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NATM Blog

NATM's 2021 Regulatory Roundup

7/27/2021

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The NATM Regulatory Roundup & Capitol Hill Visits are scheduled for September 22, 2021. Along with the Convention & Trade Show, this is one of NATM’s most important events of the year. The day of activities is divided into two distinct parts: the Regulatory Roundup which is held in the morning featuring expert presenters, and the Capitol Hill Visits in the afternoon. The Regulatory Roundup is a speaker series that in the past has featured Congressional staffers, officials from the National Highway Traffic Safety Administration (NHTSA) and experts from the National Association of Manufacturers (NAM). Capitol Hill Visits are meetings with legislators discussing industry needs and educating Members of Congress about the impact of the light- and medium-duty trailer industry on the economy and in local communities.
 
With continued meeting restrictions, the 2021 event will be a hybrid format with both virtual and in-person meetings with legislative offices. All NATM Members and Dealer Affiliates are invited to participate in the Regulatory Roundup which will be hosted virtually. For those individuals who are interested in what’s happening in Washington, D.C. and within federal agencies, this is the perfect chance to get a feel for the event, which is usually hosted in person, without investing in a trip to the Capitol. As of this writing, the current speaker lineup includes Congressional members and staffers to talk about infrastructure, a NHTSA official, and a speaker from NAM to discuss workforce. To see the up-to-date slate of speakers and sign up to attend, visit https://www.natm.com/regulatory_roundup.html
 
Meetings with legislators will happen both virtually and in-person for a small group of attendees. The NATM Government Affairs Committee has established talking points to ensure the needs of the industry are being heard. Talking points for 2021 are as follows:
  • Trailers as “motor vehicles” – educating legislators that by definition, trailers are motor vehicles and as such any legislation using the term “motor vehicle” includes trailers – an often-unintentional inclusion.
  • Trailer Safety Week – highlighting the industry’s commitment to trailer safety and the need for legislation to direct support to trailer safety efforts.
  • Workforce Shortage – highlighting the critical nature of the workforce shortage and asking legislators to look for opportunities to support skills training, improving access to automation, and communicating the challenges presented by increased unemployment benefits.
  • Supply Chain – educating legislators about the significant challenges posed by a disrupted supply chain, lack of domestic production for critical components, and the resulting detriment incurred by tariffs.
  • Infrastructure Package – as of this writing, a final Infrastructure Package has yet to be passed. The trailer manufacturing industry has a vested interested in a long-term solution to infrastructure spending and investment in roads and bridges, with a specific interest in potential language related to rear and side underride guards.
 
While in-person attendees have already been selected, members interested in virtual legislator meetings scheduled to occur Sept. 20 – Oct. 1, can sign up online here: https://www.natm.com/regulatory_roundup.html.
 
If virtual legislator meetings are not workable for you, NATM invites all of its members to host their legislators for a plant tour at any time of year. Plant tours are an easy way to not only showcase member companies and their impact on the community, but are also an opportunity to discuss key priorities for the industry and business more specifically. NATM has invitation templates for members to use, and NATM staff will work with the Congressional office on scheduling, and can help companies prepare for the tour.  If you are interested in hosting a plant visit, contact Assistant Director Meghan Ryan at Meghan.Ryan@natm.com or call NATM Headquarters at (785) 272-4433. 
 
For members interested in attending the event in person, the next Regulatory Roundup and Capitol Hill Visits are scheduled for April 2022! 
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Post-Pandemic Supply Chain Issues

6/23/2021

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Supply chain issues have been a hot topic since the pandemic started, making their way into headlines across the world. IBEX 365, in partnership with the National Marine Manufacturers Association (NMMA), held a webinar addressing supply chain concerns for manufacturers on April 29, 2021. IBEX 365 is North America’s largest technical trade event for marine industry professionals. NMMA is the leading trade organization for the North American recreational boating industry. Andrea Sordi, Clinical Professor Supply Chain Management, University of Tennessee, spoke with Scott Berry, Director of Engineering Standards, NMMA, to answer questions about planning for disruptive events such as costly shipping, innovation, and consolidation. 
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Global and environmental factors are shaking the principles on which the supply chain has built itself. The pandemic, trade wars, tariffs, etc. have all impacted the global supply chain over the last 18 months. With these tumultuous landscapes changing daily, many manufacturers are struggling with no end in sight. Sordi explained that extreme solutions do not solve these problems. He said, "You need to find balance. Extreme doesn't work. Some materials can be sourced nearshore [vs. offshore], so the question becomes how do you control that balance?" He encouraged manufacturers to think critically about their supply chains and pivot quickly when issues, like costly shipping, arise. 

