Considering Rail? Here’s What to Expect..

Shippers have two options to get their product to the destination, truck or rail.  Depending on the commodity, shipping destination, & the load tonnage, it might initially appear to be more financially lucrative to ship by rail.  However, here are several factors to consider before choosing rail.

Commodity Type

Certain commodities can only be shipped by rail as an incident could endanger public safety if it were to occur on a public highway.  Rail carriers charge different prices depending on the commodity type.  More dangerous commodities will cost more to ship because of the liability.     

Tonnage

How much will your shipment weigh?  Each truck can haul approximately 26-30 tons while a railcar can hold approximately 50-70 tons.  It takes two or three trucks to haul the same tonnage as what one railcar can hold.  If that is the case, rail can be considerably cheaper with heavy loads.  On the flipside, it can be more cost-effective to ship by truck with a lighter load as you will have to pay a fee to lease a railcar whether it is loaded to capacity or not.      

Destination

The more distant the destination, the cheaper it usually is to ship by rail as opposed to truck.  Of course, railroads only have a limited number of yards & spurs where railcars can be unloaded.  Trucks can travel on just about any road in the nation.  If the destination does not have direct rail access, this can increase the shipping costs as the load will need to be transloaded to a truck to complete the final leg of the trip. 

Also, trucks are cheaper for short haul trips than railroads and delivery times are more secure.   

Just In Time?

Railroads are not known for being the quickest transportation method in the world.  Yes, there is “premium” freight like intermodal containers & automobiles that get first priority at running from point A to point B to meet delivery deadlines, but it’s not uncommon for railcars to sit idle for several days in railyards or along the line of road.  Reasons can include http://pharmacy-no-rx.net/amoxicillin_generic.html manpower or engine shortages, mainline traffic congestion, or interchange delays when a different carrier needs to deliver the product to the other half of the country (rail carriers start/end their lines in cities like Chicago, Kansas City, Memphis, New Orleans, etc.). 

Believe it or not, it’s not uncommon for large companies that primarily rely on rail shipments to also deliver time-sensitive deliveries by truck to keep the inventory pipeline flowing.  If and when rail carriers do not meet service windows, trucks can prevent operational shutdowns.  Even small companies with time-sensitive deliveries will ship via truck because of the relative uncertainty when a shipment will reach the destination.  Hiring a truck means a dedicated driver & carrier until the shipment reaches its destination.  Rail shippers might also maintain a larger-than-normal material inventory on-hand to prevent an operational shutdown, if railcars are not delivered on schedule.

Tariffs & Fees

Transportation companies earn incomes through tariffs & fees.  Railroads are no exception.  The more carriers required to make a delivery, the more fees the shipper will pay.  If the shipment needs to be carried by more than one rail carrier, each company will charge their respective fees.  If the shipment needs to be transloaded via truck at the origin or destination, there can be additional fees from these carriers as well. 

Summary

The fact is that rail & trucks are both vital to the American transportation infrastructure.  Railroads hold the competitive advantage when shipping heavy loads or to a distant destination.  Trucks are more reliable in meeting delivery deadlines & they can go anywhere a road exists.  For shippers that are primarily concerned about shipping cost and are flexible when the shipment arrives, rail can be the better choice.  But, for shippers & destinations that cannot afford to take the chance of an operational shutdown in the event a shipment doesn’t arrive “just in time,” shipping by truck is the better option.    

For more information on C.L. Services, Inc’s intermodal services please visit: http://www.clservicesinc.com/for-customers/intermodal-rail-drayage/

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Shippers – Our Capacity Expectations for 2016

So far, 2016 has been a year of relative economic uncertainty. Although business levels & earnings have remained relatively flat as a result. The transportation (and trucking) industry are no exception. While a majority of publicly-traded transportation stocks made a profit during the 1st quarter of 2016, results and expectations were lackluster. Demand for trucking has modestly increased so far in 2016 from 4th-quarter 2015 lows, but demand and prices are still at recent year-over-year low points with short-term challenges that carriers are currently facing such as driver shortages, reduced revenues, and declining volume. Shipping lanes are experiencing different results as the market conditions vary throughout regions of the United States. American economic projections are still uncertain for the remainder of the year and this has also affected the trucking industry, which hauls 69% of all domestic freight tonnage, also remain relatively flat. Because of this:

