Lana Batts' appeal stems from her lifelong love of trucking and her ability to speak the language of the guys and gals on the road. Now, she's tackling a new and thorny issue: driver pre-screening.
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
Lana R. Batts and trucking are joined at the axle. Reared in a Montana trucking family, Batts came east 40 years ago to take a job with the American Trucking Associations (ATA). She spent 20 years there, rising to the post of senior vice president for government affairs. Batts helped guide the industry through an unprecedented multiyear transition to deregulation, becoming the voice of the profession in the process. Her legacy at ATA remains unmatched despite her being gone since 1994.
Batts has been involved in numerous endeavors over the past two decades. Today, she is co-president of Driver iQ, a Tulsa, Okla.-based company that conducts background screenings of drivers. She spoke recently with Senior Editor Mark B. Solomon about her work and the industry's outlook, peppering her comments with the sharp wit and candor that has long endeared her to the folks behind the wheel.
Q: How did you get involved in the trucking industry? A: I've been involved in trucking my whole life. My father owned a livestock trucking business in Billings, Mont. My first "real" job was with the American Trucking Associations. My husband was in the Air Force at the time and was assigned to Washington, D.C., after a tour of duty in the Philippines. I couldn't find a job so I called my father, who was an officer in what is now the Truckload Carriers Association. He called ATA and I was offered a job as a junior analyst. I was the highest-paid female and the lowest-paid professional.
My first real break came after three weeks on the job. The energy crisis of 1973 broke and ATA was looking for someone on the staff who could spell diesel. I remembered "i" before "e" except after "c," volunteered, and got the job. It was great because no one knew any more than I did. It became a high-profile job with no one second-guessing my decisions, and it launched my career. From then on, all the right people died or retired at the right time.
Q: This has long been a male-dominated field. However, women have made inroads in recent years. Where has the most progress been made, and in what areas does progress have yet to be made? A: Women who have made inroads have not been afraid to volunteer for tough jobs. But the surest way for women to make progress is to work in areas such as sales that have measurable goals. Too many women still find themselves in women-dominated fields, such as human resources, where there are not objective measurements. Unfortunately, until women move into operations with line positions, they will never make it into the front office.
Q: It is no secret that truckers face significant regulatory headwinds on various fronts. Does this reflect aggressive policies of this administration, or was this bound to happen regardless of who occupied the White House? A: Most of trucking's issues are on the political agenda, regardless of the party in power. This means energy, environment, and safety. Many of the issues addressed by the Obama administration such as truck driver hours of service and CSA [the Compliance Safety and Accountability initiative for rating drivers] began under Republican administrations. But this administration always seems to "balance" the scales against business, and by extension, trucking. In essence, this administration likes employees, not employers.
Q: The Federal Motor Carrier Safety Administration (FMCSA) was heavily criticized for basing its new hours-of-service rule not on good science or economics, but on politics. Congress has now taken steps to ensure that the agency's proposals on driver sleep apnea will be part of a rulemaking and not take the form of guidelines that might not require it to use hard numbers to justify its actions. Does this mark a turning point in Congress's recognition of industry concerns that safety regulations have become too onerous and threaten its viability? A: No. What it does is address the industry's concerns that this wasn't going to be handled through a formal rulemaking. FMCSA originally wanted to issue "guidelines" on sleep apnea and not go through the regular rulemaking process. Guidelines result in a continuously moving target, subjecting the carriers to heavy-handed enforcement and ultimately resulting in the courts' codifying the decision through litigation. In essence, guidelines sidestep the process of vigorous debate among all participants and don't require the agencies to do real cost-benefit analysis. At least under a rulemaking, the agencies have to disclose their analysis, no matter how flawed.
Q: Can you describe Driver iQ, and how it came into being? A: Driver iQ is a background screening company dedicated to the transportation industry, and specifically trucking. It was the brainchild of Billie Lee, who had been the president of DAC Services for 14 years before it was sold to USIS and then to HireRight (both background screening firms). She wanted to know if I thought the trucking industry was ready for a competitor in this space. I said an opportunity did exist and that I wanted to be involved if she were serious. We spent several years building a business model and working with industry leaders to see if they'd support it. The feedback was positive, and we launched in April 2011.
