Industry News Briefs

Courtesy of PMTA
March 2016

Economic Outlook Shows Continued Slow Growth in 2016

The economy is expected to continue to expand at a pace slightly above trends for 2016, according to Bill Strauss, senior economist and economic advisor, Federal Reserve Bank of Chicago. Strauss talked about a number of factors affecting the economy and offered his thoughts on what we can expect for the year ahead.

Since the Great Recession, he said, the gross domestic product has expanded by 2.1%. The Federal Open Market Committee expects this slow growth to continue with predictions of 2.3% to 2.5% percent growth for 2016 and 2.0% to 2.3% growth for 2017. Longer term the committee sees GDP at 1.8% to 2.2%.

Jobless Claims Fall to Three-Week Low Amid U.S. Holidays Swings

Applications for unemployment benefits in the U.S. declined from a six-month high, indicating firings remain low following the volatility typically associated with post-holiday staff adjustments.

Jobless claims fell by 16,000 to 278,000 in the week ended Jan. 23, from 294,000 in the prior period, a report from the Labor Department showed on Thursday in Washington. The median forecast of 51 economists surveyed by Bloomberg called for 281,000. The number of those continuing to receive benefits climbed.

While a shorter filing period due to the Martin Luther King Jr. holiday and bad weather in some parts of the U.S. probably influenced the weekly data, the recent trend shows employers are holding on to workers to meet demand.

Why the Manufacturing Contraction Might Not Signal a Recession ($)

Wall Street Journal reports that demand for manufactured products sank sharply last year, a rare occurrence outside a recession. But that doesn’t necessarily mean the six-and-a-half-year-old expansion is about to end. Orders for durable goods, long-lasting products such as appliances and machinery, declined 3.5% in 2015 from a year earlier, the Commerce Department said Thursday. The drop is largest annual decline outside a recession on records back to 1992. (It’s only the fifth annual decline in 24 years.)

New Safety Fitness Rule Could Affect State Laws, FMCSA Tells Governors Group

The Federal Motor Carrier Safety Administration has notified the National Governors Association that the agency’s proposed new methodology it plans to use to determine the safety fitness of motor carriers may affect some existing state laws, regulations or regulatory activity. In a letter to the NGA late last month, Larry Minor, FMCSA’s associate administrator for policy, said that an existing executive order requires federal agencies to consult with state and local officials when developing policies that “have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.”

The Jan. 15 proposed FMCSA safety fitness determination rule would scrap the current three-tier federal SafeStat rating system of “satisfactory, conditional or unsatisfactory” for carriers used since 1982 with a single determination of “unfit,” which would require the carrier to either improve or cease operations. Turnover Rate Climbs at Large Carriers, Drops for Small Carriers

The annualized turnover rate at large truckload carriers rose 13 points to 100% in the third quarter of 2015, the highest it has been in three years, according to American Trucking Associations Chief Economist Bob Costello. However, the rate at smaller truckload carriers dipped to 68%, its lowest point since the final quarter in 2011.

For the first three quarters of 2015, the turnover rate for larger carriers — fleets with more than $30 million in annual revenue — has averaged 90%, down slightly from 2014’s average of 95%. The small carrier rate has averaged 75% year-to-date, a significant dip from the 90% it averaged in 2014.

Global oil demand growth is slowing going into 2016

The United States was one of the biggest sources of oil demand growth in 2015 but the outlook for 2016 is much more muted, according to official forecasters. The U.S. transportation sector continues to send mixed signals about the strength of fuel demand at the end of 2015 and heading into 2016. U.S. consumers are buying a record number of new vehicles, and more of them are choosing fuel-hungry crossover utility vehicles, according to market intelligence supplier Wards Auto.

The volume of traffic on U.S. roads has also hit a new record and is growing at the fastest rate for almost two decades, according to the Federal Highway Administration.

But the volume of freight transported by road, rail, air, barge and pipeline has been trending flat or lower since the end of 2014, according to the U.S. Bureau of Transportation Statistics.

ELD mandate’s anti-harassment provisions and when they take effect

The final version of the U.S. DOT’s rule to mandate the use of electronic logging devices, published in early December, maintained the major anti-harassment provisions included in FMCSA’s March 2014-published ELD mandate proposal. The measures fleshed out in the rule come, at least in part, in response to a 2012 court ruling that concluded FMCSA failed to include adequate safeguards in its 2010-issued ELD mandate to protect truck operators from harassment from carriers via ELDs (then called EOBRs). The court also vacated the rule because of it, sending it back to the DOT’s drawing board.

PA Senate Bill Proposes Fines if Trucks Don't Clear Off Snow Of Their Rigs

Pennsylvania state Senate held a hearing Jan. 27 focused on a bill requiring truckers to "make all reasonable efforts" to remove snow and ice from their rigs before driving, but truck association officials fear the wording may be too subjective. As numerous parts of the state still recover from January’s snowstorm, Sen. Lisa Boscola (D-Northampton/Lehigh) urged fellow Senate Transportation Committee members to pass her legislation, according to her news release.

New Safety Fitness Rule Could Affect State Laws, FMCSA Tells Governors Group

Obama's $98.1 bill. Budget Proposes Per-Barrel Fee on Oil

New infrastructure projects capable of withstanding severe weather events would be funded through a new tax on oil companies, according to the Obama White House’s fiscal 2017 budget request unveiled Feb. 9. Specifically, the Obama administration has proposed that oil companies pay a $10.25-per-barrel fee on oil as a way to fund resilient transportation projects. In a fact sheet about the budget, the administration explained the infrastructure programs would aim to reduce people’s work commutes and time stuck in traffic for truckers and motorists.

GOP pushes to prohibit states from requiring paid trucker breaks

States would be prohibited from requiring truck drivers to receive paid meal and rest breaks under an aviation funding bill that is scheduled to be considered by lawmakers in the House. The Hill reports, the Federal Aviation Administration measure unveiled by the House Transportation and Infrastructure Committee included language that would prohibit states from enacting or enforcing a "law, regulation, or other provision" that would require truckers to be paid for meal and rest breaks beyond what federal law currently requires.

IEA Warns Oil Prices Could Fall Further as Oversupply Worsens

Wall Street Journal reports, Crude-oil prices could fall even further as the world’s vast oversupply of petroleum is only getting worse with a surge in production from OPEC, according to some of the world’s top oil-market observers. The past month featured the return of Iranian oil after European sanctions were lifted and the failure of the Organization of the Petroleum Exporting Countries to agree on production levels. The cartel flooded the market with an additional 280,000 barrels a day last month, said the International Energy Agency, which tracks oil and gas data for industrialized countries.