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Category Archives: Shippers

Boost Driver Safety and Your Bottom Line

Boost Driver Safety and Your Bottom Line

Focus on safety and risk management to control rising insurance costs

Many commercial fleets are seeing premium increases for the second or third year in a row, and some have even seen rates double – the direct result of increasingly high legal settlements and skyrocketing auto repairs.1 Fearing loss of profits (or no profit at all), insurance companies are being very selective when it comes to renewals and new quotes.  It’s important to work with an insurance broker who understands the market and can advocate on your behalf.

HUB International has identified several ways to help you navigate the current hard insurance market. Follow these 10 best practices to get ahead of your next policy renewal.

  1. Keep CSA safety scores low.  Address the easiest and most preventable violations – maintenance for tires and lights. Pre-trip vehicle inspections can prevent most of these issues. Tackle unsafe driving violations through training and accountability programs.
  2. Implement a safety program across your fleet.  Keep safety concepts at the forefront of your driver’s minds and actions by instituting training on vehicle inspections, hours of service regulations and defensive driving concepts during training.
  3. Hold drivers accountable.  Drivers need to know about both best practices and company rules. They also need to know what will happen when violations occur.
  4. Hire good people. Make sure the drivers you bring in are a good fit for your organization. This is especially critical if your organization does not have an extensive onboarding or ongoing training program.
  5. Manage your losses. Manage and report all claims in a timely manner and keep good documentation.
  6. Know your numbers and tell their story. Make sure you are familiar with your loss trends so you can talk to the insurance carrier about them.
  7. Be proud of what you’re doing right – and talk about it.  If your fleet is utilizing best practices, let the insurance carrier know what you’re doing well so they can include it in your pricing model.
  8. Incentivize your drivers. Create an incentive program that rewards clean roadside inspections, no preventable crashes over various intervals and positive citizen comments.
  9. Prevent driver turnover.  Know your turnover rates and be able to explain why they are what they are.
  10. Be as transparent as possible. Let your insurance broker know what your fleet does and what changes you’ve made over the last year so there are no surprises at renewal time.

 

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California Gov. Gavin Newsom Signs Heavy-Duty Truck Smog Inspection Program Bill Into Law

September 25, 2019 4:45 PM, EDT

California Gov. Gavin Newsom Signs Heavy-Duty Truck Smog Inspection Program Bill Into Law

Calif. Gov. Gavin Newsom Calif. Gov. Gavin Newsom by Rich Pedroncelli/Associated Press

Democratic Gov. Gavin Newsom has signed into law a bill that directs the California Air Resources Board and other state agencies to develop and implement a new smog inspection program for heavy-duty diesel on-road trucks.

The inspection and maintenance program would begin with a two-year pilot program to develop and demonstrate technologies that show potential for bringing heavy vehicles more than 6 years old and with a gross vehicle weight of more than 14,000 pounds into a permanent testing program similar to one already in place for cars.

“Just as car owners have to get their own personal cars ‘smog checked’ every two years, so too should truck operators be required to maintain their emissions controls so that we can ensure long-lasting air quality improvements here in California,” Democratic state Sen. Connie Leyva, author of the bill, said in a statement. “With Governor Newsom’s signature, SB 210 reinforces California’s leadership on improving air quality and public health, while also leveling the playing field for law-abiding truck owners and operators in our state.”

Calif. Democratic state Sen. Connie Leyva

The new law would authorize CARB to assess a fee and penalties as part of the program and would create the Truck Emission Check Fund, which would be available upon appropriation by the legislature to the state board for “the regulatory purposes of the program.”

Mike Tunnell, California-based director of energy and environmental affairs for American Trucking Associations, said the future system would eventually sunset the current program requiring motor carriers to conduct annual smoke tests and replace it with a program that is more emissions-based.

“What that will look like is still to be determined,” Tunnell said.

But CARB is hoping to accomplish the goals of the new law with an emissions-testing program that would not have to follow the station-based model of the smog check program currently used for cars.

Instead, the agency has been working on a program concept that could be based on the use of telematics and other data collection and submission tools to enable the inspection process from the vehicle’s location, officials have said in discussion documents.

Mike Tunnell, California-based director of energy and environmental affairs for American Trucking Associations

One potential program design concept couples periodic on-board diagnostics system checks as the primary test method with on-road emissions monitoring that would use remote sensing devices and plume capture systems to identify high emitters and verify program effectiveness.

The program should be designed to ensure both in-state and out-of-state vehicles have adequate methods to demonstrate compliance with program requirements, according to CARB.

