Stay tuned if you’re moving your goods across the country or borders by land. I’m checking out the latest developments, trends, and opinions, and I’ll share my thought leadership right here – about every month. Feel free to interact and leave a comment or reach out to me directly.
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“The only way to do great work is to love what you do.” – Steve Jobs
Brian Petrie, Senior Vice President of Land – Sales for DB Schenker, USA
Q2 Updates
U.S. Rail Reform on the Horizon
Railroads are responsible for moving approximately 30% of all freight in the United States, making it an essential mode of transportation for the country’s economy. However, recent safety incidents have highlighted the need for improvements in rail safety. One such example is the East Palestine, Ohio, disaster where hazardous materials were spilled, causing concern for local communities.
So, how can Congress help enhance rail safety? There are three things to consider: patience, recent legislative history, and economics.
It’s important to note that investigations by the National Transportation Safety Board (NTSB) could take several months to complete. In the meantime, House and Senate committees can begin developing their own rail safety legislation. While doing so, they need to learn from what worked and what didn’t work in the bipartisan infrastructure law of 2021, also known as the Infrastructure Investment and Jobs Act (IIJA).
One area where Congress has already found common ground is on grade crossings, which are intersections where roads and railroads meet. There are 212,000 railroad crossings in the US, which are often dangerous and involve fatalities. Thankfully, the IIJA includes funding to improve these crossings and build more overpasses, making transportation safer and more efficient. This is great news for anyone on the road, as most people would agree that waiting for a long train to pass is about as exciting as watching paint dry.
In recent years, there has been a push to mandate a minimum crew size for trains. However, with the development of new technologies, there may be a need for new jobs and roles to be created. Rushing into mandating crew sizes may not be the best option, as automation technologies could provide safer alternatives for communities.
Despite recent accidents, it is important to remember that freight rail is still the safest and most affordable way to transport goods, even hazardous materials. DB Schenker understands the significance of safely and efficiently transporting customers’ freight, utilizing our expertise and extensive geographic coverage for Full Truckload, LTL, and Intermodal shipments. I encourage you to check out how we do business.
With a shared commitment to safety and innovation, we support Congress’s effort to ensure a sustainable future of rail transport and encourage our country to support future legislation that fosters safer solutions across our industry. I will keep you updated with all the latest on this rail reform, so be sure to check back. soon.
American Transportation Research Institute (ATRI) 2023 research projects
The American Transportation Research Institute (ATRI) just revealed their top five research projects for 2023 at the American Trucking Associations’ Mid-Year Management Session, and let me tell you, they’re tackling some really important stuff.
Their projects will cover expanding truck parking at public rest areas, breaking down the barriers for women to become truck drivers, figuring out how complete streets affect freight mobility, diving into the shortage of diesel technicians, and tackling the costly issue of driver detention. Yep, they’re leaving no stone unturned. Let’s highlight a few.
Starting with their number one focus, the ever-present problem of truck parking facilities at public rest areas. It is estimated that there is one parking spot for every 11 drivers! ATRI’s board has already approved a study to crunch the numbers and measure the potential impacts.
“If states would examine their footprint at public rest stops, it could just be as simple as putting down more pavement at a location where there is already a facility. It’s land that states already own,” ATRI President and chief operating officer Rebecca Brewster told Transport Topics. Smart, right? They’re hoping this study will spark some ideas for state DOTs to make some improvements.
Another notable focus – ATRI is addressing the obstacles faced by women aspiring to become truck drivers. Women In Trucking Association estimates that only 13.7% of drivers in 2022 were women.
ATRI is conversing with current and former female industry professionals to figure out what’s holding them back. Some researchers speculate that childcare, safety concerns, and even the truck parking issue could be factors. DB Schenker values our high representation of female executives and employees, and we are always looking to support initiatives that promote diversity and inclusion. It’s all about identifying the hurdles and finding solutions, so I will be sure to update you as we hear more about their findings.
These research projects are just a glimpse of the amazing work ATRI does on a regular basis. They’re providing valuable insights and data-driven solutions to enhance safety, productivity, and sustainability within the trucking industry, and I love to see them finding ways to level up the industry. Stay tuned for more updates as these projects are underway!
California’s Zero-Emission Truck Sales Mandate Receives EPA Approval
Hey there! Did you hear the news? The U.S. Environmental Protection Agency just approved California’s Advanced Clean Truck regulation, which means that truck makers will be required to sell an increasing percentage of zero-emission trucks as part of their annual sales in California from 2024 to 2035. This plan also includes the goal of having airport shuttle fleets made up of mostly zero-emission buses.
According to the California Air Resources Board (CARB), by 2035, the sales of zero-emission vehicles will need to reach the following percentages:
- 55% of Class 2b – 3 light and medium-duty truck sales
- 75% of Class 4 – 8 medium to heavy-duty straight truck sales
- 40% of truck tractor sales
California has been authorized to impose stricter emissions standards than other states under the Clean Air Act because of its previous struggles with severe air pollution. In fact, California’s emissions standards have become the benchmark for automobile manufacturers across the country. Governor Gavin Newsome is very pleased with this regulation, stating, “We’re leading the charge to get dirty trucks and buses – the most polluting vehicles – off our streets, and other states and countries are lining up to follow our lead around the world.”
