Wishing everyone Happy Holiday’s from everyone at DMTB. Looking forward to a great year in 2015!
On Saturday night the Senate passed and sent to President Obama a bill that replaces the controversial 2013 version of the restart with an earlier, less restrictive, version while the Federal Motor Carrier Safety Administration does more research on the issue.
The provision occupies five pages of a 1,603-page, $1.1 trillion measure that funds the government through next September.
The earlier version of the restart goes into effect as soon as Obama signs the bill. The bill tells FMCSA to publish notice of the change in the Federal Register as soon as possible. There is speculation that the President will sign the bill in the next couple of days.
On Dec. 13, Congress passed the fiscal year 2015 Omnibus Appropriations bill, providing funding for the vast majority of the federal government, including the Department of Transportation, for the current fiscal year. The President is expected to sign the bill into law shortly. Officially titled the Consolidated and Further Continuing Appropriations Act, 2015, the bill is over 1,700 pages long and has a host of detailed spending and policy-related provisions affecting many industries.
The most important trucking-related provision is language that provides relief from the two new restrictions of the hours-of-service restart rule. Specifically, the legislation suspends the requirement that all qualifying restarts contain two consecutive periods of time between 1 a.m. and 5 a.m., and that it can only be used once every 168 hours (or seven days). In other words, the restart rule reverts back to the simple 34-hour restart in effect from 2003 to June 2013.
Below are some frequently asked questions concerning the hours-of-service changes. (These were supplied to us by the American Trucking Associations).
1. What does the Congressional language actually say, and what does it mean?
The legislation says:
“Section 133 temporarily suspends enforcement of the hours-of-service regulation related to the restart provisions that went into effect on July 1, 2013 and directs the Secretary to conduct a study of the operational, safety, health and fatigue aspects of the restart provisions in effect before and after July 1, 2013. The Inspector General is directed to review the study plan and report to the House and Senate Committees on Appropriations whether it meets the requirements under this provision.”
Essentially, this law eliminates, temporarily, the two new restrictions on the use of the 34-hour restart, namely the 1-5 a.m. provision and the 168-hour rule. Drivers will be permitted to restart their weekly hours by taking at least 34 consecutive hours off-duty, regardless of whether or not it includes two periods of time between 1 a.m. and 5 a.m. A driver can also utilize the restart more than one time per week if necessary.
2. When is the new 34-hour restart effective?
The 34-hour restart rule will revert to its pre-July 1, 2013 version as soon as the President signs the bill into law.
3. How long will this change last?
Because the language resides in an annual spending bill, its terms expire at the end of FY2015, which is Sept. 30, 2015. It’s important to note that the legislation also directs the Department of Transportation to conduct a study comparing the effectiveness of the 34-hour restart rules in place before July 1, 2013 with those that took effect after. During 2015, ATA will continue to pursue strategies in an effort to keep the simple 34-hour restart rule in place for a longer period of time.
4. Does the legislation include any other changes to the hours-of-service rules?
No, all other hours-of-service rules, including the 30-minute rest break provision, remain unchanged and must be complied with.
5. If our trucks have ELDs, will we be able to use the simple 34-hour restart immediately?
Carriers are encouraged to work with their ELD suppliers to determine what software updates are necessary to comply with this legislatively directed rule change. A short transition period may be necessary, and ATA encourages fleets to be patient as ELD suppliers will need some time to write and deploy the software updates.
6. Will enforcement officials know about this change?
Soon after the law is signed, ATA fully expects the Commercial Vehicle Safety Alliance and the Federal Motor Carrier Safety Administration to issue enforcement memos describing the changes and their impact to law enforcement personnel. The enforcement memos/guidance will be distributed by ATA to its members as they become available. Motor carriers may experience minor disruptions at roadside as law enforcement adapt to the changes. If a driver experiences a problem at roadside, you should contact head of the commercial vehicle safety program in that state’s lead MCSAP agency.
IMTA would like to caution our members that these changes are not effective until the bill has been signed by the President and FMCSA has published a notice in the Federal Register. We have spoken with the FMCSA office in Ames this morning and they assure us that this process will be completed as soon as possible, possibly within the next day or two.
SOURCE: ATA and IMTA
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Nearly $1 trillion in retail sales will result if analysts at Deloitte are correct in their forecast of 4.5% growth during the upcoming holiday season. Consumers have 2.6% more disposable income this year, according to Deloitte, due in part to declining fuel prices. Employment statistics are improving, as well, and the picture for Q4 will be even rosier with the addition of as many as 800,000 seasonal jobs in retail and related service sectors.
The National Retail Federation (NRF) projects a 4.1% increase in holiday sales, compared to 2013. If the industry organization’s forecast is correct, seasonal sales growth will exceed 4% for the first time since 2011.
A more Grinch-like forecast emerged from the Standard & Poor’s 500 Retailing Index, which declined 0.9% for the first eight months of 2014. That period included a weak back-to-school season. Consumer confidence fell in September, as well, according to the Conference Board.
The transportation sector is flourishing, at least in part because of rate increases. The Dow Jones Transportation Index has been outperforming both the retail sector and the S&P 500 since March of this year, as seen in the graph below of 2014 to-date:
The Dow Jones Transportation Index (DJTA) has steadily outperformed both the Dow Jones Retail Index (DJUSRT) and the S&P 500 (SPX Daily) since March of this year. (Custom graph created on MarketWatch.com.)
Shippers expect to pay higher rates for truckload and rail intermodal transportation in the busy holiday season and well into 2015. A survey by Wolfe Research, according to Journal of Commerce, revealed that “52% of shippers plan to pay peak surcharges to move their truckload freight” in the fourth quarter. Another result of tight capacity: the shippers surveyed expect to rely increasingly on freight brokers to help find trucks.
Fourth-quarter freight volume was not expected to increase dramatically, according to previous estimates. because many shippers brought imports into the West Coast early. Concerns persisted about a potential labor strike at ports from Southern California up to British Columbia, but there has been no work stoppage even though contract negotiations are still not complete.
Freight is still arriving, and the highest-volume U.S. ports, in Los Angeles and Long Beach are busier than ever. A significant number of van loads are finding their way onto the spot market. This week’s activity on DAT Load Boards included more than 2,000 available van loads and 500 to 600 outbound trucks posted per day from the Los Angeles market, home to both ports. Spot market rates rose last week on the lanes from L.A. to the regional freight hubs of Stockton, Phoenix, Denver, Dallas and Atlanta, as recorded in DAT RateView.
Rates are atypically high outbound from L.A., including the lane to Phoenix. Rates on that lane are approaching the all-time peak average of $2.57 (not including the fuel surcharge, which was a few cents higher in June.) The current load-to-truck ratio is up to 4.3, indicating capacity pressure in October that resembles the June peak for vans outbound from L.A. This lane has seen high demand and atypically high rates since late May, when spot market rates surpassed the contract rates. That means that small and mid-sized carriers got more money per mile for one-time loads from freight brokers than the big, contract carriers received directly from shippers. During a slack season, the contract rate typically exceeds the spot market rate (paid to the truck) by 10% to 20%, and a portion of the margin goes to the broker.