That’s a wrap to the third quarter! Let’s take a look back and see what the last three months brought that can help us make smarter business decisions going into the fourth quarter and 2020.
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Buffalo, New York – Logistic Dynamics, Inc. (LDI) today announced that it has submitted and received approval for their current data submission to the SmartWay® Transport Partnership, an innovative collaboration between U.S. Environmental Protection Agency (EPA) and industry. The SmartWay Transport Partnership provides a framework to assess the environmental and energy efficiency of goods movement supply chains.
2019 marks the 9th year LDI has been a SmartWay Transport Partner. LDI will continue to contribute to the Partnership’s savings of 248.9 million barrels of oil, $33.4 billion in fuel costs and 119 million tons of air pollutants. This is the equivalent of the annual electricity use in 16 million homes. By joining SmartWay Transport Partnership, LDI demonstrates its strong environmental leadership and corporate responsibility.
“We have had a commitment to the SmartWay partnership since it started in 2004 and will continue to improve our logistics operations so we can continue to reduce our environmental footprint.” said Mike Cannistra, COO.
Developed jointly in early 2003 by EPA and Charter Partners represented by industry stakeholders, environmental groups, American Trucking Associations, and Business for Social Responsibility, this innovative program celebrated its 10 year anniversary in 2014. Partners rely upon SmartWay tools and approaches to track and reduce emissions and fuel use from goods movement. The Partnership currently has over 3,000 Partners including shipper, logistics companies, truck, rail, barge, and multimodal carriers.
Logistic Dynamics, Inc. (LDI) is a non-asset based third party logistics provider that specializes in transportation management and freight broker related services. LDI provides full truckload, less than truckload, rail, air and ocean services to a broad range of customers throughout North America by utilizing their ever expanding network of agents and carrier partners. For more information about LDI, visit www.logisticdynamics.com or call 1-800-554-3734.
Logistic Dynamics, Inc. looks forward to many more years of partnering with the EPA and other carrier partners dedicated to reducing emissions, conserving fuel, and helping create a more sustainable future.
“We are honored to be a SmartWay Transport Partner,” stated LDI President Evan Gaskill. “LDI is fully committed to the SmartWay program by being responsible in how we manage our carrier network and choosing carriers that have demonstrated a marked reduction in carbon dioxide emissions and other air pollutants. The SmartWay program was a natural next step for us in our continuous efforts to minimize our own environmental impact while delivering world-class transportation and logistics services.”
For information about the SmartWay Transport Partnership visit www.epa.gov/smartway.
End of the second quarter already! Time to deliver an update to our 2019 Logistics Forecast published at the beginning of this year.
Few other industries are as in tune with the nation’s infrastructure as the logistic industry. LDI supports the seventh annual infrastructure week. We are building for tomorrow!
The first quarter has just come to an end. While it will still take some time for numbers to come in, we can recap on the topics we covered in January.
The New Year is loaded with all kinds of new and shifting developments. It almost feels like a gamble to report the news lest the information is no longer relevant in a few weeks. But for the moment, here’s what we have.
United States – Mexico – Canada Agreement (USMCA)
November 30, 2018 marked the official agreement between the United States, Mexico, and Canada on a new trade policy when leaders of all three countries signed off on it at the G-20 Summit in South America. The renegotiation of the North American Free Trade Agreement (NAFTA) has added a few new chapters addressing digital trade, anti-corruption, and good regulatory practices to protect small and medium-sized enterprises. Since NAFTA originally went into effect in 1994, it was undeniably in desperate need of modernization. Today’s technological advancements and developments have been identified and addressed fairly extensively to protect intellectual property in each country.
As far as transportation goes, there’s unanimous agreement that this new agreement is a good thing. For the most part, it’s very similar to the existing NAFTA, but the updated text aims to streamline transportation standards. Primarily, it’s aiming to implement more technology to expedite shipping and transportation procedures. The expectation is that the USMCA should translate into faster shipping times and relieve some pressure currently placed on logistic companies that cross international borders.
The only major concern associated with this otherwise good news is Section 232 of the Trade Expansion Act of 1962—the 25 percent tariff on steel and the 10 percent tariff on aluminum. The Motor and Equipment Manufacturers Association claims that this piece of the agreement chokes the United States’ ability to invest in more manufacturing and workforce development, which then affects the transportation industry. Many are calling on the Trump administration to include language to exempt Mexico and Canada from Section 232 to keep those channels open and running.
