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Trailer orders fell for the sixth month in a row with preliminary U.S. orders dropping to 18,600 units, according to FTR. Trailer orders have totaled 335,000 units for the past 12 months.

The trailer market has entered summer’s seasonally slow-order months and Don Ake, FTR vice president of commercial vehicles, says trailer production has held up fairly well despite some late supplier deliveries.

“You can expect order rates to remain subdued for a couple of months,” Ake says. “Fleets should begin placing substantial orders for 2019 beginning in September – a month earlier than normal – because production next year is expected to be hefty once again.”

Build rates continue at robust levels and the backlog remains strong, Ake says, adding there is little need at this point for fleets to place many new orders.

“The economy is healthy, freight growth is sturdy, and sales remain strong,” he says. “The market is performing according to traditional trends, albeit at record-setting levels.”

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“He who has the drivers wins.” That’s a comment Gordon Klemp, president of the National Transportation Institute, heard recently from a long-time subscriber to his National Survey of Driver Wages. Facing the tightest driver recruiting market in decades, that fleet had just raised pay 15 cents in an effort to try and “stay ahead of the market,” Klemp says.

Traditionally, carriers have split into two segments relative to driver pay increases — aggressive movers and less aggressive movers. This year, NTI President Gordon Klemp has noticed a shift to three segments, with a small group of carriers raising pay at a more accelerated pace. (Data from the National Transportation Institute)

Just over 6 percent of carriers Klemp tracks have made such aggressive pay increases – a  group he calls very high payers – that have raised pay around 7 to 11 cents per mile through the second quarter of 2018. Historically, Klemp has grouped carriers into lower 50th percentile payers and high payers. Assuming 100,000 driving miles annually, drivers working for the high and very high paying carriers should take home on average $3,000 and $6,000 more, respectively, than those working for the 50th percentile carriers of were less aggressive with driver pay bumps, Klemp says.

Carriers that have raised pay significantly “weren’t low-ballers,” Klemp says. They were carriers “in the top half to start with who made a very aggressive move and they think they have the chance to capture profitable business right now,” Klemp says. He’s seen large increases across all types of carriers – dry van, flatbed and refrigerated.

Many carriers have raised pay twice since late fourth quarter 2017, Klemp says, a fact that surprised him. “Everyone is looking for the sweet spot in their market, but it is complicated by the growing difficulty of finding qualified drivers and the quickly shifting driver compensation landscape,” he said in his Q2 NSDW report. Making the situation even more difficult is the need to buy time to adjust freight rates to support pay increases, he says. Assuming the freight rate market remains strong, more than half of carriers Klemp tracks say they may raise pay again this year.

(Data from the National Transportation Institute)

Most carriers are also offering sign-on bonuses, a trend that is spreading to niche haulers, such as in the explosives sector, as well as private fleets, Klemp says. The widest use of sign-on bonuses remains in the team driver segment, where bonuses as high as $30,000 or more are not uncommon.

A major shift in the driver recruiting landscape is the difficulty even private fleets now have in hiring qualified drivers, Klemp says. Private carriers pay on average nearly 29 percent more than for-hire carriers, offer regular home time, driver-friendly freight, excellent benefits and first-class equipment, giving them “the pick of the litter” of for-hire drivers, Klemp says. Two factors are now making the driver situation difficult for private fleets, Klemp says: their drivers are retiring in record numbers and they lack a core competency in recruiting drivers because they’ve never had to compete for drivers. Klemp predicts the pay spread between private and for-hire carriers will continue to shrink as they try to distance themselves from for-hire.

By the end of the year, Klemp says, pay will have increased 12-15 percent, a significant bump but still not enough to make up for the 16-19 percent shortfall of driver wages when adjusted for inflation. “This will help existing drivers, but the number will have to get bigger in order to attract people” from other industries, Klemp says. That will be necessary because at 3.8 percent unemployment, “we’re frozen in place on driver supply,” Klemp says, and predicts: “We’ll have some serious driver wars.”

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Taking aim at two separate legal issues brimming in California, the Western States Trucking Association this month filed a petition with the U.S. DOT asking it to interject in the ongoing dispute over California’s breaks requirement and filed a lawsuit challenging a recent California Supreme Court ruling regarding owner-operator status.

