Trucking Industry Shrinking, Nearshoring on the Rise

Trucking Industry Shrinking, Nearshoring on the Rise
October 3, 2008

As over 3000 trucking firms are expected to shut down in the next year and others scaling down operations, capacity may be strained. And as extra shipping fees are being added on, wholesale prices will probably inflate and retailers will not be able to pass too many costs onto the consumer. Small businesses in the same region are advised to pool their resources to have better standing with the trucking companies.


Local manufacturing looks like it will be on the increase though since the prices of cargo transport from China has tripled in the last 5 years; not counting the ocean freight costs from other nations as well. And since oil prices are not likely to dip to pre-2007 levels either, many companies seek to avoid outsourcing, thus cutting their delivery times. Volkswagen, Ikea and others have already begun increasing output at their plants and building new ones in the US. At the same time, food retailers are focusing more on pushing local produce, and imports of out-of-season items may be more costly and less commonly found.

The Future Looks Cleaner

The Future Looks Cleaner
August 21, 2008

There is no getting around the inevitable. As fuel prices continue to dominate world markets, the smart money will be following the development of alternate fuel sources. On the other hand, dependence on fuel is not going to disappear in the coming years. As new energy sources are sought and researched, others are seeking methods to reduce our current usage and make the most of our present situation.

Recycling has become a way of life in many countries. Local ordinances in many locales require homeowners to sort their trash. Many municipalities encourage disposal of waste items with recycling in mind by providing designated receptacles in public places. Water recycling for agriculture is quite common, especially in countries where water shortages are chronic. But, what about recycling the fuel that we burn in our vehicles?

Clean Power Technologies, of Calgary, Alberta, is committed to the development of hybrid fuel technology for a variety of vehicles including locomotives, heavy trucks, and light cars. The company's flagship product is the Clean Energy Storage and Recovery (CESAR) System. CESAR takes otherwise wasted heat from the exhaust of a standard combustion engine and converts it to clean power for the vehicle through a heat recovery system.

A heat exchanger captures waste energy in an accumulator, where the energy is stored in the form of steam. The steam can then be used "on demand" either in the source engine or in a secondary vapor engine. The secondary engine can produce power even after the source engine has been shut down.

Although Clean Power has conducted tests of the CESAR system on passenger vehicles, their primary application, at this point, has been use of the system in the trucking industry. It has proven very efficient for powering trailer refrigeration systems. Initial tests have shown a 40 percent increase in fuel efficiency. It can also be used to power other auxiliary truck systems, such as cab cooling and heating. The potential economic benefits of this system are tremendous. At the same time, the environmental benefits are no less impressive. The CESAR system prevents noxious and hazardous waste from entering the atmosphere and puts it to positive use in a clean, safe fashion.

As development continues towards use of this system in passenger vehicles, Clean Power is continuing its research to develop systems applicable to all transportation sectors.

Emission control and energy recycling – examples of partnering necessity and ingenuity for a cleaner tomorrow.

Honoring the Saviors

Honoring the Saviors
August 21, 2008

It is difficult to travel the United States and not find a museum or Hall of Fame that honors and pays tribute to great individuals who have made a lasting and memorable contribution to the history of America. Some of those honored are veritable legends, their stories known to every child in school. Others are less known, their glorious achievements, nonetheless, being charted and remembered by caring historians, ensuring that future generations will carry the torch of history.

In some cases, important aspects of history might be totally obliterated from our collective memories, were it not for the efforts of a devoted minority.

Travelers to Memphis, Tennessee make their way to Graceland, the mansion of entertainment legend Elvis Presley. More than half a million visitors make their way to Graceland each year, making it the second most visited "museum-home" in America (the White House is first).

Unknown to many Americans, though, is that Tennessee is also home to a museum that honors an important part of our lives that we often take for granted.

Chattanooga, Tennessee is a city that played an important role in transport history. During the heyday of the railroads, the city was a major transportation hub, being a terminus for many railway lines and river transport systems.

As the age of railroads faded and motor transport became supreme, Chattanooga became the birth place of one aspect of motor transport that cannot be ignored.

More than 10,000 visitors a year visit one of Chattanooga's major tourist sites – the International Towing and Recovery Hall of Fame and Museum. Curator Jim Starry maintains this one of a kind museum. The first tow truck wrecker was designed and used in Chattanooga in the early 1900's. Since then, tow trucks have become an indispensable part of our lives.

