• While discussion of fuel consumption has always been a topic of concern, the most prevalent issue that is currently swirling through the transportation industry is the FMCSA's recent adjustment to the hours-of-service regulation. Safety administrators are praising the policy change for its structured increase of off-duty time requirements. However, Fleet managers, drivers, and business owners alike are up in arms about the massive reduction of available working hours. In our last article on the topic, which summarized the full policy, we calculated that each individual driver is having 624 hours cut annually due to the change. To put that into greater perspective, if driving at an average pace of 60 MPH for 624 hours, 37440 miles will be traversed; equivalent to starting in Seattle, WA and circling the contiguous United States 4 times. If this reduction was spread across a fleet of drivers, the business would feel the repercussions. However, this is for each of the nearly 6 million Commercial Motor Vehicle drivers in the United States, so "it's only a matter of time before these impacts ripple throughout the nation's economy." (K. Burch)

    The American Transportation Research Institute (ATRI) recently released a 60-pg, thorough analysis of the "Operational and Economic Impacts of the New Hours-of-Service". Utilizing results from a 2300 driver survey and 40,000 commercial driver logbooks, the research established a few noteworthy operational and economic impacts from the HOS update.

    ~  Greater than 80% of motor carriers are in the midst of a quantifiable productivity loss since July.

    ~  Nearly half of the businesses surveyed have had to employ more drivers to deliver the same amount of inventory.

    ~  Even though the updated HOS policy reduced a driver's weekly hours from 82 to 70, 66% of the drivers are experienced greater levels of fatigue while just over 82% of commercial drivers have had their quality of life negatively affected.

    ~  Unchanged deadlines have required drivers to operate at more time periods of greater traffic a financial risk to fleets that we discussed last week.

    ~  Annualized loss of wages is around $2 billion due to the drop in hours

    The research also provided the key outcomes related to productivity which are as follows:

    ~  More Drivers are now Required to Move the Same Amount of Freight: To comply with the HOS rules carriers have shifted driver schedules. Many of these new schedules have resulted in a decrease in the number of weekly miles a driver can log. Due to the decrease in miles, carriers have a choice of turning down freight or making up the miles by incorporating additional drivers and/or equipment into their operations. These options are less efficient than operations prior to the new HOS rules, and are a central component of the productivity loss.

    ~  Driver Shortage and Turnover: Prior to the July 1st HOS rules, qualified drivers were scarce with an estimated shortage of 20,000 to 25,000 for-hire truckload drivers.7 As a result of the changes more drivers are required and the level of scarcity has increased. To attract drivers after the HOS change, some carriers have opted to increase pay8 and some may increase rates for shippers. Rate hikes are challenging, however, due to strong competition among industry participants. If rate increases do not fully compensate for driver pay increases then carriers raising pay will assume an additional financial burden.

    ~  Decreased Flexibility to Meet Customer Requirements: Meeting customer requirements is more difficult under the new HOS rules. In particular, drivers are limited to one restart per week and must take those restarts across two nighttime periods. Shippers, however, may require delivery at any point on a given day, and with little notice. The data show, particularly those data describing the variability in driver weekly work time, that flexibility has decreased. As a result, drivers are less able to accumulate hours for unanticipated shipper requests via the 34-hour restart. In many instances carriers must either turn down business or increase driver capacity.

    This valuable research will likely be presented in some form at the subcommittee hearing on Thursday, November, 21. Chairman of the Subcommittee on Contracting and Workforce of the House Small Business Committee, Rep. Richard Hanna (R-NY) stated that the hearing will "examine the economic and operational impact of the FMCSA new Hours of Service regulation on small businesses". Hanna went on to add that he "looks forward to learning from the witnesses how they are operating under this rule and examining how we can better balance the needs of our economy and the important goal of highway safety." These witnesses will represent both sides of the argument as Anne Ferro of the FMCSA is scheduled to be heard alongside carrier executives from the Owner-Operator Independent Drivers Association and the American Trucking Association.

    It will be interesting to see the outcome of this hearing, so stay tuned to FleetCardsUSA.com for all your industry updates. 