WSTA represents trucking companies in 11 states, including California. The two issues at hand, however, affect all carries who operate in California, no matter where they’re based, the group argues.

The July 9 petition filed with the U.S. DOT asks the agency to declare that, for drivers of oversize and overweight loads, federal hours of service regulations supersede California’s break requirement laws. The lawsuit against California’s Department of Industrial Relations and the state’s attorney general, meanwhile, seeks “to nullify the Supreme Court ruling that effectively eliminates the use of owner-operators, even one-truck motor carriers from the trucking marketplace,” says Joe Rajkovacz, head of government affairs for Western States.

The April 30 ruling by the California Supreme Court outlined criteria by which carriers should determine whether a driver is an employee or an independent contractor (owner-operator). The case at hand was Dynamex Operations West Inc. vs. Superior Court. Dynamex is a trucking company, who sued to challenge a ruling by the Supreme Court regarding driver classification.

The state’s Supreme Court court, in short, contended that California’s labor laws heavily favor classifying drivers as company employees (and therefore entitled to certain benefits and labor law protections), instead of contractors. The decision presses carriers to classify drivers as employees, even for owner-operators to whom they contract freight. Citing the so-called ABC test, the court said that if employers have a high degree of control over the type and manner of work performed, the worker should be classified as an employee.

Western States in its lawsuit says the decision conflicts with the 1994 Federal Aviation Administration Authorization Act, which says that states cannot enact laws that interfere with “prices, routes and service” of interstate motor carriers. WSTA argues that the California Supreme Court ruling interferes with all three. It also argues that the ruling would severely hurt many small trucking companies in the state, including single-truck owner-operators. The group says the ruling violates both the Commerce Clause and the Supremacy Clause within the U.S. Constitution.

“Virtually all entities in California utilizing independent contractors are now at risk from predatory lawsuits because of the California Supreme Court decision,” says Rajkovacz. “The trucking industry has unique legal protection under federal law from this type of decision. Our desired outcome is an immediate injunction against California utilizing an A-B-C test to determine employment classification in the trucking industry.

“We’re also working with other organizations within the state for a legislative solution,” he says. “However, until and if that can occur, the trucking industry needs to be protected from this Supreme Court decision that amounted to legislating from the bench.”

**

The petition from WSTA to the U.S. DOT is the latest move by the group in its effort to mitigate the effects of a 2014 court decision that Rajkovacz says has led to a wave of lawsuits against trucking companies by drivers, particularly smaller carries who don’t have the resources to take on expensive litigation.

The 2014 decision, made by the federal 9th Circuit Court of Appeals, involved group of drivers who sued Penske Logistics for not allowing them to take the state-mandated breaks. The court sided with the drivers, ruling that carriers must provide drivers paid rest breaks at certain intervals and allow them 30-minute meal breaks.

WSTA and other groups, such as the American Trucking Associations, have said the ruling also conflicts with the 1994 Federal Aviation Administration Authorization Act, which states federal hours of service regs dictate drivers’ work schedules, not state-level laws. Speaking to CCJ earlier this year about the group’s legislative efforts to try to resolve the issue, Rajkovacz said, “All this does is tell the state of California, ‘You aren’t going to tell an interstate truck driver when to take a break.’”

The July 9 petition from WSTA would only apply to oversize/overweight haulers, but, if successful, “the same safety argument we are using can be expanded to all of trucking,” WSTA said in an email newsletter to members on Monday.

Western States has lobbied to have Congress to take up the issue. Multiple bills before the Senate and the House included language to effectively overrule the 9th Circuit decision by reasserting FAAAA’s authority over managing drivers’ work hours.

In addition to the myriad of lawsuits brought against carriers following the 9th Circuit ruling, the measures from Congress would prevent more states from enacting similar laws. Should all states take up their own break laws, it would create a patchwork of state laws for carriers to navigate, rather than simply adhering to unified federal regulations, says both ATA and WSTA.

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CCJ‘s Indicators rounds up the latest reports on trucking business indicators on rates, freight, equipment, the economy and more.

