CONNECTING THE DOTS
The difficult insurance market is tied to the poor litigation environment, but Iowa truckers aren’t alone in the fight to improve the situation. Issue 1, 2020
FEATURES Issue 1, 2020
Time to Stand Up p18
The rules we have long played by are shifting and costs are rising for all that are involved. Now is the time to unite as an industry and step up.
Make a Difference p27
The IMTA leadership program is now in its 27th year, and the momentum has not been lost on IMTA members.
p2 p3 p5 p6 p9 p10 p13 p29 p32 p33 p34 p36
Listening In Chairman's Message President’s Message Up Close & Personal Your Association at Work Members in the News Industry News Iowa Motor Carriers Foundation ATRI Update ATA Update Iowa DOT Update IMTA Events
COLUMNS p 26 p27 p40
Iowa Council of Safety Management Next Generation Speaks Final Thought
OUR STAFF BRENDA NEVILLE, CAE President & CEO
brenda@iowamotortruck.com
JORDAN BJERKE Membership & Finance Manager
jordan@iowamotortruck.com
DON EGLI, CDS Director of Safety & Security
don@iowamotortruck.com
MORGAN STEENHOEK Communications, Events & Marketing Assistant
morgan@iowamotortruck.com
JANELLE STEVENS Director of Communications, Education & Events janelle@iowamotortruck.com
KENZIE IHLE Education & Events Coordinator kenzie@iowamotortruck.com GARY HANDLEY Special Projects Coordinator gary@iowamotortruck.com MACLYN Design & Cover Illustration
IOWA MOTOR TRUCK ASSOCIATION 717 East Court Ave, Des Moines, IA 50309 515.244.5193 | iowamotortruck.com
SPONSORS IFC p4 p8 p12
Great West Casualty
p16
MHC Kenworth
IMTA Cornerstone Sponsors Midwest Peterbilt Group
p17 p25 p28
Management Conference Truck Driving Championships
p30
Renewable Energy Group
p31
Thompson Truck and Trailer Thermo King Sales and Service
Central Trailer Service O’Halloran International McGowen Hurst Clark Smith Donaghy-Kempton Insurors Quality Services Corp.
p35
Harrison Truck Centers
p39
IMTA Show Trailer Washer Systems of Iowa
IBC
Truck Country
BC
Midwest Wheel Companies
ISSUE 1, 2020
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“I just can’t begin to describe the impact he had on the state of Iowa.” IOWA HEAD FOOTBALL COACH KIRK FERENTZ in remarks made about the passing of Hawkeye legend Hayden Fry
“What job is worth selling your political soul for?” MSNBC’S JOE SCARBROUGH slamming Republican lawmakers for selling out to President Trump
“Boeing executives should be walking away in handcuffs, not with millions of dollars.” Complaint made on behalf of victim’s family members about Boeing’s fired CEO Muilenburg walking away with more than $60 million after firing
LISTENING IN
“What job is worth selling “Transportation today is your political soul for?” synonymous with innovation.” MSNBC’S JOE SCARBROUGH U.S. DEPARTMENT OF slamming Republican for selling TRANSPORTATION lawmakers SECRETARY out to President ELAINE CHAO Trump in her keynote address at the Consumer Technology Association’s CES 2020 event
“I am no expert, but I am a global observer, of course, there is climate change taking place. It is happening worldwide. Australia is just one example.” AUSTRALIAN PROFESSIONAL GOLFER GREG NORMAN regarding the Australian brushfires
“That is good news for millions of farmers, manufacturers and workers in every corner of America.” SENATE FINANCE COMMITTEE CHAIRMAN CHUCK GRASSLEY regarding the broad, bipartisan passage of USMCA
“What I do hear from a lot of folks is: stop this. There’s so many things that we have to get done and yet all of the effort is going towards impeachment.” U.S. SENATOR JONI ERNST arguing that impeachment is not on top of Iowa voters’ minds
CHAIRMAN'S MESSAGE Another Iowa legislative session is underway! These early days of the New Year are always hectic, active, and even dramatic at the Capital. Our unique legislative process means a great deal happens in a relatively short time period. This year’s legislative agenda holds significant impact for IMTA, our members, and our broader industry The Iowa legislative “season” requires our members to put our “game faces on”. This is a time that all of us must make getting involved a priority. Your voice matters, and our collective voice has demonstrated time and again, that we can, and do influence outcomes. Favorable laws and regulations for our industry have been realized because our members leveraged relationships, communicated with passion, and worked tirelessly to shape thinking and steer the debate. The top priority of our association is to advocate and work with engaged members for Iowa’s trucking industry. Every year our advocacy efforts are played out in the State Capitol daily beginning in January and running through April or May. While the importance of our presence at the State Capitol can never be understated, the most important component of an effective government relations program unfolds back in the district when active members engage the elected official over a cup of coffee, a slice of pie, or a beer at the local bar. These critical interactions personalize the issues. The topics become real and tangible. These are the scenarios that really define the process that produces winning results. We are all extremely busy with many demands on our time and resources. Yet, my involvement with several different organizations over the last few years has deepened my awareness of how important individual efforts are to drive results for a collective cause. There are many examples of the correlation between success and active involvement in the legislative process. Our calendars have little room, I understand, however I would strongly encourage you to make time to join the cause. Brenda and team have a lengthy menu of activities for you to take on. Being involved and engaged truly matters. The foundation of our legislative process can only remain intact and be effective if the average person has the ability to express their concerns about proposed legislative initiatives. Your willingness to reach out to a legislator and highlight a concern or weigh in on a specific issue moves the needle in a way that many people fail to appreciate. Legislators are no different than you and me; hard-working individuals that want to succeed and achieve positive results. Especially here in Iowa, legislators, regardless of party affiliation, are interested in hearing from their constituents. They rely heavily on input from individuals
in their districts and from across the state. That feedback helps them determine their individual course of action. As a constituent you are also a “vote” which puts you in an important position with your legislator. Your input, your opinion, your feedback, and your willingness to ask a legislator for their support on a specific issue is an important part of the process. While we have a talented and dedicated government relations team at the IMTA, the real power is having members throughout the state, in an organized, coordinated, and effective fashion, be our voice. These grassroots efforts far exceed the value of even the best lobbyist. Our ability to impact an issue is very effective as every legislator knows the impact of our industry on Iowa’s economy. Our team reinforces constantly the impressive statistics: 75% of Iowa’s communities depend DAN VAN ALSTINE exclusively on trucks to deliver 2020 IMTA Chairman of the Board their goods, and 73% of manufactured tonnage is transported in our state by trucks—that’s almost 285,000 tons per day! Iowa’s trucking industry is home to 98,540 trucking industry jobs, which translates to 1-in-13 people in the state who receive a paycheck from work connected to the trucking industry. Every day, trucking delivers the products that are needed by every Iowan! Enabling our standard of living. That simple, yet powerful fact is never lost on an elected official. As we continue to work on several priorities during the 2020 Iowa legislative session, I urge you to make it a priority to get engaged. Don’t ignore the legislative updates, don’t be afraid to ask questions, and reach out to the association about these issues. Importantly, don’t shy away from calling a legislator to offer yourself or others as a resource. That kind of interaction is fundamentally the heart and soul of the legislative process and quite frankly, the heart and soul of who we are as an industry. Our issues are never easy, but we didn’t get into the trucking industry because we wanted things to be easy now did, we? Thank you for your continued support and thank you for your willingness to help as we embark on another legislative adventure.