The key to successfully providing background screening for the trucking industry is to have a database of driver termination records related to employment, accidents, and substance use and abuse. We have 22 of the top 25 truckload carriers supplying, or in the process of supplying, driver termination records. To date, we have almost 1.5 million termination records in our database, which we call ''PRE" or "Previous Records of Employment." In addition, we supply all the records recruiting managers need to review before making a good hiring decision.
Q: Pre-employment screening is a basic component of the hiring process. What has changed to make screening more difficult? A: Pre-employment screening has changed because the Federal Trade Commission (FTC), which regulates the Fair Credit Reporting Act, and the Equal Employment Opportunity Commission (EEOC) have stepped up their regulation of background screening companies and perceived discrimination against ex-felons. The FTC is more aggressively auditing background screening companies, like Driver iQ, to ensure that background screening reports, which are consumer reports, are timely and accurate, and follow laws protecting consumers' rights in the way information is gathered and used. That means the driver applicant, who is the consumer in these instances, can object to a report even before a hiring decision has been made, as well as after.
The EEOC has stepped up efforts to eliminate what it calls "disparate impact" on minorities when employers refuse to hire convicted felons or individuals with an arrest record. In essence, employers can only deny employment to ex-felons if the crime has some relation to the job—think vehicular homicide and driving a truck—the crime was committed recently, and the individual has not demonstrated any rehabilitation efforts. The EEOC also frowns on denying employment based in whole or in part on arrest records. As a result, there is more paperwork, and carriers are exposed to higher enforcement fines and a higher degree of potential liability to class-action lawsuits.
Q: What are the red flags that companies should be aware of when screening an applicant? A: Carriers make mistakes when they rush an applicant through the screening and hiring process. In the past, carriers may have relied solely on criminal record databases to determine if an applicant had a record. Such databases, by definition, contain stale information that does not meet the requirements of the Fair Credit Reporting Act. Thus, it is unacceptable to the FTC. Background screening companies must re-verify that the applicant and the criminal record represent the same individual, and that nothing has happened since the conviction, such as the record's being expunged.
Further, carriers can no longer have a blanket policy that denies employment based solely on the presence of an applicant's criminal record; again, the crime must have some nexus to the job the applicant is applying for. In addition, employers can no longer run criminal checks on a select few without it appearing that they are using the background check to discriminate against a protected class. Carriers must also be aware of local and state laws that might preclude even asking about criminal convictions on the application. For example, in Newark, N.J., employers cannot ask about criminal convictions until after a conditional offer of employment has been made.
Q: It's tough enough these days finding qualified drivers. Will more rigorous screening practices winnow out prospective applicants that in the past might have been hired? A: Ironically, both the FTC and the EEOC believe their actions will increase the labor pool because applicants won't be denied employment based on faulty reports or age-old crimes. For carriers, however, it has complicated the process and has extended the time from when the application is made to when a carrier can put a driver in a truck.
Q: An analyst recently said tongue-in-cheek that the "mother of capacity shortages is still another year away." We've been waiting for widespread shortages, yet all we've seen are short-lived shortages that are region-specific. Will we see any meaningful crunch in the next two to three years? Have shippers and 3PLs done an effective enough job of re-engineering their supply chains so that a crunch, if one comes, won't matter? A: I, too, predicted significant capacity shortages after looking at the decline in equipment purchases during the recession, the changing demographics, and upcoming regulatory induced productivity losses. But what I, and others, didn't predict was the sideways nature of the recovery. Everyone seems to be in a holding pattern waiting for something to happen. First, we were waiting for a decision on the debt ceiling. Then it was the election. Then it was ObamaCare. Until there is stability and certainty in the markets, no one is going to make any major, irreversible commitments requiring huge investments.
Regarding 3PLs, I don't believe they have done an effective job to reduce the impact of the capacity crunch. No matter what they "re-engineer," all their algorithms still depend on someone, somewhere, somehow owning a truck. At this point, there are simply not large enough returns to justify investing in iron. Most new equipment purchases are simply to replace old, inefficient equipment. No new significant capacity has been added since 2007.