In addition to California, eight other states have either taken steps or are in the process of adopting the Advanced Clean Truck regulation, representing 22% of the overall truck market in the country. CARB has even proposed to exclude gas and diesel trucks on the drayage register, which is a list of trucks that are authorized to carry cargo in and out of California’s ports and rail yards. However, there may be some technological challenges with this proposal that we’ll hear more about when the board votes on it in May.
While the growing popularity of electric vehicles is great for the environment, it’s important to consider the complete life cycle of EV batteries within our ecosystem. We’ve made huge strides in the last decade, but we still have some challenges to overcome. However, this presents an opportunity for innovation and collaboration across industries to create a more sustainable future for transportation. The success of EVs will depend on both technological advancements and effective policy-making and public awareness.
Let’s spread the word about these updates and stay tuned for more developments in ground transportation!
Of course, all of us here at DB Schenker is very much part of this environmental initiative. We recently brought our first Prototype Volta Zero truck on the road and plan 150 vehicles to be rolled out this year – check out the full story here.
Bipartisan Bill Aims to Address Supply Chain Challenges in Trucking Industry
Hey there, let’s chat about the current state of the trucking industry. Last year, we saw some serious hiring and retention challenges due to a shortage of certified truck drivers, which led to higher expenses and delays. In fact, it was estimated that there were almost 80,000 fewer truck drivers on the road than usual. To help fix this problem, bipartisan U.S. lawmakers introduced the Strengthening Supply Chains Through Truck Driver Incentives Act in 2022.
This legislation proposes two-year refundable tax credits of up to $7,500 for Class A commercial driver’s license holders who drive at least 1,900 hours in a year, and $10,000 for new drivers or those in a registered trucking apprenticeship. The goal is to increase the number of qualified truck drivers and to reward them for their hard work during the pandemic, which kept the supply chain running smoothly.
Although the bill was not passed last year, it was reintroduced by House representatives this month. It’s great to see that the bill still has massive support from a range of organizations, including the American Trucking Association, American Loggers Council, National Grocers Association, International Foodservice Distributors Association, American Building Materials Alliance, Forest Resources Association, and many more.
Representative Mike Gallagher noted in his recent press release that the proposal is “a common-sense way to recruit and retain more drivers to keep our shelves stocked and our economy moving.” He added that the industry is “facing a massive workforce shortage that’s disrupting nearly every aspect of our supply chains.”
Chris Spear, President & CEO of the American Trucking Association, commented, “reducing the nationwide shortage of qualified truck drivers will require investment in developing the next generation of trucking talent.” He believes that this bipartisan legislation will make a significant difference in the lives of new truckers, helping them move into one of the few professions in today’s economy that can provide a middle-class lifestyle without the time and expense of a four-year college degree.
I agree with Chris, the demand for truck drivers is high and projected to keep growing. However, new truckers face numerous challenges, such as high startup costs for equipment, long hours, and a shortage of training programs. To Gallagher’s point, we need to promote economic growth by driving economic activity. This bill is an excellent way to start making positive changes in the lives of our truckers, and I’ll be sure to keep you updated as the bill progresses through the legislative process.
It was 6-months ago that we moved from non-asset land transport to owning our 1,900-unit fleet of trucks. Having the best truck drivers in our fleet is top of mind.
Q1 Updates
January Sets New Record for Truckload Freight Volume
Hey there! The trucking industry has been pretty busy lately! According to DAT, the Truckload Volume Index (TVI) hit record levels in January, with an increase in truckload freight volume across spot vans, reefers, and flatbeds. This indicates a high seasonal demand for truckload services.
DAT Freight & Analytics provides data-driven solutions and analytics for the transportation and logistics industry, and the TVI indicates the variation in the number of loads picked up in a given month. The index number is normalized monthly to ensure accurate data representation, accounting for new data sources. A baseline of 100 represents the number of loads transported in January 2015.
Ken Adamo, the Chief of Analytics at DAT, explains that line-haul rates experienced a significant increase, and spot truckload freight rates finished the year on a positive note. He also notes that the peak season for truckload freight arrived later than usual in December, with winter storms and a rush of holiday sales.
The recent drop in fuel prices has also brought relief to many carriers, as they can offer lower rates while still maintaining profit margins. This can lower spot market rates for vans, flatbeds, and reefers, which can be especially beneficial for shippers and brokers who rely on spot market rates to reduce transportation costs.
It’s recommended to closely monitor the Truckload Volume Index throughout the year to gain valuable insights into market trends and anticipate changes in demand. This information can help carriers and brokers optimize pricing and capacity strategies while shippers can plan transportation needs accordingly. Additionally, the TVI provides a benchmark for industry players to compare their performance against their peers and optimize their operations.
