Welcome back and thanks for reading The Bottom Line! Today I’m simply passing along a reminder about ROADCHECK 2012!!! SEE BELOW! 

ROADCHECK - 2012  – June 5th-7th

 5 Quick Facts: 

1. Commercial Vehicle Safety Alliance’s (CVSA) 2012 Roadcheck is approaching. This year’s Roadcheck is scheduled to be conducted June 5-7.
   
2. CVSA sponsors the 72 hour safety inspections with help from the Federal Motor Carrier Safety Administration (FMCSA), Pipeline and Hazardous Materials Safety Administration, Canadian Council of Motor Transport Administrators, Transport Canada, and the Secretariat of Communications and Transportation (Mexico). 
   
3. 14 trucks inspected every minute from Mexico to Canada during the 3 day inspection program
   
4. Over a million vehicles have been inspected during the Roadcheck program since the program was kicked off in 1988.
   
5. 10,000 CVSA certified inspectors perform inspections at 1,500 locations during Roadcheck.

 CVSA’s website explains this is a bit more detail… CLICK HERE to see it!

The Bottom Line:  ROADCHECK 2012 is coming fast. Be prepared! Make sure your trucks are ready to be inspected…the better your inspections, the better your scores. The better your scores…the lower your insurance rates!!!

Hopefully you’ll check back soon to see our weekly updates. And always, if you have any questions for the Truck Insurance Pro…please just let us know and we’ll get back to you ASAP!

Keep on Rollin’!

Jason Stevenson
Truck Insurance Pro
The Hoffman Group – Transportation Services
800.826.4006
jstevenson@thehoffmangrp.com

Welcome back and thanks for reading The Bottom Line! I’m going to talk a little about the driver shortage – we predicted it in 2010…and it’s here.

When I last addressed the driver shortage issue in December, 2010, it was commonly believed that a driver shortage might happen. Today, April 2012, it is commonly accepted that a driver shortage is happening.

Most of my clients would tell you they are having trouble recruiting drivers to fill trucks that have loads waiting on them…that if they just had 10 more drivers, they’d have 10 more trucks and the freight to fill them…what a problem to have!

Maybe a good problem – but a problem nonetheless. There are any number of ways to reduce the effect of the shortage on your company’s growth plans…many companies have hired staffing companies or recruiters to help fill seats, some have decided to pay higher wages and improve benefits to keep current drivers around, and others have simply lowered their standards and are hiring under-qualified drivers.

There are two generally-accepted standards for insurability of drivers – 2 years experience and a clean driving record…there are good reasons for these standards too. The insurance companies are pretty good gauges of driver capability, after all they insure drivers all over and have for many, many years. The insurance company’s interest is always safety…safer drivers mean fewer insurable incidents, and a smaller number of losses. Additionally, fleet managers/owners would agree that it’s a risk putting someone with too little experience in such expensive equipment too.

That being said, there are some drivers that fit the exception, not the rule. Sometimes drivers have military CDL experience, or they’ve been driving for 18 months, instead of 2 years, or they’re a little young, but grew up on a farm driving large equipment and ‘really know how to handle themselves and their equipment’.

Whatever the exception’s case, I believe YOU KNOW BEST who can and cannot drive your trucks. You’ve made the investment in the equipment, you meet with the prospective drivers, you’re in and around trucks every day, and you know how to measure a truck driver.

So, what can you do with those drivers you want to hire, but don’t meet the insurance company’s standards?

The answer depends almost entirely on your insurance agency/agent and on your insurance company. Some agencies will go to bat for you on specific cases…if you can make the case that a guy should be able to drive, the agent will stand up for you with the company and get them through. Some agents hold the company line and have a ‘standards and standards’ mentality. Some insurance companies can be flexible too…they’re as aware of the shortage and you and me. 

For some trucking companies there’s another option too. (This BLOG isn’t intended as an advertising forum, so, though our agency has proprietary access to the program in reference, I didn’t use the program’s name) Certain trucking companies qualify to buy insurance through a proprietary program our agency has helped develop. The program includes a test that, if prospective drivers, regardless of their level of experience, pass, they can be added to the driver schedule as if they had the normally-required level of experience. The test, free to member-clients, can be used on any prospective driver (not just those with less than 2 years experience) and is proprietary to the specific insurance program in reference. It is unique to the transportation industry, and is a huge asset to a company looking to grow. Effectively, the test measures whether or not a driver is capable of being a quality driver, even before the driver has the road time to prove it.

We can help you decide if you’re qualified if you’re interested – my contact information is included if you’d like to find out more.

In any case, the shortage is real. Do what you can to combat it by investing in recruiting, making sure your current drivers are happy, and call me if you need any additional help!

I’ve pasted the article we published in December, 2010 below for your reading pleasure! Or you can CLICK HERE to see it as published.

