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Raman Dhillon

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Not surprisingly, Amazon announced this month that it would expand its freight brokerage platform throughout the U.S. after spending the last several months piloting a program in the Northeast. The move would give Amazon more trucking capacity to deliver its own freight or to sell that capacity to other carriers at cost or with a small profit.

Amazon is now offering brokerage services to 48 states. On its website, Amazon said, “We treat your shipment like our own, securing capacity with our reliable carrier network. As earth’s most customer-centric company, we provide the support and technology to make shipping easy with full shipment visibility and no blackout dates.”

In order to grab more shipping, Amazon offered rates up to 30% below market value in an attempt to garner dedicated service from independent, small, and medium-sized trucking companies. Some analysts are worried that Amazon’s new-found power could bring down shipping rates, although Amazon contends its new brokerage is intended only to 

“better utilize its existing freight network.”

Still, experts fear that Amazon wants to take over the entire market and set middle-mile rates which would be in line with their past monopolistic tendencies. This would be a huge accomplishment for a company that is essentially a middleman, taking profits at every step of retail sales and shipping. 

The introduction of the nationwide freight brokerage coincides with Amazon’s recent investments in technology companies which are developing autonomous vehicle hardware and software. One can only imagine a world where every big rig hauling coast to coast and every delivery van pulling up to your curb displays Amazon’s trademark A to Z logo.  

Flush with increased earnings as the coronavirus pandemic has caused Americans to get delivery of everything from groceries to facemasks, Amazon is looking to acquire autonomous vehicle (AV) technology company Zoox in an effort to boost their footprint in the self-driving and electric powered vehicle market. 

Zoox is developing SAE Level 5 automated self-driving taxis which can maneuver through busy city streets. The Zoox website claims, “Zoox is driving autonomously in ways that no one else has shown. We are applying the latest in automotive, robotics, and renewable energy to design an a…zero-emissions vehicle from the ground up to solve the unique challenges of autonomous mobility.”

Amazon has reportedly offered less than $3.2 billion for the company, below the company’s stated value in 2018. The acquisition would add resources to Amazon’s attempt to strengthen its expanding logistics and delivery network. 

Amazon has recently invested $530 million in AV startup Aurora Innovation as well as another significant investment in electric car manufacturer Rivian which will produce 100,000 delivery vans for Amazon within the next ten years. 

Wall Street analysts indicate that Amazon could save $20 billion a year in delivery and shipping costs if it can develop a reliable self-driving technology. Experts also predict that with such technology, Amazon may look to compete with Uber and Lyft by rolling out a cab-hailing platform utilizing a fleet of AV cabs.

Amazon is also hoping to capitalize on existing Level 4 AV technology which can already be used to haul freight cross country with self-driving long-haul trucks. Zoox has been working toward SAE Level 5 which delivers true autonomy with emergency safety features and protocols to ultimately deliver someone or something from one place to another in a completely driverless environment.

Recent earnings reports from Amazon show the retail goliath saw sales climb 29% in North America and 18% internationally at the beginning of 2020. The company’s stock has also risen, although investors were leery of the fact that Amazon would need to absorb approximately $4 billion in costs related to the pandemic.   

Florida-based Comcar Industries, which owns four trucking companies and one truck repair and parts distributor announced May 17 it is filing Chapter 11 bankruptcy. Comcar will sell off its holdings to various buyers, including White Willow Holdings, a New Hampshire-based private equity firm, which figured prominently in the bankruptcy of Indianapolis-based trucking company Celadon last December.

White Willow is set to purchase Comcar’s refrigerated and dry van carrier MCT Transportation. It also offered to buy Taylor Express, the last trucking company that had been part of Celadon. 

In addition, Comcar will sell its flatbed company, CT Transportation, to Alabama-based PS Logistics, a full-service logistics firm that runs more than 2,000 flatbed trucks, vans, and trailers.

On their website, Comcar said, “Our decision to file Chapter 11 was to better enable us to find homes for our customers, people, and assets. Prior to this decision, we worked diligently to find a solution that would reduce our debt, enhance our liquidity, and best position all Comcar holdings for the future. After evaluating options to address our capital structure and conducting extensive negotiations, we determined that a sale of all companies would be the best path forward to maximize their value.”

Other companies up for sale by Comcar are liquid bulk carrier CTL Transport, bulk carrier CCC Transportation which runs dry van, intermodal, dedicated fleets and logistics services, and full-service tractor and trailer parts and repair operation CTTS. 