ISSUE 1, 2020
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Dealership Leasing & Rental Truck Source Carrier
mhc.com
RoadReady TRP
PRESIDENT’S MESSAGE It is that time of year again … the 2020 Iowa Legislature Unfortunately, in contrast, no amount of money or is in session and Iowa’s trucking industry is once again preparation can eliminate bad weather conditions, disactively engaged in what could be considered a historical tracted driving and a multitude of other factors that sadly oftentimes contribute to accidents. effort on behalf of every trucking company in the state. Our options were limited in combating this issue. This year we are taking on what I believe to be the most significant legislative effort we have ever taken on Trucking companies are being forced to close their doors during my tenure at IMTA (33 years) and that would be because they can’t afford the litigation reform. As we started to develop our legislative insurance needed to put their priorities last fall, it became apparent very quickly that trucks on the road. That is the we needed to address this issue. stark reality of the current Prompted by a commercial insurance market that is market. Securing a solution on unlike anything we have ever seen; carriers of all sizes the federal level is the optimal were calling the IMTA office in desperation for answers goal and that important work and assistance as they scrambled to secure insurance continues in DC with ATA leadand we had nothing to offer but a sympathetic ear, while ing the charge and providing valuable, this is not up to our standards in serving the the leadership that is needed to membership. So, work began immediately to develop get this done. a plan of action. However, in the meantime, As the significant reduction in insurance capacity the states have been asked to has continued to emerge, trucking operations of all step up and get involved in sizes are feeling the tremendous impact of this tenuous this critically important work environment. This is not a scenario that is unique to and that is what we are doing Iowa, ATA President Chris Spear took on the issue as in Iowa. We have legislative BRENDA NEVILLE the foundation of his keynote address at the annual leaders and a legislative enviIMTA President & CEO ATA conference in October and urged action by all the ronment that warranted introduction of legislative initiatives states as this item moved to priority status. Why is the insurance market in this position? specific to litigation reform. Excessive losses in the commercial auto underwriting This work is hard, and the fight will be challenging. world. Losses that have resulted as claims and settle- There is a lot at stake here especially from the viewpoint ments against trucking companies have escalated in of the plaintiff attorneys who will be very formidable recent years. We have all seen the headopponents as we continue to work on this lines and continue to gasp as the settleat the Capitol. ments get larger and larger regardless of We will need the help of every IMTA AS YOU TRY who is at fault. (More information in the member. As you try to secure insurance, TO SECURE your voice, your story and concern is needed. lead article on page 18.) INSURANCE, Every IMTA member is being impacted by Safety always has been and always will YOUR VOICE, the current insurance environment and be the top priority of this industry. Those YOUR STORY every IMTA member will be impacted by of us in the trucking industry clearly recAND CONCERN ognize the tremendous responsibility and this legislation if we are successful in getting exposure we face daily given the nature of it passed and to the Governor. IS NEEDED. the job that is required to deliver the goods This work is important, not because we and products that America depends on. want to walk away from our responsibilities Trucking companies have never backed away from if we are at fault in an accident but conversely, we want the significant investments and attention required for to create a fair and balanced environment that allows the safety training that is needed to prepare drivers the victims to be the true benefactors of any settlement. for the perils of the road. Trucking companies are also And of equal importance, we want every Iowan to be making significant investments to their fleets by adding assured that the products they depend on will continue as many safety enhancements as possible to their trucks to be found on the shelf of the local grocery store for a to ensure they are operating at the safest level possible. price that is reasonable and affordable.
ISSUE 1, 2020
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UP CLOSE & PERSONAL
PAT GRASSLEY, 2020 Iowa Speaker of the House The Speaker of the House is the presiding officer of the House chamber. The Speaker ensures that debate runs smoothly and that chamber rules are followed. Speaker Grassley works with both parties in this role to make sure the voice of the minority party is also heard. The Speaker is also responsible for the dayto-day administration of the Iowa House, even when legislators are not in session.
1
What motivates you to serve as a legislator every day?
I am always grateful for my constituents that send me to Des Moines. I want to make sure that they have a voice and a seat at the table.
2
hat do you believe your most W important job is as the new Speaker of the House?
My job is to listen to my caucus, hear the issues that their constituents have brought forward, and then turn their ideas into action. My most important job is to make sure that Iowans priorities are being addressed and that their state government functions in an efficient manner.
3
hat are the three W biggest challenges facing the State of Iowa in your opinion?
Workforce, childcare, and broadband.
4
hat is your typical W day as the Iowa Speaker of the House?
I am new to this and still learning. On any typical day, I’ll get to the Capitol around 7:30 a.m. and meet with members of the caucus who PAT GRASSLEY want to discuss policy issues Iowa Speaker of the House or priorities. At 8:30 a.m., the House gavels in and we get about our official business. Most days are filled with meetings with groups, constituents, and other legislators. As we progress through session, we will spend more time on the floor debating bills. At the end of the day, I always try to attend some of the receptions, especially if I have someone local coming
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IOWA TRUCKING LIFELINER
into town for it. I really like to see people from back home when they come to Des Moines.
5
hat is the most misunderstood W element of being a legislator?
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What are you looking forward to the most as the new Speaker?
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How is the Iowa economy? The national economy?
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What is the most difficult aspect of your job in leadership?
How much time you actually put into the job. Iowa is a citizen Legislature and when members aren’t at the Capitol in Des Moines, they’re back home living and working in their communities. When we’re out of session, most legislators go back to their full-time jobs as farmers, teachers, small business owners, and many other professions. They do all of this while also being a public official and serving constituents. Whether it’s connecting someone with a state department that’s giving them the runaround, helping to fix an issue with Medicaid, or just listening to them and hearing their ideas about a piece of legislation, legislators are always on the clock for their constituents and they all take the job seriously.
Listening to the caucus, hearing what their constituents’ priorities are, and then taking action to address those issues.
Both the Iowa and the national economies are strong. New trade agreements like the USMCA and China deal will further strengthen our ag economy, which is high importance to Iowa. The biggest issue with our economy is the workforce shortage that many states are facing. We have been working to address in previous sessions by expanding job training opportunities and will continue our efforts this session.
Time away from family is always a difficult part of serving, not just in leadership, but for all legislators.
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ho were your mentors and how did W they prepare you for your current position as the Iowa Speaker?
1. My grandpa, Chuck Grassley, and seeing how hard he has worked to serve the people of Iowa. He is a great example for other public officials to learn from.
Speaker Grassley with his grandfather, who is no stranger to the political environment in Iowa, U.S. Senator Chuck Grassley.
2. My dad, Robin, who brought me up on the farm and instilled in me a strong work ethic. 3. Former Speaker Upmeyer, who has given me lots of advice and counsel during my time in the Legislature.
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Describe yourself in 3 to 5 words.
At one of my kid’s sporting events. Both of my daughters are active in volleyball, softball, and basketball and I really enjoy going to those. I wouldn’t say that I get rowdy at the games, but I can sometimes get very invested in the outcome. I enjoy seeing my kids and their classmates compete and be successful.
I f you could have a conversation with someone either dead or alive, who would it be and why?
George Washington … He risked everything for an idea of what this country could be, life, family, and fortune.
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heard, and their priorities are being addressed. I don’t want to be an arm twister. I want to make sure that our agenda comes from our members.
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Sand farmer from New Hartford
Describe your “perfect” day away from the Iowa legislature.
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The Grassley Family — Amanda, Reagan, Indee, Chancellor & Pat
hat are your guiding principles as a W legislator and leader?
As the Speaker, I want to lead the caucus in a bottom up way. I want to make sure that their concerns are
ow do you stay on the “pulse” of H the State of Iowa and get a good understanding and appreciation of what the “real people” in the state are going through on a daily basis?
I visit every town in my district every single year and hear from constituents about lots of issues. Hearing from people directly is the best way that I can serve them and take their priorities to Des Moines.
15
What is your view of Iowa’s trucking industry?
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What is your favorite truck?
Iowa’s trucking industry plays a vital role in our economy. Each of us legislators have manufacturers in our communities that make products that have to be delivered to market. That’s where the trucking industry comes into play. They are the middle man in making sure that small businesses in Iowa are able to transport their products across the country in a timely fashion.
ur farm truck, a 1999 Sterling. But I wouldn’t O mind something newer.
ISSUE 1, 2020
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CORNERSTONE SPONSORS THANK YOU TO OUR 2020 CORNERSTONE SPONSORS As of February 1, 2020 $25,000
PLATINUM
PATRON
Harrison Truck Centers
Interstate PowerSystems / I-State Truck Center
MHC Kenworth Midwest Peterbilt Group Midwest Wheel Companies Thompson Truck & Trailer
$8,000
McGowen Hurst Clark Smith O’Halloran International, Inc. / Quality Services Corp. PrePass Safety Alliance
Truck Country
$5,000
ASSOCIATE
$2,500
BMO Transportation Finance
Allied Oil & Supply, Inc.
Northland Insurance Co.
Cornhusker International Trucks
Bauer Built Tire & Service
Renewable Energy Group
Cottingham & Butler
Bridgestone Commercial Solutions
Reynolds & Reynolds, Inc.
Gatr Truck Center
Dave Syverson Truck Centers
RSM US LLP
Housby Mack Inc.
Eastern Iowa Tire
Thermo King Christensen
J.J. Keller & Associates
Engles, Ketcham, Olson & Keith, P.C.
Truck Center Companies
Kwik Trip / Kwik Star Inc.
Hanifen Towing
Truckers Insurance Associates, Inc.
Lube-Tech
Katz, Sapper & Miller
US Cargo Control
Mid-States Utility / Keizer Co.
Majestic Truck Collision & Frame Repair
COLLEAGUE
Ottsen Oil Company Thermo King Sales & Service TrueNorth Companies Wilson Trailer Company
Want to see your company listed as an IMTA Cornerstone Sponsor? Contact the IMTA at 515-244-5193 or visit www.iowamotortruck.com
YOUR
ASSOCIATION AT WORK
2019: It’s All in the Numbers Quantifying what we do for our members is important. Here are some metrics for 2019.
01 MEMBERSHIP
02 ADVOCACY
Our number one priority is to serve the membership and be an effective & reliable partner.
Being a trusted & consistent voice in front of elected officials & regulatory leaders is always our top priority.