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  • Just hours after the 2013 government shutdown ended last week, President Barack Obama signed into law a succinct sleep apnea bill.  While only three sentences in length, the bill sets forth legislation which has been desired by all those invested in and employed by the trucking industry.  In the past, the issues of sleep apnea impacting the safety of fleet operators have only been addressed by regulatory guidance. However, after unanimously passing through both the House of Representatives and Senate, it is now law that:

    "a requirement providing for the screening, testing, or treatment (including consideration of all possible treatment alternatives) of individuals operating commercial motor vehicles for sleep disorders only if the requirement is adopted pursuant to a rule-making proceeding."

    This piece of legislation (Public Law #113-45) is so highly touted throughout the industry because it requires that the FMCSA must execute a full cost-benefit and regulatory impact analysis before setting policy regarding sleep apnea as opposed to the loosely adhered to 'guidance'.

    Prior to this bill being signed into law, the FMCSA could set policy without taking into account the high costs to the industry (estimated to be greater than $1 billion) – which would most likely fall on the shoulders of the safer fleets controlled by small businesses. Now, with the law passed, Todd Spencer of the Owner-Operator Independent Drivers Association (OOIDA) has thanked Representatives Bucshon and Lipinski for their efforts and stated that this law "is common sense legislation that has the support of the entire industry." Spencer went on to say that "anything FMCSA does regarding sleep apnea should absolutely consider the costs such a policy will pass on to truckers."

    While it was explicitly announced that a rulemaking process will be followed, the FMCSA stated to the press that "Congress should still weigh in by passing legislation and guaranteeing that a transparent and sound process is used."

    While this Sleep Apnea bill is important for the costs imposed on the industry and passed through Congress in record time, don't expect the same ease of passage to be seen next year as the Highway Trust Fund reaches its limit.

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  • Think your fleet is one of the best in the trucking industry?  The Truckload Carriers Association's (TCA) 6th annual Best Fleets to Drive For® award is right around the corner, so now is the time to see how your fleet stacks up against the rest.

    Best Fleets to Drive For® is an annual evaluation of North American for-hire trucking companies that provide an exceptional workplace environment for drivers and owner-operators.  Conducted by CarriersEdge in partnership with the Truckload Carriers Association (TCA), the Best Fleets to Drive For® award highlights the best employers in the trucking industry.

    This annual contest and survey promotes positive elements and great opportunities within the trucking industry. In addition to these accolades, this award sets higher employer standards for companies to follow through the documentation of success stories and showcase of fleets providing exceptional workplace environments.

    "This program publicly recognizes and celebrates the fleets that are working to provide exceptional workplace environments," said Mark Murrell, president of CarriersEdge. "As we survey the participants, we're documenting a series of success stories that model best practices for other companies to adopt or follow. It's good for the carriers, the drivers, and the image of trucking, which is why the number of nominations seems to double every year. As we head into the next round, I have no doubt that this trend will continue."

    The contest guidelines are straightforward for drivers or owner-operators: nominate your fleet for the award and complete the driver survey which is conducted to gain deeper feedback. In addition to the operator submitted metrics, company safety and driver retention data are collected, as well as corporate interviews of each nominated company. After data is compiled of all applicable fleets, it is reviewed to determine the Top 20 Best Fleets to Drive For®. Before voting, read the full list of evaluation metrics.

    There is no fee to nominate a company and the Best Fleets to Drive For® 2013 survey is open to all North American, for-hire trucking companies with 10 vehicles or more. Since this is a vote of the best fleets to drive for, only those employees that operate the vehicles can complete a nomination; i.e. office staff, management, and company owners cannot nominate their fleet.

    To nominate a fleet, drivers can fill out the nomination form  or send an email to Nominate@BestFleetsToDriveFor.com, and include the full name and contact info for both the nominated fleet and the individual submitting the nomination.  Nomination deadline is 5:00 pm EST November 1st, 2013.

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  • Fleet operations depend on proficient guidance from fleet management as much as vehicles depend on fuel. Yet fleet managers must balance many challenging responsibilities, such as overseeing maintenance, financing and telematics details for vehicles, as well as monitoring fleet driver performance, safety conditions and fuel usage. The most successful fleet managers, therefore, are those who keep all of these tasks skillfully under their control.

    Fleet managers can employ one of the most powerful fleet service tools available for managing fuel costs and controlling budgets: the fleet fuel card.

    Fleet fuel cards are designed to give fleet managers control over spending through carefully engineered features. For example, fleet managers can restrict the types of purchases cardholders make, and regulate the day of week and time of day fleet cards can be used. They can even take control of critical situations remotely with the ability to stop the flow of fuel at the pump in real-time!

