If you need more specific information please call us! Thank you for your inquiry.
All specifications and photo are believed to be correct, however, periodically errors and omissions do occur. TRUCKNATION will not be held liable for errors or omissions. Please verify pertinent specifications prior to sale.
Frustrated Customers Sue Cat Over Acert Failures, But All Engines Have Problems, Sources Say By Tom Berg, Senior Editor
Continual breakdowns, ineffective repairs and financial losses from disrupted operations have pushed frustrated fleet owners to sue Caterpillar Inc., along with the truck and engine dealers who sold and tried to fix the trouble-prone heavy duty diesels.
Meanwhile, another suit against Cat and one other builder is pending in Arkansas, a source told Heavy Duty Trucking. But no details of that suit were available at this writing.
The Texas lawsuit chronicles problems with Caterpillar C15 Acert engines produced with exhaust emissions equipment designed to meet federal limits imposed in January 2007. The suit involves 90 Cat-powered trucks run by three fleets. No 2010-spec engines are involved.
Stories of numerous problems with diesels since the Environmental Protection Agency's October '02/January '04 limits took effect have since been circulating in the industry. But fleet executives have tried to get satisfaction from builders rather than through lawsuits, and builders have said they are fixing problems while improving newer products.
The Texas Suit
Miller, Curtis & Weisbrod LLC, of Dallas, filed the suit March 4 in a Bowie County circuit court. The firm says more fleets have joined the complaint, and it's advertising for disgruntled owners of Cat C13 and C15 engines to contact its attorneys for possible inclusion in the suit. The ads brought the suit to light; the law firm has since commented on it to HDT, which is seeking comment from the defendants.
The suit names as defendants Caterpillar Inc., plus its "agents," Warren Power & Machinery, the Cat dealer, and Rush Truck Centers of Texas, a large Peterbilt dealer. Both dealers have locations in Texarkana, Texas, where the Cat-powered trucks were sold and serviced.
Plaintiffs are Thomason Trucking Inc., Paul Trucking Inc., and Tapley Forestry Service, all based in Oklahoma. They bought a total of 90 trucks with C15 engines in 2007 and 2008, but were not warned of the engines' defects, the suit says.
Cat and its dealer representatives "assured plaintiffs Thomason, Paul and Tapley that the engines were in perfect working order and without defects," which "induced" the fleets to buy the engines, the suit states. "However, the engines were defective when purchased" by the fleets.
"Defendant Warren and Defendant Rush have been in the business of selling Caterpillar engines for many years and knew or should have known of the defects to the Caterpillar engines," the suit continues. "Not long after plaintiffs received these engines, plaintiffs began to experience problems with the trucks these engines were installed in, which put the trucks out of service."
Consequently, the fleets "suffered substantial financial losses and other damages," the suit charged. It does not specify monetary amounts, but probably will when the law firm amends the suit, said Attorney Warren Armstrong, who is working with Miller, Curtis & Weisbrod's lead lawyer on the case, Clay Miller.
The suit charges fraud, breach of contract, breach of implied and express warranties, and violation of the Texas Deceptive Trade and Practices Act. Under this law, the trucking companies are consumers who can sue Cat and its dealers, the suit says. And bcause of the alleged fraud, defendants are entitled to treble damages.
"In particular it's the regeneration system" in the C15 Acert engines' exhaust - "clogged injector heads, sensor malfunctions, something wrong with fuel line - for whatever reason, it doesn't regenerate as it's supposed to," Warren said of the system's diesel particulate filter. "The ECM will then tell the engine to shut down."
"When you're in business to haul over the road and this happens, it's very difficult to continue" because trucks and drivers are stranded until repairs are made. And the breakdowns happen repeatedly because dealer technicians can't properly fix them. "They're scared," he said of truck owners, "because you don't know where it will happen... It's not if, but when" the malfunctions and breakdowns will occur.
Beyond Caterpillar
Caterpillar formally left the North American truck-engine market in late 2009, just before EPA's 2010 regulations took effect. It produced EPA-'07 Acert-model diesels before the deadline and many were installed in Peterbilt, Kenworth and International trucks. Many Cat Acert engines are in service and Cat had promised to back them, but customers have said this hasn't happened.
Cat last year stopped sending representatives to regular meetings of the Technology & Maintenance Council of the American Trucking Associations. So Cat reps have not been not present to answer complaints made through that group, leading to more disgruntlement.
But all builders' engines have had problems, said Darry Stuart, a consultant and fleet manager and a past general chairman of TMC. Cat has been named in the lawsuit, but he thinks there may be as many or more issues with Cummins diesels, partly because there are more Cummins engines out there.
Builders have had "a ton of problems" with engines produced since emissions regulations were first seriously tightened in late 2002, Stuart said. In general, engines don't run long before major problems begin, and customers can't understand why. Builders pay for repairs until warranties run out, then owners are on their own.
"You ask them (manufacturers), 'What is the B50 life?'" - the point at whick at least half the engines shouls still be running - Stuart said. "They'll say maybe 750,000 miles. So the assumption is you should get at least B50 life without major failures, including turbos, EGR coolers, other parts. And that's not the case.
"When we buy a truck we're paying $20,000 for the motor and probably $10,000 for the emissions system, so now we're paying $30,000 for it and we expect to get at least B50 life out of them," Stuart said of all truck diesels. "And we're not."
However, some complaining truck owners turn out to be guilty of not maintaining the engines properly, he said. They fail to change oil regularly, idle the engines too much, do not perform certain work specific to exhaust-aftertreatment equipment, and in general are either negligent or ignorant of the new diesels' needs.
Many in the industry place ultimate blame for the situation on the federal EPA, which forced increasingly strict exhaust limits on the industry in a short time frame, while dismissing warnings that the equipment devised to meet the limits couldn't be properly tested and would be very expensive. Truck owners' experiences have proven at least some of the warnings to be true.
August 16th, 2010 8:20 am
Target: Cargo Theft
ARLINGTON, VA – Cargo thieves are becoming more organized, more sophisticated, and are creating larger economic losses for business, according to speakers here at the 2009 National Cargo Theft Summit, an event sponsored in part by the National Insurance Crime Bureau (NICB).
As a result, the shippers, transport providers, law enforcement agencies, insurance companies, and other groups attending the summit are calling for more information sharing among industries and are pushing for the development of a national cargo theft strategy – a strategy desperately needed to help reduce the unseen but serious impact cargo crime is having on the U.S. economy and the world’s as well, according to Sheriff Ed Dean of Marion County, Florida.
“If you add up all the value of the millions of burglaries and armed robberies that occurred in 2008 – including bank robberies – the total losses only reach $3.4 billion," he said. "Cargo theft, by contrast, is a $10 billion to $25 billion annual problem – one with far reaching consequences for the supply chain and, ultimately, the consumer.”
Dean – who also co-chair's the new National Cargo Theft Task Force with Joe Wehrle, the NCIB’s president – said the public simply isn't aware of how massive a problem cargo theft is today. “It’s not just about the financial losses,” he explained. “When you are staging loads, getting ready to move goods to the consumer and they get stolen, that disrupts the entire supply chain. And it doesn’t matter about the product itself, because no matter what it is or what it is worth, someone on the other end is waiting for it.”
“We all know [cargo theft] is at least a national issue if not an international issue,” added NCIB’s Wehrle, a retired U.S. Air Force Lieutenant General who is very blunt on the subject. “Some call our battle with cargo thieves a ‘protracted conflict’ – I call it a war,” he said. “They [cargo thieves] outnumber us; they are more flexible than us; and they take major advantage of our main weakness, which is not sharing information across law enforcement agencies and between companies.”
Wehrle noted that cargo thieves don’t recognize state borders or jurisdictions and don’t discriminate against one company or another. “They will steal from anyone, anytime, anywhere,” he said. “We also know that they really don’t care about the impact their actions have on the U.S. economy or the American people.”
That’s why Wehrle and others fighting the cargo theft battle want more assistance from the federal government, more federal funding for multi-jurisdictional cargo theft task forces, plus more coordinated information and intelligence sharing between private sector firms as well as law enforcement agencies.
“People have no idea we’re being taken to the cleaners by cargo theft, and this enterprise is where many hardened criminals are going,” Wehrle said. “Cargo theft is also providing the seed money for all kinds of nefarious activities, including funding terrorism. That’s why we need to break down all the barriers to win this battle. Americans deserve our best effort.”
Chuck Forsaith, corporate director of supply chain security for pharmaceutical drug maker Purdue Pharma Technologies Inc., pointed to the theft of medicines while in transit as an example of cargo theft’s growing impact, and not just because of the illicit "street value" of medicines such as his company’s main product, the painkiller oxycontin.
“They [cargo thieves] don't give a rat's ass about keeping products such as these safe during transit and storage, maintaining them at proper temperature or anything,” he said. “They are out to steal whatever they can sell as fast as they can with no regard to the safety of the products they are selling or the people they are selling it to.”
Forsaith added that maintaining temperature for drugs such as insulin for diabetics or copaxone for suffers of multiple sclerosis is absolutely critical. “For example, if copaxone gets heated above a certain temperature, injecting it will kill you,” he warned. “That’s why such drugs require the diligence of everyone that touches these products in the supply chain.”
Work is progressing on forging a more unified national response to cargo theft, with the Federal Bureau of Investigation (FBI) poised to add a cargo theft category to its uniform crime reporting (UCR) system early next year, according to Kevin Perkins, the agency’s assistant director-criminal investigative division.
“This will give us more data to analyze in terms of defining the scope of the cargo theft problem," he said. “The key will also be to connect cargo crimes to higher priority matters such as drug cartels and terrorists.”
It also requires the development of stiffer penalties for cargo crimes, stressed Congressman Cliff Stearns (R-FL), who took the lead in the five-year effort to get cargo theft its own category in the FBI's UCR system. He noted that cargo theft is a rapidly growing problem in the U.S. simply due to what he calls a "target rich" freight environment in this country.
"It's also low risk with easy opportunity and the profits are often much more lucrative than selling illegal drugs," he emphasized. "We need to increase minimum penalties for cargo theft as just a start. This is a very, very important issue and we've got to keep the ball rolling."
Oct 21, 2009 11:09 AM, By Sean Kilcarr, senior editor
October 21st, 2009 9:23 am
TRUCKNATION BLOG!!!
N.Y. Governor Wants to Regulate GPS Use in Trucking
New York Gov. David Paterson (D) is calling for a state law that would require truckers using global positioning system devices to use only ones containing truck route information.
In their quest to find faster routes, some truckers are using GPS devices meant for automobile drivers, Paterson said at an Oct. 14 press conference at which he released a proposed draft of the law.
Trucks are traveling roads not designed for heavy vehicles and hitting bridges not high enough for them, Patterson and other officials said.
Under the proposed law, the state Department of Transportation would make a list of approved GPS devices truckers could use to route them.
Kendra Adams, executive director of the New York State Motor Truck Association, said only the federal government can regulate equipment.
The Owner Operator Independent Drivers Association said such a law would force drivers to buy more expensive devices and unfairly punish safe drivers.
“What’s clear from surveys, despite some variability in their findings, is that bans on hand-held phoning while driving can have big, long-term effects, but the safety implications still aren’t clear. Many drivers still use their hand-held phones, even where it’s banned, and other drivers simply switch to hands-free phones, which doesn’t help because crash risk is about the same, regardless of phone type.” –Adrian Lund, president, Insurance Institute for Highway Safety
Here’s a conundrum the growing movement to eliminate distracted driving must solve: do laws banning the most frequent forms of driver distraction actually succeed in changing patterns of driver behavior behind the wheel?
The answer, it seems, is decidedly mixed – and not in a good way. The Insurance Institute for Highway Safety (IIHS) researchers recently conducted a new round of observations of driver use of hand-held phones in three jurisdictions where the practice is banned. The findings, along with results of previous studies, reveal a critical divergence – in some jurisdictions, such behavior declines and stays down, while in others, it only initially declines, then starts trending back up.
In the District of Columbia, the proportion of drivers using hand-held phones dropped by about half immediately after a ban on hand0held cell phone use while driving took effect in 2004. Nearly five years later, IIHS said, cell phone use while driving has edged up a little, but the decline is largely holding relative to nearby Virginia and Maryland.
That’s not the case, however, in New York – the first U.S. state to prohibit drivers from using hand-held phones in 2001. Connecticut enacted a ban in 2005. Comparing trends in New York with nearby Connecticut – which enacted a similar ban in 2005 – IIHS researcher’s found cell phone use declined an estimated 76% in Connecticut and 47% in New York, but then use began going back up.
To quantify the long-term effects, researchers observed phone use multiple times during 2001-09 in both the study states and nearby communities without phone bans, to estimate the proportion of drivers expected to be using hand-held phones if the laws hadn’t been enacted. By this measure, then, the laws seem to be a success as hand-held phone use was an estimated 65% lower in Connecticut, 24% lower in New York, and 43% lower in the District of Columbia than would have been expected without the laws.
Yet in Connecticut and New York, cell phone use behind the wheel was higher in spring 2009 among women of all ages compared with men and higher among drivers younger than 25 versus 25-59 year-olds. Only 1% of drivers 60 and older were observed using phones, IIHS said.
What’s more worrisome to Adrian Lund, IIHS’ president, is whether drivers are merely trading one distracting habit for another.
“Banning hand-held phones does reduce their use while driving, but it isn’t known whether such bans also reduce crashes,” Lund noted. “Nor is it known how drivers respond when hand-held phones are banned. This has important implications concerning the laws state legislators are considering [for] crash risk is about the same, whether drivers use hand-held or hands-free phones. So if motorists respond to hand-held bans by switching the type of phone they use, they may not be reducing crash risk. What they’re doing, though, is engaging in a practice that’s harder to curb because laws against it are harder to enforce.”
In a 2006 study, the Virginia Tech Transportation Institute (VTTI) equipped cars with video and sensors to estimate the risk associated with using cell phones while driving. The main finding from that research is an almost 3-fold increase in the odds of crashing or nearly crashing when dialing a hand-held phone. Yet there’s also a 1.3 increase in crash risk merely for talking. However, IIHS noted that this study included only 100 cars and not many crashes occurred during the study period, so the results are inconclusive.
VTTI researchers, however, say the risk associated with text messaging may be much higher, based on a new study of truck drivers. The main finding is a 23-fold increase in the odds of crashing, nearly crashing, or drifting from a travel lane among truckers who texted while they drove. A limitation is that most of the incidents involved lane drift or other driver error, not crashes, and it’s unknown how such incidents relate to actual crashes.
Two other studies that relied on the cell phone records of crash-involved drivers show big increases in crash risk when drivers talk on phones, whether hands-free or hand-held, with the risk of a crash involving injury or property damage is four times as high. Other studies conducted on simulators found that cell phone use while driving not only impairs driving performance, the impairment is similar for hand-held and hands-free phones alike.
“Whether the risk associated with phoning or texting while driving is four-fold or 23-fold or somewhere in between, the fact of the risk is clear: Manual dialing and texting seem especially risky, but talking also involves crash risk – and drivers spend more time talking on phones than dialing,” lund pointed out.
IIHS added that no U.S. state currently bans all drivers from using hands-free phones. Though 21 states and the District of Columbia prohibit beginning drivers from using any type of phone, including hands-free, these laws are hard to enforce, the group noted – pointing to research findings in North Carolina that found teenage drivers didn’t curtail phone use in response to such a ban, in part because they didn’t think the law was being enforced.
That “human behavior” element (and oh how often “human behavior” totally CONFOUNDS all the nice and neat theories scientists and others put forth!) is also complicating efforts to get technology to make a difference.
IIHS said one approach to preventing cell phone use of any sort behind the wheel would be to use “Blocking devices” to prevent phone use in moving vehicles. But one problem is that such devices would block phoning by passengers as well as drivers. To get around this, some systems include a passenger mode, IHHS said, but it’s unclear whether drivers can be prevented from activating it to circumvent the whole purpose of the devices. On top of that, cell phone “blockers” of any sort for vehicles aren’t yet in widespread use, and their effects aren’t known.
All of this lays a big layer of complications atop efforts to reduce distracted driving; not unsolvable ones, mind you, but ones that require above all permanent changes in permanent behavior – behavior that many drivers, everyday motorists as well as truckers, feel is a benefit to them when behind the wheel. That will be a very tough nut to crack.
Though diesel fuel prices have dropped over the last five weeks and may continue to trend lower in the near-term, they are expected to start climbing back up early next year – thanks to growing uncertainty about global oil prices.
After reaching an average high of $2.674 per gallon in the U.S. during the week of August 31, diesel fuel prices steadily declined to a U.S. average of $2.582 per gallon for the week of October 5. The Energy Information Administration (EIA) predicts that the U.S. average diesel fuel price should end the year around $2.43 per gallon, which would be a 36.1% decline from 2008’s $3.80 per gallon average.
That decline is reflective of the steep falloff in global oil prices from last year along with a significant buildup of distillate supplies in the U.S. from which diesel and gasoline are produced – supplies that are now at their highest level since the 1980s, EIA reported.
Oil prices overall in the U.S. are expected to finish 2009 at $59.90 per barrel, down 39.8% from last year’s average of $99.57 per barrel, according to EIA’s analysis. Yet the agency expects U.S. oil prices to jump 20.9% next year to $72.42 per barrel as sustained economic growth in China and signs of a turnaround in other Asian countries continue to fuel expectations of a global recovery in world oil consumption.
As a result, EIA revised its expectations for world oil consumption upwards by 200,000 barrels per day (bbl/d) for the remainder of 2009 and for 2010, in large part because of the revision to Asian growth. However, EIA has not revised its West Texas Intermediate (WTI) projections – the standard measure of U.S. oil prices – upward because ample oil supplies remain on the market.
“We’re not expecting a significant increase in diesel prices for the remainder of this year based on that fact that distillate stocks are so high,” Tavio Headley, an economist with the American Trucking Assns. (ATA), told FleetOwner. . “But while things are looking better, diesel prices remain a concern for fleet, largely because we’re at the bottom in terms of global oil prices, so there is nowhere to really go but up.”
The EIA data on oil consumption mirrors that concern. Although the agency said global oil consumption declined by 3.2 million bbl/d in the first half of 2009, with preliminary data indicating oil consumption in the third quarter this year declined 1.2 million bbl/d below year-earlier levels, the EIA’s current macroeconomic outlook assumes the world economy will begin to recover at the end of 2009.
As a result, EIA expects world oil consumption to grow in the fourth quarter of 2009 compared with year-earlier levels – the first such growth in five quarters – with world oil consumption growing by 1.1 million bbl/d in 2010.
Here in the U.S., EIA expects the price of WTI crude oil to average about $70 per barrel this winter (from October 2009 to March 2010). That’s a $19 increase over last winter, with average WTI prices predicted to rise gradually to about $75 per barrel by December 2010 as U.S. and world economic conditions improve.
“While the decline in diesel fuel prices has been a huge help to the trucking industry, that relief disappears when the global economy starts to recover, pushing up oil consumption,” ATA’s Headley said. “Longer term, oil prices of $90 to $100 per barrel are far more likely than the pricing we’re experiencing now.”
Oct 9, 2009 12:06 PM, By Sean Kilcarr, senior editor
If you need more specific information please call us! Thank you for your inquiry.
All specifications and photo are believed to be correct, however, periodically errors and omissions do occur. TRUCKNATION will not be held liable for errors or omissions. Please verify pertinent specifications prior to sale.
$35,000.00
September 24th, 2009 8:26 am
TRUCKNATION BLOG!
9/16/2009 Truck Driver Honored For Act of Kindness
The Truckload Carriers Association has honored Larry Goessens, a driver for Anderson Trucking Service of St. Cloud, Minn., as a Highway Angel for his act of kindness in helping two sisters fix a flat tire.
On Feb. 4, 2009, a snowy day, the two sisters were driving along Interstate 64 in Kentucky when their tire blew out. The women's spare tire was flat as well, and their car had slid off the road. Even though several people passed the helpless women, Goessens pulled over to help. He not only got the car out of the ditch, but he also drove to the next town, had the spare tire repaired, and replaced the flat with the spare.
Following Goessens' act of kindness, Rhonda Davis, one of the women he helped, wrote a letter to Anderson Trucking Service.
In the letter, she wrote, "This may not be a big deal to some people, but you would not believe how many people just drove right by me, standing on the side of the road...it was snowing to beat the dickens, and I am an old lady!...It was as if God himself sent this man to help me. It seems like today's truck drivers get such a raw deal that I felt it was important for me to write this letter and let you know just how important the good ones really are...Truckers are so under-appreciated that even I have a newfound respect for them and the vital services they provide for our great country."
According to Deborah Sparks, a spokeswoman for Highway Angels, acts such as Goessens' provides the best possible publicity for the trucking industry, and this is what Highway Angels originally sought out to do.
"Now that Ms. Davis' life has been positively touched by a professional truck driver, she will probably tell her friends and family, who will in turn come away with a positive impression of drivers and trucking," Sparks said. "It is exactly this type of grass-roots goodwill that Highway Angels hopes to foster, and we do our part to keep the momentum going by releasing positive driver stories to local hometown newspapers and other media outlets."
As a Highway Angel, Goessens will receive a Highway Angel lapel pin, certificate, and patch for his kindness in helping Davis and her sister. Anderson Trucking Service will also receive a certificate acknowledging that one of its drivers is a Highway Angel.
September 24th, 2009 8:23 am
Trucknation Blog!!!!!
9/24/2009 Driver Named Highway Angel For Saving Elderly Man
The Truckload Carriers Association has recognized truck driver William Sydenstricker as a Highway Angel for his effort in helping an elderly man out of his pickup truck following an accident.
On July 21, 2009, while Sydenstricker was headed westbound on Interstate 40 in Arkansas, he witnessed a pickup truck hydroplane in the rain, lose control, veer off the road, hit a tree and spin around. He pulled over to help and found that the driver, an elderly man, had been seriously injured from the impact of his body colliding with the steering wheel. The man could not walk and needed assistance out of his vehicle.
At that moment, the pickup truck caught on fire. Along with another motorist, Sydenstricker helped the man out of the truck to a safe area. Then, he went back to the pickup to retrieve the man's cell phone and other important personal items before it became engulfed in flames.
"In my 48 years on the road, I've never been in a position to help anyone out before," Sydenstricker said. "It feels good, saving a man's life. There's no way he would have gotten out of his pickup by himself."
A driver for John Christner Trucking of Sapulpa, Okla., Sydenstricker received a Highway Angel lapel pin, certificate, and patch for his efforts. John Christner Trucking also received a certificate acknowledging that one of its drivers is a Highway Angel.
September 24th, 2009 8:18 am
TRUCKNATION BLOG!!!!
Diesel Average Dips 2.7¢
First Decline in 7 Weeks Puts Price at $2.647
This story appears in the Sept. 14 print edition of Transport Topics.
The average retail price of U.S. diesel dipped 2.7 cents to $2.647 a gallon, breaking a string of six small weekly increases that began in mid-July, the U.S. Department of Energy reported.
Including last week’s decline, the price of diesel climbed 15.1 cents, an average of about 2 cents a week, since July 20.
Gasoline prices last week declined 2.5 cents to $2.588, the fourth straight weekly drop.
Modest changes in diesel and gas prices weren’t reflected in the price of crude oil last week, which climbed toward $72 a barrel, rising $3 in a single day, and closed at $71.94 on Sept. 10.
With diesel moving a few cents at a time this summer, fleets said fuel prices were currently not their primary issue.
“Business is so bad that fuel is not a concern,” said Fred Burns, CEO of Burns Motor Freight, Marlinton, W.Va. “We don’t have enough business to even worry about fuel. Forty out of 100 of our trucks are parked. This is the worst we have seen in 60 years.”
The economy “is beyond our control,” Burns told Transport Topics. “We can’t make consumers buy products, and we can’t make shippers produce more products. We haven’t seen any improvement at all. I don’t see much hope before 2011.”
“Our biggest difficulty, with the market being so competitive, is that some of our customers don’t want to pay fuel surcharges,” David Duncan, vice president of operations for Duncan & Son Lines Inc., Buckeye, Ariz., told TT.
Customers reject fuel surcharges in a tough market today because they have to keep their own costs under control, he said.
As a result, Duncan said, “it puts a lot of pressure on us to recoup our added fuel costs” when diesel rises.
Declining prices don’t help, he said, because when fuel falls, competitors lower their base rates in a bid to fill their trucks.
Duncan said he did see bright spots: The weak dollar has made U.S. exports more attractive and helped the company, which has an intermodal focus, to move more loads to Southern California ports. At the same time, he said, inbound volume is picking up there, as vessels are full when they arrive.
The weak dollar also was a factor in helping to drive up the price of crude last week while diesel and gas declined.
“There is a renewed focus on the dollar in the market now,” Phil Flynn, vice president of PFGBest Research, Chicago, told TT Sept. 9. “Until recently, it seemed the [oil] market was trying to focus on supply and demand more and more. Then . . . the dollar got slammed.”
The U.S. currency has fallen to its lowest level against the euro this year, and Flynn explained that typically there is an in-verse relationship between the dollar and crude oil prices, because investors buy more oil and drive up the price when the dollar declines.
Meanwhile, Chinese auto sales in August rose 90%, helped by tax cuts and subsidies. Flynn said that trend “will lead to a huge increase in fuel use,” adding to the upward pressure on crude prices.
At this time last year, the picture was different.
A year ago, the average price for trucking’s main fuel was $4.059, almost 15% less than the July 2008 peak and more than 50% above last week. Gasoline was $3.648 a year ago, about 41% higher than the current price.
Like other fleets, Duncan and Burns are trying to cut costs wherever possible, even as they focus on finding more freight.
Duncan, for example, is reducing costs wherever possible, cutting speeds and adding auxiliary power units that lower idling costs.
“We have done everything possible [with fuel],” said Burns, whose company serves the housing and paper markets. “We are running the latest engines, aerodynamics. We’ve put heaters in the bunks. We’ve done everything we can to get the best fuel economy.”
The Energy Department’s latest short-term outlook, issued Sept. 9, predicted a modest rise in diesel costs during the fourth quarter to $2.74 from a third-quarter average of $2.62. Gasoline prices are expected to slip in the fourth quarter to $2.56.
The DOE forecast tacked 4 cents a gallon onto the agency’s diesel price prediction for 2010, with trucking’s main fuel now expected to cost $2.88, on average.
By Rip Watson
September 14th, 2009 6:33 am
TRUCKNATION BLOG!!!
August 17, 2009
Next week's "Energy Citizen" rallies: grassroots or Astroturf?
According to a memo reportedly from American Petroleum Institute president Jack Gerard, events will be staged throughout the country with financial support for logistics from API:
"The objective of these rallies is to put a human face on the impacts of unsound energy policy and to aim a loud message at those states' U.S. Senators to avoid the mistakes embodied in the House climate bill and the Obama Administration's tax increases on our industry," according to the memo.
That human face will come in the form of employees of API member companies who are being recruited to attend the noontime rallies. ConocoPhillips has a link referring to the rallies on its Web site, for example.
In its blog this afternoon API is defending the rallies, saying they aren't taking a cue from the confrontations that have arisen during the many congressional town hall meetings held in recent weeks over how to overhaul the health care system.
"These rallies are not going to be shouting matches between members of Congress and their constituents. Rather they are an opportunity for Americans--truckers, farmers, small business owners, energy workers, homemakers and seniors--to voice their dissatisfaction over the House climate bill, urge the Senate to get it right, and to stand up for the American Dream."
Here at the Chronicle we've been asked to meet Monday with Anadarko President & CEO James Hackett , National Black Chamber of Commerce President & CEO Harry C. Alford and Houston-based Trucknation Owner & President Robert Garcia to talk about the events.
August 17th, 2009 6:53 am
TRUCKNATION BLOG!!!!
All Types of Used Trucks
Searching for a truck for sale or a Heavy Duty Truck for sale can be difficult. For many years truckers have been obligated to search dealer by dealer hoping that their dream truck would be in one of the dealers they would walk into. However, since the rise of the Internet, truckers and companies have been increasingly aware of the efficiency of searching for trucks online. At Truck Nation our goal is to do just that. We want to make Searching for a truck fun and easy.
With so many Companies taking advantage of building their own truck search engine databases, one might ask how it is that we differentiate ourselves from the competition. While many companies out there are focusing on only making profits as a result of advertising trucks on the Internet, we are going the extra mile to not only focus on what produces revenues but on what a trucker really needs, which is certainly more than just having a truck. A full service web site for truckers is our vision. We want truckers to enter our site knowing that they won’t have to go anywhere else to find the equipment or service they need to get them back on the road. Such as Freightliner, Mack, Volvo, GM, Isuzu Trucks etc.
August 12th, 2009 10:59 am
TRUCKNATION BLOG!!!!.
Become a Truck Driver!!!
(A Few of the Many Pluses of Trucking)
There are more trucks to be seen on the road today and more people who wish to become truck drivers. The reasons behind wanting to become a truck driver are many and each person has their own specific reason which prompts them to choose to become one. To some it may be the money, while to others it is the sheer love of being on the road. Yet others opt for the profession because of the health benefits that are given while on the job. Essentially, one must love the job to become a dedicated trucker.
Wages
One very important reason for the hike in wages is the increasing shortage of truck drivers available. As a new driver, the average annual is $35,000 which continues to rise with time. The wages are based on the number of miles logged in and the more the miles, the more the wages. Truck drivers who operate as independent contractors earn as much as a million dollars a year. When a truck driver signs up with a trucking company, he’s offered signing bonuses and also other incentives.
Benefits
Other attractions are the benefits and insurance coverage that trucking companies offer new drivers. The insurance given covers health, long and short term disability, and also worker compensation. This means a lot to a trucker.