How can manufacturers plan for disruptive events?

Although no event can be fully anticipated, some preparations can be made in advance. Sordi explained that too much time is spent perfecting data and forecasts when the truth is accurate forecasts are entirely subjective. Each company has to decide for what "accurate" means for them. However, Sordi elaborated that what matters is the ability to turn those forecasts into directional data and understand how different scenarios might play out. Accuracy is less important than ability to be flexible. This can be difficulty to do since the supply chain has built itself around the bottom line and growth, which downplays risk management; all industries need to move to a supply chain that is lean and has groundwork built on flexibility instead. 

Another way companies can prepare for disruptive events is to ask the question, "How can the company shape demand in the future?" Sordi posed this question so companies look beyond current demand and determine how they can influence it. Looking for new customers and tracking new customer interests are ways the companies can shape demand; the idea is to get ahead of the curve and lead demand in the business's favor. Investing in infrastructure, personnel, and automation can also help anticipate or lessen the effect of disruptive events. For example, if companies take the time to understand where bottlenecks occur in their supply chains, they can mitigate those effects now instead of waiting until the bottleneck causes issues. 

Innovation and the Supply Chain

Manufacturers are constantly looking for ways to innovate their products, services, and processes, but there are many hurdles to innovation, including the supply chain. It is unlikely innovation will be found within the supply chain; businesses may need to forge relationships with more than one supplier to create the desired result. Use long-term tactics and strategies with suppliers so a stable, symbiotic relationship is made. When looking for suppliers, small and medium enterprises may be worthwhile investments. According to Sordi, small and medium businesses are more diverse and 20 to 30 percent more creative than big businesses.

Many companies start with a tool and then build business around that tool. However, that is not a sustainable business model. It is much more effective to have a goal or an answer to the question "why are you making this tool/product/service/etc.?" and work backward from there to create a business. Understand why this particular product needs innovating. Even working from this model, innovation can still fail if the values and goals are not aligned internally. If the team does not understand why this innovation needs to be made, not only will confusion run rampant, but trust between leadership and employees could break down. 

Consolidation in the Supply Chain

When questioned about consolidation within the supply chain, Sordi did not believe it was a solution. "Consolidation means putting too many eggs in the same basket," he said. It is not a solution the the issues that exist right now. He explains there was a big push for consolidation several years ago because it made managing more efficient. Keeping the supply chain diverse does not only spark innovation, as mentioned above, but can also create competitiveness within the industry. Overall, diversifying supply chins is a much safer solution than consolidation. 

Quick Tips to Improve Supply Chains

  • Lock in prices (components, shipping, etc.) as far in advance as possible to avoid inflated prices.
  • To find the best ports to ship to, analyze the company's inland network to see where the resources are the most bountiful (i.e., alternative routes if needed, enough drivers and containers, strong infrastructure).
  • If there are not enough resources to serve all customers equally, prioritize certain demographics or types of customers. Focus time, attention, and resources on the segments that will bring the most financial stability. 
  • Build incentives into supplier agreements such as penalties if they do not deliver on time or cannot hold their end of the contract.
  • Give suppliers visibility of the customer base and focus on long-term partnership. The stability may be enticing for them.
  • Remember, there is always a lag between normalcy and prices going down. The return to normal is estimated to take another three to six months in the best-case scenario. 
There are, unfortunately, no instantaneous fixes to the supply chain issues present today. The information here is meant to help you think critically about your own supply chain in hopes of preventing or mitigating future issues. Time and the return to normal will eventually bring inflated prices down and allow for more movement within the manufacturing industry. If you would like more information on Sordi's presentation, contact NATM Tracks Editor Elizabeth Moore at Elizabeth.Moore@natm.com

Update courtesy of the National Association of Manufacturers. 
New Supply Chain Plan Released This week the White House released a report on “Building Resilient Supply Chains” and outlined measures our government will undertake to address the supply-chain challenges that continue to plague manufacturers. The report includes policy recommendations and highlights work that is underway to address supply chain vulnerabilities, including: steps to strengthen U.S. manufacturing capacity for critical goods, to recruit and train workers to make critical products here at home, to invest in research and development that will reduce supply chain vulnerabilities, and to work with America’s allies and partners to strengthen collective supply chain resilience.
 