Membership = Foundation of IMTA
LEGISLATIVE VOICE IN IOWA & D.C.
95% RETENTION RATE 653 MEMBERS 77 COUNTIES
» 89 in-person meetings with state legislators outside the realm of lobbying activities & fundraising » 41 in-person meetings with members of Iowa’s congressional delegation (both in D.C. & Iowa)
UNPRECEDENTED NETWORKING OPPORTUNITIES
» Mock Audits Performed: 6 » Other “Regulatory & Compliance” Support Efforts Performed: 20 » IMTA Staff, IDOT and IDPS meet quarterly to discuss important issues relative to Iowa’s trucking industry and regulatory / compliance activities.
» 308 Carrier Locations » 345 Vendor Locations
» with IMTA members
» 102 IMTA events & activities held » 2,899 IMTA members engaged
03 TELLING OUR STORY
REGULATORY ADVOCATE / REGULATORY & COMPLIANCE ASSISTANCE
Reminding everyone of the importance of trucking in Iowa is paramount: Every Iowan is impacted in a positive way EVERY DAY because of trucking.
28 PRESS RELEASES
61 MEDIA ENGAGEMENTS
» 2–4 press releases are distributed each month highlighting the importance of trucking.
» A proactive approach is always taken with our media partners. We welcome the opportunity to talk with the media about the industry, our priorities… all in an effort to build positive working relationships.
MEMBERS IN THE NEWS TrueNorth’s Duane Smith to Receive 2019 Howard Hall Business Award In addition to being named the Corridor Business Journal’s Most Influential Leader for 2019, TrueNorth Companies CEO Duane Smith is picking up another accolade by receiving the 2019 Howard Hall Excellence in Business Award. “Duane’s business savvy; his entrepreneurial DUANE SMITH spirit, his commitment to not only insurance, but to the local business community in general made him really stand out to the Selection Committee,” said Doug Neumann, Economic Alliance executive director. “It was felt that Howard Hall and Duane Smith would have really connected in their interest in leaving their community (and the world) a little better off than how they found it, whether that is through their industries, their community contributions, or their direct legacies.” In addition to his role at TrueNorth, Smith serves as chairman for Avant INS. and Health Solutions. He also owns Duffy’s Collectible Cars, a venture that marries his love for business with the thrill of fast-moving machinery. The Howard Hall Excellence in Business Award is given to a premier business leader who exemplifies the outstanding, enduring business values of Howard Hall and his passion for a vibrant Cedar Rapids. SOURCE: Corridor Business Journal
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Gerdin Family Gives $350K to Ronald McDonald House The Gerdin Family Foundation has donated $350,000 to Ronald McDonald House Charities of Eastern Iowa and Western Illinois (RMHC-EIWI) to kick off the second phase of Ronald McDonald House renovations. The gift is part of a “house refresh” project that will update the Ronald McDonald House of Iowa with new flooring and updated HVAC systems, improving the comfort, safety and services for families with children being treated at local medical facilities. “RMHC-EIWI has assisted so many families in their time of need over the last 35 years. We are honored and happy to be a part of the renovation project in the Iowa City location. We hope our donation assists RMHC in helping many more families on their visits to Iowa City,” said Mike Gerdin, CEO of North Liberty-based Heartland Express. The Gerdin family has been an active benefactor to Iowa institutions, with major gifts funding the creation and expansion of Iowa State University’s Gerdin Business Building, the University of Iowa Stead Family Children’s Hospital and the UI’s Russell and Ann Gerdin Athletic Learning Center. SOURCE: Corridor Business Journal
Midwest Wheel Companies Appoints New President/CEO
Allied Oil & Supply Opens in Cedar Rapids
Michael Callison Jr. has been appointed to the position of President/CEO of Midwest Wheel Companies, replacing retiring John Minor as he moves into an Advisor role and continues as a Board Member. Michael represents the company moving into its fifth generation with a Callison family member as President/CEO. Midwest Wheel will continue to operate with a team of seasoned industry veterans. The staff and director positions represent over one hundred years of experience with Midwest Wheel. Michael and this team will lead the vision and strategy of the company into the future.
Allied Oil & Supply has opened a new location providing the entire offering of Lubricant Distribution, DEF Distribution, Industrial Services and Equipment Services to customers in Cedar Rapids and surrounding markets. Cedar Rapids is a significant, strategic market for Allied’s expansion into broadening the scale and scope of the Central Midwest region.
IOWA TRUCKING LIFELINER
Allied Oil & Supply was founded by Conrad Heinson in 1958 providing Products and Services in the Central Midwest. It is a family owned business with Tammy Heinson-Fowler (daughter) and Kyle Fowler (grandson) continuing the legacy, and Steve Phillips and Greg Kennedy (nephew) leading the organization.
MEMBERS IN THE NEWS Dickey Retires as Packwood Mayor after 27 Years Packwood Mayor, and longtime IMTA member and Board member, Dave Dickey has stepped down from his post, having completed 27 years as mayor and a total of 49 years in city government.
Hands-on learning in action at the Midwest Diesel Tech Academy
Midwest Peterbilt Group Training School Awarded Grant Midwest Peterbilt Group (MPG), headquartered in Sioux City, Iowa, recently received a $50,000 Iowa Employer Innovation Fund matching grant for its new Midwest Diesel Tech Academy. The state grant helps employers provide post-secondary training and education opportunities for their employees. MDTA opened for classes in September under the instruction of corporate trainer Dennis Wallace. Classes are held at the Corporate Office, with a new two-story 8,000-square-foot building planned for 2020.
The training school provides a 9-month, low-cost tuition program for diesel techs beginning in September. Following graduation in May, successful candidates are employed at one of MPG’s five locations: Sioux City, Council Bluffs and Des Moines in Iowa; and Norfolk and Lincoln in Nebraska. The 9-month-long curriculum includes 14 class modules and over 6,000 hours of paid internship at one of the dealerships. Current students are interning at Peterbilt of Sioux City.
Dickey was born and raised in Packwood and has lived in the town nearly his entire life. At just 23 years of age, Dickey was the youngest member of the council. In 1992, Dickey DAVE DICKEY became mayor of Packwood. Why did he run? “Probably because no one else wanted the job,” Dickey joked. “It certainly wasn’t for financial gain. It paid about $50 a month back then.” While Dickey is retiring from city government, he’s only semi-retiring from his job at Dickey Transport in Packwood, a company founded by his father where Dave has worked for perhaps as many as 60 years. SOURCE: Southeast Iowa Union
Sukup Announces Successor
CHARLES E. SUKUP
STEVE SUKUP
After 25 years, Charles E. Sukup, President of Sukup Manufacturing Co., has transitioned from Chair, President and CEO to Chairman of the Board. His brother, and longtime IMTA Board member, Steve Sukup, who has been CFO and Vice President will become President and CEO. “While growing up, I always knew that I would work in the family business and was proud to be the first degreed engineer for the company. Evidently Dad thought it would be cheaper to raise an engineer rather than hire one! I was one of the few students at Iowa State that knew exactly what I would be
doing after graduation,” reflected Charles. Charles is now 65 years old, the same age as when his father transitioned from being president in 1995. Charles served as Chair of the Iowa Association of Business & Industry and President of the American Society of Agricultural and Biological Engineers. He is a registered Professional Engineer, a professor at Iowa State University, and a member of the National Academy of Engineering. He also is a board member of the National Association of Manufacturers and Chair of America’s Cultivation Corridor.
ISSUE 1, 2020
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INDUSTRY NEWS
What Does 2020 Look Like for Trucking? The million-dollar question right? In a recent poll of IMTA members asking for an answer to this question, the answers (as expected) were as varied as the members represented by the association. While not scientific, the survey concluded with 15 carriers stating they were “cautiously optimistic”, 21 carriers were “not optimistic”, 6 carriers were “undecided” and only 1 carrier in the survey believes that we are moving into a recession.
“The fleets that play primarily in that sandbox have got to be hurting. If you take into account wages that have increased, insurance costs, and what’s going on with volume, rates, they have to be hurting,” said Costello in the TT article. In the same article, Costello said he was optimistic about contract business in 2020. While there has been a decline in prices, the dip is far less than what has taken place on the spot market Costello noted.
Factors such as the 2020 elections, consumer confidence, trade deals, weak freight demand, slow down in manufacturing, and uncertainty in fuel pricing, equipment pricing and continued workforce issues were all cited by carriers in the survey as factors that influence their outlook for the future.
One economist with contrarian view of the overall economy in the TT article was Noel Perry, Transport Futures. He is predicting a recession in 2020, stating that the slow down began in both manufacturing and trucking in 2019, which he believes is typical about a year before a recession.
In a recent article by in Transport Topics, several different economists were interviewed and like the IMTA survey, many different opinions emerged. ATA economist Bob Costello commented on the spot market, while a relatively small segment of the trucking industry, its decline is hard on companies that rely heavily on the spot market.
