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.”

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

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.

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. 


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. 


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)


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.

Trucking in 2019: A look back the year’s top news and equipment and tech trends

As the sun sets on 2019, CCJ editors compiled a look back at some of the top trucking headlines from the year. From autonomous trucks to HOS reforms, California’s anti-owner-operator law to the latest in freight-matching tech — see a recap of the year here.

Trucking in 2019: A look back the year’s top news and equipment and tech trends

CCJ Staff Commercial Carrier Journal 2019 12 29

As the sun sets on 2019, CCJ editors compiled a look back at some of the top trucking headlines from the year. Think we missed something? Drop a comment below or email us.

California became the first state in the nation to effectively forbid fleets from contracting with owner-operators. In a sweeping legislative package passed in September, California set into state law an effective prohibition of fleets contracting with owner-operators. The law has spurred fleets of all sizes to move away from the traditional owner-operator set-up, in which drivers who own their own rig lease their truck to a larger carrier and operate under their authority.

The groundwork was laid by the state’s Supreme Court in 2018 in the case of Dynamex v. Superior Court, which began the flight away from owner-operators.

Celadon was one of a few high-profile sudden fleet closures in 2019.

As economic growth slowed, a few high-profile fleet closures followed. After a hot run for carriers in 2017 and 2018, thanks to strong rates and tight capacity, a return to normal in 2019 took its toll on some in the industry. A few large fleets suddenly ceased operations, while other fleets shrunk their workforce.

However, the industry mostly remains on solid ground. Trucking-focused economists noted at September’s FTR Transportation Conference that market conditions for trucking are still “historically strong.” Likewise, in-depth reporting from CCJ in November concluded that, despite an uptick in fleet closures and other effects of the general economic slowdown, carriers mostly are still running profitably.

The largest of the fleets to go under this year was Celadon (No. 41 on the CCJ Top 250), which abruptly announced its closure on Dec. 9 with its filing for Chapter 11 bankruptcy. Celadon followed New England Motor Freight (previously No. 67), which announced its closure in February; Falcon Transport, which closed its doors in April; LME in July; and HVH in August.

Some other large carriers to cut jobs or business segments included Roadrunner, which downsized its dry van segment by closing five terminals and eliminating 450 positions and sold off its flatbed division in December; Stevens Transport, which closed its oilfield tanker fleet of 500-plus trucks; and Swift Logistics, a branch of Swift Transportation and the Knight-Swift conglomerate, which closed a warehouse facility in Pennsylvania and laid off 56 employees.

Among reasons for the closures and cutbacks were rising overhead costs, difficulty finding drivers, an automotive plant closure and more.

The U.S. DOT, for the first time in nearly 15 years, proposed significant changes to federal hours of service regulations. Published in August, the Federal Motor Carrier Safety Administration proposed a rule to allow drivers to pause their 14-hour clock, among other changes. Also, FMCSA Administrator Ray Martinez resigned in October.

Freightliner’s 2020 Cascadia became the first series production truck to come standard with Level 2 automation.

Advanced Driver Assist Systems (ADAS) took a notable step forward. Daimler Trucks North America in February unveiled its next generation Cascadia for model year 2020, which went into production this fall. The truck’s ADAS – which include Active Lane Assist, Adaptive Cruise Control (ACC) with full braking – enables SAE Level 2 automated driving and give the truck the distinction of becoming the first production model capable of such. Level 2 automation means the truck can accelerate, decelerate and steer independently.

Volvo Trucks North America rolled out an updated version of its Volvo Active Driver Assist platform (VADA) 2.0, an enhancement to the original VADA platform with the integration of radar and camera capabilities to help drivers maintain a safe following distance through alerts and improved traffic awareness, as well as emergency braking to reduce the risk of collisions. According to the National Highway Traffic Safety Administration, 94% of crashes are caused by human error and advancements made in these platforms will go a long way to dropping that figure in the years ahead.

Electrification continued to be an industry buzzword. While Tesla has barely mentioned its vaunted electric Semi since its debut two years ago, DTNA said it delivered this year about half of the 20 eCascadia and 10 medium-duty eM2s allotted to its Innovation Fleet partners. Two of the eCascadia recently reached 10,000 miles in real world testing.

Hydrogen-electric trucks have also consistently remained a headline maker. Cummins started development of its fuel cell capabilities more than 20 years ago and recently acquired Hydrogenics, a developer and manufacturer of hydrogen generation and fuel cell products. Cummins made an investment in Loop Energy, a fuel cell electric range extender provider and signed a memo of understanding with Hyundai to collaborate on hydrogen fuel cell technology across commercial markets in North America. Kenworth and Toyota Motor North America kicked off a collaboration to develop 10 zero-emission Kenworth T680s powered by Toyota hydrogen fuel cell electric powertrains. Kenworth’s assembly plant in Renton, Wash., has produced about half of them already.