Seeing the Country
Most people love to travel to different places. You will not find a trucker who says he does not love seeing new places and also being on the road. A truck driver who is not attracted by new places can opt for a region-specific driving job. The United States has some of the best places across the stretch of the country, which is one of the reasons that go in favor of coast to coast driving. It is possible for a truck driver to break free of conventional restrictions and lay down his own schedule of working hours and the number of hours he would like to log in.
Adventure in the Job
Being on the move across the country will mean being away from home and sleeping in the truck. It needs adjustment and a passion for this kind of life if you want to be a truck driver. Sleeping on the high way is not very restful either. If you are single or without a home of your own, this way of life will be not be too difficult to adjust to and in this way you could save a lot of money and buy your own truck and then sub contract to the trucking company that had employed your services earlier!
Being a truck driver also means tough work, long hours of driving and being away from home frequently, in addition to the dangers and hazards of the road. But, if you can take all this and more you must really love a truck driver's job. Becoming a truck driver is the right job for you in that case. You will love it.
August 12th, 2009 10:57 am
TRUCKNATION BLOG!!!!
Importance of Trucking Companies
Private transportation companies very rarely transport products by themselves. Today, many companies prefer having their own truck fleet and drivers to make a transportation department. This way, they can greatly reduce their costs and can transport freights. The trucking industry is a vital section of the US economy; many States depend on the efforts of excellent drivers to transport their goods and raw materials. At any given time there are a half-a-million truckers moving down our nation’s highways. In the United States alone we have 7 to 8 million truck drivers. The industry has a culture of its own made up of drivers, dispatchers, loading dock workers, truck stop employees, just to name a few. Despite its extensive and varied history, the trucking industry of America is still growing and developing.
August 12th, 2009 10:54 am
TRUCKNATION BLOG!!!!
Consider Used & Pre-Owned Trucks!!!
A business is only as good as the product it delivers. And that can be taken literally! If the product itself is of positive quality but the company’s delivery time is slow or the product is damaged during delivery because it’s packed in too tightly, the product’s quality is barely relevant at all. With a bad delivery comes an unhappy client.
You’re starting up a business and you need a fleet of trucks to make your deliveries or maybe you’re expanding and you need to add more trucks to your company’s heavy equipment. Or, you’re looking for a different kind of truck, one with better gas mileage to save you a lot of money or one with more space so you can deliver more products at simultaneously.
When you’re just starting up a business, you don’t want to put yourself so much in debt that you won’t be able to afford to give your business a chance to take off, so buying a brand new fleet of trucks may not be the best idea at that time. Yet, when you’re expanding a business, you’re taking a chance on new investments and new markets. Why put tens of thousands more into brand new trucks when there are quality used trucks—some that aren’t even that old—for much less?
Rather than buying your fleet of trucks directly from the manufacturer, save yourself thousands by searching for used trucks. You may browse through used trucks by type and manufacturer. You may also read descriptions of each used truck and see pictures.
No business can hope to get its products on the road without a quality fleet of trucks to get them there. When searching for trucks, remember that used trucks can still be pretty new and have low mileage as well as low gas mileage for a fraction of the cost of new trucks. Saving on used trucks can make all the difference in the success of your business!
August 12th, 2009 10:53 am
TRUCKNATION BLOG!!!
Truck Driving Jobs
(The Top Secrets for a Successful CDL Job Search)
Professional truckers have spent many years in good paying CDL truck driving jobs only to stretch to maintain a continuous and effective job search. Primarily, these poor souls are always searching for the world's best truck driving job.
The following is a limited number of priceless job search secrets and strategies. If implemented correctly, you will put yourself in a position to land your dream truck driving job and negotiate the best possible compensation plan for you and your family at the same time.
Before we begin, keep in mind that the probability of these priceless job search techniques ever being uttered from the mouths of trucking company hiring managers or truck driving job recruiters are slim at best. Why? Because the primary functions of a trucking company hiring manager is to staff its local truck driving jobs at the lowest possible cost to its bottom line and to maximize its profits.
The primary goal of a truck driver job recruiter is to collect commissions for getting you hired on to one of his clients. Their concern for your compensation package is not on the top of their priority list.
All too often, a trucker will leave behind a good CDL truck driving job at a company with a solid business model and a good record of taking care of their drivers only to realize that they could have avoided making an incredibly bad career move, if only they’d thought it through more carefully. There’s one common mistake that’s been committed by dedicated, hard working truck drivers and observed by many. That mistake is poor career decisions.
Hopefully, these top secrets to a successful truck driving job search will help you avoid a poor career move in the near future. They include:
Planning Your Work & Working According To Your Plan
The first step in any considerable life changing move is to be realistic with your expectations and create a list of objectives and strategies to achieve your short and long term goals.
Many professionals in search of the best truck driving jobs fail to set realistic job search career goals. If you were an Olympic archery expert, would you not agree with me that you would be highly focused on your target during your event? Of course you would. Setting career goal strategies has two major benefits. First, it helps you develop laser focus in establishing career priorities. Second, it will dramatically improve your self esteem for this highly stressful process.
Prepare a List of Short-Term & Long-Term Career Goals
Before you start your career search process, spend some serious time planning out on paper 1, 3 and 5 year goals. Is your long term goal to become and independent owner operator or are you more likely to work for a trucking company? There are positives and negatives with each opportunity. Most employers consider an employment package to include approximately 70% salary and 30% benefits. This may be more suited for someone with a young family with a wife who has decided stay at home with the children. Whereas an owner operator may make more money, they usually have to acquire benefits on their own which can be an enormous expense.
The Bottom Line is that as an employee of a trucking company, you're more likely to be offered a compensation package that includes salary and a benefits package.
Strive To Avoid Inadequate Pre-Employment Research
This is the primary reason why professional truck drivers are unhappy 1-2 years following a job change from one company to another. The last thing you or your family wants to do is to accept a new truck driver job position by hastily jumping to a company that offers you $0.50 more per hour or $0.05 more a mile. Far too many times, good truck drivers make a quick move from an established company that has treated them well to a company that offered the sky for a small, short term economical gain. This can ruin your mind emotionally and inflict real havoc on your family.
The Bottom Line here is that it’s imperative that you take this process seriously and spend the necessary time researching all other truck driving job opportunities.
Evaluate Your Current Job Satisfaction
Keep a written journal of your daily reactions to your job situation for at least 30 days. Along the way, look for recurring themes or events that bring pleasure to your mind and soul. This will help you focus in on which aspects of your current truck driving job deliver the most positive and negative job satisfaction.
The Bottom Line for this step is that you must determine whether or not your primary positive and negative responses relate to the duties of your job, the company culture, and/or the individuals with whom you work every day. This will go a long way in helping you pinpoint key job satisfaction areas for your next truck driving job career move.
A Contract with a Professional Trucking Job Recruiter
Pay close attention. A successful truck driving job search is a full time job and unless you can be in two places at one time, this is the best investment you can make. In most cases, with an 80,000 job shortfall, a successful recruiter would gladly take a phone call from an educated, professional owner operator looking to make a career move. A reputable recruiter will have established relationships with the key decision makers you are looking to connect with and, in most cases, their fees are paid for by the trucking companies. They will make sure your resume is professionally prepared and provide you with a customized cover letter. Additional services of resume/cover writing and interview preparation are skills you should definitely consider investing in.
Your Key Point should be to at least contact 2 or 3 professional trucking industry recruiters and meet with them to discuss your results from the previous step.
Always keep in mind that trucking company human resource personnel do not have your best interests in mind. All companies have one primary objective and that’s to obtain the best talent available for the least amount of money. In today's economic climate, as long as that industry's job market is tight, the hiring managers have the upper hand. However, with the trucking industry's current truck driver shortage, a professional OTR independent owner operator has more room to negotiate the best compensation package available.
August 12th, 2009 10:49 am
TRUCKNATION BLOG!!!!
Quality, Dependability, & Reliability
To be able to achieve important jobs that are constantly being placed on truck users, it is a must to have equipment that is of the highest quality and always at top performance. If you would like to obtain the best in reliability and most reasonable prices that can be found anywhere when you are looking to find used trucks for sale, there is only one name that you will ever need to know and that is Truck Nation! Here at Truck Nation we realize this fact and we do everything that is possible to continuously offer each of our valued customers a tremendous selection of trucks when it comes to quality trucks for sale and we make it a point to offer each of our valuable customers a large and varied selection of trucks. It simply does not matter what specific manufactured name brand that you may be looking to find, you can be assured that you’ll find it here! Our listings include such well known names as International trucks, GMC, Freightliner, Isuzu, Kentworth, Volvo, and many other popular names that consumers have grown to know and trust. When you have a need for a light duty truck, medium duty truck, or heavy-duty truck, we have everything you need in used trucks. We consistently aim to provide our customers with one of the largest selections to be found in all types of trucks. No matter what your specific needs may be in a truck, you can be sure that you will find everything you need here, conveniently in one place.
August 12th, 2009 10:46 am
TRUCKNATION Blog!!!!
Diesel Continues to Rise, Oil Down After Rally
6/16/2009
Diesel prices continued to rise for the sixth straight week, jumping up 7.4 cents to $2.572, according to the Department of Energy. This is still $2.12 below last year's price during the same week, when it hit $4.69.
Monday marked the highest level diesel has reached since Dec. 1, 2008, when the price was $2.62.
Of the different regions, the Central Atlantic saw the highest prices this week at $2.696, followed by the West Coast at $2.655. This included California, where it hit $2.73. The lowest prices were experienced by the Rocky Mountain and Gulf Coast regions at $2.52 and $2.54, respectively.
Separately, crude oil rose to $72.68 a barrel last Thursday, the highest since Oct. 20, and fell to around $70 Monday, according to CNNMoney.com. Oil fell as the dollar rose against the Euro, stocks fell and as oil-related global events unfolded, including Iran's presidential election and a meeting of the Group of Eight in Italy.
Gas prices went up 0.6 cents to $2.669 a gallon Monday, which is up about two-thirds since the beginning of the year, reported the Associated Press.
New York City Takes Title for Worst Road Rage
6/17/2009
The Big Apple was the least courteous city for road rage this year, up from number three last year, according to the fourth annual In the Driver's Seat Road Rage Survey by AutoVantage.
While Miami has taken the slot for worst for the past three years, the city was not on the list for this year's worst. The least courteous included Dallas/Fort Worth, Detroit, Atlanta and Minneapolis/St. Paul.
AutoVantage conducts the survey to determine the driving habits and attitudes of commuters across the U.S., and to learn more about consumer views on the topic of road rage. The study defined road rage as angry drivers who overreact and lose their tempers and aggressive driving.
Portland, Ore., was named the most courteous city, moving up from the second slot last year. Other courteous cities were Cleveland, Baltimore, Sacramento, Calif., and Pittsburgh. Behaviors that lead to road rage included talking on cell phones, driving too fast, tailgating, eating or drinking, texting and e-mailing.
2009 survey results are as follows:
Least Courteous Cities (Worst Road Rage):
1. New York
2. Dallas/Fort Worth
3. Detroit
4. Atlanta
5. Minneapolis/St. Paul
Other cities surveyed include Boston, Chicago, Cincinnati, Denver, Houston, Los Angeles, Miami, Philadelphia, Phoenix, San Diego, San Francisco, Seattle, St. Louis, Tampa, Fla., and Washington, D.C.
The average price of a gallon of diesel fell almost 3 cents this week to $2.219, according to weekly figures from the U.S. Energy Information Administration.
That's $1.061 less than the average a year ago. Diesel prices have not been this low since mid-2005.
The highest prices were seen in the New England region, with an average of $2.576; the lowest in the Gulf Coast region at $2.156, followed by the Midwest at $2.173.
Meanwhile, crude oil prices fell below $40 a barrel Monday, closing at $39.56 a barrel, the lowest close since Jan. 20, when oil settled at $38.74 a barrel. This is despite oil cartel OPEC's actions to cut production. Abdullah al-Badri, secretary-general of OPEC, told reporters that about 80 percent of the previously agreed-upon cuts were complete, according to CNN Money.
PortCheck to Begin Clean Truck Fee Collection
PortCheck of Long Beach, Calif., the not-for-profit company created by marine terminal operators to collect the Clean Truck Fee for the Port of Los Angeles and Port of Long Beach, will start collecting the fee beginning Wednesday, Feb. 18.
On Oct. 22, the ports of Los Angeles and Long Beach signed an agreement with PortCheck, contracting it to collect the fees and enforce a ban on trucks older than model year 1989, part of the ports' Clean Truck Program.
All cargo must be claimed before the CTF can be paid. Beginning Feb. 18, no cargo will be allowed to enter or exit from a marine container terminal unless the cargo has been claimed. Under the ports' program, the cargo owner (the party named on the bill of lading) is responsible for paying the CTF.
Prior to the availability of the official PortCheck website, PortCheck urges cargo owners that are not registered with PierPASS to register on the PierPASS site at www.pierpass-tmf.org.
Cargo owners that are already registered in PierPASS will be uploaded automatically to PortCheck once they accept the terms and conditions. PortCheck encourages cargo owners to visit www.pierpass-tmf.org to ensure they are registered, familiarize themselves with the website and navigation, and begin to claim cargo.
1/6/2009
Diesel prices are still falling, although the rate of decline has slowed. Energy Information Administration figures released Monday show the average price of a gallon of diesel to be $2.291, down 3.6 cents from last week.
The previous week, prices fell 3.9 cents per gallon, 5.6 the week before that, after drops of between 9 and 21 cents per gallon each week except one since the first week in October.
This week's average was lower than it's been since May 30, 2005, when it hit $2.16 per gallon.
The highest prices this week were again reported in the New England region, at $2.596, with the lowest in the Rocky Mountain region at $2.215.
Crude oil rose to a three-week high on the New York Mercantile Exchange Monday, reported Bloomberg. Oil for February delivery rose $1.98, or 4.2 percent, to $48.32 a barrel at the closing of the exchange. The contract briefly went as high as $49.28 a barrel, the highest since Dec. 15. Bloomberg attributes the increase to speculation that the conflict in the Gaza Strip may spread and disrupt oil supplies from other parts of the Middle East, a well as signs that OPEC production cuts are being implemented.
Meanwhile, the Houston Chronicle reported last week that refiners are taking steps to boost production of diesel fuel, which is expected to be in higher demand around the world in coming years.
Refineries in the U.S. have traditionally been geared to produce gasoline primarily, with diesel as sort of a byproduct. This fact has helped contribute to the price premium diesel currently commands over gasoline.
Exxon Mobil, the Chron reports, is the latest major refiner to reveal plans to increase diesel output, following moves by Valero Energy, Motiva and Marathon Oil. Exxon Mobil will spend more than $1 billion to upgrade facilities here and abroad, which will boost its worldwide diesel production by about 10 percent.
By Deborah Lockridge, Senior Managing Editor
January 10th, 2009 11:25 am
TRUCKNATION Blog!!!!!!!
Daimler Trucks North America Cutting More than 2,300 Jobs
1/9/2009
Daimler Trucks North America is laying off more than 2,300 employees at three Freightliner plants in North Carolina and at a plant in Portland, Ore.
According to published reports, Freightliner parent company Daimler Trucks North America announced Thursday that nearly 1,300 employees at the Freightliner plant in Cleveland will be laid off as it eliminates it second shift -- about three-quarters of the workforce. The Mount Holly facility will cut 600 workers and will only perform limited component assembly work after March 13. About 275 people will lost their plants at a parts plant in Gastonia, following more than 550 jobs that were cut there last fall.
Another 190 jobs layoffs will take effect Jan. 30 at Daimler Trucks North America's Swan Island plant, which builds U.S. military vehicles and Western Star trucks. About 700 workers will be left at the plant, which is scheduled to close in June 2010.
"Although these actions are unavoidable and necessary, we deeply regret the impact on our employees and their families," Chris Patterson, DTNA president and CEO, said in a news release. "These are extremely difficult and challenging times for our industry. We look forward to returning to normal production operations when business conditions stabilize."
Stifel, Nicolaus Analysts Look Into Crystal Ball
1/8/2009
In their first "think piece" of the new year, the transportation analysts at Stifel, Nicolaus predicted increasing regulations that will constrain capacity increases as we come out of the economic downturn..
"As we contemplate the future, in the third year of the current freight recession (in fact, Stifel Nicolaus says we're currently in a freight depression), we believe that accelerating capacity reductions ... are likely to overshoot even the reduced demands of the leaner and greener supply chain."
So, as the federal government works to jump-start lending, job creation and economic growth, they say, they are inclined to be optimistic about the companies that survive the downturn.
Stifel Nicolaus analysts expect that we will see new, more costly and more restrictive initiatives in the areas of environment, safety and national security. The contested hours of service rules, they believe, may be revised by the new administration. They expect a national speed limit for trucks governed by factory-installed speed limiters, and do not expect that heavier trucks or longer combination vehicles will be allowed.
The net effect of existing and forthcoming regulations, they say, should constrain the capacity available in the freight market, and will exacerbate the capacity crunch that will likely occur as we emerge from the current freight depression, meaning the surviving carriers will be in the cat-bird's seat as far as rates.
January 10th, 2009 10:47 am
TRUCKNATION Weekly BLog!!!!
Diesel Price Lowest in 20 Months, Crude Oil Prices Rise
11/25/2008
The average price of diesel fuel fell another 14.5 cents per gallon this week to $2.664, a level not seen since spring of 2007.
Weekly figures from the U.S. Energy Information Administration show the average retail on-highway diesel price of $2.664 is 78 cents lower than it was a year ago. The lowest average prices were seen in the Gulf Coast region, with a $2.598 average; the highest average was in New England, at $2.997.
Oil prices, however, were up significantly Monday as markets reacted to government action addressing the economic downturn and as it looks increasingly likely OPEC will move to cut oil production when it meets this weekend. Light sweet crude for delivery in January was up more than $4 a barrel to $54.50 on the New York Mercantile Exchange.
AASHTO Launches Site to Let Public Voice Concerns on Transportation
11/26/2008
The American Association of State Highway and Transportation Officials launched a new
campaign that will give travelers an opportunity to share their views on "What the New President and Congress Should Know About Transportation."
Between now and the Inauguration, AASHTA asks the traveling public to go to www.IToldThePresident.org and post comments and videos about their transportation concerns.
"It's important that the American people have a voice in creating the kind of transportation system this nation needs," said AASHTO Executive Director John Horsley. "Our goal is to make certain that we find transportation solutions that work with and for communities and support jobs right here at home."
State departments of transportation across the country will be encouraging citizens to post videos about what's happening in their communities. AASHTO will also be posting comments from "person-on-the-street" interviews the association will be conducting over the next several months.
You can already watch videos from drivers, transit users, and transportation experts voicing their concerns about traffic congestion, safety, air pollution, state budget cutting, and project delays
due to funding shortfalls. A major challenge facing the new Administration and Congress will be to pass a new transportation bill before the current federally funded highway and transit programs expire on September 30, 2009.
AASHTO will continue the campaign through the Inauguration and will share the public's concerns with members of Congress and the White House early next year.
November 26th, 2008 12:56 pm
SUPER SPECIAL !!!!!!
$39,500
2005 Freightliner Columbia (White) - #84-N69498 Cleaned and Detailed (SN: 1FUJA6CK85LN69498)
Odometer
490,457 - 545,900
Engine / Serial
Detroit 14.0L Series 60
Horsepower
515 HP
Transmission
Super 10
Sleeper
70
Suspension
Air Ride
Rear End Ratio
3.58
Front Axle Capacity
12,000 Lbs.
Rear End Capacity
40,000 Lbs.
Wheelbase
227
Front Wheels
Aluminum
Rear Wheels
Steel
5th Wheel
Air Slide
Tires
11R22.5LP
Available Options
Jakes
Air Condition
Power Steering
Cab Extenders
Heated Mirrors
Visor
Dual Air Horn
Dual Bunks
Power Steering
Sun Roof
Tilt
Wrap Around Dash
Dual High Seats
Air Ride Passenger Seat
Cruise Control
AM/FM Cassette
If you need more specific information please call us! Thank you for your inquiry.
All specifications and photo are believed to be correct, however, periodically errors and omissions do occur. TRUCKNATION will not be held liable for errors or omissions. Please verify pertinent specifications prior to sale.
October 30th, 2008 8:24 am
TruckNation Weekly Blog!!!!
Oil prices jump on strengthening markets Wednesday October 29, 12:05 pm ET .
COLUMBUS, Ohio (AP) -- Oil prices posted solid gains Wednesday, rebounding from a 17-month low as a rally in global stock markets backs the view of some oil traders who think that crude prices may have bottomed out.
The Energy Information Administration's weekly report showed that inventories rose 500,000 barrels last week, a million fewer barrels than was expected by analysts surveyed by energy information provider Platts. Gasoline inventories decreased 1.5 million barrels last week, a surprise to analysts who predicted a build of 900,000 barrels.
Light, sweet crude for December delivery rose $5.56 to $68.29 a barrel on the New York Mercantile Exchange. The contract settled at $62.73 Tuesday, the lowest closing price since May 2007.
Oil prices have fallen by 55 percent since peaking at $147 a barrel in mid-July.
Oil investors have been tracking equity indexes for signs of market sentiment. They took heart from a rally in stocks that began Tuesday in the U.S. and continued in Asia and Europe on Wednesday.
But oil trader and analyst Stephen Schork did not read much into Wednesday's rally.
He credited the rise in oil prices on the dollar weakening against the euro in anticipation of a half-point rate cut Wednesday afternoon by the Federal Reserve and an oversold market for crude.
Investors often buy commodities such as crude oil as an inflation hedge when the dollar weakens and sell those investments when the greenback rises.
"Anyone who thinks a bottom is in, I'll sell them all the oil they want," Schork said.
Motorists, meanwhile, are continuing to get a break at the gas pump.
Retail prices fell 4 cents overnight to $2.589 a gallon, according to auto club AAA, the Oil Price Information Service and Wright Express. That is about 30 cents lower than prices were a year ago.
In other Nymex trading, gasoline futures rose 6 cents to $1.51 a gallon, while heating oil gained more than 7 cents to fetch $1.98 a gallon. Natural gas for November delivery increased by 24 cents to $6.43 per 1,000 cubic feet.
In London, December Brent crude rose $3.59 to $63.88 a barrel on the ICE Futures exchange.
Japan's benchmark Nikkei index jumped 7.7 percent on Wednesday while Australia's key stock index rose 1.3 percent. The Dow Jones industrials were flat Wednesday heading up to the Fed announcement, a day after a stunning 889-point gain Tuesday. The 10.88 percent jump was the Dow's second-largest point gain, coming after the 936 points the Dow jumped on Oct. 13.
Part of the reason for oil's collapse is declining consumption.
Demand for gasoline over the four weeks ended Oct. 24 was 3.4 percent lower than a year earlier, averaging 8.9 million barrels a day, the Energy Department said.
At the same time, U.S. refineries ran at 85.3 percent of total capacity on average, a gain of 0.5 percentage point from the prior week. Analysts expected capacity to rise 0.3 percentage point to 85.1 percent.
“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” –President Ronald Reagan
We’re in a bad patch right now, no doubt about it – and I don’t need to recite the litany of bad economic news here to explain why, either, despite the nearly 900 point rise in the stock market yesterday.
The question truckers need to ask themselves is how to pull through to the other side. From a general business perspective, one thing truckers should NOT do is pull back on their outreach and marketing efforts with shippers. That’s the opinion of Professor Jerry Osteryoung with the college of business at Florida State University. Down times often times mean market share – for truckers this translates into freight – can be gained, and not always just by offering a lower price.
In Professor Osteryoung’s view, controlling costs coupled with a step-up in marketing can help almost any businesses not just survive but succeed during times like these. I’ll let him explain that reasoning in his own words. Professor Osteryoung, the floor is yours:
“There is no question that we are in tough economic times. We are in a very clear recession with the falling Gross National Product predominantly caused by the slump in the housing market and compounded by the giant mess with the financial institutions.
Some of the basic elements of this slow down are declining retail sales and plummeting car sales. In September, car sales were 19% lower than one year ago. The stock market is on a dramatic roller coaster ride downward with stocks losing over $8 trillion in just one year. Unemployment has been inching up, and people’s confidence has eroded.
Our economy has business cycles. It is just the nature of capitalism. Just as there are upturns in these business cycles, there are also downturns. We are now in a falling cycle, but it will turn around, and we will be doing well again!
The natural tendency for a business going through rough times is to pull back and be conservative. As our economy has cooled off, so many entrepreneurs we know have responded by hording cash and cutting back on spending money on expansion. However, this is the wrong approach.
During slow downs, you need to make sure that your business is prepared for the inevitable market turn-around and is seizing the opportunity to grab up market share. For those who have the financial resources, market share is gathered much more easily during an economic downturn as competitors do not have the resources to maintain their market share in the face of competition.
You can gain market share in one of two ways: acquiring other firms that are having financial problems, and attracting new customers with increased advertising and more aggressive pricing. More and more firms are going up for sale at very low prices as the owners can no longer afford the business. They are being forced to get out before losses take away all of their assets.
I promise you are going to pull out of this downturn in the business cycle. Of course, the question of the hour is ‘When?’ I would estimate that we will not really see a turnaround until late 2009 or 2010, but the economy will turn around.”
That’s why cost control, especially for truckers, is so vital right now. Steve Russell, chairman and CEO of Indianapolis-based Celadon Group summed that up pretty succinctly in the carrier’s most recent earnings report.
“In periods of weak demand, cost control is exceptionally important. We continued to actively manage our costs, particularly fuel expense,” he explained. “For the past year we have employed numerous tactics to improve fuel efficiency and lower costs. We have reduced the top speed of our tractors, improved tractor aerodynamics, added auxiliary heaters, implemented a strict tractor idling policy, renegotiated bulk fuel purchasing arrangements, and counseled our drivers in more efficient driving patterns. Although the drop in fuel prices from July through September certainly benefited us, our concerted efforts over the past year contributed more to [our] results.”
It’s also important to point out that good drivers are a critical asset in times like these – something Russell took pains to point out. “We intend to keep our most important strategic asset—our corps of safe and experienced drivers—intact and ready to capitalize on increased market share when the combination of our efforts and a better freight market improve the operating environment,” he said.
Another tip: don’t be afraid to up-end the apple cart. Van Buren, AR-based carrier USA Truck provides a great example and I’ve always paid close attention to the strategic ideas Clifton Beckham, the truckload carrier’s president and CEO, lays out in every earnings report.
“Our long-term strategic plan calls for a halt to fleet growth until we consistently earn at least a 10% return on capital,” he said in USA Truck’s third quarter statement. “Our goal is to achieve that return by the end of 2010. We have launched eight supporting initiatives to help attain this goal … designed to help us expand our margins in our asset-intensive trucking operations through more efficient revenue production and cost control.”
He said they are also designed to position USA Truck’s business model to resume asset-based growth in 2011 after improving our asset-based margins and by building sizeable asset-light platforms for rail intermodal and truck brokerage services – both of which should produce a higher return on capital.
That’s some sharp thinking – and shows Beckham and USA Truck, along with Russell and Celadon, among others, are indeed saddling up to prepare for the tough times ahead.
Trucks at Work: Sean Kilcarr comments on trends affecting the many different strata of the trucking industry -- light and medium duty fleets up through over-the-road truckload, less-than-truckload, and private fleet operations
“Today the financial crisis coupled with volatile oil prices poses demanding new challenges for international transport systems. [Because] a healthy global economy requires a strong and sustainable transport sector [and] competitive transport services operated securely and sustainably are essential for growth and development.” –Jack Short, secretary general, International Transport Forum
All is not well in the world of transportation – much less for the world in general. Everyone’s getting whipsawed by a variety of calamities all at once, first a housing downturn, followed by a freight falloff, then skyrocketing fuel prices, and finally a financial sector collapse. To say it’s not a pretty picture is to win the understatement-of-the-year award.
That being said, though, it’s certainly not time to start thumbing through Revelations while laying out sackcloth and ashes fordaily business attire (though it’s certainly necessary for more than a few Wall Street tycoons). If you as a trucker – large or small – have made it this far, through all that’s gone before, you should be able to weather the rough road ahead, which is predicted to last well into 2009.
“The world has experienced significant turbulence in financial markets, and we expect this will slow world economic growth over the next three or four quarters,” said Jim Owens, chairman and CEO of Peoria, IL-based Caterpillar Inc.
“While we are encouraged by the coordinated response by governments and central banks around the world and believe the actions they’ve taken will restore global liquidity, the depth and duration of economic decline and the timing and strength of the recovery are very uncertain,” he noted. “Our current outlook for 2009 calls for sales and revenues to be about flat with our full-year 2008 results.”
Everyone is taking a hard look at how the economic turbulence today impacts transportation in the near term. The International Transport Forum, for example, plans to address these issues at its global conference in May next year in Leipzig, Germany under an appropriate banner: “Transport for a Global Economy — New Challenges and Opportunities”
Transport policy makers from 50 countries are going to meet key leaders from industry, the research sector and civil society to discuss the challenges of globalization for the transport sector and consider what transport can do to respond to the needs for global economic and social development today. Key issues include what the present economic crisis means for globalization, what impact high transport costs have on the economy and how the global credit crunch will affect transport investment programs, says Jack Short, the forum’s secretary general.
“The question of a further liberalization in the transport sector in order to meet the needs of a steadily globalizing economy needs to be discussed as well as improvements of the connections of seaports and airports to inland – rail and road – infrastructure,” he explains. “At the same time the environmental and social implications of globalization are concerning more and more people and they expect answers.”
U.S.-based transportation firms are already battening down the hatches for the rough days ahead. United Parcel Service for one is already cutting pack spending to husband cash in advance of a further decline in freight volumes.