In a recent report issued by The Balance, they continued to say that the US economic outlook is healthy stating a review of key economic indicators was positive. The article stated that the most critical indicator, the gross domestic product, which measures the nation’s production is expected to fall below 2% and 3% ideal
range. Another factor cited in the article was the that the unemployment forecast will continue to fall below the natural rate and there isn’t too much inflation or deflation. The article also maintained that the low interest rates will continue to stay in the 1.5% to 1.75% range until 2021 which will further help strengthen the economy. Some Iowa carriers believe that the recent ratification of the USMCA and finally moving forward with a trade deal with China will also have a positive impact on the overall economy. “Creating some added certainty with international markets is always a good thing,” wrote one IMTA member in his response. A variety of opinions emerged regarding equipment. In the TT article, it noted that trailer makers ended 2019 with a steep drop in orders, which sets up a softer backlog in 2020 and truck makers have indicated that they are looking to add production in 2020. In conversations with IMTA allied members specific in these segments, they continued to be “cautiously optimistic” when looking to 2020.
ISSUE 1, 2020
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INDUSTRY NEWS USMCA Finally Passed by the US Senate with Unanimous Support by Iowa Delegation The U.S.-Mexico-Canada Agreement, or USMCA, passed by a vote of 89-10. The trade pact, signed by the president in November 2018, received a similar bipartisan vote in the House in December of 2019.
REP. CINDY AXNE
SEN. JONI ERNST
REP. ABBY FINKENAUER
SEN. CHARLES GRASSLEY
REP. STEVE KING
REP. DAVE LOEBSACK
The USMCA replaces the North American Free Trade Agreement (NAFTA), negotiated in the 1990s by President George H.W. Bush and pushed through Congress by President Bill Clinton. With a renegotiated trade pact with Mexico and Canada and the signing of an initial trade deal with China aimed lawmakers from both sides of the aisle were touting the importance of continued emphasis on trade.
creating 175,700 new jobs over six years, fewer on average than the U.S. economy creates in a single month.
increase by $19.1 billion (4.8 percent) and $12.4 billion (3.8 percent), respectively,” according to the report.
According to a report by the U.S. International Trade Commission, USMCA would boost gross domestic product by 0.35% after inflation, or $68.2 billion,
“U.S. exports to Canada and Mexico would increase by $19.1 billion (5.9 percent) and $14.2 billion (6.7 percent), respectively. U.S. imports from Canada and Mexico would
All of Iowa’s congressional delegation (Grassley, Ernst, Axne, Finkenauer, King, Loebsack) voted for the passage of the USMCA.
Phase One of the US-China Trade Deal Signed The United States and China have agreed on the terms of a “phase one” trade deal that reduces US tariffs on Chinese goods while boosting Chinese purchases of American farm, energy and manufactured goods. Additionally, intellectual property practices are also a priority of ongoing talks between the US and China. Since the deal was signed, the United States will not proceed with the 15% tariffs on nearly $160 billion worth of Chinese goods (cell phones, laptop computers, toys and clothing). In return, China canceled its retaliatory tariffs that would have gone into the effect the same day as the US tariffs. The 25% tariff on US made automobiles was especially problematic.
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IOWA TRUCKING LIFELINER
The US will cut by half the tariff rate that was imposed on September 1st on a $120 billion list of Chinese goods to 7.5%. US tariffs of 25% on $250 billion worth of Chinese goods will remain unchanged, which is considered to be of value when negotiating continues for a second phase next year. China agreed to increase purchases of American products and services by at least $200 billion over the next two years, with the expectation that the higher purchases will continue after that period. The purchases will include manufactured goods, agricultural goods, energy, and services. China has committed to increase purchases of US agricultural products by $32 million
over the next two years. China has also committed to reduce non-tariff barriers to agricultural products such as poultry, seafood, and feed additives as well as approval of biotechnology products. The new deal will also include stronger Chinese legal protections for patents, trademarks, copyrights with improved criminal and civil procedures to combat online infringement, pirated and counterfeit goods. China has also committed to follow through on previous pledges to eliminate any pressure from foreign companies to transfer technology to Chinese firms as a condition of market access, licensing, or administrative approvals and to eliminate any government advantages for such transfers.
INDUSTRY NEWS Judge Temporarily Blocks California Labor Law for Independent Contractors The implementation of the California Assembly Bill 5 (AB5) called for the reclassification of tens of thousands of independent contractors as employees. The new law would have removed opportunities for truck drivers to own their own business and work as independent owner operators in California. The legislation was passed in 2019 and was to go into effect January 1, 2020. California’s AB5 ABC test requires that motor carriers render their workers employees unless the employer demonstrates that the worker is free from control of the hiring entity, the worker performs work outside the usual course of the hiring entity’s business; and that the worker is customarily engaged in an independent trade or occupation. The second part of the three-prong test is especially problematic for carriers to demonstrate. A federal judge in California temporarily halted the implementation of the new law by issuing a temporary restraining order against the implementation. The order (issued December 31) which pertains exclusively to the law’s potential effects on the trucking industry was issued in response to a request filed in midDecember by the California Trucking Association (CTA) seeking a delay in the law. The trucking association filed a lawsuit challenging AB5 arguing that many of its members want to remain as independent contractors because it allows them the ability to be business owners. CTA cited that the new law would force these drivers to be treated as employees and forfeit these “ownership” benefits. The California Attorney General Xavier Becerra and the International Brotherhood of Teamsters are the defendants in the case.
FMCSA Study to Focus on Large Truck Crashes The Federal Motor Carrier Safety Administration announced plans to develop and conduct a major study of factors that contribute to large-truck fatal, injury and tow-away crashes. The study entitled “Large Truck Crash Casual Factors Study” will replace a 15-year old crash causation study that the agency has used for policy decisions. Given the many changes that have continued to be made in truck technology, vehicle safety, driver behavior and roadway design, a new study seemed logical. The agency is seeking public comment on how to proceed. FMCSA has noted that the study’s methodology should address the use of onboard electronic
systems that can generate data about the vehicle speed, lane departure and hard braking. Acting Director for FMCSA, Jim Mullen has tasked the agency with finding ways to decrease the number of largetruck fatalities on the nation’s roads. From 2003 to 2009, fatal crashes involving large trucks decreased. In 2009, there were 2,893 crashes, the lowest number. In 2010, crashes started to increase and continued in that pattern. In 2018, fatal crashes involving big trucks had increased almost 53% (4,415). There will be a 60 day comment period regarding the new study.
ISSUE 1, 2020
15
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THE COMMERCIAL INSURANCE MARKET AND LITIGATION REFORM:
Connecting the
O
Dots
STORY: J. DANIEL COOK, TRUENORTH COMPANIES
ver the past year, I have been given the opportunity to present at multiple industry events on a variety of topics. The two items that keep coming up in discussion and seem to be on the mind of all facets of the transportation industry, are insurance costs and the litigious operating environment. At a high level, I will attempt to provide an update on each.
COMMERCIAL INSURANCE MARKET
It sucks – next topic. No seriously, during my 30 years in the insurance industry, this is about the toughest operating environment I have witnessed. That is true for both the trucking companies and the insurance carriers. The rules we have long played by are shifting and costs are rising for all that are involved. By and large, the insurance carriers that provide auto liability and excess coverage to the trucking industry have lost money since 2010, and in general have performed even worse than business auto insurers. We don’t often think about it, but insurance companies buy insurance too. They too lament over and must deal with insurance renewals of their own. I
18
IOWA TRUCKING LIFELINER
am referring to their reinsurance agreements or the “treaties” that insurance carriers use to protect their businesses and spread risk. Reinsurance renewals occur throughout the year, just as truck insurance renewals vary. However, the two main dates are July 1st and January 1st. In July 2019, we saw a couple of truck insurance carriers experience significant reinsurance rate increases; increases in retained risk and reductions in reinsurance capacity. The result? Those companies became less competitive, and in several cases, offered less insurance capacity to the trucking industry in Q3 and Q4 as a result. In January, a majority of those in the rest of the truck insurance industry had their day of reinsurance reckoning. I have heard insurance executives describe their
VERDICTS AGAINST TRUCKING COMPANIES $17.5 million
18M
Average Payout Amounts
14M
Average payouts
4M
KEY
12M
2.5M
8M
2M
6M
1.5M
4M
1M
0
500K
$2.6 million ’10
’11
’12
The rules SHIFTING we have long played by are and costs are
RISING for all that are involved.
