Driving To Deliver Your Business

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A bump in the road – Garden Center Magazine

The ELD mandate is meant to keep roads safe by tracking commercial driver activity and imposing stiff penalties on those who exceed drive-time limits, but some see flaws in the regulations.

ADOBE STOCK Whether you receive regular shipments of hard goods or you have plant material shipped in from wholesale growers, chances are your garden center, like much of United States commerce, relies on ground transportation to make it all happen. Managing deliveries and budgeting for shipping costs are already pressing concerns for independent retailers, but recent regulatory changes in the commercial freight industry may complicate matters even further.

In the past, commercial truck drivers were expected to keep track of the hours they spent on the road, being careful not to exceed their on duty limits and taking rest breaks when needed . This was often done manually in paper log books . However, regulatory agencies have been working for the past several years to take the guesswork out of the system with engine-tracking technology.

Enter the ELD, or electronic logging device . These web-enabled modules are installed on the engines of semi trucks and other commercial vehicles, where they track mechanical activity to keep an exact record of miles driven . The overall goal is to ensure fatigued drivers are not creating safety hazards on the road, but many commerce industry advocates are concerned that the regulations have overcorrected the issue of driver safety, with flexibility suffering as a result.

Legislation mandating the use of ELDs was debated in 2012 and had been proposed previously, but it wasn t until 2014 when the regulations were made official . A years-long period of education and soft enforcement followed, in which transportation companies and independent drivers had time to familiarize themselves with the new laws and become compliant . As of April 1, 2018, full enforcement is in effect, with some groups seeking more time or direct reform of the rules.

Under current regulations, commercial drivers are permitted to be on duty for no more than 14 hours per day, with 11 of those hours allotted for driving time spent on the road . Other on-duty activities include pre-drive and post-drive checklists, loading and unloading cargo, work-related phone calls and more . Drivers who exceed these limits are subject to fines and penalties and with the ELD mandate in place, there s very little room for error.

Talmadge Coley, director of government affairs with AmericanHort1, hopes that government officials will revisit the rules to allow more flexibility for drivers . Before the ELD mandate, if drivers encountered delays in their routes, they could log the delays and work them into their schedules . Now, delayed or not, every hour spent on the road counts toward a truck driver s 11 hours of permitted drive time.

That s why we re looking for just a little bit of flexibility for these guys, because you just never know what you re going to hit when you get out there, Coley says . You can annotate and everything, but you might come into four or five situations during that drive that are out of the ordinary and you have to adjust accordingly . It s a tough call.

The ELD Mandate makes existing hours of duty limits more rigid some groups fear that this could delay and complicate shipments.

ADOBE STOCK

Balancing safety and efficiency

The issue of commercial driver safety has a long history of back-and-forth debate, and as with many aspects of public policy, it took a high-profile case to prompt official action .

Andy Bruney, Vice President of T . Load Specialties, Inc.2 in Columbus, Ohio, says the ELD debate had been ongoing since 2012, but didn t gain momentum as a government policy until 2014, when actor and comedian Tracy Morgan was struck by a commercial driver employed by Walmart. In 2012, the government had an idea to regulate this and keep fatigued drivers off the road, but it was flawed so it kept being tabled, Bruney says .

In 2014, they found the driver was awake for about 30 hours and crashed into Tracy Morgan s limo on the New Jersey Turnpike . Unfortunately, things like that had been happening before, but because of social media and because Tracy Morgan was a high-profile person, it kind of brought this conversation to the forefront . So then, in 2015, the government basically said, We re going to go through with this.

As the ELD mandate progressed through the legal system and soft enforcement began, a line was drawn and several different groups either opposed or supported the new regulations for various reasons . Coley says some trucking associations are in favor of ensuring road safety at any cost, while others, such as the Owner Operator Independent Drivers Association, bemoan the bureaucratic burden. I think probably the loudest group on this is the independent truckers the OOIDA .

They ve made a lot of noise, Coley says . They see it as the government trying to force the smaller guys out of business because they don t have enough people to drive . There s a lot of politics at play with this, like with any large regulation .

Some people see it as an attack, some people see it as necessary in the industry . The guys who are pushing for this, groups like the American Trucking Association, see it as a safety concern . It s all brought back to the safety aspect.

By enacting the ELD mandate, lawmakers hope to ratify existing hours of service limits into concrete requirements that are tracked and monitored . This way, drivers who exceed their allowed daily drive time can be accurately held accountable . However, Bruney suggests that the law is overcorrecting the driver safety issue, causing stricter schedules.

