Trucking Biz Buzz

DAT Solutions: Spot van rate on MembersEdge hits $2.09 a mile

Load posts on DAT MembersEdge dropped 3 percent during the week ending Oct. 7, taking the edge off the uptick from the previous week. Truck posts gained just 1 percent, which kept load-to-truck ratios high:

  • Vans: 6.5 available loads per truck
  • Flatbeds: 46.7 loads per truck
  • Reefers: 12.4 loads per truck

Tight capacity pushed rates higher. Check it out:

  • Vans: $2.09/mile, up 12 cents compared to the previous week
  • Flatbeds: $2.31/mile, up 4 cents
  • Reefers: $2.37/mile, up 14 cents

On to the trendlines.

Spot van volumes declined 6 percent and van posts increased 1 percent. Western markets were solid and the Pacific Northwest in particular, with higher reefer load counts in the region contributing to tighter van capacity. That meant fewer reefer trucks were competing for van loads. Rerouted port traffic from Houston to Seattle after Hurricane Harvey may have added to demand for trucks in the area.

Outbound van rates have soared more than 40 percent out of Seattle in the past month. Seattle is normally a backhaul market, meaning that outbound rates are usually quite a bit lower than the inbound rates.

  • Columbus, Ohio, has been one of the hottest van freight markets ever since Hurricane Harvey caused massive disruptions. Prices are above seasonal norms but key outbound lanes declined compared to the previous week:
  • Columbus-Buffalo fell 19 cents but still averaged $3.42/mile
  • Columbus-Allentown was down 14 cents to $3.72/mile
  • Columbus-Memphis dropped 13 cents to $2.15/mile

In the reefer market, load posts and truck posts were unchanged from the previous week. Seasonal harvests are winding down but tight capacity led to higher reefer rates on the West Coast and in the Midwest.

After reaching the highest flatbed load-to-truck ratio in years the previous week, flatbed load posts dipped 1 percent and truck posts increased 6 percent. Rebuilding efforts in Florida and the Gulf Coast continue to pace demand for flatbeds.

Tri-haul of the Week
The going rate for reefer loads from Grand Rapids, Mich.-Philadelphia was down but paid well at $3.51/mile, while the return trip averaged $1.92/mile. That’s a good roundtrip especially if you can complete the 1,436 miles, with pickup and delivery, in three days.

If your trip will take four days anyway, you can boost your revenue with a tri-haul. One route takes advantage of high rates on the lane from Philly-Cincinnati, which paid an average of $2.51/mile last week. Reefer loads from Cincinnati-Grand Rapids averaged $3.44/mile.

Adding that extra leg would make the trip about 200 miles longer, not counting deadhead. Your average rate would also go from $2.72 to $3.15 per loaded mile. The combination of more loaded miles and higher rate per mile will add more than $1,200 to your total revenue for the trip, giving you $5,100 over four days. Looking at it another way, it’s $1,300 per day instead of $1,000.

Rates are derived from DAT RateView, which provides real-time reports on prevailing spot market and contract rates, as well as historical rate and capacity trends. All reported rates include fuel surcharges.

For the latest spot market load availability and rate information, visit OOIDA’s MyMembersEdge.com load board or tune in to Land Line Now. You can get all of the latest rate information at dat.com/industry-trends/trendlines, comment on the DAT Freight Talk blog, or join us on Facebook. On Twitter you can tweet your questions to us @LoadBoards and have your questions answered by DAT Industry Analyst Mark Montague.

Trucking propels Transportation Services Index to all-time high in August

The official freight index, which measures freight movement in tons and ton-miles, reveals August freight experienced significant gains in trucking, enough to make up for declines in water and pipeline freight to push the index to an all-time high.

Trucking freight made a giant leap for a second consecutive month, increasing to 147.9 from 143.9, a significant increase of nearly 3 percent. Numbers from the American Trucking Associations reveal a tonnage increase of a 7.1 percent in August to 149 from 139.1 in July. ATA calculates the tonnage index based on surveys of its membership.

According to the Bureau of Transportation Statistics of the U.S. Department of Transportation, the Freight Transportation Services Index for August rose 1.5 percent to 130.7. In July, the index increased by 1.4 percent, replacing an all-time high set in May.

The August index was 38 percent above the low that was set during the recession in April 2009. TSI records began in 2000.

According to the DOT, the TSI’s upward movement comes amid other positive signals elsewhere in the economy. Employment, personal income and housing starts all increased. Meanwhile, the Institute for Supply Management’s Purchasing Managers’ Index revealed accelerated growth.

Truck stops show huge support for trucking customers

TA/Petro, Sapp Bros. and Coffee Cup Fuel Stop locations participated in the 2017 Band Together for St. Christopher Truckers Relief Fund. This year’s late summer campaign raised well over a quarter of a million dollars to benefit truckers and their families who have suffered financial difficulty because of medical problems.