The museum is stocked with some of the earliest models of tow trucks, collected from various parts of the world. The Hall of Fame pays tribute to the best and brightest of the tow truck world, many of whom have literally put their lives on the line to save drivers in distress from dangerous situations.

In order to qualify for a spot in the Hall of Fame, one must be in the business for a minimum of 20 years, or invented something pertaining to the towing business, says Curator Starry. Similarly, the Hall of Fame looks for those towing professionals who are active members of their communities, giving of their time and resources to contribute to the benefit of others. Towing professionals from around the world, from America to Australia, have already earned places of honor in the museum's Hall of Fame.

Finally, the Hall of Fame pays tribute to tow truck drivers who have been killed in the line of duty. Rescuing cars in snow storms or at accident sites can often be perilous. These drivers will forever be honored in Chattanooga.

From the first tow truck in the early 1900's, Chattanooga is now the largest manufacturer of tow trucks in the world. The city has certainly earned its place of honor it the world of transport.

In Trains We Trust

In Trains We Trust
August 20, 2008

With the end of the current business sessions of the 110th U.S. Congress on the horizon, farmers across America and their representatives are doing their utmost to bring pressure on U.S. lawmakers to grant one more vital bill.

The average consumer has surely noticed that prices of food, both domestic and imported, have been on the rise. There are various reasons for the price hikes. However, one factor that has been common to most markets is the effect of high fuel prices.

How does the price of a barrel of crude oil from the Middle East affect the price of hamburger rolls made from U.S. grown wheat?

In factoring the wholesale and eventual retail prices of food items, transportation is a key factor. Local grown tomatoes sold at a farmer's market will have a much lower price than produce that has been shipped halfway across the country. On the other hand, supplying fresh daily produce to all corners of the nation is a luxury not enjoyed by many countries on this globe. Luxury, though, has its price tag.

Truck transport was the most common mode of long haul transportation until recently. The flexibility of routes, combined with the affordability of the transport mode, made trucking the choice of many farmers and suppliers. However, as trucking companies have been re-thinking the economic viability of long haul transport, railroad freight has become a realistic option. In many cases, trucking combined with rail freight has proven to be a successful combination.

Farmers across America have been relying more on rail service to ship their crops to the designated markets. Washington, D.C., though, has been making the economic reality of rail freight difficult for the farmers. In order for food prices to remain reasonable, rail prices must be reasonable. Antitrust exemptions granted to the freight rail industry allow the rail companies to charge farmers exorbitantly high prices. Removal of these exemptions would force the rail companies to become competitive and, thus, would reduce the rates and provide better service, also a complaint of the farmers. The lower rates would be passed on to the consumer. As many farmers rely heavily on the railroads, they feel that they are being held captive with no place to turn, and no other options.

The American Farm Bureau Federation has been pressuring members of the House and Senate to eliminate the Freight Rail Antitrust Exemptions. Senate bill 772 and House bill 1650 are companion bills that would make the antitrust exemptions obsolete. Farmers, growers, and consumers hope that the bills soon find a favorable place in the nation's law books.

Community Partners

Community Partners
August 14, 2008

America – the land of opportunity.

America – the land of community.

Every year, communities across America demonstrate that, underneath the hustle and bustle of everyday life, lay the hearts and souls of millions of hard-working people who recognize the need to give back to their communities a little of what they have received.

Statistics show that volunteerism is on the rise in the U.S. As a result of the partial recession that has struck worldwide, many communities are taking up the slack in social programs that would otherwise be understaffed or non-existent. Also, as gas prices remain high, many people are working together to create solutions to help themselves and others deal with the crisis.

But, beyond donating human resources, America is also a leading country for philanthropy, both private and corporate. Despite sluggish economic indicators in 2007, Americans reached a new record for giving, donating $307 billion to charities, up almost 4 percent from the prior year.

Although corporations only accounted for roughly 5 percent of this philanthropy, it is important to note that behind corporations are people. Many companies have instituted unique corporate programs that attempt to attract increased amounts of donations in various ways. Some create challenges; others institute matching programs. Interesting to note is that charitable giving takes places from small mom-and-pop groceries way up to huge mega-corporations.

A prime example of corporate America helping support local communities is the program initiated and sponsored by the Wal-Mart Foundation and the fleet of private truck drivers that serve Wal-Mart stores in Arkansas.