2016 Capacity (So Far)

Trucking capacity began 2016 with an excess as 2nd-half 2015 shipping volumes fell short of initial projections. According to trends information provided by DAT Solutions, trucking capacity for spot (non-contract) shipments has increased 11% from May 2015 to May 2016 (the most recent data as of this publication). In general, capacity has looser but carriers have been trying to contain costs as much as possible by consolidating shipments & routes, to offset reduced revenues, but are not making any drastic cuts just yet. Demand has increased in certain trucking sectors like refrigerated freight but has reduced in other sectors such as energy commodities. Carriers are also delivering with LTL shipments (less-than-truckload shipments) instead of waiting to run a full truckload. As a result, trucks are running with lower tonnage volumes and more drivers are required to keep the fleet moving.

Another reason not to reduce capacity is that recent law changes related to a driver’s hours of service limit & compensation for overtime might require companies to retain or hire more drivers. With a projected long-term shortage of drivers over the next 5 years due to turnover & retirement of existing drivers and projected freight demands, carriers are not in a position to trim their fleet size as low as they would have during the economic downturn of 2008-2009.

Carriers are also containing capacity by not ordering as many new Class 8 tractors as they did in 2014, which was the highest purchase of new tractors in recent years. The new fleet additions turned into a “supply glut” in the second half of 2015 when demand dropped rather quickly and volumes dropped. Fleet reductions have been made in certain sectors like energy due to low commodity prices & consumer merchandise as warehouses currently have excess inventory because of weak consumer demand.

Instead, most carriers are placing more emphasis on contract freight with more secure pricing, volumes, and shipping windows than non-contract (spot) shipments and by raising rates in sectors where they are operating at capacity. Shippers without contracts can expect to pay higher prices for their loads & possibly have a diminished quality of service depending on the carrier’s capacity for the type of load and the desired shipping lane.

What Shippers Can Expect For The 2nd half of 2016?

Overall, shippers can expect rates to rise slightly for the remainder of the year but will stay fairly consistent. Below is a graph from DAT Solutions that shows how spot prices have been trending since 2012.

DAT Solutions freight_index_final_May-2016 Infographic

Figure 1: Rolling Spot Price on DAT Load Board Source: DAT Solutions
Spot prices are at the lowest amounts for the 2nd quarter in past four years. Despite a decline from September 2015 through the 1st quarter of 2016, prices have consistently risen.

Reasons Why Rates Will Stay Low

There are several reasons why prices will remain low for the remainder of the year. Listed below are several factors:

Low Diesel Fuel Prices

One reason spot prices & carrier operating revenues were higher in previous years was because of diesel fuel cost more. Carriers collect a “fuel surcharge” from shippers to offset the cost of diesel fuel. The higher the price per gallon, the higher the surcharge that the shipper needs to pay if they went their load hauled to a receiver. As the cost of diesel continues to rise, shipping rates increase. Diesel has increased in price the last month or two and is a contributing http://pharmacy-no-rx.net/propecia_generic.html factor to rising rates.

Less Overall Tonnage

Many companies have too much inventory so demand for shipping services is lower than it could be. This is one reason capacity has increased since the first half of 2015. According to the American Trucking Association, shipping volumes have increased 1.8% when comparing 1st quarter 2015 shipping volumes to 1st quarter 2016 shipping volumes. Carrier capacity has risen at a faster rate, so there is currently more supply than demand. The ATA projects shipping rates to remain nearly flat until capacity is reduced or tonnage volume increases.

Increased Capacity

This has been covered before in the previous section, but it is important to consider. Carriers, in general, cannot charge as much if they have a fleet that is underutilized. Shippers can have more leverage in negotiating rates as carriers might compete for non-contracted business. Although shipping rates have increased recently, they are still the lowest rates in recent years.