Market conditions for trucking companies, based on metrics like fuel prices, freight demand and capacity, continues to reflect a strong environment for carriers, according to FTR’s Trucking Conditions Index for May.

A hot economy is yielding strong freight demand, and the industry is operating at full capacity, which has driven rates to record highs. FTR says trucking conditions “are only expected to improve as freight season enters its peak.” FTR says rates could climb 13 percent in 2018 from last year. These conditions could moderate some into 2019, as fleets take hold of equipment ordered this year and expand their capacity, says FTR.

“Key indicators of freight demand such as manufacturing and construction remain strong,” says Avery Vise, FTR’s vice president of trucking research. “Aside from any major negative impacts due to trade relations, which is difficult to forecast at this stage, freight demand should lead to even stronger trucking conditions in the near term.”

“On the other hand, despite aggressive recruiting, a very tight labor market has allowed trucking companies to add only modestly to the driver force, keeping the industry at full active utilization,”
he says. “Therefore, two critical external factors in coming months will be trade and the labor market. Another factor will be the fuel environment as the direction of diesel and crude prices is unclear. Fuel pricing has risen a couple of times recently only to moderate slightly each time.”

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One month into Rhode Island’s trucks-only tolling plan, truckers have already paid $625,989 at the first two of 14 gantries to open in the state, according to numbers released Wednesday by the Rhode Island Department of Transportation.

RIDOT says the total received so far is $27,322 more than what the state’s financial studies estimated.

“With one full month of operation under our belts, we feel confident that the tractor-trailer truck-only tolling system is working as expected,” says RIDOT Director Peter Alviti.

The trucking industry has staunchly opposed the Rhodeworks truck tolling plan. The American Trucking Associations just this month filed a lawsuit against the state seeking to have the plan struck down in court. ATA argued its unconstitutional and discriminatory against interstate trucking companies.

RIDOT says 188,815 trucks were tolled in the first month of the first two tolls’ operations, which began June 11. The first location is between exits 2 and 3 on I-95 and charges truckers $3.25 once per day in each direction when passing under the gantry. The second location is between exits 4 and 5 on I-95 and charges truckers $3.50 once per day in each direction.

Truckers can expect the system to expand in the coming year and a half.

RIDOT says it has submitted its Environmental Assessment for the next 10 toll locations to the Federal Highway Administration, which Alviti expects to either be under construction or operational within the next 18 months.

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CCJ Innovators profiles carriers and fleets that have found innovative ways to overcome trucking’s challenges. If you know a carrier that has displayed innovation, contact CCJ Editor Jeff Crissey at jcrissey@ccjmagazine.com or 800-633-5953.

When a private equity firm purchased a $150 million majority share of Express-1 Expedited Solutions in the fall of 2011, Bradley Jacobs, the newly established chairman and chief executive officer, made it clear his expectations for the future of the company now known as XPO Logistics (CCJ Top 250, No. 4).

“I plan to build a multibillion-dollar transportation brokerage business over the next several years,” said Jacobs before the deal was finalized. “Express-1 is an ideal platform, with prominent positions in expedited services, freight brokerage and freight forwarding. I’m excited about leading the company into its next phase of growth.”

After a number of high-profile acquisitions over the next several years – including home delivery provider 3PD, intermodal carrier Pacer International and less-than-truckload giant Con-way (XPO divested the Con-way truckload division in 2016) – XPO was well on its way to achieving Jacobs’ initial vision.

At the same time as XPO was establishing itself in the industry, consumer habits began to shift quickly toward online purchases. Since 2011, e-commerce has become a bright spot in the economy, growing from 5 percent to nearly 10 percent of all U.S. retail sales by 2018. Globally, e-commerce represents a $1.7 trillion market today.

With $15 billion in revenue last year – roughly $9 billion for transportation and $6 billion for logistics – XPO now is the largest last-mile provider of heavy goods and the second-largest contract logistics provider worldwide.

But XPO isn’t stopping there, as the company has announced several recent technology developments that will help cement itself as a leader in the brokerage and trucking spaces for years to come.

Connected network

Earlier this year, XPO Logistics launched XPO Connect, a cloud-based digital marketplace that allows shippers to manage shipments and reduce costs with real-time freight visibility across XPO’s entire transportation network of asset-based and third-party logistics solutions, all though a single login page.