The Wal-Mart Corporation is a strong supporter of education and supports numerous educational endeavors through its corporate foundation, donating millions of dollars annually for a variety of community educational programs across the nation.

During National Truck Driver Appreciation Week (August 24 – 30), private truck drivers for Wal-Mart will be driving extra carefully. The Wal-Mart Foundation has pledged to donate to local schools one cent for every accident-free mile driven by the drivers. Based on last year's program, schools will receive between $1,000 –$5,000. Last year, Wal-Mart transportation offices nationwide contributed more than $150,000 to their community schools.

Wal-Mart is proud of the safety record of their drivers, and is equally proud to be a sponsor of local education programs. Similarly, the truck drivers are equally proud to do their part in supporting education. By working together at a grass roots level, programs like this are a win-win situation for everybody.

Tex-Mex Combo Proves Unpopular

Tex-Mex Combo Proves Unpopular
August 13, 2008

The American press has been chock full of articles describing the showdown in Congress regarding the upcoming deadline signaling the end of the first, and perhaps only, year of the Mexican truck pilot program. To refresh the memory for those who have bypassed these articles, the program allows specially registered Mexican trucks to travel anywhere in the United States. Prior to this program, trucks from Mexico were limited to a zone approximately 25 miles north of the border. At this point, cargo destined for points in the U.S. would have to be transferred to American trucks for further transport.

Briefly, the program was originally approved during the Clinton administration as part of the North American Free Trade Agreement (NAFTA). Since the truck program's inception last year, it has faced fierce opposition from a number of sources including the International Brotherhood of Teamsters and various American trucking associations. The opposition argued that American drivers would be at risk due to far lower safety standards of Mexican vehicles. Additionally, cheap Mexican labor would put American trucking jobs at risk.

The Bush administration, strongly in favor of extending the program, has maintained that Mexican trucks participating in the program are inspected with greater scrutiny than American vehicles. Also, according to top officials at the Federal Motor Safety Association, the Mexican companies are thoroughly screened prior to being accepted, and their drivers are held to the same standards as U.S. drivers.

The opposition has filed suit in Federal court and is awaiting judgment. Congressional opponents are trying to force an end the program. The Bush Administration is trying to find loopholes that will allow the program to continue.

The central question, though, is who is actually benefiting or suffering from this program.

One year after its inception, only 27 Mexican companies, with 104 trucks, and 10 U.S. companies, with 52 trucks are participating. The program was intended to have the participation of 100 companies per country.

The impact of the program has been marginal. Recently, a couple of participating Texas companies were interviewed. Both admitted that they haven't truly profited from the program, nor would they lose any major investments, were the program to be terminated.

In other words, although there may be noted political gains or losses surrounding the program's continuation or demise, that's where the benefits and damages will end. On the roads, the impact has been negligible and, apparently, so it will remain.

As the saying goes, "the best-laid plans of mice and men often go awry."

Which Driver is at Fault?

Which Driver is at Fault?
August 12, 2008

According to statistics gathered by the Minnesota Trucking Association, U.S. roadways are the site of more than 40,000 vehicle related deaths each year – more than 110 deaths per day, on average. This horrific statistic is doubly frightening when one reads numerous studies attempting to find who is to blame for these tragedies but few studies that actually attack the root of the problem.

There is no argument that unfit drivers should stay off the roads. Whether a driver is suffering from severe fatigue, or has a medical condition that renders him incapable of driving safely, the best seat to occupy is the passenger seat, not the spot behind the wheel.

When an accident involves trucks and other vehicles, the immediate assumption of passersby is that the truck driver was at fault. One should not always rely on first impressions.

Of all the annual vehicle related deaths, 88 percent do not involve trucks. Moreover, of those accidents that do involve trucks, both public and private studies indicate that the drivers of the private vehicles were at fault in more than 70 percent of the accidents.

Fatigue is a primary cause of traffic fatalities. In 2006, the U.S. Department of Transportation commissioned a study to investigate car-truck crashes. The study showed conclusive evidence that, on average, the driver of the car was twice as fatigued as the professional truck driver.

It should not be concluded that all drivers of private vehicles are less careful than their professional counterparts. However, government safety data indicates that the trucking industry is the safest it has been in the last three decades. Fatality, injury, and property-damage crash rates per 100 million miles are reported at all time lows. In addition, the reports state that medical problems are the cause for only 3 percent of truck accidents.