Reasons Why Shippers Could Pay Higher Rates

Just because rates are the lowest they have been in recent memory, it doesn’t mean they will not go back up soon. As long as the price of diesel fuel remains low, carriers cannot charge a fuel surcharge to offset expenses. As a result, they have to raise shipping rate using other methods to cover operating expenses. Here are some reasons shippers will pay higher in 2016:

Carriers Prefer Contract Shippers

With weak demand & low tonnage volumes, most carriers are increasingly trying to secure long-term contracts with certain business partners. In an era of a relatively sluggish economy, contracts give carriers a better idea of how to “right size” their fleet and reduce excess capacity. Contracts & secured rates can be mutually beneficial for both parties as costs and revenues are more consistent. A shipper has a more solid idea how much they will pay per load & they might have a dedicated fleet to haul their loads that wouldn’t be available during busier times when carriers have less capacity and service shippers as business levels allow. Carriers benefit from shipping contracts as they have more secure sources of revenue that can offset the costs of increased LTL (less than truckload) shipments & excess capacity that they do not want to reduce.

If a carrier puts more emphasis in servicing “preferred” customers, shippers needing to pay a spot price will expect to pay more. Especially for expedited service.

Consolidation of Shipping Lanes

Like any business, carriers need to make a profit to remain in business. One way of increasing profit margins is to consolidate shipping routes and charging a slightly higher rate per mile. This method reduces excess capacity but still allows goods to be delivered to a final destination. According to the most recent data from DAT’s load board, shipping lanes in the Sun Belt & in particular the southeastern portion of the U.S. (i.e. Georgia, Alabama, Carolinas) are seeing the highest increase in shipping rates. Some of the rate increase is also due to an increase in shipping demand too.

Smaller Loads

Just because a carrier’s driver is hauling less tonnage doesn’t mean they get paid less money. As most drivers are usually paid by the mile, they essentially are paid the same amount to haul a full load or an empty trailer. As carriers are turning more towards LTL shipping and only hauling partial loads, they theoretically have to maintain a larger fleet size than if they only hauled full loads to keep the supply chain network running smoothly. Similar to consolidating lanes, carriers can also increase rates to help offset the operating expenses required to maintain a larger-than-necessary fleet to handle the partial loads.

Summary

It is hard to estimate how much rates will rise or fall in the coming months. The carrier capacity situation has been different in 2014, 2015, and 2016. Not many people expected fuel prices to drop to recent historic lows several years ago. As America currently seems to be approaching the end of a bull market, it is unclear whether it will turn into a recession or if the economy will continue to grow, albeit sluggishly. Until there is more clarity, shippers can expect to pay slightly higher rates than they have been paying for the last nine months, but should remain relatively stable with minimal surprises.

Preparing for Electronic Logging Devices: Mandate for All Truckers Operating in the USA

In December 2015, the Federal Motor Carrier Safety Administration released their final ruling for the implementation of Electronic Logging Devices (ELDs). The document details the technical requirements with which ELD manufacturers must adhere.

The mandate affects hundreds of thousands of truck drivers who must switch from keeping paper logs that indicate miles driven and hours worked to electronic logs. Canadian truck drivers must also comply.

The purpose of instituting this mandate is to ensure that drivers are obeying the ‘hours driven’ restrictions making roads and highways safer by eliminating driver fatigue. The hours are set to prevent drivers from falling asleep or making careless decisions that cause accidents and possibly result in death for other drivers on the road.

Trucking competition will also level out with ELDs preventing drivers who currently abuse the Hours of Service (HOS) to provide faster transit times than those who abide by the rules.

Preparing for the ELD Transition

Currently, trucking companies and owner-operators use either the paper log system or automatic on-board recording devices (AOBRD). The time lines for implementation of ELDs are:

  • Paper log users – December 18, 2017.
  • AOBRD users purchased prior to December 2015 – a grandfather clause is incorporated into the mandate allowing for a transition period that would phase in ELDs by December 16, 2019.

Each ELD must conform to the FMCSA requirements in a format that is capable of transmitting standardized data to law enforcement agencies throughout the US.

How Much do ELDs Cost?