My opinion is that the law is still somewhat flawed, he says . I think it s so rigid, and it s a race against the clock, and these trucks just really don t have enough time to execute their assignments. Coley says there is a widespread concern that these more strict schedules can lead to commercial drivers taking more risks on the road in order to meet their deadlines without going beyond their ELD-enforced drive time limits.

The mandate could create negative incentives with these limitations, where a driver says I only have 30 minutes left, I ve got to get there, I have to go 90 miles an hour to get there . So, do guys speed to overcompensate ? On the Twitter feeds, a lot of the truckers are saying now people are rushing around and driving like maniacs, Coley says.

At the same time, there is also the issue of price inflation . Bruney points out that when drivers are already stretched thin and are given even tighter deadlines to deliver on, costs of shipping tend to increase.

When transportation professionals have less time to make deliveries, shipping costs tend to increase as a result.

ADOBE STOCK A couple years ago, you had a driver who could, let s say, go back and forth from home to a source and back, and he could do that three times no problem, Bruney says .

Now, he s struggling to do it twice, and who knows where he s going to end up . There could be more costs associated because he s got to go to a hotel or something like that. Inflation in shipping costs could be even more severe, specifically for horticultural businesses like garden centers, that are dealing with perishable plants and sensitive timetables.

As far as concerns for the industry, I think first and foremost is the price increases for freight in general, Coley says . We re not the only ones that are getting these price increases I think the produce industry first started putting it up in January and February that there were significant increases . We started getting emails from our state associations, and our members as well, saying, Hey, my freight costs just went up like 50 percent, some as much as 80 percent in states like Oregon, what s going on here, is there any relief in sight?

At The Garden Factory3 in Rochester, N.Y., which placed #27 on Garden Center s 2017 Top 100 IGCs List4, the ELD regulations have introduced complications to the retailer s regular delivery schedule . Store Manager Robert James says his shipping partners based in Florida must now give themselves more time to complete their route, making drop-offs less reliable and reducing lead time. The only thing we re having any issue with is when we order our tropicals from Florida, James says .

Where we used to be able to place an order all the way up to Wednesday a week before we d get a delivery, now we have to have it done by the Sunday prior . They ve always been great with us, and they re still doing as well as they can, but those regulations have made them have to slow the process down, so we re always wondering are we getting the delivery on Friday, are we getting it on Saturday ? It s more guesswork now.

The recent regulations do allow for some deviation in the schedule when needed: drivers can report occasional delays in their ELD logs, and if they get pulled over, their logs will show law enforcement officers that extenuating circumstances complicated the driver s schedule . Drivers can also claim the safe haven option, which allows them to slightly exceed their 11-hour drive times in order to find a safe place to stop and rest . However, concerns over the rigidity of the laws and potential price inflation persist, and AmericanHort and other industry groups continue to lobby for a reevaluation.

Effective communication between IGCs, their suppliers and their shipping partners is key to keeping costs down, especially under the ELD mandate.

LAURA WATILO BLAKE

Shifting gears, finding solutions

Most parties involved in the ELD debate understand that the technology isn t likely to go anywhere .

Though the rule requiring their use recently went into effect, the devices themselves have been in use and development for several years. We, as an organization, realize that the ELD is here to stay, Coley says . There are a lot of groups out there that are saying get rid of the ELDs and stuff like that .

I think the time to ask for that has come and passed, because what you have is a whole cottage industry of ELD makers that are out there and have been waiting for this day to come. Understanding that, AmericanHort is maintaining a dialogue with the Federal Motor Carrier Safety Administration and is focusing its lobbying efforts on clarifying exemptions and possibly relaxing some of the regulatory strain on horticultural businesses and the freight they rely on. One of the things we re focused on is the agricultural exemption that is associated with this new mandate, Coley says .

They haven t put out good guidance on who is included in the exemption and who is not . From the federal side, it s very opaque . As of now, the horticulture industry isn t specifically included, but it s not really specifically excluded either.

There are also rumblings and rumors of other factions attempting to de-fund or otherwise defeat the ELD mandate legally . Coley says that despite the contention the regulations have caused, they have a constitutional basis and are not likely to be easily overturned. The most rancor out there is from the groups that say it s big government overreach, but from what I ve read, the law has been taken to court and it s held up, he says .

I don t see anybody taking it to court anymore and looking to strike it down . There s a lot of angst with this issue . I think there are five or six states that have actually put bills out there to de-fund enforcement of the actual mandate itself, because people are so upset about it.