Although final accounting has not been announced, TA/Petro’s unofficial report was $209,401.94 for all locations plus an additional $31,908.64 from a golf tournament. Sapp Brothers raised about $8,000 and the Coffee Cup Fuel Stops raised approximately $20,000.

All donations go directly to SCF and benefit drivers. 

Travel Centers of America has been supporting drivers through the SCF since 2010. It is the second year for Sapp Bros and Coffee Cup Fuel Stops to participate. 

TravelCenters of America is the largest full-service travel center company in the U.S., with corporate headquarters is located in Westlake, Ohio. Sapp Bros., Inc. is a collection of 17 full-service, friendly travel centers; primarily located on Interstate 80 from as far west as Salt Lake City, Utah to Clearfield, Pennsylvania in the east. The Coffee Cup Fuel Stop has been serving truckers since 1981 with locations throughout South Dakota, North Dakota and Wyoming.

Professional drivers who are suffering from financial hardships due to medical problems can apply to the SCF for help. Assistance may be in the form of direct payment for mortgage/rent, utilities, vehicle payments, insurance, prescriptions and/or some medical procedures. For more information, visit TruckersFund.org or call 865-202-9428.

Volvo recalls certain VNLs and VNMs over steer axle issue

Volvo Trucks North America is recalling certain VNL and VNM trucks because of a steering axle issue, according to National Highway Traffic Safety Administration documents.

More specifically, several hundred 2016 Volvo VNL and VNM trucks equipped with certain Dana Spicer D-Series and E-Series steer axles are being recalled. The castellated nut on the steer axles may not be properly torqued, allowing the tie rod to loosen, NHTSA recall documents reveal.

The tie rod could potentially disconnect from the steering knuckle if loosened. This could lead to a complete loss of steering. Worst case scenario, the steering axle issue can increase the risk of a crash.

Owners affected by the recall will be notified by Volvo, whose dealers will inspect the torque of the castellated nut and tie rod. Dealers will replace the knuckle and tie rod end assembly for free if it cannot be sufficiently torqued during inspection.

For more information, contact Volvo’s customer service at 800-528-6586 with recall number RVXX1702. The NHTSA recall number is 17V-536.

This is not the first time Greensboro, N.C.-based Volvo has recalled trucks over steering problems. Volvo had to recall nearly 16,000 trucks in the U.S. in March 2016 after it discovered VNL, VNM and VNX trucks may have been manufactured without a roll pin on the steering shafts. With this problem, the Federal Motor Carrier Safety Administration had to step in and place any affected vehicle that was not fixed out of service if driven on the roads.

In July 2016, certain 2013 VNL and VNM trucks with Meritor FF967 nondrive front steer axles were recalled. Those axles may have been incorrectly heat treated.

Transport jobs up in September, down across all industries first time since 2010

Despite the first monthly job loss across all industries in seven years because of devastating hurricanes, transportation jobs overall scored an eighth consecutive month of job gains in September. The transport sector netted 21,800 jobs to the economy. Trucking jobs were down a smidge after a significant decrease in August.

So far, the trucking subsector for 2017 has a net gain of 11,500 jobs. The truck transportation subsector experienced a decrease of 100 jobs in September after the industry lost 1,600 in August and gained 400 in July. September’s decrease was the sixth month of job losses. However, large gains in February and March puts trucking jobs in the black for the year so far. For the year, the trucking subsector had a net loss of 2,500 jobs in 2016.

In 2016, the transportation and warehousing sector had a net gain of more than 19,000 jobs. Last January, transportation lost more than 20,000 jobs, the largest decrease since January 2011, when 38,000 jobs were eliminated from the economy.

Transit/ground passenger transportation experienced the largest increase with 9,400 more jobs, followed by warehousing and storage at 4,800. Pipeline and rail transportation experienced the largest loss, with 400 fewer jobs each, trailed by trucking, with 100 jobs lost. Six of 10 subsectors experienced gains, while scenic/sightseeing transportation remained unchanged from the previous month.

Average hourly earnings for the transportation and warehousing sector were $24.03 for September – a 6-cent increase from August and up 62 cents from September 2016. Hourly earnings for production and nonsupervisory employees experienced an increase of 8 cents to $21.50 from the previous month and a 47-cent increase year to year. Average hourly earnings for private, nonfarm payrolls across all industries were $26.55, 12 cents higher from the previous month. Compared with a year ago, average earnings have gone up by 2.9 percent, or 74 cents.

According to the report, the unemployment rate for transportation and material-moving occupations lowered significantly to 4.5 percent compared with 5.9 percent last September and down from 5.3 percent in August. The overall unemployment rate for the country declined to 4.2 percent from 4.4 percent the previous month. The number of long-term unemployed was essentially unchanged at 1.7 million, accounting for one-quarter of the unemployed.