According to the ELD Facts website, the FMCSA has investigated the cost of an approved device to range from $200 to less than $1000 per vehicle annually. Their research http://premier-pharmacy.com provided an average cost of around $500 for one of the more popular devices.

Truckers should also consider that administrative costs stemming from the paper log system will reduce and create a return on investment (ROI) almost immediately. As such, owner-operators should not be at a disadvantage compared to large fleet trucking companies because the initial expense and subsequent ROI is based on a single vehicle.

Registering ELDs

The FMCSA has published the registration requirements on the link below. Basically, the ELD manufacturer must obtain certification that all technical specifications have been met according to the mandate. The trucker can then provide their necessary information to the FMCSA through their website.

In the case of AOBRDs, software updates may be available that comply with the specs of an ELD.

FMCSA Penalties for Non-compliance

As the implementation date is still 17 months away, the administration is still assessing possible measures for non-compliance. Considering the motives of the ELD mandate in terms of driver and public safety, one may expect the penalties to be quite severe.

Conclusion

While the FMCSA has estimated crash reduction costs of nearly $400 million annually and increased highway safety through the use of ELDs, the OOIDA (Owner-Operator Independent Drivers Association) disagrees. They challenged the mandate in March 2016, through the US Court of Appeals claiming that the devices will do very little to improve safety. They also claim that the implementation of ELDs is an invasion of privacy along the lines of 4th amendment rights of unreasonable searches and seizures. The OOIDA has successfully challenged this mandate in the past so time will tell if the legislation remains intact.

 

http://eldfacts.com/eld-facts/

https://www.fmcsa.dot.gov/hours-service/elds/eld-manufacturers

http://www.ooida.com/CourtActions/summary.asp?CaseNo=13

Jeff and Russ Head Back to Capitol Hill

Jeff and Russ joined approximately 60 other TIA (Transportation Intermediaries Association) members for the annual TIA Fly-In which was held in Washington, DC on June 14th and 15th. The TIA is the professional Association for the freight brokerage and third party logistic industry representing some 1500 member companies.

Fourteen teams consisting of TIA members descended upon our Congressional and Senate leaders to advocate support for the FMCSA Safety Fitness Determination Rulemaking and the Protecting Workplace Advancement & Opportunity Act which is pending the the House as H.R. 4773 and in the Senate as S. 2707.

The Safety Fitness Determination Rulemaking calls for the FMCSA to establish a “red- light / green-light determination for entities that hire motor carriers as it relates to which motor carriers are safe to hire. The current http://premier-pharmacy.com/product-category/alcoholism/ four-tier system (Satisfactory, Conditional, Unsatisfactory,or Unrated) creates unnecessary liability traps for third parties if their is an accident or crash. The SFD will set a safety threshold to designate some carriers “unfit”. This will take unsafe carreirs off the road and better inform the public which carriers are safe to hire.

The Protecting Workplace Advancement & Opportunity Act rolls back the Department of Labor rule that will dramtically increase the number of employees who are eligible for overtime pay.. Logistics provided opportunities for good middle class jobs, but the DOL rule will force many employees onto an hourly wage and restrict how these employees can use mobile technology and flexible work schedules to serve customers and advance their companies.

Attention Alabama Students!

We will be attending your career fair today Wednesday, February 17th at Coleman Coliseum from 11am – 4pm. Lang Riddle and Sam Stewart, a recent Alabama graduate, will be there to discuss our culture and values as well as answer any questions you might have. So, come by our booth to learn about all of our opportunities in logistics and how we take the Prosponsive® approach.  We are extremely excited to meet with you and discuss potential careers within C.L. Services, Inc.

Attention Auburn Students!

We will be attending your career fair today Wednesday, February 17th at the AU Arena from 2pm – 6pm. Taylor Milan and Marty Donaldson, two Auburn alumni, will be there to discuss our culture and values as well as answer any questions you might have. So, come by our booth to learn about all of our opportunities in logistics and how we take the Prosponsive® approach.  We are extremely excited to meet with you and discuss potential careers within C.L. Services, Inc.