Published 12/15/2010

One unfortunate fact is that over the last few years many young drivers with little experience just didn’t have success and dropped out of the driver pool. Many Owner Operators and young drivers, with so little freight to carry, left the industry. Coupled with extremely tight credit markets making it hard on a driver to buy a truck and insurance companies strengthening their driver standards, young or inexperienced drivers just got pushed out of the industry.

Additionally, the impending CSA 2010 driver profiles becoming available shortly will have a lasting effect on net driver pool. While the effect of driver profiles is likely to be somewhat delayed, the loss of employable and insurable drivers will start to effect the driver pool in the next 6-24 months as insurance companies gain access to DSMS and carriers get wise to the liability they take on if they hire someone with a poor historical rating.

Lastly and probably the largest contributing factor to the impending shortage is the extinction of the large carrier driver training programs. Over the last few years it’s been pretty cost prohibitive for large carriers to keep their driver training programs alive and well. For years large carriers took CDL drivers with little or no experience, paid them a slightly lower wage, and made them part of a team to get them trained. As the economy soured and freight all but dried up, companies looking to cut costs did the obvious thing…they reduced, or in many cases, cut driver training programs all together. The fact of the matter is that large carriers, the ones largely responsible for the training programs that get young drivers to the training finish line, have largely exited the training game. Moreover, the cost to enter a private training course is too high for many would-be drivers. The net result is a hole in the driver pool that’s 3-4 years deep with no visible replenishment in sight.

The cumulative effect of the above mentioned factors leads me to believe that a driver shortage is a very real possibility. In fact, many growing carrier clients of mine are having so much trouble hiring quality drivers that they’ve hired hiring specialists to recruit quality drivers! I bet you wouldn’t have expected that just a few short months ago!

The Bottom Line: All-in-all the fact that there may be a driver shortage ultimately means that trucking companies are busy enough that they need to hire more drivers than they have now…that’s a great problem to have. In any case, protect the drivers you have now by showing appreciation, paying fair wages, and start recruiting NOW for potential open positions down the road. The shortage will be real and the best recruiters will probably be on top when it’s all said and done.

The Bottom Line: The driver shortage is real and it’s here. I suggest protecting your current drivers by showing appreciation, paying fair wages, and actively recruiting BEFORE you lose someone. I also suggest reviewing your insurance company and agent if they aren’t working with you to help you grow your business. I firmly believe it’s your insurance agent’s obligation to design an insurance program around you business, not the other way around.

Hopefully you’ll check back soon to see our weekly updates. And always, if you have any questions for the Truck Insurance Pro…please just let us know and we’ll get back to you ASAP!

Keep on Rollin’!

Jason Stevenson
Truck Insurance Pro
a division of
The Hoffman Group
800.826.4006
jstevenson@thehoffmangrp.com

Welcome back and thanks for reading The Bottom Line! Today I’m passing along an alert sent by the FMCSA regarding its new package of SMS Enhancements…see the entry below and follow the links to see the changes!

I received notice this morning that the FMCSA is giving carriers a ‘sneak peak’ of the proposed changes to the BASICS analysis program. These changes may seem subtle, but for many of you reading this the somewhat small changes in the BASIC methodology should prove to be a fairer measurement system…especially for those of you transporting Hazardous property or in the Intermodal Transport business.

 Changes include:

1. Strengthening the Vehicle Maintenance Behavior Analysis and Safety Improvement Category (BASIC) by incorporating cargo/load securement violations from today’s Cargo-Related BASIC.
2. Changing the Cargo-Related BASIC to the Hazardous Materials (HM) BASIC to better identify HM-related safety problems.
3. Better aligning the SMS with Intermodal Equipment Provider (IEP) regulations.
4. Aligning violations that are included in the SMS with Commercial Vehicle Safety Alliance (CVSA) inspection levels by eliminating vehicle violations derived from driver-only inspections and driver violations from vehicle-only inspections.
5. More accurately identifying carriers involved in transporting HM.
6. More accurately identifying carriers involved in transporting passengers.
7. Modifying the SMS display to:
   a.  Change current terminology, “inconclusive” and “insufficient data,” to fact-based descriptions.
   b.  Separate crashes with injuries and crashes with fatalities.

I have pasted the full release below, but as far as I can tell the best overall explanation of these changes is available for your consumption by clicking HERE.

 3/27/2012 – Motor Carriers Can Now Preview the First Package of SMS Enhancements

The Federal Motor Carrier Safety Administration (FMCSA) is pleased to announce that motor carriers can now preview the first package of changes to the Safety Measurement System (SMS). FMCSA designed SMS to be improved over time as better technology, new data, and additional analysis become available. This release is the first in a series of improvements to SMS that will take place up to twice a year. FMCSA is providing a preview period for motor carriers and enforcement personnel before it uses the SMS changes to prioritize motor carriers for safety interventions and before it makes those changes available to the public. The SMS Preview begins on March 27, 2012 and runs through late June 2012.
These first enhancements are the agency’s response to findings from its ongoing analyses of data and input from enforcement, industry, and other safety stakeholders. During the SMS Preview, FMCSA is collecting, assessing, and addressing feedback from preview participants, and may further refine the SMS enhancements prior to public implementation in summer 2012.
As of March 27, 2012, carriers can access the SMS Preview through two websites:

1. Visit the CSA Website (https://csa.fmcsa.dot.gov/login.aspx) and log in with an FMCSA-issued U.S. DOT number and a personal identification number (PIN), or

2. Log in to the FMCSA Portal (https://portal.fmcsa.dot.gov/login ) and select the “CSA Outreach” link.

FMCSA encourages motor carriers to view the SMS Preview to see how methodology changes will affect their SMS results.