DTNA CEO Roger Nielsen said in October his company planned to, by the end of the 2020s, “bring fuel-cell powered vehicles into series production,” and Nikola Motor Company – the unofficial grandfather of the hydrogen in trucking movement – held a hydrogen showcase this year near its Phoenix-area headquarters and just a few weeks ago, in partnership with Anheuser-Busch and BYD Motors, completed what is to believed to be the first-ever zero-emission commercial delivery in the brewer’s hometown of St. Louis.

Lastly, the ELD mandate fully took effect. Four years after FMCSA finalized a rule to mandate the use of electronic logging devices by nearly all truck drivers required to keep records of duty status, the mandate took full effect, Dec. 17.

With the mandate looming, many carriers in 2019 evaluated telematics vendors to find those who can best meet their technology needs. A major factor influencing technology decisions by fleets has been the sunsetting of 3G CDMA cellular networks. Many fleets were running AOBRDs with soon-to-be-outdated 3G technology in their trucks.

FMCSA’s proposed changes to hours-of-service rules also impacted fleet technology decisions. A study by EROAD found that a significant number of short-haul fleets plan to stop using ELDs if the proposal becomes law.

Another hot technology trend in 2019 was the use of machine learning technology in all levels of the supply chain, from shippers to 3PLs and carriers, to deliver instant freight matching recommendations. Developments on this front have leveled the playing field to give companies of all sizes new, affordable options to make better load planning decisions.

Trimble launched a new product that gives fleet customers using its transportation management software (TMS) platforms way to instantly see the best options for matching their loads with trucks.
Many freight matching technologies in the market are developed by companies who are funded by private equity investors. During the McLeod Software user conference in August, the president of the company, Tom McLeod, advised his customers to choose their vendors carefully. McLeod questioned if the level of private equity investment in transportation and other industries has created an economic bubble that could burst in 2020.

CCJ editors’ picks from 2019:

–Jason Cannon, Aaron Huff, Matt Cole and James Jaillet contributed to this report.

Driving a truck is the deadliest job in the U.S., feds say

Deadliest JobsNew data from the U.S. Bureau of Labor Statistics confirms what most truckers already know — that they are doing the most dangerous job in America. A December 17 report from the U.S. Bureau of Labor Statistics examined data from 2018 to confirm that “truck driver” topped their list of the five deadliest jobs. Deadliest […]

Driving a truck is the deadliest job in the U.S., feds say

Ashley CDLLife 2019 12 18

Deadliest Jobs

New data from the U.S. Bureau of Labor Statistics confirms what most truckers already know — that they are doing the most dangerous job in America.

A December 17 report from the U.S. Bureau of Labor Statistics examined data from 2018 to confirm that “truck driver” topped their list of the five deadliest jobs.

Deadliest Jobs in the U.S. in 2018

  1. Driver/Sales Workers and Truck Drivers
  2. Construction Laborers
  3. Farmers, Ranchers, and other Agricultural Managers
  4. Grounds Maintenance Workers
  5. Miscellaneous Agricultural Workers.

According to the report, “Driver/sales workers and truck drivers had the most fatalities of any broad occupation group at 966. Among all detailed occupations, heavy and tractor-trailer truck drivers had the most fatalities at 831.”

The report also confirmed that truck driver was the deadliest of the “independent worker” jobs (meaning contract or short term jobs): “Occupations with the most fatal work injuries to independent workers in 2018 were heavy and tractor trailer-truck drivers (96), followed by first-line supervisors of construction trades and extraction workers (61), and construction laborers (48).”

There were a total of 5,250 fatal work injuries recorded in the United States in 2018. This is a a 2% increase from 5,147 in 2017.

Forward Air to Acquire Linn Star for $57.2 Million

Forward Air Corp. will acquire Linn Star Holdings Inc., Linn Star Transfer Inc. and Linn Star Logistics, a privately held final-mile provider, for $57.2 million, according to a Forward Air news release Dec. 16.

Forward Air to Acquire Linn Star for $57.2 Million

Jim Stinson Transport Topics 2019 12 16

Morgan Stanley sees lower truck capacity, higher rates in 2020

Morgan Stanley eyeing truck capacity constraints and higher rates in 2020, potentially reaching 2018 levels or higher.

Morgan Stanley sees lower truck capacity, higher rates in 2020

Todd Maiden FreightWaves 2019 12 13

In a report to clients, financial services firm Morgan Stanley (NYSE: MS) examines potential reasons truck supply could be constrained in 2020, causing trucking rates to climb.

The firm’s transportation, retail and machinery analysts contributed to the report.