“We’ve taken steps to effectively manage our costs and enhance service levels in an environment that proved substantially worse than we initially anticipated, with significant slowing toward the end of the quarter,” notes Kurt Kuehn, UPS’s CFO.
“Our focus on service, revenue management, cost reduction and our sound financial position will help us manage through these tough business conditions,” Kuehn says. “We’ve implemented a range of initiatives to ensure our network operation matches demand.” That includes reducing UPS’s 2008 capital expenditure budget by $200 million, with further reductions planned for its 2009 capital spend as well.
“Based on economic forecasts, we anticipate a challenging environment for a number of quarters going forward,” he adds. “We believe the U.S. consumer will be very conservative with spending this year.”
Commercial truck sales – already under pressure in the U.S. from the changeover to more costly emission control technology – are also projected to suffer further declines in several major markets.
“Industry truck sales in Western and Central Europe above 15 tonnes are expected to be comparable this year to the 340,000 units sold in 2007,” says Aad Goudriaan, president of DAF Trucks, the European division of Bellevue, WA-based OEM Paccar.
“After robust growth for a number of years, the European economy and truck markets are now slowing. As a result of the recent slowdown in customer demand, DAF will reduce its build rate during October and anticipates the 2009 commercial vehicle market will reflect the slower economy,” Goudriaan notes. “European industry truck sales in 2009 are difficult to predict due to economic uncertainty, but they could be at a level of 260,000-300,000 units.”
It’s less rosy in the U.S. market, according to Dan Sobic, executive vice president at Paccar. “Declining housing starts and auto production have impacted U.S. and Canadian Class 8 truck sales throughout 2008,” he says. “Industry retail sales are expected to be approximately 150,000 vehicles this year [and] are projected to improve slightly in the second half of 2009 and are expected to be in the range of 170,000-210,000 as fleets replace vehicles after several years of lower purchases.”
Still – aside from all this gloom and doom – many U.S. carriers are finding freight and posting profits. True, most of the truckers making money are big fleets, but it nonetheless it shows there’s business – and money – to be had out there in the freight world, despite the choppy economic waters. “Several of our major customers are reporting increased third quarter income due to good freight traffic and lower fuel prices.” Paccar’s Sobic says.
Indianapolis-based Celadon Group provides a good example. By closely managing freight selection, they were able to obtain a small increase in loaded rate per mile, which was augmented by a significant reduction of non-revenue miles. That led to an approximately 1.5 cent per mile increase in average revenue per total mile (excluding fuel surcharges). Now, while average miles per tractor decreased as a result of a slow economy and choosing to eliminate loads that failed to meet the carrier’s fiscal requirements, average freight revenue per tractor per week (again excluding fuel surcharges) remained essentially constant with the same quarter last year, despite the very weak freight environment.
“In periods of weak demand, cost control is exceptionally important, particularly fuel expense,” says Steve Russell, Celadon’s chairman and CEO. “For the past year we have employed numerous tactics to improve fuel efficiency and lower costs. We have reduced the top speed of our tractors, improved tractor aerodynamics, added auxiliary heaters, implemented a strict tractor idling policy, renegotiated bulk fuel purchasing arrangements, and counseled our drivers in more efficient driving patterns.”
I think Clifton Beckham, president and CEO of USA Truck in Van Buren, AR, sums it up the best – it’s going to be a tough few quarters, but if carriers can control their costs, they’ll be able to weather the current economic storm until better days arrive.
“These past few weeks have been quite fluid and our ability to predict the near-term future is murky at best. We believe freight demand is likely to deteriorate further over the next few quarters, and that less freight, inflated equipment prices and tightening credit will further shrink industry capacity,” Beckham says.
“Falling fuel prices are the only material factor we see that aids industry-wide capacity retention, and we do not expect that to be sufficient to outweigh the negative factors for underperforming and undercapitalized competitors,” he stresses. “We realize that the U.S. economy is enormous, and that a tremendous amount of freight must be moved even in a slow-growth or even slightly contracting environment. Thus, improving industry fundamentals may emerge next year for those trucking companies that weather the difficult times and survive to compete.”
By Sean Kilcarr, senior editor
October 23rd, 2008 3:11 am
TRUCKNATION WEEKLY BLOG....
Mack Continues Sponsorship of Share the Road
10/13/2008
Mack Trucks announced it will continue as a primary sponsor of the American Trucking Associations' Share the Road program in 2009.
The company made the announcement after receiving an award recognizing its 2008 sponsorship of this highway safety initiative at the ATA's Management Conference and Exhibition in New Orleans.
Designed to enhance the safety of America's roadways by teaching car drivers how to safely drive around large trucks, Share the Road delivers life-saving messages to hundreds of U.S. cities and reaches millions of motorists annually. The program uses as spokespeople a group of professional truck drivers with exemplary safety records. These drivers conduct safety demonstrations for local media, students, community leaders and highway users in cities around the United States as a way to deliver the program's life-saving messages about potential blind spots, safe following distances, truck stopping distances and the like.
Oil Prices Plummet; Government Lowers Diesel Price Predictions
Crude oil futures fell below $85 Thursday on the New York Mercantile Exchange, a near 12-month-low.
U.S. crude closed at $86.59 a barrel, dropping to $84.63 in post-settlement trade, as the Dow Jones Industrial Average fell below 9,000.
In addition to the financial crisis, analysts say another factor in the fall of crude prices were reports from the Energy Information Administration that U.S. gasoline and crude stocks rose sharply last week, as demand continued to slow thanks to the economic crisis and high fuel costs.
In its Short-Term Energy Outlook released this week, the EIA said that absent a major worldwide economic downturn that significantly impacts global demand (and at this point that looks like a big "if"), it projects West Texas Intermediate crude oil prices will average about $112 per barrel in both 2008 and 2009.
Strong global demand and low surplus production capacity contributed to the run-up to record crude oil prices in July. The current slowdown in economic growth is contributing to the recent decline in oil demand and the sharp decline in prices since July, EIA says. Nonetheless, oil markets are expected to remain relatively tight because of sluggish production growth.
The EIA also said that although oil prices are expected to be up slightly on average next year, on-highway diesel fuel retail prices are projected to average $3.91 per gallon in 2009, down from a projected $4.01 per gallon in 2008.
Just two months ago, it its August report, the EIA was predicting that diesel fuel retail prices would increase to an average of $4.27 per gallon in 2009.
OPEC will hold an emergency meeting next month to discuss the impact of the financial crisis, which is partly responsible for oil prices falling from their record high of more than $147 a barrel in July.
October 13th, 2008 9:58 am
TruckNation Weekly Blog.....
Proposed Legislation Would Offer Loans For Truckers Hit By Fuel Prices
9/22/2008
U.S. Rep. Brian Baird (D-Wash.) has introduced legislation that would provide low interest loans to truckers and other small transportation businesses struggling to keep their businesses afloat in the face of record high fuel prices.
Congressman Baird has met with dozens of independent truckers to discuss the problems facing the industry and the possible solutions.
"Truckers provide the backbone of our nation's retail economy, and an alarming number of trucking and transportation businesses are going belly up, unable to afford the rising cost of fuel," Baird said. "Even more disturbing, some are being forced to choose between paying for safety repairs, and filling the gas tank. This legislation would provide them with a stopgap measure to help keep them, and our economy afloat."
"Just about everything you see on store shelves was brought there by a truck. We can not just sit idly by while a significant part of our nation's economy disappears," added Baird. "The federal government has devoted a lot of energy to backing up Wall Street in the past few days; we need to focus our attention on Main Street as well. This bill does that."
Baird has reached out to Speaker Nancy Pelosi and asked that his legislation be included in the upcoming economic stimulus package. Rep. Norm Dicks (D-Wash.), Rep. Peter DeFazio (D-Ore.), Rep. John Salazar (D-Colo.), and Rep. Stephanie Herseth Sandlin (D-S.D.) have all signed on as co-sponsors. The bill is also being supported by the Northwest Log Truckers Cooperative and the Owner-Operator Independent Drivers Association.
Under the terms of the proposed legislation, transportation businesses that have suffered, or that are likely to suffer from high fuel prices would be able to apply for emergency loans through the Small Business Administration. The loans would be capped at $250,000 and would be offered under terms similar to those offered through the SBA's "essential employee" program, which allows small businesses to seek disaster assistance if one of their employees is a military reservist who gets called up to active duty.
“I look at these trucks as big sculptures – a huge artistic canvas – and it’s my goal to create and publish the definitive coffee table book about custom trucks from around the world.” –Roger Snider, photographer
Roger Snider wants to change the way people think about heavy commercial trucks – and this reporter is pulling for him to succeed in his quest in a big BIG way.
[Roger has a soft spot for retro cabovers, such as this one proudly displayed by Bill Rethwisch.]
I talked to Roger recently by phone after I’d luckily been forwarded a link to his one-of-a-kind website, “Ultra Rigs of the World.” To say I was blown away by his photography is an understatement – to characterize his photographs as “gorgeous” doesn’t do them an ounce of justice.
This is a guy that’s held four ART GALLERY shows to display his work – the kind of shows one usually associates with snobby New York City faux-intellectuals, looking all kinds of bizarre nonsense being passed off as art whilst nibbling on foo-foo food. And do you know what Roger did? He brought not one but TWO of the custom trucks and their owners pictured in his photographs to those shows, so the people could see these rigs live and in living color and get the owners to expound on their craftsmanship in detail.
[He also got his truck shots featured in the counter-cultural hip art mag Swindle this year as well … not the place you’d expect to find a feature on custom trucks, let me tell you!]
“I want to take this custom truck culture out of its niche and bring it to the public at large,” Roger told me. “And I want a couple of the truck owner’s there because I don’t like to speak on their behalf – I am not nearly as intimate with these artistic creations as they are. I want the public to connect with THEM through my work, not just with me.”
How COOL is that philosophy, I ask you? Bringing custom truck owners to ART GALLERY shows about big rigs? Not hiding them away out of sight and out of mind, but getting the public to mingle with them?
“To me, these are the coolest, most amazing works of art – and it’s WORKING art, too,” Snider said. “These people literally live in these trucks – they don’t just sit in a museum somewhere.”
A native of Miami, Roger fell in love with trucks at a very young age after numerous road trips to the outskirts of Roanoke, Va., to visit family relatives in the late 1970s. He badgered his parents into taking him to the truck stop down the road every night so he could look at all the glistening steel and chrome for hours on end it seemed – cementing in his mind the desire to be one of those truck drivers when he grew up.
Yet another passion intervened – photography. Bitten by the shutter bug in college in the mid 1990s, he became a fashion photographer, leaving Florida for San Francisco, then eventually New York and finally Los Angeles. Trucking had receded into the dim memories of his brain until fate, leavened with grief, intervened in August 2005.
[Roger Snider.]
“My father was dying of cancer and I was on a plane back to Miami – needless to say, in no frame of mind to talk with anyone. I just wasn’t in a good place,” Roger told me. “So on the plane with me is a group of three people I immediately peg as a film crew. And while waiting for our bags, the director comments on my cool shoes – which were the same brand he was wearing. One thing led to another and we started talking.”
That director was none other than Doug Pray (who’s been in this space before), at the time on the final leg of a five year effort to make the documentary “Big Rig” about the trucking industry. As luck would have it, that conversation eventually led Pray to hire Snider to take some still shots of the last leg of their nationwide tour in May 2006 to find truckers willing to let Pray film their stories. That re-awakened the long-dormant trucker inside of Snider, leading to his dramatic shift from fashion to trucking photography.
“For me, I’m focusing on the worldwide phenomenon of custom trucks – it’s not just about the trucks here in the U.S.,” he explained to me. “In Japan, they have these exquisite ‘art trucks’ – mirrored by similar creations in countries like Australia, Pakistan, even Switzerland.”
[Custom trucks are not just a U.S. phenomenon.]
Snider’s gone to Japan and Europe to photograph custom rigs and hopes to line up sponsors to allow him to travel to Australia and photograph the mighty road trains plying the Outback, to Asia, Latin America, and who knows where else.
“My goal for the next four years is to go all over the world, take pictures of all these different custom trucks, and put together the ultimate global coffee table book about them,” he said. “I’m really coming at this from an eight year-olds sensitivity, trying to capture that level of excitement, passion, and wonder in my work. As I meet more custom truck owners and they learn to trust me, I’ll keep expanding my work, too.”
[Roger makes sure the owner — not just the custom rig — gets highlighted in his work.]
Snider’s over-arching goal, though, is to change how people think about trucking, truckers, and the rigs they drive. And so far, he thinks it’s working.
“After my gallery shows, the people attending told me they viewed trucks differently – in some cases actually began ‘seeing’ them for the first time ever,” he told me. “Trucks used to be almost invisible to them on the highway, merely part of the background. Now, they noticed them, respected them, treated them differently. That’s what I want to achieve.”
[Roger and his wife touring Japan to record images of that country’s venerable “art truck” culture.]
If he keeps taking pictures like the ones you see here, let me tell you, Roger will have no problem doing it. Here’s to you, Roger! Keep at it man!
By Sean Kilcarr
September 19th, 2008 3:32 am
TRUCKNATION WEEKLY BLOG...
Is federal CDL tracking ahead?
Sep 11, 2008 12:40 PM
A new study by the Federal Motor Carrier Safety Administration (FMCSA) suggests that a nationwide Commercial Drivers License (CDL) system is both economically feasible and necessary as drivers can currently easily hide changes in CDL status or suspensions. However, FMCSA said it has yet to conclude whether the system should be federally run or operated through third parties and added that it would be several years before it could be fully implemented.
“Truck and bus drivers with past convictions are statistically more likely to be involved in future crashes, and employers are not always notified about these convictions,” said Chris Flanigan, office of analysis, research and technology for FMCSA. “We found that at a minimum 50% do not notify employers of convictions, and the number could possibly be as high as 80%.”
According to Flanigan, carriers can easily miss violations even if they’re following every rule in the book. While drivers must report CDL changes within 30 days and convictions within a day, they do not always do so. Carriers are only required to check CDL status annually, so hypothetically a driver can get away with a conviction for up to 364 days.
There is no nationwide employee notification program, and only 11 states—New York, Maryland, Virginia, North Carolina, Michigan, Wisconsin, Illinois, Nebraska, Arkansas, Oregon and California—have state ENS (Employer Notification System) programs in place. Another option for fleets is third-party systems, which are not available in all states.
The FMCSA study involved two phases—a cost benefit and feasibility analysis, which was completed in September 2004; and state pilot tests, which were conducted in Colorado and Minnesota between December 2006 and June 2008.
In the pilot program, participating carriers received a secure email that informed them a driver enrolled in the program has a change in CDL status and provides them with a link to a secure site. When the carrier views the link, the records disappear. The carrier can say no to the request, but will get notices every two days for a week, with the records deleted after that point.
A total of 1099 drivers enrolled in the pilot program, resulting in 229 notifications—425 drivers with 155 notifications in Colorado and 674 drivers with 74 notifications in Minnesota.
FMCSA said it will do a full evaluation of the results, interviewing participating carriers about their experience with the program, as well as asking what staff hours are required to track CDLs with or without the system and what their response was to the notifications. A final report is due in early spring of 2009.
FMCSA concluded that a successful national system should include integration with state systems; a secure, web-based platform, and have minimum impact on existing systems. However, it has not yet made a decision on whether the program should be federally administered or left to third parties.
A federally administered program would be similar to the pilot system, connecting to a centrally located hub. However, FMCSA said only ten states are currently compatible with the system and federal money and additional modifications would be required to connect the remainder.
“This is probably a very liberal guess, but the phase-in-process would take at least five years to get all the states involved,” Flanigan noted.
The benefit of using third parties would be that the entities already exist, and it would take less time to fully implement than a federal program. However, a number of states do not offer access to its CDL information to third parties, and a third party system would provide no revenue to states.
“Third party providers exist to provide this service to carriers and other fleets,” Flanigan said. “However, these services are not nationwide—they just cover specific regions and states.”
By Justin Carretta, online news editor
September 11th, 2008 3:22 am
TRUCKNATION Weekly Blog
Diesel Prices Continue To Drop
9/3/2008
Weekly diesel price average figures from the federal government released Tuesday show that the retail price of diesel fuel continues to fall.
The weekly average of $4.121 is down 2.4 cents from a week ago, according to a report released Tuesday by the U.S. Energy Information Administration. This is the seventh week in a row the average retail price has dropped, from a high of $4.764 in mid-July.
The highest average retail prices were in the New England region at $4.359. The lowest were reported in the Midwest at $4.066.
The average price is $1.228 higher than it was a year ago.
On one of my last blogs about 4 months ago when oil was over 140.00 a barrell, I stated that oil was going to drop.....I guess I was right. I now think it may go up a little, but eventually will end up and live around 90.00 a barrell.............
September 4th, 2008 9:49 am
TruckNation's Weekly Blog!
Indianapolis Driver Wins Truck Driving Championship
8/25/2008 Dennis R. Shirar, a Heritage Transport professional truck driver based in Indianapolis, was named the 2008 National Truck Driving Grand Champion over the weekend.
Shirar's driving skills and knowledge of transportation and truck safety information topped those of 375 other professional drivers from all across the United States in the National Truck Driving Championships, held in Houston, Texas. The 71st annual "Super Bowl of Safety" is sponsored by the American Trucking Associations.
Shirar has logged 30 accident and injury free years as a driver, with over 3 million miles behind the wheel. He began competing in the National Truck Driving Championships in 1997, when he was named Indiana Rookie of the Year and placed second at Nationals in five-axle sleeper.
The contestants were the state champions in eight truck types from all 50 states. Collectively, they have driven 498,368,294 accident-free miles.
In their respective classes, drivers tested their expertise in the driving skills they use daily. The competition course inside Houston's George R. Brown Convention Center challenged their knowledge of safety, equipment and the industry. The skills course tested drivers' ability to judge distances, maneuver tight spaces, reverse, park, and position their vehicle exactly over scales, before barriers or around curves.
Shirar also won the individual straight truck driving competition. Joining Shirar as champions in their respective classes:
Three-Axle: Victor K. Wheeler - Roadway (Bountiful, Utah)
Four-Axle: Ryan R. Kelley - FedEx Freight (Nora Springs, Iowa)
Five-Axle: Buner H. Evans - USF Holland (Bremen, Georgia)
Five-Axle Sleeper: Karl R. Bohrer - Wal-Mart Transportation (Katy, Texas)
Twins: Chris A. Mahony - FedEx Freight (Kearns, Utah)
Flatbed: Ben S. Moore, Jr. - Wal-Mart Transportation (Americus, Georgia)
Tank Truck: John A. Smith, Jr. - FedEx Ground (Mooreville, Mississippi)
Shirar succeeds Alphonso Lewis, a professional truck driver with Roadway, as the National Grand Champion.
Robert Romando, a three-axle driver for FedEx National LTL from Surprise, Ariz., was named 2008 Rookie of the Year. Romando has been a professional truck driver for 18 years and has over 700,000 miles of accident free driving.
The Georgia state truck driving championship team won honors as the highest scoring state team, followed by Indiana and West Virginia.
August 25th, 2008 9:46 am
August 25, 2008
Lights, camera, trucking
“It’s all about freedom. About getting that feeling of the highway, with no one looking over your shoulder, just you and the truck. I can turn off the phone, the CB, and just drive.” –Tim Young, speaking to the press before the premier of the movie “Drive and Deliver”
I’ve got three letters for you this morning, ladies and Gs:
W.O.W.
That’s my reaction after seeing Navistar’s film “Drive and Deliver” this past Friday: a movie that started out ostensibly as a grandiose 45-minute commercial for its new LoneStar Class 8 highway tractor but became oh so much more than that in the talented hands of director Brett Morgen and the three drivers he culled from a pool of over 700 candidates.
[The LoneStar on display front and center outside the premier.]
The LoneStar (in my humble opinion) is completely upstaged by drivers Tim “Shoestring” Young, Chris “Discount” LeCount, and Steven “Stingray” Donaldson. Morgen does an absolutely brilliant job letting them tell their stories, relating the high and lows of piloting a big rig for a living. Now, sure, there’s plenty of lavish praise heaped on the LoneStar (it IS a commercial after all) and more beauty shots than I can count, but it’s the character of the drivers that really resonates throughout the film.
(The true stars of the movie “Drive and Deliver.” From left to right: Donaldson, LeCount, and Young.)
“We’re the backbone of this nation,” Donaldson explains in one scene. “People need to realize without the truck, nothing would move, absolutely nothing would move … but you’re out here, all alone, doing a job most people don’t want to do. I guess it takes true grit to stay out here all the time.”
There’s a lot of joy and laughter alongside sorrow and tears in this movie as it takes you on three week-long emotional journeys with Young (a company driver), LeCount and Donaldson (both owner-operators) – all tied together seamlessly with the lush vistas of America.
[Navistar spent big bucks making the premier of “Drive and Deliver” a real red carpet event.]
Oh, that scenery! It’s simply GORGEOUS! Filmed from helicopters in Montana, Utah, Arizona, and Utah, spliced with film shot from the cabs of the trucks and chase cars, it’s absolutely STUNNING. I simply can’t do justice to it with words – even on the small screen (I’ve watched the DVD four times now) the film just takes my breath away.
Whether you’re a fan of Navistar and its International truck brand or not, you’ve got to give the OEM credit for going out on a limb to produce a movie like this – to turn a highly-secretive new truck model over to three drivers, an Academy Award-winning director and his crew of 20, then basically take your hands off the steering wheel. But Morgen says that’s exactly what happened.
[That’s Brett Morgen, second from left in the red checkered shirt, at the press conference before the premier. Al Saltiel, Navistar’s vice president of truck marketing, is to the left of Morgen, with the three drivers and David Allendorf, chief designer of the LoneStar, line up to the right of him.]
“No editorial notes were given to me for this,” he explained during a press conference before the film’s premier Aug. 22. “In fact, I’d never been in many trucks before making this film. All I can say is that this is about as authentic as any commercial enterprise could be. I just hope I did justice to the stories of these drivers.”
[The drivers themselves talk about the film and the trucking industry below in these clips I shot at the press conference before the film’s premier.]
This reporter believes he did just that – and a whole lot more. Shot over the course of 21 days, covering 5,255 miles across 17 states and amassing some 153 hours of film, Morgen stayed away from trying to fit in every single detail and nuance about the trucking industry, instead keeping the story tightly focused on the three drivers, their experiences on the road, and the stories they tell in their own words without any narration.
What a hell of a risk Navistar took with this approach. Rumor has it they spent $5 million on this movie – $3 million to finance it, another $2 million to market it – which is about a third of the LoneStar’s overall marketing budget of some $15 million. Yet they ended up with something so poignant, so rich in human emotion – almost a living, breathing ode to the truck driver, painted in searing, larger-than-life colors.
[Tim “Shoestring” Young.]
Even the music Morgen selected fit perfectly – including one of my absolute favorite songs of all time, Lynyrd Skynyrd’s “Coming Home” (which I misremembered during the premier as being an Allman Brothers tune – SHAME ON ME!!)
[You can listen to Lynyrd Skynyrd’s “Coming Home” below to see what I mean. It’s even better when combined with the visual elements in “Drive and Delivered.”]
The music adds a loving and at times haunting aspect to what we see on the screen. Probably the best example is during Chris LeCount’s at times nightmarish haul from West Point, Mississippi to Charleston, South Carolina to deliver an Navistar MRAP military vehicle (gee, how convenient!). The scenes at night, in the rain, with the glow of traffic around him, backed by the wicked strings of a blues guitar and the crackle of the citizens band radio is all anyone (myself included) needed to instantly understand LeCount’s situation; to feel the stress of navigating those last nerve-wracking miles to his destination.
(Chris “Discount” LeCount.)
Now, I talked to a lot of drivers after the film and though they all loved it, many voiced expected complaints – a lack of traffic congestion scenes, car drivers dangerously cutting off big rigs at high speed, rude shippers or receivers, roadside inspections, struggles to find parking at night, horrid weather (snow, ice, etc.) and breakdowns (in a marketing campaign for a new truck model? Are you kidding me?)
Others noted the none-too-subtle hours-of-service violation by LeCount (a day that starts at 6 a.m. with delivery 12:10 a.m. the next exceeds 14 hours just a WEE bit), along with something similar as Donaldson relates his grief-stricken accumulation of 130,000 miles in under six months following the tragic death of his son, only 27, from a brain aneurysm back in 1997.
Even the happy homecomings for each driver at the end of the movie came under the cold glare of the cynic’s eye. A few folks told me that – in reality – oft times the “coming home” ritual is boiled down to “throw the dirty laundry in the corner and go straight to bed.” I say, sure, maybe that’s true, but isn’t the happy greeting by family and friends how anyone – but especially truck drivers, gone 15 or 30 days or more – WANTS to be welcomed home? Isn’t this film also about the reality we’d like to see more of, too?
[Tim Young with his family — the family he treasures so much.]
Morgen I think answered those and other countless questions this way: his film is for truckers, pure and simple. It’s supposed to tell a larger story through these three drivers about some – but not all – of the realities commercial truck drivers face every day on the road, as well as celebrate the real joys the profession holds.
“This film wasn’t made to explain everything in trucking – it was meant to give voice to truckers and their unique lifestyle,” Morgen says. “We wanted to share their attitudes and philosophies about trucking. These three drivers opened their hearts and souls to us, putting themselves out there for all to see. All human beings have an innate desire to share who they are and what they stand for with other human beings. This is what you see on the screen.”
[Driver Tim Young – a native of Flat Rock, Alabama – explains in his own words why he participated in this film. FYI, his infectious laugh and southern drawl are big highlights of the film.]
It isn’t all peaches and cream, either. There’s plenty of vocal frustration expressed by the drivers in this film – about traffic, last-minute load assignments, the stress on the family back home, the high cost of fuel, lack of respect, etc. – along a with a lot of leeriness at times about their lives being put on camera.
Donaldson says he very nearly quit on the first day of filming in South Dakota – going so far as to dial information for the nearest airport so he could fly home. “There were people and camera equipment so stuffed in my truck that I barely had room to move in my seat,” he said at the press conference. “I wasn’t used to being so confined like that.”
[Steven “Stingray” Donaldson.]
But he stayed – and ended up delivering one of the most powerful segments of the movie.
Let me tell you, too, no one is more pleased with this film — warts and all — than Al Saltiel, Navistar’s vice president of truck marketing.
“You just never know until you see it,” he told me after the premier. “You can’t help but feel really good about these guys on the screen, for as you get to know them, you like them more and more. Only along the way does the product story come out.”
[The site of the film premier in Dallas.]
He says the goal in creating this one-of-a-kind film was to capture the spirit and pride of today’s long haul trucker, documenting both the challenges and triumphs they face while on the road, hauling the goods that keep our nation move. “All I can say is the movie is infectious; it creates it’s own enthusiasm as it rolls along.”
Did it ever. The packed movie theatre that night rendered a pretty dramatic verdict, as well. They gave the movie a three-minute standing ovation.
August 25th, 2008 5:35 am
August 25, 2008
Lights, camera, trucking
“It’s all about freedom. About getting that feeling of the highway, with no one looking over your shoulder, just you and the truck. I can turn off the phone, the CB, and just drive.” –Tim Young, speaking to the press before the premier of the movie “Drive and Deliver”
I’ve got three letters for you this morning, ladies and Gs:
W.O.W.
That’s my reaction after seeing Navistar’s film “Drive and Deliver” this past Friday: a movie that started out ostensibly as a grandiose 45-minute commercial for its new LoneStar Class 8 highway tractor but became oh so much more than that in the talented hands of director Brett Morgen and the three drivers he culled from a pool of over 700 candidates.
[The LoneStar on display front and center outside the premier.]
The LoneStar (in my humble opinion) is completely upstaged by drivers Tim “Shoestring” Young, Chris “Discount” LeCount, and Steven “Stingray” Donaldson. Morgen does an absolutely brilliant job letting them tell their stories, relating the high and lows of piloting a big rig for a living. Now, sure, there’s plenty of lavish praise heaped on the LoneStar (it IS a commercial after all) and more beauty shots than I can count, but it’s the character of the drivers that really resonates throughout the film.
(The true stars of the movie “Drive and Deliver.” From left to right: Donaldson, LeCount, and Young.)
“We’re the backbone of this nation,” Donaldson explains in one scene. “People need to realize without the truck, nothing would move, absolutely nothing would move … but you’re out here, all alone, doing a job most people don’t want to do. I guess it takes true grit to stay out here all the time.”
There’s a lot of joy and laughter alongside sorrow and tears in this movie as it takes you on three week-long emotional journeys with Young (a company driver), LeCount and Donaldson (both owner-operators) – all tied together seamlessly with the lush vistas of America.
[Navistar spent big bucks making the premier of “Drive and Deliver” a real red carpet event.]
Oh, that scenery! It’s simply GORGEOUS! Filmed from helicopters in Montana, Utah, Arizona, and Utah, spliced with film shot from the cabs of the trucks and chase cars, it’s absolutely STUNNING. I simply can’t do justice to it with words – even on the small screen (I’ve watched the DVD four times now) the film just takes my breath away.
Whether you’re a fan of Navistar and its International truck brand or not, you’ve got to give the OEM credit for going out on a limb to produce a movie like this – to turn a highly-secretive new truck model over to three drivers, an Academy Award-winning director and his crew of 20, then basically take your hands off the steering wheel. But Morgen says that’s exactly what happened.
[That’s Brett Morgen, second from left in the red checkered shirt, at the press conference before the premier. Al Saltiel, Navistar’s vice president of truck marketing, is to the left of Morgen, with the three drivers and David Allendorf, chief designer of the LoneStar, line up to the right of him.]