On the CSA Website’s Resources page, motor carriers and other stakeholders can access a foundational document that provides additional information about the first set of SMS changes. A Federal Register notice outlining the changes is also available for review.  Written comments regarding the changes can be filed to the Federal Docket Management System at http://www.regulations.gov, Docket ID Number FMCSA-2012-0074.

Thank You,
CSA Web Team
USDOT/Federal Motor Carrier Safety Administration

The Bottom Line: Take a look at these changes and make your opinions heard. The links provide a feedback option. The reason the DOT is sending a ‘preview’ to carriers is to get your feedback…I suggest you give it!

Hopefully you’ll check back soon to see our weekly updates. And always, if you have any questions for the Truck Insurance Pro…please just let us know and we’ll get back to you ASAP!

Keep on Rollin’!

Jason Stevenson, MBA, CPIA
Truck Insurance Pro
The Hoffman Group–Transportation Services
800.826.4006
jstevenson@thehoffmangrp.com

Welcome back and thanks for reading The Bottom Line! Today I’m going to follow-up on my previous entry. I mentioned the coming hardening insurance market, and while that wasn’t the focus of the article, it sure got the most attention.

In my last entry I mentioned that:
“Economic growth and extreme losses over the last few years coupled with expected low interest rates and rates of return over the next several years, is causing the insurance market to harden and harden quickly.

 I personally estimate that transportation premiums will increase 5-8% annually for the next few years before stabilizing. Sorry to be the bearer of bad news, but truckers have gotten all too used to expecting a decrease in premiums. The ‘perfect storm’ of factors causing that marketing pressure have subsided and it’s prudent to build into your budget a few percent increase regardless of your own performance. There are of course exceptions to this rule, but an average trucker should expect increases.”

The entry was actually about current growth of the trucking industry and the fact that we’re seeing more freight volume moved right now than in any other time in the industry’s past, but the snippet above is apparently what stuck out as the calls for me to explain or to expand on this have overwhelmed any interest in freight volume.

Without expanding into the extremely technical side of insurance markets and pricing, there are several factors influencing what I believe to be an inevitable hardening process over the next few years.

The first, as I mentioned above, is the catastrophic losses due to weather over the last few years have caused the industry as a whole to spend more money than ever on claims.  You might be saying: “What does a tsunami in Japan have to do with my trucking business in the Midwest US?” That’s a good question…the fact is that behind the scenes most insurance companies are pretty entwined with one another. Insurance companies spread their own risk by buying their own insurance policies. It’s not uncommon for a regional insurance company that specializes in restaurants, manufacturing, local trucking, etc, to have some exposure in an earthquake in Europe, or a tsunami in Japan. And, because pretty much all insurance companies participate in these arrangements at some level, when there are huge storms in the Midwest, or a tsunami in Japan, at some level, they all lose. When they lose, prices increase.

The second, also mentioned above, is the expectation of low interest rates and low investment returns over the next several years. Insurance companies only make money 2 ways. Either they earn an operating profit – which simply means they spend less on operations and claims than they generate in premiums, OR they earn an investment return on premiums generated before they spend those premiums on operations costs and claims.

Investment returns are expected to be pretty low for insurance companies over the next several years as insurance companies are understandably extremely conservative investors and interest rates are predicted to stay relatively low for quite some time.

So, between higher expenses and lower investment returns, insurance company profits are shrinking rapidly. With expenses as low as most insurance companies can make them (many companies cut considerable staff, have instituted hiring and pay freezes, and have even liquidated under-performing divisions and lines of coverage over the last few years to keep expenses low to maintain competitive rates), there is only one place to look for profits…increased revenue.

From 30,000 feet the economics of the situation are quite simple – expenses are increasing, and revenue has to catch up.

In terms of ‘being prepared’ for the market shift, there are a number of simple things a trucking company can plan to do, not the least of which is EXPECT YOUR COSTS TO RISE. Don’t get caught uninformed when your agent comes in and tells you that premiums are up 8% from last year.

There are quite a few other options for managing higher premiums like increasing deductibles, considering insuring only your newer units, making a rating type change (CLICK HERE TO SEE WHAT RATING MECHANISM MAKES THE MOST SENSE FOR YOUR COMPANY), or moving to a captive insurance program, that you can consider to help get through the hard market. 

