Drivers Behaving Badly

There are bad apples in any profession, of course, but the visibility of tractor-trailers tends to result in more media coverage. Our industry already battles image problems, and these truckers really give all the safe, professional drivers out there a bad name.

My news feed every day is full of stories about drivers who get stuck driving places they aren't supposed to go, trying to make U-turns and failing miserably, striking overpasses that aren't high enough for their load, etc. But some really stand out.

Some of these stories are tragic. Take Randall J. Weddle, who the Federal Motor Carrier Safety Administration declared an "imminent hazard" recently. Weddle was traveling around 80 mph in a 55-mph zone in Maine when his rig crossed the centerline, tipped over and scattered its load of lumber onto the highway. Two people were killed.

A field sobriety detected the presence of alcohol and police found a bottle of whiskey in Weddle's truck. His CDL had been revoked by the state of Virginia for a driving while intoxicated conviction. He had multiple federal hours-of-service violations, and had taken a family member as an unauthorized passenger on the same trip, dropping the passenger off shortly before the crash. Weddle reportedly was asleep in his bunk while his trailer was loaded with lumber, while that unauthorized family member secured the load.

Others just make you shake your head, wondering whether the driver was really that dumb, careless, or simply didn't give a crap.

Take this example, from the Gothamist, about a trucker who decided to use the bike path to go the wrong way down a one-way street in the Williamsburg neighborhood of Brooklyn. It appears he was taking the four-block shortcut to avoid having to travel

"Look, sometimes you're driving a big rig through Williamsburg and that one-way isn't going your way but there's this green path to the side that's as wide as a truck with these weird little symbols on it, and well, you know the rest," starts the Gothamist story accompanying video shot by a cyclist.

The street, Kent Avenue, IS an official truck route, but it's a one-way, notes the report. "To travel south, as the trucker here wanted to, without breaking the law, commercial drivers are supposed to head five blocks over onto Roebling Street, or seven onto Union Avenue."

The cyclist who shot the video said, "My dad is a trucker, so I have a certain amount of sympathy for truck drivers getting disorientied/pressured in urban environments," he explained. But the driver cut off the videographer and another cyclist to make his turn off the one-way, and yelled some pretty rude and angry things at the cyclist while doing it.

It's these types of "bad apples" that give hard-working, safe drivers and trucking companies a bad name. And unfortunately it's a lot harder to get stories about the good things trucking is doing to go "viral." We just have to keep trying to tell our stories, one good guy at a time.

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Mack Weathering Sales ‘Correction’ Well, Its President Says

Photo: Mack Trucks

The new truck market is experiencing a “correction” as fleets are moderating their truck orders in response to slower freight movement while lowered values for used trucks have caused some potential customers to hang onto theirs instead of trading them in.

However, Mack Trucks is handling both situations better than some other manufacturers, said the builder's president, Dennis Slagle, at a briefing for reporters on Wednesday.

Although there are still “too many trucks in the pipeline” to dealers – the reason all heavy truck makers are cutting production from last year's high levels – Mack has been able to slow production with “down weeks rather than cutbacks and layoffs,” and it managed trade-in cycles through sales contracts in recent years to avoid a glut of trade-ins. That strategy is now paying off, he said.

Also helping is Volvo Group's ownership of Arrow Truck Sales, which is reselling many traded-in vehicles that might otherwise burden Mack and Volvo dealers. Meanwhile, a persistently strong economy is showing encouraging signs.

“We are seeing full employment and consumers are starting to clear off those shelves” of store merchandise piled there in anticipation of a strong Christmas shopping season which fell short, Slagle said.

That and other positive economic news are causing North American Class 8 production to clip along at a 255,000-unit pace for this year, above the 240,000 Mack predicted earlier this year but well under the 301,740 sold in 2015, he said.

Industry sales of long-haul and regional tractors are therefore down somewhat, though they still dominate overall sales, and other segments like construction, especially home building, are up, while refuse remains strong. This has given Mack - a traditionally energetic player in vocational trucks with its Granite, MR and recently introduced LR models - a second straight strong quarter.

Improvements to the Granite, including the addition of “crawler gears” to the mDrive automated manual transmission, should further boost Mack's performance in construction, said John Walsh, vice president, global marketing and brand management. A 13-speed mDrive HD is now standard on Granite, and a 14-speed version is available; these give better startability and high-speed cruising for construction trucks. The 12-speed HD is still available, and the regular 12-speed remains standard on highway models.

The mDrive now goes into 20% of Granites and now that should rise. The mDrive goes in 30% of Titans, while 80% of Pinnacle axle-back and 60% of Pinnacle axle-forward tractors get the AMT, Walsh said.

Mack and its dealers have improved the service experience for customers at its dealers, who have succeeded in cutting in half the industry's average 4.5-day waiting time for a 3.5-hour truck repair, he said. This is partly due to better staffing at dealers. Technician staffing is up by 98% and Mack Master Technician numbers are up by 340%. Dealers now have 6,430 technicians and 1,872 of them have been awarded master status.

This is part of Mack's Certified Uptime program wherein dealers improve staffing, processes and facilities to quickly fix trucks and get them back on the road, Slagle said. Thirty-nine dealer locations are now certified and 60 should be by year's end. The eventual goal is for all 430 locations to be certified.