IOWA TRUCKING LIFELINER
3M
10M
2M
20
3.5M
Median Payout Amounts
Median
16M
4.5M
’13
’14
’15
’16
’17
’18
’19
0
reinsurance renewals as “almost unfair”, “a real shit show,” “pretty punitive,” and in a multitude of ways, describe how it has hindered their ability to do business or support their customers. These conversations sound eerily similar to the comments trucking companies often make about the insurance renewals they are going through. And that is the point, something has got to give to ebb the tide of increasing claim costs and larger settlements or verdicts. You may have seen the recent Freightwaves article on the size of legal awards against trucking companies. The chart above is telling. The bottom line: according to the CaseMetrix data, the average verdict against a trucking company in 2012 was about $2.6 million. Now it’s more than $17 million.
AVERAGE VERDICTS AGAINST TRUCKING COMPANIES Willis Towers Watson recently updated their Insurance Marketplace Realities 2020, pointing to “Social Inflation” as a contributor to spiking auto liability and general liability rates. Driven by the severity of claims and a reduction in insurance capacity, they predict excess insurance costs to increase dramatically. Stating that accounts with large commercial fleets are still seeing significant increases in the lead umbrella pricing (25%+) after already enduring several years of increases. These increases are also putting upward pressure on the following excess layer pricing. Excess capacity continues to contract, and many motor carriers are finding it difficult to fill out their excess towers. Just as trucking companies try to protect
their balance sheets by purchasing excess coverage, so do the excess underwriters by reducing the amount of risk they take in any one loss or for any one client. Motor carriers are now finding themselves competing for excess capacity as opposed to excess underwriters competing for their business. Nationwide recently released what they have termed to be the “Big 3” loss types that are driving the majority of commercial auto claims: 1. Lane Departures: A factor in 60% of all road fatalities 2. Rear-end collisions: 34% of all vehicle crashes annually 3. Hitting pedestrians or cyclists: Nearly 6,000 fatalities in 2016 When I think about those statistics a few things come to mind: T hese claims all normally involve legal » representation » W hat difference would it make if there were video footage? » How seldom the professional truck driver is at fault and needs to be defended
THE SLOW PAINFUL PROCESS How many times have you hear someone say, “if I am going to die, I hope I do so quickly”? Unfortunately, right now, the insurance renewal process has become
slower, longer and more painful. Due to poor financial performance, reduced market capacity and the general inability to accurately predict loss costs in this litigious environment, everyone is working harder for less. I sat at an underwriting desk 25 years ago, during a hard market. Self-preservation meant that I asked a lot more questions, performed a great deal more analysis and was significantly more selective as an underwriter – job #1 “document the file and cover my …….” Due to the increased frequency of large losses, this approach has now extended to the excess underwriters, with many reducing limits offered or exiting the market entirely. Where just a year ago getting excess quotes was a matter of days, it is now a matter of weeks or months. Much of the same detailed work, including actuarial review, that was the purview of the primary underwriters is now being performed by the excess underwriters as well. It is a slow slog, often requiring repeated re-underwriting as added limits are requested or underwriters get involved.
LEGAL & TORT REFORM INITIATIVE The current legal and social environment is not sustainable from a commercial standpoint. It is adversely, and in many cases, unfairly driving outcomes that are hurting the transportation industry today and will ultimately hurt the economy and consumers directly. Improving the situation will be hard, but since we are in trucking, we have a shared affinity for doing hard things. ATA has stepped forward to assume a leadership
ISSUE 1, 2020
21
role, addressing what is now a Tier One priority for the association. Strategy will include: » Federal: legislation, regulatory, education and coalitions » State: centralized “what works” library, state legislative and ballot advocacy, state courts and support grants » Education: supporting ATA Members – Member Education Hub » Public Affairs/Communications: educating the general public The trucking industry is not in this fight alone and the coalition of supporting partners is growing. The issues are not limited to trucking, but rather affect all companies operating commercial autos. The detrimental impact upon business and consumers is staggering. It is time to stand up. We can’t undervalue the importance of public affairs and education. At a recent meeting, which ATA held with several executives from transportation insurance carriers, there was broad agreement that any successful attempt at litigation reform must include a strong public education component. Consumers need to know that in the end, many are paying to enrich the few. This effort will not end quickly, nor will some of the results appear until well down the road. That said, there are opportunities to get wins. State associations like IMTA are already stepping forward to offer their support of specific issues where we can get a foothold and create a template for other states to follow. The strategy will also not be cheap. A key to success will be for all of those affected to contribute and to do so in a way that we can leverage our resources towards common objectives. It will take contribution from the trucking companies themselves, the insurance carriers, the OEMs and other associated companies that benefit from their affiliation with the transportation industry. It will also require aligning these resources with other industries and national groups that recognize the harm that run-away litigation is causing to our industry, our country and the communities that we serve. You can directly track the negative impact that this legal environment is having on investment and perhaps most importantly, jobs. It drives up the cost of insurance for all drivers, not just those in trucks, and makes consumer products more expensive. It is time to get that word out!
22
IOWA TRUCKING LIFELINER
IMTA MEMBERSHIP PERSPECTIVE ON CURRENT INSURANCE MARKET 74 Carriers Responded (25% Completion Rate) 10 Question survey specific to current insurance market
Liability Coverage Amount
What is the total limit of auto liability coverage you currently carry (primary and excess)? $1 Million or less
9 (12.2%) 38 (51.2%)
$2 - 5 Million $6 - 10 Million
11 (14.9%)
$10 Million+
16(21.6%)
Key Yes
No
Do you feel you have enough excess insurance to adequately protect your business given the current operating environment?
62.2% SAID NO
Do you believe that insurance cost has negatively impacted the value of your business over the past two years?
79.5% SAID YES
Due to cost of insurance, have you had to increase your deductible or self-insure risk during the past three years?
74.3% SAID YES
Has your cost of insurance increased 25% or more over the past two years?*
56.2% SAID YES
Source: 2020 IMTA Carrier Member Survey *Insurance is in the top 3-5 costs for a trucking company, so a 25% increase in a top tier expense is significant (especially when most trucking companies are operating on single-digit margins).
ISSUE 1, 2020
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BEST PRACTICES IN A HARD INSURANCE MARKET Think about the commercial slide deck that your sales / executive team has built to present your company’s service offerings to your best / largest prospects. Or the one you wish you had but haven’t take the time to develop. Do you have something similar relative to risk? How do you present yourself in a distinguishing way to the insurance market? Are you getting full credit for investments that you have made in safety and the culture you have created? The financing of risk is no longer just a purchasing activity, nor can it be an activity that a motor carrier undertakes once a year leading up to a renewal date. You must actively work your management of risk and your relationships with your underwriting facilities. As underwriters become fewer, partnerships become more valuable. So yes, the insurance market is hard, but someone always gets the best deal. That is true when it comes to buying commercial insurance or for that matter reinsurance. As I look at our benchmarking data, I see a vast difference between the customers that have the lowest rates and similar companies who pay significantly more. Why is that? It is often driven by the motor carrier’s approach, their control over the process, who they partner with and how proactively they drive results. Are you getting the best deal that you have earned? Have you earned the best deal that is being offered? The difficult insurance market in part ties to the poor litigation environment. In short term, neither is likely to improve soon or without a collaborative longterm reform effort. In the meantime, managing risk and the financing of risk as core components of your organization’s operating strategy can help you get the “best deal” available.
