EPA Limits Production of Glider Trucks

According to a recent article in Transport Topics, acting administrator Andrew Wheeler has reversed a decision that would have allowed a proliferation of glider trucks until the end of 2019. Wheeler’s decision came just days after 16 state attorneys general filed requests for review by the US State Court of Appeals for the District of Columbia.

U.S. Environmental Protection Agency acting Administrator Andrew Wheeler has reversed a controversial decision made earlier this month that would have allowed the proliferation of glider kit trucks until the end of 2019.

In a July 26 memo to the agency’s enforcement chief, Susan Bodine, Wheeler said a “no-action assurance” order blocking enforcement of the glider kit trucks provision in the 2016 Obama administration’s Phase 2 Greenhouse Gas Heavy Truck Rule is “not in the public interest.”

“The Office of Enforcement and Compliance Assurance has a general guidance limiting the circumstances under which the agency will consider issuing no-action assurances,” Wheeler wrote. “The 1995 restatement of that policy states that the principles against the issuance of a no-action assurance are at ‘their most compelling in the context of rulemakings.’ OECA guidance is clear that a no-action assurance should be issued only in an ‘extremely unusual’ case when the no-action assurance is necessary to serve the public interest, and only when no other mechanism can adequately address that interest.”

Bodine’s “no-action assurance” memo was dated only a day after then EPA Administrator Scott Pruitt resigned amid a dozen ethics investigations. In November, the agency issued a proposed rule to repeal the Obama-era regulation, questioning the notion that the gliders were big polluters and whether EPA even had the authority to regulate the gliders.

Bodine’s “no-action assurance” memo was dated only a day after then EPA Administrator Scott Pruitt resigned amid a dozen ethics investigations. In November, the agency issued a proposed rule to repeal the Obama-era regulation, questioning the notion that the gliders were big polluters and whether EPA even had the authority to regulate the gliders.

Wheeler’s action came July 26, only days after an environmental coalition and 16 state attorneys general filed separate requests for review by the U.S. Court of Appeals for the District of Columbia, claiming that not enforcing the glider provision in the 2016 Phase 2 Heavy Truck Greenhouse Gas rule would allow thousands of the “super polluting” glider trucks on U.S. roadways.

The court quickly issued a temporary stay of the EPA nonenforcement plan while it considers whether to approve or deny the emergency motions filed by environmentalists and the states, which said allowing the production and sale of more than 300 per-manufacturer gliders — “new heavy-duty trucks manufactured with highly polluting, refurbished engines that do not comply with modern emissions standards” — is unlawful.

“This is a huge win for all Americans who care about clean air and human health,” Fred Krupp, president of the Environmental Defense Fund, one of the lawsuit plaintiffs, said in a statement. “These super-polluting diesel freight trucks fill our lungs with a toxic stew of pollution. EPA’s effort to create a loophole allowing more of them onto our roads was irresponsible and dangerous. We hope their decision to withdraw that loophole puts a firm and final end to this serious threat to our families’ health.”

Glen Kedzie, energy and environmental counsel for American Trucking Associations, told Transport Topics, EPA’s reversal of its prior decision to not enforceglider vehicle provision under the final Phase 2 rule was a welcome announcement, which reaffirms the agency’s legal authority and responsibility to the public to close the dangerous emissions loophole created by a small special interest group of manufacturers. We will await EPA’s next steps as this issue continues to evolve.”

In their emergency motion, the environmentalists said the trucks are “poised to spend their lifetimes emitting many times more smog-forming nitrogen oxides, lung-damaging particulate matter and cancer-causing toxics than lawfully built heavy-duty trucks. Relief is urgently needed from EPA’s unlawful action in order to avert substantial and irreparable public-health consequences.”

The attorneys general in their court brief said, “Testing of glider vehicles conducted by EPA in 2017 showed even greater emissions impacts: NOx emissions were as much as 43 times higher than emissions from compliant vehicles, and PM emissions as much as 450 times higher. NOx and PM are linked to serious adverse health effects, including increased incidence of respiratory and cardiovascular disease and premature death.”

 

To read the article on Transport Topics, click here.

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Human Error Takes Toll on Global Supply Chain

Although there is a plethora of technology in today’s global supply chain industry, many jobs still require human interaction. According to a recent article in Inbound Logistics, the problem is that too many people are making too many mistakes.

By Matthew Tillman, CEO & Co-founder, Haven, Inc. writes in Inbound Logistics:

Most business is driven by an incentive to grow. The global supply chain follows a different narrative. Growth costs more than is affordable for the steamship line whose business it is to transport cargo, and there’s no way for these carriers to differentiate from competitors. Instead, carriers cut their costs and increase their margins.

The supply chain is broken because there are too many people who are doing too many things wrong. The result is human suffering. Businesses are deprived of the goods they sell. Communities are deprived of the food imports upon which they depend and workers are exploited. These practices are part of the history of the shipping industry. While identifying their symptoms is easy, finding root causes is difficult when the problem behaviors are taken for granted.

