Today, we are going to dive into several issues that \u2013 though unrelated \u2013 all impact the trucking industry, as well as other transportation-sector related industries. With the U.S. economy on a tear and another election having come and gone, so many aspects of American society are in flux. As changes come and go, they present new challenges to industries both young and old.
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The first of the challenges we are going to look at is that of a changing landscape where marijuana is concerned. This may seem like an odd topic, but it certainly is one that trucking companies<\/a> have on their mind. Let\u2019s find out why. <\/p>\n\n\n\n The ATA Talks\nMarijuana<\/strong><\/p>\n\n\n\n At the ATA\u2019s 2018 Management Conference & Exhibition,\nAbigail Potter, who serves as the manager of safety and occupational policy for\nthe advocacy group, made a powerful statement when she said that \u201cthe legalization\nof marijuana is an issue that is not really an if, but a when. This really has\nopened up the accessibility of marijuana and has really started to break down\nthe stigmas of marijuana use.\u201d<\/p>\n\n\n\n Indeed, there is a great big unknown percolating within the\nindustry in regards to how federal and state enforcement authorities and\ntrucking companies will deal with the proliferation of state laws allowing the\nmedical and recreational use of marijuana. At the time of this publication, 31\nstates and the District of Columbia allow medical marijuana. Nine states and\nthe District of Columbia, and Canada, have laws permitting the recreational use\nof the drug. <\/p>\n\n\n\n The changes in state and national law, on both sides of the border, carries implications for truck drivers and trucking companies<\/a> as they figure out how the scope of the law impacts employment and business concerns. It is important to note that interstate truck drivers are not permitted to use marijuana while operating a commercial motor vehicle. Further, they are not even allowed to have trace amounts in their systems. Federal laws also do not permit trucking companies to transport marijuana. <\/p>\n\n\n\n One of the problems, however, is that law enforcement\nofficers do not have the equipment necessary to field test truck drivers for\nmarijuana. The only way to test a truck driver for marijuana intoxication is to\nconduct a blood test at a law enforcement station. This cannot be done on the\nroadside. <\/p>\n\n\n\n In Canada, regulators are facing a unique challenge. With\nrecreational marijuana use becoming legal on October 17, officials are trying\nto figure out how they can find a new way to categorize marijuana. Previously,\nwhenever Canadian officials had addressed issues related to drugs or alcohol,\nthey looked at them within the context of U.S. DOT regulations. Those days are\nnow over.<\/p>\n\n\n\n Within Canada, a new problem has arisen in which Canada\u2019s 10\nprovinces have set up their own patchwork of rules and regulations governing\nthe relaxation of marijuana laws. They are looking at everything from the\ndifference between impairment and recent use and what Canadian truck drivers\ntraveling into the U.S. will do, specifically where marijuana transportation is\nconcerned.<\/p>\n\n\n\n How will trucking companies on either side of the border\naddress these concerns? With the new laws, rules, and regulations coming on\nrapid fire, only time will tell which way this will go. <\/p>\n\n\n\n How the ELD Mandate\nImpacts Consumers<\/strong><\/p>\n\n\n\n According to a 2017 report<\/a> by the ATA, the United States was short by 36,500 truck drivers in 2016. Even more, the ongoing truck driver shortage has become even more acute in 2017 and 2018, with a large driver of this being the ELD mandate. <\/p>\n\n\n\n <\/p>\n\n\n\n Truck drivers have been facing problems of diminished\ncapacity and operating efficiency due to the constraints the ELD mandate has\nput on daily operation. As a result, shippers in general are finding it\ndifficult to find the trucks they need to move their freight. <\/p>\n\n\n\n This, in turn has had an outsized impact on the consumer. In\nan effort to bid for truck drivers, shippers have upped their freight rates to record\nhighs<\/a>. To account for these rises, trucking companies have increased wages\nand benefits packages. The knock-on effect has a direct impact on what\nconsumers pay for everyday goods.