Related: Class 8 Truck Demand Hits 4-Year Low

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Truckload Linehaul Rates Remain Soft, Intermodal Rates Continue Steep Drop

Truckload linehaul rates in June were nearly the same as the month before, but they are still below levels from a year ago, while there seems to be no end to the recent drop in rates for intermodal shipments.

The Cass Truckload Linehaul Index fell another 1.8% year-over-year, after falling 2.3% and 1.2% in April and May, respectively, representing four consecutive months of year-over-year declines.

The index, which posted a reading of 121.2 in June, its lowest level since August 2014, fell 0.1% from May, the third straight monthly drop.

Analysts at the investment firm Avondale Partners, which provides analysis of the index, have further adjusted their pricing forecast range downward for the remainder of 2016 to a 1% to a 3% decline.

The report says several factors continue to contribute to the excess capacity that has caused rates to drop, including driver pay increases, overall fleet growth, reduction in carrier bankruptcies and an easing of the controversial 34-hour restart rule.

The index is an indicator of market fluctuations in per-mile truckload pricing, isolating the linehaul component of full truckload costs from other components, such as fuel and accessorials, providing a look at trends in baseline truckload prices.

Meantime, Cass Intermodal Index fell another 1.5% year over year in June, representing 18 consecutive months of year-over-year declines. Its reading of 121.1 also represents a 4.3% drop in June from May and is at its lowest level since January 2011.

Historically, there is a "high degree of correlation between truckload and intermodal pricing," said analysts with Avondale Partners. As contract rates for trucking continue to lose strength and move further into negative territory, “[this] would imply even more potential weakness for intermodal pricing."

The Cass Intermodal Price Index is a measure of market fluctuations in per-mile U.S. domestic intermodal costs that includes all costs associated with the move, such as linehaul, fuel and accessorials.

Data within both measures is derived from actual freight invoices paid on behalf of clients of payment processor Cass Information Systems, which totaled $25 billion in 2015.

Surprisingly, the figures follow a report from the day before showing freight shipments and expenditures edged up in June after three months of lackluster performance, hitting their highest levels of the year, according to the Cass Freight Index – but it remains unclear whether this is part of a larger trend.

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Land Line Now online: Freight market report from DAT

Landstar Profit Sinks 20%, Falls Short of Expectations

Asset-light trucking and related services provider Landstar System Inc. (NASDAQ: LSTR) reported a 20% second quarter decline in earnings due to lower revenue and a big insurance claim.

The Florida company reported net income of $32.3 million, or 76 cents per share, down from $40.5 million a year earlier, or 92 cents per share. The earnings per share was less than a consensus estimate of 82 cents from analysts and below updated guidance issued by Landstar in early June. Back in April it was expecting second-quarter earnings of 80 cents to 85 cents per share.

“Net income was negatively impacted by elevated insurance and claims costs, driven mostly by the severity of claims ... the highest quarterly insurance and claims cost over the past six years,” the company said in a statement. It did not elaborate about the claim

Total revenue during the second quarter fell to $775.2 million from $868.4 million, in line with the company's June expectations. Truck transportation revenue hauled by independent contractor drivers and truck brokerage carriers during the quarter was $718.5 million, compared to $809.2 million in the 2015 second quarter.

Landstar's truckload transportation revenue hauled by van was $458 million, down from $496.9 million a year earlier. During the same time, truckload transportation revenue hauled via unsided/platform equipment fell to $242 million from $291 million. Revenue from freight hauled by rail, air and ocean cargo carriers was $45.1 million, compared to $48.1 million, in the 2015 second quarter.

"Overall, from a revenue standpoint, I believe we executed well considering the sluggish freight environment," said Landstar President and CEO Jim Gattoni. He pointed out that comparisons to last year's second quarter are thrown off because of more than 13,000 truckloads on platform trailers hauled for a project for a single automotive customer that was resposible for $27 million in revenue last year. "Excluding the loadings related to that project, we experienced a slight increase in loads hauled via truck over the 2015 second quarter.”

He said Landstar's truckload services continued to experience significant pricing pressure throughout the 2016 second quarter, as industry-wide truck capacity was more readily available as compared to the 2015 second quarter and demand continued to be soft.

“Although we experienced a somewhat normal seasonal uptick in revenue per load from May to June, the pricing pressure continued in the U.S. spot market, in which the company operates much of its business,” Gattoni said. “Additionally, the average cost of a gallon of diesel fuel was approximately 20% lower during the 2016 second quarter compared to the 2015 second quarter, putting additional pressure on pricing, especially as it relates to loads hauled via truck brokerage carriers.”

The result: Revenue per load on freight hauled via truck was 9% lower in the 2016 second quarter compared to the 2015 second quarter.

Looking at the current third quarter of the year, Landstar said it is experiencing the normal seasonal uptick in revenue per load on loads hauled via truck and expects revenue for the period to be similar to second quarter revenue.

Landstar also announced on Wednesday that its board of directors has declared a quarterly dividend of 9 cents per share, 12.5% higher that it was in each of the previous four quarters.

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Landstar misses Street 2Q forecasts