“We see five Trucking supply-side catalysts potentially constraining truck supply in 2020, similar to what the ELD mandate did in 2018. Memories of 2018 are still fresh which should help mitigate the impact but we still see risk to EPS [earnings per share] across Retail, tailwinds for Trucking (TLs) and Class 8 Trucks,” the report stated.

Capacity-constraining catalysts

The firm highlights five catalysts that could draw down truck capacity.

The first is the final electronic logging device (ELD) rule requiring carriers to convert from automatic on-board recording devices (AOBRDs), an earlier version of ELDs that provided significantly less data and the capability to alter some data, to ELDs by Tuesday, Dec. 17, 2019. The mandate is intended to provide a safer work environment for drivers, make the flow of data easier and faster and ensure the data is not compromised.

The second catalyst highlighted in the report is the precipitous increase in insurance rates. As juries in lawsuits related to catastrophic accidents have begun to award “nuclear verdicts” — those in the tens of millions of dollars — carriers have seen insurance premiums spike by 50% to more than double. Even well-capitalized, larger fleets have noted the pain from the increase in insurance rates.

The Drug & Alcohol Clearinghouse, which aims to speed the reporting of drivers’ positive drug or alcohol tests, was cited as potentially drawing down capacity as well. The clearinghouse is designed to prevent drivers from failing a pre-employment screening with one carrier then finding a job with another carrier before the positive test appears on their record. Reporting of failed tests on the federal database is required starting Jan. 6, 2020.

The International Maritime Organization (IMO) 2020 regulation, which begins Jan. 1, is aimed at significantly reducing sulphur emissions by enacting a 0.5% sulfur restriction in 2020, which is down significantly from the existing 3.5% mandate. This will require the maritime industry to use fuels with lower sulphur content. The expectation is that this will create increased demand for refined products like diesel. The range of forecasts on the impact of diesel demand is wide, with some speculating that as much as 2.5 million barrels of distillate per day would be needed to offset the high-sulfur fuel oil that the maritime industry can no longer use without installing scrubbers.

Morgan Stanley estimates that diesel prices could increase by 5-33%, placing increased financial strain on the smaller carriers, which make up the bulk of the TL industry. The thought is that many smaller operators have inadequate fuel surcharge programs in place to pass through the fuel cost increase to the shipper.

Lastly, the report cited California Assembly Bill 5, or the California AB 5 rule, as a headwind for truck capacity. The rule, which goes into effect Jan 1, 2020, is designed to limit the definition of independent contractors, requiring many of the independent owner-operators with whom carriers contract to haul loads to be reclassified as company employees. While the new bill faces legal challenges, some carriers have already begun to alter their operations in California, with some attempting to unwind their exposure to the state completely.

The Morgan Stanley report stated that the best-case scenario would provide no change to capacity in California if all owner-operators were offered and accepted employee driver positions with a company. However, it labeled this scenario “highly unlikely” and indicated independent contractor rules are a creeping concern as other states will likely begin to pursue some type of similar reform. This is already in the works in New Jersey.

Some of the trucking industry’s largest companies have also highlighted a range of headwinds to truck capacity in recent months.

Potential impact to rates and earnings

The report suggested that 2020 could provide a scenario similar to 2018 with regard to truck capacity and rates. In 2018, the year of the original mandate to ELDs from paper logs to enforce stricter adherence to hours of service rules, some truck capacity exited the industry in lieu of compliance. The firm believes that the 2018 mandate resulted in a high-single-digit to low-double-digit hit to truck capacity, causing TL spot rates to spike 30%, with contract rates moving 15-20% higher.

“2020 could potentially see a repeat of the supply-side constraints that drove truck pricing to all-time-high levels in 2018,” the report stated.

It added that these capacity headwinds could provide potential upside to TL EPS estimates “that could close the 20% gap between post-2018 EPS peaks and current trough earnings” as truck pricing moves higher. The firm estimates that the impact of all five catalysts could be bigger than what occurred in 2018. The “low case” presents a scenario in which contract rates increase 2-3% and spot rates climb 5-10% in 2020. The “medium case” calls for contract rates to increase 5-10% and spot rates to rise 20-25% next year. The “high case” predicts contract rates to rise 15-20%, with spot rates surging 35-40%.

Shanker is currently modeling low-single-digit price increases for the TLs in 2020, closer to the low case scenario that calls for spot rates to improve 5-10% in the first half of 2020 with contract rates flat to slightly negative in the first half, but up 2-3% in the second half. The report noted that this scenario results in EPS estimates that are 7-10% higher than current consensus estimates. Further, if the medium case scenario played out, earnings estimates would move at least 10% higher and more than 20% higher if the high case scenario occurred.

From the report, “we have already seen a clear bottom in the second derivative of spot/contract rates, as well as the absolute rates start to rebound, which we believe sets up the TLs well for further boosts in pricing and operating ratio (OR) if truck rates were to sharply rise next year.”