Currently, there is no smog check-type program for heavy-duty vehicles to ensure their emissions control systems are functioning properly and repaired in a timely manner, according to CARB.

CARB’s current Periodic Smoke Inspection Program requires diesel and bus fleet owners to conduct annual smoke opacity inspections and maintain records of the tests, and repair those vehicles with excessive smoke emissions to ensure compliance. In addition, CARB randomly audits fleets, reviews maintenance and inspection records, and tests a representative sample of vehicles. A fleet owner that neglects to perform the annual smoke opacity inspection on applicable vehicles is subject to a penalty of $500 per vehicle per year.

CARB officials say that even with modern emissions controls and on-board diagnostics monitoring systems, 2019 estimates indicate that heavy trucks contribute approximately 58% of the statewide on-road mobile source oxides of nitrogen emissions and about 82% of the statewide on-road mobile source particulate matter emissions. Some of these emissions are attributed to broken or failing emissions-related equipment.

Approximately 12 million residents across California live in communities that exceed federal ozone and PM standards, according to state environmental officials. Increased exposure to harmful emissions has been directly associated with serious health impacts, particularly for the elderly, small children and people with pre-existing respiratory issues, it said.

“There’s work to be done on a new system,” Tunnell said. “Hopefully with the telematics on the truck, something can be designed that is less intrusive than what most of us know as a smog test program.”

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Forming a Company – 5 of 5 in Starting a Logistics Operation – Brief History of the Brokers

Brief History of the Brokers

The transportation industry has changed drastically since the Interstate Commerce Commission “ICC Termination Act of 1995” which deregulated the trucking and the transportation industry.  Prior to 1980 there was only one authorized broker operating in the United States, but after 1995, there have been thousands of Property Brokers authorized to broker property.  Within the U.S. Brokering has become an integral part of the transportation mix.  Brokers perform an important function within the logistics and transportation industry.  Carriers rely on brokers to supply hem with freight, both as front haul as well as back-haul freight.

Shippers look to brokers to fulfill the important function of supplying the many trucks required to meet their shipping needs.  The small fleets and owner-operators find that the broker can supply freight needed by the carrier, thereby, relieving the carrier. Thereby relieving the carrier need of hiring a sales force to find freight for their company.  Shippers on the other hand may need hundreds of trucks a day to move their freight.  Rather than calling carriers, the shippers can have one call, find one or one hundred trucks.

The modern day computer network provides the broker with a “virtual terminal” with thousands of trucks at their fingertips.  With the Internet , they can post the number of trucks, and type of equipment they will need to meet their shipping needs at a moment’s notice.  The tendency is to quote the lowest rate possible, but remember it is not always the lowest rate that gets the freight.  Having a following of owner operators who deliver on time and for a reasonable rate, is the best sales tool you possess.

In addition, a user-friendly web site is an important asset in the modern transportation market place.

Frequently Asked Questions:

 What is a Truck Broker?

The technical terminology for what is referred to as a “Truck Broker” is  reality, a “third part” logistics provider.  The Federal Motor Carrier Safety Administration (FMCSA) would classify it as a “Property Broker”.  The other type broker is referred to as a “Household Goods Broker”.

A third party logistics provider is rarely or if ever shown as a party to the Bill of Lading, which is the controlling document in the movement of freight in interstate commerce.  Therefore, a broker should have well written “rate agreement, linking you directly with the shipment.

What is Double Brokering?

The hotly debated issue in today’s transport industry is “double brokering”.  Although this practice is not spelled out as illegal practice in any of the FMCSA’s broker regulation, it is not a good practice, and many carriers will not accept any such shipment.  Most importantly delivering carriers will net get paid.  The underlying surety bond form, BMC 84 or trust agreement BMC 85 does not allow for payment to a broker, only payment to a regulated carrier or shipper.

What is a Truck Broker?

The technical terminology for what is referred to as a “truck broker” is in reality a third party to a transportation contract.  The broker is in fact a party inserted between a carrier and the shipper.

In essence, the property broker assumes the sales and the billing position for the carrier, and receives percentages of the truck rate for providing the services.  The carrier retains the responsibility for all regulatory, safety, liability insurance,

cargo insurance and all other legal responsibility for the transportation act.  Although the shipper pays the broker direct, technically he is paying for the transportation services only.

What is the role of a Property Broker in Interstate Commerce?

The essential duty of a broker in interstate commerce is to become a third party in a transportation transaction.  In a traditional movement of freight the shipper would contact a carrier and contract with him or her to deliver a sum of freight for a set amount of money (a rate).

