What You Can Expect with New Entry-Level Driver Training Regulations

After the better part of a decade, the Federal Motor Carrier Safety Administration (FMCSA) is raising the professional standards for new drivers with a new training requirements.

The Entry-Level Driver Training (ELDT) should actually help the industry attract and hold more quality drivers and help off-set the current driver shortage.

Starting February 7, 2020, if you are interested in becoming a truck driver, you need to complete a training program before you can get a Class A or Class B Commercial Driver’s License (CDL). This training requires aspiring drivers to complete a curriculum of basic working knowledge and behind-the-wheel (BTW) instruction with one of the FMCSA’s registered training providers.

What are the new ELDT rules?

  • Minimum training requirements will now be set at the federal level

  • Training providers must record and report hours spent behind the wheel to the Department of Transportation

  • Training providers are required to register and self-certify students

  • Instructors are now required to have a minimum two years of driving experience, a clean MVR, and a medical certification for classroom, both on the road and private range instruction

  • Curriculum consisting of 31 theory course topics and 19 BTW skills will be tested at the state Department of Motor Vehicles

Any organization that provides ELDT that meets state’s requirements can be a training provider. However, after February 7, 2020, the new Training Provider Registry (TPR) will require CDL training providers to apply in order to join the registry.

What are the costs for ELDT programs?

ELDT programs can cost up to $10,000, but because of the value of hiring a trained driver, there are companies that offer students reimbursement plans. In fact, a student could receive up to $300 per month towards the cost of tuition. There are no contractual agreements and the student receives the reimbursement money as long as they drive for the company.

What are the risks for carriers with ELDT?

Unfortunately, a lot of logistics companies are seeing their drivers quit just months after completing their ELDT. When this happens, the company is now down an employee and the thousands of dollars that paid for their training. This is a major financial risk and is the reason why more companies are opting out of paying for ELDT.

How does ELDT benefit the industry?

Undoubtedly, the stability that comes along with a company-paid training program is a big consideration for potential drivers, and companies that offer reimbursement for ELDT are showing drivers that they are dedicated to their employees. Another major benefit of the ELDT regulations is having more fully-trained drivers on the road who are safe. Moreover, the rise in quality drivers could help combat driver shortage in the industry.

 

What do the logistics economists see in our future?

After such a long period of economic recovery, some economists expect we are overdue for a recession. Is all this recession talk warranted or just media noise we should ignore?

We rounded up commentary from top logistics economists to see if a recession is on our horizon and how it could impact our industry.

 

ATA economist Bob Costello has concerns about the state of our economy but isn’t expecting a recession. He recently spoke at the American Trucking Associations’ National Accounting and Finance Council where he indicated the increased concerns about a recession mean many businesses will operate in a more conservative way which can negatively impact the economy.

Costello said “The risks for a mild recession have increased. It’s not my forecast. All I am saying is, the risks have increased … The theme is slowing but growing.” He also noted the unemployment rate is the lowest it has been since 1969. “We now have significantly more job openings than we have unemployed people,” he said. In a recent Transport Topics article, Costello’s break down of freight statistics noted inventories have gone up in the first quarter of 2019, driven by fear of possible Chinese tariffs, not poor consumer demand. [1]

For fleets, the economic uncertainty poses the biggest danger to smaller carriers who are at the mercy of spot markets, which have seen rates drop in recent months. Spot market rates dropping comes at a time when smaller carriers increased pay to attract drivers. The increased pay and lower spot rates are coming together at a bad time, Costello said.

Nariman Behravesh is the chief economist with HIS Markit and predicts the chance of a recession in 2019 is only about a third or lower according to a Supply Chain Brain article. He spoke at the TPM 2019 conference where he expressed a less alarmist outlook than some other economists. While he noted troubling trends, he still believes we have a positive short-term outlook in the U.S. Looking to the year ahead, “unless we make some serious policy mistakes, U.S. growth of around 2 percent is in the cards,” Behravesh said. “But we can still blow this one if we’re not careful.”[2]

Noël Perry is the chief economists for the TIA and for Truckstop.com. He spoke at the TIA’s conference in April and noted he sees another year of growth before an economic downturn in 2020 according to an article in Transport Topics. “Recessions can be very nasty,” says Noël Perry, “especially for spot markets.” “Contract freight is doing better than the spot market,” he said. “The spot market has been hit hard … I think you are going to see more and more fleets going out of business.”[3] While he is optimistic for 2019, his 2020 outlook is a bit more pessimistic. Mr. Perry stated in his TIA commentary, “If China and Mexico tariffs go into effect, it could mean up to a .5% drop in GDP.  Enough to kick off a recession.  Probably not, but the drag could combine with other downside risks.”

 

The consensus seems to be that there are certainly market risks we all need to be aware of, but fears of an impending recession are overblown.