The report also highlighted a scenario wherein there would be upside to Class 8 production forecasts if capacity were culled out of the market due to these catalysts, but it didn’t offer what the impact to earnings for the original equipment manufacturers would look like. The report noted a high correlation between Class 8 truck orders and TL spot rates and stated that Class 8 orders could increase 50-100% in late 2020 to early 2021 if spot rates increased in the 20-25% range.

Class 8 Truck Orders – SONAR: ORDERS.CL8

Lastly, the report noted that the potential increase in rates to ship goods via truck presents an EPS risk (base case) of 2-3% for the retail space and as much as 4-7% downside to estimates if these capacity constraints materialize greater than expected.

Morgan Stanley conducted a survey of approximately 400 carriers, brokers and shippers to produce its expectations around these events. Of those surveyed, 65-70% expect the first three catalysts (ELDs, rising insurance costs and the Drug & Alcohol Clearinghouse) to have at least a small impact on capacity in 2020. Fifty-one percent of those polled expect an impact to capacity from IMO 2020, and 62% see an impact from the California AB 5 rule.

Hendrickson Truck Lines Files for Chapter 11 Bankruptcy

Hendrickson Truck Lines Files for Chapter 11 Bankruptcy (rickybobby) Trucking Forum | #1 CDL Truck Driver Message Board 2019 12 13

Hendrickson Truck Lines Inc., a small truckload and less-than-truckload carrier based in Sacramento, Calif., declared Chapter 11 bankruptcy Dec. 3, according to federal court documents, blaming a cut in rates and maintenance woes.

The family-owned company, which declared Chapter 11 bankruptcy in 2015, employs 97 drivers and has 90 tractors, according to the Federal Motor Carrier Safety Administration.


Hendrickson Truck Lines Files for Chapter 11 Bankruptcy

Today’s Pickup: KeepTruckin launches developer platform

Keep Trucking development platformPlus: Napa freight company hauls wine in electric truck; Spin E-scooter workers join Teamsters

Today’s Pickup: KeepTruckin launches developer platform

Linda Baker, Staff Writer FreightWaves 2019 12 13

Keep Trucking development platform

Good day,

KeepTruckin, an IoT fleet management technology company, announced the release of its modern developer platform, featuring a developer portal and driver workflow tools.

The platform gives partners, developers and customers access to the company’s APIs so they can build and utilize tailored fleet management solutions.

The developer portal features a self-service model that allows users to register, build and publish integrations. The portal will further grow KeepTruckin’s App Marketplace, featuring integrations that streamline business workflows and enable fleets to build custom management solutions. 

KeepTruckin’s Driver Workflow tool, available within the API documentation, simplifies operations by integrating with any dispatch or transportation management system (TMS).

“We are excited to continue evolving the fleet management industry and help companies of all sizes run more efficiently with our best-in-class technology solutions,” said Ryan Johns, CTO of KeepTruckin, in a statement. 

Did you know?

Carriers delivered about 80 million packages per day during the week of Cyber Monday, but Amazon, FedEx, UPS and the U.S. Postal Service each saw a drop in on-time delivery performance during the week. During the week of Cyber Monday, Amazon’s on-time performance was 93.7%, FedEx’s was 90.4%, UPS’ was 92.7% and USPS’ was 92.3%.

ShipMatrix, via Supply Chain Dive


“I was told we were trying to turn things around. We were continuing to hire right up until the very end.”

Celadon recruiter Ernesto Gonzales, via FreightWaves

In other news

Napa freight carrier Biagi Bros. tests all-electric heavy truck to haul bottled wine

The trucking and warehousing company will run a Peterbilt 579 Class 8 truck tractor with a TransPower electric kit. (NorthbayBusinessJournal)

Spins electric scooter workers join Teamsters Local 665 

The scooter company employees are first in San Francisco to organize (PRNewswire)

Four Seattle companies make Glassdoor’s 100 Best Companies to Work for in 2020
Amazon was not on the the list. (SeattlePI)

Cannabis retailer MedMen implements Onfleet logistics software

The software will fulfill MedMen’s delivery management, including driver scheduling, routing, tracking, analytics and customer communications. (Yahoo)

Final thoughts:

The electrification of trucks and buses needs to be accelerated, according to a new report released Dec.11 by the Union of Concerned Scientists (UCS). Titled “Ready for Work: Now Is the Time for Heavy-Duty Electric Vehicles,” the report states that in addition to lowering emissions, the overall ownership costs can be cheaper than diesel. “Fuel and maintenance savings can offset the higher upfront costs of heavy-duty electric vehicles, making them cheaper than a diesel or natural gas vehicle over the life of a vehicle,” the report said.

Hammer down, everyone!