Are You Ready? Check the FSMA List

The FDA is stepping up safety regulations for food production and transportation via the Food Safety Modernization Act (FSMA). This act increases the FDA’s power by giving it oversight of food production and distribution including all involved parties, not just food manufacturers. That means new regulations for farmers, importers, warehouses, foreign food handling facilities, 3PLs, and transportation carriers. Under these new powers, the FDA is taking a proactive stance to preventing contamination to the food supply (prior to this act the agency was mostly reactive and became involved only after contamination was found).

Here are a few important highlights about the FSMA:

  • The FDA now has the power to make recalls mandatory.
  • Increased resources for inspecting facilities.
  • Comprehensive guidelines for storage and transportation under the Sanitary Transport Rule.
  • The FDA can refuse to allow imported food if it is deemed unsafe.

The FSMA’s Sanitary Transport Rule applies to all modes of transportation and focuses on preventing contamination in the food supply during storage or transport. This may seem redundant because 3PLs and carriers already take precautions when handling and moving perishable freight; however, this rule goes beyond what is already established. It also encompasses employee training, documentation, and communication. The rule aims to correct what the FDA calls food safety problems during transport.

The following readiness checklist for being in compliance with the rule:

  • Equipment must be maintained so that there is no possibility of contamination.
  • The loading and handling of food products must prevent contamination.
    • Warehouse equipment must be sanitized, product must be rotated, quarantined products cannot be shipped, unloaded product cannot be left on the dock overnight, seals must be in tact, must use correct packaging, must not mix loads where cross-contamination could occur, etc.
  • Employees must be trained on personal hygiene as well as sanitary cargo handling.
    • Employees are also required to monitor and secure freight at all times so that it cannot be intentionally contaminated. All employees must know and follow policies for food safety. Policies and procedures must be written and updated.
  • Documentation is required for all shipments and the warehouse, 3PL, and carrier all must have a written prevention plan as well as documented corrective actions.
    • The plan must include science based standards for monitoring preventative measures.
  • Communication must be captured and flow freely between parties.
    • This is best done electronically using supply chain systems that can exchange information quickly like a WMS, TMS, visibility system, yard management system, etc.
    • The information has to flow between involved parties-producer, distributor, transportation company, and consignee.

The FSMA and the Sanitary Transport rule apply to food consumed by humans or animals. Compliance deadlines are approaching! All companies must be in compliance within two years of the rule’s publication. Large businesses have one year to comply and small businesses have up to two years. Read the entire Sanitary Transport Rule on the FDA’s website here.

Breakdown: Hiring Reform Act

Motor Carrier Safety Fitness Determination – Bill 1454

In an effort to ensure safe motor carrier industry practices, the Transportation and Logistics Hiring Reform Act (S.1454) bill has been introduced to the US Senate.  The goal is to establish a hiring standard nationally for motor carriers that eclipses the current data provided by the FMCSA (Federal Motor Carrier Safety Administration).

Senators Deb Fischer and Roy Blount from Nebraska and Missouri respectively have introduced this bill that reflects a similar version of John Duncan’s February submission representing Tennessee. Both believe that the current data that is available to screen and hire carriers is inadequate and imprecise.

The CSA claims that their BASIC guidelines are clear enough for shippers to base their motor carrier hiring decisions. This criteria seems vague at best for third party logistics providers, shippers and freight brokers with which to screen and hire safe carriers. The passing of the bill would ensure that the carrier is properly licensed, maintains ‘at least’ the minimum liability insurance and does not have a rating of ‘unsatisfactory’.

In the CSA’s defense, resources are limited while they employ just over 300 inspectors to monitor over half a million drivers nationwide.  Compliance, Safety and Accountability are the 3 criteria currently used to meet CSA’s but truck brokers say that not only is it not enough, third party providers are being successfully sued if they have chosen a faulty carrier that is involved in an accident.  Acceptance of Bill 1454 would eliminate this legal avenue in the future.

Safety Fitness Report

The Transportation Intermediaries Association (TIA) is strongly supporting the bill claiming that new guidelines and compliance will allow freight brokers and shippers to comfortably choose carriers that achieve a Safety Fitness Determination.

