Arkansas Trucking Association

Rising Driver Compensation Could Up Truckload Pricing

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Hefty increases in truck driver wages are expected to propel truckload rates higher in 2015, pushing pricing up by double digits, a transportation analyst warns.

“While our current earnings models assume low-to-mid-single-digit (truckload) price increases over the next couple of years, we would like to point out these estimates will likely be proven wrong,” David G. Ross, a managing director at the Stifel Transportation and Logistics Research Group in Baltimore, said.

Truckload carriers will need to raise driver pay substantially to attract the type of qualified candidates needed to haul freight. On top of that, a host of new driver-related regulations will make hiring truck drivers harder, and more expensive.

“The biggest cost component for a truckload carrier is labor (which is primarily drivers), comprising anywhere from 25 percent to 35 percent of revenue,” Ross said. “Therefore, if we believe (truckload) driver wages need to go up approximately 50 percent to bring them in-line with the (wages paid in the) LTL market and attract significant new entrants, underlying pricing would need to rise 12 percent to 18 percent, all else equal, to fund these increases.”

Continued economic growth will create more trucking jobs but those jobs are likely to be even harder to fill. As the U.S. unemployment rate drops toward 5 percent in 2015, fewer hireable candidates — those who are drug-free and have good driving records — will be available for trucking companies to bring onboard. They’ll already be working elsewhere.

That will only serve to push driver pay and trucking rates higher, especially if U.S. wages overall begin to rise, as many economists anticipate. And that may finally narrow or even close the widening gap between the average truck driver wage and the average overall U.S. wage, a gap that widened from 1 percent in 2001 to nearly 12 percent in 2013.

ATA Announces $1 Million Dividend from Workers' Compensation Fund

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The Arkansas Trucking Association Self-Insurers' Fund has declared a $1 million dividend to 48 trucking companies that are enrolled in its workers' compensation insurance trust.

The Arkansas Trucking Association created the insurance trust in 1993 to pay the workers' compensation claims for employees injured on the job.

Employees of trucking companies that enrolled in the insurance group are covered. Since 1993, the trucking insurance fund has paid out almost $44 million to injured workers.

"We are so excited to be able to reward our member companies for excellent performance," said Shannon Newton, the association's president. "Our fund is evidence that small businesses can work together for mutual benefit. In this case, pooling with one another to cover the medical costs of their injured workers and be self-sustaining and financially stable."

Newton said that the fund has distributed more than $22 million in dividends to enrolled trucking companies since the Arkansas Trucking Association created the fund. Dividends can be declared by the fund's board of trustees after injury claims and other expenses are paid, and distribution is subject to approval by the Arkansas Workers' Compensation Commission.

The association hopes to be able to distribute dividend checks at their annual meeting April 29 in Hot Springs. "Our member companies are true believers. Time and again, our fund has proven to be a reliable and affordable way to provide workers' comp insurance," said Newton. According to Newton, the Arkansas Workers' Compensation Commission is expected to approve the dividend distribution within a few days.



FMCSA's Compliance, Safety, Accountability (CSA) system for evaluating carrier safety has long been criticized by the trucking industry. Trucking points out that CSA does not distinguish between accidents in which the truck or truck driver is to blame and accidents in which the truck clearly was not at fault. Accidents factor into CSA's Crash Indicator BASIC, a calculation which ranks carriers based on their propensity for accidents.

Following the release of a study in January, FMCSA claimed that incorporating crash accountability into CSA scores would not improve the DOT's ability to target for intervention carriers most at risk for crashes, nor would it be easy to implement or cost-effective.

"It is not lost on the trucking industry that the word 'Accountability' is in the title of CSA, yet FMCSA continues to ignore crash accountability," said American Trucking Associations Executive Vice President Dave Osiecki.

“Analysis using all crashes shows that incorporating crash weighting determinations does not consistently improve the Crash Indicator when the various weighting approaches are applied,” the study concludes,

And because the process for determining crash weighting — receiving accident reports from police, analyzing and making crash fault determination, weighting the crash appropriately and then going through an appeals process — would be so lengthy, incorporating crash fault into SMS rankings may be a moot point, the agency says, as SMS rankings only use crashes from the preceding two-year period.

The agency’s report also says incorporating crash accountability into CSA would cost between $3.9 million and $11.1 million each year, depending on how many accidents are reviewed, the appeals brought and the agency’s final process for determining crash weighting.



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There are now 3.2 million more Americans earning paychecks than there were 12 months ago. That additional cash tends to boost consumer spending, which drives about 70 percent of economic growth.

Americans are feeling better about the economy. Consumer confidence jumped in January to its highest level in a decade, according to a survey by the University of Michigan. And consumers increased their spending during the final three months of last year at the fastest pace in nearly nine years.

Companies that benefit most directly from consumer spending have ramped up hiring since the fall, when gas price savings began to pile up in Americans' bank accounts. Retailers added 45,900 jobs in January, hotels and restaurants 37,100.

Construction companies have been a source of big job gains. They've added 308,000 jobs in the past 12 months, nearly 10 percent of the overall gain.

Mark Vitner, an economist at Wells Fargo, says shifts in how Americans shop might have given the job market a temporary lift. Online shopping has boosted warehousing, shipping and trucking jobs during the winter shopping season, Vitner said.


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The for-hire trucking industry added 2,400 jobs in January on a seasonally adjusted basis, according to the Department of Labor's monthly report, released Feb. 6. It also upwardly revised December's job gains to 11,900 -- up from the 7,300.

For-hire trucking employment now totals 1.443 million on a seasonally adjusted basis -- up 3.5 percent from January 2014's 1.3947 million. It's also up 16.9 percent from March 2010's bottom from the most recent recession.


