Trucking will be dealing with familiar tough issues next year, as well as some that may have a new twist, whether it's in the boardroom, in the cab or in Congress.

On the business side, issues fleets will need to stay on top of in 2013 include the economy, fuel prices and the driver shortage. On Capitol Hill, hours of service, electronic logs and CSA are at the front of the line
2013: 6 Key Issues Fleets Face
2013: 6 Key Issues Fleets Face
, not to mention a long list of other regulator y issues. Another issue is the need to find a solution to the highway funding puzzle.

This year's highway bill, Moving Ahead for Progress in the 21st Century, was only a two-year patch for the key issue of funding. Congress will soon have to start committee work on how it will pay for the next stage of the national highway program.

Earlier this year Congress gave inklings of a willingness to raise highway money through fuel taxes, but resistance to that idea remains strong.

In addition, trucking interests on Capitol Hill will have to make room for a new player in highway policy negotiations.

The small group of trucking companies that lobbied for mandatory electronic onboard recorders in the recent highway bill is on a mission to apply the same focus to a half-dozen additional safety initiatives.

The Trucking Alliance, an eight-member group of trucking companies, is not nearly as big a player as American Trucking Associations or the Owner-Operator Independent Drivers Association, but it is focused and determined.

Its agenda for the next two-year congressional cycle is to promote hair testing for drugs, creation of a drug and alcohol clearinghouse, mandatory speed limiters, higher financial requirements for would-be truckers and consideration of alternative compliance methods for determining safety fitness.

We turned to the American Transportation Research Institute's annual survey of Critical Issues in the Trucking Industry, as well as our own editors expertise, to develop the following list of top issues for 2013.

1. CSA

Compliance, Safety, Accountability, or CSA, as the Federal Motor Carrier Safety Administration calls its flagship enforcement program, will be a work in progress for the foreseeable future.

The program is generally acknowledged to be an improvement over the previous SafeStat system, but some details have been criticized and the agency has been pressed to open its decision-making to public scrutiny.

In response, the agency asked a panel of advisers to review the program and come up with suggestions for improvements.

The Motor Carrier Safety Advisory Committee, a group of 19 executives from the industry and the enforcement and safety advocacy communities, is planning a review that will include research that is critical of the program.

The review will start at the beginning, covering the programs focus, priorities and objectives, and cover details such as how well the data reflects safety performance and predicts risk.

It also is going to look at regional disparities in how data is reported, how insurers use the system and how shippers and brokers use the data to make decisions about which carrier they will hire.

Meanwhile, the agency is proceeding with twice-yearly revisions of CSA details, and is working on a new approach to the hot-button issue of crash accountability. In an analysis due next summer, the agency will look at three questions:

1. Are police accident reports reliable enough to determine accountability?
2. Are the benefits of determining accountability worth the costs, which are about $3 million a year?
3. How should the agency manage the process, giving the public a chance to participate?

From this research, the agency will decide whether, and how, it can include accountability in its measurement of carrier performance.

The agency needs to get out a Notice of Proposed Rulemaking regarding its changes in how it makes a safety fitness determination, says John Hill, former FMCSA administrator and now a trucking consultant as head of The Hill Group.

This rule, which the agency is expected to propose early next year, will formally incorporate the CSA data and rating system into a standard for determining if a carrier is fit to operate. Right now, many complaints contend that the CSA program has changed the way fleets are regulated, without going through the official regulatory process.

I think the sooner the agency can get out an NPRM about safety fitness determination the better off we're all going to be, Hill says.

2. Hours of Service

The new hours of service rule is supposed to go into effect in July, but that date is not a sure thing.

The rule is in federal appeals court, challenged by trucking and shipping interests led by ATA, and by safety advocates led by Public Citizen.

Depending on what the court decides, the case could be appealed to the Supreme Court, or the FMCSA could be required to go back and make changes.

Briefs have been filed, but as HDT went to press, oral arguments had not yet been scheduled. Typically, the court takes two to three months after oral arguments to issue a decision.

ATA and its allies have asked the U.S. Court of Appeals for the District of Columbia Circuit to strike several provisions of the rule, including restrictions on the 34-hour restart, the half-hour break requirement and the narrowing of the short-haul exemption.

ATA contends that the rules established in 2004 work well and have contributed to significant improvements in industry safety.

Safety advocates hold that FMCSA erred when it preserved the 34-hour restart and 11-hour driving limit.

In its brief, the agency defended the rule, arguing that the limits on the restart are reasonable and that the productivity savings outweigh the risks of the 11-hour limit. The agency also contends that the 30-minute rest break improves safety.

Also pending next year is a field study of the restart provision ordered by Congress in this year's highway law.

The study, which ATA lobbied to get written into the law, must expand on the research the agency used to tighten the restart last year. (The restrictions limit its use to once a week and require two periods of rest between 1 a.m. and 5 a.m. during the 34 hours.)

