Industry Insights

NHTSA Initiates Investigation of Michelin Auto Hauler Tires

October 23, 2014

Investigation of Michelin

WASHINGTON—The National Highway Traffic Safety Administration has opened a preliminary evaluation of Michelin XZA 295/60/R22.5 tires for possible defects.

“The tire may fail catastrophically when used on the steer axle,” states the resume dated Oct. 6 from NHTSA’s Office of Defects Investigation initiating the investigation.

ODI said it has received six vehicle owner complaints and one police accident report involving a total of seven crashes allegedly caused by failure of the Michelin XZA tire in a steer axle position. Five of the reports came from a single fleet, the ODI resume said. No deaths or injuries were reported.

ODI estimates the population of allegedly defective tires at 10,000. If the agency finds sufficient evidence of a defect, the investigation will progress to an engineering analysis, under NHTSA defect analysis protocol. If the engineering analysis confirms the presence of a defect, a recall will be ordered.

In a statement, Michelin said it is aware of the investigation and is cooperating fully with NHTSA.

Source RubberNews.com

Industry Insights

Cutting logistics costs key to GM profit targets

October 13, 2014

GM Profit Target

General Motors has revealed details about how it plans to increase its margin to 10% in 2016, with cuts in material and logistics costs making up a large part of the company’s savings in regions including North America and South America.

During an investor meetings last week in Michigan, the company’s chief executive officer, Mary Barra, said that the company will reduce material and logistics costs specifically by around $2.5 billion over the next two years. In North America alone, she said that GM would save $900m in both 2015 and 2016 in logistics costs.

The plans are part of larger aims that include product and technology advances, a reduction in production platforms, targeted growth in China and the establishment of Cadillac as a separate business unit to pursue growth in the luxury market. GM also expects to return to profit in Europe by 2016. Margins are targeted to grow from around 8.5% in recent years to 10% by 2016.

Barra said the company aims to improve relationships with suppliers and derive more global volume from fewer vehicle architectures. By 2020, the company expects that about 99% of global production will be on core architectures.

To deliver better margins on forthcoming high-volume product launches, including the Opel/Vauxhall Corsa and Astra, and the Chevrolet Cruze and Malibu in North America, the company said it needed to lower enterprise costs for material and logistics.

Last year, Grace Leiblein, vice-president of global purchasing and supply chain (GPSC), made clear the company’s intention to reduce logistics expenditure. She said that the company would trim its multi-billion dollar global logistics budget over the coming years by brining suppliers closer to assembly and investing in logistics infrastructure at plants, amongst other plans.

The finer points of that strategy were detailed by Edgar Pezzo, executive director of global logistics and containerisation, in the most recent edition of Automotive Logistics magazine (www.automotivelogisticsmagazine.com/interview/general-motors-waste-not-want-not). Pezzo has moved logistics to the fore in overall model planning and development. Central to that is the elimination of waste and this involves changes to material order processes as a way of eliminating extra inventory and making routes more efficient.

Beyond total enterprise cost
GM has been pursuing a policy of ‘total enterprise cost’ for some years now, which has meant early consideration of supply chain costs and operations starting from vehicle development, including packaging requirements, supply breakpoints and long-distance transport and inventory costs.

Pezzo said that while that was still a focus, spending had changed because of increasing fuel, trucking and other logistics costs. GM’s logistics experts are now working even more closely with suppliers and the company’s global purchasing department to lower material and logistics costs.

That tightening of collaboration in planning has three main strategies: working with purchasing to better position suppliers taking into account global platforms’ working with manufacturing to ensure the best infrastructure is in place close to the plants; and working with purchasing to localise as many suppliers as possible, especially in areas where there is a high imported content.

Pezzo said that it is up to logistics teams to understand the requirements of design, sourcing and manufacturing to ensure that logistics can support and influence those areas.

“Logistics is a very important part of the whole system,” Pezzo told Automotive Logistics. “If we work upfront with our colleagues internally to optimise our network, we will contribute to the company’s success, profits and overall objectives. The very fact that senior management is putting so much focus on logistics shows how important it really is at GM.”

 

Marcus Williams

Automotive Logistics

 

 

 

Industry Insights

MetroGistics, PMTG, and McNutt will partner as ‘asset medium’ provider

October 13, 2014

Announcements of the partnerships
US vehicle logistics services provider MetroGistics is joining up operations and customers with trucking provider Precision Motor Transport Group (PMTG) and less-than-truckload service provider, McNutt Automotive Logistics. Both MetroGistics and McNutt will eventually merge to become a single company.