You can read NAMs response here. 
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NATM Companies Encouraged to Host Virtual Plant Tours

2/26/2021

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NATM has had a number of successes in its Government Affairs program over the past several years due in large part to the relationships NATM members have built with their local members of Congress. Through NATM's plant tours, legislative roundtables and Capitol Hill visits, NATM has built an awareness of the trailer manufacturing industry and the impact it has on the various states and legislative districts.

With over 60 new members in Congress, it is crucial that companies in the light- and medium-duty trailer industry continue to build relationships and awareness of the industry with legislators. With many of the new congressional members joining the Transportation & Infrastructure Committee, NATM is encouraging both suppliers and trailer manufacturers to schedule virtual plant tours this year. All members of Congress have an impact on the outcome of any legislation, so it is important to recruit advocates that understand and support the trailer industry.

With the highway reauthorization expiring in 2021 and continued pressure for infrastructure investment, it is expected that President Biden and Congress will seek to make bold decisions in the area of transportation, which makes engagement with key decision makers critical. Further, several iterations of the bill in both the House and Senate contemplate additional underride requirements that would be potentially more expansive than existing regulation. All NATM members are encouraged to get involved in the Association’s government affairs outreach, particularly if you see your Member of Congress on the list below.

Historically, plant tours have taken place onsite at member company facilities. As COVID-19 protocols limit visitors, NATM is encouraging members to host virtual plant tours online for 2021.

For those companies interested in engaging, NATM has template invite letters and other resources to make the process easier. NATM’s government affairs group K&L Gates will contact the congressional offices and schedule the event once the company completes the template invitation letter. The Association will provide a suggested tour outline and talking points. With the switch to virtual, the plant tours will take place on a Zoom call and feature a slide deck of photos of the facility and/or a pre-taped video walk through.

If your business is represented by a new legislator, listed below, or sits on the House Committee on Transportation and Infrastructure (Committee list here), NATM highly encourages you to host your representative for a virtual plant tour.

If you are interested in hosting a plant visit, contact Assistant Director Meghan Ryan at Meghan.Ryan@natm.com or call NATM Headquarters at (785) 272-4433. ​If your business is represented by a new legislator, listed below, or sits on the House Committee on Transportation and Infrastructure (Committee list here), NATM highly encourages you to host your representative for a virtual plant tour.

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Stimulus Package Update

10/30/2020

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​Reports from Washington regarding another round of stimulus have American riding a rollercoaster in recent weeks. Just a few weeks ago, it seemed stimulus talks had been stalled, only to be potentially reinvigorated the next day, and again stalled last week only to be reinvigorated by the end of the week.
 
House Speaker Pelosi and Treasury Secretary Mnuchin have been meeting regularly, with reports late last week noting the parties were working quickly toward an agreement. Central discussion has been funding for testing and tracing needed to safely reopen schools and the economy. According to Bloomberg, three remaining sticking points include aid for state and local government, school funding, and liability shields for employers. However, by Monday morning, optimism again waned as Speaker Pelosi and Secretary Mnuchin continue to reconcile differences.
 
While just a few weeks ago President Trump announced moving another stimulus package to the backburner, instead forging ahead with the nomination of a new justice to the Supreme Court, the President has since reversed course and pushed for Congress to reach a deal on a stimulus package. On Fox News last week the President noted he wanted a bill “even bigger than the Democrats” though he went on to note that not all Republicans were in agreement with him.
 
Importantly, according to the Washington Post, Federal Reserve Chair Jerome H. Powell warned "more economic stimulus was needed to sustain the recovery. Politico further reported the Chairman Powell said, "too little fiscal support for the economy would lead to a weak recovery, creating unnecessary hardship for households and businesses." Bloomberg reported that Federal Reserve Bank President Neel Kashkari said the economic recovery had "flattened out and was in "vital need" of economic stimulus.
 
Meanwhile, the stock market seems to be riding the same ups and downs as optimism for another round of stimulus before the election. On Monday morning, CNN reported stocked tumbled alongside hopes for a new stimulus package before the election. 
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Chinese Chassis Under Investigation

8/28/2020

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On July 30, 2020 the Coalition of American Chassis Manufacturers filed antidumping (AD) and countervailing duty (CVD) petitions on certain chassis and subassemblies thereof from China. The Coalition includes Cheetah Chassis Corporation, Hercules Enterprises, LLC, Pitts Enterprises, Inc., Pratt Industries, Inc., and Stoughton Trailers, LLC. The alleged dumping margin in the filing was 211.49%
 