 

 

 

 

[1] https://www.ttnews.com/articles/ata-economist-bob-costello-recession-remains-uncertain-expect-more-carrier-closures

[2] https://www.supplychainbrain.com/blogs/1-think-tank/post/29472-a-recession-may-be-coming-but-not-just-yet-one-optimistic-economist-believes

[3] https://www.ttnews.com/articles/growth-continues-risk-recession-looms-larger-economist-says

LOGISTICS INDUSTRY NEWS IN 2 MINUTES: Q2 2019

Only have a few minutes to gain insight into the latest news? Our quick logistics update is perfect for you. 

Tightened Capacity During International Roadcheck Week June 4-6

Each year the Commercial Vehicle Safety Alliance’s (CVSA) conducts a three-day commercial motor vehicle and driver inspection and enforcement event. During this 72-hour period the North American commercial vehicle inspectors perform tens of thousands of intensive 37-step Level 1 inspections on drivers and vehicles. This year, extra emphasis is being placed on steering and suspension systems. Many drivers would rather not deal with these intense inspections and take their trucks off the road causing a capacity crunch during the time period.

  

New Report Finds Trucking Industry Revenues Topped $700 Billion

American Trucking Associations just released the latest edition its annual compilation of trucking industry data – ATA American Trucking Trends  – highlighting the industry’s dominance over the freight market.

Among the findings in this year’s edition of Trends:

  • Trucks moved 10.77 billion tons of freight, 70.2% of all domestic freight tonnage

  • The industry generated $700.1 billion in annual revenue in 2017, 79.3% of the nation’s freight bill

  • The industry moved 69.1% of all trade between the U.S. and Mexico, and 57.7% of Canada-U.S. trade

  • Roughly 7.7 million people were employed in jobs related to trucking activity, including 3.5 million drivers

  • Of those 3.5 million drivers, there were 1.7 million heavy and tractor-trailer drivers. Minorities account for 40.6% of all drivers and 6.2% of truck drivers are women.

 

The TIA Presses Congress For Infrastructure Investments

The Transportation Intermediaries Association will hold their annual 3PL Policy Forum in Washington, D.C., June 11-12 to meet with members of Congress and their staff. They are seeking to rally behind the need to invest in infrastructure and gain commitment from our elected officials to fund projects to improve our roads and bridges.

 

Competitive Market Boosting Driver Pay and Benefit Packages

New data reveals that driver pay has increased with the rising demand for freight transportation services. “This latest survey shows that fleets are reacting to an increasingly tight market for drivers by boosting pay, improving benefit packages and offering other enticements to recruit and retain safe and experienced drivers,” said ATA Chief Economist Bob Costello.

Along with increased pay, Costello said fleets were offering generous signing bonuses and benefit packages to attract and keep drivers. “I expect that trend to continue as demand for trucking services increases as our economy grows.”

PARTNER WITH TREK FOR A DEPENDABLE, EXPERIENCED LOGISTICS PROVIDER.

CONTACT US

Improving Truck Repair with Prognostic Maintenance

Prognostic maintenance predicts the time a system or a component will no longer perform its intended function. It is based on based on the analysis of failure modes, detection of early signs of wear and aging. As condition-based maintenance is becoming more mainstream for commercial vehicles, experts are seeing a lot of changes to the transportation industry. According to Transport Topics, these changes are transforming the trucking and logistics industry in more ways than one… expanding real-time operational insights, fostering an improved warranty process, and accelerating the sales of replacement parts, just to name a few. Experts says the trucking industry has made a start in the direction of implementing proactive alerts to supplement diagnosis and repairs.

The Transport Topics article references some interesting data from a recent survey of 250 owner-operators and midsize fleets:

  • 33% of the companies reported predictive maintenance was the top technology investment they planned in the next 12 to 24 months

  • 28% reported they expected predictive maintenance and route optimization to be the technology with the biggest impact in the next three years

The advantages of condition-based maintenance for trucking are clear: only those vehicles that can complete the trip are put into service and fewer service failures that can work against the company and their customers. In addition, repairing parts of systems based on need could be much more efficient than over-maintaining according to the calendar or odometer.

Prognostics will not prevent a part from failing, but it could drastically reduce service interruptions or breakdowns. There are still unpredictable variables that cannot be avoided.

Part of what predictive maintenance currently helps with:

  • Oil changes

  • Valve trains

  • Air drier cartridge replacements

  • Diesel particulate cleanings

  • DEF filters

The future of predictive maintenance could help with monitoring and diagnosing in real time:

  • Engine

  • After treatment systems

  • Automated transmissions

  • HVAC systems

  • Low-voltage disconnects

  • Cab components

  • Drivetrain

  • Wheel ends

As technology continues to advance and increasingly complex and expensive equipment is needed to do ever more time-critical jobs, condition-based maintenance will allow fleet owners and managers to get a handle on costs and increase efficiency.

 

PARTNER WITH TREK FOR A DEPENDABLE, EXPERIENCED LOGISTICS PROVIDER.

CONTACT US