J. DANIEL COOK
Principal & National Transportation Practice Leader for TrueNorth Companies
Dan joined the TrueNorth team in 2013. Dan’s responsibilities include helping clients develop risk financing strategies related to reducing cost-of-risk on a long-term, sustainable basis that aligns with their operational objectives. Dan leads the national primary transportation practice in addition to heading large project teams; his passion stems from the ‘innovate’ and ‘build’ aspects of a business, procuring development of industry-leading processes, such as the 5C’s of Risk Financing™ approach. Over the past 20 years Dan has developed a Risk Based Due Diligence model that assigns additive or derivative value against EBIDTA. Dan leads the TrueNorth M&A Advisory Group facilitating transactions from both the buy and sell sides. If you would like to speak with Dan you can reach him at dcook@ truenorthcompanies.com or (616) 690-5856
24
IOWA TRUCKING LIFELINER
CEDAR RAPIDS, IA 7820 6TH ST. SW (319) 364-2491
DAVENPORT, IA 3665 W 83RD ST. (563) 326-4002
TRUCK SALES SERVICE PARTS LEASING TIRE & RETREAD WWW.THOMPSONTRUCK.COM
DECORAH, IA 1656 STATE HWY 9 (563) 382-8761
DUBUQUE, IA 1190 ROOSEVELT EXT. (563) 557-8170 STERLING, IL 23940 MOLINE RD. (815) 625-7798
WATERLOO, IA 2420 K LINE DR. (319) 233-8313
IOWA COUNCIL OF SAFETY MANAGEMENT
ICSM Steering Committee Members: Allison Meiners (Ruan), Bret Smith (Johnsrud Transport, Inc.), Marvin McGinnis (Casey’s General Stores, Inc.), Kenny Bauman (JMT Trucking Company)
Upcoming 2020 ICSM Sponsored Events The events listed below are open to the entire IMTA membership to attend. Thursday, March 26 Fleet Safety 101 Seminar IMTA Office (Des Moines) Tuesday, April 14 & Wednesday, April 15 Annual Safety Professionals Conference IMTA Office (Des Moines) Thursday, June 11 & Friday, June 12 Iowa Truck Driving Championships Prairie Meadows (Altoona) Thursday, July 9 Fleet Safety 101 Seminar IMTA Office (Des Moines) Information specific to each event can be found at iowamotortruck.com
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IOWA TRUCKING LIFELINER
Regulatory Panelists: Tom Bruun (Iowa DOT MVE), Shirley McGuire (FMCSA), Mike Kober (Iowa State Patrol)
New & Improved ICSM Division Well Received by Safety Professionals The efforts made on behalf of the ICSM steering committee have proven to be what the IMTA membership is looking for when it comes to serving the safety side of the trucking industry. Currently, 65 individual safety professionals make up the 2020 Iowa Council of Safety Management division, with 30 of these professionals being new to ICSM. “ICSM provides an invaluable opportunity for me to engage, learn and grow. ICSM is critical for staying informed of emerging safety technologies, practices and regulations. The meetings and conferences provide networking opportunities with other safety professionals and creates a forum to discuss practical applications and best practices. The interaction with regulators and legislators is beneficial for not only achieving compliance, but for shaping the future of the trucking industry,” said ICSM Steering Committee member Terry Pump, CRST International. In December, ICSM held their first-ever Mini-Safety Conference at the IMTA head-
quarters in Des Moines. Reassurance of the successful reboot of this valuable division was certainly visible with over 50 safety professionals in attendance. The event kicked off with a regulatory panel consisting of Shirley McGuire, Iowa Division Administrator for FMCSA; Sergeant Mike Kober, Iowa State Patrol; and Tom Bruun, Assistant Chief of Iowa DOT MVE. Attendees spent the noon hour networking with colleagues and peers over timely regulatory and safety topics and ended the day with a presentation on Driver Recruitment & Retention from Wendy Bartz of DriverReach. The mini-conference format is one of the many new features included with ICSM membership this year. At this event, attendees were able to get more clarification on regulatory issues and gain valuable ideas on practices they can bring back to their own companies. Special thank you to the ICSM Steering Committee who dedicated a great deal of time and planning to create a successful event and division: Kenny Bauman (JMT Trucking Co.), Marvin McGinnis (Casey’s General Stores), Allison Meiners (Ruan), Terry Pump (CRST International) and Bret Smith (Johnsrud Transport, Inc.)
NEXT GENERATION SPEAKS
LEAD IMTA Efforts Continue to Make an Impact The IMTA leadership program is now in its 27th year, and the momentum for the program has not been lost on IMTA members. In fact, the personal and professional development focused program continues to generate an increase in involvement by the next generation of IMTA members year after year. In 2016, the LEAD IMTA Council was formed as a way for IMTA Leadership Class graduates to stay closely involved and give back to the Association. The Council continues to set an example of a program so successful other state associations have tried to emulate it. New council members are drawn to joining after witnessing the interaction among other council members and the leadership roles they have at various IMTA events. “The LEAD Council offers a rare opportunity for our members that work at competing companies to sit at the table with one another as allies to collaborate and do great work for the trucking industry. The Council was built on a very inclusive model; it doesn’t have age or position restrictions to joining. This allows us to recruit members from a large pool of candidates and is one of the many reasons behind the continued success of the Council. The input and involvement we receive from the LEAD Council is very important to IMTA because they are the future of this Association,” said IMTA President Brenda Neville. The Council participates in monthly conference calls where they oversee the planning of the LEAD IMTA Conference, work on the annual Foundation silent auction, and plan social events throughout the state to get more members involved. The
2020 LEAD IMTA Council members at the strategic planning session. FRONT: Tracy Petrak (CJ Cooper & Associates), Kelli Boyle (Ruan) MIDDLE: Mike Bash (Britton Transport), Jason Rose (Midwest Wheel Companies), Justin Walters (West Side Transport, Inc.), Andy Schmitt (Sukup Manufacturing Co.), Blake Grolmus (Ruan) BACK: Mike Garreans (Truck Center Companies), Cory Richmond (West Side Transport, Inc.), Robert Sullivan (Warren Transport, Inc.), Ben Couch (Reynolds & Reynolds, Inc.), Brian Pyle (Pyle Transportation)
2020 LEAD IMTA Council Mike Bash, Britton Transport Kelli Boyle, Ruan Ben Couch, Reynolds & Reynolds, Inc. Mike Garreans, Truck Center Companies Blake Grolmus, Ruan Phil Kennedy, Motor-Ways, Inc. Jeff Martin, Green Products Company Tracy Petrak, CJ Cooper & Associates Brian Pyle, Pyle Transportation Cory Richmond, West Side Transport, Inc. Jason Rose, Midwest Wheel Companies Andy Schmitt, Sukup Manufacturing Co. Robert Sullivan, Warren Transport, Inc. Justin Walters, West Side Transport, Inc.
event socials have no agenda and continue to be popular with IMTA members. The 2020 Council recently held their annual strategic planning meeting and
will continue to be a strong and positive presence in 2020. In 2020, they will continue to take on the previously executed projects, but in addition they are focusing on forming subcommittees to raise money for Truck PAC Iowa, to research future IMTA rebranding strategies and to plan an additional social events. “I have been a member of the LEAD Council since 2017. I choose to remain on the Council today not only because of the great networking opportunities it provides, but also because the Council is continuously brainstorming new ways, we can make a difference within IMTA. It’s exciting to be a part of the strategic planning session every year and watch the committee work together to meet the goals we set,” said LEAD Council member Justin Walters, West Side Transport, Inc.
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27
IOWA MOTOR CARRIERS FOUNDATION
Thank You, Foundation Donors The Iowa Motor Carriers Foundation (IMCF) continues to work on important efforts to compliment and support the work of the Iowa Motor Truck Association. The IMCF was formed in 1986. As a 501 C 3 organization it has its own board, its own set of priorities and offers valuable financial assistance in several areas of importance to Iowa’s trucking industry. Unlike the Iowa Motor Truck Association, all contributions to the Foundation are 100% tax deductible and the generous support of IMTA members is critical in the important work of the Foundation. A special thanks to all the individuals and companies listed below for their financial support in 2019. Your contributions are greatly appreciated. All Seasons Trucking
Panama Transfer
Bryan Sweeney Great West Casualty Company
Pat Storey Motor-Ways, Inc.
Central Iowa Trucking
Pyle Transportation
Dan Van Alstine Ruan
Reppert Transfer & Storage
Dave Dickey Dickey Transport, Inc. Don Decker Decker Truck Line, Inc. Harrison Truck Centers Hugh Ekberg CRST International, Inc. Des Moines Transportation Co. Jim O’Halloran O’Halloran International John Ruan Foundation Trust John Smith Admiralty Holdings
Rory Triplett Insurance Associates Steve Schuster Schuster Co. Schuster Co. Thermo King Sales & Service Thompson Truck & Trailer Tracy Petrak CJ Cooper & Associates Truck Country Weinrich Truck Line, Inc. West Side Transport West Wind Logistics
Kyle and Sharon Krause Family Foundation
ISSUE 1, 2020
29
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ATRI UPDATE ATRI’s Newest “Operational Costs” Research Shows Dramatic Increases
REBECCA BREWSTER ATRI President & COO
Want to get more involved with ATRI? There are a number of ways you can be part of this vital industry organization: » P articipate in ATRI’s research. When ATRI puts out a call for carrier data or asks for responses to an industry survey, take the time to participate. More is always better when it comes to research and we encourage you to join the growing number of motor carriers, professional drivers and industry suppliers who all regularly take part in ATRI’s studies. » C ontribute to ATRI. Join your peers in the industry and STEP UP with a charitable contribution to support ATRI’s research. Giving is easy and can be done online at www.truckingresearch.org. » S uggest a research topic. ATRI is always looking for new research ideas for the RAC to evaluate. » J oin the RAC. Want to be involved in setting the trucking industry’s research agenda? Send us an email letting us know you want to be considered for a nomination to serve on the RAC. » S pread the news. When ATRI releases research results, please Tweet, Facebook and otherwise share the findings with your colleagues and peer network so that everyone benefits from our work on behalf of the trucking industry.