Trucking still leads in surging transport of cross-border freight

The U.S. Department of Transportation’s Bureau of Transportation Statistics reports that in July trucks moved more than 63 percent of NAFTA freight – with trains, planes, ships and pipelines picking up the rest. All five modes experienced an increase in freight year to year for the third consecutive month.

The value of freight hauled across the borders decreased by nearly 11 percent compared with June, when freight was up 1.5 percent from the previous month. March had the largest month-to-month increase (16 percent) since March 2011, when NAFTA freight was up more than 22 percent compared to February 2011.

Compared to July 2016, freight was up 6.5 percent. This marks the ninth consecutive month of year-to-year increases. Nine of 12 months experienced a loss compared to the previous year in 2016.

July’s rise was only the fifth largest year-to-year increase this year, ahead of February (2.9 percent increase) and April (0.8 percent increase). In March, the index reached more than $100 billion for the first time since October 2014.

August, November and December were the only months to have a year-to-year increase in 2016 at 0.7 percent, 3.3 percent and 0.4 percent respectively. August was the first year-to-year increase since December 2014, when freight increased by more than 5 percent.

Trucks carried more than $56 billion of the $89.2 billion of imports and exports in July. Rail came in second with more than $13 billion.

Freight totaled $89.175 billion, down nearly $11 billion from the previous month but an increase of more than $5 billion from July 2016.

Pipeline freight accounted for the largest increase at 24 percent after an increase of 26.3 percent in June. Trucks accounted for a modest increase at 4 percent. In June, truck freight experienced a similar modest increase of 4.4 percent.
 
Nearly 58 percent of U.S.-Canada freight was moved by trucks, followed by rail at nearly 16 percent. U.S.-Mexico freight went up by more than 7 percent compared with July 2016. Of the $44.4 billion of freight moving in and out of Mexico, trucks carried nearly 70 percent of the loads.

Warren Buffett’s Berkshire Hathaway to own majority stake of Pilot Flying J

Pilot Flying J has just inked a deal for a dramatic shift of ownership in the coming years. Warren Buffett’s Berkshire Hathaway will acquire nearly 40 percent of PFJ stake. In 2023, Berkshire will own a majority stake, transferring power from the hands of the Haslam family.

According to a news release, Berkshire’s initial minority investment of 38.6 percent will allow the Haslams to continue to own a majority 50.1 percent of PFJ, with Jimmy Haslam remaining chief executive officer. Management team, president and headquarters in Knoxville, Tenn., also will remain.

The Haslams’ 50.1 percent ownership and FJ Management’s 11.3 percent will stay intact until 2023. Berkshire will acquire an additional 41.4 percent in 2023, giving Buffett’s holding company an 80 percent majority stake. After 2023, the Haslams will maintain 20 percent ownership and remain involved with PFJ.

“Given the impeccable reputation of Warren Buffett’s Berkshire Hathaway, and our shared vision and values, we decided this was an ideal opportunity,” Jimmy Haslam said in a statement. “As a family business that has evolved and prospered over the last six decades, we knew that any potential partner would need to share our commitment and have a proven track record as a long-term investor.”

Pilot Flying J is the largest operator of travel centers in North America with more than 750 locations in 43 states and six Canadian provinces, according to its website. The company employs more than 26,000 people.

James A. "Jim" Haslam II opened the first Pilot on Nov. 20, 1958, in Gate City, Va. Within 10 years, Pilot had 21 locations in the Tennessee, Kentucky and Virginia region. James A. "Jimmy" Haslam III joined Pilot’s board in 1975 at the age of 20. Jimmy Haslam would be named CEO in 1996 after the company grew to nearly 150 locations with more than 5,000 employees. Pilot Travel Centers and Flying J merged in 2010, creating Pilot Travel Centers LLC, which known as Pilot Flying J.

Buffett has been widely known for acquiring family-owned businesses. Berkshire has a reputation of keeping business as usual while maintaining a long-term investment, rather than other investment models that include making changes and selling at a profit.

In a letter to investors, Buffett mentioned family-owned businesses that plan to sell have two option: sell to a competitor or sell to a “Wall Street buyer.” Buffet informed investors of a third option that Berkshire offers:

“Berkshire offers a third choice to the business owner who wishes to sell: a permanent home, in which the company’s people and culture will be retained (though, occasionally, management changes will be needed). Beyond that, any business we acquire dramatically increases its financial strength and ability to grow. Its days of dealing with banks and Wall Street analysts are also forever ended.”

Berkshire has ownership with BNSF Railway, Duracell, Fruit of the Loom, Geico, Helzberg Diamonds, Justin Brands, Kraft Heinz, Nebraska Furniture Mart and dozens of other companies. In 2016, Berkshire had total assets valued at more than $600 billion with a net income of more than $24 billion.