Most of these options present their own problems though. Higher deductibles simply amounts to more risk/direct expense shouldered by the trucking company. Insuring only newer vehicles means the same thing. A rating change only changes the way you’re rated and while you may find a more efficient way to pay for your insurance, inevitably those rates will increase over time too. Captives are quite different and are great options for the right truckers – stay tuned as the next entry will be about captive insurance!

The most productive thing you can do though is to consult a professional trucking-specific insurance agent that can advise you on the market, on the insurance company you’re currently working with, and its long term outlook. An insurer’s financial stability and commitment to the trucking marketplace are keys to your long-term protection and price stability.

The Bottom Line: The long and the short of it is that insurance prices are going to rise…and going to rise fast. Be prepared. Make a call to your agent or to a specialist that can advise you on finding a stable, reliable insurance company devoted to the trucking industry. Doing so will help keep you from sleepless nights wondering if you’re going to get dropped or if your rates are going sky high. Look for expertise and stability…you’re going to need it over the next few years.

Hopefully you’ll check back soon to see our weekly updates. And always, if you have any questions for the Truck Insurance Pro…please just let us know and we’ll get back to you ASAP!

Keep on Rollin’!

Jason Stevenson, MBA, CPIA
Truck Insurance Pro
The Hoffman Group–Transportation Services
800.826.4006
jstevenson@thehoffmangrp.com

Welcome back and thanks for reading The Bottom Line! Today I wanted to share some interesting statistics on our industry. We’re growing and it’s great!

Recently I’ve read several articles talking about trucking industry growth. I’ve copied and pasted two of them below.

The first – Trucking Industry Points to Strong Economic Growth by Dirk Van Dijk – can be reached by clicking HERE.

The Second – Work Truck Industry Growth Expected to Continue into 2016 by Steve Latin-Kasper – can be reached by clicking HERE.

Both authors articulate the better-than-expected growth in the transportation sector all together, but specifically in trucking because of healthy freight counts. These indicators suggest an economic up-tick on the horizon.

At The Hoffman Group we consult on insurance so I’d be remiss if I didn’t mention it here! Economic growth and extreme losses over the last few years coupled with expected low interest rates and rates of return over the next several years, is causing the insurance market to harden and harden quickly.

I personally estimate that transportation premiums will increase 5-8% annually for the next few years before stabilizing. Sorry to be the bearer of bad news, but truckers have gotten all to used to expecting a decrease in premiums. The ‘perfect storm’ of factors causing that marketing pressure have subsided and it’s prudent to build into your budget a few percent increase regardless of your own performance. There are of course exceptions to this rule, but an average trucker should expect increases.

You can mitigate some of those increases with some creative deductible options and maybe a rating basis change (click HERE to see which rating basis makes sense for you). Call your agent to discuss this and make sure you’re looking around if you don’t have confidence that your agent has the tools or the insurance carriers to help you weather the storm. It was pretty easy to get a trucking account written over the last few years, but it requires a pro from here forward.

See the articles below and enjoy.

Trucking Industry Points to Strong Economic Growth

By Dirk van Dijk CFA01/25/2012

“America Moves on Trucks” is the trucking industry’s slogan, and there is a lot of truth to it.  Trucks account for 67.2% of all the freight tonnage in the U.S.  Since much of the freight moved by rail is low value per ton stuff, the Trucking industry collected 81.2% of all the freight transportation revenues. Given that when something is produced, it then has to be moved to the consumer, the trucking industry thus serves as an excellent barometer of the economy, particularly the domestic economy. That barometer is now pointing to extremely sunny skys.

The American Trucking Association (ATA) index rose by 6.8% in November, a huge acceleration over the 0.3% gain in November.  It is now up 10.5% year over year. In November it was showing a 6.1% gain. The total tonnage moved in all of 2011 was 5.9% higher than for all of 2010. That is the biggest annual gain in 13 years.

Some of the gain appears to be from trucks taking market share from the rails, but not much. Total rail traffic was up 7.3% year over year in December (as measured by the American Association of Railroads, or AAR). Intermodal traffic, which is the most directly competitive with the truckers (containers moved long distances by train then carried to their final destination by truck) was up 9.4% year over year. The month to month gains though were more subdued, with a total traffic gain of 1.8% and an intermodal gain of 0.4% in December.

Thus, the transportation indicators are strongly suggesting that the economy is headed in the right direction.

Source: Zacks

________________________________________________________________________

Work Truck Industry Growth Expected to Continue Into 2016

By Steve Latin-Kasper
NTEA Director of Market Data and Research 

U.S. Economy
Bloomberg News announced in the second week of December that its forecast panelists had increased their prediction of U.S. gross domestic product (GDP) for the fourth quarter of 2011 to 2.7%, a 0.4 percentage point increase from the November consensus. The improved forecast was attributed to better-than-expected economic growth in the third quarter and less uncertainty about financial conditions in the Euro Zone. The forecast for 2012, however, was barely changed, with first-quarter predictions increasing slightly and second through fourth-quarter estimates declining by 0.1 percentage points each. The net result was an average forecast of 2.2% GDP growth in 2012 — the same as predicted in November.