When a broker enters the picture, the circumstances change drastically, no longer is the trucker the second party to the movement, but the “broker” becomes the second party, and the trucker becomes the “third party” to the transaction.

The broker assumes the responsibility of paying the trucker for the transportation charges.  In one sense, the transportation pie becomes smaller because the broker has inserted himself in the middle of the transaction, but assumes the reconcilability of paying the carrier and collecting from the shipper.  The carrier is assured of being paid, and is relieved of the duty of billing the shipper, and they can spend the time driving and dong what they do best.

In return, the carrier relives themselves of the problem of finding freight, and worrying about collecting their money from the shipper.  The shipper is in turn relieved of the responsibility of finding carriers and negotiating with each one what their rate will be.

The most important responsibility of the Property Broker is the selection of a “Bona Fide Carrier” authorized by the Federal Motor Carrier Safety Administration (FMCSA) to operate as a: Contract or Common Carrier in interstate commerce.

It is solely the duty of the authorized property broker to insure that the carrier they select has a valid Motor Carrier (MC) number, and US DOT number, and is in good standing with he FMCSA.  Th broker must be informed as to their cargo and liability insurance coverage before the shipper releases freight to the carrier.

Background and Experience

It would be virtually impossible to produce a “Transportation Guide” that would cover all aspects of freight brokering from the novice to the experienced broker agent.  Therefore, we attempted to produce a learning manual that would be user friendly to the complete novice as well as to the person with experience in the trucking and shipping industry.

It is a decided disadvantage for a complete novice entering the freight brokerage transportation industry.  The same would be true for a novice entering into  any other field of endeavor now to that person.

The general public is completely unfamiliar with the world off freight transportation.  In fact, May 2016 I was invited as an “Expert Witness” to the FMCSA Round Table on Financial Responsibility as only one of two financial because of the recent law

That increased bonds/trust from $10,000 to $75,000 and they had concerns that financials under financed the bonds and would amass claims that they would be able to pay.  They were wrong, but the experience in listening to all of the major insurance companies

That provided BMC 84 Bonds provided me a new level of education. Being in a room filled with transportation professionals and attorneys was truly educational.

This is said not to demand the general public.  The same public could be true to any person entering a new field.  Anyone in a new field could be taken advantage of during the learning curve. This is why “Transportation Consultant and Attorneys must be utilized.

This is why the Transportation Guide designed with real cases of day to day operation has Questions and Answers that are comprehensively structured for carriers, freight brokers, freight forwarders, shippers, and intended to help the newcomer as well as the experienced veterans of the transportation wars.

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The Learning Center

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Contract Permit Versus Common Carrier Certificate

Contract Permit Versus Common Carrier Certificate

A word of caution when contracting a common carrier, as common carriers authorized by the Public Law that sunset the Interstate Commerce Commission, an act entitled “ICC Termination Act of 1995).  Entering Into a contract with a common carrier can be risky since common carriers have published rates in addition to the “spot rate”

 

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Forming a Company – 3 of 5 in Starting a Logistics Operation

Companies that plan revenue opportunities that may exceed a million dollars in annual should consult an attorney,  and  a competent Certified Public Accountant (CPA).  A corporate structure is a must for motor carrier (trucking) from medium and up. There are numerous classification of corporation, so an attorney or/and CPA should be consulted.  Contracts of any kind is an agreement between two (2) parties, and a breach of contract may have dire consequence.

Once you know that you are ready to move forward through the Secretary of State, select a “Fictitious Name”, which is the official name of your business, and a “DBA”, Doing Business As. Create a positive presence, promote your services on the social media, i.e. Twitter, Facebook. your business.

You must contact the Internal Revenue Service “IRS” for your “Federal Identification Number”  for assistance in selecting the type of business you will own, and the pros and cons of each for filing your business and personal taxes.  They range from a Corporation…Partnership…Limited Liability “LLC”… S or C Corp.

The broker and carrier business can be risky when you factor in the moving a load.  The broker agrees to pay the carrier an agreed Dollar ($)  amount for moving a load with a small profit margin for the amount of money expended for fuel, permits, and travel time.

Scenario:  In an average movement, the broker agrees to pay the carrier am agreed amount to move the load from point “Origin” to point “Destination”.  It is assumed that the full amount of the debt or cost is to the carrier.

View Point:  When a shipper is unable to pay, particularly if the shipper is deeply indebted the broker may be liable to pay the carriers and the broker may be forced into bankruptcy. In many instances the broker’s commission is only 10 to 15%.  Just one (1) or (2) bad loads could cost a broker thousands of dollars.

