Tag Archives: trucking

Amazon has filed a patent for its drone delivery systems

Amazon teased consumers with drone delivery during a 2017 Super Bowl commercial, though the ad bore a disclaimer: “Prime Air is not available in some states (or any really). Yet.”

Back in December 2016, Amazon made its first successful customer delivery in a trial area in the United Kingdom; in March 2017, the online retail giant completed a test delivery at its invite-only MARS 2017 robotics conference in Palm Springs. Now that it has filed a series of patents for drone delivery systems, Amazon seems to be following through on promises that Prime Air will eventually become a reality.

An old joke says, “You don’t need a parachute to skydive. You only need one if you want to skydive twice.” This logic applies to dropping packages—which could contain any number of fragile products—from the air. Amazon’s latest approved patent reveals a design that incorporates a parachute directly into a package label, according to documents obtained from the U.S. Patent and Trade Office.

Using these labels, Unmanned Aerial Vehicles (UAVs)—or drones—could deploy packages from the air and let them drift safely to the ground. This would reduce delivery times by eliminating the need to land and take off. Packages could even potentially be dropped without the drone stopping, which makes it possible to use multiple types of UAVs instead of just those that can hover and land.

The patent also states that “different sized parachute canopies can be used for different sized shipping container’s descent appropriately to prevent damage to the contents of the shipping container,” suggesting that Amazon would scale the technology for a wide range of package sizes and weights. The patent also describes multiple ways UAVs might carry a parachute-labeled package, including mechanical arms, a suction system, magnets, and retractable shelves.

The retailer also received recent patents for a magnet-based delivery system and a coiled spring model, so it seems likely that the company will use a combination of many technologies to get drone packages on doorsteps.

Amazon continues to wait on Federal Aviation Administration approval before it can complete more widespread Prime Air distribution testing. This process will most likely take several more years, but there is little doubt that the company plans to drop its packages from the skies as soon as it is able.

Story by Jason McDowell @ inbound logistics

Regulators Pull Plan To Test Truckers, Train Operators For Sleep Apnea

Two agencies in the Transportation Department are ending their push for a rule that would have required truck drivers and train operators to be tested for obstructive sleep apnea, a sleep disorder that’s been linked to preventable accidents.

The agencies — the Federal Motor Carrier Safety Administration and Federal Railroad Administration — have withdrawn a proposed rule they published in March of 2016, when they wrote that when it goes undiagnosed or inadequately treated, obstructive sleep apnea, or OSA, “can cause unintended sleep episodes and resulting deficits in attention, concentration, situational awareness, and memory, thus reducing the capacity to safely respond to hazards when performing safety sensitive duties.”

While calling OSA “an on-going concern,” the regulators said the issue can be addressed through existing safety programs and rules.

According to the Associated Press, “The agencies argue that it should be up to railroads and trucking companies to decide whether to test employees. One railroad that does test, Metro-North in the New York City suburbs, found that 11.6 percent of its engineers have sleep apnea.”

The decision didn’t sit well with the National Transportation Safety Board. The agency, which has pushed for apnea screening and awareness, said it is “disappointed” by the move. The board cited its own findings that obstructive sleep apnea has been linked to 10 highway and rail accidents in the past 17 years.

“Medical fitness and fatigue, two of the NTSB’s 10 Most Wanted List of Transportation Safety Improvements for 2017 – 2018, are tied to obstructive sleep apnea,” says the agency’s media relations chief, Christopher O’Neil. He added, “The need for this rulemaking is well documented.”

Last spring, the FMCSA and FRA cited a number of cases of rail and trucking crashes that were linked to OSA in recent years, including a railway collision that took place near Red Oak, Iowa, in 2011.

That crash, which killed two crewmembers who were found to have been at risk of apnea, prompted the NTSB to urge the Federal Railroad Administration to “require railroads to medically screen employees with safety sensitive duties for sleep apnea and other sleep disorders.”

The agencies’ initial proposal also cited the 2013 derailment of a Metro-North Railroad passenger train that had been approaching the Spuyten Duyvil Station in New York City. In that crash that killed four passengers and injured more than 60 people, the engineer reported feeling dazed — and was later diagnosed with severe OSA.

Obstructive sleep apnea’s risk factors include being male, obese, and middle-age or older. Family history can also play a role.

