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Supply Chain News: After Some Tough Battles Against Each Other in Recent Years, Truck and Rail Carriers, Shippers Uniting to Change Regulatory Environment in Washington

 

Carriers See Chance to Roll Back Some Rules, Require More Evidence to Push New Regulations Through

Jan. 19, 2017

Outsiders most likely think of various transportation interests - carriers across various modes, shippers - as being reasonably aligned in their approach to Washington and rules and regulations impacting the movement of freight.

In general that would be wrong. Regulations that negatively impact trucking, for example, are often supported by rail interests, and vice versa. Shipper and carrier interests of course are frequently not aligned.

Supply Chain Digest Says...

The FMCSA made costly new rules on hours of service even as deaths from trucking accidents was falling sharply and the evidence of the benefits was thin indeed.


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Perhaps there is no better example of those divides than the multi-year battles to change rules to allow heavier and/or longer trucks on federal highways. Without going through the details relative to the proposed changes, shipper groups such as NASSTRAC and the Coalition for Transportation Productivity were very much behind the proposals, as was the American Trucking Associations, a group which represents truckers.

But rail interests funded efforts to convince Congress not to approve the changes, including the brilliant ploy of bringing country sheriffs from across the country to Washington to meet with legislators and express their opposition to the changes due to safety concerns, among other lobbying moves.

The tactics worked. Congress has never approved changes for heavier or longer trucks.

But then fractures were exposed even on the trucking side of the ledger. Then ATA CEO Bill Graves noted in an interview with SCDigest early last year that there were divisions within trucker ranks as whether to support the changes, with carriers concerned in the end they would wind up hauling more freight for the same price.

The split with shippers on these issues came into sharp relief in January, when the Truckload Carriers Association reversed its stance and came out against both changes.

That was then. This is now.

With the Trump administration poise to take over Washington this week, shippers and especially carriers are hoping for a new, more freight friendly approach to regulations after eight tough years under Obama.

The efforts seem to follow two primary tracks. One, the freight industry is looking to roll back regulatory changes such as recent hours of service rules in trucking, looming safety-equipment requirements for trains, and more.

But perhaps even more consequential, carriers across modes are looking to alter the way regulations on the industry are developed in Washington - after eight years in which carriers feel they had little opportunity to work with regulators to craft sensible rules.

"We want to see industry included in developing regulations," Chris Spear, chief executive of the ATA, said in a recent interview with the Wall Street Journal. "We'd hope to see a lot more collaboration than we've seen in the past few years."

Hours of service rules for truck drivers serves as an example of where there was sharp disagreement between the Federal Motor Carrier Safety Administration and carrier interests.

The requirement that drivers rest during a set number of overnight periods put in place a few years ago ignored the preferences of truck drivers, and made highways less safe by putting more trucks on roads when they are crowded, trucking groups say. The ATA said the rule was made without proof that it would make highways safer.

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Congress actually rescinded that aspect of the new HOS rules late last year.

Ed Hamberger, CEO of the Association of American Railroads (AAR), said transportation companies want more data collected to verify that "the benefits claimed are the direct result of the regulation itself," an issue that has been hotly debated in many cases, especially in areas related to rules said to improve safety.

For example, the AAR says that a proposed Federal Railroad Administration rule barring trains from operating with only one engineer, rather than the usual two-person crews, was written without evidence that two-person crews are safer.

Carrier groups are also hopeful that Elaine Chao, nominated by Trump for Secretary of Transportation, will be more attuned to balance interests, given her past experience relative to freight transportation as chairman of the Maritime Administration and as a deputy Transportation secretary in earlier GOP administrations.

SCDigest's Take: The battles between truckers and rail roads is hardly over, but both sides do obviously see an opening after a change in administrations, with the FMCSA especially seemingly out to get trucking. A balance is needed - carriers aren't always right, of course - but for example the FMCSA made costly new rules on hours of service even as deaths from trucking accidents was falling sharply and the evidence of the benefits was thin indeed.


What do you expect relative to transportation regulation under Trump/Chao? What changes in practice do you think should be made? Let us know your thoughts at the Feedback section below or the link above to send an email.

 

Your Comments/Feedback

Srihari

Senior Consultant, Infosys
Posted on: May, 22 2016
Great article. I am a little suprised not to see BNSF in the mix while I understand their financial mode/operation is a little different. 

That would only give a complete perspective with all the players in the pool.

Mike O'Brien

Senior editor, Access Intelligence
Posted on: May, 26 2016
Surprised to see Home Depot fall off the list; thought they were winning with Sync?

Julie Leonard

Marketing Director, Inovity
Posted on: Jun, 27 2016
Using the right tool for the right job has always been a best practice and one of the reasons, we feel, that RFID has never taken off in the DC as exponentially as pundits have been forecasting since 2006. While these results may seem surprising to those solely focused on barcode scanning, the adoption of multi-modal technologies in the DC makes perfect sense for greater worker efficiency and productivity.