Most of the apparel sold in North America is manufactured in Asia, meaning the finished goods travel long distances to reach end markets, with all the associated greenhouse gas emissions. On top of that, apparel manufacturing itself requires a significant amount of energy, water, and raw materials like cotton. Overall, the production of apparel is responsible for about 2% of the world’s total greenhouse gas emissions, according to a report titled
Taking Stock of Progress Against the Roadmap to Net Zeroby the Apparel Impact Institute. Founded in 2017, the Apparel Impact Institute is an organization dedicated to identifying, funding, and then scaling solutions aimed at reducing the carbon emissions and other environmental impacts of the apparel and textile industries.
The author of this annual study is researcher and consultant Michael Sadowski. He wrote the first report in 2021 as well as the latest edition, which was released earlier this year. Sadowski, who is also executive director of the environmental nonprofit
The Circulate Initiative, recently joined DC Velocity Group Editorial Director David Maloney on an episode of the “Logistics Matters” podcast to discuss the key findings of the research, what companies are doing to reduce emissions, and the progress they’ve made since the first report was issued.
A: While companies in the apparel industry can set their own sustainability targets, we realized there was a need to give them a blueprint for actually reducing emissions. And so, we produced the first report back in 2021, where we laid out the emissions from the sector, based on the best estimates [we could make using] data from various sources. It gives companies and the sector a blueprint for what we collectively need to do to drive toward the ambitious reduction [target] of staying within a 1.5 degrees Celsius pathway. That was the first report, and then we committed to refresh the analysis on an annual basis. The second report was published last year, and the third report came out in May of this year.
Q: What were some of the key findings of your research?
A: We found that about half of the emissions in the sector come from Tier Two, which is essentially textile production. That includes the knitting, weaving, dyeing, and finishing of fabric, which together account for over half of the total emissions. That was a really important finding, and it allows us to focus our attention on the interventions that can drive those emissions down.
Raw material production accounts for another quarter of emissions. That includes cotton farming, extracting gas and oil from the ground to make synthetics, and things like that. So we now have a really keen understanding of the source of our industry’s emissions.
Q: Your report mentions that the apparel industry is responsible for about 2% of global emissions. Is that an accurate statistic?
A: That’s our best estimate of the total emissions [generated by] the apparel sector. Some other reports on the industry have apparel at up to 8% of global emissions. And there is a commonly misquoted number in the media that it’s 10%. From my perspective, I think the best estimate is somewhere under 2%.
We know that globally, humankind needs to reduce emissions by roughly half by 2030 and reach net zero by 2050 to hit international goals. [Reaching that target will require the involvement of] every facet of the global economy and every aspect of the apparel sector—transportation, material production, manufacturing, cotton farming. Through our work and that of others, I think the apparel sector understands what has to happen. We have highlighted examples of how companies are taking action to reduce emissions in the roadmap reports.
Q: What are some of those actions the industry can take to reduce emissions?
A: I think one of the positive developments since we wrote the first report is that we’re seeing companies really focus on the most impactful areas. We see companies diving deep on thermal energy, for example. With respect to Tier Two, we [focus] a lot of attention on things like ocean freight versus air. There’s a rule of thumb I’ve heard that indicates air freight is about 10 times the cost [of ocean] and also produces 10 times more greenhouse gas emissions.
There is money available to invest in sustainability efforts. It’s really exciting to see the funding that’s coming through for AI [artificial intelligence] and to see that individual companies, such as H&M and Lululemon, are investing in real solutions in their supply chains. I think a lot of concrete actions are being taken.
And yet we know that reducing emissions by half on an absolute basis by 2030 is a monumental undertaking. So I don’t want to be overly optimistic, because I think we have a lot of work to do. But I do think we’ve got some amazing progress happening.
Q: You mentioned several companies that are starting to address their emissions. Is that a result of their being more aware of the emissions they generate? Have you seen progress made since the first report came out in 2021?