As the legal and regulatory debate continues, trucking professionals, growers and retailers alike must adapt to the regulations as best they can . The ELD mandate will likely bring about a time crunch for plant deliveries, especially when a driver is making deliveries to multiple businesses on a single route, Bruney says . He suggests that garden center retailers in close proximity to one another may be able to work out a joint delivery destination so everyone saves on shipping costs .

The fewer deliveries a driver has to make, the better.

LAURA WATILO BLAKE One of my suggestions was, for instance, if we re going to the quad cities in Northwest Illinois and Southeastern Iowa, where you ve got Davenport, Molina and Port Byron all these little towns are within eight miles of each other . If there s any way we could make a two pick-up, five drop-off load into a two pick-up, two drop-off load, we could cut down on extra deliveries, Bruney says .

I understand that some garden centers are competitors with one another, but if one main nursery could accept a delivery and tell the others in the area to come pick up their product, that would really help. If consolidating deliveries isn t feasible, Bruney says using pallets as often as possible can keep shipping costs down as well . When a driver is moving plant products on pallets, unloading is easier as a result, driver assistance isn t needed as often and deadlines are easier to maintain.

When all else fails, effective and regular communication between retailers, suppliers and transportation services is always helpful . Too often, Bruney says, drivers are making deliveries when garden centers aren t expecting them, which exacerbates deadline stress and negatively impacts shipping costs. Communication is key, Bruney says .

Sometimes, these nurseries will have a load and they ll say, Hey, someone ordered this in Iowa, so they load it up in Ohio, send it to Iowa and the truck gets there and the people there say, I had no idea it was coming . So, I m going to make that call and let them know, because I m not going to string my driver out . I m going to let retailers know that product is coming and they need to be prepared for it.

No matter how garden centers and their shipping providers adapt to the ELD mandate, the situation is bound to evolve over time as lobbying groups and invested factions continue to make their cases to lawmakers. We do have unique needs in the horticulture industry, Coley says . It s very time-consuming to load plants into a truck .

We re trying to do everything we can for our folks to keep them educated and hopefully get to a better place than we are right now, because it s a tough situation . And it s not just our industry, it s many industries . It s a collective effort.

References

  1. ^ AmericanHort (www.americanhort.org)
  2. ^ T .

    Load Specialties, Inc. (www.tloadspecialties.com)

  3. ^ The Garden Factory (www.gardenfactoryny.com)
  4. ^ 2017 Top 100 IGCs List (giecdn.blob.core.windows.net)

Road Haulage Operators and Freight Forwarding Agents Find More Work as Civil Servants

Society Increasingly Reliant on Private Companies to Police Themselves and Collect Revenue Shipping News Feature UK Both the UK and Europe have been moving almost imperceptibly to become a working society in which a company is responsible for administrating not only its employees’ behaviour, but that of its customers as well as its own, and being liable to penalties for failing to follow government guidelines when doing so . Many companies traditionally resent the fact that, not only do they have to collect carefully calculated amounts of tax, such as VAT, and hand it to central government, but stand to be heavily penalised should they make any honest mistakes in their calculations, whilst of course all the associated administrative costs are simply a drain on resources.

Now it seems it is the fashion for governments, the UK is a case in point, to cut the number of public employees to the bone but, to avoid any loss of revenue, pass on the mantle of responsibility to the companies concerned, and the transport and logistics sector it seems is a prime target . Two unconnected examples in the UK, aside from the fact they both now fall under the auspices of HM Revenue and Customs1, give perfect illustrations of this.

In the first instance there is the case of night out money, traditionally payable to lorry drivers who have to rest whilst away from home overnight . Payment for such inconveniences have always varied dependent on employer, driver and the circumstances of the job . As vehicle technology has evolved over the decades the sleeper cabs now fitted to trucks are dedicated to making life on the road as comfortable as possible.

Last year HMRC decided that any such payments are to be deemed as income as opposed to expenses, i.e . liable to tax as such . The road haulage lobby complained bitterly explaining that there is a small matter of subsistence, food being one of a number of essentials, personal hygiene, laundry and other costs perhaps, and even a bed for the night if they do not have a suitable cab .

Now certain countries forbid taking the weekly 45 hour rest even in the most luxurious of cabs, and where does one sleep if parked in a major city awaiting delivery on the next working day? Despite the complaint, the HMRC in its usual fashion, started to come up with complex solutions to resolve a problem that had never before seemed to exist . To ensure only genuine expenses are claimed, HMRC began insisting that a haulage operator must conduct sample reviews without specifying how often .