Carsten Baumann

Strategic Alliance Manager, Schneider Electric
Posted on: Aug, 19 2016

The IoT Platform in this year's (2016) Hype Cycle is on the ascending side, entering the "Peak of Inflated Expectation" area. How does this compare to the IoT positions of the previous years, which have already peaked in 2015? Isn't this contradicting in itself?

Editor's Note: 

You are right, Internet of Things (IoT) was at the top of the Garter new technology hype curve not long ago. As you noted, however, this time the placement was for “IoT Platforms,” a category of software tools from a good number of vendors to manage connectivity, data communications and more with IoT-enabled devices in the field.

So, this is different fro IoT generally, though a company deploying connected things obviously needs some kind of platform – hoe grown or acquired – to manage those functions.

Why IoT generically is not on the curve this year I wondered myself.

 

 

Jo Ann Tudtud-Navalta

Materials Management Manager, Chong Hua Hospital, Cebu City, Philippines
Posted on: Aug, 21 2016

I agree totally with Mr. Schneider.

I have always lived by "put it in writing" all my work life.  I am a firm believer of the many benefits of putting everything in writing and I try to teach it to as many people as I can.

This "putting in writing" can also be used for almost anything else.  Here are some general benefits (only some) of "putting in writing":

1. Everything is better understood between parties involved.  There are lots of people types who need something visual to improve their understanding.
2. Everyone can read to review and correct anything misunderstood.  This will ensure that all parties concerned confirm the details of the agreements as correct.  This is further enhanced by having all parties involved sign off on a hard copy or confirm via reply email.
3. Everything has a proof.  Not to belittle the element of trust among parties involved, it is always safest to have tangible proof of what was agreed on.
4. There will be a document to refer to at any time by any one who needs clarification.
5. The documentation can be useful historical data for any future endeavor.  It provides inputs for better decisions on related situations in the future.
6. This can also be compiled and used to teach future new team members.  "Learn from the past" it is said.

There are many more benefits.  Mr. Schneider is very correct about his call to "put it in writing".





Sandy Montalbano

Consultant, Reshoring Initiative
Posted on: Aug, 24 2016
U.S. companies are reshoring and foreign companies are investing in U.S. locations to be in close proximity to the U.S. market for customer responsiveness, flexibility, quality control, and for the positive branding of "Made in USA".

Reshoring including FDI balanced offshoring in 2015 as it did in 2014. In comparison, in 2000-2007 the U.S. lost net about 200,000 manufacturing jobs per year to offshoring. That is huge progress to celebrate!

The Reshoring Initiative Can Help. In order to help companies decide objectively to reshore manufacturing back to the U.S. or offshore, the nonprofit Reshoring Initiative's free Total Cost of Ownership Estimator can help corporations calculate the real P&L impact of reshoring or offshoring. http://www.reshorenow.org/TCO_Estimator.cfm

Robert

Transportation Manager, N/A
Posted on: Aug, 30 2016
 Good article!  I am sending this to my colleagues who work with me.  We have to keep this in mind.  Thanks!

Ian Jansen

Mr, NHLS
Posted on: Sep, 14 2016
SCM is all about getting the order delivered to the Customer on date/ time requested because happy Customers = Revenue. Using the right tools to do the right job is important and SCM is heavily dependent on sophisticated ERP systems to get right real data info ASP.

I've worked in a DC with more than 400,000 line items and measured the Productivity of Pickers by how many "picks" per day.

I've learned that one doesn't have to remind Germany about your EDI orders.

Don Benson

Partner, Warehouse Coach
Posted on: Sep, 15 2016
Challenge - to build and sustain effective relationships at the level of the organizations that are responsible for effectively coordinating and colaborating in an otherwise highly competitive environment 

Jade

Admin, Fulfillment Logistics UK Ltd
Posted on: Oct, 02 2016
Of course we all need to up our game. We need to move with the times, and always be one step ahead of what the future will bring.

Mike Dargis

President of asset-based carrier based in the Midwest, Zip Xpress Inc. (at ZipXpress.net)
Posted on: Oct, 03 2016
Thanks for the article, but I know there's a lot more to this issue than just the pay rates. Please check out my blogs on the subject at www.zipxpress.net.

Blaine

Inventory Specialist, Syncron
Posted on: Nov, 16 2016
Lora, great article! I agree that companies choose the 'safe' solution more often than not. My solution is a bolt-on for legacy ERP's and we even face challeneges of customer adoption. Most like to play it safe and choose an ERP upgrade, which is more costly, time consuming, and has lower ROI across the board. Would love to learn more about your company, we are always looking for partnerships.

Blaine
blaine.schultz@syncron.com

Bob McIntyre

National Account Executive, DBK Concepts LLC
Posted on: Nov, 21 2016
This is a game changer in GE's production and prototyping.  It also has huge implications across the GE global supply chain with regard to the management of their support and spare parts network. 
 

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