The law does not tell FMCSA how, or whether, to apply the results of the study to the rule. However, presumably a finding that the rule is, say, ineffective, would influence the agency's approach.

The study is due March 31, 2013.

In a related matter, under the highway law passed this year, FMCSA must post a universal mandate for electronic onboard recorders by Oct. 1, 2013. The agency then has three years to put the rule into effect.

It is possible that the process will move more quickly than that. The agency's own schedule calls for publication of the rule this coming March.

Complications may arise to affect the timing, however.

As a result of a suit by the OOI-DA, the agency is under a court order to make sure that recorders cannot be used to harass drivers. It is taking that requirement into account as it drafts the rule, but the association may not be satisfied with the result.


After topping ATRI's list of critical issues for the previous three years, the economy slid to third place in the rankings. However, the survey notes, concern about the economy remains high, receiving more first-place votes than any other issue.

At press time, the big issue was the fiscal cliff, the bundle of spending cuts and tax increases scheduled to go into effect at the end of the year. Most observers expected Congress to come up with some sort of fix, even if it's just kicking the can another three or six months down the road. If they don't, it could put enough of a drag on the economy to create less than 1% growth or even a recession.

The problem with simply postponing the inevitable is you just have a longer period of uncertainty, and uncertainty is what's keeping many businesses from spending money on hiring or other investments.

It's the 800-pound gorilla of things that can go wrong, and the people who are in charge of fixing it aren't the most confidence-inspiring bunch on the planet, says Kenny Vieth, president and chief analyst at ACT Research. It could mean a minus 1 or minus 2 GDP. It has to be fixed.

If we can get past that cliff, analysts told us, the economy is not in bad shape. Some troubling recent numbers in the manufacturing index and durable goods are offset by more job creation, an improving housing market and auto sales that are nearly back to normal. Corporate profits are healthy. Household financial obligations dropped to the lowest levels in years, consumer confidence has risen, inflation has fallen, and real income growth stands at 2%, Vieth points out.

Nol Perry, economist and senior consultant for FTR Associates and principal of Transport Fundamentals, says the election year has led to unemployment rhetoric that's misleading.

I urge you as businesspeople to tune out some of the negative commentary you get on employment, because it understates the health of this economy, he says.

Most economists predict the economy to grow at a rate of about 2.5% in 2013. That's a good number for trucking, Perry says. If you compare GDP growth with truck tonnage growth, he explains, When GDP gets below 2% as it did in 2011, tonnage tends to fall. When GDP gets above 2%, tonnage grows pretty rapidly 2% seems to be kind of a magic number for use in transportation.

Rates also are expected to rise. Perry predicts tight capacity will drive up truckload rates by 7% in the fourth quarter of 2013 compared to the current fourth quarter.

Perhaps the biggest economic news is Sandy, the hurricane-turned-Frankenstorm that has devastated the heavily populated Northeast.

Hurricane Katrina, Perry says, was an $83 billion to $85 billion event. Sandy looks more like a $100 billion event and that means money spent on things trucks will haul.

Natural disasters in highly developed economies are good things for the economy, Perry says. People really get organized to fix things and spend money they wouldn't have spent otherwise.

Trucking companies involved in transporting construction materials, such as flatbedders, will get a big boost as the area rebuilds.

A storm like this is good news for trucking revenues, Perry says, because not only are you doing extra work, but you're also doing extra hard work. Everything is rushed, out of normal route, and people are willing to pay more.

Perry predicts the storm will generate $ 15 billion in additional revenue for trucking over the next three or four quarters. The peak may come next spring, as the end of winter weather paves the way for serious construction work.

There are, of course, what economists call downside risks wild-card factors that could drive the actual economic numbers lower than that projection.

In addition to the fiscal cliff, they include a collapse of the Eu-roZone, a more sluggish Chinese economy than in the past, and longer-term, the U.S. debt.

At some point, Perry says, probably by the middle of the decade, if the government does not address the debt issue, lenders will raise the rates they charge the U.S. for loans. That's what happened in troubled European countries such as Greece. It could cause a recession if it happens to the U.S., he says.


In a study released this year, 90% of for-hire truckload carriers said they cannot find enough drivers who are capable of meeting DOT requirements, according to ATA.

ATA estimates the current shortage of drivers to be in the 20,000- to 25,000-range in the for-hire truckload market, on a base of roughly 750,000 trucks. Yet that's just the tip of the iceberg. At current trends, ATA projects the shortage could balloon to as much as 239,000 by 2022.

Government regulations are expected to make it even worse. If the changes to hours-of-service regulations are implemented next year as currently written, ATA says it will likely reduce motor carrier productivity by as much as 3%. Carriers will have to add more trucks and drivers to make up for it.

CSA also will likely add to the shortage. ATA says about 7% of drivers generate a significant portion of CSA scoring problems for carriers. Many of those drivers will be pushed out of the industry as they become unemployable.

The driver shortage is not going to go away, says ACT Research's Vieth.