“We are proud that we have found excellent future owners as each division is being purchased and will be managed by strong and reputable operators upon their respective sales.” the company’s website said. “Further, this process will allow our companies to continue operating in the ordinary course of business while the sales process for each one continues. We believe this will best maintain opportunities for our people, continue to serve our customers, and maintain vendor relationships.”

The bankruptcy comes only two months after the unexpected death of Comcar’s newly appointed CEO, Randy Clark, who died at the age of 60 in Hilton Head, South Carolina. Originally founded as Commercial Carrier Corp. in 1953, Comcar had more than 2,000 employees and annual revenues exceeding $220 million.

As parts of the U.S. economy opened this week after several weeks of closure due to the COVID-19 outbreak, officials have agreed to keep the border between the U.S. and Canada closed to nonessential traffic until June 21. The original closure order was set to expire on May 21.

Although President Donald Trump has shown eagerness to reopen “everything,” Canadian Prime Minister Justin Trudeau and Canada’s provincial leaders have been more cautious. On May 19, Trudeau said, “These are ongoing questions. We’ve given ourselves another month before we have to have the right answers to those questions on nonessential travel.”

Trudeau also said, “But even now, we know we need to do more to ensure that travelers who are coming back from overseas or the United States as Canadians are properly followed up, properly isolated and don’t become further vectors for the spread of COVID-19.”

Truck drivers and other essential travelers, however, are exempted from the closure. Truck drivers carrying food, medical goods, and other trade items have been seen as critical for the two nations.

Canada imports about $25 billion in agricultural products, representing more than 15% of the U.S.’s total agricultural exports to the world. 

Trudeau indicated that even as the health emergency declines there will be a need for testing at the border for anyone attempting to enter Canada, saying that his nation “recognizes that increased contact tracing and increased testing will be key to a reopened Canadian economy.”

“We need to make sure, right across the country, that we have a strong capacity to respond wherever there is a flare-up of COVID-19,” Trudeau said, “and that means having significant resources at the availability of all regions and provinces. We need to have strong measures in place, and we’re looking at that closely.”

On the U.S.’s southern border the closure is also set to end on May 21, but officials from Mexico and the U.S. are in current negotiations to extend the restrictions into June.

 

In an effort to help spur an economic rebound, President Donald Trump signed an executive order on May 19 allowing federal agencies to cut or eliminate what Trump has labeled as unnecessary regulations. More than 600 regulations will be reviewed, including several related to the Department of Transportation (DOT).

The Federal Motor Carrier Safety Administration (FMCSA) has already modified hours-of-service (HOS) rules for truckers carrying essential supplies. The new rules have been extended until June 14. 

Addressing DOT Secretary Elaine Chao, Trump said, “Elaine, you can do things that no one would believe in your department. So good luck. I’m signing this, it gives you tremendous power to cut regulations.”

The order gives agencies wide power to identify regulations that can be suspended in order to fast track economic growth. Due to the coronavirus health emergency, the U.S. economy will contract approximately 40% in the second quarter and more than 35 million Americans have applied for unemployment benefits.

Trump said, “I’m directing agencies to review the hundreds of regulations we’ve already suspended in response to the virus and make these suspensions permanent where possible.”

Trump has made the cutting of regulations a cornerstone of his administration, directing Congress in 2017 to eliminate two regulations for every new regulation enacted by federal agencies.

Democrats and environmentalists criticized the executive order. They argue it will allow the industry to ignore the levels of pollution they put into the air and water. 

Brett Hartl, Government Affairs Director of the Center for Biological Diversity said the administration is “using the pandemic to slash life-saving protections for our air, water, and wildlife when these safeguards have never been more important.”

 

In an announcement on May 15, the Federal Motor Carrier Safety Administration (FMCSA) rejected a five-year exemption request from Illinois-based PTS Worldwide Inc. to split sleeper berth hours into 4/6, 5/5 or 6/4-hour segments rather than the prescribed 8/2 or 7/3 split which is required by the FMCSA. 

PTS carries highly sensitive cargo such as ammunition and explosives for the U.S. Department of Defense. Its request was limited to team driver operations.

In an announcement, the agency said, “FMCSA analyzed the exemption application and public comments, and determined that the application lacked evidence that would ensure an equivalent level of safety or greater would be achieved absent such exemption.”

The FMCSA recently released an hours-of-service final rule that modified the split sleeper berth exception, settling on the 8/2, 7/3 split during the required 10-hour off-duty time frame. The split would not count against a driver’s 14-hour window for driving.