The agreement will produce a mixed transport asset heavy and light model: ‘asset medium’, according to the three companies, which share the same private equity investor, Corinthian Capital Group. MetroGistics and McNutt, both based in Missouri, act as brokers for moving vehicles across the US; PMTG, meanwhile, is an asset-heavy car-haul company, based in Michigan, that transports vehicles via 300-plus covered and uncovered trucks.

Together, the three companies will serve customers that include new car manufacturers, the used car market, new and used car dealerships, remarketing companies, auctions, and personal vehicle transport. According to Scott Naz, co-owner of MetroGistics, the partnership would lead to a higher level of transport flexibility and services, particularly at a time of increased vehicle sales and limited trucking capacity in the US.

“It’s going to increase our operational reach tremendously,” Naz explained to Automotive Logistics. “Before we didn’t have access to company-owned trucks, but now we have access to PMTG’s 330 trucks that we can work with every day. It’s a very exciting move for us, and for them.”

MetroGistics works with more than 2,500 carriers in its brokerage network that will now be available to PMTG, which could help the company overcome capacity bottlenecks as well as carry out smaller transport moves, said Naz. “PMTG will be able to increase their operational reach too. Before perhaps they may have struggled to do a single move, but now they have access to us,” he said.

“For example, one of PMTG’s customers had overflow opportunities, but PMTG was basically at capacity, so couldn’t service a one-off move their customer needed,” explained Naz. “However, they now have access to over 2,500 carriers, all across the country, and will be able to utilise our services to help expand their reach, take on more opportunities, and handle one off moves.”

“We are very excited about working with the MetroGistics team and their professional blend of technology and logistics services to reduce lead times with our customers and empty miles on our trucks,” said Dallas Knepp, COO of PMTG, in a statement.

For MetroGistics, the partnership offers ready access to capacity, and the possibility to secure longer-term contracts. “We have 330 trucks behind us that we can start projects with, try to sell more long-term deals, and go after more contract opportunities,” Naz said.

McNutt and MetroGistics will combine under one entity, eventually becoming a single company, working closely and using the same technology, according to Naz. PMTG will be under the same umbrella as Corinthian Capital, but will remain as a standalone company with its own systems and processes. MetroGistics will have access to PMTG’s trucks, and PMTG will have access to MetroGistics’ and McNutt’s carrier network.

With the announcements of the partnerships, the three companies are also combining their customer focus. PMTG was solely focused on the new car side and non-domestic end of the new car segment, MetroGistics focused on the new car side, but had 40% of its business on the used and remarketed side, and McNutt focused on the dealer side.

“We’re bringing everything together and it’s pretty powerful,” Naz said.

 

Rachael Hogg

Source Automotive Logistics Magazine

Industry Insights

FMCSA Including Extra Step In Insurance Increase Rulemaking Allowing For More Industry Comment

October 13, 2014

More Industry Comment
The upcoming rule to increase the minimum amount of liability insurance that carriers and brokers must carry will have an additional step that allows fleets and owner-operators another chance to offer formal comment on the rule.

The proposed rule will first be issued as an Advanced Notice of Proposed Rulemaking, rather than simply a Notice of Proposed Rulemaking. The ANPRM’s publication is expected sometime this month. FMCSA sent the rule to the White House’s Office of Management and Budget last week, and after its clearance there, the agency is set to publish the proposed rule.

The ANPRM will give the industry, the public and any other stakeholders the chance to make public comments on the rule in the regulations.gov rulemaking portal.

However, the agency must still issue a Notice of Proposed Rulemaking prior to issuing a final rule. The NPRM will also give all stakeholders another opportunity to comment.

The ANPRM this month will have a 60-day public comment period, according to a recent Department of Transportation report.

The NPRM, which will come after the ANPRM, will likely have a 60- or 90-day public comment period.

By James Jaillet

   Source Trucking News
Industry Insights

More Trucking Groups Call On FMCSA To Remove CSA Scores From Public View

October 9, 2014

Trucking Groups Call on FMCSA

Several more trucking groups have called on DOT head Anthony Foxx to remove carriers’ safety data and Compliance, Safety, Accountability rankings from public view.

The groups say the Federal Motor Carrier Safety Administration uses data that has “statistical flaws” to produce the Safety Measurement System rankings within CSA. Furthermore, the groups allege, the flaws have been made known to FMCSA numerous times, which the agency “shamelessly and repeatedly ignored.”

The joint letter came from the Alliance for Safety, Efficient and Competitive Truck Transportation, the National Association of Small Trucking Companies, California Construction Trucking Association, the Expedite Association of North America, Auto Haulers Association of America and others.