“No editorial notes were given to me for this,” he explained during a press conference before the film’s premier Aug. 22. “In fact, I’d never been in many trucks before making this film. All I can say is that this is about as authentic as any commercial enterprise could be. I just hope I did justice to the stories of these drivers.”
[The drivers themselves talk about the film and the trucking industry below in these clips I shot at the press conference before the film’s premier.]
This reporter believes he did just that – and a whole lot more. Shot over the course of 21 days, covering 5,255 miles across 17 states and amassing some 153 hours of film, Morgen stayed away from trying to fit in every single detail and nuance about the trucking industry, instead keeping the story tightly focused on the three drivers, their experiences on the road, and the stories they tell in their own words without any narration.
What a hell of a risk Navistar took with this approach. Rumor has it they spent $5 million on this movie – $3 million to finance it, another $2 million to market it – which is about a third of the LoneStar’s overall marketing budget of some $15 million. Yet they ended up with something so poignant, so rich in human emotion – almost a living, breathing ode to the truck driver, painted in searing, larger-than-life colors.
[Tim “Shoestring” Young.]
Even the music Morgen selected fit perfectly – including one of my absolute favorite songs of all time, Lynyrd Skynyrd’s “Coming Home” (which I misremembered during the premier as being an Allman Brothers tune – SHAME ON ME!!)
[You can listen to Lynyrd Skynyrd’s “Coming Home” below to see what I mean. It’s even better when combined with the visual elements in “Drive and Delivered.”]
The music adds a loving and at times haunting aspect to what we see on the screen. Probably the best example is during Chris LeCount’s at times nightmarish haul from West Point, Mississippi to Charleston, South Carolina to deliver an Navistar MRAP military vehicle (gee, how convenient!). The scenes at night, in the rain, with the glow of traffic around him, backed by the wicked strings of a blues guitar and the crackle of the citizens band radio is all anyone (myself included) needed to instantly understand LeCount’s situation; to feel the stress of navigating those last nerve-wracking miles to his destination.
(Chris “Discount” LeCount.)
Now, I talked to a lot of drivers after the film and though they all loved it, many voiced expected complaints – a lack of traffic congestion scenes, car drivers dangerously cutting off big rigs at high speed, rude shippers or receivers, roadside inspections, struggles to find parking at night, horrid weather (snow, ice, etc.) and breakdowns (in a marketing campaign for a new truck model? Are you kidding me?)
Others noted the none-too-subtle hours-of-service violation by LeCount (a day that starts at 6 a.m. with delivery 12:10 a.m. the next exceeds 14 hours just a WEE bit), along with something similar as Donaldson relates his grief-stricken accumulation of 130,000 miles in under six months following the tragic death of his son, only 27, from a brain aneurysm back in 1997.
Even the happy homecomings for each driver at the end of the movie came under the cold glare of the cynic’s eye. A few folks told me that – in reality – oft times the “coming home” ritual is boiled down to “throw the dirty laundry in the corner and go straight to bed.” I say, sure, maybe that’s true, but isn’t the happy greeting by family and friends how anyone – but especially truck drivers, gone 15 or 30 days or more – WANTS to be welcomed home? Isn’t this film also about the reality we’d like to see more of, too?
[Tim Young with his family — the family he treasures so much.]
Morgen I think answered those and other countless questions this way: his film is for truckers, pure and simple. It’s supposed to tell a larger story through these three drivers about some – but not all – of the realities commercial truck drivers face every day on the road, as well as celebrate the real joys the profession holds.
“This film wasn’t made to explain everything in trucking – it was meant to give voice to truckers and their unique lifestyle,” Morgen says. “We wanted to share their attitudes and philosophies about trucking. These three drivers opened their hearts and souls to us, putting themselves out there for all to see. All human beings have an innate desire to share who they are and what they stand for with other human beings. This is what you see on the screen.”
[Driver Tim Young – a native of Flat Rock, Alabama – explains in his own words why he participated in this film. FYI, his infectious laugh and southern drawl are big highlights of the film.]
It isn’t all peaches and cream, either. There’s plenty of vocal frustration expressed by the drivers in this film – about traffic, last-minute load assignments, the stress on the family back home, the high cost of fuel, lack of respect, etc. – along a with a lot of leeriness at times about their lives being put on camera.
Donaldson says he very nearly quit on the first day of filming in South Dakota – going so far as to dial information for the nearest airport so he could fly home. “There were people and camera equipment so stuffed in my truck that I barely had room to move in my seat,” he said at the press conference. “I wasn’t used to being so confined like that.”
[Steven “Stingray” Donaldson.]
But he stayed – and ended up delivering one of the most powerful segments of the movie.
Let me tell you, too, no one is more pleased with this film — warts and all — than Al Saltiel, Navistar’s vice president of truck marketing.
“You just never know until you see it,” he told me after the premier. “You can’t help but feel really good about these guys on the screen, for as you get to know them, you like them more and more. Only along the way does the product story come out.”
[The site of the film premier in Dallas.]
He says the goal in creating this one-of-a-kind film was to capture the spirit and pride of today’s long haul trucker, documenting both the challenges and triumphs they face while on the road, hauling the goods that keep our nation move. “All I can say is the movie is infectious; it creates it’s own enthusiasm as it rolls along.”
Did it ever. The packed movie theatre that night rendered a pretty dramatic verdict, as well. They gave the movie a three-minute standing ovation.
August 25th, 2008 5:34 am
August 25, 2008
Lights, camera, trucking
“It’s all about freedom. About getting that feeling of the highway, with no one looking over your shoulder, just you and the truck. I can turn off the phone, the CB, and just drive.” –Tim Young, speaking to the press before the premier of the movie “Drive and Deliver”
I’ve got three letters for you this morning, ladies and Gs:
W.O.W.
That’s my reaction after seeing Navistar’s film “Drive and Deliver” this past Friday: a movie that started out ostensibly as a grandiose 45-minute commercial for its new LoneStar Class 8 highway tractor but became oh so much more than that in the talented hands of director Brett Morgen and the three drivers he culled from a pool of over 700 candidates.
[The LoneStar on display front and center outside the premier.]
The LoneStar (in my humble opinion) is completely upstaged by drivers Tim “Shoestring” Young, Chris “Discount” LeCount, and Steven “Stingray” Donaldson. Morgen does an absolutely brilliant job letting them tell their stories, relating the high and lows of piloting a big rig for a living. Now, sure, there’s plenty of lavish praise heaped on the LoneStar (it IS a commercial after all) and more beauty shots than I can count, but it’s the character of the drivers that really resonates throughout the film.
(The true stars of the movie “Drive and Deliver.” From left to right: Donaldson, LeCount, and Young.)
“We’re the backbone of this nation,” Donaldson explains in one scene. “People need to realize without the truck, nothing would move, absolutely nothing would move … but you’re out here, all alone, doing a job most people don’t want to do. I guess it takes true grit to stay out here all the time.”
There’s a lot of joy and laughter alongside sorrow and tears in this movie as it takes you on three week-long emotional journeys with Young (a company driver), LeCount and Donaldson (both owner-operators) – all tied together seamlessly with the lush vistas of America.
[Navistar spent big bucks making the premier of “Drive and Deliver” a real red carpet event.]
Oh, that scenery! It’s simply GORGEOUS! Filmed from helicopters in Montana, Utah, Arizona, and Utah, spliced with film shot from the cabs of the trucks and chase cars, it’s absolutely STUNNING. I simply can’t do justice to it with words – even on the small screen (I’ve watched the DVD four times now) the film just takes my breath away.
Whether you’re a fan of Navistar and its International truck brand or not, you’ve got to give the OEM credit for going out on a limb to produce a movie like this – to turn a highly-secretive new truck model over to three drivers, an Academy Award-winning director and his crew of 20, then basically take your hands off the steering wheel. But Morgen says that’s exactly what happened.
[That’s Brett Morgen, second from left in the red checkered shirt, at the press conference before the premier. Al Saltiel, Navistar’s vice president of truck marketing, is to the left of Morgen, with the three drivers and David Allendorf, chief designer of the LoneStar, line up to the right of him.]
“No editorial notes were given to me for this,” he explained during a press conference before the film’s premier Aug. 22. “In fact, I’d never been in many trucks before making this film. All I can say is that this is about as authentic as any commercial enterprise could be. I just hope I did justice to the stories of these drivers.”
[The drivers themselves talk about the film and the trucking industry below in these clips I shot at the press conference before the film’s premier.]
This reporter believes he did just that – and a whole lot more. Shot over the course of 21 days, covering 5,255 miles across 17 states and amassing some 153 hours of film, Morgen stayed away from trying to fit in every single detail and nuance about the trucking industry, instead keeping the story tightly focused on the three drivers, their experiences on the road, and the stories they tell in their own words without any narration.
What a hell of a risk Navistar took with this approach. Rumor has it they spent $5 million on this movie – $3 million to finance it, another $2 million to market it – which is about a third of the LoneStar’s overall marketing budget of some $15 million. Yet they ended up with something so poignant, so rich in human emotion – almost a living, breathing ode to the truck driver, painted in searing, larger-than-life colors.
[Tim “Shoestring” Young.]
Even the music Morgen selected fit perfectly – including one of my absolute favorite songs of all time, Lynyrd Skynyrd’s “Coming Home” (which I misremembered during the premier as being an Allman Brothers tune – SHAME ON ME!!)
[You can listen to Lynyrd Skynyrd’s “Coming Home” below to see what I mean. It’s even better when combined with the visual elements in “Drive and Delivered.”]
The music adds a loving and at times haunting aspect to what we see on the screen. Probably the best example is during Chris LeCount’s at times nightmarish haul from West Point, Mississippi to Charleston, South Carolina to deliver an Navistar MRAP military vehicle (gee, how convenient!). The scenes at night, in the rain, with the glow of traffic around him, backed by the wicked strings of a blues guitar and the crackle of the citizens band radio is all anyone (myself included) needed to instantly understand LeCount’s situation; to feel the stress of navigating those last nerve-wracking miles to his destination.
(Chris “Discount” LeCount.)
Now, I talked to a lot of drivers after the film and though they all loved it, many voiced expected complaints – a lack of traffic congestion scenes, car drivers dangerously cutting off big rigs at high speed, rude shippers or receivers, roadside inspections, struggles to find parking at night, horrid weather (snow, ice, etc.) and breakdowns (in a marketing campaign for a new truck model? Are you kidding me?)
Others noted the none-too-subtle hours-of-service violation by LeCount (a day that starts at 6 a.m. with delivery 12:10 a.m. the next exceeds 14 hours just a WEE bit), along with something similar as Donaldson relates his grief-stricken accumulation of 130,000 miles in under six months following the tragic death of his son, only 27, from a brain aneurysm back in 1997.
Even the happy homecomings for each driver at the end of the movie came under the cold glare of the cynic’s eye. A few folks told me that – in reality – oft times the “coming home” ritual is boiled down to “throw the dirty laundry in the corner and go straight to bed.” I say, sure, maybe that’s true, but isn’t the happy greeting by family and friends how anyone – but especially truck drivers, gone 15 or 30 days or more – WANTS to be welcomed home? Isn’t this film also about the reality we’d like to see more of, too?
[Tim Young with his family — the family he treasures so much.]
Morgen I think answered those and other countless questions this way: his film is for truckers, pure and simple. It’s supposed to tell a larger story through these three drivers about some – but not all – of the realities commercial truck drivers face every day on the road, as well as celebrate the real joys the profession holds.
“This film wasn’t made to explain everything in trucking – it was meant to give voice to truckers and their unique lifestyle,” Morgen says. “We wanted to share their attitudes and philosophies about trucking. These three drivers opened their hearts and souls to us, putting themselves out there for all to see. All human beings have an innate desire to share who they are and what they stand for with other human beings. This is what you see on the screen.”
[Driver Tim Young – a native of Flat Rock, Alabama – explains in his own words why he participated in this film. FYI, his infectious laugh and southern drawl are big highlights of the film.]
It isn’t all peaches and cream, either. There’s plenty of vocal frustration expressed by the drivers in this film – about traffic, last-minute load assignments, the stress on the family back home, the high cost of fuel, lack of respect, etc. – along a with a lot of leeriness at times about their lives being put on camera.
Donaldson says he very nearly quit on the first day of filming in South Dakota – going so far as to dial information for the nearest airport so he could fly home. “There were people and camera equipment so stuffed in my truck that I barely had room to move in my seat,” he said at the press conference. “I wasn’t used to being so confined like that.”
[Steven “Stingray” Donaldson.]
But he stayed – and ended up delivering one of the most powerful segments of the movie.
Let me tell you, too, no one is more pleased with this film — warts and all — than Al Saltiel, Navistar’s vice president of truck marketing.
“You just never know until you see it,” he told me after the premier. “You can’t help but feel really good about these guys on the screen, for as you get to know them, you like them more and more. Only along the way does the product story come out.”
[The site of the film premier in Dallas.]
He says the goal in creating this one-of-a-kind film was to capture the spirit and pride of today’s long haul trucker, documenting both the challenges and triumphs they face while on the road, hauling the goods that keep our nation move. “All I can say is the movie is infectious; it creates it’s own enthusiasm as it rolls along.”
Did it ever. The packed movie theatre that night rendered a pretty dramatic verdict, as well. They gave the movie a three-minute standing ovation.
August 25th, 2008 5:18 am
August 25, 2008
Lights, camera, trucking
“It’s all about freedom. About getting that feeling of the highway, with no one looking over your shoulder, just you and the truck. I can turn off the phone, the CB, and just drive.” –Tim Young, speaking to the press before the premier of the movie “Drive and Deliver”
I’ve got three letters for you this morning, ladies and Gs:
W.O.W.
That’s my reaction after seeing Navistar’s film “Drive and Deliver” this past Friday: a movie that started out ostensibly as a grandiose 45-minute commercial for its new LoneStar Class 8 highway tractor but became oh so much more than that in the talented hands of director Brett Morgen and the three drivers he culled from a pool of over 700 candidates.
[The LoneStar on display front and center outside the premier.]
The LoneStar (in my humble opinion) is completely upstaged by drivers Tim “Shoestring” Young, Chris “Discount” LeCount, and Steven “Stingray” Donaldson. Morgen does an absolutely brilliant job letting them tell their stories, relating the high and lows of piloting a big rig for a living. Now, sure, there’s plenty of lavish praise heaped on the LoneStar (it IS a commercial after all) and more beauty shots than I can count, but it’s the character of the drivers that really resonates throughout the film.
(The true stars of the movie “Drive and Deliver.” From left to right: Donaldson, LeCount, and Young.)
“We’re the backbone of this nation,” Donaldson explains in one scene. “People need to realize without the truck, nothing would move, absolutely nothing would move … but you’re out here, all alone, doing a job most people don’t want to do. I guess it takes true grit to stay out here all the time.”
There’s a lot of joy and laughter alongside sorrow and tears in this movie as it takes you on three week-long emotional journeys with Young (a company driver), LeCount and Donaldson (both owner-operators) – all tied together seamlessly with the lush vistas of America.
[Navistar spent big bucks making the premier of “Drive and Deliver” a real red carpet event.]
Oh, that scenery! It’s simply GORGEOUS! Filmed from helicopters in Montana, Utah, Arizona, and Utah, spliced with film shot from the cabs of the trucks and chase cars, it’s absolutely STUNNING. I simply can’t do justice to it with words – even on the small screen (I’ve watched the DVD four times now) the film just takes my breath away.
Whether you’re a fan of Navistar and its International truck brand or not, you’ve got to give the OEM credit for going out on a limb to produce a movie like this – to turn a highly-secretive new truck model over to three drivers, an Academy Award-winning director and his crew of 20, then basically take your hands off the steering wheel. But Morgen says that’s exactly what happened.
[That’s Brett Morgen, second from left in the red checkered shirt, at the press conference before the premier. Al Saltiel, Navistar’s vice president of truck marketing, is to the left of Morgen, with the three drivers and David Allendorf, chief designer of the LoneStar, line up to the right of him.]
“No editorial notes were given to me for this,” he explained during a press conference before the film’s premier Aug. 22. “In fact, I’d never been in many trucks before making this film. All I can say is that this is about as authentic as any commercial enterprise could be. I just hope I did justice to the stories of these drivers.”
[The drivers themselves talk about the film and the trucking industry below in these clips I shot at the press conference before the film’s premier.]
This reporter believes he did just that – and a whole lot more. Shot over the course of 21 days, covering 5,255 miles across 17 states and amassing some 153 hours of film, Morgen stayed away from trying to fit in every single detail and nuance about the trucking industry, instead keeping the story tightly focused on the three drivers, their experiences on the road, and the stories they tell in their own words without any narration.
What a hell of a risk Navistar took with this approach. Rumor has it they spent $5 million on this movie – $3 million to finance it, another $2 million to market it – which is about a third of the LoneStar’s overall marketing budget of some $15 million. Yet they ended up with something so poignant, so rich in human emotion – almost a living, breathing ode to the truck driver, painted in searing, larger-than-life colors.
[Tim “Shoestring” Young.]
Even the music Morgen selected fit perfectly – including one of my absolute favorite songs of all time, Lynyrd Skynyrd’s “Coming Home” (which I misremembered during the premier as being an Allman Brothers tune – SHAME ON ME!!)
[You can listen to Lynyrd Skynyrd’s “Coming Home” below to see what I mean. It’s even better when combined with the visual elements in “Drive and Delivered.”]
The music adds a loving and at times haunting aspect to what we see on the screen. Probably the best example is during Chris LeCount’s at times nightmarish haul from West Point, Mississippi to Charleston, South Carolina to deliver an Navistar MRAP military vehicle (gee, how convenient!). The scenes at night, in the rain, with the glow of traffic around him, backed by the wicked strings of a blues guitar and the crackle of the citizens band radio is all anyone (myself included) needed to instantly understand LeCount’s situation; to feel the stress of navigating those last nerve-wracking miles to his destination.
(Chris “Discount” LeCount.)
Now, I talked to a lot of drivers after the film and though they all loved it, many voiced expected complaints – a lack of traffic congestion scenes, car drivers dangerously cutting off big rigs at high speed, rude shippers or receivers, roadside inspections, struggles to find parking at night, horrid weather (snow, ice, etc.) and breakdowns (in a marketing campaign for a new truck model? Are you kidding me?)
Others noted the none-too-subtle hours-of-service violation by LeCount (a day that starts at 6 a.m. with delivery 12:10 a.m. the next exceeds 14 hours just a WEE bit), along with something similar as Donaldson relates his grief-stricken accumulation of 130,000 miles in under six months following the tragic death of his son, only 27, from a brain aneurysm back in 1997.
Even the happy homecomings for each driver at the end of the movie came under the cold glare of the cynic’s eye. A few folks told me that – in reality – oft times the “coming home” ritual is boiled down to “throw the dirty laundry in the corner and go straight to bed.” I say, sure, maybe that’s true, but isn’t the happy greeting by family and friends how anyone – but especially truck drivers, gone 15 or 30 days or more – WANTS to be welcomed home? Isn’t this film also about the reality we’d like to see more of, too?
[Tim Young with his family — the family he treasures so much.]
Morgen I think answered those and other countless questions this way: his film is for truckers, pure and simple. It’s supposed to tell a larger story through these three drivers about some – but not all – of the realities commercial truck drivers face every day on the road, as well as celebrate the real joys the profession holds.
“This film wasn’t made to explain everything in trucking – it was meant to give voice to truckers and their unique lifestyle,” Morgen says. “We wanted to share their attitudes and philosophies about trucking. These three drivers opened their hearts and souls to us, putting themselves out there for all to see. All human beings have an innate desire to share who they are and what they stand for with other human beings. This is what you see on the screen.”
[Driver Tim Young – a native of Flat Rock, Alabama – explains in his own words why he participated in this film. FYI, his infectious laugh and southern drawl are big highlights of the film.]
It isn’t all peaches and cream, either. There’s plenty of vocal frustration expressed by the drivers in this film – about traffic, last-minute load assignments, the stress on the family back home, the high cost of fuel, lack of respect, etc. – along a with a lot of leeriness at times about their lives being put on camera.
Donaldson says he very nearly quit on the first day of filming in South Dakota – going so far as to dial information for the nearest airport so he could fly home. “There were people and camera equipment so stuffed in my truck that I barely had room to move in my seat,” he said at the press conference. “I wasn’t used to being so confined like that.”
[Steven “Stingray” Donaldson.]
But he stayed – and ended up delivering one of the most powerful segments of the movie.
Let me tell you, too, no one is more pleased with this film — warts and all — than Al Saltiel, Navistar’s vice president of truck marketing.
“You just never know until you see it,” he told me after the premier. “You can’t help but feel really good about these guys on the screen, for as you get to know them, you like them more and more. Only along the way does the product story come out.”
[The site of the film premier in Dallas.]
He says the goal in creating this one-of-a-kind film was to capture the spirit and pride of today’s long haul trucker, documenting both the challenges and triumphs they face while on the road, hauling the goods that keep our nation move. “All I can say is the movie is infectious; it creates it’s own enthusiasm as it rolls along.”
Did it ever. The packed movie theatre that night rendered a pretty dramatic verdict, as well. They gave the movie a three-minute standing ovation.
August 25th, 2008 4:35 am
TruckNation's First Weekly
Blog!
Lorem ipsum dolor sit amet, consectetuer adipiscing elit, sed diam nonummy
nibh euismod tincidunt ut laoreet dolore magna aliquam erat volutpat. Ut wisi
enim ad minim veniam, quis nostrud exerci tation ullamcorper suscipit lobortis
nisl ut aliquip ex ea commodo consequat. Duis autem vel eum iriure dolor in
hendrerit in vulputate velit esse molestie consequat, vel illum dolore eu
feugiat nulla facilisis at vero eros et accumsan et iusto odio dignissim qui
blandit praesent luptatum zzril delenit augue duis dolore te feugait nulla
facilisi.
August 25th, 2008 4:33 am
TruckNation's First Weekly
Blog!
Lorem ipsum dolor sit amet, consectetuer adipiscing elit, sed diam nonummy
nibh euismod tincidunt ut laoreet dolore magna aliquam erat volutpat. Ut wisi
enim ad minim veniam, quis nostrud exerci tation ullamcorper suscipit lobortis
nisl ut aliquip ex ea commodo consequat. Duis autem vel eum iriure dolor in
hendrerit in vulputate velit esse molestie consequat, vel illum dolore eu
feugiat nulla facilisis at vero eros et accumsan et iusto odio dignissim qui
blandit praesent luptatum zzril delenit augue duis dolore te feugait nulla
facilisi.
August 25th, 2008 4:32 am
TruckNation's First Weekly
Blog!
Lorem ipsum dolor sit amet, consectetuer adipiscing elit, sed diam nonummy
nibh euismod tincidunt ut laoreet dolore magna aliquam erat volutpat. Ut wisi
enim ad minim veniam, quis nostrud exerci tation ullamcorper suscipit lobortis
nisl ut aliquip ex ea commodo consequat. Duis autem vel eum iriure dolor in
hendrerit in vulputate velit esse molestie consequat, vel illum dolore eu
feugiat nulla facilisis at vero eros et accumsan et iusto odio dignissim qui
blandit praesent luptatum zzril delenit augue duis dolore te feugait nulla
facilisi.
“It’s all about freedom. About getting that feeling of the highway, with no one looking over your shoulder, just you and the truck. I can turn off the phone, the CB, and just drive.” –Tim Young, speaking to the press before the premier of the movie “Drive and Deliver”
I’ve got three letters for you this morning, ladies and Gs:
W.O.W.
That’s my reaction after seeing Navistar’s film “Drive and Deliver” this past Friday: a movie that started out ostensibly as a grandiose 45-minute commercial for its new LoneStar Class 8 highway tractor but became oh so much more than that in the talented hands of director Brett Morgen and the three drivers he culled from a pool of over 700 candidates.
[The LoneStar on display front and center outside the premier.]
The LoneStar (in my humble opinion) is completely upstaged by drivers Tim “Shoestring” Young, Chris “Discount” LeCount, and Steven “Stingray” Donaldson. Morgen does an absolutely brilliant job letting them tell their stories, relating the high and lows of piloting a big rig for a living. Now, sure, there’s plenty of lavish praise heaped on the LoneStar (it IS a commercial after all) and more beauty shots than I can count, but it’s the character of the drivers that really resonates throughout the film.
(The true stars of the movie “Drive and Deliver.” From left to right: Donaldson, LeCount, and Young.)
“We’re the backbone of this nation,” Donaldson explains in one scene. “People need to realize without the truck, nothing would move, absolutely nothing would move … but you’re out here, all alone, doing a job most people don’t want to do. I guess it takes true grit to stay out here all the time.”
There’s a lot of joy and laughter alongside sorrow and tears in this movie as it takes you on three week-long emotional journeys with Young (a company driver), LeCount and Donaldson (both owner-operators) – all tied together seamlessly with the lush vistas of America.
[Navistar spent big bucks making the premier of “Drive and Deliver” a real red carpet event.]
Oh, that scenery! It’s simply GORGEOUS! Filmed from helicopters in Montana, Utah, Arizona, and Utah, spliced with film shot from the cabs of the trucks and chase cars, it’s absolutely STUNNING. I simply can’t do justice to it with words – even on the small screen (I’ve watched the DVD four times now) the film just takes my breath away.
Whether you’re a fan of Navistar and its International truck brand or not, you’ve got to give the OEM credit for going out on a limb to produce a movie like this – to turn a highly-secretive new truck model over to three drivers, an Academy Award-winning director and his crew of 20, then basically take your hands off the steering wheel. But Morgen says that’s exactly what happened.
[That’s Brett Morgen, second from left in the red checkered shirt, at the press conference before the premier. Al Saltiel, Navistar’s vice president of truck marketing, is to the left of Morgen, with the three drivers and David Allendorf, chief designer of the LoneStar, line up to the right of him.]
“No editorial notes were given to me for this,” he explained during a press conference before the film’s premier Aug. 22. “In fact, I’d never been in many trucks before making this film. All I can say is that this is about as authentic as any commercial enterprise could be. I just hope I did justice to the stories of these drivers.”
[The drivers themselves talk about the film and the trucking industry below in these clips I shot at the press conference before the film’s premier.]
This reporter believes he did just that – and a whole lot more. Shot over the course of 21 days, covering 5,255 miles across 17 states and amassing some 153 hours of film, Morgen stayed away from trying to fit in every single detail and nuance about the trucking industry, instead keeping the story tightly focused on the three drivers, their experiences on the road, and the stories they tell in their own words without any narration.
What a hell of a risk Navistar took with this approach. Rumor has it they spent $5 million on this movie – $3 million to finance it, another $2 million to market it – which is about a third of the LoneStar’s overall marketing budget of some $15 million. Yet they ended up with something so poignant, so rich in human emotion – almost a living, breathing ode to the truck driver, painted in searing, larger-than-life colors.
[Tim “Shoestring” Young.]
Even the music Morgen selected fit perfectly – including one of my absolute favorite songs of all time, Lynyrd Skynyrd’s “Coming Home” (which I misremembered during the premier as being an Allman Brothers tune – SHAME ON ME!!)
[You can listen to Lynyrd Skynyrd’s “Coming Home” below to see what I mean. It’s even better when combined with the visual elements in “Drive and Delivered.”]
The music adds a loving and at times haunting aspect to what we see on the screen. Probably the best example is during Chris LeCount’s at times nightmarish haul from West Point, Mississippi to Charleston, South Carolina to deliver an Navistar MRAP military vehicle (gee, how convenient!). The scenes at night, in the rain, with the glow of traffic around him, backed by the wicked strings of a blues guitar and the crackle of the citizens band radio is all anyone (myself included) needed to instantly understand LeCount’s situation; to feel the stress of navigating those last nerve-wracking miles to his destination.
(Chris “Discount” LeCount.)
Now, I talked to a lot of drivers after the film and though they all loved it, many voiced expected complaints – a lack of traffic congestion scenes, car drivers dangerously cutting off big rigs at high speed, rude shippers or receivers, roadside inspections, struggles to find parking at night, horrid weather (snow, ice, etc.) and breakdowns (in a marketing campaign for a new truck model? Are you kidding me?)
Others noted the none-too-subtle hours-of-service violation by LeCount (a day that starts at 6 a.m. with delivery 12:10 a.m. the next exceeds 14 hours just a WEE bit), along with something similar as Donaldson relates his grief-stricken accumulation of 130,000 miles in under six months following the tragic death of his son, only 27, from a brain aneurysm back in 1997.
Even the happy homecomings for each driver at the end of the movie came under the cold glare of the cynic’s eye. A few folks told me that – in reality – oft times the “coming home” ritual is boiled down to “throw the dirty laundry in the corner and go straight to bed.” I say, sure, maybe that’s true, but isn’t the happy greeting by family and friends how anyone – but especially truck drivers, gone 15 or 30 days or more – WANTS to be welcomed home? Isn’t this film also about the reality we’d like to see more of, too?
[Tim Young with his family — the family he treasures so much.]
Morgen I think answered those and other countless questions this way: his film is for truckers, pure and simple. It’s supposed to tell a larger story through these three drivers about some – but not all – of the realities commercial truck drivers face every day on the road, as well as celebrate the real joys the profession holds.
“This film wasn’t made to explain everything in trucking – it was meant to give voice to truckers and their unique lifestyle,” Morgen says. “We wanted to share their attitudes and philosophies about trucking. These three drivers opened their hearts and souls to us, putting themselves out there for all to see. All human beings have an innate desire to share who they are and what they stand for with other human beings. This is what you see on the screen.”
[Driver Tim Young – a native of Flat Rock, Alabama – explains in his own words why he participated in this film. FYI, his infectious laugh and southern drawl are big highlights of the film.]