The trucking industry is in the business of providing quality service. Efficient, productive and safe drivers make good business sense. Therefore, the industry is committed to strong compliance with government regulations. Random drug and alcohol testing are commonplace. Annual physicals are required for drivers. Similarly, regulations govern where a truck may travel, under what conditions, and how much it may haul. A driver driving at peak performance levels gets the job done well and safely, guaranteeing future business. That's the bottom line.

Certainly, the trucking industry is not foolproof. Any human resource manager will tell you that there is no guarantee of 100 percent perfection when hiring personnel. However, the trucking industry continues to strive for extremely high standards. Their employees are trained professionals.

If only a fraction of the trucking industry standards were applied to private vehicles, the roadways would certainly be a far safer place to drive.

Women in the Ranks

Women in the Ranks
August 12, 2008

As times have progressed, traditional roles in society have changed - some in the name of progress, others for a variety of reasons, both logical and illogical. Throughout the years, though, some professions have remained in the man's realm, considered far from the women's world.

Until the mid '90's, trucking was considered a man's domain, by and large. Certainly, one saw women driving rigs here and there, but it was far from a commonplace sight. The 21st century, though, has brought with it significant changes to this "men's only" profession.

A recent study conducted by the American Trucking Association (ATA) indicates that there is a current shortage of 20,000 drivers in the U.S. If current trends do not change significantly, the study projects a country-wide shortage of 111,000 drivers by the year 2014.

The most severe shortage prevails in the long haul sector. Of the 3.4 million trucks on the road, nearly one third serve long haul travel. Based on present economic indicators, long haul transport will continue to grow and generate a need for 2.2 percent annual growth of long haul drivers. However, current demographic trends project growth of only 1.6 percent. Overall, 320,000 new jobs will be needed. Add to this replacement of drivers over age 55 who will retire over the next decade. The total number of new drivers needed for expansion and replacement over the next decade will reach 539,000, roughly 54,000 new drivers per year. Compounding matters is the demographic composition of the U.S. Men aged 35 to 54, the primary driver demographic group, are currently at a growth plateau and their numbers are projected to decrease over the next decade.

Women currently represent approximately 5 percent of truck drivers in the U.S. While figures are not exact, the ATA estimates that there were over 200,000 female drivers at the end of 2007. This figure continues to grow as women are proving to be among the safest drivers and are as competent and conscientious as their male counterparts.

Driving academies around the country are offering courses for women. Although some professions have discrepancies between salaries for men and women, female drivers are earning the same wages as men, adding to the lure of the profession. With the doors open for women, many more are considering trucking as a viable career option, and a means to bring home a decent wage, especially during these difficult economic times when many households require dual incomes.

Next time you spot a woman behind the wheel of a rig on the interstate, don't stop and stare. Offer a friendly wave to a professional driver who is helping to keep the national economy moving.

Showing Appreciation

Showing Appreciation
August 6, 2008

You can say what you want about America, both good and bad. Whatever you're looking for, you're bound to find in one of the states of the Union. But, there is one aspect of America that is unsurpassed around the world. In fact, the country probably holds an international record. The U.S. is unparalleled in establishing National Days and Weeks for many causes that Americans wish to celebrate or appreciate.

During the week of August 24 -30, Americans around the country will have the opportunity to say thank you for delivering America. That's right! National Truck Driver Appreciation Week is all about saying "thanks" to the nearly 3.5 million men and women who daily move the goods and products that make up the national economy. Without America's truck drivers, the country simply could not function.

The first wave of recognition is from elected officials. In many states, governors have issued official proclamations designating the week as Truck Driver Appreciation Week in their respective states.

Next in line are the national motor carriers, state trucking associations and trucking industry manufacturers and suppliers. In the past, they have honored drivers in various ways including safety awards, cash bonuses, gifts, extra paid holidays, free meals and company picnics. Other companies have arranged special sales on truck parts and accessories at reduced prices. Some companies even had management roll up their sleeves and wash drivers' trucks. And, sometimes, even a simple SMS message of thanks can bring a smile to the driver out on the road.

But what about showing appreciation from outside the industry? After all, everyone benefits from America's truckers.

One promotional company on Long Island (N.Y.) prepared a catalogue of promotional gifts for this special week with everything from posters and banners to travel mugs, t-shirts, and even first aid kits. The gifts of appreciation are plenty but, of course, where there's a cause, there's a buck to be made.