Economists are reluctant to ramp-up forecasts for GDP in 2012 primarily due to consumer confidence. The University of Michigan’s Consumer Confidence Index has improved markedly since reaching its recent historic low of about 57 in 2010. However, it’s important to note that consumer confidence didn’t begin waning as a result of the 2007–2009 recession — it has been trending down since 1999, from a level of about 112. In the second quarter of 2011, it climbed to a recent high of about 75 and then fell back into the mid-60s again as Euro Zone uncertainty led to extreme volatility in stock markets around the world.

So, the big question for 2012 is: Will consumer confidence continue improving? The likely answer is yes — but not due to substantial improvements in the labor market or gains in real income (which probably will not occur). What is happening, and what will continue to happen, is a decline in the debt-to-income ratio. As of the third quarter of 2011, the Financial Obligations Ratio (which relates consumer debt to personal disposable income) was at 14.42. In other words, the average American consumer was using 14.4% of his/her income for loan payments. The Ratio, which was down from a high of 17.55 reached in the third quarter of 2007, hasn’t been as low as 14.42 since the first quarter of 1995. This means that more consumers can afford to spend again.

Since banks are still exercising caution on issuing loans to consumers and businesses, a higher level of creditworthiness likely won’t contribute to increased consumer spending. This is negligible, however, because while consumers were paying down debt, the rate of savings increased. As such, many consumers and businesses have additional funds entering 2012. On that note, November sales of automobiles and holiday season retail sales both seem to indicate that consumers are starting to feel like spending again.

The chart above, which depicts the difference between two- and 10-year maturity treasury bill rates (the yield curve), indicates that the U.S. economy is nowhere near a level that historically has proceeded a recession. So, even if consumers don’t increase expenditures enough to push U.S. GDP back up to its historic trend level of about 3.2% in 2012, the U.S. economy will not likely slide back into a recession.

Work Truck Industry
The work truck industry is more volatile than the U.S. economy, so when economic growth is at or near trend, U.S. commercial vehicle sales have historically been much higher. (Unfortunately, that is also true during recessionary phases of business cycles.) What’s occurring in this business cycle fits the historic relationship. While U.S. GDP grew roughly 2% through September, retail sales of truck chassis grew more than 25%, according to the NTEA’s OEM/Body Manufacturing Monthly Statistics Survey.

Since the U.S. economy is expected to continue growing in 2012, retail sales of truck chassis will likely continue growing as well — but it’s not quite that simple. In addition to expected growth in the economy as a whole, numerous application markets for trucks are expected to fare well in 2012. In fact, the only significant truck application markets that are expected to perform poorly in 2012 are the construction industry and state and local governments. This doesn’t mean that construction companies and governments won’t buy any trucks in 2012 — it means that sales in those markets will be about the same as in 2011, or slightly better.

As will apply to most truck application markets in 2012, the relatively high average age of trucks will once again lead to many being replaced. As shown in the graph above, conventional cab-chassis dominate the market for straight trucks, and the trend in that market segment is expected to extend through 2012. However, the current trend indicates continued excess capacity in the industry, which means that the high sales volumes experienced in 2006 may not be reached again until 2016 or later.

Commodities Prices
Currently slow global economic growth has allowed for metals prices to stabilize (and even fall slightly) in the second half of 2011. As shown below, prices for steel sheet started declining in the second quarter, and prices for plates, bars and structural shapes followed in the third quarter. However, prices haven’t fallen enough to indicate that the long-run upward trend has changed.

The aluminum market currently has a similar pricing environment. From 2010 through the second quarter of 2011, aluminum prices grew at the long-run trend rate established from 2004–2007. Prices spiked in 2008 and then crashed as a result of the recession. During the economic recovery, prices began increasing but then stabilized as the global economy slowed slightly in the second and third quarters. Going forward into 2012, whether metals prices return to trend (which will eventually take them back to 2008 levels) depends on economic growth in Asia, the BRICS (Brazil, Russia, India, China and South Africa) countries and the U.S. Current expectations are that global growth will pick up again in 2012, which will likely lead to increases in metals prices at some point during the year.

In the meantime, as shown in the figure above, the price of oil remains volatile. After climbing rather quickly back to $100 per barrel in the futures markets in November 2011, announcements from OPEC and the U.S. Department of Energy on Dec. 15 pushed it down about $7 per barrel. Both organizations indicated that demand for oil was unlikely to increase as much as expected in 2012 because of slower growth in Europe, which will likely affect China and the U.S. In the same announcement, OPEC leaders suggested they expected production to continue increasing in Libya and Iraq, but that the price of oil would probably remain around $100 per barrel in 2012 as Saudi Arabia cut its production to maintain the OPEC at desired levels. Oil prices of $100 per barrel means that diesel and gasoline costs will continue to put pressure on profit margins in 2012, and truck owners will continue looking for ways to save on fuel. Therefore, interest in alternative fuel and hybrid truck technology will likely continue expanding in 2012.