U.S. Mexico border

Federal officials are making permanent a controversial three-year pilot program that allows Mexican truckers to haul goods inside the U.S. beyond the border zone. FMCSA will soon start accepting applications from Mexican truckers who didn’t participate in the pilot but want the authority to operate beyond the U.S.-Mexico border region.

The move is likely to be met with significant backlash from groups representing independent truckers and labor interests, who teamed up in 2011 to unsuccessfully sue DOT in an attempt to scuttle the program.

Critics maintain that FMCSA didn’t have enough participants to determine if it would be safe to make the program permanent, an assessment the DOT’s Inspector General agreed with.

FMCSA maintains the program is safe, saying the agency’s decision also took into account safety data from the nearly 1,000 Mexico carriers already allowed to operate beyond the U.S. border zone. A FMCSA analysis determined that those carriers and the 15 pilot participants operated just as safely as U.S. and Canadian carriers over the life of the program.



Predicted to run $770 million over budget, newly-elected Governor Asa Hutchinson (R-Ark.) has called for the state's "private option" Medicaid expansion to continue in its current form only through 2016.

“This avoids harm to the 200,000-plus covered through the private option and assures our hospitals and providers financial stability,” Hutchinson said during an address at the University of Arkansas for Medical Sciences.

In his statement, Hutchinson also pointed out that getting rid of the program, which cut Arkansas's uninsured rate in half, might save the state some money, but it would come at an enormous cost to the thousands currently enrolled in the private option, which was implemented as an alternative to Obamacare.

Hutchinson introduced a compromise that emerged after negotiations with legislators following his election in November. It would create a task force to recommend ways to overhaul the Medicaid system more broadly.

“With regard to the private option, it is time to close this chapter and start a new one,” Hutchinson said. “While we are turning the page and starting a new effort, our innovative efforts in Medicaid reform will continue.”

The private option was championed by Hutchinson's predecessor Democratic Governor Mike Beebe who worked with Republican state legislators and the Obama administration to come up with a way to expand access to coverage for Arkansas's poor residents (those earning up to 138 percent of the federal poverty level-around $16,000 for an individual, $33,000 for a family of four.)

Since Arkansas's private option took effect, a handful of other states that opted out of the Affordable Care Act's Medicaid expansion have been lining up to create similar programs that allow them to expand access to coverage to their poor residents without having to subscribe to Obamacare.

Hutchinson noted that 40 percent of private option enrollees did not have a source of income when they first signed up. Outlining his own goals for future changes, he said he wants social programs to include incentives to work and pursue preventive care.



ABF Logistics has purchased Smart Lines Transportation Group, a truckload brokerage firm based in Oklahoma City, for $5.17 million on Jan. 2.

Smart Lines, founded in 2003, has 24 employees and approximately $18 million in annual revenue, primarily serving the food, energy and industrial segments. The acquisition will expand ABF Logistics into the Oklahoma City market.

ABF Logistics is the third-party logistics arm of ArcBest Corp. and a sister company to less-than-truckload carrier ABF Freight.

“The purchase of Smart Lines Transportation Group is an important step in our strategy to grow the emerging businesses at ArcBest and provide a variety of supply chain services to our customers in the way they expect,” said ABF Logistics President Jim Ingram.

Greg Roush, who founded Smart Lines and served as president, has been named branch director of the Oklahoma City location, now officially known as ABF Logistics.



America's Road Team represents the country's 3.2 million professional driver and serves as an example of the dedication and teamwork needed to deliver America's freight safely and on time. Last month, American Trucking Associations named 19 professional truck drivers as Captains of the 2015-2016 America's Road Team.

The 19 new captains have 453 combined years of experience and have logged more than 30.3 million accident-free miles. Among the new captains is Hot Springs, Ark. driver David Green of Werner Enterprises.

“America’s Road Team represents the best of what trucking can be: dedication to safety, professionalism and pride in an industry that delivers life’s essentials every day,” said ATA President and CEO Bill Graves. “These 19 outstanding professionals join a select fraternity. Since 1986, America’s Road Team has delivered the message of safety to millions, and I’m proud that these individuals will now be representing our industry.”

While maintaining their jobs as full-time professional drivers, the new Captains will now travel the country speaking on behalf of the trucking industry to communities, news media and public officials. The Captains will address transportation and safety issues, speaking at community events and anywhere they can reach the motoring public to share safe driving tips and offer advice on how to safely share the road with tractor-trailers.


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After admitting that he exchanged drugs for tractor-trailer tires, a West Virginia trucking company owner faces up to 20 years in prison.

U.S. Attorney Booth Goodwin says 50-year-old Kenneth Ray Cisco of Lesage pleaded guilty to aiding and abetting the distribution of oxycodone.

Cisco owned the defunct Cisco Trucking in Huntington, W. Va. Goodwin says an undercover federal agent and another individual met with Cisco at the company on March 14, 2013, to exchange six tires for oxycodone. The agent received 33 oxycodone pills.



The Federal Motor Carrier Safety Administration (FMCSA) reported that the annual minimum random controlled substances testing rates for employees in safety sensitive positions, including tractor-trailer and bus drivers, will remain at 50 percent through 2015. 



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The company that produces SkyMall, the in-flight shopping catalog that entices airline travelers with offers for iFetch ball launchers for dogs and mini clap-on alarm clocks, is bracing for a hard financial landing.

SkyMall parent firm Xhibit Corp filed for federal bankruptcy court protection in Phoenix on Jan. 23, citing a funding crisis and seeking a court-supervised sale of their assets.


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Arkansas Trucking Association
PO Box 3476 (72203)
1401 West Capitol Ave.
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Little Rock, AR 72201

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