The petition comes less than a month after American Trucking Associations and the Owner-Operator Independent Drivers Association made a similar appeal to Foxx regarding the presentation of carrier Compliance, Safety, Accountability scores on the FMCSA website.

The latest letter points to several studies done on CSA that show the flaws in the agency’s scoring methods, including ones that show no correlation between the SMS data and future crash risk.

Overdrive Senior Editor Todd Dills in his ongoing CSA’s Data Trail series points out flaws in the agency’s data, along with the data’s bias against small carriers and owner-operators. Click here to see those articles.

The letter from ASECTT says FMCSA has “played mere lip service” to its disclaimer that SMS scores are not safety ratings. “Instead, the agency has continued to tout unproven SMS methodology as an alternative standard to be used by the public in selecting carriers. The agency’s advocacy of SMS has been seized upon by the plaintiffs’ personal injury bar, thereby causing great harm to shippers, brokers and carriers.”

ASECTT brought an unsuccessful suit against FMCSA in an attempt to have carrier scores removed from public view, since the agency has promoted them as de facto safety ratings. But the case was dismissed in June.

 

Source OverDrive

 

 

Industry Insights

Volvo Trucks Delivers 1,000th Auto Hauler

October 9, 2014

1,000th Auto Hauler

Volvo Trucks said it recently delivered its 1,000th Volvo Auto Hauler model, which the company designed specifically for the specialized automobile transport industry.

Volvo delivered the milestone truck, a VAH 200 model powered by Volvo’s D11 engine, to Hansen & Adkins Auto Transport. The daycab model featured a short bumper-to-back-of-cab configuration that enables the truck to haul up to 11 vehicles per trip.

“Understanding that payload is key for auto transporters, we designed the Volvo Auto Hauler’s dimensions to maximize the size and number of vehicles that can be carried in each load,” Göran Nyberg, Volvo Trucks’ president of North American sales and marketing, said in the announcement.

In addition to the VAH 200 daycab model for local hauling, Volvo also offers the VAH 430 sleeper model for regional-haul applications.

Volvo said all of its VAH models include features that reduce the truck’s overall height, including deep-drop front axles, low-height Volvo air ride rear suspension and reduced-height cab options.

Hansen & Adkins, based in Los Alamitos, California, operates 29 terminals in 21 states. The carrier delivers nearly 2 million vehicles per year with its 884-truck fleet.

 

 

Source Transport Topics

Industry Insights

Employee Benefits Liability

September 22, 2014

It’s no secret, given today’s driver shortage, companies are competing to attract and retain the best and most talented drivers. Often, this advantage comes in the form of financial benefits, including employee benefit programs. Employee benefit programs are a popular way to compete for new employees and have been shown to improve overall employee morale and productivity.

That sounds great, but providing an employee benefit program is not without risk. As an employer you face legal and regulatory requirements, as well as, the financial consequences from damages resulting from errors in administering these programs.
There is insurance coverage that will protect your business in the event a claim is filed due to these errors and omissions. Employee Benefits Liability, which is often referred to as Employee Benefits E&O, covers claims arising out of the administration of employee benefit plans.

An example of how Employee Benefits Liability comes into play would be as follows:
You hire a new employee who is eligible for medical, dental and life insurance benefits. The employee requests to add coverage for his spouse and son. The program administrator fails to get the employee’s family added as requested. The employee’s spouse is diagnosed with cancer and has over $400,000 in uncovered medical bills as a result of the error. As the employer you can be found liable for the uncovered medical bills.

Employee Benefits Liability can be covered a few different ways; as an endorsement to your General Liability policy, written as a stand-alone policy, or by a Fiduciary Liability policy. Contact your agent to design a program that is right for your business.

Claim Spotlight

Tree Limbs

September 22, 2014

Tree Limbs

Bill was hauling a load of brand new pickup trucks. As he neared the dealership, he saw the route he planned was under construction.  He needed to take a short detour around the block to get to the entrance.  Although the area was residential, the streets were wide and Bill had plenty of room to maneuver.  The streets were lined with trees, but he thought he had more than enough clearance.  Besides that, the tree limbs looked pretty small and delicate… certainly not enough to cause any damage if he brushed against one or two.  He arrived at the dealership with no further delays and unloaded his cargo.  Each one of the brand new pickups that were on the top deck had dents on the roof and deep gouges in the paint.  Every damaged truck was crushed and the total claim was $135,000.

When Bill’s detour took him down an unexpected road, he made several expensive errors in judgment: (1) estimating the tree limbs’ height by eye versus getting out and measuring, and (2) assuming the branches could not harm his cargo. Simply “eye-balling” the height of your cargo, a bridge, a traffic light, or a tree branch is always a bad idea, especially while in a moving vehicle.  Experienced haulers know the only way to accurately gauge something’s height is to measure it.  Bill’s second mistake was assuming there were only small and flexible limbs above.  While there were small and flexible limbs, those branches were hiding the larger, older limbs that had latticed together and created a very solid hazard.