Leading Indicators
The leading indicator of U.S. economic activity has been positive for the last six months, the rate of inflation remains under control, the unemployment rate is declining and the Federal Reserve continues to keep interest rates at historic lows. Consumer and business expenditures have been increasing, while debt-to-income ratios have been declining. On the down side, the construction industry is still holding the U.S. economy back from reaching its historic average rate of growth, and Euro Zone uncertainty remains. In other words, continued slow U.S. economic growth is expected.

What this means for the work truck industry is that 2012 may be very similar to 2011. The heavy-duty segment is expected to continue growing faster than the medium-duty segment in the first half of 2012, and in the second half, growth rates are forecast to be about the same. As shown above, the forecast for housing starts is positive for 2012. What isn’t shown, however, is that the optimistic forecast extends to 2015, which translates into industry growth through 2016.

The PRIME (average prime rate of interest inverted) tells the same story in the chart above. For the last two business cycles, the PRIME has provided about two-and-a-half years of lead-time at turns in the heavy-duty business cycle. Given current statements by the Federal Reserve, it is unlikely that rates will start rising significantly until the second half of 2013. This means the PRIME is also indicating work truck industry growth into 2016 (albeit, the rate of growth may slow after 2012).

If you have any questions or comments about this article, contact Steve Latin-Kasper at (414) 294-3408 or e-mail stevelk@ntea.com.  

 The Bottom Line: Overall it’s a great sign that the economy is picking up. It’s even better that we’re producing goods in the US and we need to move freight. 

Hopefully you’ll check back soon to see our weekly updates. And always, if you have any questions for the Truck Insurance Pro…please just let us know and we’ll get back to you ASAP!

Keep on Rollin’!

Jason Stevenson, MBA, CPIA
Truck Insurance Pro
The Hoffman Group–Transportation Services
800.826.4006
jstevenson@thehoffmangrp.com

Welcome back and thanks for reading The Bottom Line! Today I wanted to pass along another regulation change.  As you may recall, a while back I did a series on PUCO regulations. As you might expect…regulations are still changing!

I’ve copied and pasted the text from the release below and here is a link directly to the article: Click Here

PUCO grants hours-of-service relief to agricultural carriers

COLUMBUS, OHIO (Nov. 29, 2011) – The Public Utilities Commission of Ohio (PUCO) today granted temporary regulatory relief from the hours-of-service requirements for drivers operating commercial motor vehicles that transport agricultural products within Ohio.

The regulatory relief is effective immediately and will expire at 12:01 a.m. on Jan. 1, 2012. The PUCO granted the temporary waiver to allow farmers and agribusinesses with additional time to complete their annual operations following an uncharacteristically wet planting season and a delayed harvest.

Carriers subject to this regulatory relief are not exempt from any other motor carrier safety regulations, including commercial driver’s licensing, controlled substance and alcohol and testing, and financial responsibility requirements. Carriers should continue to maintain records of duty status and take all measures to ensure that drivers have the ability to safely operate their commercial vehicles.

The Public Utilities Commission of Ohio (PUCO) is the sole agency charged with regulating public utility service. The role of the PUCO is to assure all residential, business, and industrial consumers have access to adequate, safe, and reliable utility services at fair prices while facilitating an environment that provides competitive choices. Consumers with utility-related questions or concerns can call the PUCO hotline at (800) 686-PUCO (7826) and speak with a representative.

Subscribe and Unsubscribe to the PUCO Media Release e-mail service

The Bottom Line: Check back regularly for updates on the PUCO, the FMCSA, and many other transportation topics! 

 Hopefully you’ll check back soon to see our weekly updates. And always, if you have any questions for the Truck Insurance Pro…please just let us know and we’ll get back to you ASAP!

Keep on Rollin’!

Jason Stevenson, MBA, CPIA
Truck Insurance Pro
The Hoffman Group–Transportation Services
800.826.4006
jstevenson@thehoffmangrp.com

Welcome back and thanks for reading The Bottom Line! Today I wanted to make sure I passed around new info on the FMCSA’s Cell Phone Ban…this is an important note and I hope you read below.

 …Special Thanks to David Bartosic from the Ohio Trucking Association for sharing…

 “It probably comes as no surprise that FMCSA issued its final rule basically banning the use of all handheld cell phones by commercial motor vehicle drivers in INTERSTATE commerce, which becomes effective 30 days after appearing in the Federal Register.  

Because this new rule comes equipped with an $11,000 fine for employers who fail to require their drivers to comply, you might want to get started if you haven’t already banned the use of such devices. Drivers face a fine of up to $2,750 if caught using one.”