Dr. Stefanos Kales of the Harvard School of Public Health, who has studied the link between sleep apnea and serious accidents, told NPR’s David Schaper last year, “Drivers with untreated obstructive sleep apnea who were noncompliant with treatment had a five-fold increase in the risk of serious preventable crashes.”

In announcing the withdrawal of the proposal, the FMCSA recommended that commercial drivers and their employers consult the North American Fatigue Management Program to boost their awareness of fatigue and its impact on performance.

Story by Bill Chappell at NPR

Diesel hits three-month high after six straight weeks of increases

The average price of a gallon of on-highway diesel went up 5 cents to $2.581 per gallon for the week ending Monday, Aug. 7. This marks the sixth consecutive increase after a month of decreases and the highest prices since May 1, when diesel cost $2.583.

Diesel price averages went up in all 10 regions in the U.S., according to the Energy Information Administration. The largest average increase was in the Rocky Mountain region, where prices at the pump went up by 5.8 cents per gallon. Prices increased by 2.3 cents in the California region, the smallest increase in the nation.

Following are the average prices by region as reported by the EIA:

  • U.S. – $2.531, up 5 cents
  • East Coast – $2.613, up 4.7 cents
  • New England – $2.618, up 2.8 cents
  • Central Atlantic – $2.751, up 4.5 cents
  • Lower Atlantic – $2.514, up 5.2 cents
  • Midwest – $2.543, up 5.7 cents
  • Gulf Coast – $2.41, up 5.1 cents
  • Rocky Mountain – $2.673, up 5.8 cents
  • West Coast – $2.848, up 3.2 cents
  • West Coast less California – $2.747, up 4.3 cents
  • California – $2.93, up 2.3 cents

According to ProMiles, the average retail price at truck stops was $2.552 on Monday morning, a 5.7 cent increase from last week.

ProMiles, the software company that maintains the websites ProMiles.com and TruckMiles.com, continues to offer its own weekly fuel price information. The company’s fuel price data are presented in the same format used by the EIA in the agency’s weekly reports. The prices include a national average as well as regional averages, and comparisons to the previous week and the previous year.

A key difference between the EIA and ProMiles reporting is the type and number of fueling stations the company surveys in order to calculate its averages. While EIA surveys 400 truck stops and convenience stores nationwide, ProMiles uses its direct feed from thousands of truck stops to develop its averages.

TruckMiles.com listed the daily average price for Monday at $2.64, with truckers in Pennsylvania paying an average of $3.097 per gallon, the highest in the nation. Truckers in South Carolina are paying a national low of $2.397 per gallon, according to the site. No states in the Lower 48 states have been listed in excess of $4 per gallon at the pump since Dec. 4, 2014. Two states, Pennsylvania and Washington, are reporting average prices, one more than last week. It has been nearly two months since the last time more than one state reported prices above $3. No states have reported average diesel prices below $2 since April 27, 2016.

AAA has indexed diesel prices at $2.512 for Monday, 21.3 cents more expensive than this time last year and 6.6 cents higher than a month ago.

In separate energy news, according to the New York Mercantile Exchange, light sweet crude (also known as West Texas Intermediate) for September delivery was trading at $48.95 at noon CDT on Monday, a $1.22 decrease from last Monday and a 63-cent decrease from its last settlement price. The price of Brent crude oil for October settlement was listed at $51.90, a 75-cent decrease from last Monday and a 52-cent decrease from its last settlement price.

According to Reuters, oil prices dipped on Monday as investors cashed out amid news of increased production in Libya and continued concerns regarding more production from the U.S. and OPEC countries. Prices dropped last week despite a boost on Friday from a positive employment report in the U.S.

Story by Tyson Fisher

Senate Committee Advances Human Trafficking Prevention Legislation











WASHINGTON — Legislation meant to remove individuals involved in human trafficking from the trucking industry was easily approved by a Senate committee Aug. 2.

The bill sponsored by Commerce Committee Chairman John Thune (R-S.D.) would disqualify truck drivers from the industry if they are found to be involved in human trafficking.

Another bill was approved, as amended, and it would designate a human trafficking prevention coordinator, as well as expand the authorities of the Federal Motor Carrier Safety Administration’s outreach and education program. Also under the bill, a 15-person advisory committee on human trafficking would be established at the U.S. Department of Transportation.