OOIDA member wins Minimizer contest

OOIDA Member Mike Atwell can no longer say he’s never won anything. The owner-operator from Iowa, La., recently won Minimizer's Comfort Package giveaway on the company's Facebook page.

As part of Truck Driver Appreciation Week, Minimizer gave away a Long Haul Series Seat, Long Haul Series Mattress, and set of Custom Molded Floor Mats, a package valued at over $3,000.

Shell Rotella rolls out one-size-fits-all oil for trucks, passenger vehicles

For years using an oil formulated for your heavy-duty truck in your personal cars wasn’t the best idea. But those days have ended with the introduction of Shell Rotella T6 5W-30 MV.

The new oil was introduced by Jason Brown, Shell Rotella technical manager of heavy-duty engine oil on Wednesday, Sept. 20, at a media event in Goleta, Calif.

Brown explained that normal heavy-duty engine oils and passenger car motor oils are relatively the same. They have the same base oil and the same viscosity modifiers. Performance additives are where they begin to vary widely.

In the trek to develop a one-size-fits-all oil, Shell’s development team had to acknowledge part of the challenge has been the oil weight differences between the two vehicles. The average heavy-duty engine oil used in trucks is 15W-40 and passenger cars is 5W-40.

Part of that trend had to do with options for heavy-duty trucks and prevailing misconceptions. However, with the evolution of lower viscosity heavy-duty engine oils and a push toward lower viscosity oils with equivalent and even better engine protection, those hurdles began to fall.

Enter the Environmental Protection Agency’s new greenhouse gas regulations, known as GHG I, in the industry. Engine makers were required to lower emissions even further, while also increasing fuel mileage. That meant everything, including the oil, would need to evolve. Inevitably, lower viscosity oils were going to be part of the solution.

The American Petroleum Institute established a new category of engine oils, and the oil makers went to work to meet the standards. Because of the unique demands of older engines and engines of the future, a split category was established. That resulted in two new types of engine oils, CK-4 and FA-4. Basically CK-4 oils are backward compatible with all trucks on the road, and FA-4 is designed for new engines going forward.

Shell rolled out its CK-4 Rotella T6 5W-30 in December 2016 as part of the new lineup of engine oils. In addition to meeting the new standards for heavy-duty engines, it also cracked the door further open to an oil that could be used in passenger cars.

A second significant hurdle that oil makers faced was the amount of phosphorus allowed in the different oils. Heavy-duty engine oils were allowed 1,200 parts per million while passenger car oils only allowed 800 parts per million.

Before December 2016, heavy-duty engine oils also could license under the American Petroleum Institute standards for passenger cars with a waiver. That allowed them to keep the higher phosphorus content in the passenger car oil.

While running a heavy-duty engine oil in your passenger car engines would not cause an immediate catastrophic engine failure, it posed a long-term threat to catalytic converters. The higher phosphorus content could eventually poison the catalytic converter over time, leading to an expensive replacement.

When the new API standard went into effect in December 2016, that waiver was eliminated for XW-30 oils. That meant if manufacturers of a heavy-duty engine oil, say Shell’s 5W-30, wanted it to be licensed for passenger cars as well, it would have to drop that phosphorus level to 800 parts per million.

To reduce the levels, Shell engineers turned to the final component of engine oils – the additives. The previous requirements and needs had the formulation of additives different for diesel and gasoline engine oils. The engineers were able to unlock the matrix of additives to fit the unique needs of the different engines with one oil – the Rotella T6 5W-30 MV.

That means truckers opting for the lighter weight Rotella T6 5W-30 for fuel economy will no longer be forced to buy a second passenger car-specific oil for their personal vehicles.

The new T6 5W-30 MV (multivehicle) is expected to be available starting in October at retailers such as NAPA, O’Reilly’s and Wal-Mart.

St. Christopher Fund vaccine program begins

The St. Christopher Truckers Fund is continuing its vaccine voucher program for the 2017-18 season.

As of Oct. 1, free flu shots will be available for truckers. The program lasts through April 30. Vouchers for free pneumonia and shingles vaccines are also available as of Oct. 1 and will continue through Sept. 20, 2018.

Drivers can get their vouchers from the St. Christopher Fund website or from OOIDA’s Jon Osburn on the Association’s tour truck, The Spirit. Drivers will have a choice of Kroger, the Little Clinic, Walgreens and CVS to redeem the vouchers for a free vaccine. However, each location has a separate voucher, so the drivers need to plan on a location before printing the vouchers. Select locations will accept the vouchers electronically. That information will be on the St. Christopher Fund website at truckersfund.org.

The vouchers are solely for semitrailer drivers who hold a valid CDL. Licenses will be checked at each location before the vaccines are given. If a driver has insurance, they are asked to provide that information, as often the vaccines are fully covered through insurance, especially for the flu vaccine.

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