According to its research and data, the FMCSA believes that the longer sleeper berth period needs to be at least seven hours when all aspects of a driver’s time such as daily and weekly driving time limits and other factors mandated by hours-of-service remain unchanged.

PTS had hoped to split its team driver sleeper berth periods to obtain the required 10 hours in two segments with neither less than four hours. PTS indicated its drivers travel more than 1,100 miles per 24 hours, averaging 60 hours per week.

“PTS asserts that due to the nature of its business, these drivers would be more alert if allowed to take shorter rest periods in the sleeper berth,” the FMCSA announcement said. “It believes that the shorter period would allow PTS drivers to obtain nighttime hours in the sleeper berth and thereby minimize driver fatigue.”

PTS also claimed that its safety record is excellent and that it provides the best safety and service of any DOD sensitive cargo carrier. PTS referenced other studies showing that sleeper berth flexibility led to normalizing sleep patterns while cutting down on driver fatigue.

FMCSA received important comments from the Commercial Vehicle Safety Alliance and DOD sensitive cargo carrier Boyle Transportation. Boyle argued that FMCSA should conduct its originally scheduled pilot program (which had been scheduled for 2014 but was canceled) on the matter and examine data from the study to determine “the effects of various sleeper berth splits on driver fatigue.”

Boyle further argued that PTS has not provided data that would establish an acceptable level of safety if FMCSA were to grant them the exemption. They claim that such changes would be problematic “given the inherent danger of much of the material being transported and the unsafe conditions it would create for other professional drivers,” as well as all others involved in the process.  

Truckers protesting low spot rates and a lack of freight as the coronavirus pandemic grips the nation have found a way to be recognized by President Donald Trump. Parked not far from the White House on Constitution Avenue, truckers have been blowing their airhorns during Trump’s outdoor events, including a press conference on May 15. And Trump has heard them. 

As truckers made their presence felt, Trump said, “Those are truckers that are with us all the way. They’re protesting in favor of President Trump, as opposed to against, and that’s a sign of love, not the sign of your typical protest, so I want to thank our great truckers. They like me, and I like them. We’re working on something together.” The claim which is denied by protesters. 

To “something,” Trump may be referring to attempts by the Department of Justice to uncover evidence that brokers and third-party logistics companies have not been totally transparent in dealings with truckers and may even be price gouging.

Truckers have been parked outside the White House in protest for the last two weeks. Their ultimate goal is to meet face to face with Trump to air their grievances. More than 80,000 truckers lost their jobs in April as the freight and retail markets have crashed. Goldman-Sachs predicted the U.S. economy will contract by 39% in the second quarter. 

Although Trump claims the horns are in support of his administration, truckers are hurting, and the recent health crisis only exacerbated existing problems in the industry. The strategy, however, has gotten the mainstream press to focus on the truckers’ plight.

Nevertheless, Trump insists that he has the support of truckers, telling Fox News, “They’re supporters of me. Because we’re getting things for the truckers, and all those great truckers that are all over our country.”

Trump has indicated that he does believe truckers are being gouged, yet his administration has yet to launch a full-fledged investigation into the matter. 

 

WASHINGTON – The U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) today published a final rule updating hours of service (HOS) rules to increase safety on America’s roadways by updating existing regulations for commercial motor vehicle (CMV) drivers.

“America’s truckers are doing a heroic job keeping our supply chains open during this unprecedented time and these rules will provide them greater flexibility to keep America moving,” said U.S. Transportation Secretary Elaine L. Chao.

“The Department of Transportation and the Trump Administration listened directly to the concerns of truckers seeking rules that are safer and have more flexibility—and we have acted. These updated hours of service rules are based on the thousands of comments we received from the American people. These reforms will improve safety on America’s roadways and strengthen the nation’s motor carrier industry,” said FMCSA Acting Administrator Jim Mullen.

First adopted in 1937, FMCSA’s hours of service rules specify the permitted operating hours of commercial drivers. In 2018, FMCSA authored an Advanced Notice of Proposed Rulemaking (ANPRM) to receive public comment on portions of the HOS rules to alleviate unnecessary burdens placed on drivers while maintaining safety on our nation’s highways and roads.  Subsequently, in August 2019, the Agency published a detailed proposed rule which received an additional 2,800 public comments.