Directly from FMCSA:
FMCSA and PHMSA are amending the Federal Motor Carrier Safety Regulations (FMCSRs) and the Hazardous Materials Regulations (HMR) to restrict the use of hand-held mobile telephones by drivers of commercial motor vehicles (CMVs). This rulemaking will improve safety on the Nation’s highways by reducing the prevalence of distracted driving-related crashes, fatalities, and injuries involving drivers of CMVs. The Agencies also amend their regulations to implement new driver disqualification sanctions for drivers of CMVs who fail to comply with this Federal restriction and new driver disqualification sanctions for commercial driver’s license (CDL) holders who have multiple convictions for violating a State or local law or ordinance on motor vehicle traffic control that restricts the use of hand-held mobile telephones. Additionally, motor carriers are prohibited from requiring or allowing drivers of CMVs to use hand-held mobile telephones. Click Here Read the Full Text of the Ruling

The Bottom Line: This is a big deal. This new rule and its accompanying fines are significant. For your own sake, dust off your driver manuals and REQUIRE that your drivers stop using phones while driving. Aside from the fines, you should be concerned about what can happen in court if you are lax about the policy. 

Hopefully you’ll check back soon to see our weekly updates. And always, if you have any questions for the Truck Insurance Pro…please just let us know and we’ll get back to you ASAP!

 Keep on Rollin’!

Jason Stevenson, MBA, CPIA
Truck Insurance Pro
The Hoffman Group–Transportation Services
800.826.4006
jstevenson@thehoffmangrp.com

Welcome back and thanks for reading The Bottom Line! Today the US DOT released the new Hours of Service changes we’ve all been expecting…there are some surprises, so take a look…

I’ve copied and pasted selected sections of the text from the press release below and here is a link directly to the full article: Click Here

Thursday, December 22, 2011

U.S. Department of Transportation Takes Action to Ensure Truck Driver Rest Time and Improve Safety Behind the Wheel

WASHINGTON – U.S.

“This final rule is the culmination of the most extensive and transparent public outreach effort in our agency’s history,” said FMCSA Administrator Anne S. Ferro.  “With robust input from all areas of the trucking community, coupled with the latest scientific research, we carefully crafted a rule acknowledging that when truckers are rested, alert and focused on safety, it makes our roadways safer.”

FMCSA’s new HOS final rule reduces by 12 hours the maximum number of hours a truck driver can work within a week. Under the old rule, truck drivers could work on average up to 82 hours within a seven-day period. The new HOS final rule limits a driver’s work week to 70 hours.  

In addition, truck drivers cannot drive after working eight hours without first taking a break of at least 30 minutes. Drivers can take the 30-minute break whenever they need rest during the eight-hour window.

The final rule retains the current 11-hour daily driving limit.  FMCSA will continue to conduct data analysis and research to further examine any risks associated with the 11 hours of driving time. 

The rule requires truck drivers who maximize their weekly work hours to take at least two nights’ rest when their 24-hour body clock demands sleep the most – from 1:00 a.m. to 5:00 a.m. This rest requirement is part of the rule’s “34-hour restart” provision that allows drivers to restart the clock on their work week by taking at least 34 consecutive hours off-duty. The final rule allows drivers to use the restart provision only once during a seven-day period

Companies and drivers that commit egregious violations of the rule could face the maximum penalties for each offense. Trucking companies that allow drivers to exceed the 11-hour driving limit by 3 or more hours could be fined $11,000 per offense, and the drivers themselves could face civil penalties of up to $2,750 for each offense.
Commercial truck drivers and companies must comply with the HOS final rule by July 1, 2013.

The full text of the rule and its explanation is here: 2013 Hours of Service Rules.

The Bottom Line: Check back regularly for updates on the PUCO, the FMCSA, and many other transportation topics! 

Hopefully you’ll check back soon to see our weekly updates. And always, if you have any questions for the Truck Insurance Pro…please just let us know and we’ll get back to you ASAP!

 Keep on Rollin’

Keep on Rollin’!

Jason Stevenson, MBA, CPIA
Truck Insurance Pro
The Hoffman Group–Transportation Services
800.826.4006
jstevenson@thehoffmangrp.com

Welcome back and thanks for reading The Bottom Line! Here is all you need to know about what you can use and not use with the new cell phone ban.  It goes into effect 01/03/12.  Those of you who are INTRASTATE HAZARDOUS MATERIAL CARRIERS-please see highlighted area

Hand-Held Mobile Phones Now Less Mobile
Beginning January 3, 2012, drivers of commercial motor vehicles (CMVs) will not be able to hold, dial, or reach for a hand-held cell phone, including those with push-to-talk capabilities, while driving. This will also include the occasions when the driver is temporarily stopped in traffic due to delays or waiting for traffic signals to change. No longer will a driver be allowed to drive and hold a cell phone, or as many have done or seen, squeeze the cell phone with their shoulder and ear while motoring anywhere on the highways. Once the driver has moved the vehicle to the side of, or off, a highway and has sufficiently parked in a safe location, the use of a hand-held cell phone is allowed.