With more than 100 warehouses and last-mile hubs in its network, XPO Logistics can stage goods within two days of 95 percent of the U.S. population.

XPO says shippers can leverage XPO Connect’s increased visibility to identify fluctuations in capacity, spot rates and load postings by geography.

“XPO Connect gives customers direct access to our transportation network and the predictive data that powers it,” said Mario Harik, XPO’s chief information officer. “The platform provides a new level of visibility that informs better decision-making under all market conditions.”

XPO tied its XPO Connect service to its existing Drive XPO mobile app that allows drivers to access the company’s Freight Optimizer truckload management system to locate loads while on the road. XPO plans to expand XPO Connect’s capabilities to include other transportation options such as truckload, rail and last-mile delivery.

“One of the most exciting things about XPO Connect is the way we’ve redefined visibility as business intelligence,” said Troy Cooper, XPO’s chief operating officer. “Our proprietary algorithms are turning masses of data into relevant information in split seconds so that our customers can purchase transportation as efficiently as possible.”

Shippers can view fluctuations in capacity, spot market rates, weather conditions, traffic and other factors that could affect the choice of carrier and circumvent delays during track and trace. “Carriers use our Drive XPO mobile app to bid on loads filtered by geography, dates, equipment and special handling,” Cooper said. “XPO Connect facilitates the whole process.”

Getting closer, faster

As consumer expectations shift toward next-day and even same-day delivery of orders, the ability for companies to meet those demands is challenged.

“Brick-and-mortar retailers that shift into omnichannel or pure e-commerce can be blindsided by consumer expectations,” Cooper said. “It boils down to retailers and e-tailers looking for new ways to position goods more efficiently — to shorten delivery transit times without adding overhead. This can be particularly challenging with the purchase of heavy goods such as furniture or appliances.”

With more than 100 warehouses and last-mile hubs in its network, XPO Logistics can stage goods within two days of 95 percent of the U.S. population.

To help existing online customers as well as brick-and-mortar retailers breaking into the omnichannel and e-commerce markets, the company launched XPO Direct, a nationwide shared-space distribution model that provides flexible stockholding sites and cross-docks used by multiple customers simultaneously.

“In essence, we’re renting out our scale and disrupting traditional thinking about the capital-intensive regional distribution model,” Jacobs said.

XPO Direct also uses algorithms to identify seasonal and consumer behavior patterns and predict where to position customer stock within its warehouse network. XPO Direct uses proprietary technology to link multiple sites with cross-network visibility, moving goods as needed between locations with brokered, contracted and owned capacity.

“We can speed up deployment and reflow goods to sites as demand patterns change,” Cooper said.

“Hey Google …”

In 2017, XPO Logistics’ last-mile network handled 13 million deliveries, the majority of which were heavy goods such as appliances, exercise equipment, electronics and furniture. With 66 last-mile hubs and plans to expand to 85 before yearend 2018, XPO expects to make its last-mile solution available to 95 percent of the U.S. population.

XPO Logistics is making it possible for consumers to manage their delivery experience from point of sale through fulfillment and home delivery with smart speakers.

As consumer buying habits continue to migrate online, XPO recently launched another new gadget in its technology toolbelt that connects the consumer to their order status in real time without them ever having to leave the couch.

In April, XPO launched a voice-enabled tracking feature that integrates directly with Google Assistant and Amazon’s Alexa to integrate consumers into the supply chain.

“It’s all driven by consumerization,” Cooper said. “Today’s consumers expect to have control over their personal experience within the supply chain. They care about mobility and convenience. They want interactive access to information and on-the-fly flexibility that adapts to their lifestyle. So we gave them ‘Alexa, launch XPO.’ ”

After opting in to mobile alerts at the time of purchase, consumers with Google or Amazon personal assistants with the XPO skill enabled can use the tracking platform to track their order and, if necessary, make delivery date and time window changes with a simple voice command: “Alexa, track my order.”

Based on consumer responses to voice prompts, XPO’s software relays changes in delivery preferences to the delivery driver’s mobile app.