On the other hand, many local businesses around the country are taking the opportunity to say thanks to the people who help keep them supplied. No direct profits to be made from the deal – just good old fashioned "thank you" for a job well done.

A fine example is to be found in Toledo, Ohio. A local insurance agency, that insures a large number of trucks and drivers, is taking the opportunity of this week to give something back. The agency is sponsoring a contest to encourage drivers to send e-mails or short videos describing how they best employ computer technology to stay ahead in a tough economy. The winner with the most creative answer will receive a new Dell laptop computer with gaming capabilities and a built-in web cam. Runners up will receive awards of hundreds of dollars of free fuel.

As National Truck Drivers Appreciation Week approaches, hopefully many other local businesses will take the initiative and find ways to thank those dedicated drivers who help keep America supplied and functioning 24/7.

Globalization vs. Regionalization

Globalization vs. Regionalization
August 6, 2008

The litmus test of the 21st century global economy is the clothing label inside the garment purchased at the local Wal-Mart. Chances are very good that the t-shirt with the popular television cartoon character emblazoned on the front does not carry a "Made in the U.S.A." tag inside.

Over the past quarter-century, the world economy became extremely integrated caused, in part, by the profits to be made through the lure of cheap oil and cheap foreign wages. However, oil that cost $10 a barrel a decade ago now costs more than $120 a barrel. Moreover, as more Americans are looking for work, the call has gone out to keep jobs at home. Many economists feel that globalization is about to undergo serious change.

There is no escaping the reality that rising prices throughout the economy will force America to re-assess the management of its economy. Transportation costs are now a major factor in pricing, especially of large ticket items. Previously, raw materials, like iron and wood, were shipped abroad for processing and manufacturing in countries where labor costs were a fraction of those in the U.S. Now, more companies are returning to regional manufacturing. Production close to the point of origin is the economic choice today. The higher cost of domestic labor is more than offset by the savings from lower transportation costs.

Some economists worry, though, that reverting to regionalization may not be a smooth transition. A generation of Americans has lost some of its manufacturing base and skills to the more dynamic production centers of Asia. A return to "Made in America" may not occur overnight. Other concerns, though, may outweigh these.

Americans have become far more environmentally conscious. Many American companies are doing their part to protect the environment and the effects of global warming by adopting green policies meant to reduce fuel consumption and carbon emissions. The same cannot be said of many companies in the far-east where emission standards are far less stringent than in the west.

The same worry about lax standards applies to food products. Lack of rigorous inspection at food production plants abroad may cause Americans, concerned about disease and health standards, to re-consider purchasing imported food products and may shift a large percentage of this market to domestic production.

Business executives and economists know that many factors determine the flow of international trade. The decision of where to invest in a new factory or from where to buy a product is determined not only by shipping costs but by exchange rates, labor costs, consumer confidence, government regulations, and availability of skilled management. But, as certain factors begin to outweigh others, the decision making process will change accordingly.

After years of buying products produced abroad, the day may soon be at hand when Americans will once again buy a traditional La-Z-Boy recliner with a tag stating "Made in America".

The Best Route to Navigate New York

The Best Route to Navigate New York
July 28, 2008

One of the most important economic resources of New York State is the transport truck. Few New Yorkers are aware of the fact that trucks transport nearly 90 percent of manufactured freight in the state. Approximately 91 percent of communities throughout the state rely exclusively on delivery of goods by truck. Thus, the economic solvency of this industry should be of vital concern to state residents. Moreover, the state government should be concerned with the well-being of the trucking industry. However, all is not in a state of domestic bliss in New York.

On May 12, NY Governor David Paterson announced his intention of instituting a new policy on statewide large-truck movement. The new regulations would, in essence, force trucks to travel only on the state highway system.

In an attempt to reduce fuel consumption and transport costs, many trucks opt to travel across the state via local roads. The routes are shorter, the roads are toll-free, and cheaper fuel can be found off the main roadways.

According to facts and figures released by the New York State Department of Transportation, the excess travel by trucks on secondary or local roads is posing a hazard to the environment, and is disrupting local welfare through increased noise and increased traffic. Furthermore, the smaller local roads were not designed and engineered for large scale, heavy traffic. The roads are narrower, shoulders are narrow or non-existent, and many roads are home to local pedestrians. Also, many local roads have a much lower standard of maintenance than the main roads. As such, the state intends to re-direct large-truck traffic to the regulated interstate highways.