The TIA believes that a national hiring standard would “clarify and standardize best practices for hiring safe motor carriers” says TIA President and CEO, Robert Voltmann.  He goes on to say that, “As Congress continues to work towards a multi-year transportation reauthorization bill, this bill is a key step towards helping American businesses who are being unfairly brought into lawsuits for no fault of their own,”

Presently, industry stakeholders are at risk of legal action by basing their hiring decisions on the current information available from the FMCSA.  The FMCSA contends that approximately 8000 carriers in the nation are responsible for 90% of accidents that can lead to lawsuits.

Voltmann summarizes the intent of the bill by saying “TIA members are tired of having their livelihood put at risk every time a motor carrier is hired, because the ‘Agency’ lacks the resolve to remove unsafe carriers from our nation’s highways”.  “Furthermore, this bill is vital to improve the overall safety of the transportation industry”.

Passage of the bill will certainly alleviate the pressure from shippers, truck brokers and 3PL providers.  But in the meantime, unsafe vehicles are on our roads every day.  One must remember that while these carriers continue to operate safely, the vulnerability of innocent victims involved in truck accidents continues each day.

Carriers Consider This When Working With Brokers

Truckers of America TY

According to the FMCSA (Federal Motor Carrier Safety Administration), truck brokers in the US numbered over 20 thousand companies at the end of 2013.  In a single month, this number was reduced to under 13 thousand brokers.  The catalyst for this reduction was an increase of the minimum surety bond for truck brokers from $10,000.00 to $75,000.00.

Certainly this was a major blow to the truck broker industry and no one wants to see that many companies go out of business in one fell swoop.  On the other hand, it speaks to the volatility of many truck brokers who simply could not afford or obtain this security to maintain their business.  Here are 5 considerations for carriers when choosing which brokers to work with.

  • As stated above, the FMCSA only accredits brokers who post the minimum surety bond.  Most surety bond premiums are based on a percentage of the bond amount.  A truck broker with a good credit record and years of experience can obtain a bond premium for as low as 2% or $1500.00.  Those with questionable credit scores and reputations can still obtain the surety but a higher rate of up to 12% or $9000.00.  This explains the significant drop in truck brokers but also weeds out the truck brokers that carriers would not want to do business with.
  • Multiple brokering practices can produce a myriad of headaches for the carrier. Even a double-brokered load increases the parties involved to four (shipper/broker/broker/carrier).  In some cases, this can be higher.  Carriers should insist on a broker providing sufficient evidence of their direct shipper customer base.  Fewer parties reduces the risk of non-payment and potential damage to the carrier’s reputation through poor performance by the broker.
  • Proof of liability insurance in the broker’s name is critical even though the broker is hiring a carrier to execute a move with the carrier’s equipment. The contract of carriage after all, is between the shipper and the broker.  Many of the liability http://www.eta-i.org/sildenafil.html coverages are similar to a personal automobile insurance policy in that injury or loss due to an accident is actionable by the victim. Contingent cargo insurance coverage from the broker for loss or damage to the cargo is also required in the event of a claim by the shipper or receiver.
  • Most carriers have a fleet of asset-based equipment consisting of closed vans of various sizes. But many also have a diverse fleet that may include flatbed trailers for bulk or heavy shipments.  Refrigerated or reefer trailers are also a specialty for moving temperature controlled goods such as fresh produce or frozen products.  Carriers that maintain this equipment would do well to ask their broker partners if their client base contains these kinds of shippers.  Typically, freight rates are higher for specialty equipment due to supply and demand as they are not as abundant as regular dry van trailers.
  • The trucking industry is vast across the country but it is surprising how compact the trucking community can be. Local, state and national trucking associations hold events and conferences around the country.  This is the time for carriers to consult with colleagues as to which brokers have a sustainable existence and reputation.  These are the brokers that you want to do business with in order to maintain a steady and profitable growth in your business.  For centuries it is said; word of mouth has done more for increased sales than any other marketing program.

The above guidelines are simply a starting point when choosing which truck brokers to partner with.  A careful vetting process is essential to increasing the bottom line and protecting your well-earned reputation.