While there’s no other language that concerns supply chain experts, everyone is still well aware that unforeseen issues could arise once USMCA officially goes into effect. That won’t happen until the agreement goes through the Trade Promotion Authority procedures and Congress signs off on the bill.
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China and the United States
As of December 1, 2018, President Trump and President Xi of China came to a verbal agreement that brought cautious relief to those following the situation. Trump and Xi have agreed to try to come to a compromise regarding treatment of intellectual property and technology transfer issues by March 2, 2019. A new compromise will then allow for renegotiation of tariff rates for both countries. Until then, the U.S. has paused the tariff increase for the New Year and will keep the 10 percent rate, and China has promised to begin purchasing from the U.S. agriculture sector. Considering the fact that China was our main export for soybeans in 2017, it is a welcomed relief, but we’ll believe it when the orders come through. We might be able to expect to see China source the US for pork, as outbreaks of African Swine flu are hitting their herds hard. That is still an unknown, but should agricultural exports pick up, that will help relieve serious economic pressures on small farms and rural communities.
Effects of ELD Mandate
Speaking of unknown effects until implementation, the ELD Mandate has been in effect for a year now and we pretty much saw real-life consequences as early as Q1.
Earlier this year the load-to-truck ratios were significantly higher than the previous year. Tie that into the trucker shortage, and it means a lot of freight was sitting around waiting to be moved. This forced shippers to up their rates, which they then passed that cost along to consumers. The last half of this year did see a down-turn from load-to-truck ratios, but consumers shouldn’t expect price decreases.
A few companies who raised prices are familiar names: Amazon increased their Prime membership due to hiked shipping costs. Grocery store name brands like Hormel Foods, General Mills, Tyson Foods, Betty Croker, Haagen-Dazs and PepsiCo have all raised their prices, and others such as Hershey, Procter & Gamble, and Mondelez are slated to raise their prices as well.
The ELD Mandate also messed with paychecks. Drivers aren’t willing to sit around for more than 2 hours to be unloaded while miles are money and their time window is limited. This has created a new culture of drivers/carriers who purposefully avoid specific chains or manufacturers who are notoriously disrespectful drivers’ time. While comfortable lounges are nice, all the free soda and available showers don’t make up for eating into 5 hours of a shift.
The ELD Mandate has had some positive influence. Since the data is now digital, truckers are able to prove beyond doubt that they’ve been kept waiting at warehouses and are now more likely to receive compensation. And about 60 percent of drivers do believe the safety implications the mandate was intended to enable have been reached.
The other 40 percent feel like safety measures are getting worse, with drivers plowing on through bad weather, driving while exhausted for every last available minute, and speeding to cover more miles. ELD actually has reported that following long unloading detainments, drivers do drive an average of 3.5 miles faster. Clearly, some adjustments need to be made.
There has been talk that rather than repeal the ELD Mandate, the Federal Motor Carrier Safety Administration revisit and update the Hours-of-Service (HOS) of Drivers Rule. Ideally, the 30-minute break rule will be nixed, and drivers will be allowed “to use multiple off-duty periods of three hours or longer in lieu of having 10 consecutive hours off-duty.” Since nearly 75 percent of drivers reported they’re detained at a warehouse for longer than 2 hours at least once a week, this should help make that time work as breaks rather than count against drivers allotted driving window. The public call for concerns has closed, and we should have more information about the results of what might happen to HOS later in 2019.
The restrictions the ELD Mandate has placed is overall not so terrible. In fact, the limitations it’s put on shipping goods in a timely manner has brought about the biggest positive of 2018:
Increased Pay for Drivers
The pay for over-the-road drivers has not been great, with the United States averaging about a $40,000 salary. The shortage of drivers and the restrictions of the ELD Mandate has caused some companies to drive up sign-on bonuses as much as $6 grand and increase salaries.