It isn’t all peaches and cream, either. There’s plenty of vocal frustration expressed by the drivers in this film – about traffic, last-minute load assignments, the stress on the family back home, the high cost of fuel, lack of respect, etc. – along a with a lot of leeriness at times about their lives being put on camera.
Donaldson says he very nearly quit on the first day of filming in South Dakota – going so far as to dial information for the nearest airport so he could fly home. “There were people and camera equipment so stuffed in my truck that I barely had room to move in my seat,” he said at the press conference. “I wasn’t used to being so confined like that.”
[Steven “Stingray” Donaldson.]
But he stayed – and ended up delivering one of the most powerful segments of the movie.
Let me tell you, too, no one is more pleased with this film — warts and all — than Al Saltiel, Navistar’s vice president of truck marketing.
“You just never know until you see it,” he told me after the premier. “You can’t help but feel really good about these guys on the screen, for as you get to know them, you like them more and more. Only along the way does the product story come out.”
[The site of the film premier in Dallas.]
He says the goal in creating this one-of-a-kind film was to capture the spirit and pride of today’s long haul trucker, documenting both the challenges and triumphs they face while on the road, hauling the goods that keep our nation move. “All I can say is the movie is infectious; it creates it’s own enthusiasm as it rolls along.”
Did it ever. The packed movie theatre that night rendered a pretty dramatic verdict, as well. They gave the movie a three-minute standing ovation.
“When you add up the attributes, we think it’s the way to go.” –Jerry Warmkessel, marketing product manager, Mack Trucks
So I attended a press conference yesterday to learn that Mack Trucks is now offering Bendix’s ADB22X air disc brakes the steer and drive axles of its Pinnacle Axle Forward and Axle Back tractor models, as well as on its Granite vocational truck product, as optional equipment. Now, air disc brakes are more expensive than the traditional drum brakes used by the trucking industry for decades – WAY more expensive – but Jerry Warmkessel, for one, believes that cost should be outweighed by all the benefits air disc brakes bring to the table.
(Bendix’s air brake for heavy trucks.)
Jerry’s old school, by the way – meaning he doesn’t dabble in snake oil or fancy pitches, despite having the word “marketing” in his title. He was awarded a Silver Spark Plug by the Technology & Maintenance Council back in 2004 – the group’s highest honor – in recognition for years of tireless service (he joined TMC in 1989) developing standards in partnership with fleet managers to make the industry’s equipment better for everyone, not just Mack.
So when he came right out and said air disc brakes can cost 50% to 80% more per axle than drum brakes – with front disc brakes lower in cost as they are less complex – you know he’s a straight shooter. Despite that higher initial price, Jerry thinks there are some serious savings fleets can achieve by switching completely to air disc brakes – outside of their biggest advantages, which are more stopping power and better braking in poor weather conditions.
[I’ll let Jerry explain the safety and maintenance benefits himself: just click on the video below.]
The reason braking systems are being debated in trucking right now is pretty straightforward: new federal stopping distance requirements that should go into effect later this fall. Finalized in March 2007, the new rules promulgated by the National Highway Traffic Safety Administration (NHTSA) cuts by 30% the amount of distance a Class 8 tractor gets to come to a complete stop from 60 mph. By 2009, all new three-axle tractors must comply with this new requirement – about 80% of all new tractor air-brake production – followed by specialty tractors in 2011.
(Mack’s Pinnacle tractor.)
So fleets have a choice – go with beefed up drum brakes designs or switch over the air disc brakes. Weight is the first hurdle to cross: while air disc brakes weigh slightly more than current drum brake packages (a fully air disc tractor system weighs 11 pounds more compared to one equipped with drums) the new wider drums needed to meet the new federal standards surpass the weight of air discs. Go with air disc over those wider drums and the truck slims down by 158 pounds – a pretty significant drop, says Jerry.
The other big savings comes on the maintenance side of the ledger. Air disc brake pads are easier to change out and last a lot longer than drum brakes. A Mack fleet that Jerry knows that runs all disc brakes on its tractor units reports that when they sell their trucks at 600,000 miles, 90% still have the original air disc pads in them.
Air disc brakes also self-adjust, bypassing a major out-of-service problem for many truckers. In its annual brake inspection safety blitz this year, the Commercial Vehicle Safety Alliance (CVSA) reported that 9.9% of the 11,908 vehicles inspected were placed out of service for brake adjustment defects.
(Mack’s Granite vocational truck.)
“Poorly adjusted or defective air brakes reduce the braking capacity of large vehicles and further increase their stopping distance,” said CVSA’s Executive Director Stephen Campbell. “Even under ideal conditions, the stopping distance of commercial vehicles can be twice as far as that of cars and other smaller vehicles.”
Air brakes have a compelling story to tell – but will the price differential prove too much to overcome? That will be the big question as air disc brakes begin to position themselves in the market.
“It’s pretty simple when you lay the facts out about retreads to fleets: they’ll save them a lot of dad-gum money.” –Robert “Bobby” Ford, assistant center manager, Goodyear Truck Care Center, Dallas TX.
Got a chance to sit down with Ford and Scott Schranck the other day and talk not only about how retreading truck tires can save fleets money but also about how proper tire maintenance can save them even more – and may determine whether fleets get an opportunity to retread their tires or not.
(Scott Schranck checks over tires being readied for inspection and then retreading. The barcode Scott is pointing to allows Wingfoot to track each tire individually for fleet customers — vital when it comes to compiling wear pattern evidence that may reveal alignment or other wheel issues.)
Schranck, regional business operations manager for Wingfoot Commercial Tire Systems LLC – the retreading arm of Goodyear Tire & Rubber Co. – explained to me that the economics of retreads is pretty simple. “On average, a retread is one-third the price of a new tire and is much more environmentally friendly,” he says.
[Below, Bobby Ford highlights the types of irregular wear that can damage truck tires — preventing them in some cases from being retreaded.]
Industry figures note that it takes 22 gallons of oil to manufacture one new truck tire, most of it used to make the tire casing, which is then reused in the retreading process. As a result, it takes only 7 gallons of oil to retread a tire – and that’s why retreading helps save annually more than 400 million gallons of oil in North America.
According to retreading expert Marvin Bozarth, one-time executive director of the former American Retreaders Association (now merged into the Tire Industry Association), more than 33.5 million tires on North American commercial vehicles wear out and must be replaced every year – and 16.5 million, or nearly 49% of them, will be retreads.
(“Old style” retreading: this is where new tread is carefully stitched on manually once a tire clears inspection, the old tread is “buffed” off and any minor nicks and dings are repaired.)
“[Truck] fleets favor retreads over new tires because it makes economic sense,” he says. “That’s because the cost of a retread is typically 30% to 50% lower than a new tire.”
In addition, the quality of retreads has improved in recent years to the point where they provide comparable life and performance to new tires, Bozarth adds. “In the 1960s and 70s, treads would wear out in 60,000 to 70,000 miles,” he explains. “Now a retread tire can go 200,000 miles or more, depending upon the wheel position and application. The tire construction has improved and today’s tread compounds are more resistant to heat so they wear better.”
For example, the Buy Recycled Business Alliance (BRBA), an offshoot of the National Recycling Coalition formed in 1992 in partnership with 25 major American businesses, said that when the original tread is worn off the casing of a large truck tire, less than 30% of the tire investment is realized. Retreading can recover the rest of the investment, the group notes.
(These retreads are being loaded into the “chamber” where they will be “cooked” or vulcanized so the new tread firmly adheres to the old casing. As you can imagine, this process creates a lot of heat — and with three chambers in Wingfoot’s Dallas location in operation at any one time, added to the outside temperature on a typical summer day of over 100 degrees, being inside the building is like being in a sauna at times.)
Thing is, though, truckers won’t get the benefits of retreading if they don’t care for their tires properly in the first place, stressed Goodyear’s Ford. “Tire wear comes from heat, generated by frication on the pavement and low tire pressure,” he says. “The lower the tire’s air pressure, the hotter it will run and the faster it will wear out. And we’re talking about running 10% to 15% under-inflated here, too.”
That includes not only maintaining proper tire inflation pressure but also pulling the tire before all of the original tread is used up – usually between 6/32nd and 5/32nd of tread depth, according to tire industry averages. Go below that and you risk damaging the tire casing and thus eliminating the possibility of retreading that tire.
I also toured Goodyear’s Wingfoot retreading facility down here in Dallas, TX, to get a glimpse of all the technology and care being expended on retreads – largely because more and more fleets in these tight economic times are beginning to realize retreads can save them some serious money.
[And of course, I could NOT resist the chance to have some fun, as the video below illustrates …]
“Typically, it takes a full day – one 12 hour shift – to go through the entire retread process for one tire,” Ford told me, trying to be heard above the din of tires being buffed, repaired, then retreaded. “Naturally, when fleets are sending us hundreds of casings at a time, we can’t turn them all around that fast, so we typically offer a seven-day turnaround window for them.”
About 75% of truck tire wear during the year occurs between April and October, leading to a falloff in retreading activity during the remaining months – the biggest drop from December through February – simply because the heat brought on by spring and summer temperatures is a major tire killer.
“It all depends on the state, though,” adds Schranck. “Florida, where it’s warm almost all year round, only sees a 10% drop in business over those months, whereas in an area like Dallas we may see a 20% to 25% drop.”
(Good as new: once vulcanized, painted and tagged, retreads get stacked in preparation for shipping back to customer fleet terminals — by trucks, of course.)
Ford stresses, though, that it all goes back to properly taking care of tires. “You must keep them properly inflated – not only does that prevent irregular wear, it improves fuel economy as well,” he says. “Take care of your tires and you’ll save a lot of money over time.”
“We are giving back to a soldier and his wife for the sacrifices they have made for our country. Ultimately what we are doing for Staff Sergeant Karl is very little compared to what he has done for us.” –Joel Ross, marketing communication manager, Avery Dennison Graphics & Reflective Products Division.
How do you properly thank our military veterans for the tours of duty in places like Iraq, Afghanistan, the Horn of Africa, and other nasty hotspots around the world? How can we even come close to offering a proper gesture for men and women who’ve lived through some of the worst trauma human beings can go through, day after day, month after endless month?
So it was a welcome piece of news the other day when I heard about Avery Graphics, GatorWraps, and a couple of other companies that joined forces to give Staff Sergeant Jacob Karl of the U.S. Marine Corps a one-of-a-kind homecoming present – a free-of-charge custom vinyl mural, upgrade suspension package, and high-toned chrome and polish treatment for his beloved 1997 F-250 pickup.
(Pictured left to right: Rod Voegele, GatorWraps’ president; Tammy Karl, Koby Karl, age 8; Sadie Karl, age 10; SSgt. Jacob Karl; and Bear Scharbarth, TAG Motorsports General Manager).
This is a 13-year veteran Marine, ladies and Gs, that’s served THREE tours in Iraq – each lasting more than a year, leaving his wife Tammy to hold down the home fort solo for some long, lonely stretches. So how cool is it that several companies stepped up to the plate to make his homecoming to Camp Pendleton even more special?
For those interested in the nitty gritty, Avery donated its popular MPI 1005 EZ RS film and DOL 1100 matte overlaminate for this truck wrap project – a wrap custom-designed with the new Mossy Oak Break-Up pattern, printed and then installed by GatorWraps at its Ontario, Calif., location. Note that this vinyl wrap can be adjusted or removed without damaging the truck’s original paint, notes Avery.
Tammy Karl, SSgt. Karl’s wife, knew her husband has a weak spot for the Mossy Oak Break-Up pattern so she contacted GatorWraps a few months before he rotated home on Aug. 7 to see if it was possible to create a special design for his truck. Avery, GatorWraps and Mossy Oak didn’t hesitate to grant Tammy’s request – creating a unique truck mural that includes the U.S. Marine Corps emblem, silhouettes of Marines, and the shadow of a bull rider to reflect SSgt. Karl’s love for the rodeo.
That’s not all, of course. Tag Motorsports installed a Banks Stinger 2 Power suspension free of charge, with Banks Engineering donating the system. Herbie Auto Detailing also got into the act with a full detail & chrome polishing of Karl’s truck as well.
So, after this latest tour spent training Iraqi police forces, let’s hope SSgt. Karl and wife Tammy get some time off to enjoy his new custom truck and each other’s company. SSgt. Karl, thank you for your service to our country and to us – “Semper Fi” indeed.
“If you wish to prosper, let your customer prosper… When people have learned this lesson, everyone will seek his individual welfare in the general welfare. Then jealousies between man and man, city and city, province and province, nation and nation, will no longer trouble the world.” –Claude Frédéric Bastiat
OK – THAT quote is definitely over the top! But the extremity of what Bastiat (b. 1801, d. 1850, a French economist, legislator, and writer who championed private property, free markets, and limited government) said is meant to highlight how important the relationship is between customer and service provider – a relationship that’s becoming more and more critical every day in trucking.
Of course, many shippers in the freight world are focused solely on price (and lord knows, many shippers and receivers docks need electroshock-style customer service training for the way they treat truck drivers) so the value of courtesy, hard work, and diligence oft times get lost in the demand for low cost.
But not always. I talked to Gary Kelly, senior director of transportation and distribution for Schwan’s Logistics, a few months ago about this subject after his firm – a division of the renowned Schwan Food Company, based in Marshall, Minn. – presented a series of wards to contracted carriers are rated for their on-time delivery, customer service, invoicing accuracy, damage free deliveries and technology.
K&J Trucking, Inc., of Sioux Falls, S.D., received the Gold Carrier of the Year award from Schwan, while Floyd Wild, Inc., of Marshall, Minn., received the Silver Carrier of the Year award and Triangle Trucking, Inc., of Salina, Kan., received the Bronze Carrier of the Year award. Doug Bradley Trucking, Inc., of Salina, Kan., received the People’s Choice Award — given for outstanding customer service.
(Pictured left to right: Gary Kelly; Jim Gray, Marketing Manager, K&J; Shelley Schipper, President, K&J;
Joe Buysse, Carrier Relations Manager, Schwan’s Logistics.)
“We are well aware of the high level of commitment and fully appreciate the hard work that our entire carrier base does day in and day out,” said Kelly. “Their hard work assures that our company and our customers are serviced in the most effective manner. These carriers that we have specially recognized and honored clearly represent the best of the best.”
It’s this level of customer service that reaps rewards for truckers over the long term – but it doesn’t happen without constant attention and training. Professor Jerry Osteryoung from the college of business at Florida State University has a few thoughts on the subject, gleaned not only from the classroom but from real life experience as well. Here’s why he thinks ongoing customer training service is essential in the business world today:
“I went in for some routine tests at a doctor’s office. My appointment was for nine in the morning, and I showed up at 8:45 a.m. (for some reason, I am always early). The receptionist told me to have a seat in the waiting area, and that they would call me when they were ready.
At 9:45 a.m., they still had not called me. I went up to the same receptionist and asked her when I would be called. It did not seem to matter to her that I had been waiting, but she begrudgingly said that she would check. She returned a short while later saying that one of the machines was down, and that they would get to me as soon as they could. When I asked her how much longer this would be, she said that she did not know.
During this entire exchange, the receptionist’s attitude was completely uncaring, and she never did apologize for the wait. When I finally told her that I was leaving, she asked if I wanted to reschedule my appointment. Of course, frustrated by the experience, I did not want to at that time.
When I got back to my office and calmed down, I called the office manager at the doctor’s office and explained the problem. She said she did not understand what had happened, as the front office had received training in how to deal with these types of issues. When I asked her how long ago this had been, she said she thought it was about a year and a half ago.
Evidently, the staff had received the proper training a long time ago, but they had since lapsed into old forms of habitual behavior. But if you are going to change behavior and maintain it for any length of time, you must have continual training to reinforce the wanted behavior. Great firms have customer service training every month to ensure that exceptional customer service stays in the forefront.
In my case, the receptionist should have noticed how long I was waiting and done something about it. Basically, she needed to take action instead of being a passive receptionist. The real problem was not that a machine was broken, but that no one told me about it or really seemed to care when I brought up the problem.
Obviously, this experience was awful, but with additional training, it could be easily fixed. Customer service is a critical function of all offices – medical as well as non-medical. It is an important way to keep your customers returning. Since it is roughly 15 times more expensive to get a new customer than it is to keep an existing one, maintaining your customer base is vital. Once a customer walks in your door, it is the job of customer service to keep that customer happy and returning.
Every firm needs to have a continual customer service training program for all their employees that interact with customers. This training could use role-playing to simulate various problems and situations the staff might encounter. Having other staff observe the way an employee deals with a simulated situation is a powerful motivator for changed behavior. Customer service training could also cover the appropriate words to use when a customer is upset, current customer issues, and how to be proactive in customer service. That will ensure that you maintain great customer service.”
No doubt the carriers working for Schwan know more than a little about how that gets done.
“As these new statistics show, we are making progress, but far too many of our friends, neighbors and family members are still getting killed or seriously injured.” – Transportation Secretary Mary Peters.
The statistics Madame Peters, head of the U.S. Department of Transportation (DOT), are referring to are these: In 2007, the overall number of traffic fatalities fell to 41,059 – the lowest number since 1994 – pegging the fatality rate per 100 million vehicle miles traveled at 1.37, the lowest fatality rate on record, she noted.
Peters added that 2.49 million people were injured in highway crashes last year, the lowest seen since the National Highway Traffic Safety Administration (NHTSA) began collecting injury data in 1988.
One the trucking side of the safety ledger, the news is even better. The total number of traffic fatalities in large truck involved crashes decreased 4.4% in 2007, from 5,027 in 2006 to 4,808 last year – the lowest level since 1992. Truck occupant fatalities decreased 0.4% and fatalities for occupants of other vehicles involved in the crash dropped 5.2%, while fatalities for people who were not a vehicle occupant, such as cyclists or pedestrians, decreased 4.7%.
This is all good stuff – if not great stuff – but the questions we need to look at are what’s behind this big drop … and is a drop of this magnitude sustainable?
Let’s see if we can answer the second question first. One reason I think we’ll see even lower highway fatality and injury rates for 2008 is that people are simply driving less – way, WAY less. In June this year people logged 12 billion FEWER miles on the road than they did in June 2007 – and with fewer people on the road, obviously, fewer fatalities should occur. It also seems that people are slowing down for the same reason they are driving less: sky0high fuel prices.
Though gasoline and diesel costs have been in retreat for 26 days now, they are still far higher than last year, which, hopefully, means people will continue to drive less, thus reducing their chances of being injured or killed in a highway crash. (We’re also reducing the golden lining of OPEC’s pockets a little bit – to the point where they are mightily worried, as oil production has jumped 24% over the last month. But that’s for another post for another day.)
So, now, back to the first question: WHY are highway fatalities and injuries – especially those related to large trucks – in such rapid decline? Governor Bill Graves, president and CEO of the American Trucking Associations (ATA) said recently that slower speeds being enacted by trucking companies larger and small to save fuel are also tangentially helping reduce crashes. He also noted that the slumping U.S. economy is reducing mileage for many truckers, too, which is reducing their exposure to crash risks as well (though this isn’t what we would call a ‘win-win’ by any stretch of the imagination.)
Technology is playing a role as well. “Some of the decline in fatalities may be attributed to trucks utilizing more safety technologies such as collision avoidance, lane departure warning, stability control and brake stroke monitoring systems,” he noted – one reason ATA is supporting the Safety Technology Tax Credit Bill (S. 3428) introduced at the beginning of August that focuses on providing incentives to add such systems to trucks.
The bill – which mirrors H.R. 3820, the Commercial Motor Vehicle Advanced Safety Technology Tax Act, introduced in the House of Representatives last year – offers a tax credit equal to 50% of the cost of a qualified system up to $1,500; allowing for a total credit of up to $3,500 per vehicle; limiting the qualifying taxpayer to a maximum credit of $350,000 per taxable year; and extending credit eligibility for the purchase of school buses, intercity buses and vehicles used in commerce weighing over 26,000 lbs.
“The statistics from this most recent study also show that the efforts of law enforcement agencies to focus on the most likely causes of crashes, such as speeding and impaired driving, are making our highways safer,” ATA’s Graves added – stressing that this continued safety improvement occurred under the new federal hours-of-service (HOS) regulations, offering to his mind more evidence that the regulations are working and should be retained.
He also noted that ATA continues to call for a national speed limit of 65 miles per hour, while asking DOT to require speed governors for heavy trucks be set at 68 mph on trucks at the time of manufacture, to both improve highway safety and reduce fuel consumption. We’ll see how that effort fares in the months ahead.
However, it’s not all peaches and cream, as fatalities among motorcycle riders and passengers increased significantly. DOT Secretary Peters Motorcycle fatalities now account for 13% of all fatalities and, in 2007 alone, the number of motorcycle riders or passengers killed on the nation’s roads increased 6.6% over the previous year. No doubt this is partly due to more people trying out motorcycles as a way to cut their fuel bills and commuting costs, though that’s a very risky way to do it.
The big takeaway from all of this is simple: the highways are getting safer, with big rigs contributing to that safety improvement in a huge way. Let’s hope that trend line continues – and that trucking gets some props for making it happen.
“The absolutely number one thing we focus on is providing top notch service to the customer. If we didn’t provide that, we wouldn’t be nearly the size we are today.” –Brett Hartman, vice president and director of operations for Truck Enterprises Inc. (TEI), which operates eight truck dealerships throughout Virginia.
Sit and talk with Brett Hartman for a while and you’ll quickly understand why his family’s had such success in the truck dealership business.
(Brett Hartman in front of the trucks for sale at TEI’s Manassas Va. location.)
Hartman’s grandfather founded what became Truck Enterprises Inc. (TEI) in Harrisonburg, Va., back in 1961 as a sideline business to his trucking company – an ambitious thing to do with a family of four kids underfoot. Brett told me, though, that the time soon came when his granddad had to choose between his trucking company and dealership – with the dealership winning out.
Not that it was a huge operation, you understand. “It was a small place – barely fit five trucks,” Brett told me. But oh how they grew that small operation over time, slowly but steadily expanding TEI’s reach, opening dealerships in Richmond Va. (1971), Roanoke Va. (1978), Kaiser Md. (1985), Hagerstown Md. (1995), Chesapeake Va. (1996), Lynchburg Va. (2004) and finally Manassas Va. (2007).
[For fun, I made a short video of my visit to TEI’s Manassas Va. location. Enjoy!]
The reasons TEI expanded to each location differed – some were heavy with current customer business, so a new location was needed to adequately serve them; others had strong truck populations where TEI felt good market share was available for the taking – but the reason the company succeeded at each boiled down to two reasons: an almost fanatical devotion to customer service and the grit, determination, and loyalty of the company’s 350 employees.
All the dealerships have all-makes and models parts and service operations working multiple shifts and Saturdays to meet the needs of customers. Franchises include Kenworth, Volvo and GMC trucks, Rhodes and Ox bodies, and Rhodes and Transcraft trailers. Full service body shops are located in Harrisonburg Va. and Richmond Va., with Harrisonburg also featuring Josam frame straightening and alignments systems.
(TEI’s “youngest” dealership in Manassas Va. sits on 12 acres 25 miles outside of Washington, D.C., just off I-66. Much of that property is as yet undeveloped, giving TEI plenty of room to expand as business volume grows.)
“All I really am here for is to support our operations – we let our general managers really run things day-to-day, telling them to run each dealership like it was their own business,” Brett explains. “We give them a lot of flexibility to address customer needs. We want them to have the authority to make those crucial decisions, with corporate really just setting the overall strategy and guidelines.”
Brett feels that if every employee understands and acts on the philosophy that the customer comes first and that it’s a team effort to serve the customer – without regard to what position that particular employee holds – then the foundation for ultimate success is in place. “Hey, if a customer needs a part and I am heading up that way, I’ll take that part with me,” he told me. “I get those 1 a.m. calls from a customer broken down in South Dakota, and we do what wee can to help them even if though they are out of our area.”
[That mentality extends to the company’s heavy truck technicians as well – as a short chat with Jimmy Bailey below illustrates.]
The Hartman’s boil it down this way: their strategy is to build lasting relationships with current customers and attract new customers by providing exceptional products and services – all of this accomplished through talented people committed to high ethical standards; people that anticipate the customer needs and exceed their expectations.
“The mentality is, if we take care of the customer, then the business will take care of itself,” Brett explains. “That’s why we try to be a one-stop shop – selling new and used trucks, offering finance, insurance, maintenance, stocking our parts inventory properly, etc. – so we can take care of the customer. I don’t ever want to be tasked with the customer calling to say ‘you didn’t take care of me.’”
That’s one reason Brett spent two and a half years centralizing TEI’s finance arm, so the company’s economies of scale – the business of several dealerships instead of each one individually – could pay off for the customer. “It gives the customer better rates – that’s why we did it,” he says.
Of course, maintaining that philosophy in the tough market of today isn’t easy. The Hartman’s saw the writing on the wall about a year and a half ago in terms of sales of new trucks falling way, way off, so they started switching their focus from trucks sales to parts and service.
“As trucks get older and aren’t traded out, they need more maintenance, they need more parts,” Brett said. “So we saw this as an opportunity to build more relationships with customers through exceptional parts and service capability, which we hope to turn into truck sales as well when the market returns.”
(Trucks of all makes, modesl, sizes, and applications get worked on at TEI’s Manassas dealership — and at all of its other locations as well.)
In the meantime, everyone is focused on cutting expenses and trying to boost absorption to 100% or better, so parts and service business can be in a position to pay the bulk of the bills. “That strategy takes the pressure off truck sales in a down market and gives us more flexibility,” Brett explained. “We’re not yet where we want to be with absorption, but we’re on the right path. And we’re all focusing on this as a group – general managers, sales people, our parts and service departments, everyone.”
It all adds up to a pretty draining job for Brett – on average, he gets 150 emails a day – moving from dealership to dealership across large swaths of Maryland and Virginia, in his role as coach, trainer, fire support, and morale booster. But he wouldn’t have it any other way.
“The most stressful part of the job is knowing that 350 employees and their families rely on us for their livelihood – that weighs most heavily on me,” he said. “But I take a lot of pride in watching them grow and create success, getting to that level to where they are excited to come to work, that it is a career for them, not just punching a time clock. They make me look good.”
Brett notes that “can-do” attitude among TEI’s employees is what helped the company expand from one to three dealerships back in his grandfather’s day and from three to eight over his father’s tenure – and should help the company keeping right on growing, though still at a very deliberate pace.
(The management team at TEI Manassas. From right to left: Al de Charleroy, sales manager; Dane Tice, service manager; Brett Hartman; Adam Harms, parts service manager; and Patti Deariso, office manager.)
“We’re not a mega-dealer – we’re not expanding by three or four locations a year,” he said. “When we open a location, we take our time and grow into it, keeping the focus on serving the customer.”
Brett points to TEI’s Chesapeake dealership as an example; a facility that struggled for a while, reaching just a measly 4.3% market share by 2002 until a crack team of employees moved in, re-focused the business, and drove market share up to 23% by 2006.
“Once we get customers believing in us and what we can do for them, that’s when we really shine,” he says.
“When I got into this industry in the 1980s, I wouldn’t tell people I was a truck driver – I’d just say I drove for a living. But as time has gone on, that’s really changed. Driving a truck is something to be proud of. We know what we stand for out here, for without us, everything stops.” –Wayne Crowder, relay driver for FedEx Freight and a captain with America’s Road Team.
Talked to Wayne a few days ago, and man, what a charge I got from my conversation with him! This guy really, REALLY loves driving big rigs for a living. Not only did he dream as a kid about being a truck driver when he grew up, Wayne frankly admits that his driving career actually surpassed his boyhood dreams – a very rare thing these days.
“I never dreamed driving a truck could be this great,” he told me. “I grew up on a farm a bit of a motorhead, really fascinated with trucks and trucking. More than that, though, as part of the Road Team I’ve given lots of speeches to kids and competed in truck driving championships. I’ve really lived the glamorous side of trucking – the last few years have been awesome for me. I just wish every driver could be a lucky as me to experience these things.”
(Wayne Crowder, speaking to the media as part of his Road Team captain duties.)
However, as quoted at the start of this blog entry, it wasn’t always so for Wayne and his brethren. When he started driving almost 25 years ago, truckers had a very different – and very negative – image. As a result, he kept his head down and talked little about his career choice with others outside the industry. Not anymore, however.
“I tell kids today that from them in this room, one day there will be doctors, lawyers, maybe a few astronauts, maybe even a U.S. president – and truck drivers,” he told me. “Because driving a truck – like being a doctor – is a necessary profession. We’re needed. That’s why there are so many trucks on the road in the first place, it’s just that people don’t realize why we’re there.”
Wayne’s also a big believer in sharpening the professionalism among drivers – which is why he’s a big supporter of the National Truck Driving Championships (NTDC), an annual event organized by the American Trucking Associations (ATA) that’s free to the public. He talks about why this is such an important event in his own words below:
(Wayne explains in his own words the importance of the annual truck driving championship.)
As part of his Road Team duties, Wayne spends a few days a month talking to fellow drivers about the importance of image and safety for the industry, while educating the motoring public about safe driving practices and the importance the trucking industry.
And he’s definitely got the chops for it, accumulating 1.3 million accident-free miles over his two-plus decades on the road along with a host of trophies. He’s taken home honors as Rookie of the Year at both the state and national level, won first place in his division at the Kentucky State Truck Driving Championships in 2004 and 2005, plus earned the title of National Grand Champion at the 2004 NTDC as well. He was also named Kentucky Driver of the Year in 2007.
(Want to see how tricky it is to win? Then check out Warren Lewis and his championship run at last year’s NTDC.)
“People just don’t realize what it takes just to get the chance to compete at the NTDC,” Wayne explained to me. “You must have been accident-free for at least a year before you are allowed to compete, then you must work your way up through local and state competitions before reaching the national championship.”