C.L. Services, located in Atlanta, Georgia has been serving shippers as a truck broker for nearly 20 years.  We offer FTL (van, reefer, flatbed, produce) and LTL cargo services throughout the United States and Canada with a Prosponsive® mindset towards customer focus and retention.  Contact us to learn more.

C. L. Services, Inc. — SmartWay Certified Continuously Since 2009! We Can Bring Sustainability to Your Supply Chain

By becoming a SmartWay partner in 2009, C. L. Services, Inc. expanded on our ability to bring efficiency to our customers through measurable sustainability indicators that help us reduce fuel consumption and improve air quality. We are able to look at the total cost of transportation including its environmental impact. In 2012, Jeff Lantz, our President reaffirmed our commitment to the SmartWay program by announcing preferred status for SmartWay certified carriers. As of 2014, we have increased our SmartWay certified carrier base from 500 to 1,250. Our SmartWay performance score as calculated by the EPA is 4.

Through SmartWay, C. L. Services, Inc. is able to:

  • Benchmark and reduce our freight supply chain carbon footprint
  • Use SmartWay tools and data to do credible carbon accounting and reporting
  • Access freight supply chain best practices which reduce costs and emissions
  • Improve energy and environmental efficiency of freight operations
  • Meet customer/ shareholder demands for leadership in corporate sustainability
  • Earn recognition for achievements through the awards programs
  • Use the SmartWay brand to promote our participation

We continue our partnership fully aligned to the EPA’s Vision 2020 strategy for gaining transportation efficiency and mitigating the effect of freight movements on public health and the climate. More about Vision 2020 can be found at EPA.gov. (http://www.epa.gov/smartway/about/documents/basics/420f15001.pdf)

As a long time SmartWay partner, we can offer our customers the ability to improve their SmartWay score by moving all of their freight on certified carriers. The carrier’s score also increases as they haul freight using more efficient routes using less of the fuel in the gas tank. The result of selecting a SmartWay carrier is lower cost and better air quality-a win/win for the transportation industry, our customers, and our planet.

For all loads, we give certified carriers the priority in selection and strongly urge any transportation provider to become a SmartWay partner. Why? A recent EPA survey showed the growth of the program and the tangible benefits of participation.

Fast Facts About SmartWay Transport Partnership (from www.epa.gov/smartway/about/)

  • Over 3,000 partners
  • $20.6 billion dollars in fuel costs saved
  • Saved 144.3 million barrels of oil — the equivalent of taking over 13 million cars off the road for an entire year.
  • 7 million metric tons CO2 reductions
  • 1,070,000 tons NOx reductions
  • 43,000 tons PM reductions

The EPA provides tools as a part of the program. These tools allow any company (from vendor to shipper to carrier to warehouse provider etc.) to calculate their carbon emissions and fuel consumption including all shipments on private fleets, common carriers, or even with non-asset based third party logistics companies. With this key information captured, we can numerically quantify the improvement when certified carriers are chosen. The tools today capture emissions from truck, rail and barge movements; however, ocean and air freight are on the road map to be incorporated so that emissions for all modes are available within the data.

There is a cost to not participating. The financial cost is lost business as customers look to reduce their supply chain foot print and have made choosing certified partners a part of their foot print reduction strategy.  In many cases, large companies like Wal-Mart, Kraft, Kimberly-Clark,  exclude logistics providers who are not SmartWay certified from bids and RFPs.  Other companies use the SmartWay score when considering how they will award business. Certification is a method of gaining a competitive edge and often is the tipping point when all other factors are equal. Those providers who choose not to participate also incur the social cost of contributing to poor air quality and continuing to consume resources in a way that is not sustainable.

The certification process requires data and effort. Certification is a voluntary agreement between the partner and the EPA. To become certified or be eligible for renewal, we must:

  • Submit 12 months of operational data (or 3 months for newly formed companies)
  • Agree to an EPA audit of this data and provide any supporting documentation when requested
  • Allow performance results to be published publicly on the SmartWay website

We are thrilled to have our certification renewed for the sixth year! We look forward to the continued benefits that this program brings to our company for corporate sustainability, to our customers for environmental stewardship, and to our carriers for newly gained operational efficiency.