    Yes, Fuelman customers have actually stopped fuel at the pump to prevent drivers from accidentally adding unleaded gas into a diesel-powered vehicle. Fleet managers can avoid this type of simple mistake, which can cost companies thousands of dollars to fix, and ensure vehicles stay active on the road by being alerted before the mistake occurs.

    With fuel prices in constant fluctuation, fleet managers frequently feel the pinch of economic turbulence. They know how critical it is to make every dollar count. Fleet fuel cards help to budget and track every dollar spent on fleet fuel and fleet maintenance, and allow fleet managers to control and monitor spending – even in real-time.

    For more information about fleet cards and how they can help your company, check out our fleet cards FAQ page, contact our fleet fuel professionals at (800) 633-3271, or start your fleet card application today!

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  • During an era in which gas prices seem to only get higher and higher, many drivers believe there’s no end in sight. Coupons and discounts are non-existent and limited transportation and fueling alternatives give consumers little choice. In a sign of global economic development, geography is playing its biggest part yet in the price of gasoline, and consumers, politicians, and even oil companies are taking notice.

    Although there isn’t one dominating factor that drives the price of gas up or down, the large discrepancies worldwide and nationwide can be attributed to supply and demand, natural disasters, taxes and geography. While the price of gasoline this year has remained below $4 per gallon for most of the country, prices vary widely from coast to coast.

    In the United States, remote locations often lead to more expensive products and services, and gasoline is no different. Most notably the West, where there is a lack of refineries, the price of gasoline is more sensitive to unplanned changes, including pipeline connections, distance to active physical trading markets and outages. Without a single oil pipeline cutting across the Rocky Mountains, the West Coast is virtually cut off from the rest of the nation’s supply of gas, making the region extremely susceptible to sudden gas shortages and steep price increases.

    Although isolated from oil reserves, the West still inhibits large populations in need of gasoline. Being the ninth largest economy in the world, California’s gas demands require its refineries to operate at near full capacity. Additionally, California also supplies fuel to other Western states such as Oregon, Arizona, Washington and Nevada, increasing the reliance beyond just California on the minimal resources.

    Although the West Coast gets the brunt of high prices, the entire country goes through price fluctuations – no matter where one resides. Annually, refineries shut down or reduce production for routine maintenance and adjust their fuel to make a cleaner, more expensive gas. During this time, which usually occurs April to September, consumers tend to travel more, only pushing demand – and prices – higher. Those living in a populated area in an oil producing state, still have a price disadvantage compared to those across town. Oil companies use zone pricing to determine the price each dealer sells by charging dealers different amounts for fuel based on traffic volume, station amenities, nearby household incomes, the strength of competitors, and other factors, all in an effort to boost profits.

    Like many industries, government regulation and taxes also contribute to pricing differences. (californiagasprices.com, 2012) Washington holds the highest tax rate for gasoline at 37.5 cents-per-gallon, followed by California at 35.3 cents-per-gallon. Oregon, a state limited by refineries and location, also has a high tax rates at 30. cents-per-gallon. Those states that have refineries on the other hand, have generous tax rates. Alaska and Wyoming, both oil supplying states, are taxed 8 and 13 cents-per-gallon, respectively.  

    The demand for gas isn’t just limited within the United States, as it also extends beyond our borders. This is a sign of the times to come, as we can anticipate gas prices to continue to increase, regardless of fueling location.

    For businesses who rely on transportation to provide services, the increasing gas prices are a cost that is closely monitored - from coast to coast or one side of town to the other. Businesses are looking for more fuel management solutions to help control and manage their business. Whether a business owner, a driver by profession, or even just a vehicle owner, knowing pricing differences can help you understand what you are paying for in this fast changing industry, what options are available, and even helping to improve your fleets efficiency. A fleet fuel card program is a solid place to start!

    References:

    californiagasprices.com. (2012, Oct 19). Total US Fuel Taxes by State. (californiagasprices.com, Producer) Retrieved Oct 19, 2012, from californiagasprices.com: http://www.californiagasprices.com/tax_info.aspx

    fuelgaugereport.aaa.com. (2012, Oct 19). National Average Prices. (fuelgaugereport.aaa.com, Producer) Retrieved Oct 19, 2012, from fuelgaugereport.aaa.com: http://fuelgaugereport.aaa.com/?redirectto=http://fuelgaugereport.opisnet.com/index.asp

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