Events like this also put a driver’s skills to the test among his and her peers, too – not something taken lightly, Wayne noted. “I also learn something new every time I compete, elevating my ‘game’ in terms of driving skills and safety management to the next level.”
(Here’s a slideshow from the 2006 National Truck Driving Championships, to give you a flavor of what the entire event is like.)
Not that it’s all fun and games for Wayne, though. He lives in Lanesville, IN and operates a Volvo day cab, pulling doubles, between Louisville, KY, and Hebron, IN. Married with three children, Wayne said that while trucking provides a good living for his family, driving and his Road Team captain responsibilities do takes time away from them on occasion – and his other hobbies of fishing and line dancing.
Still, it’s a career he wouldn’t trade for the world. “I tell people I don’t work in an office as my truck is my office,” Wayne told me. “It’s great – I am out on the road, doing what I love, with no one looking over my shoulder. Frankly, I don’t think I’d like working in an office.”
“Let me remind you that credit is the lifeblood of business, the lifeblood of prices and jobs.” –President Herbert Hoover, from a speech given at Des Moines, Iowa, October 4, 1932
Scary, I know, quoting President Herbert Hoover at a time when our economy is lurching from crisis to crisis (NOT that we are in danger of repeating the Great Depression of the 1930s … though it really feels like it some days.) He also probably wouldn’t be considered the best person to draw fiscal wisdom from, either.
But as Professor Jerry Osteryoung with the college of business at Florida State University notes, Hoover hit on a very important linchpin for any company, whether you’re involved in trucking, retail, construction, etc. – you need a steady supply of credit to stay in operation.
Lines of credit, however, are getting hard to come by nowadays, as banks continue to reel from their extremely reckless mortgage lending patterns of the recent past. Even stalwart trucking clients are finding their credit lines cut short as banks scramble to increase available capital to cover their losses. Finding new sources of credit is tough, but not impossible, no matter what sector of the economy you’re in, as Professor Osteryoung explains:
“Financial institutions are in such a precarious position. With the economy slowing down and significant losses in their real estate portfolios, so many banks are cutting back credit to both new and established accounts.
With unknown losses from the sub-prime mortgage melt down still to come, plus the financial difficulties of Fannie Mae and Freddie Mac, it is not a good year for banks. With stock values declining by more than 40% and continuing to slide, many national, regional and local banks have taken a beating. The bottom line is that financial institutions are in trouble with both share price and regulators. Losses are going up and share prices are going down.
What is happening? Financial institutions have been incurring losses, and they just cannot afford to be exposed to any further losses. Banks operate on such thin margins, and because losses jeopardize the health of banks, the regulators and banking executives are being very cautious about lending any additional funds. They are even looking at existing loans as well.
We were helping a firm that had been banking at the same bank for over 15 years. This firm went to draw additional funds on their line of credit, and the bank said ‘No’ – a response that was clearly within their rights, but totally unexpected. This firm had to scramble to find another source of funding to help pay for its season increase in inventory. They are now looking for a new financial institution.
With so much happening in the financial world, each firm must protect its ability to acquire the funds it needs to operate. Firms in need of additional financing will find that there are three alternatives. First, they will get additional funding from their existing financial institution. Second, they will not get the funding they need from their financial institution and will find an alternative source of funding. Finally, they will not get the needed funding and will not be able to find alternative sources of financing.
Obviously, if your existing financial institution is willing to provide additional funding, then you really do not have a problem. However, if your existing financial institutions will not provide the necessary funding, you will have to look elsewhere. I believe that the best place to find replacement funding is local financial institutions. With the exception of Wells Fargo, big national banks are being hit hard and are just not willing to extend themselves. However, local financial institutions typically have much better financials than their national counterparts.
When hunting for local financial institutions, look for those that have the knowledge and experience to make business loans. You might get several turn downs, but you must persevere. SBA guaranteed loans, although more expensive, are another type of loan that local banks can offer. These loans reduce the bank’s risk.
If you cannot find an alternative source of funding, you will need to consider slowing down your business commensurate with the amount of financing that you have. While this is not pleasant, it may be necessary just to survive. Using a spreadsheet, you can easily model how much sales you can support with a fixed amount of debt. It really is worth going through this process.
Regardless of the level of funding you are able get, it is important to be prepared with a plan in the case that you are unable to get the required financing.”
Indeed, tough medicine to swallow, especially for the small trucking operators out there. But there’s not much one can do when the financial sector is in such upheaval.
As usual, you can reach Professor Jerry Osteryoung by e-mail at jerry.osteryoung@gmail.com or by phone at 850-644-3372.
“I don’t remember it happening because I fell asleep at the wheel, but when I woke up we were in an accident.” –Candy Baldwin, as told to the Washington Post from her bed in Maryland Shock Trauma Center, following an accident on the Chesapeake Bay Bridge that left truck driver John Short dead.
Let me give you this scenario. A young truck driver (let’s say 25 or 26, been driving for three years now) falls asleep at the wheel of his 80,000-pound rig and causes an accident, leaving a 57 year-old man dead – a man with a wife and kids.
The trucker has no record; he’s a good kid, well liked by friends, co-workers, and family. His log book is clean, but he’d been at a friend’s wedding, stayed up most of the day and night, before going on duty at 3 a.m. Didn’t get a lot of sleep – in fact, didn’t sleep much at all, though he was off-duty for the required 10 hours.
(The Chesapeake Bay Bridge — site of Sunday’s tragic car-truck crash.)
The accident itself is front-page news – ties up weekend traffic on a major bridge for a whole day, leaving thousands of people stuck for hours, fuming in their cars – as it happens not 50 miles from the nation’s capital.
What do you think happens next?
Several things you can count on: civil lawsuits by the dead man’s family against the truck driver and his company, alongside manslaughter charges against the trucker from the state. The Federal Motor Carrier Safety Administration (FMCSA) would swoop in to perform an exhaustive safety audit of the company and there would be more press conferences than you can count by politicians, safety groups, etc., calling for more laws, stiffer penalties, and greater enforcement, covering the entire trucking industry in broad, brutal brushstrokes of negligence, incompetence, and other vitriolic prose.
OK then. Now let’s flip it around.
Car driver, just 19 years old: up all night at her mother’s wedding. Falls asleep at the wheel. Resulting accident leaves 57 year-old truck driver dead and traffic snarled for days. You know the accident I’m talking about, too.
Now what happens? More importantly, what’s not going to happen?
[First of all, give the kid credit. She admitted she fell asleep. And my heart goes out to her in a big way – not only is her body badly broken, not only does she face years of physical rehabilitation, she’ll never ever forget that this crash killed somebody.]
First of all, there’s no logbook to check. She’s not required to have one. No rule says she must have 10 hours off duty before getting behind the wheel. (Not that the 10-hour rule would’ve automatically made her well-rested and ready to drive – you can’t legislate good sleep, just the way you can’t legislate human behavior, though try as we might).
You also won’t see FMCSA visiting her anytime soon. And public press conferences, by politicians and national safety groups, condemning her in harsh, provocative language? I sincerely (and hopefully) doubt it.
Here’s the thing, though, and this is important. Fatigue caused this accident between the car and the truck – and fatigue is a far, far greater problem for car drivers than truckers.
(You just can’t legislate good, restful sleep — for truckers or car drivers.)
You may remember the FMCSA’s exhaustive Large Truck Crash Causation Study published last year. Based on three years worth of study and a detailed examination of over 965 truck-car collisions, the feds found that car drivers caused 55% of those crashes. More importantly, however, they also discovered that on average car drivers we’re TWICE as likely to be fatigued as truck drivers.
The study also found that human error was by far the leading cause of these crashes, ranked among the top eight factors for truckers and car drivers. But notice the huge differences in exactly what KINDS of human error are involved between the two groups:
Truck drivers:
1. Following too close
2. Made illegal maneuver
3. Inadequate surveillance
4. Traveling too fast for conditions
5. Inattention
6. Stop required
7. External distraction
8. Brake problems
Car drivers:
1. Illegal maneuver
2. Fatigue
3. Illness
4. Inattention
5. Internal distraction
6. Inadequate surveillance
7. Illegal drugs
8. Too fast for conditions
Is it not surprising that fatigue, illness, and illegal drug use are major issues in the crashes FMCSA studied among CAR DRIVERS … yet not truck drivers? That maybe logbooks, medical qualifications and random drug testing might be needed for CAR DRIVERS today? It does make one wonder …
It brings to mind something Jeffrey Loftus, a transportation safety technology specialist with FMCSA, said during PeopleNet’s 6th annual User Conference last week: “Everyone is to blame in these crashes; the bottom line is, it’s a shared responsibility.”
That’s a truth, however, we’re having a hard time recognizing in our driving culture.
Been out of the loop for a few weeks, so this will be a short blog...... starting with as I said in an earlier blog last month, OIL has gone down and I still believe will continue to slide down to $80.00 per barrel. The national average price of a gallon of diesel fell significantly for the third week in a row, falling more than 10 cents to $4.502.
That's according to weekly average figures published each Monday by the U.S. Energy Information Administration. Those figures showed prices dropped 10.1 cents per gallon from last week's $4.603, which in turn was more than 11 cents lower than the week before.
The highest average was found in the New England region, at $4.735; the lowest in the Midwest at $4.419.
This week's average is still $1.604 more than it was a year ago.
Most companies if not all, are reporting profit declines even though the have collected fuel surcharges. This happened because fuel kept rising at a faster rate. For example UPS post a 20.9% earnings drop due to fuel cost.
A top trucking official along with a professional truck driver Wednesday urged the Bush Administration and Congress to implement a comprehensive energy plan that will ensure an affordable supply of oil and limit the effect of rising fuel costs on the U.S. economy.
Speaking at a press conference hosted by Senator Mitch McConnell and the Republican Leadership, Barbara Windsor, President and CEO of Hahn Transportation of New Market, Md., said the United States needs a comprehensive energy plan that decreases demand for fossil fuels, increases domestic energy production and ensures transparency in the petroleum markets.
"This is a big problem that requires a big solution," Windsor said. "Trucking delivers America. Trucks transport virtually 100 percent of groceries, medicine, clothing, appliances and even the fuel that's pumped at the local gas station. Rising fuel prices not only hurt the trucking industry, but the entire American economy."
Tony Sifford, a professional truck driver with over 1.8 million accident-free miles, compared the year-over-year cost of fuel for his regular roundtrip route from Hillsville, Va., to Dallas, Texas. At this time last year, Sifford's fuel bill was $1,680. That same trip recently cost $2,826.
Sifford said truck drivers are doing their part to reduce fuel consumption by slowing truck speeds, reducing idling and properly maintaining equipment. Such steps, however, do not begin to offset the rising cost of fuel, he said.
"I'm trying to do my part," Sifford said. "But we can't continue to run our business at these high prices. The high cost of diesel is cutting into our already tight margins. I've had a number of friends go out of business already this year. We're feeling it at the pump. Something needs to be done."
We Really need to fix this fuel cost problem somehow.....things I believe will stay the same now until second quarter of next year.......so buckle down, we have no choice.
August 5th, 2008 11:48 am
TruckNation's Blog!
July 23, 2008
Slogging through
“Slow U.S. economic activity and fuel price increases hit us and our customers during the quarter. Even though economists do not predict a recovery until 2009, we anticipate that the second half of 2008 will generate modestly better results than the first half, assuming business conditions do not worsen.” –Kurt Kuehn, CFO, United Parcel Service.
Things are tough, no doubt about it. Fuel costs are through the roof, while freight volumes remain stagnant or down. It doesn’t help that the oh-so-smart whizzes from financial sector are finally showing how truly stupid they’ve been with the whole mortgage-back securities debacle, with Wachovia but the latest big banking concern to own up to its “misjudgments” – to the tune of nearly $9 billion in losses for the second quarter this year.
Freight companies, though, seem to be muddling through all of this. It’s not pretty, however: tons of truckers have closed up shop (almost 1,000 since the start of 2008, including big names like Alvan Motor Freight and Jevic Transportation). Yet those that remain seem to be making the best of it, digging in until better days return.
“Although operating conditions in the second quarter were challenging, we firmly believe the long-term growth fundamentals for our company and for our industry are very favorable,” said Scott Davis, chairman and CEO at United Parcel Service. “We are helping our customers manage through this difficult period while doing everything we can inside UPS to adapt to current conditions.”
Big Brown reported a 6.7% revenue increase in the second quarter but an 18.3% decline in earnings to 85 cents per share, compared to $1.04 per share during the same period in 2007. Increasing fuel costs and a stagnant U.S. economy caused the earnings decline in both UPS’s U.S. domestic and international package segments, said Davis, though in contrast, its supply chain and freight segment posted a substantial improvement in profitability.
From April through the end of June, UPS delivered consolidated volume of 959 million packages, essentially unchanged from the second quarter last year. Revenue rose to $13.0 billion and revenue per piece increased 5.9%. Yet results were negatively affected by a 67% increase in fuel expense, a reduction in premium product volumes, and weakness in U.S. imports.
The slow U.S. economy caused average daily volume in the U.S. to decline 1.3% in the quarter and also contributed to a more pronounced reduction in premium products than in the previous quarter, with volumes dropping 0.7% for ground shipments. These factors, along with the rapid increase in fuel cost and the impact of the two-month lag in the application of the fuel surcharge, were responsible for the declines in second quarter operating results, UPS said. International results were also negatively impacted by higher fuel costs, declining U.S. import volume and slower growth in premium services in the major regions of the world, the company noted.
UPS Freight LTL revenue grew 7.2%, but shipments declined 2.3% as a consequence of the stagnant U.S. economy. However, its supply chain services segment saw revenue increase almost 11% with operating profit climbing more than 50% – driven by the continued strong performance in UPS’s forwarding and logistics businesses.
Kurt Kuehn, UPS’s CFO, noted that while the company is projecting profits for the second half of the year on the order of $1.78 to $1.98 per share compared to $1.72 per share for the first half of 2008, comparisons to last year’s results would be more difficult in the third quarter and moderate in the fourth. “We are taking the necessary steps to control costs, add value for customers and grow our business while adjusting to the realities of today’s challenging environment,” he added.
Trucks sales are, of course, choppy as a result of all of this. “The dramatic increase in diesel prices, coupled with declining housing starts and auto production, impacted U.S. and Canadian Class 8 truck sales in the first half,” said Dan Sobic, senior vice president ay Paccar, parent company of Peterbilt and Kenworth. Paccar projects that Class 8 industry retail sales for 2008 are expected to be in the range of 150,000 to 165,000 units.
The truck market in Europe, however, looks a little brighter. “The European economy, especially Central Europe, continues to experience moderate growth,” noted Aad Goudriaan, president of DAF Trucks, another Paccar subsidiary. “Industry truck sales in Europe above 15 tonnes are expected to set a record of 350,000-360,000 units compared to 340,000 in 2007.” He said DAF is increasing production by 5% in September to meet strong customer demand.
Back on the home front, though, it’s definitely going to be slow going for a while for truckers – and no one is looking through rose-colored glasses at the months ahead.
“Though this economic decline has not been as deep as others in the past, it appears to be lasting longer,” said Robert Davidson, president and CEO of Arkansas Best, the holding company for LTL carrier ABF Freight System, in its second quarter earnings statement. “As a result, ABF will continue to carefully manage labor costs and equipment levels to match available freight in our system until economic conditions show meaningful improvement.”
July 23rd, 2008 3:11 am
TruckNation's Weekly Blog!
I want to apoligize to everyone as I have a problem with my programIt is getting fixed right now. I will resent today's articles when the program is fixed.
Thanks.
Robert
July 7th, 2008 2:11 am
TruckNation's Weekly Blog!
Fuel-Saving Tires Highlight Michelin "Go Wide. Save Green." Tour
7/7/2008 Michelin's North American "Go Wide, Save Green" tour will feature real world examples of commercial trucking fleets and owner-operators who have benefited from the improved fuel efficiency, weight savings, and time savings that Michelin X One wide single tires deliver.
"With the cost of diesel fuel now averaging almost $5 per gallon, we believe this message will truly resonate with truckers who pay more than $1,000 per fill up and travel 100,000 miles or more each year," said Marc Laferriere, vice president of marketing, Michelin Americas Truck Tires. "Michelin X One tires provide an excellent means to improve a truck's operating efficiency. Not only does this save the trucking company green on their bottom line, but it also saves the environment green by reducing fuel consumption and CO2 emissions."
The Michelin X One tire replaces conventional dual tires with a specifically designed wide single tire and wheel. Introduced in December 2000, they have proven success in improving fuel economy between 4 and 10 percent when used in both drive and trailer positions while reducing weight, which enables trucks to carry more payload per vehicle.
The tour will make regional stops in eight locations across the United States and Canada and is designed to demonstrate Michelin's wide-based single tire technology and fuel-saving benefits. Participants will also have the opportunity to see product applications and participate in ride and drive activities, courtesy of Daimler Trucks North America and Utility Trailer.
The Iowa 80 Trucking Museum, located at the Iowa 80 Truckstop in Walcott, Iowa, will celebrate the opening of its new Museum Visitors Center with a ribbon cutting on Thursday, July 10 at 2:00 p.m. during the Walcott Truckers Jamboree.
The Museum Visitors Center adds 5,000 square feet to the existing structure bringing the total to approximately 20,000 square feet. The addition includes a movie theater, more truck display space, restrooms and a gift store.
Now the Iowa 80 Trucking museum can house a total of 45 trucks for display at any given time. A sidewalk has also been constructed from the truck parking area to the museum so professional drivers can easily visit. While there is no set admission fee to the museum, donations are requested.
The general public is welcome. Everyone attending the ribbon cutting is invited to tour the museum. Refreshments will be provided.
The Iowa 80 Trucking Museum is a non-profit corporation located just off of Interstate 80 and Exit 284 in Walcott, Iowa.
July 7th, 2008 2:03 am
TruckNation's Weekly Blog!
Crude Oil Prices Hit New Record High
7/3/2008 Crude oil prices hit a new record over $144 a barrel during trading on the New York Stock Exchange Wednesday before closing at $143.57. That's a full $2.60 above the previous closing record set Tuesday.
According to published reports, the spike was triggered by a government report that crude oil supplies feel more than expected last week. The U.S. Energy Information Administration reported crude oil supplies fell by 2 million barrels -- about 800,000 more than analysts predicted.
Another factor is continuing talk about possible attacks on Iran, the world's fourth-largest oil producer and OPEC's second-largest exporter.
The new record trading price means the price of a barrel of crude has risen by about 50 percent since the end of last year, when prices were about $96 a barrel.
ATA Calls for Comprehensive Plan to Ensure Affordable Oil
6/26/2008 The American Trucking Associations today urged the Bush Administration and Congress to implement a comprehensive plan to increase domestic oil supplies and ensure an affordable supply of oil for the nation's 3.5 million truck drivers and American consumers.
Speaking at a National Press Club press conference hosted by Consumers For More Energy, ATA Senior Vice President Tim Lynch encouraged Congress to implement policies that will reduce oil demand, accelerate the development of research and technology, prudently increase government oversight of the petroleum markets and increase domestic oil supplies.
"ATA recognizes that the solution to this problem is multi-faceted," said Lynch. "We need a broad relief agenda that includes increasing domestic oil production to address the escalating cost of fuel and relieve the financial hardships of the trucking industry and all drivers."
Lynch was joined at the press conference by the American Highway Users Alliance, National Defense Council Foundation, The National Grange and the Small Business and Entrepreneurship Council.
The trucking industry is experiencing the highest prolonged fuel prices in history. For most motor carriers, fuel has surpassed labor as their largest expense. It currently costs $1,400 to fill a typical tractor trailer's fuel tanks. Fuel cost increases ultimately will increase the cost of everything delivered by truck.
Because trucking is a highly competitive industry with very low profit margins, many trucking companies are reporting that higher fuel prices are greatly suppressing profits, if they are making a profit at all. According to Avondale Partners, in the first quarter of 2008, nearly 1,000 trucking companies with at least five trucks failed. This represents the largest number of trucking-related failures since the 2001 third quarter. In another report, the U.S. Department of Labor said that for-hire trucking companies decreased payrolls by over 10,000 during the first five months of this year.
ATA is urging the federal government to help bring down the price of diesel fuel and to alleviate trucking companies' hardships by doing the following:
• Allow environmentally responsible exploration of oil-rich areas in the United States that are now off-limits;
• Allow environmentally responsible development of crude resources in oil shale and tar sands in Colorado, Utah and Wyoming;
• Streamline EPA's regulatory framework for reviewing and processing applications for additional refinery operations;
• Establish a national diesel fuel standard;
• Work with the 50 state Attorneys General to combat any fuel price gouging that might occur;
• Continue to fund EPA's SmartWay Transport Partnership Program, which encourages fuel-saving strategies;
• Require speed limiters set for 68 mph or lower on all new trucks;
• Set a national maximum speed limit of 65 mph;
• Eliminate the collection of the 12 percent federal excise tax on motor carriers' purchase of auxiliary power units (APUs), which cut the consumption of fuels in idling truck engines;
• Require states to grant a weight exemption for APUs;
• Eliminate "splash and dash" - a tax benefit for imported biodiesel that is subsequently exported; and
• Release oil from the Strategic Petroleum Reserve.
July 3rd, 2008 11:44 am
TruckNation's Weekly Blog!
The US average for diesel last week went down to $4.69 a gallon. The market is going crazy. I do alot of trading a I believe these price increases in oil is the by product of traders. The demand for fuel has not decreased, however the supply has not disappeared either. So why has fuel gone up so fast?
The markets are pretty chaotic and they are not responding to the typical fundamentals like supply and demand. At the moment I am shorting fuel. I believe that after the summer prices are going to fall back some. Not by much because now the gas companies know that we the consumers are used to paying over 3.50 per gallon. I am still confused on why deisel, which is easier to produce, is more expensive than gas? Can someone answer this? Thanks.
Hope everyone has a great 4th of July weekend. Just do not use gasoline to light the fire...it's too expensive!!!!!!!!!!
July 3rd, 2008 11:22 am
TruckNation's Weekly Blog!
June 12, 2008
A very big deal
“The combination of Navistar’s truck design, development and manufacturing expertise and Caterpillar’s worldwide distribution creates a significant advantage for global customers through the ability to offer the right vehicle for the right application.” –Dee Kapur, president, Navistar Truck Group
Hoo boy. Here we go. By the end of today, we’ll have news stories galore all over the place detailing the just announced “memorandum of understanding” Caterpillar Inc. and Navistar International Corp. to form a strategic partnership aimed at garnering more share of the global truck business, while cooperating on a variety of engine platforms.
They intend to work together to develop, manufacture and distribute commercial trucks in select regions outside of North America – which includes a full line of medium and heavy-duty trucks in both conventional and cab over designs. Will we see those trucks come into the North American market someday in the future? If I was a betting man, I’d wager a few bucks that they will.
Caterpillar and Navistar also plan to develop a mid-range engines for diesel applications, such as school buses and utility trucks in the U.S. This engine development would support each company’s stated path not to utilize urea-based Selective Catalytic Reduction (SCR) technology.
(Are Cat’s on-highway products gone for good?)
“There are many opportunities for technology sharing and development that would result in the ability to better meet the worldwide demand for diesel engines in both on and off-highway applications,” said Jack Allen, president of Navistar’s Engine Group.
Here’s the big shot across the bow, however: Through this alliance, Caterpillar says it plans introduce a 2010 emission-compliant North American Cat branded heavy-duty truck for severe service applications, such as road construction, large infrastructure projects and oil and petroleum development … but WILL NOT supply EPA 2010 compliant engines to truck and other on-highway original equipment manufacturers (OEMs). In other words, no more on-highway Cat engines — period.
“Caterpillar and our dealers will continue to provide product support and service beyond 2010 for all Caterpillar on-highway engines regardless of truck brand,” said Douglas R. Oberhelman, Caterpillar’s group president. “This new truck—targeted for 2010—will incorporate the legendary quality of Caterpillar’s construction and mining machines and provide construction customers a one-stop solution.”
(A diesel particulate filter [DPF] Cat came up with to help its engines comply with 2007 emission regs … which may also disappear from the U.S. market too … )
In addition, with nearly 90% of its engine business being off-highway, Caterpillar plans to continue concentrating on opportunities to supply engines in the petroleum, marine, electric power generation and industrial markets—as well as produce engines for its own construction and mining equipment, Oberhelman said.
“In the past 15 years, Cat has become significantly less dependent on the sale of on-highway truck engines in the total contribution of our global engine profitability,” said Oberhelman. “Our global power systems business has grown significantly—in fact we supply approximately 400,000 diesel engines annually outside of the on-highway truck market. We intend to remain the world leader in clean diesel engines, and this collaboration is a key enabler.”
Caterpillar has long faced problems adapting its engines to the emission mandates being put in place for commercial trucks, you know. One reason it did not follow the exhaust gas recirculation (EGR) pathway every other truck engine maker did was because that technology didn’t work in the construction, mining, and other engine markets Caterpillar served – forcing it to forge a different route to emission control.
It’s also not surprising Caterpillar made this decision to get out of the on-highway market – especially as two of the largest users of its on-highway models, Peterbilt and Kenworth, are going to get their own proprietary engines starting in 2010.
In early 2007, Paccar announced it would build a $400-million engine plant in Missouri to manufacture 12.9-liter and 9.2-liter engines for its Peterbilt and Kenworth Class 8 trucks for the North American and global markets. These engines are based off what the company is building in Europe via its DAF and Leyland operations.
“The…facility…positions Paccar to capitalize on growing opportunities in North America, Europe and Asia,” said Mark Pigott, Paccar chairman & CEO. “It will provide the flexibility to supply products and components to Paccar facilities and customers on a global basis.”
This is the trend Caterpillar hopes to navigate with its Navistar partnership, for to comply with emission standards that differ by country as well as to keep production costs in check, many diesel engine manufacturers are tying their global network of factories together more tightly enabling them to use a single engine platform to meet worldwide needs. It’s a topic I’ve written about many times, so I’ll share some of that thinking gained from other engine makers over the last few months here.
“Engines are an international business nowadays,” said Lothar Lemmermeier, head of supplier management and assistant general manager for Daimler AG’s engine plant and foundry in Mannheim, Germany.
(Detroit Diesel’s new DD15 is built on a global engine platform used throughout the world by its parent company, Daimler AG.)
“There’s fierce competition in the engine market, added to the demands of emissions compliance,” he noted. “As a result, we’re trying to better optimize our global production flow – standardizing processes across all our plants, worldwide, while maximizing the benefits of scale.”
To accomplish that, Daimler is creating a “synchronous factory” design to manage its far-flung network of factories – coordinating production and support between the Mannheim plant and Detroit Diesel Corp.’s facility in Redford, MI and Mitsubishi Fuso’s engine plant in Kawasaki, Japan, along with Daimler’s foundries in Capetown, South Africa and Rio de Janeiro, Brazil.
Daimler’s new HDEP global engine platform is being built via this new “synchronous” approach, said Lemmermeier – allowing the company to build just a single engine product line that can be “tweaked” to meet specific market needs, from emission standards to power ratings.
Under this new program, components are built to be shared among all the factories, rather than have each plant build entire engines specific to the markets they serve, he noted. “For example, our Atlantis foundry in South Africa supplies 14.8 and 12.8 liter engine blocks to Redford, with Mannheim supplying camshafts and head liners for the 12. 8 unit,” Lemmermeier noted. “Redford builds the piston heads, liners, and camrods for the 14.8 liter engine – and supplies camrods to Mannheim for our 10.8 liter engine.”
Other engine makers are also engaging in similar global manufacturing strategies – especially Navistar, which partnered with MAN Nutzfahrzeuge AG, based in Munich, Germany to forge a “strategic agreement” back in 2004 to collaborate on the design, development, sourcing and manufacturing of components and systems for commercial trucks. That deal resulted in the new big bore line of MaxxForce engines for International highway trucks.
(Navistar is still going to equip its on-highway products with MaxxForce engines … no Cat need apply.)
How that deal gets affected by the new one with Caterpillar we can’t say right now – we’ll learn more later. But it’s safe to say that Cat-Navistar partnerhsip is going to create a large seismic shift in the truck engine market, meaning fleets and owner-operators alike will again see spec’ing options they used to enjoy in the past disappear completely in the near future.
“This is an important step for Caterpillar and we look forward to working with Navistar for the continued benefit of our customers, ” said Jim Owens, Caterpillar’s chairman and CEO.
“This relationship is a perfect example of Navistar’s strategy of growth through leveraging our own assets and those that others have built,” added Daniel C. Ustian, Navistar’s chairman, president and CEO. “In partnership with Caterpillar we intend to extend our leading-edge product focus that we have in North America into the rest of the world.”
Needless to say, this is a deal that’s going to create some interesting reactions in the truck and engine market in the U.S., I can assure you of that.
Sean Kilcarr comments on trends affecting the many different strata of the trucking industry -- light and medium duty fleets up through over-the-road truckload, less-than-truckload, and private fleet operations
June 12th, 2008 4:19 am
TruckNation's Weekly Blog!
Rising oil and gas prices have lawmakers and consumers scrambling for solutions, but it is unclear whether anything can be done to lower energy costs in the short term, experts say.
A confluence of factors, from supply and demand to speculation and a weakened dollar, are driving gas prices higher.
The price of oil has doubled over the past year. A barrel of crude oil cost about $65 in June 2007; it is currently hovering around $130 a barrel.
Gas prices have skyrocketed as a result, with some American consumers paying more than $4 a gallon. The national average is $3.95 per gallon, according to a AAA survey published May 29. A year ago, the national average was about $3.20.
Observers say several factors, domestic and global, are responsible for the price increases.
Although demand is falling in places like the United States and Europe because of high prices, it is surging in emerging markets like China and India.