The chassis and subassemblies thereof are further defined to include finished and unfinished, assembled or unassembled, coated or uncoated regardless of the number of axles. The subassemblies description includes reference to;
  • Chassis frames, or sections of chassis frames, including kingpins or kingpin assemblies, bolsters consisting of transverse beams with locking or support mechanisms, goosenecks, drop assemblies, extension mechanisms, and/or rear impact guards 
 
  • Running gear assemblies or axle assemblies for connection to the chassis frame, whether fixed in nature or capable of sliding fore and aft or lifting up and lowering down, which may or may not include suspension(s) (mechanical or pneumatic), wheel end components, slack adjusters, axles, brake chambers, locking pins, and tires and wheels 
 
  • Landing gear (legs) or landing gear assemblies, for connection to the chassis frame, capable of supporting the chassis when it is not engaged to a tractor 
 
  • Assemblies and/or components that connect to the chassis frame or a section of the chassis frame, such as, but not limited to, pintle hooks or B-trains (which include a fifth wheel), which are capable of connecting a chassis to a converter dolly or another chassis
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  •  Importation of any of these subassemblies, whether assembled or unassembled, constitutes an unfinished chassis for purposes of this investigation. 

NATM convened its Special Projects Subcommittee to evaluate the case, its scope, and potential impact to the industry. The Association also reached out to contacts in peer groups as well as some petitioners for additional insights.
 
Importantly, this language would include materials brought in to be further assembled as well as fully assembled products. In discussions with certain members of the coalition, it was clear the intention was to include potential workarounds to the chassis and subassemblies, thus identifying unassembled products as well. Essentially, this includes kits that could be sold as components needing further assembly upon receipt.
 
On September 11, the International Trade Commission (ITC) made an affirmative preliminary injury determination. Investigations will now be undertaken for the Department of Commerce (DOC) to gather information from respondents and the Chinese government. DOC is to make its preliminary decision by October 23, 2020 of the CVD case and January 6, 2021 on the AD case.
 
For a complete outline of the case schedule, click here.
 
NATM member companies may receive requests for information and should respond accordingly. NATM will continue to monitor the situation and the impact on its members, though at this time any direct participation by the Association in the case has not yet been deemed appropriate. 
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Phase One Trade Deal with China Signed, USMCA Passes Senate

1/24/2020

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​Phase One Trade Deal
On Wednesday, Jan. 15 negotiators for the US and China came together to sign the Phase One trade agreement. The deal, seven chapters in length, covers intellectual property, technology transfer, agriculture, financial services, currency, expanding trade, and dispute resolution. The full text of the agreement can be found here and fact sheets found here.
 
Though the agreement did not include tariff relief, the President did reaffirm the commitment to cutting the List 4A tariff rate to 7.5% from 15% on Feb. 14. As a reminder, List 4A is primarily clothing. According to Bloomberg, unnamed officials have indicated that no additional tariff relief is to be expected until after the 2020 election.
 
Notably, China has posted its weakest economic growth in 29 years according to Reuters.
 
US-Mexico-Canada Agreement (USMCA)

While many believed USMCA passage might not occur in the Senate until after the impeachment trial by the Senate, on Jan. 16 the Senate passed USMCA 89-10. Next, the bill headed to the President’s desk where he is expected to sign by the end of January.
 
However, the President’s signature does not yet mean the agreement is in force. Mexico and Canada must take the necessary measures to comply with the agreement. A slight delay can be expected as the Canadian parliament doesn’t resume until Jan. 27. When both countries have taken the appropriate steps, the President must notify Congress in writing 30 days prior to entry into force of the agreement of such action. Still the agreement enters into force after the President and government of Mexico and Canada follow-through with all specified implementing procedures. This is expected in 2020, though the exact timeline remains uncertain. 
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Phase 1 Deal with China, List 4 Exclusion Process Announced

10/25/2019

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Last week, the Trump Administration met with China at the White House to continue negotiations on a trade deal. The meeting, spanning two days, has laid the groundwork for a Phase One deal. While specifics are still murky, optimism for next steps helped to de-escalate the rising tariffs, delaying the October 15th scheduled increase. At the same time, USTR announced that exclusions requests for List 4A could be filed beginning October 31. 