Section 392.82, describing this ban on cell phones while driving, was recently added to the FMCSRs (Federal Motor Carrier Safety Regulations) and clearly states that motor carriers cannot allow or require drivers to use a hand-held mobile device while driving a CMV. Companies who allow their drivers to use hand-held cell phones while driving will face a maximum penalty of $11,000.00. Drivers who violate this rule will face federal fines of up to $2,750.00 for each offense and will face disqualification of their driving privileges for multiple offenses. Table 2 in §383.51 lists these disqualification penalties.

What is allowable under §392.82 is a mobile cell phone with hands-free capabilities and dialing or answering the mobile phone by pushing one single button. The FMCSA feels that this type of activity keeps both hands of the driver free and their attention fixed on the road ahead. Also, the one button activation of the hands-free cell phone only requires minimal distraction much the same as a driver would change the station on the radio, or adjust the heat in the cabin.

The only exception to this new rule is the emergency exception. Using a hand-held mobile telephone is permissible by drivers of a CMV when necessary to communicate with law enforcement officials or other emergency services. Drivers will be allowed to use CB radios and two-way radios while driving.

The new regulation banning cell phone use, which was issued jointly by the FMCSA and Pipeline and Hazardous Materials Safety Administration (PHMSA), also applies to intrastate drivers transporting hazardous materials requiring placarding.

Hopefully you’ll check back soon to see our weekly updates. And always, if you have any questions for the Truck Insurance Pro…please just let us know and we’ll get back to you ASAP!

Keep on Rollin’!

Jason Stevenson, MBA, CPIA
Truck Insurance Pro
The Hoffman Group–Transportation Services
800.826.4006
jstevenson@thehoffmangrp.com

Welcome back and thanks for reading The Bottom Line! Today I wanted to pass along an article that discusses some changes in the weight restrictions Congress is thinking about. Apparently 80,000 lbs may not be enough!

 For now I’m reserving judgment on this initiative. I think increasing weight limits from 80,000lbs to 100,000lbs has some advantages, though some disadvantages may be overlooked. PLEASE COMMENT as I’d love you opinion!

 I’ve copied and pasted the text from the article below and here is a link directly to the article: http://www.foxnews.com/politics/2011/11/25/congress-states-debate-heavier-trucks/

Congress, States Debate Heavier Trucks

By Jonathan Serrie  – Published November 25, 2011 – FoxNews.com

Large trucks on America’s interstates could become 20 percent heavier. The Coalition for Transportation Productivity, a group of more than 100 major shippers including Coca-Cola and The Home Depot, is supporting legislation in Congress that, proponents say, would increase efficiency and reduce emissions.

“With the Panama Canal being deepened, these larger cargo ships coming in are going to be carrying containers that weigh 97,000 pounds,” said Rep. Lynn Westmoreland (R-GA). “If we continue to have our weight limit at 80,000 pounds, then we would have to take the containers, unload them, repack them, put them on trucks and use more trucks to do that.” 

Oct. 19, 2011: Trucks traveling on Interstate 89 in Berlin, Vt. Trucks that weigh up to 100,000 pounds will be allowed on interstate highways in Maine and Vermont under an agreement reached in Congress Thursday, Nov. 10, 2011.

In 2009, nearly 300,000 trucks were involved in crashes in the United States, according to figures compiled by the U.S. Department of Transportation.  Safety advocates argue heavier trucks may cause more serious accidents. But proponents of the legislation say increasing the weight limit would actually reduce the number of trucks on roads, making them safer.

Either way, many state transportation officials worry about the impacts of heavier loads on their roads and their budgets.

“If we advocate for higher weights, it’s going to be more wear and tear on our roads, which means more money,” said Jim Cole, a board member of the Georgia Department of Transportation. “We have to balance that with an economic picture of the future, as well.”

While GDOT officials have yet to make a recommendation to state legislators, their counterparts in Mississippi are voicing opposition to increased truck weights. Meanwhile, Maine and Vermont have already been testing special six axle trucks weighing up to 100,000 pounds.

But large company fleets and independent operators often differ on the short-term impact of the retrofits and upgrades involved with increased loads.

“The manufacturer will be able to offset the equipment with the economies of scale they get, the productivity they get out of it,” said Ed Crowell, president of the Georgia Motor Trucking Association. “The for-hire trucker who doesn’t do any manufacturing will be faced with the cost, but all the benefit will go to the customer.”

The proposed legislation would allow individual states to opt out, leaving an open question as to whether the U.S. continues its patchwork of weight limits, or whether the heavier trucks become the new normal.

The Bottom Line: At the end of the day you’ll have to asses how increased weight limits will affect your business. When you’ve thought about it, let me know by emailing or posting to this BLOG. 

Hopefully you’ll check back soon to see our weekly updates. And always, if you have any questions for the Truck Insurance Pro…please just let us know and we’ll get back to you ASAP!

Keep on Rollin’!

Jason Stevenson, MBA, CPIA
Truck Insurance Pro
The Hoffman Group–Transportation Services
800.826.4006
jstevenson@thehoffmangrp.com