The corporate shield protects personal and/or business assets from creditors, except when a principal signed as a “Personal Guarantor”.

Corporations:

  • Limited Liability Company or LLP are created and created and treated differently, because they represent different  liabilities issues generally requires an attorney.  Here are alternatives to these entities for a corporation with associated cost savings for its formation.
  • Fictitious Business Names (d/ba)-  The Business name is processed through the Secretary of State in each state.  There is no protection against bankruptcy.  A legal notice that in the local newspaper, an article be posted declaring the individuals involved in the formation of the company involved in the formation of the company and the place of business is required to open a business checking account.  Interstate transportation is not subject to state and local sales tax.

Always make a call if uncertain on what type of protection is required for your business.

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Start-up “ALL ABOUT YOU” Part 2 of 5 in a series of thoughts related to starting a transportation business

The Business Plan for “Starting” a logistics operation consist of a narrative and several financial worksheets.  The “Narrative” template is the body of the business plan, and serves as the Global Positioning System (GPS) because this is where the journey begins.  It contains more than 150 questions on how to proceed, and why.  Work through the business plan in any order except for the “Executive Summary” which must be completed last.  Skip any questions not applicable to your type of business.

Upon completion of your first draft, you will have a collection of small essays on various topics of your various i.e., what is your niche, who to do business with, what are the funding requirements, and what agencies can support you in setting up your logistics operation.  Edit these essays into a smooth flowing narrative.  This becomes a test of your knowledge of the career you’ve chosen, and what resources are available to equip you to meet those compliance requirements.

Business plan concepts on green chalk board

The real value in creating a business plan is not to have a finished plan in hand, rather, the process of researching, and thinking about your business in a systematic way.  The Army has a slogan that clearly defines planning called the five P’s , “Prior Planning Prevents Piss Poor Performance”.   Planning and due diligence helps you to think through thoroughly all of your ideas critically to avoid costly, disastrous mistakes later.  Always contact transportation consultants, and attorneys to be certain that your decisions are made with the best information.

The business plan is generic for any business, but specific in transportation because we are experts, and can serve as your GPS.  However, modify the business plan to suit your particular business needs, teview yhe section titled “Refining the Plan” found at the end. It suggests emphasizing certain areas depending on your type of  business, freight movement, sales, auto transporting, retail or service.  It also provide valuable insight on fine-tuning your plan for an effective presentation for venture capitalist.  Pay attention to your writing style or seek assistance through professional proposal writers.  You will be judged by the quality and appearance of your presentation, as well as your ideas.  Generally, you want get a second chance to make a first impression.

It typically takes several weeks to complete a good business plan.  Most of that time is spent researching, and thinking of your ideas, assumptions, and the value of processes.  Take he time, make a call, and  do the “Business Plan” properly because that is “THE” guide to determine the success of your logistics operation.  Those that prepare business plans never regret the efforts.

There is a famous proverb that states” Consider the cost”.  His could be taken several ways, not just the dollar amount because funding is part of the plan.  You may consider a home-based business and the effect it may have on the family.

If you are a motor carrier or broker finding freight is difficult without the right resources. The truck is never where he load is, so time and ravel must be considered as well as vetting carriers qualification, confirming rates, and tracking shipments.

A well-thought out “Business Plan” determines the size of your investment, number of employees, and return of your investment.  As a home-based owner-operator your family can be trained to find freight,  and you can get two (2) authorities, One (1) as a motor carrier (trucker) and one (1) as a broker to employees other carrier as loads are secured from load boards.

Remember, that TFS has the best transportation professionals in the industry working as a cohesive unit to meet all of your transportation needs at a cost-effective and timely manner.

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I don’t want to be him and call my boss!

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Info and Fleet Owner – Technology – Autonomous Vehicles

Info and Fleet Owner – Technology – Autonomous Vehicles

Neil Abt | Jul 17, 2019

https://www.fleetowner.com/autonomous-vehicles/peloton-outlines-plan-platoons-driverless-following-truck

Six fleets are using PlatoonPro in real-world conditions, Peloton said.

Peloton outlines plan for platoons with driverless following truck

As company works on Level 4 technology for the future, CEO Switkes says fleets reporting strong fuel efficiency gains with existing PlatoonPro system.

Peloton Technology has unveiled plans to develop Level 4 automated following technology that would allow one truck driver to safely operate two tractor-trailers in a platoon.

