Discussion of Motor Carrier Safety Regulations

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The Motor Carrier Safety Advisory Committee consists of 20 members and they met in June to discuss motor carrier safety programs and safety regulations.  This committee consists of truckers, law enforcement officers, public safety nonprofits, union officials, and truck and bus trade organization executives.  In the meeting they talked about recommendations, look at  regulations that need to be added, what news to be updated, what is unnecessary, and which has costs that outweigh the benefits.  This meeting was in the hopes of making some much needed changes that have been on hold.  One of the committee members, Todd Spencer who is the Executive Vice President of the Owner-Operator Independent Drivers Association, agrees that the new administration is offering an opportunity to change the current bad regulations that are in act.  Here is a list of Motor Carrier Safety Advisory Committee (MCSAC) Members.

From the CEO's Desk: Becker Logistics continues to grow

Our first quarter results were excellent. Revenue grew in Q1 2017 by 17%, compared to sales from Q1 2016 levels. We were really excited by our net income growth of 76% (this was stronger than expected) with total load count increasing by 19% over the same period.

As Becker Logistics is in the middle of Q2, we are optimistic for this quarter to do even better than Q1 and definitely from Q2 of 16. Certain segments of our revenue streams are forecasted for growth y/y; Total TL volume +28%, LTL volume +10.9%, refrigerated volume +20.8% and adding momentum to our managed freight services division 3PL 360.

We are excited to share that Becker Logistics is celebrating 20 years in business. It seems like yesterday that we opened our doors on May 16, 1997. Our employees have built a great thing here.  This is what we're looking forward to in 2017; We have hired 9 employees in the Q1 and 6 employees halfway through Q2 with hopes that these new team members sustain our current business and continue to support our growth.  We have seen our Barrington office grow in revenue 47% y/y and we will be opening a Branch office in Chicago, IL August 1.

We would like to acknowledge and thank all of our customers, carriers, vendors, associations and employees for making this all possible. Without you our success and this growth would not have been possible.

Continuing Cargo Thefts:

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According to Cargo Net, in the first quarter of 2017 $28.7 million has been stolen in cargo.  The average loss per incident is said to be around $149,522.  31% of all cargo thefts are in food and beverage with the most thefts happening in secured yards, warehouses, and parking lots.  California is the most frequent area for incidents to happen.  They have a 40% increase year over year in cargo thefts.  

These are the 10 counties with the most cargo thefts.

  1. Los Angeles County, CA
  2. Dallas County, TX
  3. San Bernardino, County, CA
  4. Cook County, IL
  5. Miami Dade County, FL
  6. Harris County, TX
  7. Tarrant County, TX
  8. Middlesex County, NJ
  9. Will County, IL
  10. Riverside County, CA

Two years ago Becker Logistics had $112,000 worth of copper stolen.  Becker thought they hired a carrier we had been working with for 8 years to bring the load from Alabama to Chicago.  What we found out too late was that the carrier had gone out of business and someone else had stolen their name and purchased insurance so that brokers would not suspect what was happening.  The theft was successful: the copper was stolen and Becker ended up having to pay the company for the lost cargo.    

Around the same time a similar situation happened with Becker Logistics with a load of nuts.  The people who stole the authority came with a different truck as well.  In, this situation the shipper ended up taking care of it.  

These are not isolated incidents.  Law enforcement is making strides in preventing cargo crime but criminals are getting more savvy as well.  Companies are learning that they now have to safeguard their loads so that they will have as few thefts as possible.  Unfortunately, like Becker Logistics, many of these companies are learning the hard way that they need to check every little thing before sending the shipments out.  

 

Cargo Theft Reaches $114 Million:

      This past year cargo theft overall has dropped for the third year in a row, however the value of the stolen loads has increased.  According to Cargo Net the value of the missing freight peaked at $114 million compared to that of $100.5 million in 2015.  The police believe that the fluctuation in numbers could be related to more frequent reporting and greater awareness of cargo theft.  The top state for cargo theft was California with 228 incidents, followed by Texas with 135 incidents and New Jersey with 73 incidents.  The most common commodities were food and beverages, with second most common being electronic goods.  The top commodity stolen has varied from prior years, in 2015 the biggest loss was that of the pharmaceutical and medical industry.   Investigators have said that law enforcement has done an excellent job  responding to the reports of cargo theft.   Unfortunately, it remains difficult to prevent future theft because the culprits responsible continue to be strategic with their methods and locations when committing criminal offenses.  Increasing awareness and safe practices across the freight industry  will help deter thieves and hopefully help overall cargo theft continue to decrease year after year. 