Meanwhile, concerns are rising that supply -- battered by political instability in some oil-rich countries and a decision by others to not increase production substantially -- is not keeping up with demand.
Additionally, the declining value of the dollar, the currency used by the international oil market, has made it easier for Asian and European countries to purchase oil.
Some experts say speculation may also be playing a role in the rising price of oil. Many investors look to commodities like oil to act as a buffer against inflation, which typically occurs when -- as is the case now -- interest rates are low and the dollar is weakened. Other experts say the effect of speculation is minimal to negligible.
Whatever the cause, federal and state lawmakers are anxiously searching for short-term relief. Their options, however, seem limited.
The gas tax holiday debate
Two presidential candidates, Arizona Republican Sen. John McCain and New York Democratic Sen. Hillary Clinton, proposed a federal gas tax holiday this year to provide some savings for American consumers.
The plan would place a moratorium on the 18.4 cent-a-gallon federal gas tax for the summer, the time of year when Americans tend to drive the most.
McCain admitted that the tax break would have a limited effect. He said it would amount to a "little bit of a break for the summer" for low-income Americans.
Democratic presidential nominee Barack Obama, an Illinois senator, called the proposal a gimmick. He voted for such a tax holiday in his home state in 2000 but said it provided little benefit for consumers.
In addition to Illinois, three states -- Florida, Indiana, and Georgia -- have enacted gas tax holidays over the past decade. Lawmakers in several states are mulling similar cuts this year, according to published reports.
The combination of local, state and federal taxes can total more than 40 cents a gallon in some parts of the country, according to the American Petroleum Institute, a trade group that represents the American oil and natural gas industry. Find out what else goes into the price at the pump
Florida had a month-long gas tax holiday in August 2004. A state Department of Revenue statement announcing the end of the holiday said the state's drivers saw a decrease of 11 cents a gallon because of the tax cut.
An Illinois government study examining that state's suspension of motor fuel sales tax of about 7 cents a gallon in July 2000 said that although the tax holiday decreased prices at the pump, "the degree to which the reduction was passed on to motorists cannot be precisely measured."
It is difficult to predict how much consumers would save through a gas tax holiday because of the many factors -- from oil companies to retailers -- that contribute to the price at the pump, experts say. Any of them along the supply chain could pocket the savings from the tax cuts.
"The idea is that if you have this tax holiday, then the 18.4 cents a gallon [federal gas tax] will all go to the consumer to be saved," said Doug McIntyre, an analyst at the U.S. Energy Information Administration. "The question is whether the retailers would pass that all along or would try to capture some of that reduction as well.
"No one really knows."
Short-term solutions
The debate over the gas tax holiday raises the broader question of whether there is anything the U.S. government can do to reduce the price of fuel in the short term.
"I think if anybody had a good answer, it probably would have been implemented by now," McIntyre said.
Some lawmakers recently proposed that the government release oil from an emergency stockpile but were rebuffed by the U.S. Energy Department.
The Strategic Petroleum Reserve holds 701 million barrels of oil and is generally used to respond to supply crises. That stockpile has been used twice in U.S. history: During the first Gulf War in the early 1990s and in the aftermath of Hurricane Katrina in 2005.
The reserve exists to deal with the "physical interruption of the flow of oil to our country," U.S. Energy Secretary Samuel Bodman said during a recent House hearing. "We don't have that issue today."
New deliveries to the strategic reserve, however, have been halted.
"There is very little the government can do in the very short-term, other than providing misinformation about the potential for government to act," said Gilbert Metcalf, an economist at Tufts University.
He said that raising the price of energy may prove more beneficial. It seems counterintuitive, but the high prices could reduce demand and fundamentally alter consumer behavior, he said.
"We are not going to do it by reducing the price," he said. "It's saying to people: 'Don't go buy a fuel-efficient car; we'll just lower the price when it's too painful.'"
"Our best bet is to wean us off oil."
By Manav Tanneeru CNN
June 11th, 2008 5:44 am
TruckNation's Weekly Blog!
FUEL FUEL FUEL FUEL
What can I say? This is the driving force right now in trucking. If you calculate the cost of fuel per mile it becomes very scary.
Let´s say your truck averages 6 miles per gallon. You are paying an average of 4.25 per gallon of diesel. Your actual hard cost for fuel per mile is .70 - .71 cents per mile. WOW!!!!!! I can remember a few years ago not to long that companies were paying owner operators .80 cents per mile; you should not move your truck for less than $2.00 per mile to make a decent living and cover all your truck expenses like note, and PM services.
Is there a shortage of diesel out there?
My opinion is NO. However, when you have consumers paying the going rate for fuel and not lowering their consumptions the oil companies will continue to raise the price until everyone stops buying. Unfortunately, like myself no one will stop buying fuel. We need to drive our cars and trucks every day here in the United States.
In Europe fuel has always been a lot more expensive than the US . The difference is that we consume more here because we have less public transportation.
For example in Italy , you can ride a train and more than likely visit any city. The trains go practically anywhere in that country!!!
That´s were we fell behind. Imagine going from Atlanta to Jacksonville, Florida on a train, have a meeting, and come back the same day.
Not going to happen…so pay up, we have no choice.
What I suggest is make sure you do your PM services and inspect trucks so you will minimize your down time. Downtime and breakdowns will put a strain on your cash flow and may even put you behind on your expenses. Try to put some cash away for problems that arise so you can fix them quickly and get back on the road. Also, think twice before moving a load that may not pay enough to cover all your expenses.
Sometimes your truck parked can make you more money than doing a load that is not worth moving!
“The cat has too much spirit to have no heart.” –Ernest Menaul
For years, I’d always thought dogs were a trucker’s best friend – a view borne out by the many different canines I’ve met over the years riding shotgun with drivers. Yet this year at the Mid America Trucking Show, I got an eye-opener of sorts as I stumbled upon quite a few trucks that were homes away from home for plenty of cats.
(Pee Wee, perched high in the cab for a great view of the road.)
Shaun Flowers, a driver for Roady Trucking of Marysville, Kansas, introduced me to his feline highway companion, sporting the handle “Pee Wee” and resting comfortably on the dashboard. “He’s been with me for three years and goes everywhere I go,” Shaun told me. “Best thing is, I don’t have to stop and take him for a walk.”
(Pee Wee is ALWAYS ready for a close up.)
But it’s more than that, of course. Cats are very different from dogs psychologically as well as physically, content to seek out affection from humans when they need it, then quick to saunter off for a nap or ritual fur cleaning without so much as a backward glance. I know this for a fact, having spent the last 12 years in the company Woody, our resident grey tabby feline.
(The indefatigable Woodrow Wilson Kilcarr the First.)
This isn’t to denigrate the stalwart canine companion in any way, shape or form, I stress! In all honesty, I was a dog person my whole life, growing up with a wide variety of breeds, from cocker spaniels and a Collie-German Shepard mix to outright mutts. (We had three dogs at one point – meaning I probably qualify as a “Redneck” according to some of the rules laid down by the great Jeff Foxworthy). I spent countless hours in their fine company and at some point still plan to bring a Chocolate Labrador into my home
Yet cats – especially those that like to display their social skills – are more than great companions at home and on the road. They provide to us humans comfort, unquestioning friendship, and probably best of all a calming influence. After many a long day, I can tell you, there’s nothing like sitting down with a cup of hot chocolate and Sir Woody by my side, his rhythmic purrs leaching away the stress in large chunks.
(A whole gaggle of cats finds this trucker’s dashboard a fine place to keep warm.)
That soothing presence is a great boon to me, as well as to truckers plying the long highways day after countless day.
“The cat has too much spirit to have no heart.” –Ernest Menaul
For years, I’d always thought dogs were a trucker’s best friend – a view borne out by the many different canines I’ve met over the years riding shotgun with drivers. Yet this year at the Mid America Trucking Show, I got an eye-opener of sorts as I stumbled upon quite a few trucks that were homes away from home for plenty of cats.
(Pee Wee, perched high in the cab for a great view of the road.)
Shaun Flowers, a driver for Roady Trucking of Marysville, Kansas, introduced me to his feline highway companion, sporting the handle “Pee Wee” and resting comfortably on the dashboard. “He’s been with me for three years and goes everywhere I go,” Shaun told me. “Best thing is, I don’t have to stop and take him for a walk.”
(Pee Wee is ALWAYS ready for a close up.)
But it’s more than that, of course. Cats are very different from dogs psychologically as well as physically, content to seek out affection from humans when they need it, then quick to saunter off for a nap or ritual fur cleaning without so much as a backward glance. I know this for a fact, having spent the last 12 years in the company Woody, our resident grey tabby feline.
(The indefatigable Woodrow Wilson Kilcarr the First.)
This isn’t to denigrate the stalwart canine companion in any way, shape or form, I stress! In all honesty, I was a dog person my whole life, growing up with a wide variety of breeds, from cocker spaniels and a Collie-German Shepard mix to outright mutts. (We had three dogs at one point – meaning I probably qualify as a “Redneck” according to some of the rules laid down by the great Jeff Foxworthy). I spent countless hours in their fine company and at some point still plan to bring a Chocolate Labrador into my home
Yet cats – especially those that like to display their social skills – are more than great companions at home and on the road. They provide to us humans comfort, unquestioning friendship, and probably best of all a calming influence. After many a long day, I can tell you, there’s nothing like sitting down with a cup of hot chocolate and Sir Woody by my side, his rhythmic purrs leaching away the stress in large chunks.
(A whole gaggle of cats finds this trucker’s dashboard a fine place to keep warm.)
That soothing presence is a great boon to me, as well as to truckers plying the long highways day after countless day.
Trucks at Work: Sean Kilcarr comments on trends affecting the many different strata of the trucking industry -- light and medium duty fleets up through over-the-road truckload, less-than-truckload, and private fleet operations
May 8th, 2008 3:11 am
TruckNation's Weekly Blog!
April 10, 2008
Crunch time
“Without an adequate transportation system, the nation’s economic growth is at risk.” –Janet F. Kavinoky, executive director, Americans for Transportation Mobility Coalition
So we know the U.S. transportation network is a mess – overused, overstressed, and way out of date. And it’s going to take hundreds of billions of dollars we don’t have (at last check, the U.S. deficit is nearing $9.5 trillion. That’s with a ‘T’ people) to not only fix it, but also actually expand it to carry the expected volume of people and goods without massive gridlock.
(Construction progresses on the new Woodrow Wilson Bridge outside Washington D.C.)
At the risk of flogging a dead horse, I’ll repeat the above synopsis in more detail here – tallied up very well by the just-released report “The Transportation Challenge: Moving the U.S. Economy,” published by the Americans for Transportation Mobility Coalition (ATM), and the National Chamber Foundation of the U.S. Chamber of Commerce.
“If the U.S. declines to invest in transportation infrastructure and ignores the transportation needs of key industry sectors, our economy will become less productive and less competitive,” warns Janet Kavinoky, ATM’s executive director. “The U.S. transportation system is failing to keep pace with the demands of a 21st century economy and a piecemeal approach to improving the nation’s transportation infrastructure no longer works.”
She notes that countries like China are building highways and rail lines, developing ports, and constructing airports while the U.S. transportation system erodes meaning the margin of the U.S. competitive advantage is shrinking. Now, granted: it’s a whole lot easier to lay down a transportation network in a country ruled by a virtual dictatorship, and one that doesn’t adhere to even a tenth of the environmental rules and regulations in the U.S.
But without investment in transportation infrastructure here in the U.S. guided by new policies, the study says our transportation system will fall further behind the growing demand of five major economic sectors — agriculture and natural resources, manufacturing, retail, services, and transportation — that account for 84% of the U.S. economy.
(Photo courtesy of the Texas Transportation Institute.)
Given population growth, shifting demographics and steady economic growth, a high-performance transportation system is a necessity. The U.S. population is projected to grow from 300 million today to 380 million people in 2035, while the economy is likely to double over the next 30 years, as is demand for freight transportation, the study found. Expanding demand and shrinking capacity for both freight and passengers across every mode of transportation raises fears about increased congestion, less reliability, and higher costs, it says.
OK: so what do we do? The report urges policymakers to become much more strategic in planning and investing in the U.S. transportation system. If we do not, our transportation system will become a competitive disadvantage for U.S. industries, and it will be harder to sustain the growth of our regions and the national economy.
What’s that translate into? Here are some of the report’s recommendations:
– Greater emphasis on economic needs and issues, including attention to regional mobility, in formulating national transportation initiatives.
– Development of a national consensus among citizens, businesses, and political leaders on the importance of increased investment in transportation infrastructure.
– Immediate attention to the approaching deficit in the federal Highway Trust Fund.
–Greater emphasis on investments in a national freight transportation program that would implement highway, rail, and marine transportation improvements to benefit commerce.
–More public investment in infrastructure, using all potential revenue sources, including user fees and other revenues collected at different levels of government.
–Increased use of financing and credit options including tax credits and public-private partnerships, to leverage an estimated $200 billion in private capital available for transportation infrastructure investment.
Another thought that’s been floated as a way to gin up more transportation infrastructure funds is the concept of “congestion pricing.” New York City recently saw such a proposal go down to defeat, but one that I think is deserved. My own opinion here: if you want to raise taxes DEDICATED (I stress) for transportation infrastructure repair and expansion, fine. Throw tollbooths up all over the place to collect that money, forcing traffic to a crawl even on good days. Forget about it.
(Photo courtesy of the Texas Transportation Institute.)
That’s why I think the New York State Legislature rejected New York City’s proposal to charge drivers a fee to drive into parts of Manhattan during most daylight hours. The American Trucking Association (ATA) in particular didn’t like the plan because truck drivers would have paid $21 per weekday, while auto drivers paid just $8, to drive in Manhattan below 60th Street between 6 a.m. and 6 p.m. Truckers have to make deliveries: commuters can choose other forms of transportation.
“Like many areas of the United States, New York’s transportation networks are strained, and the city is searching for a solution to its problem,” said Bill Graves, ATA’s president and CEO, said after the proposal’s defeat. “But congestion pricing schemes are unfair, ineffective and ignore our real transportation needs. While there is a need to heavily invest in infrastructure, congestion pricing does little to relieve congestion and is merely a revenue raiser.”
One thing is for certain: we need to generate some serious coin to bring our transportation infrastructure up to snuff. That would mean more taxes and cuts to a lot of other federally funded initiatives. We may not like these ideas, but frankly, there’s not a lot else we can do. “We have only one option: Invest now, or pay later,” says ATM’s Kavinoky. That’s the truth, the whole truth, and nothing but the truth right there.
Trucks at Work: Sean Kilcarr
April 10th, 2008 4:41 am
TruckNation's Weekly Blog!
April 9, 2008
Tough haul
“The trucking industry is experiencing the highest prolonged fuel prices in history.” –Bill Graves, president and CEO, American Trucking Associations
It’s been a grim first quarter for 2008, to say the least, as we wait for publicly traded trucking companies to start releasing their earnings reports so we can see what tales the numbers tell.
The indications are it could be a rocky first quarter for most. United Parcel Service, for example, indicated that it lowered its first quarter earnings expectations to around 86 or 87 cents per diluted share from a previously anticipated range of 94 to 98 cents a share.
(Fuel prices and low package volume are hurting UPS.)
At UPS’s investor conference on March 12, Kurt Kuehn, the company’s chief financial officer, said high fuel prices and lower volume trends experienced in February through March are the chief culprits. “The U.S. economy has continued to weaken, causing a reduction in domestic package volume and a shift away from premium products,” he said. “Significantly increased fuel costs in the quarter also contributed to the lower-than-expected results.”
“Significantly increased fuel prices,” by the way, is the polite way of saying we are in the sort of record-setting territory no one ever wants to be in. According to the Oil Price Information Service (OPIS), retail and wholesale fuel prices shattered all previous records last month, and products used in the transportation sector began April with numbers up as much as 238% from five years ago.
(Fuel has long been ultra-pricey for truckers.)
The wallet-killing fallout from OPIS’ Transportation Fuel Index (TFI) includes some traumatic statistics:
· Americans spent about $247.7-million more each day on gasoline in March 2008 than they did in March 2007 – and OPIS estimates that the increase from five years ago is now $626-million per diem.
· Wholesale diesel prices ended March at an all time high of $3.288 a gallon, with the average retail diesel price at $4.019 per gallon. The largest increases – nearly 50 cents per gallon – occurred in northeastern states, but every region saw price advances of at least 41.8 cents per gallon.
· The average nationwide price for wholesale jet fuel in March 2008 was $3.172 per gallon, up 42.4 cents a gallon from February 2008 and up an incredible $2.235 a gallon from March 2003 – an increase of 238.7%. (Is it any wonder Aloha and ATA Airlines disappeared in the blink of an eye?)
Regional retail gasoline increases on a month-to-month basis ranged from 13.6% in New England to 26.4% in western states. Wholesale gasoline prices were up some 33.1% in the month, suggesting that the up-trend in pump prices will persist into early April.
The longer term view produces some eye-opening comparisons, according to OPIS: wholesale gasoline prices are up $1.691 gallon from March 2003; and wholesale diesel prices have advanced by well over $2.00 a gallon in every region in the country.
(Truckers large and small alike are feeling the pain at the pump.)
“For some motor carriers, however, fuel is beginning to surpass labor as their largest expense,” said Bill Graves, president and CEO of industry trade group American trucking Associations late last month. “This ultimately will increase the cost of everything delivered by truck.”
The ATA wants the federal government to help bring down the price of diesel fuel in a number of ways, including:
· Release oil from the Strategic Petroleum Reserve
· Establish a national diesel fuel standard
· Allow environmentally responsible exploration of oil-rich areas in the U.S. that are now off-limits
· Require speed limiters set for 68 mph or lower on all new trucks
· Set a national maximum speed limit of 65 mph
· Suspend the collection of the 12% federal excise tax on motor carriers’ purchase of auxiliary power units (APUs), which cut the consumption of fuels in idling truck engines
· Require states to grant a weight exemption for APUs
“The signs are troubling. We are concerned about fuel’s direct impact on our industry and also its effects on the nation’s economy,” said Graves. “The industry is doing its part to conserve fuel, but we need help.”
(Sadly, we may see a lot more of these unfortunate signs before the year is out.)
He noted that the trucking industry is on pace to spend $135 billion on diesel fuel this year, $22 billion more than in 2007 and up $83 billion in annual expenditures compared to 2003.
Those are some pretty grim numbers indeed. Now we must wait and see how they’ve impacted trucking’s bottom line over the course of the first quarter.
Trucks at Work: Sean Kilcarr comments on trends affecting the many different strata of the trucking industry -- light and medium duty fleets up through over-the-road truckload, less-than-truckload, and private fleet operations
“You tell me who will win the election this year and I will tell you what further emission rules might occur past 2010.” –Jim Kelly, president, Cummins Engine Group
One of the best things about attending the Mid America Trucking Show every year is that you get both some high-level perspective from the executives at major manufacturers and suppliers about what’s going on, along with the view from the trenches, from fleets and drivers on the front lines of the freight business.
(A view of the show floor at Mid America.)
For example, Jim Kelly’s quote above gets right to the heart of any and all future discussions about emission regulations at the national level. Will there be more after 2010? What will such regulations address in trucking – retrofits for older equipment? Will the stricter rules being promulgated by the California Air Resources Board (CARB) and various California ports be extended to the rest of the country? That all depends on who wins the Presidential election in November. Needless to say, trucking’s got a lot at stake where emissions are concerned in this increasingly bitter race for the White House.
(The lovely Ali Hall highlighted all the new safety technologies and other features available on Freightliner’s trucks.)
Fuel prices, however, proved to be topic number one at the show. Fleets, drivers, and suppliers alike all expressed tremendous frustration and concern about the high cost of diesel fuel these days – up over $4 a gallon in 17 states now.
“The price of fuel is killing me,” Sean McEndree told me; a driver I’m very lucky to know. Invited to Mid America to show off his “Fallen Heroes 2” tractor – a one-of-a-kind truck designed to honor all the servicemen and women killed in Iraq and Afghanistan – McEndree rued an opportunity to sell his truck earlier this year for a cool $175,000. “I wish I’d done it now, but I didn’t – I didn’t want to go through building another one, which I would have,” he said.
(The special mosaic for “Fallen Heroes 2″ was created by none other than Ryan “Rhino” Templeton, the artist-in-residence for the Chrome Shop Mafia.)
One good thing about McEndree – a severely wounded veteran of the Iraq campaign – is that he looks good and healthy and that his family is doing well. Needless to say, I hope he survives the rough patch the trucking industry finds itself in right now.
Despite the woes trucking faces from high fuel process and sluggish freight, everyone wasn’t completely in the dumps. I visited with Dale Corum, general manager at truckload carrier Mercer Transportation, and he says they’re starting to see capacity tighten up a bit: to the point where some shippers are willingly paying higher fuel surcharges to get their freight moved. (More on that in a posting later this week – Mercer’s got a lot of interesting tales to tell).
(Even FleetOwner’s hardy staffers needed to sit down for a spell and rest their weary feet at Mid America.)
Though there wasn’t a lot of truly “new” stuff revealed at the show – regardless of what the various PR machines told us – two new truck models did make an appearance. Though International had already revealed its new and very unique “LoneStar” class 8 tractor model at the Chicago Auto Show in February, the truck got a full-fledged rock star roll out at Mid America, as it’s a truck aimed squarely at the owner-operator segment.
(Drivers either loved or loathed International’s new “LoneStar” tractor — a truck that many thought resembled the famous car used in ZZ Top’s ‘Sharp Dressed Man’ music video from the 1980s.)
Mack got into the act, too, with its new Titan class 8 tractor for the heavy-haul segment: unveiled by the dude who does all the announcing for the Ultimate Fighting Championship program on cable TV (talk about an over the top event).
And, of course, it wouldn’t be Mid America without the “state fair” atmosphere. Western Star, for example, hired a team of ice sculptures to work in full view of the gathered public. International’s hospitality tent out behind the show truck parking lot included a real tattoo artist’s booth (and business proved brisk for them).
(Ice sculpture making proved a hit with the Mid America crowd.)
Mid America 2008 proved to an interesting and fast paced show as usual. Now I just need to catch up on my sleep
“Our fourth quarter earnings outlook has been impacted by higher than anticipated fuel prices and a weak U.S. economy. Looking ahead to our fiscal 2009, we are expecting … limited earnings growth. We are scrutinizing all expenses and investments to realign them with the current environment.” –Alan B. Graf, Jr., executive VP and CFO, FedEx Corp.
It’s not a pleasant time to be in the trucking business, to say the least. With fuel prices way, way out of sight and freight still sluggish due to the U.S.’s rocky economy, it’s been a tough road to travel for independent truckers and fleets, plus truck manufacturers and related suppliers alike.
Just look at the escalating cost of fuel. In 17 states now, diesel costs over $4 a gallon. The industry trade group American Trucking Association (ATA) is projecting that if diesel fuel costs stay that high, the trucking industry will spend $135 billion on fuel this year – a $22 billion increase over the $112.6 billion spent by trucking in 2007 and an $85 BILLION increase over the industry’s fuel tab of $52 billion back in 2003. That means, according to ATA’s data, the cost to fill the fuel tanks on a typical tractor-trailer has increased 116%, or $615, in just five years.
“Fuel represents the second-highest operating expense for motor carriers, accounting for as much as 25% of total operating costs,” said Bill Graves, ATA’s president and CEO. “For some motor carriers, however, fuel is beginning to surpass labor as their largest expense. An affordable supply of diesel fuel is imperative to keep our trucks moving, [yet] there is little to suggest that fuel prices will decline any time soon.”
The high price of diesel is also sparking talk of a nationwide trucker strike on April 1, this time being organized online by Dan Little, an owner/operator of a livestock hauling company in Carrollton, MO. According to an interview Little gave to The Quad-City Times, he estimates at least 1,000 other truckers from across the U.S. have committed so far to joining him in a strike on April 1.
“Call it a strike, a shutdown or just flat-ass going broke,” he told the Iowa newspaper. “What I would personally like to see is our federal and state governments, until our economy recovers, suspend federal and state fuel taxes. The second thing I’d like to see is an oversight committee for truck insurance, which is part of what’s taking us down.”
Little told the paper that the average owner/operator is paying $600 to $800 a month for truck insurance – an amount based on personal credit, which means the monthly cost is going up for a lot of truckers because their credit is going down, he stressed.
Truck makers are having a hard go of things, too, not in the least because of the “EPA recession” in trucks sales this year – a termed coined by Jim Meil, Eaton Corp.’s chief economist – that’s been aggravated further by the slump in freight due to the weakening U.S. economy.
“The commercial truck market is beginning to improve slowly but clearly it is still tough going,” said Daniel Ustian, chairman, president and CEO of Navistar, the holding company for International Truck & Engine Corp.
“To help offset cyclical downturns, our strategy has been to build successful and sustainable businesses in military and export markets,” he noted. “That strategy is paying off in the success of these expansionary businesses. And we are well positioned in our truck and engine businesses with strong products to respond to demand when the market does recover.”
(Sales of Navistar’s new MRAP vehicles to the U.S. military are helping it weather the downturn.)
Ustian said “expansionary shipments” of 40,000 to 45,000 vehicles this year will account for a third of Navistar’s total worldwide vehicle shipments and help to mitigate the current weakness in its core markets, with defense business is expected to consistently generate $1.5 billion to $2 billion in annual revenue going forward, Ustian said.
Still, he noted Navistar’s worldwide shipments of school buses, Class 6-7 medium trucks and Class 8 heavy trucks remain soft, with sales for the three months ending January 31 totaling 18,720 units, down 37% from 29,680 units shipped in the same period a year earlier when totals benefited from what he termed a “historic pre-buy” in advance of 2007 emissions standards.
(Sales of Navistar’s new ProStar tractors have suffered due to the new emission rules combined with the falloff in freight.)
Yet Ustian said the next pre-buy cycle – expected to begin in 2009 in advance of 2010 diesel emission requirements – should provide the necessary support for Navistar’s operating and capital needs going forward. Funny, isn’t it – the same cycle that’s hurting the OEMs bottom lines right now is what’s going to pull them out of the pits next year. But the key thing is surviving the ongoing downturn today to profit from the upswing predicted for tomorrow. That’s a challenge owner-operators, fleets, and truck manufactures are all going to share in the months ahead.
Trucks at Work: Sean Kilcarr comments on trends affecting the many different strata of the trucking industry -- light and medium duty fleets up through over-the-road truckload, less-than-truckload, and private fleet operations
March 24th, 2008 3:23 am
TruckNation's Blog!
Truck repossessions more than double in ‘07
Nassau Asset Management’s NasTrac Quarterly Index (NQI) reports a 110% increase in repossessions of tractor-trailers in 2007 compared to the previous year. Repos increased from about $5,700,000 worth to slightly under $12,000,000, the company said.
The decline in homebuilding has been seen as major factor in the increase in truck repossession, as it affects many peripheral business sectors that utilize trucks, Nassau said.
“From the forest to the saw mill to the construction site, along with the movement of people in and out of those homes and the delivery of appliances and furniture to the home, there are trucks involved in every step of the process,” said Nassau president Edward Castagna. “The rings continue to expand out of the housing epicenter.”
Other reasons for increased repossession include government regulations such as restrictions on travel time, rising fuel costs and greater competition, as well as an increase in late model trucks on the market due to the ’06 pre-buy, Nassau said.
“An increase in repossessions is normal when there is a downturn in business,” analyst Chris Brady, president of Commercial Motor Vehicle Consulting, told Fleet Owner. “Freight markets have been soft, and carriers’ profit margins are being squeezed.
“I was talking to a small fleet recently, and he just said it’s brutal,” Brady added. “A lot depends on the commodity you haul, but with higher fuel prices and excess capacity, carriers don’t have pricing power and some are going under….if you’re a small carrier, a shipper has greater opportunity to replace you.”
In addition, R.L. Polk & Co. recently reported that registrations of new Class 8 trucks fell 37.8% from the previous year, dropping from a record-high 272,700 units in 2006 to 169,000 last year.
Terry Williams, editor of Truck Blue Book, told Fleet Owner that less new trucks purchased has not had a large effect on used trucks, as inventory has been steady. “If there is a significant number of repossessions, it may have an effect, but it’s not having an effect on the used market yet.”
Williams added that repossessions could start affecting the market later in the year. “The market can absorb them to a point, but the auction business is up, which usually means a slow truck economy,” he said.
R.L. Polk also reported that the number of Class 8 vehicles rose 2.2% in the past year, after truck manufacturers sold 150,965 Class 8 vehicles in 2007, the lowest number since 2003 and a drop of 46.8% from 2006.
Nassau calculates the top five repossessed capital assets, which in addition to trucks are printing, medical, machine tool, and construction. According to the group, all but trucks and medical equipment declined significantly in 2007.
According to Castagna, the decline in construction repossessions and liquidations by 32% was due to the continued strength of the commercial construction industry, although the second half of the year showed signs of trouble.
“We are seeing a very significant correction in the market,” he said. “Even in a category such as construction equipment, where the 12-month total showed a decline, repossessions were up significantly in the second half of 2007.”
By Justin Carretta
March 20th, 2008 3:23 am
TruckNation's Weekly Blog!
Sterling, Freightliner taking orders for new diesel
ORLANDO. Using the North American market to launch a new global engine platform, Sterling Trucks and Freightliner Trucks have begun taking orders for heavy-duty models powered by the 15-liter DD15 version of the new engine from Detroit Diesel.
Truck production with the new engine will begin March 1, with deliveries to customers in late April or early May, according to David Siler, Detroit Diesel director of marketing. Freightliner, Sterling and Detroit Diesel are all subsidiaries of Daimler Trucks North America LLC, which in turn is an operating company of Daimler AG, the world’s largest manufacturer of commercial vehicles.