The impact of this proposed regulation is quite apparent. Supporters of re-routing state the inherent environmental and safety benefits of re-directing truck traffic. Opponents, primarily the trucking industry, warn that traveling solely on interstate highways will drastically increase operating costs. (Other opponents of the proposed change include local businesses – fuel stations, restaurants, service garages, motels - that have benefited economically from the increased commercial traffic in recent years). The interstate routes are longer, thus increasing overall fuel consumption. Fuel at roadside truck-stops is generally more expensive, and the highway tolls and taxes for freight trucks are quite high. Ultimately, the additional expenses will be passed on to the consumers in the form of higher prices.

Lobbying efforts by the New York State Motor Truck Association (NYSMTA), a non-profit trade association representing more than 800 trucking companies, are continuing in an attempt to dissuade the state from enacting these new regulations.

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Unemployment and the New Jersey Trucker

Unemployment and the New Jersey Trucker
July 28, 2008

June 2008 was the sixth month in a row that the United States lost jobs. Across the nation, 62,000 jobs were lost in one month, bringing the total this year to a staggering 438,000. This is the longest losing employment streak in the US since 2002. The unemployment rate, currently holding steady at 5.5 percent, is expected to climb and will likely top 6 percent early next year. Currently, there are approximately 8.5 million unemployed Americans.

June was an exceptionally hard month for the Garden State. Over 4,200 jobs were lost throughout the state, almost 7 percent of the national total. All the jobs were in the private sector. Of all the industries affected by the layoffs, the hardest hit was the trucking industry. Nearly one quarter of the jobs lost in June - 1,000 jobs - were trucking jobs.

In what appears to be a strange irony, the trucking industry throughout the US is showing signs of recovery and even posting profits in many states. On one hand, thousands of jobs are being cut throughout the industry. Due to the excessive rise in fuel prices, maintaining large fleets has become economically hazardous, especially for independent companies. The result has been a sharp increase in company closures and bankruptcies. However, consumer demand for transport has not declined. In fact, the remaining companies, having downsized and consolidated, are having difficulties keeping up with the demand. This has resulted in a seller's market for services, with high prices of fuel being absorbed by the consumer, and profits increasing for the industry. In the middle of this economic see-saw is the trucker. Many independent drivers cannot compete with the large companies, and many large companies have trimmed the number of employees in order to remain profitable.

New Jersey has seen a slump in the housing market which, in turn, has reduced the demand for building products and home furnishings. This reduction, combined with major declines in statewide manufacturing, has contributed heavily to lost trucking jobs as these industries are major customers of the transport market.

The Rutgers Economic Advisory Service, which studies the New Jersey economy, does not see any immediate relief in site for the state. In fact, indicators show that New Jersey will continue losing jobs until 2010. They predict that the state's economy will begin to turn around in the second quarter of 2010 and the state will recover its lost jobs by mid-2011.

Until then, many residents of New Jersey's hardest hit industries, including its truckers, face a worrisome future.

Canadian Trucks Heading South

Canadian Trucks Heading South
July 28, 2008

Halfway between Detroit and Toronto, in southwestern Ontario, is the town of St. Thomas. It is a pastoral town of approximately 50,000 residents. In the mid 19th century, St. Thomas became famous as the "Railway Capital of Canada" as two major railways, the London and Port Stanley Railways, began operating from the town. This was the beginning on a new transportation era for the town. By 1914, eight different railways were operating from St. Thomas with more than 100 trains passing through the city daily. St. Thomas, Canada's Railway City, benefited from unparalleled growth, socially and economically.

Until the 1950's, the Railway was the dominant employer in St. Thomas. However, the end of the steam engine marked the end of the economic boom as the railways greatly downsized. Facing a massive employment crisis, the City aggressively pursued new businesses and successfully attracted other transportation ventures. Several major manufacturers opened new factories in St. Thomas including Ford's "Crown Victoria" assembly plant and Freightliner Truck's Sterling Manufacturing plant.

Almost 5 percent of the St. Thomas population is employed at Sterling, or so had been the case. Although the transportation industry saw a boom in 2005 and 2006 due to the huge demand for hauling goods, a major slump began in early 2007 with the slowdown caused by rising fuel prices. In the U.S., the major market for Freightliner trucks, fleets are downsizing and many vehicles sit unused, greatly reducing the demand for new trucks.

