’s answers to these issues is why tech companies have developed different business strategies or plans to address autonomous trucking, according to Steve Viscelli, a consultant and an instructor and fellow with the Kleinman Center for Energy Policy at the University of Pennsylvania. 

“If you zoom out, everybody has pretty similar approaches and identifications to what the problems are,” but their approaches to those problems are different, said Viscell, an economic and political sociologist. As a result, one company is looking at combining remote operations with autonomous trucking, while another is looking at putting human drivers in a control center to pilot trucks, he said.

“You start to see real differences even though you know that there’s really a similar set of problems identified,” Viscelli said.

What makes Ike distinctive is the focus on how its autonomous technology complements existing trucking operations, he said.

“I appreciate the long-term approach and the concern about how they’re going to fit with the various players, which include drivers and other segments of the industry,” Viscelli said. “And so I think that would be one of the things that really stands out to me about Ike is the thoughtfulness to which they’re approaching how they might fit into the industry.”

Companies named to the 2020 FreightTech 25 were judged by an external panel of industry experts, with voting conducted and overseen by accounting firm Katz, Sapper & Miller (KSM).

Each member of the panel ranked their top 25 companies on a 1- to 25-point basis. The companies generating the most points make up the FreightTech 25.

Image by Peter H from Pixabay

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https://finance.yahoo.com/news/ike-garners-spot-freighttech-25-163108763.html