“Together, these two bills address the prevention and enforcement of human trafficking in the transportation sector and will continue the good work of many who fight to eliminate human trafficking on a daily basis,” Thune said.

Committee ranking Democrat Bill Nelson of Florida emphasized the severity of human trafficking, noting his home state ranked third for the number of cases reported last year.

“The two bills before us today aim to further these initiatives by elevating the issue at [DOT] and helping to prevent and deter human trafficking,” Nelson said.

Sen. Amy Klobuchar (D-Minn.), a co-sponsor, added the measures “should make a big difference.”

Senate floor managers have yet to indicate when the bills would be called up in the chamber.

Story by Eugene Mulero, Staff Report for Transport Topics

3PLs Report Freight Volumes Better in 2Q, but Margins Compression Lingered in Peak Season

Freight brokerage firms benefited from stronger volume and gross revenue in the second quarter but their net revenue and income will not be as fruitful because margins were tighter than a year ago during the peak season, according to industry analysts and executives.

Each of the six publicly traded third party logistics providers, or 3PLs, is expected to announce revenue growth but only three may generate higher profits than a year ago, according to a Bloomberg News consensus forecast.

XPO Logistics Inc., Echo Global Logistics and Radiant Logistics Inc. could report double-digit earnings growth, but C.H. Robinson Worldwide, Expeditors International of Washington and Hub Group are due to report double-digit declines, although Bloomberg News projects all six will be in the black.

Industry analysts forecast that earnings per share will range from a penny to 91 cents for the quarter ended June 30.

Tighter margins — the gap between the price that brokers charge and they pay a truck driver — explain why there is a dichotomy between revenue and profits, according to industry experts.

XPO Logistics, C.H. Robinson, Expeditors International, Hub Group and Echo Global Logistics rank Nos. 1, 5, 6, 28 and 39, respectively, on the Transport Topics Top 50 list of the largest logistics companies in North America. Radiant ranks No. 36 on the freight brokerage sector list.

“In the brokerage market, our sense is spot market demand increased significantly in June. In addition, spot market carrier rates outperformed the five-year trend throughout the quarter, which we believe could create net revenue margin compression for contractual freight levered brokers such as C.H. Robinson,” wrote Stephens Inc. analyst Jack Atkins.

The public narrative matches what several 3PL executives told Transport Topics when recapping the second quarter. In some cases, net revenue also increased year-over-year, although at a slower pace than the gross; in others, the net was flat to down year-over-year. (Privately held 3PLs often will disclose net revenue data but shy away from releasing net income figures.)

Gross revenue surged double-digit percentages at GlobalTranz Enterprises after completing three acquisitions in the first half of the year, including Worthington Logistics Solutions in June. GlobalTranz CEO Bob Farrell told Transport Topics that net revenue also rose “significantly” because the company is expanding very quickly.

Nevertheless, he acknowledged that peak produce season compressed margins with clients under annual contracts because when truckload capacity tightened and spot market rates spiked, drivers obtained the upper hand in price negotiations.

GlobalTranz ranks No. 13 on the Transport Topics freight brokerage sector list.

“Gross profit [margin] percentages in the 2Q of 2017 will be lower than it was in 2Q of 2016, but we’re growing so rapidly that our numbers are rapidly rising,” Farrell said.

Financial results were similar at Trinity Logistics where gross revenue surged 22% year-over-year. After deducting transportation costs, the results still rose but only about 3%. Chief Operating Officer Rich Clair said he was pleased with the results because freight volume grew among existing customers, even though negotiations with carriers became more challenging in the quarter.

Trinity Logistics, based in Seaford, Del., ranks No. 22 on the freight brokerage sector list.

“What we’re surmising is some of the larger carriers, such as the Schneiders and the Swifts, took trucks out of service in the fourth quarter of last year, maybe that has been enough to mute capacity a little bit. Particularly in the Southwest, we saw more resistance for price reductions on the carrier side in the second quarter than last year,” Clair said. “We’re wondering whether the smaller carriers are getting more data on the spot side to give them better pricing leverage than they’ve had in the past.”