<\/p>\n\n\n\n To give an idea, some of the brands that have indicated they\nwill raise prices to account for higher shipping costs include:<\/p>\n\n\n\n Even Amazon has felt the pinch, stating that the reason they\nincreased the price of their Prime memberships in April was due to soaring\nshipping costs, which they stated represented a 38% year-over-year increase in\noperating costs. <\/p>\n\n\n\n While some may bristle at the idea of pointing to the ELD\nmandate as the source of these problems, many truck drivers and trucking\ncompanies would agree that the mandate going into effect represented a\nmonumental shift in how trucking gets done, which resulted in a knock-on\neffect, leading to higher consumers prices.<\/p>\n\n\n\n How the ELD Mandate\nImpacts Small Businesses<\/strong><\/p>\n\n\n\n Higher operational expenses translated on to consumers have\nalso had a negative impact on small businesses. A large percentage of small\nbusinesses utilize the trucking sector to transport their goods, and with\ngovernment data showing an 8 percent rise in those costs, small businesses are\nfeeling the pinch. <\/p>\n\n\n\n The squeeze is also manifesting itself in more than just\nprices. Strict guidelines on truck driver and operating schedules mean that\nbusinesses may be looking at more delays and less flexibility due to the lack\nof trucking resources available to them. This problem becomes more acute as\nlarge trucking operators eat up available capacity at a breakneck pace.<\/p>\n\n\n\n Small trucking companies focused on heavy freight deliveries\ncould themselves face dramatically higher costs as the complexities involved\nwith moving specialty goods over long distances impacts the numbers of\nindividuals being able to fill these positions. Cost also extends beyond simply\nfinding the right people. <\/p>\n\n\n\n There has already been a higher cost burden with small trucking companies adopting the ELD mandate and switching to new sets of equipment to track hours of service<\/a> <\/a>regulations<\/a>. Will less heavily-financed trucking operators be able to stay competitive in a changing market? Furthermore, will Congress finally do something to modify the rules that are having such a negative impact on how truck drivers get the job done? At this point, only time will tell.<\/p>\n\n\n\n An Obscure Rule\nShakes the Transportation Sector<\/strong><\/p>\n\n\n\n You may not have heard of it, but an obscure regulation\ntargeting the international marine shipping industry will likely have a big\nimpact on the economy, including the price of airline tickets and diesel fuel.\nWhile the change mainly impacts large ships, which use high-polluting low-grade\nfuel, the impact could be far more widespread.<\/p>\n\n\n\n The International Maritime Organization has introduced a\nsulfur limit rule set to go into effect for 2020. Known as IMO 2020, the rule\nwill decrease the amount of sulfur allowed in fuel from 3.5 to 0.5 percent. To\ncomply with the new regulation, many ships will likely switch to diesel. This\nswitch will result in the highest increase in diesel fuel demand ever seen. <\/p>\n\n\n\n When the change goes into effect, expect to see diesel fuel\nprices rise dramatically. It is entirely possible the price of diesel will\nincrease by around 30 percent. Since nearly every transportation sector relies\non diesel fuel to move products, whether by truck, train, or boat, it could\nspur major inflation across world economies. <\/p>\n\n\n\n The airline sector is not immune from these potential\nchanges, either, since diesel and jet fuel are similar in grade and typically\nsell for a similar value. It is likely that if diesel prices spike, so too will\njet fuel. There still could be some ways in which shipping companies could get\naround simply switching to diesel as a viable alternative. <\/p>\n\n\n\n Some shipping companies have stated they will install scrubbers in the exhaust stacks of their vessels. In fact, according to the Canadian Fuels Association, shippers operating north of the border are expected to install scrubbers in the stacks of around 2,500 cargo ships. Yet, with more than 85,000 ships operating globally, will that be enough? <\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n Fortunately, there is still time. IMO 2020 has been in\ndevelopment for more than 10 years, so they are trying to phase in the changes\nto prevent a dramatic rise in the price of diesel fuel. Many trucking companies\nhope the impact will be short-lived, since a rise between 4\nand 34 cents per gallon could have seriously detrimental effects on the\nindustry as a whole. <\/p>\n\n\n\n With these and so many other issues facing the\ntransportation and trucking sectors, the prospects for continued economic\ngrowth remain unknown. How inflation will fare and if industries can adapt to a\nchanging landscape remains anyone\u2019s guess. <\/p>\n","protected":false},"excerpt":{"rendered":"
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