The shipment status also can be tracked in real time on the Ship XPO web-based tool that displays delivery vehicle location, as well as traffic and weather alerts that may impact the package delivery schedule. The consumer also receives a post-delivery survey to provide XPO with actionable data on its service performance.

“Tech-enabled customer services are critically important in an increasingly competitive marketplace,” said Harik when the feature was introduced. “We’re helping our customers build loyalty and protect their brands, many of which are household names in e-commerce and retail.”

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Daimler is recalling more than 18,000 Freightliner Cascadia trucks for a potential brake caliper issue.

Daimler Trucks North America is recalling more than 18,000 model year 2018-2019 Freightliner Cascadia tractors for an issue with the brake calipers, according to documents from the National Highway Traffic Safety Administration.

According to NHTSA, the brake caliper mounting bolts on approximately 18,105 Cascadias manufactured between Jan. 2, 2017, and May 19, 2018, may not have been properly tightened, which could result in the caliper detaching. This would reduce braking performance and increase the risk of a crash.

Daimler says it will begin notifying owners on Aug. 13, and dealers will inspect the brake caliper mounting bolts and tighten if necessary for free. DTNA estimates that 25 percent of the recalled trucks have the defect.

Owners of affected rigs can contact DTNA customer service at 1-800-547-0712 with recall number FL-775. NHTSA’s recall number is 18V-411.

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On the morning of the crash, refrigerated straight-truck driver John Doe was rolling along Friendly Road toward Greensboro, N.C., en route to the Fiesta Fresh restaurant with several boxes of Mrs. Hotstuff’s Chili Con Carne. At the moment, Doe was listening to a dramatic account on Channel 19 of a heroic Quebec-based trucker who’d taken a trailer load of broccoli hostage – as a protest against unsafe working conditions – before his capture in Iowa. Holy hollandaise!

Ah hah … there was the “Trucks Only” delivery entrance to Fiesta Fresh dead ahead. Doe slowed to a crawl, cautiously entered the tiny dock area behind the restaurant and began a wide swing toward the right, at 5 mph, in anticipation of parking by the loading area. His right-turn signal was flashing. Without warning, tragedy struck.

Betty Brashly, a sleep-dazed late-for-work waitress, accelerated wildly into the gravel-covered dock area behind the wheel of her pink Mustang, seeking a shortcut to the employee parking area. Suddenly aware that Doe was turning across her bow, Brashly leaned on her horn, hit the brakes and started to slide. Simultaneously, Doe saw a flash of pink enter the yard and panic-stopped within a few feet but … WHUMPO! Egad! Brashly’s pony car had skidded right into, and slightly dented, Doe’s right-side saddle tank!

Since Doe contested the preventable-accident warning letter from his safety director, the National Safety Council’s Accident Review Committee was asked for a final verdict. NSC immediately ruled in Doe’s favor, noting that he’d proceeded with caution and was stationary when struck by the speed-crazed Brashly.

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Much of the freight that comes into or leaves the ports of Los Angeles and Long Beach moves through giant warehouses and logistics facilities near Interstate 10 in the Inland Empire, a region east of the Los Angeles basin.

San Bernardino county is its epicenter of trucking activity. More heavy-duty trucks are registered here than any county in the United States.

The greater Los Angeles area is the second-largest metropolitan center in the U.S., and many of the trucks registered in this area are used for waste and refuse operations.

On Wed., July 18, representatives from Mack Trucks held a press event at a large dealership in Fontana to announce a new connectivity option: a factory pre-wire for the Lytx video telematics platform. The prewire will reduce installation time of the Lytx platform by one or two hours per truck.

An expanding market

The new factory option is available for three Mack Truck models typically used in waste and refuse applications. The TeraPro and Mack LR are cab-over-engine (COE) trucks that can be upfitted with front and side-loading containers. The Granite is a highway straight truck that fleets often upfit with rear-loading containers and dump bodies.

Earlier this year, Mack introduced an over-the-road tractor model, the Anthem, with 70-inch and 48-inch sleeper options. The Lytx pre-wire option for Anthem has not yet been announced.

With the Anthem, Mack is in a great position to continue climbing in the over-the-road market while still maintaining a strong position in the refuse industry as the number one provider of cab-over-engine (COE) and straight trucks, said John Randall, senior vice president of North American sales and marketing for Mack and Volvo.

