In a behind-the-scenes split that highlights the divergent interests between truckload carriers and the less-than-truckload (LTL) industry, the Truckload Carriers Association has officially split from the larger American Trucking Associations’ official policy position on truck sizes and weights.
During its recent convention in Las Vegas, the TCA officially changed its policy stance. It is endorsing the current five-axle, 80,000-pound weight restriction. Since 2011, the TCA and ATA had been united in seeking a five-axle, 88,000-pound weight limit or six-axle, 97,000-pound limit that is found elsewhere in North America.
At issue is TCA blowback from a failed lobbying effort fueled by FedEx Chairman Frederick Smith to try and allow twin 33-foot trailers for the LTL sector, a change from the current twin 28-foot legal limit. ATA lobbied extensively for that change late last year. That change would have benefited FedEx, UPS and a handful of LTL carriers, but would have resulted in little benefit for TL carriers, which largely utilize single 53-foot trailers rather than the twin “pups” preferred by LTL carriers.
FedEx and ATA were beaten back by lobbying efforts by the railroad industry and some individual truckload carriers, including Swift Transportation and Knight Transportation, two large Phoenix-based TL carriers.
Now, the group representing the truckload industry is officially changing its position on truck size and weights, sticking with the current 80,000-pound limit that has been in place for more than two decades.
The issue is moot currently as there is no push in this election-year Congress to change truck size and weight limits, always an emotional legislative issue. But the TCA split from the official ATA position is likely to be an issue if the trucking industry pursues changes in the future because officials admit it is unlikely Congress would change something that even the trucking industry cannot agree on internally.
“The action by the Truckload Carriers Association board of directors continues to highlight the difference of opinion within the trucking industry about improving truck productivity,” ATA President and CEO Bill Graves told the ATA newspaper Transport Topics. “We should not expect our public officials to find solutions to problems the trucking industry doesn’t agree on.”
It’s a sensitive issue internally and highlights the split within ATA between the larger truckload members and the smaller LTL members that also includes two of the biggest transportation companies in the world, UPS and FedEx.
“Wow, the ATA-TCA issue was to be expected,” says one truckload industry executive who asked not to be identified because he was not authorized to speak on behalf of the TCA. “The ATA executives really misplayed the truckload segment of their membership on the twin-33 issue.”
Some truckload executives say privately that federal preemption allowing twin-33-foot trailers nationwide would hurt truck safety and the industry’s image. They said privately that most LTL drivers were totally untrained to handle these larger combinations. Also, they feared a possible diversion of freight from TL to LTL as a result of the larger combination vehicles.
“The upheaval on the truckload business model of utilizing 53-foot single trailers would have been tremendous,” another TL executive said privately. “ATA was either naive or simply didn’t consider these facts. But it really goes to the culture at ATA. It has always been an LTL organization, and then everybody else. That came back to bite them.”
Complicating the matter is the uncertainty of future leadership at ATA and changes at the helm of the 700-member TCA. Graves is retiring at the end of this year and the search for his successor is ongoing. Whether the incoming ATA president will favor the interests of the TL sector over the LTL interests is a burning question within truck lobbying circles.
Meanwhile, TCA has had three different presidents within the past 21 months. Longtime TCA head Chris Burress resigned in June 2014. His replacement, Brad Bentley, lasted 10 months. The current TCA president, John Lyboldt, has been on the job since late 2015.
The politics between TCA and ATA always has been touchy but the two groups do have common interests and leaders. Kevin Burch, president of Dayton, Ohio-based Jet Express, is due to become next chairman of ATA in October. He is a former TCA president and an eloquent advocate for both the truckload sector and the trucking industry as a whole.
TCA’s official stance against larger truck size and weight limits is explained on the group’s website. It says that truck size and weight stability is “critical” right now at a time when carriers already are absorbing higher costs of regulatory changes in trailer aerodynamics, safety technologies, electronic onboard recorders and brakes, among others.
TCA officials believe shippers would not support equipment that did not accommodate the maximum allowable volume. In the past when industry converted from 48-foot to 53-foot trailers, the financial burden was dramatic and the costs of buying the larger trailers was a severe financial hit for many TL carriers, some of whom went bankrupt.
TCA believes any regulatory change allowing twin 33-foot trailers would be not be any different. Truckload executives such as Swift’s Jerry Moyes and Knight chairman Kevin Knight have said that TL carriers would have to buy new twin 33-foot trailers in order to remain competitive on the basis of volume per load.
While UPS and FedEx enjoy significant freight density and pricing power within the LTL sector, the more fragmented TL industry would be hard pressed to raise its rates enough to offset the higher equipment costs. TL carriers also say it would be impossible to retrofit existing equipment, requiring significant capital expenditures to buy new, larger trailers.
“The abrupt shift to the new trailer configuration would severely distort the trailer market in two key areas,” TCA’s website says.
First, the huge excess of suddenly obsolete single trailers would artificially depress the value of these trailers, resulting in huge capital losses for carriers. Second, the rapid increase in demand for the twin 33-foot trailers in a market with fixed production capacity would artificially inflate the price of those trailers, further exacerbating the capital impact on carriers.
The move to twin 33-foot trailers also would exacerbate the driver shortage, TCA official say. That shortage currently is pegged at 20,000 drivers, although there are estimates that the industry may be short as many as 100,000 drivers within the next decade.
“While TCA strongly supports a thoughtful, evolutionary pace for the development and deployment of productivity innovations that benefit the entire trucking industry, the revolutionary change of allowing twin 33-foot trailers on federal-aid highways would have only benefited a small minority of the trucking industry, while the nature and pace of such a change would have been detrimental to the trucking industry in general, and to the truckload carrier segment specifically,” the TCA web site says.
TCA says it will continue to advocate for long-term stability in equipment regulations, a “realistic and predictable schedule” for development and implementation of those regulations, and a “balanced distribution of the costs and benefits” of those regulations across the entire trucking industry.