Sunset Transportation of St. Louis is also increasing in size as freight volume, gross and net revenues were all up about 20% year-over-year.

“The pendulum began to swing in favor of carriers during the second quarter of 2017. Spot truckload freight availability reached its highest point since September 2015 (63% year-over-year), leading carrier experts to believe the great ‘freight’ recession is behind them,” the company wrote in an early July blog post.

Nevertheless, the company acknowledged that margins tightened at the end of the quarter.

“The compression happened with our contractual customers between Memorial Day and the Fourth of July with the typical spike in demand. But it’s also opened the door for us to assist customers without contractual arrangements by providing capacity at [higher] open market prices with better margins,” said Mike Fritz, Sunset Transportation carrier relationship manager.

“Looking ahead, we believe a key focus on quarterly earnings calls this earnings season will be the potential sustainability of the strength in June, or if this was a strong seasonal surge,” Atkins added.

Fritz said that he expects margins to ease until September or October, when “things may get dicey” for shippers and brokers because of the unknown effects of the electronic logging device mandate and the typical holiday season ramping up.

Story by Ari Ashe at Transport Topics

2017 State of Logistics: Less-than-truckload (LTL)

The once beleaguered $35 billion LTL market is enjoying a revival thanks to its substantial investment in technology, difficult-to-replicate hub-and-spoke networks, the boom in e-commerce as well as other non-traditional growth areas.

Simply put, it’s about market share and pricing power. The top 25 LTL carriers still account for nearly 90% of market share. And with giants FedEx Freight and UPS Freight upping the ante with multi-million dollar investments in technology and operations improvements, the LTL sector continues to enjoy pricing power over shippers that the highly fragment truckload (TL) sector does not.

According to David Ross, veteran LTL analyst for Stifel Inc., 2017 will be “generally good” for LTL carriers, with results improving as the freight year progresses.

“The expectation remains for better times ahead in LTL due to the prospect of lower taxes, reduced regulation, increased capital spending and the administration’s stated focus on domestic jobs, infrastructure and manufacturing,” says Ross. “In theory, these should all work to drive earnings per share higher for LTL carriers—but in practice it may take a while.”

For some leading LTL carriers, it’s already happening. XPO Logistics, the nation’s 2nd-largest group of LTL carriers, earned a profit in the first quarter of a year for the first time since 2010. According to CEO Brad Jacobs, XPO, the former Con-way Inc., is benefitting from the boom in e-commerce, last-mile delivery capability, investment in technology and cross-selling among other XPO units.

Dating back to last year, overall LTL demand is picking up, if only slightly. Fourth quarter daily tonnage and shipments at public LTL carriers rose about 1% on average, but at least both were positive for the first time since the fourth quarter of 2014. Low-single-digit growth rates are forecast for the rest of this year.

Stifel’s Ross says that the key to 2018 growth is an improving manufacturing sector and reduced truckload supply, which might be sufficient enough to cause lighter-weight TL shipments to flow back into LTL networks.

Ross adds that LTL pricing should be higher for the rest of this year. In fact, revenue per hundredweight (yield–not pure price) rose on average 1.8% in the fourth quarter. He’s currently forecasting 2% higher rates this year.

Unlike the TL market, which recently saw a $6 billion merger between Knight and Swift Transportation, analysts are not expecting similar moves in LTL due to the fact that public LTL carriers already have their networks largely built out. Few analysts are expecting any mega-mergers in LTL. “There simply aren’t any benefits,” says Ross, who adds that smaller, “bolt-on acquisitions” could make more sense down the road.

However, Saia—the only public LTL without a national footprint—is moving down the organic expansion path. “Even if Saia buys someone to accelerate its growth into the Mid-Atlantic or Northeast, it probably won’t be a publiccarrier, as they’re all too big,” adds Ross.

Of course, all these LTL companies are chasing Old Dominion Freight Line (ODFL), which posted a sector-leading $195 million in net income last year while posting an 83.8 operating ratio, a mark that leads the LTL sector.

ODFL vice chairman and president David Congdon says that his company formula for success is simple: 99+% on-time service in regional, interregional and national market lanes at competitive rates with low claims. That’s easy to say, but difficult to do consistently in the highly competitive LTL market place.

Story by John D. Schulz at Logistcsmgmt.com