The Sterling plant was producing 75 trucks a day. They predict that production will be cut in half by the fall of this year. Sterling already has 600 workers on layoff and announced that an additional 720 employees will be cut from the payroll by November of this year. Adding to this situation is Freightliner's Mexican operations.

The cost of living in Mexico is below that of Canada. Unionized automotive workers in Mexico recently agreed to a new two-tier wage package. New workers will earn $2.25 an hour compared to $4.50 an hour for existing workers. Freightliner currently operates one factory in Mexico and a second is under construction, slated to open in early 2009.

Workers at the St. Thomas plant are extremely worried. In addition to the extensive layoffs of fellow employees, the current collective agreement is due to expire in March 2009. The union is concerned that they may have to make extensive and painful concessions, lest Freightliner decide to move its operations entirely to Mexico.

The end of the steam engine saw the end of the railway industry in St. Thomas. Will high fuel prices see the demise of its transportation industry?

Economy Down; Profits Up

Economy Down; Profits Up
July 28, 2008

If you're involved in the trucking industry today, it's a fact that everyone has a story to tell, especially if it relates to the economy. The rising price of fuel is a growing global concern, especially for those whose livelihood depends on daily consumption of this expensive commodity.

As America's economy continues its downward slide, due, in part, to the fuel crisis, the trucking industry has taken a beating. Many independent drivers, and small trucking companies, have been put out of business due to their inability to cope with the economic burden imposed by high fuel costs. However, all is not bleak for the industry. When the going gets tough, the tough get going. For some of America's leaders in the trucking industry, profits have never been better.

USA Truck Inc. is a dry van truckload carrier transporting general commodities throughout the continental United States and portions of Canada and Mexico. The Van Buren, Arkansas-based business, with a fleet in excess of 2,500 trucks, is traded on the NASDAQ and recently posted strong second quarter results.

As operating costs have skyrocketed over the last eighteen months, large fleet operators, like USA Truck, have learned the secrets to survival and success. Companies have adopted a different, far more economical, approach to managing their fleet.

Wall Street analysts predicted serious second quarter losses for the trucking industry. To their amazement, USA Truck's profits increased by 32 percent, compared with the same period last year. Their share prices have increased by a stunning 25.5 percent.

Their secret? The company became far more disciplined about its truck network. They placed trucks where they should be. Trucks logged shorter lengths of haul and improved the average miles per tractor per week. Careful planning shaved roughly 70 miles per trip from each truck. The company has begun to focus on serving the more lucrative shorter-haul market. They have slightly trimmed the number of trucks in use, thus maximizing the use of each vehicle. Optimum utilization has paid off, allowing the company to earn the greatest amount of revenue per hour of the driver's hours of service.

By achieving an acceptable balance between fleet capacity and freight demand, large operators, like USA Truck, are managing to keep ahead of expenses and show profits, despite the continual rise in expenses. Also, better freight selection is expected to help the carrier's improve their revenue per mile.

By going back to basics, and managing their businesses in a far more accountable manner, the larger operators will continue to keep America supplied, and their shareholders happy.

Changing With The Times

Changing With the Times
July 28, 2008

"Necessity is the mother of invention," wrote the Greek philosopher, Plato. Long before our "modern" world was even a glimmer of a thought in someone's imagination, Plato coined this phrase that still has much meaning. Centuries later, another writer, Mark Twain, penned a variation of Plato's words, when he wrote, "Necessity is the mother of taking chances." In retrospect, both Plato and Mark Twain seemed to envision the 21st century.

The global fuel situation has affected virtually every one of us in one way or another. For those whose livelihood depends directly on fuel, the impact has been ever more severe. The trucking industry in America is a prime of example of both making changes and taking chances.

Clyde M. Fuller (1926 – 2002) will long be remembered as a prolific entrepreneur and innovator in the trucking industry. In the 1970's, Mr. Fuller revolutionized long haul trucking through the introduction of cross-country driving teams, enabling freight to cross the country in 48 hours. Employing their father's long haul techniques, Fuller's sons built their own fortunes and competing companies, U.S. Xpress and Covenant Transport, both based in Chattanooga, Tennessee. While both companies contributed greatly to establishing their hometown as one of the leading trucking hubs in the U.S., events of recent years have forced the owners to re-examine their father's business strategy.