Overall, this surge in truckload freight volume plays into the bigger picture of the economy, as it indicates increased demand for goods and services being transported across the country. As a result, it can also have an impact on consumer spending and overall economic growth. It will be interesting to see how the trucking industry continues to evolve and adapt to these changing market conditions. Stay tuned!
February Rebound in Class 8 Truck Orders – Demand for Transportation Services continues
I have some news to share about North American Class 8 trucks. So, a recent report from ACT Research indicated that there was a drop in orders for these heavy-duty commercial vehicles from October 2022 to January 2023. However, things started to look up in February when orders increased to 23,600 units, which is a growth of 12% compared to the same period last year.
Just to give you some context, North American Class 8 trucks are an essential part of the transportation industry. These are the big rigs or tractor-trailers that transport goods across the continent. Trucking companies invest a lot in these trucks, and an increase in orders suggests that they’re willing to invest even more to meet the growing demand for transportation services.
According to Eric Starks, Chairman of FTR Transportation Intelligence, “Total net orders reached 303,000 units over the past year. In any market, this is a strong number, and it’s especially welcome news that demand has not collapsed, and fleets still have access to capital.”
Navistar, the manufacturer of International trucks, even announced that all of their Class 8 production had been allocated for 2023, and they’re currently receiving orders for 2024. Customers are also placing orders for the new International S13 integrated powertrain, which is scheduled to commence production later this year.
An increase in Class 8 truck orders is usually seen as a positive sign for the economy because it indicates an increase in demand for the transportation of goods. This demand can come from various sources like growing manufacturing output, increased consumer spending, and expanding e-commerce. By investing in fleets to meet this demand, trucking companies support economic growth, create job opportunities, and drive business activity in related sectors.
At DB Schenker, we’re committed to keeping our team and the industry moving forward. That’s why we’re proud to announce the latest addition of 1900 trucks to our fleet. Investing in transportation services makes us better equipped to serve our customers and contribute to the economy.
World Bank grants Ukraine $50 million for road transport infrastructure.
Latest global news – The World Bank unveiled a $50 million initiative to repair and restore Ukraine’s transportation network to provide immediate humanitarian aid, facilitate recovery, and enhance the capacity of import and export routes.
Here’s the background: Anna Bjerde, Vice President for Europe and Central Asia at the World Bank, made a statement on the grant, explaining that “Ukraine needs urgent investments to repair damaged essential transport routes.” According to the World Bank, over 2,100 Ukrainian villages that have been freed since the start of the conflict are facing the challenge of disrupted transportation links because of the war.
This means there is the finance for the acquisition of modular bridges, necessary equipment, and materials to quickly repair road-to-bridge connections and crucial rail lines that have been damaged. It will also assist in financing the procurement of flatbed rail cars and additional rolling stock to increase the railway’s ability to transport cargo in containers.
Let’s be real, restoring Ukraine’s transportation infrastructure is key to enhancing the capacity of import and export routes, and that’s huge for the country’s economic stability and growth. The faster we can get this done, the faster we can eliminate delays, lower costs for international trade, and effectively deliver aid to those in need. And, as we all know, Ukraine is a strategic route for logistics between Asia and Europe, making this logistics infrastructure not only crucial for immediate aid efforts but also for long-term economic prosperity.
The proposed SHIP IT Act aims to enhance trucking and supply chain logistics.
I am also excited to share with you the introduction of the Safer Highways and Increased Performance for Interstate Trucking (SHIP IT) Act! This piece of legislation, brought to us with support from both parties by Dusty Johnson and Jim Costa, is going to modernize the way we operate during emergencies and streamline the entire process of transporting goods throughout the United States.
Johnson believes the act “increases safety and shipping capacity for truckers, provides recruitment and retention incentives for drivers and includes flexibility during times of emergencies or black swan events.” As a result of the COVID-19 pandemic, Americans faced numerous disruptions in the freight industry. The SHIP IT Act aims to address these gaps, keep consumer costs low, and streamline the process for shippers to transport goods throughout the United States.
This legislation also allows truck drivers to apply for Workforce Innovation and Opportunity Act grants, incentivizes new truck drivers to enter the workforce through targeted and temporary tax credits, streamlines the Commercial Driver’s License (CDL) process, and expands access to truck parking and rest facilities for commercial drivers. These provisions aim to address the challenges faced by the trucking industry and support the growth and development of the sector.
I can tell you, the support for this act is strong, with trucking manufacturers and over 80 members of the Shippers Coalition praising its potential for improving the supply chain, boosting shipping capacity, and easing the workload on truck drivers. I think we can all agree, improving the efficiency of goods transportation on highways is key to being more environmentally conscious and prioritizing safety.
I believe safe commercial driving is essential for maintaining the public’s trust and confidence in the trucking industry. The need for more drivers across the industry is well-documented, and I’m excited by this development. Find out more about our recently enhanced US domestic and cross-border trucking products, including our newly acquired 1,900-unit fleet of trucks and 2,100 employees.