Based on the detailed public comments and input from the American people, FMCSA’s final rule on hours of service offers four key revisions to the existing HOS rules:

  • The Agency will increase safety and flexibility for the 30-minute break rule by requiring a break after 8 hours of consecutive driving and allowing the break to be satisfied by a driver using on-duty, not driving status, rather than off-duty status.
  • The Agency will modify the sleeper-berth exception to allow drivers to split their required 10 hours off duty into two periods: an 8/2 split, or a 7/3 split—with neither period counting against the driver’s 14‑hour driving window.
  • The Agency will modify the adverse driving conditions exception by extending by two hours the maximum window during which driving is permitted.
  • The Agency will change the short-haul exception available to certain commercial drivers by lengthening the drivers’ maximum on‑duty period from 12 to 14 hours and extending the distance limit within which the driver may operate from 100 air miles to 150 air miles.

FMCSA’s final rule is crafted to improve safety on the nation’s roadways. The rule changes do not increase driving time and will continue to prevent CMV operators from driving for more than eight consecutive hours without at least a 30-minute break.

In addition, FMCSA’s rule modernizing hours of service regulations is estimated to provide nearly $274 million in annualized cost savings for the U.S. economy and American consumers. The trucking industry is a key component of the national economy, employing more than seven million people and moving 70 percent of the nation’s domestic freight.

The new hours of service rule will have an implementation date of 120 days after publication in the Federal Register.

The complete final rule is available here: https://www.fmcsa.dot.gov/regulations/hours-service/hours-service-drivers-final-rule

Truckers have played a key role in getting America through the COVID-19 public health emergency. FMCSA has provided regulatory relief to commercial drivers to get critically important medical supplies, food, and household goods to Americans in need. The nation’s truck drivers have been on the front lines of this effort and are vital to America’s supply chain. The latest information, declarations, and resources on FMCSA’s response to the COVID-19 are available at https://www.fmcsa.dot.gov/COVID-19

In remarks made on the popular morning news program Fox and Friends on May 8, President Donald Trump vowed his support for truckers in their fight against alleged price gouging. Trump made his comments as truckers have been rallying in Washington D.C. with dozens of trucks parked near the White House. 

Truckers claim they are being taken advantage of by brokers and third-party logistics companies during the coronavirus health crisis. Spot rates have cratered as the pandemic has forced the U.S. economy into recession.

Trump said, “Oh, they are price gouged…all they want is to be treated fairly and we’re going to treat them fairly.” But what Trump means by this is still a mystery. At this point, the Department of Justice is seeking evidence of possible antitrust violations before launching an investigation into business practices and records of freight brokers and third-party logistics companies.

Antitrust law violations, however, are quite difficult to prove. One avenue may be to force brokers to provide more transparency into records of transactions between them and small business and independent truckers. This is precisely what trucking lobbyists are currently hoping Congress will do as they have petitioned all 535 members of the House and Senate to look into the matter.

While many truckers are accusing freight brokers of using overcapacity as an excuse for declining rates, brokers argue the lower rates are simply a product of supply and demand in a free market economy.

Nevertheless, truckers appear to have a strong ally in Trump who told Fox about the rally,

“In fact, they were in front of the White House. We had, must have been, looked like a thousand trucks. They were honking, and then I actually sent representatives out…they were honking all day and they’re great people and they’re people that like me. They like Trump.”

Recently released Canadian federal jobs statistics showed that Canada’s transportation and warehouse sector lost over 100,000 jobs in April or about 10% of total workers. 

This news came despite a rebound in truckload volumes with the Outbound Tender Volume Index-Canada, an important indicator of Canada’s truckload volumes, climbing 35% over its April low and continuing to surge upward.

As with soaring unemployment in the U.S., Canada reported a loss of 3 million jobs since the beginning of the COVID-19 pandemic across every sector of its economy. To deal with the problem, the Canadian Trucking Alliance (CTA) is asking the Canadian government for added help in dealing with the worst of the current health crisis.

One possible solution is to broaden the government’s emergency wage subsidy program for businesses affected by the pandemic. Many Canadian carriers did not qualify for the original subsidy and CTA is lobbying officials to change the current qualifications to cover more carriers.

Another solution being pushed by CTA is a deferral of payroll taxes for trucking companies as they attempt to deal with low spot rates, lane imbalances, and delayed payments from hard-hit retail businesses. 

Although April’s jobs data revealed an economy verging on the disaster, some experts believed it could have been worse. These numbers also came in before the emergency wage subsidy program, which only started on April 27. 

May’s numbers could be stronger as the subsidies take effect. Canadian Prime Minister Justin Trudeau has said the subsidy program will be extended well into the summer.