A: Yes. When we published the first roadmap back in 2021, our statistics showed that only about 12 companies had met the criteria [for setting] science-based targets. In 2024, the number of apparel, textile, and footwear companies that have set targets or have commitments to set targets is close to 500. It’s an enormous increase. I think they see the urgency more than other sectors do.
We have companies that have been working at sustainability for quite a long time. I think the apparel sector has developed a keen understanding of the impacts of climate change. You can see the impacts of flooding, drought, heat, and other things happening in places like Bangladesh and Pakistan and India. If you’re a brand or a manufacturer and you have operations and supply chains in these places, I think you understand what the future will look like if we don’t significantly reduce emissions.
Q: There are different categories of emission levels, depending on the role within the supply chain. Scope 1 are “direct” emissions under the reporting company’s control. For apparel, this might be the production of raw materials or the manufacturing of the finished product. Scope 2 covers “indirect” emissions from purchased energy, such as electricity used in these processes. Scope 3 emissions are harder to track, as they include emissions from supply chain partners both upstream and downstream.
Now companies are finding there are legislative efforts around the world that could soon require them to track and report on all these emissions, including emissions produced by their partners’ supply chains. Does this mean that companies now need to be more aware of not only what greenhouse gas emissions they produce, but also what their partners produce?
A: That’s right. Just to put this into context, if you’re a brand like an Adidas or a Gap, you still have to consider the Scope 3 emissions. In particular, there are the so-called “purchased goods and services,” which refers to all of the embedded emissions in your products, from farming cotton to knitting yarn to making fabric. Those “purchased goods and services” generally account for well above 80% of the total emissions associated with a product. It’s by far the most significant portion of your emissions.
Leading companies have begun measuring and taking action on Scope 3 emissions because of regulatory developments in Europe and, to some extent now, in California. I do think this is just a further tailwind for the work that the industry is doing.
I also think it will definitely ratchet up the quality requirements of Scope 3 data, which is not yet where we’d all like it to be. Companies are working to improve that data, but I think the regulatory push will make the quality side increasingly important.
Q: Overall, do you think the work being done by the Apparel Impact Institute will help reduce greenhouse gas emissions within the industry?
A: When we started this back in 2020, we were at a place where companies were setting targets and knew their intended destination, but what they needed was a blueprint for how to get there. And so, the roadmap [provided] this blueprint and identified six key things that the sector needed to do—from using more sustainable materials to deploying renewable electricity in the supply chain.
Decarbonizing any sector, whether it’s transportation, chemicals, or automotive, requires investment. The Apparel Impact Institute is bringing collective investment, which is so critical. I’m really optimistic about what they’re doing. They have taken a data-driven, evidence-based approach, so they know where the emissions are and they know what the needed interventions are. And they’ve got the industry behind them in doing that.
The global air cargo market’s hot summer of double-digit demand growth continued in August with average spot rates showing their largest year-on-year jump with a 24% increase, according to the latest weekly analysis by Xeneta.
Xeneta cited two reasons to explain the increase. First, Global average air cargo spot rates reached $2.68 per kg in August due to continuing supply and demand imbalance. That came as August's global cargo supply grew at its slowest ratio in 2024 to-date at 2% year-on-year, while global cargo demand continued its double-digit growth, rising +11%.
The second reason for higher rates was an ocean-to-air shift in freight volumes due to Red Sea disruptions and e-commerce demand.
Those factors could soon be amplified as e-commerce shows continued strong growth approaching the hotly anticipated winter peak season. E-commerce and low-value goods exports from China in the first seven months of 2024 increased 30% year-on-year, including shipments to Europe and the US rising 38% and 30% growth respectively, Xeneta said.
“Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024,” Niall van de Wouw, Xeneta’s chief airfreight officer, said in a release.
“Rates we saw bottoming out in late July started picking up again in mid-August. This is too short a period to call a season. This has been a busy summer, and now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red-hot peak season materializes,” van de Wouw said.
The report cites data showing that there are approximately 1.7 million workers missing from the post-pandemic workforce and that 38% of small firms are unable to fill open positions. At the same time, the “skills gap” in the workforce is accelerating as automation and AI create significant shifts in how work is performed.