The most visible symptom of the ineffectual structure of shipping is criminal corruption, the type that lands an executive in prison seemingly every year; for example, the conviction of an employee of shipping line NYK with price fixing. Lacking solid data to prove price fixing is rampant, trade is structured to make it a very tempting crime because transporting cargo is a uniquely low-margin business in which the cost of growth is linear.

Customers of shipping lines aren’t encouraged to pay one particular carrier more for better offerings. Another option is for lines to improve customer experience, which could justify a carrier charging higher prices, but that means hiring workers. A carrier is likely to differentiate by lowering prices with lower interest rates on financing of new ships and loans that insure cargo.

Shipping lines will try to negotiate with banks for better interest rates, but this requires them to promise a certain volume of business to support the number of ships the bank is financing. Some lines are fortunate enough to be headquartered in countries that subsidize their business, giving them an edge over competitors. Lines that fail to secure good rates or subsidies have to consider other means to either increase margins. They can spend less on labor, which can easily lead to exploitation; an example of this is labor abuses in the Thai fishing industry.

Limited opportunity to differentiate and charge more is one reason margins are tight for shipping lines. Another is that adding a new line of business is expensive. In most industries, expansion becomes cost-effective over time, but not for carriers. Each new shipping line requires as many workers as established lines, so to start running a new ship between ports is as expensive as founding an entire new carrier company. This deters shipping lines from expanding and working with more customers, reinforcing their focus on increasing margins by lowering costs.

Examining the Root Cause

This problem of restricted expansion is where you understand that people are the problem. Too many workers are needed to keep things running because too much work is required for basic tasks. The average shipment with French carrier CMA CGM entails 22 booking changes before it’s booked to be transported.

Instead of a customer filling out a form online that automatically transfers information to every electronic location where it needs to be, workers physically copy and paste addresses from incoming orders to outgoing directions for laborers handling the physical cargo. Invoice errors are inevitable in this process, leading to billing disputes. The typical shipper loses $50,000 to $150,000 a year from invoice mistakes by carriers, according to one auditor. The ramifications of an error can be even more costly. If a dispute means a grain import doesn’t dock and unload, people aren’t eating.

As much attention as we pay to exploitative labor practices in palm oil production and brick making, we rarely look at the expenses that might incentivize these tragic systems. We bemoan world hunger and the irony of food waste, but we rarely look at why more food isn’t transported. The incentive and why is our broken global supply chain, and the problem is people. Automating shipping would lead to fewer errors and workers, which could lower transportation costs and allow for more cargo to be transported. Until shipping is automated, it will be glutted with people performing minute, redundant tasks, with a high propensity for error.

Click here to read the article in Inbound Logistics.

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Many Small and Mid-Sized Enterprises say Technology Drives Trade Growth

We know that technology continues to drive change in the transportation sector, but are companies more optimistic about it than we think?  According to a recent article in Inbound Logistics, approximately 80 percent of executives at small and mid-sized enterprises, who were surveyed, say that they use online platforms for rate quotes and bookings.

Felecia Stratton writes in Inbound Logistics:

Small and mid-size enterprises (SMEs) struggling for equal footing in the global economy increasingly look to cross-border trade for growth, seeing technology as a way past obstacles in shipping and compliance, according to new research from Shipa Freight.

Shipa Freight’s global study of 800 SMEs from developed and emerging markets shows smaller companies are remarkably upbeat about their ability to expand through trade.

Eighty-nine percent of exporting SMEs surveyed say their export revenue will grow over the next three years; 71 percent say they are concentrating more on international markets than on their home markets. The Shipa Freight survey included exporters and importers from the United States, UK, Germany, Italy, China, India, Indonesia, and UAE.

Smaller companies account for an estimated 95 percent of all businesses and employ two-thirds of the world’s workers. Critics of globalization have argued that decades of efforts aimed at easing the flow of goods, capital, and jobs across borders have come at the expense of SMEs and disproportionately benefitted multi-nationals and other large businesses.

Three-quarters of SME executives surveyed believe businesses that operate internationally are more resilient. Nearly 80 percent say they use online platforms for freight quotes and bookings.

SMEs that view the UK as one of their top export markets are looking elsewhere because of Brexit. Britain’s vote to leave the European Union has prompted 73 percent of respondents to prioritize trade with other European countries. Sixty percent of UK SMEs that export and 52 percent of UK SMEs that import say leaving the EU Single Market would be “disastrous” for them.

Smaller companies clearly see technology as a way to close the gap with bigger competitors, cope with documentation requirements, and access competitive shipping options. Eighty-six percent say technology is leveling the playing field for SMEs to operate globally; 89 percent believe technology is transforming the logistics sector.

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