NASSTRAC 2015 – Day 2 Review – National Shippers Strategic Transportation Council

NASSTRACHere is Supply Chains Station’s review of Day 2 at the NASSTRAC conference here in Walt Disney World, Florida, a conference geared specifically at the transport sector of global supply chain operations.

New-Trucking-Moves-America-Forward

The main event on day 2 of NASSTRAC was presentation by a company called New-Trucking-Moves-America-Forward NTMAF); a new organization that only started trading a little over 15 months ago. This company’s aim is to improve people’s image and perception of the trucking industry in general, and truck drivers in particular.

NTMAF has already established itself as a force for change within the trucking industry. In the 15 months they’ve been operating they have already secured millions of dollars worth of funding to help them to represent the image of the trucking industry, not just to trucking industry clients, but to members of the general public, and the legislative body in Washington too.

The company’s public relations activities include things like: distributing videos featuring truck drivers, that trucking companies can use to present their services to potential new clients. They also offer things like full truck wraps whereby trucking companies or owner drivers can completely brand their vehicles in a very attractive looking livery that includes both the trucking company’s own logo and that of NTMAF too. It’s all part of a package of initiatives to personalize the face of the trucking industry and its drivers.

Wall Street’s view on the Transport and Logistics Industry

Another presentation here at NASSTRAC on day 2 of the conference involved a panel putting across Wall Street’s view of the Transport and Logistics industry. A spokesman from BB&T recounted that truckload rates were high in the 1st quarter of 2015, up at 6%, but predicted that they were likely to fall to 4% in the 2nd quarter of the year and down to 3% in the 3rd quarter, reflecting the fact that the supply/demand balance will move back toward normality, creating a better environment for shipping companies.

The driver shortage

The general consensus with regard to the driver shortage is that it is not going to improve in the immediate future. This point is discussed again later on in this report, the section on driver demographics

Electronic Data Logging

The panel went on to discuss the legal requirements for Electronic Data Logging (EDL). Questions about exactly when and how this will roll-out (which is will be a mandatory requirement of the Federal Motor Carrier Safety Association – FMCSA) still remain to be answered. The impact of the costs on small companies and owner drivers could be significant, and it is feared this will contribute toward many companies deserting their businesses, leading to further reductions in the overall capacity of the sector. It is feared that total trucking capacity could be lowered by as much as 5% when EDL is finally installed across the board by 2017, and that given the state of the industry at the moment, with capacity being as tight as it is, plus the driver shortage; it could have a really damaging effect.

Driver Demographics

Another fear with regard to industry capacity was voiced, and this was to do with the driver demographic, which at present is continuing to worsen. The problem is that approximately 21% of the US national driver pool is aged between 55 and 64. It means that many are due to be retiring in the next 10 years and with the current shortage of drivers in the industry, unless something drastic is done to improve recruitment statistics, the industry could be facing a an employment crisis.

The move away from shipping brokerage services

The Wall Street panel went on to discuss the trend whereby a number of shippers are cutting down on the use of shipping brokers, and instead, are developing and making more use of dedicated relationships, which could be a result of the capacity problems that the industry has been experiencing. However the consensus of opinion was that if the current driver shortage persists, dedicated services too, will come under pressure.

Transport award given to Bay & Bay

Transport company Bay & Bay took NASSTRAC’s top award for shipper of the year. The company has achieved phenomenal growth over the past decade, going from $20 million in turnover, to $200 million in turnover in approximately 10 years.

The legal and regulatory climate

The transport industry is very much under the microscope right now, and is being subjected to an avalanche of legal and regulatory issues that are being tabled. For example the current Highway Bill is scheduled to expire at the end of May this year. This is the bill that determines funding for the highways.

With elections coming up in 2016, current betting is that the bill will simply be extended rather than replaced, which means that funding levels will remain the same. If the bill does get extended, it will be the 34th time in 6 years. Although the transport industry is pushing for a new bill, the big question is where would the money come from? But with an impending election, no one wants to start raising taxes. NASSTRAC and ATA etc. are in favor of raising fuel tax, but it appears there is little appetite for doing this in Washington.

Report on longer, heavier trucks may be being repressed

A report has been completed which is believed could favor longer, heavier trucks. But according to the panel, the Department of Transport could be holding it back from being read. If this is the case it will prove to be extremely controversial, because longer, heavier vehicles would impact yon green issues in terms of fuel consumption and carbon emissions. It’s something that would also significantly impact on the driver shortage situation

Driver Coercion

The FMCSA is developing a set of rules which are being referred to as “Driver Coercion. Under these all companies involved in the transport industry, carriers, shippers, receivers, and service suppliers such as 3PLs would be responsible for ensuring drivers carrying their products have enough hours left under their individual tours of duty, to legally drive the loads. This is being linked to earlier statement made by the FMCSA two or three years ago whereby they linked all of these types of companies with the interests of road safety. This is another move that if passed through the legislature, would have a significant impact on the transport industry as a whole.

The point was also made that until now, the FMCSA has been well balanced and as such has had a relatively even approach to trucking issues. But since the new interim director has been in office, the tone has appeared to change somewhat, leading to concern about the interests of the trucking industry.

Carbon emissions and LTL shipments

On an issue of sustainability, it has only been practical to calculate carbon emissions for shipping items on a full truckload basis. But a new formula has now been created by CH Robinson for calculating Less-Than-Truckload (LTL) consignments. A White Paper on the subject is soon to be issued.

Conclusion on Day 2 of the NASSTRAC conference          

Day 2 at NASSTRAC was full of discussion relating to the rules and regulations governing the trucking industry, as well as some operational issues such as the driver shortage, together with sustainability and health and safety concerns.  Keep your eyes open for complete trip report.


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