“We want to leverage the skill and experience of the lead driver,” Josh Switkes, founder and CEO of Peloton, told Fleet Owner in an interview. “That helps in a variety of ways make this type of automation dramatically simpler than a stand-alone driverless truck.”

Switkes spoke publicly of Peloton’s plans for first time on July 17 at the 2019 Automated Vehicle Symposium in Orlando, FL.

Currently, the company is rolling out its Level 1 PlatoonPro system, which has a driver in both the lead and follow trucks. The driver in the second truck steers, but the system controls the powertrain and brakes to manage the following distance.

PlatoonPro is being used by six fleet customers in real-world conditions, with numerous other customer trials underway. Switkes said the system has a perfect safety record, and customers are achieving fuel savings averaging more than 7%. In some cases, miles per day have exceeded 700 per truck, resulting in projected fuel savings of up to $7,000-10,000 per truck, per year.

Switkes declined to provide specific details on any of the fleets using PlatoonPro, but hinted much of the activity has taken place in Texas. He emphasized one takeaway thus far is how infrequently other vehicles cut into an established platoon, which critics have pointed to as a safety risk and a reason the suggested fuel economy benefits would not be as high in real-world conditions.

Addressing another frequently cited concern, Switkes noted it is rare for significant “hard braking” events to occur. However, the company has spent “a huge amount of time” understanding and measuring braking capabilities to ensure the system will work properly every time, regardless of the circumstances.

As Peloton works today to further deploy PlatoonPro, Switkes said there is no exact timetable for its Level 4 system, stressing that safety testing and validation takes time. But he was confident this technology would prove attractive to an industry struggling with finding enough truckers.

“We see the drivers as the world’s best sensors, and we are leveraging this to enable today’s drivers to be more productive through automated following platoons,” said Switkes.

Peloton’s advanced platooning system will use vehicle-to-vehicle (V2V) technology, which allows the human-driven truck to guide the steering, acceleration and braking of the follow truck. Switkes said he believes the ability to double the productivity of the driver by controlling two vehicles through the platoon will prove attractive to fleets.

He also said the highest skilled drivers will likely operate these future platoons, and could receive higher compensation for their efforts.

Peloton said this will result in “improved work for drivers through better routes, schedules, and compensation, as well as better quality of life through expanding hub-to-hub and relay-style operations that allow drivers to be home with their families every night.”

Separately, a report released on July 17 from the Competitive Enterprise Institute (CEI) found that only 20 U.S. states have thus far authorized commercial automated vehicle platooning. The first start to do so was Utah back in 2015.

CEI said “with the coming advent of automated vehicles, numerous sections of state motor vehicle codes likely will need revision if we are to take advantage of the full range of benefits offered by vehicle automation technology.”

For platooning, the legislative hurdle generally surrounds minimum following distances on the highway. The group made two recommendations for altering these regulations while maintaining safety.

First is a “strong amendment,” which would preclude agencies from promulgating any regulations restricting automated vehicle platoons. Next is a “weak amendment,” which would grant motor vehicle authorities discretion in how to promulgate platooning rules.

CEI’s report, “Authorizing Automated Vehicle Platooning: A Guide for State Legislators” is a nationwide inventory of state “following too closely” rules that offers specific, state-by-state fixes to amend statutes in a way that exempts speed-coordinated vehicle platooning from those laws.

“The economic, safety, and environmental benefits of platooning should prompt other states to update their laws,” said Marc Scribner, CEI senior fellow and author of the report.

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ATA: Turnover rates in first quarter present “muddled picture” of driver market

The annualized turnover rate at large truckload fleets rose 5 percentage points in the year’s first quarter from the quarter prior, according to the American Trucking Associations, while the turnover rate at smaller truckload fleets fell four percentage points –   the first dip for small fleets in three quarters. The parity between the two rates “demonstrated a muddled picture” of the driver market, said ATA.

“While the market for drivers in certain segments continues to be tight, we’re seeing the impacts of a softer freight environment,” said Bob Costello, chief economist at ATA. Despite weaker freight growth, it is clear that there is still strong demand for quality driver’s industry wide, which will continue to put carriers under pressure to recruit and keep good ones.”

Large carriers are defined as those with more than $30 million in annual revenue, while smaller truckloads carriers are those with less than $30 million in revenue.

The turnover rate at large truckload fleets in the first quarter was 83% – 6% points lower than 2018’s average and 11% lower than the same quarter a year ago. At smaller truckload carriers, the rate fell to 73% – the same rate as 2018’s first quarter.

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