Unfortunately, even with these salary increases, when adjusted for inflation, drivers are still making about 50 percent less than they were in the 1970s. But it looks like we can expect these pay increases to continue as long as the ELD Mandate stays in effect. For those who are going into truck driving, or intend to stay in the game for a few more years, they should experience some better compensation. The US is already short about 60,000 truckers, and ForeignPolicy expects that in less than a decade that number will be about 174,000.
2019 will hopefully provide us with some happier numbers about salaries. Maybe the future of over the road truck drivers will be as attractive as it once was.
Stay Tuned to LDI’s Blog Feed
We’ll be revisiting these topics and surely much more each quarter throughout 2019 to update you on the state of affairs in transportation.
The end of Q1 will undoubtedly have some interesting tariff updates with China and some real-time transportation data about the US/Mexico/Canada border.
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Stay up to date with the world of trucking by tuning into these renowned podcasts.
Podcasts are perfect for over-the-road entertainment. Truckers know this, but podcasts are ideal for anyone with a 20 to 30 minute work commute (brokers and dispatchers, looking at you). Lunch breaks are a good time to catch an episode, or, my favorite, the time it takes to get in a nice cardio work out. I love music, but occasionally, I need to learn something new.
Sometimes the branches of logistics can feel disconnected from each other. Brokers, drivers, and dispatchers all live in very different environments, but podcasts can bring us back together. Learn about something new going on in your truckers’ world, and keep up with what your truckers are talking about right now.
Here’s a list of some of the most popular trucking podcasts out there today. The first few are specifically about trucking, so they tie us all together. Each podcast has a spin that makes it a winner, so read about each one and check out the websites to sample an episode or two. If you’re looking to expand your podcast playlist and want to keep up on what’s important to your drivers, add these podcasts to your Stitcher list:
This podcast works for everyone in logistics. Buck Ballard and his son Don Ballard are both truckers who love talking about trucking, topics truckers find interesting, and offer some trucking business advice. They keep the content pretty fresh with a new episode released each week, so they aren’t scraping the bottom of the barrel for anything to talk about, and forethought is put into each episode. The Trucking Podcast has a website what expands on the details of each episode. Whenever the Ballards publish an episode that resonates with you, you can visit the website and read more about the topic.
Host Todd McCann is a 20-year trucking veteran who talks about his own insights and views on truck driving. He releases one episode a month that lasts about an hour and a half, so these episodes come at you slowly, but they’re fun to listen to. Trucker Dump makes the list on all the best trucker podcasts, and once you listen, you’ll get it. While it’s geared towards truck drivers, it doesn’t hurt for everyone else to be tuned in. Why? McCann gives a trucker’s personal experience about shippers/receivers, customer experiences, and more. This kind of information provides insight on how others are running their businesses, sometimes inefficiently. That can prompt you to do an audit on your own business when he hits on a certain topic that could relate to you. When you find that topic, go to his website, click on the episode, and the content is right there for you to review.
This is a trucking podcast for truck drivers released every Friday morning. This is a trucking culture kind of podcast: the hosts are funny, they talk about the industry, and vent about issues and frustrations truckers face every day. TalkCDL brings current attention to safety issues, emerging technology, and evolving rules and regulations. If you have any kind of question about what’s going on in the life of a trucker, these hosts have covered it.
How to listen: Apple Podcasts
Shifting gears a bit, this serial fiction podcast makes the trucker lists because it blends the world of trucking with the sexy appeal of crime thrillers. Alice Isn’t Dead is a 48-episode podcast about an over-the-road trucker on a journey across the country to search out a wife he long thought dead. Much like Trucker Dump, this podcast is wildly popular among truckers and it spans interest beyond just over-the-road drivers. This podcast is especially attractive to the logistic industry for obvious reasons. Since the series has officially wrapped, you can binge listen to the whole thing now.
Your Turn: What Are You Listening To?
Now we want to hear from you: what podcasts are you listening to? Do you have any other trucker-oriented suggestions? Or do you have something outside of trucking you’re recommending to everyone right now?
Both my dad and my father-in-law are over-the-road truckers, and here are the podcasts they’re quick to recommend:
My dad loves learning about economics, but when it comes to actually recommending a podcast for the general public, he doesn’t hesitate to suggest Freakonomics. Economist Steven Levitt and journalist Stephen Dubner look into all kinds of obscure topics and view them from multiple sides. They interview experts, dig up research, and present it all in an interesting way. The topics these guys cover have prompted some rather memorable conversations around the dinner table.