The advice given to hauliers has been inconsistent and includes such as this a driver selected for a sample review must satisfy you that they had been away from base on the night the claim relates and that they incurred the cost of food and drink . You need therefore to see evidence that a meal was bought which could be a receipt or, if not, then HMRC will accept a photo of the meal which shows a time and date . And this the drivers are required to keep the evidence until you have reviewed the period to be reviewed .

If the driver is selected for review then that evidence must be passed to you to check . You can either keep this evidence or prepare a spreadsheet showing who was selected for review and detail of the evidence they provided which states what you saw and the amount of the claim . All this to make sure that the driver is entitled to the huge sum of 26.20 per night (or 34.90 for drivers without sleeper cab) for all the costs incurred during a night away from home .

So leave the real world, photograph your dinner and staple the picture to your spreadsheet – couldn t be simpler. Now this type of thinking, get a company to do the government required admin and penalise them if they don t come up to scratch (scratch being arbitrarily decided post event) seems to be spreading faster than PFI as a cost control measure for the administration (and we know how well that s working out) . The next example is the government inspired wheeze to save an estimated 1.9 billion annually in lost VAT, uncannily close to the amount the UK is currently being fined by the EU after the HMRC has allegedly failed to collect correct duties and taxes on goods imported from outside the Community.

Not that ‘ 2 billion is the actual amount, the government itself puts the annual shortfall in VAT at 13.5 billion due to fraud, company liquidations when in debt to the Treasury, and simple bad management (presumably it means by the collectors i.e . the VAT registered companies, not its own staff) . So how to mend that 1.9 billion hole in the accounts ?

The HMRC sees the new Fulfilment House Due Diligence Scheme2 as the answer . Critics say this is more a case of we can t manage it, so you ll have to and then we can claim the money from you if you are as bad at it as we were . The scheme means that unscrupulous exporters operating abroad who send goods to the UK, usually via internet sales who avoid duty and VAT payments are, from June 2019, to be held to account by the freight agents they appoint to handle their stock .

We put the point to the HMRC representative who was outlining the scheme to us that what was envisaged, i.e . examining and taking responsibility for the actual goods, goes against the professional status which a freight forwarding agent traditionally holds. The Due Diligence effectively means that if a company imports goods as stock to be distributed by a UK agent, that agent needs to be registered as a Fulfilment House .

Once registered the agent takes over all responsibility, and has to ensure not only that the goods are exactly as described on the import entry, but are of the precise nature and quality required and worth the correct declared value for duty and VAT purposes (and potentially safe to use and legally compliant). These checks of course mean that it is necessary for the Fulfilment House not only to open some of the goods to physically check them (something which goes completely against all the principles of the forwarding trade), but ascertain the value and quality are exactly as described, plus keep a proper log detailing all his or her findings for HMRC to inspect at will. As usual there is no direct reward for the agent in this from the authorities (whose job is now in the company s remit), whilst there is a considerable potential for downside in the way of penalties (up to 20,000) .

When we put it to the relevant official that the items most likely to abuse VAT regulations were liable to be items such as mobile phones, tablets etc . and that, once the security sealed packages these are usually packed in were opened they became unsaleable, answer came there none, as was pointed out in an earlier article 3describing the regulations in full. In the two instances quoted the relevant UK bodies who lobby on behalf of their respective sectors have been active in promoting their members causes .

The Road Haulage Association (RHA4) has consistently pressed for common sense over the night payments to drivers, rightly considering that there has been no evidence of widespread abuse, whilst elsewhere many feel much more serious practices avoiding tax have been bypassed without investigation or prevention. In the case of Fulfilment Houses the British International Freight Association (BIFA5) has been involved in the consultation process for approximately three years and feels that, with its input, the regulations as introduced are not as onerous as they might have been, the original proposals having been much more draconian. BIFA s Executive Director, Robert Windsor confirmed that there is a move in Europe intending to make the trader more responsible for their own activities and industry more self-policing, something BIFA has repeatedly outlined, in part through its published papers regarding Customs Representation which highlighted the situations where a forwarder acting on behalf of a party not established in the EU would in effect become fully responsible for all aspects of customs activity.

Robert Windsor points out that although the original intention of HMRC did not concern itself with product safety, the Department for Business, Energy and Industrial Strategy (BEIS6) has been working on implementing a Product Safety Directive which, as it is applicable to the importer, would effectively render the Fulfilment House liable for all aspects of the supply of goods to the market including safety and product recall if necessary. BIFA has ongoing meetings scheduled with both the BEIS and its legal teams and, despite the fact applications for Fulfilment House status are currently being processed, the final responsibilities of such a qualification remain unclear at present . Until the muddy waters of Brexit clear somewhat the actual effect of these regulations will be hard to gauge, as the EU status of goods imported from beyond the borders of the EU on which duty and VAT have been paid in the UK, remain impossible to determine at this time.