32
IOWA TRUCKING LIFELINER
The American Transportation Research Institute (ATRI) released the findings of its 2019 update to “An Analysis of the Operational Costs of Trucking.” Using detailed financial data provided directly by motor carriers of all sectors and fleet sizes, this “Ops Costs” research annually documents and analyzes trucking costs from 2008 through 2018. ATRI’s analysis provides industry stakeholders with an essential benchmarking tool, and government agencies with input on industry finances necessary for comprehensive transportation planning and infrastructure improvement analyses. ATRI’s newest 2019 Ops Costs report documents the extremely robust economic environment that carriers and drivers experienced in 2018, but these same economic conditions put considerable upward pressure on nearly every line-item cost center experienced by carriers. The average marginal cost per mile incurred by motor carriers in 2018 increased 7.7 percent to $1.82. Costs rose in every cost center except tires, with fuel costs experiencing the highest year-over-year growth of 17.7 percent. Not surprisingly, insurance costs saw the second fastest year-over-year growth at 12 percent. As a strategic response to the severe driver shortage that existed in 2018, driver wages
and benefits increased 7.0 and 4.7 percent, respectively – representing 43 percent of all marginal costs in 2018. Repair & maintenance (R&M) costs, at 17.1 cents per mile in 2018, have increased 24 percent since 2012 – a counterintuitive increase given the record sales of new trucks and trailers. From 2012 to 2018, overall motor carrier operational costs have increased more than 11.6 percent – exceeding the 10.8 percent inflation rate for that same time period. ATRI’s 2019 report again includes an “Industry Sector in Focus” analysis for tank fleet operators. “The research highlighted by ATRI in this high-level report is instrumental for carriers and government agencies to inform and educate on the continual financial and operating pressures our industry is burdened with and must manage and control,” said Hugh Ekberg, President and Chief Executive Officer of CRST International and a member of ATRI’s Board of Directors. Since its original publication in 2008, ATRI has received over 16,000 requests for the Operational Costs reports.
Average Costs Per Mile, 2018-2013 Motor Carrier Costs
2013
2014
2015
2016
2017
2018
Fuel Costs
$0.645
$0.583
$0.403
$0.336
$0.368
$0.433
Truck/Trailer Lease or Purchase Payments
$0.163
$0.215
$0.230
$0.255
$0.264
$0.265
Repair & Maintenance
$0.148
$0.158
$0.156
$0.166
$0.167
$0.171
Truck Insurance Premiums
$0.064
$0.071
$0.074
$0.075
$0.075
$0.084
Permits & Licenses
$0.026
$0.019
$0.019
$0.022
$0.023
$0.024
Tires
$0.041
$0.044
$0.043
$0.035
$0.038
$0.038
Tolls
$0.019
$0.023
$0.020
$0.024
$0.027
$0.030
Driver Wages
$0.440
$0.462
$0.499
$0.523
$0.557
$0.596
Driver Benefits
$0.129
$0.129
$0.131
$0.155
$0.172
$0.180
TOTAL
$1.676
$1.703
$1.575
$1.592
$1.691
$1.821
ATA UPDATE WE HAVE A STORY TO TELL — HELP US SHARE IT ECONOMIC GROWTH & JOBS
TRUCKING MOVES AMERICA FORWARD (TMAF)
Telling the Positive Story of Trucking TMAF MISSION The mission of Trucking Moves America Forward is to establish a long-term industry-wide movement to create a positive image for the industry, to ensure that policymakers and the public understand the importance of the trucking industry to the nation’s economy, and to build the political and grassroots support necessary to strengthen and grow the industry in the future.
WHAT DOES TMAF DO? Every day, millions of trucks travel across the United States to help move America forward. Whether you are a student, mother, homeowner, doctor, business executive or politician, you depend on trucks to deliver essential foods, medicines, office supplies, computers, cribs, and other products that help you live every day. The fact is that trucks are critical to our national and global economy, to our families, to our businesses, and so much more. When they stop moving, the country stops moving. By educating the public and working with policymakers we can ensure that the trucking industry remains the thriving industry it is today.
» Trucks drive economic growth and jobs in America—in fact, the industry currently supports 7.7 million jobs, including 3.5 million professional drivers. » Today, there are more than 50,000 job openings in the trucking industry. » Trucking is mostly made up of small businesses – with 91% operating six or fewer trucks and 97.3% operating fewer than 20 trucks.
SAFETY » Truck drivers are skilled professionals who are required to follow stringent safety regulations and willingly work with the public to educate them on how to drive with tractortrailers on the road. » Trucking organizations regularly recognize drivers for accidentfree driving records. » The trucking industry strives for safer highways and has seen overall declines in truck-related crashes and fatalities over the past decade. » The trucking industry invests at least $9.5 billion in safety improvements each year.
TECHNOLOGY » Today’s modern trucks are equipped with technologies that
not only make them safer, but also smarter and more fuel efficient than they’ve ever been before. » In addition to safety and environmental advances, new truck technology makes trucks more reliable, making just-intime delivery possible and even improving the quality of food and other goods upon their delivery.
SUSTAINABILITY » The trucking industry is committed to improving the environment. Many companies have participated in a sustainability program to reduce greenhouse gas emissions by one billion tons and fuel consumption by 86 billion gallons over 10 years. » Trucks are embracing green technologies—hybrid electric and engine-powered systems—that reduce idling time and air pollution.
COMMUNITY PARTNER » Trucks connect and grow communities across the country every day, one truck at a time. And during times of community need, we deliver. » Trucks perform a massive service to victims of natural disaster, delivering everything from food to housing relief and first aid to hauling away debris. And when the immediate crisis is over, trucks deliver the essentials to rebuild those communities.
MEET THE INDUSTRY MASCOT
Putting a Friendly Face on the Trucking Industry In 2017, Safety Sammy was unveiled to further the impact of the TMAF mission. TMAF devised a plan to more broadly and creatively tell its story of safety and responsibility, and reach an even wider audience, through a bold and unexpected move – an industry mascot.
Safety Sammy has quickly become a positive and well-recognized face for our industry and has proved to be a symbol of industry education and safety information in a new, exciting and accessible manner.
ISSUE 1, 2020
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IOWA DOT UPDATE New Feature on Iowa 511 App Helps Find Available Truck Parking A new feature on the Iowa DOT’s popular 511 traveler information app for Android and iOS can now tell you about available parking on your route. Sinclair Stolle, the Iowa DOT’s 511 program manager, said, “We are always looking for ways to make the 511 system work for the people who use it most, and professional drivers are heavy users of our system. To help them find available parking was a priority for us.” When using the Iowa 511 app, go into “settings,” choose “tell me settings and swipe to turn on this notification. Once this setting is activated, just touch the “tell me” button and it will
IMTA & DOT Partnership IMTA has always maintained a positive working relationship with the Iowa DOT. For the past several years, IMTA staff and volunteer leaders have met quarterly with DOT leaders to discuss issues of mutual interest and importance. Iowa DOT also does a quick update at the IMTA Board of Director’s meetings too. “We place a lot of value on maintaining a positive working relationship with our regulatory and enforcement partners. We have a shared goal of safety and keeping this priority in the forefront is paramount. Additionally, IMTA and the membership has a lot of interaction with many departments within the DOT so keeping the lines of communications open and being as proactive as possible in our efforts is extremely valuable,” said IMTA President Brenda Neville.
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audibly alert you of upcoming parking availability at rest areas and truck stops five miles ahead of your current location in the direction of travel. Stolle said, “This is a pilot project, so not all available parking is on the system yet. We hope to get feedback and make updates in the future.”
Stuart Anderson Appointed as DOT’s Interim Director Governor Kim Reynolds announced the appointment of Stuart Anderson as interim director at the Iowa Department of Transportation, effective January 19. “Stuart brings a wealth of transportation experience and will provide steady leadership to the department until a permanent Director is appointed,” Gov. Reynolds said in a statement. “I look forward to working with him to not only ensure a smooth transition at the agency, but also improve infrastructure and road safety.” Anderson joined the department in 1992 as an engineer-in-training in the Systems Planning Bureau. He served in various roles within the bureau until his appointment to director of the Office of Systems Planning in
2002. Since January 2009, he has served as the director of the Planning, Programming & Modal Division. “I appreciate the opportunity to guide the Iowa DOT through this interim period while the process to identify a permanent director is completed,” he said. “During this time, the great team at Iowa DOT remains committed STUART ANDERSON to providing outstanding service to Iowans and other users of our multimodal transportation system.” Stuart is a 1991 graduate of Iowa State University with a bachelor’s degree in civil engineering.
IMTA EVENTS
2020 IMTA Board of Directors
IMTA Leaders — Making a Difference
Newly elected 2020 IMTA Board members. Jeff Arens (Schuster Co.), Hugh Ekberg (CRST International), Rory Triplett (Insurance Associates), Matt Hurd (Hanifen Company)
IMTA leaders and invited guests convened at the IMTA headquarters in November for the annual fall Board of Directors meeting. Newly elected Chairman of the Board Dan Van Alstine, Ruan, presided over the meeting which included recognizing newly elected board members, approval of the 2020 IMTA budget and speakers focusing on important topics. The meeting featured an economic update from a familiar face with Anirban Basu, Chairman and Chief Executive Officer from Saige Policy Group, and an update on infrastructure, priorities, and Iowa projects from Mark Lowe of the Iowa DOT.