My father-in-law is the kind of guy who never meets a stranger. He immediately has something interesting and fun to talk about. When someone has that kind of personality, you have to wonder where they’re getting their info. Enter Stuff to Blow Your Mind, a podcast that talks about anything and everything in minuscule detail. Hosts Robert Lamb and Joe McCormick do their due diligence to deliver interesting, researched, and speculated takes on topics from neuroscience to art and everything in between.
What podcasts do you recommend? Share a link in the comments.
We’re already well into 2018, and a lot has happened in the logistics and transportation industry. The ELD mandate continues to be a controversial topic, we’re keeping an eye on the current capacity crisis, the industry is soaring to new technological heights with autonomous vehicles, and so much more.
Whether you’re a carrier, trucker, or freight broker, it’s crucial for everyone in the industry to stay up to date on the latest news and trends. As a truck driver or carrier, it’s important to know the latest regulations and news so you know how to keep doing your job efficiently (and legally). For freight brokers, knowing what’s going on in the industry can help you manage your loads, keep positive relationships with your carriers, and continue to provide the best support possible.
To help keep you consistently updated on the logistics and transportation industry, we’ve decided to look back on each quarter and roundup the best resources highlighting the quarter’s most important industry news, trends, and happenings. Below are the highlights we found for the first quarter of 2018.
Remember to check back at the end of June for our second quarterly update.
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1. After effects of Phase 2 of the ELD mandate
At the end of last year, phase two of the ELD mandate officially went into effect. From December 19th, 2017 and on, truckers are now required to log their hours electronically via an electronic logging device, or ELD. Now, we’re just a couple weeks away from another important date — April 1st — which is set to be the start of the enforcement and penalty phases.
With the looming deadline, it’s going to be important to keep an eye on those who have been avoiding complying to the mandate hitherto. A few FMCSA officials held a webinar on the ELD rule recently, and FreightWaves has the full recap you can read here. To summarize, the webinar discussed the rules and exceptions to the rule, including the agricultural exemption, uses of AOBRDs throughout the end of 2019, what happens when an ELD malfunctions, hours of service clarifications, and reminding all of the April 1st deadline.
Here are a few helpful resources to keep up to date on all information regarding the ELD mandate:
- The Federal Motor Carrier Safety Administration
- SupplyChainDive news
- Follow related hashtags on social media like #ELDmandate or #ELD
2. The truck driver shortage
For over the past ten years, the trucking industry has been dealing with the truck driver shortage. Many people believe this is due to age demographics or a difference in generational work ethic. Others claim it’s because the lifestyle of a trucker is often shown as less than ideal — whether it be the long hours, unfair wages, etc. And the recent ELD mandate is not helping the matter.
Whatever the reasons may be, we can all agree that the driver shortage is one of the most critical issues facing the industry. According to the American Truckers Association, “more than 70% of goods consumed in the U.S. are moved by truck, but the industry needs to hire almost 900,000 more drivers to meet rising demand.”
While the shortage has fluctuated over the years, it has yet to come close to a resolution. A recent analysis by DAT Solutions said at the beginning of this year, the available trucks versus the amount of loads was the lowest ratio since 2005. The Chief Economist of ATA said that, “even as the shortage numbers fluctuate, it remains a serious concern for our industry, for the supply chain and for the economy at large.”
So, what is the industry doing to reverse the shortage?
Many companies have to increase the wages of their current drivers to make up for lost hours on the road due to lack of drivers. And by attracting a younger generation of drivers, it might help replace the large number of drivers that are retiring every year.
It’s also been stated that the negative connotations associated with the “life of a trucker” has kept the job in the shadows – and simply increasing the wages and improving the benefits could solve a lot of the problem. In an article in the January 8th, 2018 issue of Transport Topics, Joe Chandler, President of SPI International Transportation, writes, “we have let real wages for drivers decline while paying more to our executives and more for our trucks.”
Plenty of blogs and news outlets consistently report on the ups and downs of the driver shortage. You can find some of them here:
Although the issue remains at a critical level, Supply Chain Dive has high hopes that the current capacity crisis will cause a growing need for drivers. Thus, pushing companies to improve their wages, benefits, etc. to attract more people. Joe Chandler believes since, “drivers are in high demand, [truck] driving should be a natural path forward for many of the nation’s underemployed workers.”