The truck market is “about as strong as we’ve ever seen in the last few decades,” he said. Randall forecasts new truck builds will hit 300,000 this year and the 2019 market will be equally as robust.

“We are gearing up for that and are looking forward to taking advantage of that,” he said.

Ready for service

Lytx has a sizable presence in the waste industry with customers that include Waste Management, Waste Connections and Waste Industries.

Having a large and ever-expanding database of risky driving events and behaviors helps Lytx continuously improve its machine vision technology and scoring of risky behaviors and events inside and outside the cab, said Kristin Costas, director of product management. To date the company’s technology has captured 16.1 million risky behaviors and 6.9 million risky video event records.

Identifying risky behaviors and recording the events on video “allows our customers to have meaningful conversations with drivers,” she said, by using the online platform’s coaching workflow.

Following distance, not wearing seatbelts, cell phone use and other distractions are the most common risky behaviors captured by the system. Video clips of the events are available for review online within 24 hours. The DriveCam program prioritizes video events so that safety managers and coaches only see what need to see, she said, and noted the average driver has two coachable events per month.

Beyond safety

Future development by Lytx will include machine vision applications that go beyond safety to identify operational exceptions such as an overfilled waste bin. This type of exception can help refuse haulers collect more revenue, Costas said.

During the press event, Costas discussed Lytx Video Services (LVS). By choosing this optional configuration, Lytx in-cab devices retain a continuous recording of the road facing camera view. Users can select any timeframe they want to view during the last 100 hours of recorded video.

Waste and refuse haulers could use LVS to find the time of day a driver passed by a certain house to prove the residents did not have their waste bin out on the street, as they might have claimed, she said.

With LVS a fleet can view a live feed of the road-facing camera as well. This could help fleet managers identify exceptions such as a driver being detained at a customer when loading or unloading.

The pre-wire kit also supports Lytx Hub, an optional configuration that allows fleets to connect up to four auxiliary cameras around the vehicle.

The event was held at TEC Equipment in Fontana, one of the largest Mack and Volvo dealerships in the country. The Fontana location is one of 26 TEC Equipment dealerships in five Western states.

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Reversing a decision made less than two weeks ago by the Environmental Protection Agency, a federal court on Wednesday ruled to temporarily block a July 6 decision by the EPA to not enforce Obama-era emissions standards placed on glider kit trucks. The court’s temporary injunction against the EPA’s move means that glider kit builders will be capped at making and selling just 300 trucks annually until the the court lifts its injunction or the EPA finalizes a rule to repeal emissions regs on glider kits.

A three-judge panel for the U.S. Court of Appeals in the D.C. Circuit ruled 2-1 in favor of a motion filed by a coalition of environmental activists groups, who sued the EPA over its July 6 announcement that it would not enforce the 300-truck cap put in place in 2016 by the EPA under President Obama.

The EPA’s policy change was a major win for glider kit makers, like Fitzgerald Glider Kits, who have fought the emissions regulations in recent years. However, a lawsuit filed by the Sierra Club, the Environmental Defense Fund and the Center for Biological Diversity challenged the policy change. The D.C. Appellate Court on Wednesday sided with the environmental groups, saying it would put a stay on the EPA’s enforcement discretion “pending further order of the court.”

EPA is working on a rule to rescind the Obama-era regulations and permanently remove the 300-truck cap, but the rule has been slow to come to fruition. The EPA proposed the rule in August of last year, but the regulations took effect January 1 of this year, meaning glider kit makers were left to comply with the 300-truck cap. The EPA’s July 6 decision to not enforce that cap was meant to give the EPA more time to finalize the rule and, in the meantime, allow glider kit makers to produce and sell as many gliders as they sold in 2017.

Glider kits are new truck bodies and chassis that are equipped with older, remanufactured engines and transmissions. They had seen strong growth in sales since 2008, given their lack of modern emissions systems. The EPA sought to stymie that growth with its 2016 Phase 2 rule, claiming that gliders produced an outsized share of emissions of greenhouse gases and particulate matter relative to their share of total truck sales each year.

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