Skip to content
Search AI Powered

Latest Stories

outbound

Proposed truck regs would come at a cost

Measures pending in Washington could lead to an unprecedented run-up in truckers' operating costs. That would be bad news for shippers.

The recession may be receding into the rear view mirror, but that doesn't mean the freight community's worries are behind it. In fact, for at least one segment of the business, the worst may be yet to come. Just as the freight recovery gets under way, the nation's truckers find themselves facing a host of new challenges that could put a serious crimp in their operations. And that's a concern not just for the folks who run trucking companies, but for the folks who use their services as well.

The source of their worries? A legislative climate that carriers say is downright hostile to truckers. "There is a certain amount of anti-truck rhetoric in Washington today," YRC Worldwide COO Michael Smid said at the NASSTRAC conference in April. The result has been a flurry of regulations and proposals aimed at making trucking operations safer, greener, and more union friendly. They include the Federal Motor Carrier Safety Administration's upcoming Comprehensive Safety Analysis program, proposals to further restrict truck drivers' hours of service, proposed "cap and trade" legislation, efforts to fund highway improvements via increased fuel taxes, and various initiatives viewed as concessions to organized labor.


Trouble is, the regulations would do more than just make truckers greener, safer, etc.; they would also drive up their costs—and by extension, the rates shippers pay. "There are at least five issues at play," Mike Regan, president and CEO of the consultancy TranzAct Technologies, warned at the NASSTRAC conference. "If they swing the wrong way, your rates will go up."

And these rate increases could be substantial. According to some of the conference speakers, any one of these initiatives alone could result in a rate hike of 2 to 4 percent. If they were all to hit at once in a so-called "perfect storm" scenario, freight rates could shoot up as much as 15 to 20 percent.

If this scenario plays out, don't expect shippers to go down without a fight. Speaking on a shipper panel at the conference, Candace Holowicki, manager of logistics for building products maker Masco Corp., noted that while she understood the need for carriers to cover their costs, her budget may not support double-digit rate hikes. "I envision a lot of trouble explaining to my management why we need all these rate increases," she said. "I'm trying to be an advocate for both sides of this, but I can't give everyone a 20-percent increase, so don't ask—the money's not there."

Regan warned shippers, however, that "just say no" won't be one of the options. Refusing to accept the hikes won't make the problem go away, he pointed out. "Whether it's in your budget or not, you are going to have to pay it. If you don't, your freight simply isn't going to move."

No one wants to see that kind of standoff. But resolving the problem won't be easy given the anti-truck sentiment on Capitol Hill. The trucking industry makes an easy target for politicians, said FedEx Freight President Bill Logue at the NASSTRAC conference. "It's a very visible thing because there are so many trucks on the road." Nothing will change until policymakers stop viewing those trucks as a threat to public health and safety, and start seeing them for what they really are: a vital part of the nation's economy.

Both Logue and YRC's Smid emphasized the importance of getting that message across to members of Congress and their aides (who are, after all, the people who actually draft the legislation). "A lot of education is needed," Smid said. "There are people working on those congressional committees that if they had their way, there would be no trucks at all. They have very little idea of what trucks carry or the role they play in the economy."

That's where shippers come in. The industry has a monumental public relations task ahead of it, and truckers can't do it alone. Make sure your elected representatives know what they need to know. Explain that the old saw "Freight don't vote, people do" no longer holds true. Let them know that freight interests do vote, and when they do, they back candidates who "get" why trucking is important to us all and will act accordingly.

* This article has been revised to include more information on the specific proposals that have trucking companies concerned.

The Latest

More Stories

From pingpong diplomacy to supply chain diplomacy?

There’s a photo from 1971 that John Kent, professor of supply chain management at the University of Arkansas, likes to show. It’s of a shaggy-haired 18-year-old named Glenn Cowan grinning at three-time world table tennis champion Zhuang Zedong, while holding a silk tapestry Zhuang had just given him. Cowan was a member of the U.S. table tennis team who participated in the 1971 World Table Tennis Championships in Nagoya, Japan. Story has it that one morning, he overslept and missed his bus to the tournament and had to hitch a ride with the Chinese national team and met and connected with Zhuang.

Cowan and Zhuang’s interaction led to an invitation for the U.S. team to visit China. At the time, the two countries were just beginning to emerge from a 20-year period of decidedly frosty relations, strict travel bans, and trade restrictions. The highly publicized trip signaled a willingness on both sides to renew relations and launched the term “pingpong diplomacy.”

Keep ReadingShow less

Featured

forklift driving through warehouse

Hyster-Yale to expand domestic manufacturing

Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.

That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.

Keep ReadingShow less
map of truck routes in US

California moves a step closer to requiring EV sales only by 2035

Federal regulators today gave California a green light to tackle the remaining steps to finalize its plan to gradually shift new car sales in the state by 2035 to only zero-emissions models — meaning battery-electric, hydrogen fuel cell, and plug-in hybrid cars — known as the Advanced Clean Cars II Rule.

In a separate move, the U.S. Environmental Protection Agency (EPA) also gave its approval for the state to advance its Heavy-Duty Omnibus Rule, which is crafted to significantly reduce smog-forming nitrogen oxide (NOx) emissions from new heavy-duty, diesel-powered trucks.

Keep ReadingShow less
screenshots for starboard trade software

Canadian startup gains $5.5 million for AI-based global trade platform

A Canadian startup that provides AI-powered logistics solutions has gained $5.5 million in seed funding to support its concept of creating a digital platform for global trade, according to Toronto-based Starboard.

The round was led by Eclipse, with participation from previous backers Garuda Ventures and Everywhere Ventures. The firm says it will use its new backing to expand its engineering team in Toronto and accelerate its AI-driven product development to simplify supply chain complexities.

Keep ReadingShow less
chart of global trade forecast

Tariff threat pours cold water on global trade forecast

Global trade will see a moderate rebound in 2025, likely growing by 3.6% in volume terms, helped by companies restocking and households renewing purchases of durable goods while reducing spending on services, according to a forecast from trade credit insurer Allianz Trade.

The end of the year for 2024 will also likely be supported by companies rushing to ship goods in anticipation of the higher tariffs likely to be imposed by the coming Trump administration, and other potential disruptions in the coming quarters, the report said.

Keep ReadingShow less