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Supply Chain News: Transportation News Round Up for Aug. 1, 2017


ATA Strongly Rebukes those Seeking ELD Mandate Delay; CSX Gets Service Warning from STB During Changes in Operations; UPS Says Most Retailers will Aceept Peak Surcharge

Aug. 1, 2017
SCDigest Editorial Staff

ATA Strongly Opposes Any Delay in ELD Mandate

The American Trucking Associations, in a letter last week to the Daphne Jefferson, Deputy Administrator of the Federal Motor Carrier Safety Administration, expressed its "staunch" opposition to any effort that would delay the December implementation deadline for electronic logging devices or ELDs.

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"We have heard from our members, loudly and clearly, that they are vehemently opposed to these attempts to delay this important regulation," said Bill Sullivan, ATA's executive vice president of advocacy. "The industry stands ready and is prepared to implement ELDs. It is incumbent on regulators and on Congress to dismiss this last-ditch try by some to evade critically important safety laws."

The statement was likely triggered by the recent introduction of the ELD Extension Act of 2017 in the US House, which would provide for an additional two year delay before mandatory implementation of ELDs on all US freight-hauling trucks scheduled for December 18 this year.

"While technology like ELDs have great promise, I didn't come to Washington to force those ideas on small businesses - and neither did President Trump" said Rep. Brian Babin of Texas, who introduced the bill.

The Owner-Operator Independent Drivers Association (OOIDA) has long opposed the mandate, but lost recent federal court decisions challenging the legality of the rule. After its most recent loss in court, when the Supreme Court refused to take on the case in June, OOIDA said it would continue its opposition by focusing on Congressional action.

ATA said it bases its support for that mandate on the fact that the technology has been proven effective in "improving safety and increasing compliance many times," citing the FMCSA's 2014 report titled "Evaluating the Potential Safety Benefits of Electronic Hours-of-Service (HOS) Recorders," which found that carriers using an ELD saw an 11.7% reduction in crash rate an 50% drop in hours-of-service violations over carriers using traditional paper logs.

The ATA accuses supporters of a delay as "attempting to accomplish, almost at the 11th hour, what they've been unable to do in the courts, Congress or with the agency: roll back this common sense, data-supported regulation based on at best specious and at worst outright dishonest arguments."

"At the end of the day, I believe the implicit reason opponents of electronic logging oppose this regulation is because they intend to cheat on their hours-of-service," said Sullivan.

STB Reprimands CSX Over Delays

Spurred by what it called concerns about deteriorating service resulting from recent operating changes at rail carrier, the US Department of Transportation's Surface Transportation Board (STB) sent a letter to CSX CEO Hunter Harrison relative to a number of informal complaints from both CSX customers and railroad industry stakeholders.

These complaints included:

• Transit times increasing significantly and/or becoming unpredictable;
Loaded and empty railcars sitting for days at yards
Switching operations becoming inconsistent and unreliable; car routings becoming circuitous and inefficient
CSX customer service being unable to provide meaningful assistance
Delays due to CSX congestion in critical gateways including New Orleans and St. Louis
Slowing train speed and increasing dwell time along with numbers of cars on-line

"We understand that these disruptions have forced a number of rail shippers and their customers to curtail production, temporarily halt operations, and/or utilize other transportation options that have added additional expense and inefficiencies to their operations," wrote STB Acting Chairman Ann Begeman, STB Vice Chairman Daniel Elliott, and Board Member Deb Miller in the letter to Harrison.

These service issues have been driven by the implementation of significant changes to CSX's operations, including adoption of an approach Harrison' calls "precision railroading," which in part requires cargo to be ready when rail cars arrive for loading or risk being left behind, similar to "just in time" practices with inbound trucking in the automotive supply chain.

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Other operational initiatives at CSX since Harrison became CEO in March include idling around 550 locomotives and 25,000 railcars, and converting several so-called "hump yards" to flat-switching yards that he says are more efficient.

The STB letter said that shippers have complained that CSX has made operational changes without sufficient lead time and coordination efforts that would have allowed them to adjust their production cycles and logistics plans. They also cited a lack of communications from CSX on the changes and issues.

The STB is now requesting that CSX have weekly service calls with the STB's Rail Customer and Public Assistance staff in order to "better understand the scope and magnitude of CSX's railroad performance issues and its efforts to resolve these problems," adding that on these calls "CSX should provide an overview of its operations including congestion at critical yards, availability of equipment and manpower, local spot and pull reports, and service to customer with critical needs."

The Wall Street Journal reported that CSX will provide the requested information and "respond fully and factually to the STB complaint."

UPS Says Retailers will Pony Up for Peak Season Surcharges

UPS said last week that it expects most retailers will agree to higher shipping rates during the weeks leading up to Christmas, which it said last month are necessary due to huge increase in on-line, B2C shipments.

UPS recently unveiled plans for the extra peak-season fee that would affect packages shipped in the two weeks around Thanksgiving and in the week before Christmas. Discussions with retailers about the charges and their holiday-season forecasts are continuing, but UPS said in its Q2 earnings call that it expects most shippers will accept the surcharges.

UPS is encouraging retailers to avoid shipping during those peak-season weeks by holding promotions earlier in November, offering incentives to shoppers to accept later deliveries or other tactics.

Experts say some shippers may be able to avoid the surcharges, depending on how their contracts are written.

Meanwhile, UPS reported its Q2 its revenue per unit shipped rose 1.7%, including 3% in the US package business. That pushed US package revenue up 8.1% to $9.75 billion, while gross margins rose to 14.3%, the highest level in nearly two years for the division.

Any reaction to this week's transportation round up stories? Let us know your thoughts at the Feedback section below.


Your Comments/Feedback


Owner op, Not Provided
Posted on: Aug, 08 2017

About ATA members strongly disagreeing on delaying the ELD Mandate. First they don't represent any small companies or true owner ops.

Their so called members (Major big companies) fund them to fight for them and their benefits only. We all out here know this has NOTHING to do with safety!!! It is all about $$$$. They pushed for this to eliminate the smaller fleets and owner ops. We all talk about it out here.

The bigger fleets said we pushed this through so small business owners can compete. How can we compete with their buying fuel, tire, maintenance and numbers. We make everyone have an ELD?

When the smaller fleets or single owners run out of time and can't make their delivery on time, they lose. The big fleets can, because all they have to do is send another driver-trk. The load never stops and make them look good. And they continue to gobble up all and control all the freight. Then buy small fleets and owner ops.

Just like Wal-Mart has done to all the smaller chain stores. They know and have preparing for it. Buy other companies and join with other companies to up their fleet numbers. We see all them buying stacks of new flats, steps, lowboys and curtain sides. Also advertising they are getting bigger and needing new drivers. They know what they trying to do. Safety? All this is going to do is cause more accidents and tickets. Speeding and ALWAYS counting down that clock which will make you more tired!! Trying to always make up for lost time. My first week on this ELD and I lost my first load due to 15mins. Cost me $3.75 load.  




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