​President Trump met with Chine Vice Premier Liu late the week of October 13th at the White House. While speculations varied widely about the possible results, reports from both the Administration and most recently the Vice Premier indicate the groundwork for a Phase One deal is well underway. While the text of the deal is still being nailed down, according to Treasure Secretary Mnuchin the deal will include intellectual property, currency, and agriculture. While House economic advisory Larry Kudlow expanded on the agriculture component noting that China’s commitment to the purchase of $40-50 billion of agricultural products “would depend in part on private companies and market conditions.” Bloomberg reported that Chinese Vice Premier Liu confirmed a Phase One deal, commenting “China and the U.S. have made substantial progress in many aspects, and laid an important foundation for a phase one agreement,” though he did not confirm any specifics of the deal. Trump is optimistic that that the trade deal will be signed by mid-November. While the deal is not yet complete and is only a part of a larger, more comprehensive agreement, the talks did prevent the escalation of the Section 301 List 1-3 tariffs planned for October 15th.
 
Meanwhile, the United States Trade Representative (USTR) announced on Friday October 18th that the Office would begin accepting tariff exclusion requests for important subject to 15% tariff on List 4A products that went into effect on September 1, 2019. Exclusion requests can be submitted beginning October 31, 2019 via the new exclusion portal. 

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FMCSA Seeking Comments on Hours of Service Rule

9/26/2019

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On August 22, 2019 the Federal Motor Carrier Safety Administration (FMCSA) published a notice of proposed rulemaking (NPRM) seeking comments on proposed changes to the Hours of Service regulations. The proposed changes are intended to provide flexibility in several areas following concerns raised by industries and commercial drivers. These include:
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  1. Extend the maximum duty-period allowed under the short-haul exception from 12 hours to 14 hours,
  2. Extend the maximum distance for short-haul drivers (subject to existing exception requirements) from a 100 air-mile radius to a 150 air-mile radius,
  3. Modifying the exception for adverse driving condition by extending the maximum driving windows by 2 hours,
  4. Making the 30 minute rest break applicable only in situations where a driver has driven for a period of 8 hours without at least 1 30 minute break, which can be satisfied with a period either off duty, in the sleeper berth, or on-duty not-driving,
  5. Modifying the sleeper berth requirements such that the required 10 hours off duty could be split into two periods, provided one off duty period is at least 2 hours long (either in or out of the sleeper berth) and the other involves at least 7 consecutive hours in the sleeper birth,
  6. Adding an additional optional under § 395.3 (a)(3)(iii) that would allow one off-duty break of at least 30 minutes, but not more than 3 hours, during the course of a 14-hour driving window to extend that period for the length of the break, provided the drivers take at least 10 consecutive hours off duty at the end of the work shift.
 
The entire notice can be found here including additional discussion about comments received and Agency reasonings.
 
Originally, the NPRM noted a due date for comments of October 7th, however, that deadline has been extended to October 21. FMCSA is seeking comments from the industries and drivers impacted by these potential changes. More information on the topic can be found here and comments may be submitted to FMCSA here.
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Section 301 Tariffs: List 3 Escalates, List 4 Released

5/24/2019

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​As NATM previously reported, on May 10 Section 301 List 3 tariffs escalated from 10% to 25%. On May 21st the US Trade Representative announced in a Federal Register notice that the exclusion process for List 3 was to be implemented on or around June 30, 2019. The notice includes the form to be used for making an exclusion request. It is important to note that for List 1 and List 2, requests received early in the process have been decided on more quickly.
 
As a result of the List 3 escalation, on Monday, May 13 China announced retaliatory tariffs ranging from 5% to 25% on $60 billion of U.S. exports to take effect beginning June 1. The announcement from China noted that the increase of List 3 tariffs was an “an escalation of Sino-US economic and trade frictions, contrary to the consensus between China and the United States on resolving trade differences through consultations, jeopardizing the interests of both sides and not meeting the general expectations of the international community.”
 
As anticipated, the United States Trade Representative released a List 4 late in the day on May 13. List 4 includes a vast array of $300 billion worth of goods, from books to housewares, shoes, and sporting goods and much more. The proposed tariff rate is 25%. Along with the release of List 4 comes a timeline for hearings and comments from the public. Although no firm date has yet been set, implementation of List 4 is currently not expected before late June.
 
NATM will keep members apprised as the List 3 exclusion process is released and as List 4 moves forward.
 
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US Strikes Deal with Mexico and Canada, Steel and Aluminum Tariffs to be Lifted

5/24/2019

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​With the Trump Administration announced rolling back Section 232 aluminum and steel tariffs on Canada and Mexico, and media sources are reporting that no quotas will be placed on either country. However, it is likely there will be additional requirements regarding transshipment of steel and aluminum products that will remain subject to the action. There is additional opportunity for re-imposition of these tariffs should imports begin to surge. As of this writing, there have been no indications of retroactive relief. As more details become available, NATM will notify its members. 
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