What you need to know about the Federal Food Safety Modernization Regulations:

April 6th, 2017 brings new regulations on the sanitary transportation of food products.  Regulators from the Food and Drug Administration prepare to crack down on shippers and carriers in the supply chain that do not comply.  These new regulations are in response to the 2011 Food Safety Modernization Act that moves from preventing food contamination rather than just responding to it when it does happen.  This deadline affects larger shippers and carriers while smaller operators have until April of 2018.  The key requirements state:

·         All equipment must maintain safe temperatures while transporting food            and must be cleaned between runs

·         Proper training of carriers transporting the goods

·         Keeping detailed records and, of course, better separation of raw food            from other products. 

This will better protect food from contamination during the transportation to and from stores.  

Intermodal traffic dropped for the first time since the recession:

Railroads transported 13.5 million intermodal containers in 2016.  Despite this number, the overall transportation declined by 1.6% from 2015 when 13.7 million containers were moved.  Although it was a tough year for railroad freight overall, the fourth quarter indicated a positive rise.   Several factors could have contributed to this decline; a weaker economy, disorder in energy, or even the drop in truck rates.  The cheaper cost of a truck may have resulted in more shippers switching freight modes from rail to over - the -road to save money.  However, many forecasters predict a stronger year for intermodal in 2017.  Truck rates will continue to rise and tuck capacity will tighten as electronic logging monitors are enforced more regularly.  For these reasons, we should see an increase in intermodal freight as we move through the year ahead.   

Federal Trucking Regulators Introduce Two New Rules:

The FMCSA (Federal Motor Carriers Safety Association) announced last week the new rules for drivers.  The first change is in the training requirements for truck and bus drivers.  The prior proposal would have required truck drivers to complete 30 hours of training at the wheel before they were even eligible to complete the commercial driver license test.  However the new rule states that training hours are determined by the instructor’s evaluation and how well the trainee performs the driving procedures.  A score of 80% is required to pass the evaluation.  The second rule announced allows motor carriers the chance to document when a new hire either refused or had failed their new driver drug and alcohol tests.  This rule additionally requires that employers routinely check the database against current employees to see if drug or alcohol violations occurred in the past that would decrease their ability to complete ‘safety-sensitive’ functions as part of their driver duties.  Both rules go into effect in the coming months, but do not require compliance until the year 2020.  This lengthy period is to allow the necessary time to design the technology that would be needed.  It will be required that the new driver must give consent before their name is checked in the database.  If an employee does test positive for drugs or alcohol, they must complete the return-to-duty drug/alcohol rehabilitation process before they can begin working again.  Read the full article in the Transport Topics Magazine issued week of December 12, 2016.

Freight Forecast: Year-Over-Year Decline

       According to the Americas Commercial Transportation (ACT) Research, numbers have indicated a 28% decrease in truck orders from September this year to that of the same month in 2015.  Reports have shown a total of 13,900 units in September during a traditionally slower month out of the year.  ACT Vice President Steve Tam was quoted in the Transport Topics magazine saying, “This level of order intake is in line with how we see the industry performing.  We expect to see a modest seasonal uptake in the fourth quarter, probably around 19,000 units.”  Analyzing month by month on year-over-year basis the average numbers slumped by 40%.   The article in Transport Topics Magazine informs on various statistics similar in nature but then goes on to note a relatively positive trend.  Earlier in 2016 the inventory of unsold heavy trucks peaked at 25,000 but more recent data has shown that the number has now dropped closer to 15,000. Analysts from the ACT Meeting discussed much about the state of the U.S. Economy and left readers with a more positive thought.  “The truck forecasts are built on a few more years of steady, though uninspiring economic growth.  There do not seem to be serious warning signs for a recession currently.”    Read the full article in the Transport Topics Magazine issued week of October 10th, 2016.