However, he notes, when you dig into the data, the driver shortage appears to be positive for trucker profitability.

Lana Batts, longtime industry association executive and today a transportation consultant, agreed that the driver shortage is not going away.

I don't like the words driver shortage; the driver turnover is the issue, Batts says. It's not the front door, it's the back door. When guys only offer 1 to 2 cents per mile increased wages, all that does is exacerbate the job-hopping. We've really got to get the driver wages up, and it's not going to happen when you have the GDP growth we've had the last few years.

But if the economy gets started, holy cow, Batts says. We are going to have a capacity crunch. We're not going to have enough trucks, much less enough drivers. I can train a driver in about four weeks, but I can't order a truck in four weeks. If we have the slightest increase in GDP, the truck driver really will be in the driver's seat.

Vieth thinks a driver shortage may be good news for truck makers, because you should be able to do a better job of finding drivers if you have 1-year-old trucks than if you have 10-year-old trucks.

ACT is forecasting a build of 280,000 Class 8 trucks in 2013 in North America, about the same as in 2012. However, Vieth believes more of that will come in the later part of the year, the opposite from what we saw in 2012, where we started out the year with higher truck sales.

That's partly due to the likelihood that the economy will continue to go sideways while the government gets its act together, and partly due to fleets waiting until the newer, more fuel-efficient engines that will meet 2014 EPA/NHTSA standards arrive on the marketplace.


ATRI's 2012 Operational Costs of Trucking report found that fuel and oil was the second highest motor carrier cost after driver wages and benefits. Fuel prices have been remarkably stable this year, if at a higher new normal level, and experts are predicting they will remain near the $4-per-gallon mark through 2013.

At press time, the year-to-date average retail price for diesel was $3.97. The Energy Information Administration expects prices will average $3.83 per gallon in 2013.

EIAs most recent monthly forecast projects that the West Texas Intermediate crude oil price will average per barrel in 2013.

Given that oil is more plentiful and the world's appetite for oil is soft because of the economy, I expect this flat trend to expand through mid-decade, Perry predicts. With one exception if you get a hot war in the Persian Gulf, those numbers spike up.

Meanwhile, the International Energy Agency said the global energy map is changing in dramatic fashion in its annual World Energy Outlook released last month.

North America is at the forefront of a sweeping transformation in oil and gas production that will affect all regions of the world, said IEA Executive Director Maria van der Hoeven.

The World Energy Outlook projects that the extraordinary growth in oil and natural gas output in the United States means the U.S. will become a net exporter of natural gas by 2020. By 2035, the agency predicts the U.S. will be almost self-sufficient in energy, and North America will emerge as a net oil exporter.

However, that doesn't mean fuel prices will go down anytime soon. While they may become less volatile, thanks to increasing global demand, they probably will stay high.

One potential problem is California's new low-carbon fuel regulations, which hit Jan. 1. The Oil Price Information Service says studies show price hikes of as much as $ 1 per gallon for gasoline and $2 per gallon for diesel could be on the way.

In fact, 2013 may be a key year for some fleets to move to less-expensive natural gas fuel for a portion of their vehicles.

Clean Energy Fuels has accelerated its development of America's Natural Gas Highway, which it says will offer a border-to-border liquefied natural gas network by the end of the year in conjunction with Pilot-Flying J. Shell Oil is teaming up with TravelCenters of America for natural gas fueling stations, and Chesapeake is in the game, as well.

Four major truck makers will offer the new Cummins Westport ISX 12 G, a 12-liter LNG engine, filling a previous gap between the 8.9-liter and the 15-liter natural gas engines currently on the market.


Driver health and wellness debuted on the ATRI's Top 10 Issues list this year at No. 9. By next year, at least one industry observer is predicting that concern will be a lot higher on the list, thanks to one particular topic: screening for sleep disorders, especially obstructive sleep apnea.

Earlier this year, the FMCSA issued a proposed guidance for medical examiners to screen drivers with a body mass index of 35 or more for sleep apnea when determining if a driver was fit enough to drive. It was almost immediately retracted, but the issue has been brought up at recent events where agency officials were speaking, says The Hill Group's John Hill. It's quite likely the agency will again propose guidelines for sleep apnea screening in 2013.

When that happens, that's going to have a huge impact, Hill says. Medical examiners are going to be bound to follow the guidance from FMCSA. You're going to have a lot of employees that aren't going to get a two-year medical card. It's going to create confusion among the drivers. There will be costs to the motor carrier, and the question of how you practically implement a program. I'd guess it would be no. 3 next year on the ATRI list. It's going to have that profound of an impact.

The issue is important enough that ATA voted on a new policy calling for the government to address sleep disorders such as apnea through rulemaking and not through the publication of regulatory guidance.

The association wants to make sure those rules focus on conditions that pose a substantially elevated crash risk based on sound data and analysis, be cost beneficial and promote effective treatments that minimize the impact to motor carriers.

From the December issue of HDT