3. The Capacity Crisis
In our post about the crisis from last year, we discussed what it is, what’s causing it, and how businesses can handle the problem. To recap, a capacity crisis occurs when the industry has an abundance of loads, but is lacking the capacity (or trucks) to ship those loads.
Evidence of what’s causing the crisis points to fleet deterioration, loss of truckers with commercial drivers licenses, an increase in government regulations, etc. According to Supply Chain Dive, the ELD mandate and the driver shortage are primarily to blame.
Essentially, the reason there is a low truck supply is heavily due to the lack of drivers available to drive them. And the increased government regulations — such as the ELD mandate — are upsetting many of the already limited number of drivers in the industry. In a recent article by Forbes, it states that, “regulations such as these are…perceived by the drivers as an infringement on personal space [since] many consider their trucks to be a home away from home.”
Read more details on what’s causing the crisis, and how the industry is working to correct it, here:
4. Autonomous vehicles
Recently, there’s been a huge focus on the technology of self-driving, or autonomous, vehicles. It’s particularly popular in the transportation and logistics industries for a variety of reasons. Autonomous trucks can potentially lead to a more environmentally-friendly industry, save money on gas and other truck maintenance, and actually create more jobs — not fewer — for truckers.
Last year, Elon Musk unveiled Tesla’s first electric semi-truck, and Uber Freight recently announced it’s sending a driverless truck on a trip across Arizona. Other companies like Waymo, Starsky, and Embark aren’t far behind.
As technology continues to evolve at a rapid pace, it’s difficult to truly predict how autonomous trucks will impact the industry. We like to stay positive and hope the autonomous vehicle era will bring jobs, help the environment, and improve the way we transport goods. Unfortunately, not everyone agrees with that outlook.
Wired’s article, “What Does Tesla’s Automated Truck Mean for Truckers?” suggests that this new technology could actually worsen the driver shortage, and potentially worsen job conditions (i.e. force 24-hour shifts on employees because the driver would technically be ‘not driving’). It’s also important to mention that Uber is now under fire as one of their self-driving cars hit and killed a pedestrian, marking the first fatality due to an autonomous vehicle. Although this technology has been tested for some time, this is a brutal reminder that it’s still in its infancy.
Ultimately, there isn’t enough research being done yet on the effects of automation, so one prediction is as good as the next. Keep updated on the latest industry technology here:
5. Increasing sustainability within the industry
As previously mentioned, some pros of the autonomous technology would lower the industry’s carbon footprint, use less gas, etc. So, it makes sense that many within the transportation and logistic industries are aiming to implement more sustainable business practices.
The American Truckers Association is committed to establishing a bold sustainability program, and the American Transportation Research Institute shares best practices for sustainable trucking such as driving, vehicle, and public sector practices.
You can keep track of the companies who are making waves in sustainable trucking practices here:
6. President Trump’s New Tax Law
The ELD mandate is not the only way the government is impacting the industry. President Trump’s new tax law (and “trade war”) are more than likely to affect the industry.
The federal Tax Cuts and Jobs Act that was signed on December 22, 2017 will change how carriers account for buying and selling trucks. According to Transport Topics, “how the law will affect trucking businesses depends on business type.” If you’re a C Corporation, the federal tax bill lowers from 35% to 21%, but it’s important to keep in mind that C Corps have double taxation. S Corporations will choose between the lowest calculation of 50% of W-2 wages, 20% of taxable income, and 25% of W-2 wages plus 2.5% of all qualified property. Many businesses may look into restructuring their business, and sole-proprietorships may need to consider becoming an S Corporation.
Additionally, many are worried about the President’s proposed steel and aluminum tariffs will start a trade war.
Some helpful sources for staying on top of these new stories are:
Between government regulations and new technology, 2018 is bringing a lot of changes to the world of logistics and transportation. Whether you’re a truck driver, carrier, freight broker, etc., it’s important to be aware of what’s happening within the industry.
Know of any other important industry news or additional resources that we haven’t listed? Share in the comments – we’d love to check them out, too!