No matter how loud the complaints regarding the extra responsibilities, the matter of Fulfilment Houses requires a mind shift from the logistics community .

Whatever Brexit brings, the role is not one of a traditional forwarder rather that of an agent with a vested interest in the actual import business itself .

Those considering it simply as a useful add on to their existing trade should be aware that there are pitfalls regarding acting for foreign companies for which they have no full understanding of their status, history, morals and intent.

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References

  1. ^ HM Revenue and Customs (www.gov.uk)
  2. ^ Fulfilment House Due Diligence Scheme (www.gov.uk)
  3. ^ earlier article (www.handyshippingguide.com)
  4. ^ RHA (www.rha.uk.net)
  5. ^ BIFA (www.bifa.org)
  6. ^ BEIS (www.gov.uk)

High Fines, Potholes and Pollution Make Road Haulage Drivers and Freight Operators Lives a Misery – The Handy Shipping Guide

UK Association Speaks Out on the Issues Concerning Trucking Companies Shipping News Feature UK ITALY The Road Haulage Association (RHA1) has been particularly active of late, advising members of some particularly important changes which will affect road freight operations both at home and abroad . Potholes and pollution are high on the domestic agenda whilst we start with a serious warning for those operators plying their trade on the continent.

As from the beginning of this month the Italian authorities are enforcing the rule that drivers cannot take their 45-hour rest breaks within their cabs . Traditionally of course intercontinental drivers have habitually slept in the cab, both overnight and when stranded far from home, usually over a weekend waiting to reload on a Monday.

Such practices are exactly what the modern lorry cab is designed for, but now penalties ranging between ‘ 422 and ‘ 1,800 are being imposed if a roadside check reveals the practice . There is also the possibility that similar enforcement will occur in Spain from July 1 . The RHA says it will keep members informed.

Meanwhile back in the UK pollution and potholes top the agenda . With less money available to local authorities the situation has been worsened by a prolonged spell of changeable weather and now the AA, which operates a #FlagitFunditFillit2 campaign says the cost to motorists, haulage companies and insurers tops 1 million a month as more vehicles suffer damage, mainly due to tyre, steering and suspension problems. Once again the RHA has raised the matter with government, pointing out that the results were quite predictable given the current level of neglect .

RHA chief executive, Richard Burnett observed: The Government and local authorities must do more to bring the network up to standard . Currently, many roads are full of cracks waiting to turn into dangerous potholes that can cause collisions .

Local roads where hauliers make their last-mile deliveries are often in an even worse state and the damage to HGVs, in particular to their suspension systems, can be considerable . More potholes means more breakdowns, more roadworks and more delays . And delays to a just in time economy are disastrous for business.

On the matter of pollution, particularly in urban areas, the RHA has now released its 2018 Nitrous Oxide (NOx) emission assessment3 which it says is to clarify how lorries impact our air quality and to correct some of the myths that are feeding the drive to charge all non-Euro 6 lorries for entering our cities. The RHA sees the rush to change standards as targeting the road freight and transport industry generally as unfair, pointing out that in 2015 only 7.6% of the UK s NOx was emitted by trucks and buses . Additionally lorry NOx emissions have dropped in the region of 43% in the past 5 years and predictions are this will grow to 70% by 2021.

The problem of course is that, whilst authorities across Europe wish to see only Euro VI vehicles on the roads, 2021 will still see a massive 37% of trucks in the UK below this standard, 28% being Euro V, and therefore comparatively recent additions to most fleets . There are no retrofit options for pre Euro lorries and the taxes proposed cannot be avoided as the fleet of Euro VI vehicles will not be big enough to meet freight demand in Clean Air Zone cities, some as soon as the end of next year. The RHA has published a paper called Intelligent Phasing4 listing the difficulties and cost of replacing a fleet of UK wide vehicles, estimating the cost at around 12,500 million to replace the 180,000+ pre Euro VI lorries still in service in 2021 with new Clean Air Zone compliant Euro VI lorries .

The RHA considers government and local Clean Air Zone and Road Levy pay to pollute policies wrong-headed and says it has based all its statistics on the administration s own figures.

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References

  1. ^ RHA (www.rha.uk.net)
  2. ^ #FlagitFunditFillit (twitter.com)
  3. ^ 2018 Nitrous Oxide (NOx) emission assessment (www.rha.uk.net)
  4. ^ Intelligent Phasing (www.rha.uk.net)
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