Lessons Learned:

Overhead accidents are always preventable. While measuring the height of your load and planning your route are important, overhead obstacles cannot always be anticipated.  There may be detours, missed turns, or even just trees branches that grew since the last time you went through.  By exercising the following best practices, you can prevent costly mistakes:
-1-When in doubt, get out. Never “eye-ball” the height of a possible overhead obstacle: get out and measure it.
-2-Be aware of the routes you take. Avoid residential areas when possible, since these roads are not built to accommodate tractor trailers and auto haulers.
-3-Remember that tree branches can hide other overhead obstacles, such as larger tree branches and poorly-maintained power lines. What you see above you does not mean that is all there is.

Bill Fralic Insurance News

BFIS Announcements

September 10, 2014

Bill Fralic Insurance Services, Inc. Announcements

We are excited to announce that August marks the celebration of Bill Fralic Insurance Services, Inc.’s 25-year anniversary. Bill Fralic started the company in August 1989 with Mike Staines and Ken Walker. From the beginning they had a great business strategy, exceptional customer support, positive attitudes, and total dedication. Working together, we have grown the company into the most respected commercial transportation insurance agency in the country.

As another successful year comes to an end, BFIS is gearing up, in many ways, to better serve our clients. Here is a quick look at the changes you can expect to see within our agency:

•BFIS is excited to announce that we are in the process of going paperless. We know that it is a necessity for a growing company to have the fastest access to information with the ease of information sharing among staff for better client support.

•BFIS continually strives to find ways to give our customers exactly what they WANT – a fast, reliable, easier way to pay. In turn, we are now accepting all major credit cards. We want to do everything we can to make it easier on our clients and we understand that they like the speed, flexibility, and convenience of electronic payments.

In 2015, growth will not be a given; it will be earned.

Industry Insights

Freight Increasingly At Risk For Cyber Crime

September 10, 2014

Cyber Crime

First, the good news: Old-fashioned cargo theft is down. Within the past three years, incidents have fallen from 1,317 in 2011 to 1,090 in 2013, according to CargoNet, a cargo crime tracking subsidiary of Verisk Crime Analytics.

And now the bad news: Cyber crime, as it relates to cargo, is up.

Cyber crime is less physically dangerous than stealing a tractor-trailer, said Keith Lewis, vice president of operations at CargoNet. And cyber thieves are harder to catch and much less likely to be arrested.

There are a million ways to steal a shipment, especially on Friday when freight needs to move fast and security is low. Seventy-five percent of all cargo thefts occur on the weekend, according to Keith Lewis, vice president of operations at CargoNet.

Cargo thieves create fake identities through the Internet, and set up fake websites, invoices and insurance certificates. Theft by fictitious pickup (a form of identity theft) has increased 70% in the past year, CargoNet reports, and now accounts for 9% of all reported cargo theft. “They’ll pose as a legitimate carrier, or they’ll set up a fraudulent company,” Lewis said to TOC Europe’s Container Supply Chain Conference last month. “Or they’ll go back and find a company that went out of business—their certificate is still out there on the Internet, all they have to do is reactivate it. For a few hundred bucks, I can get an MC number and be a trucking company.”

Telematics and other forms of emerging technology, which seemingly increases security and recovery, also assists thieves who use it to exploit IT systems. Mike Yarwood, claims executive at freight insurance specialist TT Club, told TOC Europe’s Container Supply Chain Conference that thieves stage petty break-ins at offices. Damage appears minimal and nothing is physically removed. However, “more thorough post-incident investigations reveal that the thieves were actually installing spyware within the operator’s IT network,” he said.

Also a target? Personal devices, where cyber security is non-existent. Hackers often use social networks to target operational personnel to determine routing and overnight parking patterns. Thieves also steal container release codes and delivery passwords to track units through the supply chain.

Awareness is the first step to reducing cargo cyber crime. Establish risk management policies that stipulate what information can or cannot be stored on personal devices. Tracking devices can be embedded in cargo to detect the location of stolen goods, and some companies are implementing remote-locking devices that stop stolen vehicles in motion.

 

Source PropertyCasualty360.com

About the Author

Melissa Hillebrand, PropertyCasualty360.com

Melissa Hillebrand, National Underwriter Property & Casualty managing editoroversees the Technology channel on PropertyCasualty360.com. She has served the trade magazine industry since her graduation from Creighton University in 2004.

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