IMTA’s 2019 Cornerstone Platinum Sponsors were recognized for their continued support. Corey Murphy (MHC Kenworth), Darin Fischer (Truck Country), Delwin Van Wyk (Harrison Truck Centers), Jason Rose (Midwest Wheel Companies), Brad Wilson (Midwest Peterbilt Group), Travis Thompson (Thompson Truck & Trailer)
Attendees also engaged in a session called “Collaboration & Conversation.” Board members and guests discussed various topics such as tort reform, workforce issues and IMTA’s awards program.
IMTA Members Show Support for the Special Olympics Typically, a long line of big rigs is a bad thing, but for the Special Olympics it means strong fundraising support for their cause. This past fall IMTA members once again had the honor of participating in the annual World’s Largest Truck Convoy to benefit Special Olympics Iowa. While it may have been a dreary weather day, the strong support of this special event shined through with 112 trucks participating in the convoy, including many IMTA members.
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ABOVE: Casey’s General Stores, Inc., Johnsrud Transport and Fareway Stores were just some of the IMTA members involved in the Truck Convoy
Thank you to Midwest Peterbilt (Altoona) for providing the power unit to guide the IMTA Show Trailer.
IMTA EVENTS
Chris Patrick (Cottingham & Butler, Inc.), Dennis Legrand (Truck Country)
RIGHT: Robb Sullivan (Warren Transport, Inc.), Terry Pump (CRST International), Steven Garrish (CRST International) BELOW: Anthony Longhurst & Ashley Sink (TanTara Transportation Corp.), Jesse Houseman (Ruan), PJ Daufeldt (Daufeldt Transport, Inc.)
Jeff Petersen (Thermo King Christensen) taking the driving simulator for a test drive.
IMTA Wraps Up Fall Member Outreach Events The IMTA hit the road in October and hosted membership outreach events across the state of Iowa, with nearly 200 members in attendance at the five different events. During this outreach tour, members, colleagues and friends of the Association gathered not only to get an update on various IMTA priorities in 2020, but also had valuable one on one time with elected Chairman of the Board Dan Van Alstine, Ruan, and IMTA President Brenda Neville. The IMTA Show Trailer proved to be an added highlight as well. Attendees had the opportunity to tour the new Show Trailer and test out their driving skills with the driving simulator.
Teri Miller (Anthony P & L), Brenda Dittmer (Weinrich Truck Line, Inc.) RIGHT: Symon Zamzow & Rudy Street (I-State Truck Centers)
IMTA Chairman of the Board Dan Van Alstine (Ruan), Travis Thompson (Thompson Truck & Trailer)
ISSUE 1, 2020
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IMTA EVENTS A Festive, Holiday Celebration It wouldn’t have been the proper start to the holiday season without celebrating with the best trucking industry professionals in the state of Iowa. Members and industry supporters gathered at the IMTA headquarters to celebrate the season with food, spirits and an abundance of networking. This annual event continues to allow the IMTA to show our appreciation to members for their continual support throughout the year.
ABOVE: Dave Nelsen (Harrison Truck Centers), IMTA President Brenda Neville, Kevin Gass (PDI), Diane Gass, Dave Weber (Harrison Truck Centers), Maggie Weber LEFT: Grant Raasch (Housby), Arlen Eichmann (Interstate PowerSystems), Jeff Wangsness (JMT Trucking Co.), Scott Ferris (Housby) LEFT: IMTA Chairman of the Board Dan Van Alstine (Ruan), Justin Walters (West Side Transport, Inc.), Cory Richmond (West Side Transport, Inc.), Morgan Steenhoek (IMTA)
Jeff Croner (Mid States Utility Trailer Sales, Inc.), Nick Gerondale (BMO Transportation Finance), Tim Gorham (Truck Center Companies)
Stepping Up in a Big Way at Combat Hunger Combat Hunger, the largest food drive in the state of Iowa, took place in November and the Iowa Motor Truck Association once again proudly provided the trucks and drivers to help with this important effort. Star 102.5 started Combat Hunger over 25 years ago with a mission to help the Food Bank of Iowa provide meals for Iowans in need. In 2018, Combat Hunger raised over 234,173 meals and hopes to raise even more in 2019 once the grand total is calculated. Food Bank volunteer Rick Probst and driver Tim Modlin (Thermo King Sales & Service)
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The Iowa Motor Truck Association works with members to secure trucks and professional drivers to pick up food donations from schools and businesses in the Des Moines area. A special thank you to IMTA members who volunteered trucks, drivers and hard-earned time for this very worthwhile project: Casey’s General Stores, Inc.; FedEx Freight; Hy-Vee, Inc.; Panama Transfer, Inc.; PDI; Thermo King Sales and Service; and Two Men and a Truck.
Casey’s General Stores, Inc. driver Kelly Snow and Food Bank volunteer David Burnette Hy-Vee, Inc. drivers Jordan Haywood & Tom Howard
2020 EDUCATION & EVENTS Thursday, February 20
Wednesday, April 29
Tuesday, March 10 & Wednesday, March 11
Regulatory Updates Seminar (Eastern Iowa)
Thursday, March 26
Tuesday, May 13 & Wednesday, May 14
IMTA Member Webinar Series
IMTA Leadership Class
Fleet Safety 101 Seminar
Tuesday, April 14 & Wednesday, April 15
IMTA Safety Professionals Conference
Wednesday, April 22 & Thursday, April 23 IMTA Leadership Class
Tuesday, April 28
Regulatory Updates Seminar (Western Iowa)
Thursday, July 9
Regulatory Updates Seminar (IMTA Office)
Fleet Safety 101 Seminar
Thursday, April 30
Wednesday, July 22 & Thursday, July 23
Cargo Tank Seminar
Thursday, May 21
Truck PAC Iowa Golf Outing
Thursday, June 11 & Friday, June 12
Maintenance Technician Competition
Wednesday, August 12 & Thursday, August 13 LEAD IMTA Conference
Wednesday, September 9 & Thursday, September 10
IMTA Management Conference (Cedar Rapids)
Iowa Truck Driving Championships
Thursday, June 25
IMTA Legal Symposium
Information specific to each event can be found at iowamotortruck.com
FINAL THOUGHT
Taking Employee Recognition to the Next Level Iowa’s trucking industry is filled with outstanding professionals. Men and women who are dedicated, driven, and extremely motivated to do the very best they can within their respective roles. You know who we are talking about, you have them within your company. The employees that are in a league all their own, the ones that come in early and stay late. The employee that consistently performs at a high level. The employee that you trust and know they are always giving you 100%. The individual on your team that consistently shows initiative and volunteers valuable solutions and ideas. The ones that always have enthusiasm in their voice and actions. The ones that truly make a difference with the big and small things they do. Get the picture? These true professionals exist within your company. Maybe it is a driver, a safety professional, a dispatcher or someone in the maintenance department. More than likely, you have several employees that fit this description. How are you recognizing these folks? Since the early 1950s, IMTA has made it a priority to recognize and showcase the people within the industry that are doing
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things right. While IMTA’s awards program has evolved and changed over the years, the primary intent of the program has always remained intact – recognition of the people in the industry that are making a difference. Every September the grand finale of the annual management conference, is the awards gala. A very special event the focuses on the true foundation of this industry – the people that make things happen. Every year, based on feedback from the members and even the award winners, improvements are made and this year is no exception. Not one but two different committees review the applications to ensure there is a high degree of integrity with the program. We do not take this awards program lightly nor should you. This awards program tells a powerful story about our industry. In addition to the typical “awards hardware,” all of the winners receive a cash prize, both companies and individuals. Over $10,000 is handed out each year to professional drivers, safety directors, dispatchers, and maintenance personnel. We call it a “gala” for a good reason. We want it to be special, memorable, and unforgettable especially to the award winners. In fact, we try to go “over the top” because it further emphasizes how special and important the recognition is. Again, feedback from the award winners has always been very
positive about the gala and quite honestly, that is the feedback we are the most concerned with. The award nominees have consistently shared their approval of the “fancy” atmosphere, they like dressing up, they are impressed that IMTA leaders are present and some are even in tuxedos. And most importantly, they like their family and friends to feel the same pride they have for an industry they love, which happens the minute they walk in the room and see what a big deal it truly is. As one award winner told us this past year, “Walking into the gala, seeing the room, the people and the amazing atmosphere almost brought me to tears. I felt appreciated, I felt special, I was so proud that my wife was part of this. It was my Cinderella moment. Just being there was almost as good as receiving an award. I will never forget that evening.” It doesn’t get much better than that! If we can’t go “over the top” to recognize the people that truly make a difference in this industry, then we need to re-evaluate our priorities. Award nomination packets will be distributed in late-May, and we hope you will give some serious consideration to nominating the folks within your company that are worthy of their own “Cinderella moment.”
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