That information comes from the “2024 Labor Day Report” released by Littler’s Workplace Policy Institute (WPI), the firm’s government relations and public policy arm.
“We continue to see a labor shortage and an urgent need to upskill the current workforce to adapt to the new world of work,” said Michael Lotito, Littler shareholder and co-chair of WPI. “As corporate executives and business leaders look to the future, they are focused on realizing the many benefits of AI to streamline operations and guide strategic decision-making, while cultivating a talent pipeline that can support this growth.”
But while the need is clear, solutions may be complicated by public policy changes such as the upcoming U.S. general election and the proliferation of employment-related legislation at the state and local levels amid Congressional gridlock.
“We are heading into a contentious election that has already proven to be unpredictable and is poised to create even more uncertainty for employers, no matter the outcome,” Shannon Meade, WPI’s executive director, said in a release. “At the same time, the growing patchwork of state and local requirements across the U.S. is exacerbating compliance challenges for companies. That, coupled with looming changes following several Supreme Court decisions that have the potential to upend rulemaking, gives C-suite executives much to contend with in planning their workforce-related strategies.”
Stax Engineering, the venture-backed startup that provides smokestack emissions reduction services for maritime ships, will service all vessels from Toyota Motor North America Inc. visiting the Toyota Berth at the Port of Long Beach, according to a new five-year deal announced today.
Beginning in 2025 to coincide with new California Air Resources Board (CARB) standards, STAX will become the first and only emissions control provider to service roll-on/roll-off (ro-ros) vessels in the state of California, the company said.
Stax has rapidly grown since its launch in the first quarter of this year, supported in part by a $40 million funding round from investors, announced in July. It now holds exclusive service agreements at California ports including Los Angeles, Long Beach, Hueneme, Benicia, Richmond, and Oakland. The firm has also partnered with individual companies like NYK Line, Hyundai GLOVIS, Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), and now Toyota.
Stax says it offers an alternative to shore power with land- and barge-based, mobile emissions capture and control technology for shipping terminal and fleet operators without the need for retrofits.
In the case of this latest deal, the Toyota Long Beach Vehicle Distribution Center imports about 200,000 vehicles each year on ro-ro vessels. Stax will keep those ships green with its flexible exhaust capture system, which attaches to all vessel classes without modification to remove 99% of emitted particulate matter (PM) and 95% of emitted oxides of nitrogen (NOx). Over the lifetime of this new agreement with Toyota, Stax estimated the service will account for approximately 3,700 hours and more than 47 tons of emissions controlled.
“We set out to provide an emissions capture and control solution that was reliable, easily accessible, and cost-effective. As we begin to service Toyota, we’re confident that we can meet the needs of the full breadth of the maritime industry, furthering our impact on the local air quality, public health, and environment,” Mike Walker, CEO of Stax, said in a release. “Continuing to establish strong partnerships will help build momentum for and trust in our technology as we expand beyond the state of California.”
That result showed that driver wages across the industry continue to increase post-pandemic, despite a challenging freight market for motor carriers. The data comes from ATA’s “Driver Compensation Study,” which asked 120 fleets, more than 150,000 employee drivers, and 14,000 independent contractors about their wage and benefit information.
Drilling into specific categories, linehaul less-than-truckload (LTL) drivers earned a median annual amount of $94,525 in 2023, while local LTL drivers earned a median of $80,680. The median annual compensation for drivers at private carriers has risen 12% since 2021, reaching $95,114 in 2023. And leased-on independent contractors for truckload carriers were paid an annual median amount of $186,016 in 2023.
The results also showed how the demographics of the industry are changing, as carriers offered smaller referral and fewer sign-on bonuses for new drivers in 2023 compared to 2021 but more frequently offered tenure bonuses to their current drivers and with a greater median value.
"While our last study, conducted in 2021, illustrated how drivers benefitted from the strongest freight environment in a generation, this latest report shows professional drivers' earnings are still rising—even in a weaker freight economy," ATA Chief Economist Bob Costello said in a release. "By offering greater tenure bonuses to their current driver force, many fleets appear to be shifting their workforce priorities from recruitment to retention."