Announcing the new engine availability here at the Technology and Maintenance Council (TMC) annual meeting, Sterling said the DD15 is initially being offered as an option in the set-back axle versions of its A-Line and L-Line models. Set-forward models of the company’s vocational and regional-haul trucks require a slight engine redesign to accommodate the oil pan and will not be available until the fourth quarter, according to Siler.
Detroit Diesel expects to be in full production of the smaller DD13 by the first quarter of 2009, and it will replace the current generation MBE4000 as the standard engine for Sterling heavy-duty models, Siler said. The MBE 4000 will be phased out of production by the end of 2009, as will the Series 60 diesel, which is also currently offered in Sterling and Freightliner models.
The new Daimler diesel uses exhaust gas recirculation (EGR) and a diesel particulate filter (DPF) to meet U.S. ’07 diesel emissions standards. The DD15 also features turbo compounding, while the DD13 will, at least initially, use the more common variable vane turbocharging to accommodate power take-off (PTO) common to its vocational applications, according to Siler.
Siler also reinforced Daimler’s commitment to use selective catalytic reduction (SCR) technology to meet the upcoming 2010 U.S. emissions requirements. While at least two diesel engine builders have recently announced that they will not move to SCR for 2010, Siler told Fleet Owner, “We think SCR will give us a significant advantage because it will be both clean and more efficient.”
Siler also revealed that Detroit Diesel is planning a “stroked out” 16-liter version of its new diesel in 2010 that will product 630 hp and peak torque of 2050 lb.-ft.
By Jim Mele, editor-in-chief
February 5th, 2008 4:16 am
TruckNation's 01/29/2008 Weekly Blog!
Carriers knuckle down for ‘08
A sluggish freight environment coupled with higher operating costs is forcing many carriers to tighten their belts and look to smaller, more profitable niches.
“In a difficult economy where opportunities to improve margin are limited, operational execution becomes critically important,” said Douglas Stotlar, president & CEO of Con-way Inc., in his company’s year-end earnings report “We took specific actions in 2007 to respond to the market and reposition our businesses. This will continue into 2008, as will our focus on providing customers with reliable, premium-value LTL and truckload transportation services.”
While Con-way’s revenue increased 20.2% to $1.2 billion in the fourth quarter last year compared to the same period in 2006, net income dropped by well over 50% to $34.5 million. For 2007, revenues increased 3.9% to $4.39 billion compared to 2006, while net income again fell significantly to $146.8 million for the year from $265.2 million in 2006.
Trucking freight rates are also increasingly under pressure as shippers step up their efforts to lower transportation costs. “Trucking capacity in our industry continued to outstrip freight demand during the fourth quarter [in 2007] and overall truck tonnage declined,” noted David Parker, chairman, president & CEO at Covenant Transportation, in his firm’s year-end release.
“At Covenant, we saw customer bid requests more than double vs. the third quarter of 2007 and increase more than 200% compared with the fourth quarter of 2006,” Parker added. “The competitive freight market was evident in our average freight revenue per loaded mile, which declined. In addition, freight brokers supplied a slightly higher percentage of our loads in the fourth quarter of 2007 as compared to both the third quarter of 2007 and the fourth quarter of 2006.”
For the fourth quarter, Covenant posted a profit of $176,000 on 3.6% higher revenue of $192.9 million, compared to a loss of $894,000 over the same period in 2006. However, for all of 2007, Covenant lost $16.7 million despite a 4.2% increase in revenue to $712.5 million, compared to a net loss of $1.4 million in 2006.
To build business in the current environment, carriers are looking outside their traditional markets. LTL carrier ABF Freight System, for example, said it’s seeing an uptick in demand from regional lanes.
“Though the overall freight environment was weak, [we] continued to gain market traction with [our] regional performance model (RPM),” said Robert Davidson, president & CEO of ABF’s parent company, Arkansas Best Corp. “The rate of revenue growth in regional lanes is substantially outpacing that of ABF’s traditional business. We are encouraged by the success we are having, especially in our next-day markets. ABF’s initial success confirms the validity of our low-risk strategy of organic expansion in the growing regional market.”
ABF said operating income dropped slightly to $9.8 million on revenue of $441.3 million in the fourth quarter in 2007, compared to $20.8 million in operating income on revenues of $441.4 million over the same period in 2006. For all of 2007, ABF said operating income dipped to $86.2 million on 3.3% lower revenue of $1.77 billion, compared to operating income of $135.3 million in 2006.
Still, opportunities abound for business, stressed Con-way’s Stotlar, especially outside the U.S. “Our people did a commendable job in a tough year,” he said. And while the domestic trucking freight market is in a slump, he noted the overall market for global logistics services is growing: “With [our] strategic acquisitions in Asia and expanding customer base, [we are] poised for solid growth, particularly as multinational businesses increase their reliance on third-party logistics to enhance global supply chain efficiency.”
By Sean Kilcarr, senior editor
January 29th, 2008 3:30 am
TruckNation's Weekly Blog!
The trucking industry will continue to face a sluggish freight environment in the new year as a number of economic indicators remained on a downswing as 2007 drew to close.
While truck tonnage increased a scant 0.8% in November, according to data compiled by the American Trucking Assns. (ATA), truckload freight overall remained 1.7% lower by November 2007 compared to the same point in 2006.
ATA economist Tavio Headley noted that the slowdown in tonnage volumes is projected to continue into 2008.
“Based on the latest economic data and the expected slowdown in the economy over the next few quarters, we anticipate lackluster freight volumes at least through the first half of 2008,” Headley said, adding that the November tonnage reading suggests continued volatility and softness in freight volumes, despite the month-to-month and year-over-year gains. Headley also noted that every monthly increase in the seasonally adjusted tonnage index since March 2007 was followed by a contraction the next month.
Broader economic indicators don’t look any rosier. Daniel North, chief economist with credit insurer Euler Hermes ACI, said the seasonally adjusted Credit Manager’s Index (CMI) fell for the fourth consecutive month in December 2007, dropping 0.7%.
“While the manufacturing index actually gained 0.8%, it was overshadowed by a loss of 2.3% in the service index,” North said. “The deterioration in the combined index matches that of other major indicators in the macro-economy, including disappointing holiday sales, a weakening employment market, accelerating declines in housing prices, downgrades of banks and insurers, plummeting consumer confidence, and a rapid increase in delinquencies and defaults on many types of credit.”
Overall unemployment figures in the U.S. also rose at year’s end, according to a Department of Labor report. After falling to 4.7% in November from 4.8% in October, unemployment spiked in December 2007, rising to 5%, the agency said.
Finally, the automotive industry sees sales contracting in 2008-- not good for trucking, as automakers provide a steady source of freight volume.
Jim Farley, Ford Motor Co.’s group vp for marketing and communications, said the company’s December 2007 sales were down 9% compared with the same period in 2006, with retail sales down 13% and fleet sales falling 1%. Ford expects the economic environment to remain challenging in 2008, expecting U.S. auto sales to be in the range of 15.5 to 16 million units in the first half of 2008. He sees light vehicle sales in the range of 15.2 to 15.7 million units.
I’ve been doing a lot of thinking lately (a dangerous occupation for me, I know) about the General Motors-International Truck & Engine deal announced late last year, with GM selling its medium-duty commercial truck business to International for an estimated sticker price of $500 million or so.
What’s interesting to me is this deal is yet another sign of the opposite strategic paths auto and truck makers in the U.S. are on these days. For decades, U.S. automakers like GM and Ford seemed to be on a brand-name breeding program – even buying other brands of cars and trucks to add to their stable.
GM’s Buick, Cadillac, Chevrolet, GMC, Oldsmobile, and Pontiac brands were later joined by Hummer (bought from AM General), Saab (bought from Sweden), and Opal (bought from France). The company also went into partnership with Isuzu to gain diesel engines for its medium- and light-duty trucks (the Duramax) and get a lighter cabover medium-duty vehicle as well. It even built Class 8 trucks via a partnership with Volvo and White Mfg. For many years
Ford always had the Lincoln and Mercury brands, then went out and bought Volvo’s car business, Land Rover, and Jaguar. It even used to build heavy Class 8 trucks under the Aeromax brand.
Truck makers, by contrast, kept focused on core products – medium- and heavy-duty trucks only. Each had a distinct brand (Freightliner, Peterbilt, etc.) The only exception proved to be International Harvester at the time, which built farm equipment, heavy trucks, and even the famous Scout light vehicle (now a collectors item), an early version of Jeep’s Cherokee SUV. But by and large, each truck maker really supported only one brand name in the market – not the plethora GM and Ford supported.
How times have changed! Now the automakers are the ones rapidly divesting themselves of brands and product lines, whereas the truck makers are adding more – and on a global scale to boot.
Ford sold off its Class business in the late 1990s and is trying to find buyers for Land Rover and Jaguar now, while paring down the product offerings across its Lincoln, Mercury, and Ford brands. It’s nearly seven year relationship with International to build a joint cabover medium-duty truck and get diesel engines may very well end soon, with Ford building its own diesels in house. GM has been just as aggressive – shutting down Oldsmobile, selling off its “bread van” business, Allison Transmissions, its medium-duty business, all while shrinking product offerings across the board.
The truck makers, now, they are going down the path GM and Ford used to follow. Jim Hebe, Freightliner’s former chief, got the ball rolling. After being acquired by Daimler AG of Germany, Hebe went out and bought Ford’s Class 8 business, which it turned into Sterling Trucks, followed by Thomas Built buses, Canada’s Western Star, and others. Freightliner later bought Workhorse Custom Chassis. Daimler acquired big diesel engine maker Detroit Diesel and added that to the Freightliner mix.
Volvo AB of Sweden bought out GM’s heavy-duty truck stake and then bought Mack Trucks in Allentown, PA. Paccar, which owns Kenworth and Peterbilt, bought DAF trucks in England and plans to add that company’s diesel engines to the U.S. market via a big $400 million plant it’s building in Missouri.
International has also undergone a lot of change. After selling off the farm equipment business, the company changed its name to Navistar in the late 1980s. Finding that brand didn’t do well, it gradually brought the International nameplate back to the fore. Technically, though, the company is still Navistar and gets referred to as such by most stock analysts because it didn’t change its stock listing name – and that causes more than a little brand name confusion out in the market from time to time.
So what does all this shuffling mean, in the great scheme of things, when we look at the GM/International deal? Well, for starters, GM gets to take all the engineering resources it used to spend on medium-duty trucks and refocus that on its light-duty pickups – a real bread-and-butter line for the company. I talked to Mike Matheny, owner of GM dealer Matheny Motors, about that very subject and that is what makes him happy about this deal.
“We have a whole separate commercial department for light trucks and I consider it pretty steady business compared to our retail sales,” he told me. “The one thing I wish we had was something to match Ford’s 450/550 truck – what we need to get there is time and money, and now we’re getting some money to do it.”
On International’s side of ledger, though, the challenge will be integrating the Chevy and GMC brands into its lineup without diluting them or its core International brand – a tall order, in the eyes of Jim Walton, president of PR firm Brand Acceleration.
“Here’s the problem that Navistar will face if they continue to use all three names. In the eyes of the consumer, Chevy is a car sold by General Motors and GMC is a pseudo-Chevy, [also] sold be General Motors,” he told me.
“One reason that companies like to keep three brands is because they are afraid of losing any of the collective market share … [but] brand names should mean something,” he added. “The ‘big three’ forgot that more than thirty years ago: Oldsmobile is now gone and the Cadillac brand nearly ceased to exist.”
So where the Chevy and GMC brands go in the medium-duty market now is up in the air. Though they’ll be around for a while, International controls their destiny, so anything is possible. One thing is for certain: It’ll be an interesting brand transition to watch.
January 2nd, 2008 2:20 am
TruckNation's Weekly Blog!
Teamsters, YRC agree to tentative labor deal
The International Brotherhood of Teamsters (IBT) and TMI/YRC Worldwide, which includes Yellow Freight, Roadway, and USF Holland, have agreed to a tentative five-year labor contract that will cover about 75,000 union freight members.
The current contract expires on March 31, 2008. Leaders from local unions will meet on January 8th to approve the tentative deal, followed by a vote by members.
According to the Teamsters, the new National Master Freight Agreement (NMFA) protects workers’ jobs and benefits while allowing the unionized companies to better compete against nonunionized carriers.
“The speed at which the deal got done is a great step forward,” Satish Jindel, president of SJ Consulting, told FleetOwner “[Teamsters president] Jim Hoffa has shown a willingness to work with employers to be competitive in the market, and give concessions.”
As a result of the speed of the YRC negotiations, Jindel said that he believes the Teamsters “probably will reach a settlement quickly with ABF.”
"The early outcome of these negotiations is positive for our employees and positive for our customers," said Mike Smid, president & CEO of YRC North American Transportation. "With the major hurdle of the NMFA behind us, we are now positioned to remain competitive in a very challenging industry environment."
“The freight industry and our freight members are faced with many challenges, but this agreement will protect our tens of thousands of freight members’ futures, giving them the security they deserve,” said Hoffa. “Our entire National Negotiating Committee, led by vice president Tyson Johnson, did a great job protecting our members’ jobs and benefits.”
“This is an excellent agreement,” said Johnson, director of the Teamsters National Freight Division and lead negotiator for the union. “It provides good wage increases and protects members’ jobs and their health, welfare and pension benefits. It also allows the unionized freight companies to better compete with the non-union companies and gives the unionized companies opportunities to grow business in new areas.”
By Justin Carretta, online news editor
December 17th, 2007 3:07 am
TruckNation's Weekly Blog!
Cheering for holiday freight
With the holiday season approaching, manufacturers are hoping for a strong season, and early reports seem to indicate they may get it. According to a report by The Conference Board. U.S. households are expected to spend an average of $471 on holiday gifts this year, up from last year’s estimate of $449. However, according to analysts, this may not translate into a huge boost in tonnage.
Chris Brady, president of Commercial Motor Vehicle Consulting, told Fleet Owner that holiday freight has changed in recent years due to a change in spending habits. “The freight pattern is changing due to holiday gift cards, in addition to the internet. With gift cards, it dampens the seasonal growth and extends the freight season,” he said.
The Conference Board report, which was compiled through a survey of 5,000 U.S. households, concludes that 38% of all consumers will purchase gifts through the Internet, the same percentage as 2006. It also states that 91% of customers who bought gifts over the Internet last year were satisfied with the experience.
However, while the Conference Board expects spending to be up, Brady said that retailers have very conservative estimates for the holiday season and have ordered accordingly.
Brady continued that there has been a moderate growth in freight, with a 3% increase in durable goods for the 3rd quarter of 2007. Although furniture and appliances have remained steady due to a soft residential housing market, electronics, such as flat screen television sets, have been strong, and should continue to be so in the foreseeable future.
Overall estimates for personal and disposable income have increased slightly, which may give high hopes for a strong holiday season. According to the Bureau of Economic Analysis (BEA), personal income for October 2007 increased 0.2%, up to $21.2 billion, with disposable personal income (DPI) up 0.1% to $14 billion. Personal consumption expenditures (PCE) were up 0.2% to $23.8 billion.
For the third quarter of 2007, the BEA estimates the real gross domestic product (GDP) increased at an annual rate of 4.9%, up from 3.8% in the second quarter. The BEA reports the increase in real GDP was due to positive contributions from exports despite an increase in imports. They also report that motor vehicle output contributed 0.43% to the third quarter growth in real GDP, a substantial increase from a 0.03% increase seen in the second quarter.
According to the Bureau of Labor Statistics (BLS) of the U.S. Department of Labor, the unemployment rate remained steady at 4.7% in November, with an increase in jobs for professional and technical services, health care and food services, but a decrease in job growth for manufacturing and several housing-related industries. Overall, average hourly earnings rose 8 cents over the month.
Despite the positive signs, it is impossible to predict what freight will be for the first quarter of 2008 until the sales figures come in for the holiday season, Brady said. “The first few months of 2008 all hinges on the sales during Christmas. If the sales come in as planned, you’ll see moderate gains, but if it comes in below plan, retailers will have excess stock and they won’t be reordering.”
By Justin Carretta, online news editor
December 7th, 2007 3:21 am
TruckNation's Weekly Blog!
Cheering for holiday freight
With the holiday season approaching, manufacturers are hoping for a strong season, and early reports seem to indicate they may get it. According to a report by The Conference Board. U.S. households are expected to spend an average of $471 on holiday gifts this year, up from last year’s estimate of $449. However, according to analysts, this may not translate into a huge boost in tonnage.
Chris Brady, president of Commercial Motor Vehicle Consulting, told Fleet Owner that holiday freight has changed in recent years due to a change in spending habits. “The freight pattern is changing due to holiday gift cards, in addition to the internet. With gift cards, it dampens the seasonal growth and extends the freight season,” he said.
The Conference Board report, which was compiled through a survey of 5,000 U.S. households, concludes that 38% of all consumers will purchase gifts through the Internet, the same percentage as 2006. It also states that 91% of customers who bought gifts over the Internet last year were satisfied with the experience.
However, while the Conference Board expects spending to be up, Brady said that retailers have very conservative estimates for the holiday season and have ordered accordingly.
Brady continued that there has been a moderate growth in freight, with a 3% increase in durable goods for the 3rd quarter of 2007. Although furniture and appliances have remained steady due to a soft residential housing market, electronics, such as flat screen television sets, have been strong, and should continue to be so in the foreseeable future.
Overall estimates for personal and disposable income have increased slightly, which may give high hopes for a strong holiday season. According to the Bureau of Economic Analysis (BEA), personal income for October 2007 increased 0.2%, up to $21.2 billion, with disposable personal income (DPI) up 0.1% to $14 billion. Personal consumption expenditures (PCE) were up 0.2% to $23.8 billion.
For the third quarter of 2007, the BEA estimates the real gross domestic product (GDP) increased at an annual rate of 4.9%, up from 3.8% in the second quarter. The BEA reports the increase in real GDP was due to positive contributions from exports despite an increase in imports. They also report that motor vehicle output contributed 0.43% to the third quarter growth in real GDP, a substantial increase from a 0.03% increase seen in the second quarter.
According to the Bureau of Labor Statistics (BLS) of the U.S. Department of Labor, the unemployment rate remained steady at 4.7% in November, with an increase in jobs for professional and technical services, health care and food services, but a decrease in job growth for manufacturing and several housing-related industries. Overall, average hourly earnings rose 8 cents over the month.
Despite the positive signs, it is impossible to predict what freight will be for the first quarter of 2008 until the sales figures come in for the holiday season, Brady said. “The first few months of 2008 all hinges on the sales during Christmas. If the sales come in as planned, you’ll see moderate gains, but if it comes in below plan, retailers will have excess stock and they won’t be reordering.”
By Justin Carretta, online news editor
December 7th, 2007 3:18 am
TruckNation's Weekly Blog!
Diesel prices continue to skyrocket
By Justin Carretta, online news editor
According to the latest figures compiled by Martin Labbe Associates (MLA), diesel prices have spiked at a record-setting pace, soaring as much as a dime per gallon a week throughout the United States.
The national average for diesel has climbed to $3.41 a gallon, an increase of $.32 from only a month ago. It’s up nearly a dollar from last year at this time, when a gallon averaged $2.55, for an increase of 33.57%. This has had a substantial effect on carriers across the country.
In the past five years, the fuel cost for most carriers has more than doubled. This has led to a significant expense for freight carriers, making gasoline a far larger expense than it was as recently as five years ago.
According to the MLA report, the operating cost per mile of fuel for general freight carriers has skyrocketed from 18.37 cents per mile in 2002 up to 41.50 cents per mile this week. In addition, the price for heavy carriers has increased from 26.07 cents per mile to nearly 60 cents per mile during that time.
Denton Cinquegrana, West Coast markets editor for the Oil Price Information Service, told Fleet Owner that while a jump of 30 cents a month is extremely unlikely to continue, prices are not going to come down that quickly. He sees record prices continuing into the foreseeable future. “I don’t see it stopping in the next few weeks,” he said.
This comes at a time of year when fuel prices usually begin to decline. “There’s been a big jump at a time when gas and diesel fuel usually drop,” he said. “It’s counterintuitive to what you would expect.”
Regular gasoline is up to $3.09 per gallon, more than 20 cents higher than the average price last month. However, it has grown at a similar pace as diesel (up about $.85 a gallon) since this time a year ago. This has begun to effect demand and has contributed to the national economic slowdown, which impacts freight as well.
November 21st, 2007 3:51 am
TruckNation's Weekly Blog!
Intermodal Traffic Drops for Week
Rail traffic rose slightly, but intermodal traffic continued a downward trend in falling for the week ended Saturday from the same week last year, the Association of American Railroads said.
Rail intermodal volume fell 3.5% year-over-year to 241,360 trailers and containers, AAR said in its weekly report Thursday.
Container volume dipped 2% to 187,359 units, while trailer volume fell 8.4% to 54,001 units.
Overall rail carload traffic totaled 338,508 carloads, up 0.5% from a year ago, the group said.
Railroad volume is considered an important economic indicator. Intermodal traffic, which tends to be higher-valued merchandise than bulk commodities, uses trains for the long haul and trucks for the shorter distance at either end of the trip.
By Transport Topics
November 12th, 2007 3:29 am
TruckNation's First Weekly Blog!
International launches hybrid truck production
International Truck and Engine Corp. today announced it is the first OEM to begin line production of hybrid-drive commercial trucks. Rather than wait to initiate production in the first quarter of next year as originally planned, the company has begun building the International DuraStar Hybrid, a diesel-electric hybrid medium-duty truck that it said provides customers with improved fuel efficiency and reduced engine emissions.
“The prototype phase is done – International is now building hybrid trucks,” said Jim Williams, director of sales & distribution for new products. “As part of our development process, we teamed with the Hybrid Truck Users Forum (HTUF) – a consortium of utilities, Eaton Corp., the Federal Government and the Weststart/Calstart organization – to assist us with the cost of bringing this new technology to market. It also gave us the direct customer feedback and support required to make [our hybrid] program a success.”
International said the DuraStar Hybrid improves fuel economy by 30% to 40% in city P&D applications. Fuel efficiency jumps by more than 60% in utility-type applications in which the engine is completely shut off so crews can operate equipment such as aerial booms solely on electric power from the vehicle’s battery reserve. The OEM noted that in such applications, the diesel engine restarts roughly every two hours to recharge the battery pack.
“We believe that hybrid technology is an important development for the commercial transportation sector,” added Daniel Ustian, president & CEO of Navistar, International’s parent company. “Increasing fuel efficiency and reducing emissions for the nation’s commercial trucks results in significant benefits for all of us.”
Last year, International built and delivered 24 developmental hybrid units to 14 major utility companies to gauge the potential fuel savings. “We tested International’s hybrid truck for almost a year and it has provided substantial savings in diesel fuel,” said George Servant, director of fleet operations for Florida Power & Light. “Plus, the truck’s boom can operate on battery power instead of the engine, which results in less fuel consumed, less emissions released into the air and reduced noise in the neighborhoods where we work.”
HTUF estimates that nearly 1,000 gallons of fuel can be saved annually by using hybrid utility trucks. The key challenge, noted International’s Williams, is the high initial cost to bring the hybrid technology to market. As International ramps up production and sales, hybrid truck prices should decrease, similar to the price reductions witnessed in computer technology and home electronics equipment over the years. Williams added that the Energy Policy Act of 2005 can provide tax credits of up to $12,000 per hybrid truck as well.
The production announcement follows word that Navistar has received the 2007 Blue Sky Award from WestStart-Calstart for its contributions to the commercial development of diesel-hybrid technology.
November 12th, 2007 3:26 am
SoCal Ports Set Plan to Ban Older Trucks
The Port of Long Beach said it is joining the Port of Los Angeles in setting a plan to bar older trucks from operating at the port, and approved a tariff structure that will gradually limit access to all but the cleanest vehicles.
The tariff, which matches one enacted last week by its neighboring Port of Los Angeles, will cut pollution from short-haul drayage trucks working in the harbor by nearly 80% within five years, the port said in a statement Monday.
Both ports’ tariff structures are based on a progressive ban of older trucks. The schedule is:
• Oct. 1, 2008 — All pre-1989 trucks will be banned from port service. • Jan. 1, 2010 — 1989-1993 trucks will be banned along with unretrofitted 1994-2003 trucks. • Jan. 1, 2012 — All trucks that do not meet the 2007 federal standard will be banned.
“With this clean truck program, the Port of Long Beach has taken a major step forward for clean air,” Long Beach Harbor Commission President Mario Cordero said in a statement.
The plan will rely on an electronic identification system such as radio frequency identification to ensure port access only to newer, cleaner trucks, the port said.
November 6th, 2007 12:56 pm
Diesel Soars 14.6¢ to Record $3.303; Gas Jumps Over $3
One-Week Gain Is Most Since Record 34.6¢ in October 2005
Diesel fuel jumped to a new all-time high Monday, rising 14.6 cents over last week’s record price to $3.303 a gallon, the Department of Energy said.
The jump was the biggest since record 34.6-cent single-week increase following Hurricanes Katrina and Rita, when diesel jumped to a then-record $3.144 on Oct. 3, 2005.
Gasoline also spiked, rising 14.1 cents to $3.013 a gallon, DOE said following its weekly survey of filling stations. It was the first time since June 18 that gas was above the $3 level.
That gain was also the largest since the record 45.9-cent jump immediately following Katrina, when gas leaped 45.9 cents to a then-record $3.069 a gallon.
Gasoline’s all-time record was set earlier this year, when it topped out at $3.218 on May 21.
Last week’s 6.3-cent diesel increase to $3.157 matched a previous record that was set on Oct. 24, 2005, following the hurricanes. Coupled with that increase, diesel has gained 20.9 cents in two weeks.
Diesel jumped 19.4 cents over a three-week span earlier this year, finishing that run at $2.685 a gallon on March 21.
Monday’s price left trucking’s main fuel 79.7 cents over the same week last year, which would cost a trucker pumping 200 gallons about an additional $160 to fuel up.
Crude oil spiked to a new all-time high last week, closing at a record $95.93 a barrel on Friday on the New York Mercantile Exchange, Bloomberg reported. Futures fell Monday to close at $94.54, Bloomberg said.
Each week, DOE surveys about 350 diesel filling stations to compile a national snapshot average price.
By Transport Topics
November 6th, 2007 12:53 pm
TruckNation's First Weekly Blog!
Economic unease threatens freight
A variety of indicators point to slowing U.S. economic growth, which most likely will depress freight volumes in the near future.
According to recent comments by Phillip Swagel, Asst. Secretary of the Treasury or Economic Policy, the weak housing market in particular looks to be a drag on U.S. gross domestic product (GDP) growth for the next several quarters. However, the housing downturn doesn’t appear to have had serious impact on other parts of the economy, he stressed.
“The labor market remains broadly healthy, with low unemployment, continuing job creation, and wage gains that should support consumer spending,” said Swagel. “World output growth has boosted net exports and core inflation appears to be contained. Looking forward, however, the ongoing drag from construction, the problems in credit markets, and higher oil prices have led private forecasters to reduce their projections for GDP growth in the fourth quarter of 2007 and into 2008.”
Declining residential building activity has subtracted substantially from GDP growth since the correction began, Swagel said, with annual housing starts falling nearly 50% through September this year after peaking at an annual rate of almost 2.3 million units in early 2006.
Trucking executives noted that the U.S. economic slump continues to impact operating results. “The third quarter presented the most difficult operating environment in several years for … our business model,” said Kevin Knight, chairman & CEO of Phoenix-based Knight Transportation, in its third-quarter earnings report.
The carrier’s net income decreased to $14.5 million in the third quarter despite a 3.2% increase in revenues to $180.3 million compared to the same period in 2006. Year to date, net income declined to $49.3 million from $52.8 million in the same quarter last year, even though total revenue increased 7.7% to $527 compared to the same nine-month period in 2006.
“During the third quarter, the industry wide supply of truckload equipment outpaced freight demand, which pressured pricing and resulted in lower equipment utilization,” said Knight. “[Our] average freight revenue per tractor declined 7.7% vs. the third quarter of 2006, resulting from a combination of lower freight rates and fewer average miles per tractor … [as] our revenue per loaded mile decreased 3.7%.”
“Our third quarter financial results were disappointing as we continue to work through the sustained weakness in freight demand,” said Robert Weaver, president of Tontitown, AR-based P.A.M. Transportation Services. “The prolonged softness of the freight market and continued aggressive price competition resulted in a 4.7% reduction in revenue per tractor per day for the [third] quarter compared to the same quarter in 2006.”
P.A.M. compiled net income of just $36,178 in the third quarter on roughly $86.6 million in revenues, a far cry from the $3.36 million in earnings it booked on revenues of $85.5 million in the same period last year.
An increase in fuel expense without a corresponding increase in surcharges paid by customers as well as a decrease in fuel efficiency measured in miles per gallon due to the use of trucks equipped with 2007 emission-compliant engines also hurt P.A.M.’s bottom line. “Looking ahead at the remainder of the year, we do not expect our current market environment to improve significantly, and intend to focus on cost control and reduction,” said Weaver.
On the energy front, Treasury’s Swagel said higher energy costs should continue. “Energy prices increased 5.4% over the latest twelve months, although prices have been volatile in this period, and crude oil prices have surged in the most recent few weeks,” he said. “The sharp run-up in oil prices since mid-August has prompted forecasters to lower their projections for near-term growth. High energy prices remain a challenge for consumer and business spending, while tight inventories and limited global production capacity mean that the possibility of sharply higher oil prices from a supply disruption is a key downside risk for the economy.”
The jump was the biggest since record 34.6-cent single-week increase following Hurricanes Katrina and Rita, when diesel jumped to a then-record $3.144 on Oct. 3, 2005.