U.S. Xpress is one of several long-haul companies that are seriously examining their target market. They believe that the future of cross country drives is limited. They have begun to cut the drivers' length of haul, and are greatly increasing their regional fleets for shorter routes. Additionally, U.S. Xpress has shifted a large percentage of its long haul business to shipping via railroads. Some trucking executives believe that railroads will eventually come to own the long-haul marketplace.

Other companies, like Covenant, are not rushing to abandon a market that has proven to be quite lucrative. They hope that better control of expenses will enable the companies to remain competitive and profitable. Covenant has introduced new policies that cut down on truck idling time, reduced empty miles, decreased its number of long distance teams, and limited the traveling speed of trucks to 65 m.p.h. for better fuel efficiency. Covenant has also concentrated some of its business in regional trucking. Rather than abandon the long haul routes, they have added short haul routes through a regional company that they recently purchased.

The question, of course, is which of Clyde Fuller's legacy is correct? The answer is still unclear. Only time will tell if it is possible to retain and modify the past, or if change will be the way of the future.

The Price of Living in Rural America

The Price of Living in Rural America
July 20, 2008

Throughout the US, a common topic of conversation is the rising price of fuel. One can't escape it. Soaring gas prices affect virtually every American in one way or another. The Constitution of the United States grants equal rights to all citizens of the nation. However, in the current battle against rising fuel costs, rural Americans feel that carrying the burden is far from equal for all Americans.

It is a fact of life that vehicles and travel are an intrinsic part of life in rural America. With many services and places of employment located many miles from homes, there remains no alternative except driving from place to place.

According to figures published by the Federal Highway Administration, rural Americans drive an average of 3,100 miles more per year than urban dwellers. In a recent May 2008 survey conducted by the Oil Price Information Service, an independent fuel analysis company, figures showed that residents of rural areas spend as much as 16 percent of their available monthly income at the fuel pump. Counterparts in major urban centers spend as little as 2 percent.

It is not uncommon these days to hold down a second job in rural areas, simply to pay the gas bill. Salaries have not risen at the same pace as fuel expenses. Therefore, absurd as it may seem, extra income is necessary to cover the expenses of going to work.

With many people living distances from neighbors, carpooling has become a viable option, although not without its challenges. Due to the distances, travel must begun much earlier than it would in the city, sometimes well before sunrise.

Some employers have made accommodations by extending workdays and allowing employees to work a four day work week, thus reducing travel by 20 percent. Some, if few, are participating in fuel expenses.

Many city dwellers have been trading cars and purchasing hybrids in order to reduce fuel consumption. However, in outlying areas, where many gravel roads are difficult to traverse, smaller, more fuel-efficient cars are not realistic.

Leisure time has certainly been affected. The Montana Department of Transportation released figures showing that weekend leisure travel was down 8 percent in June, compared to the same time last year.

Bulletin boards, electronic and other, are filled with listings of people looking to share rides for shopping and doctors visits. Quite often, a medical specialist may be located hundreds of miles from home. The travel cost may exceed the cost of the visit or treatment.

Some families have changed the way they eat, how they dress, or how they manage their homes. Expenses do have to be regulated. As travel cannot be eliminated, the expenses must be offset elsewhere.

The price of crude oil is affecting the way all Americans live.

Casualty Count is Rising

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Casualty Count is Rising
July 20, 2008

They said it would never happen but it did. Gasoline prices have cleared $4 a gallon. Diesel fuel is approaching $5. Most anyone who drives a motorized vehicle has an opinion about these prices and few are favorable. Dig a little deeper, though, and one will see another level of collateral damage caused by gas prices. In the war at the gas pump, there are many casualties and the number is rising.

According to the oil industry trade publication, NPN Magazine, nearly 3,000 gas stations have closed in the last year due to a reduction in driving by motorists. The closures are also attributed to the fact that many drivers can no longer afford to support their independent, neighborhood station but are willing to travel a little further in order to save money at the pump.

Thinking of moving your home or office? The price of operating a moving truck loads has virtually doubled in one year's time. Someone has to make up the difference and the companies, primarily independent movers, are sharing the higher prices with their customers.

The moving industry is just one trucking industry in trouble. In the first quarter of 2008, 1,000 fleets of truckloads – roughly 40,000 vehicles – went out of business in the US. Some truckers have found work with other companies but many have left the industry.

Taxi drivers can tell stories, many stories. One of the most common ones is about their reduced income levels in 2008. Over the last two years, the cost of operating a taxicab has risen by 38%. As fares have not risen accordingly, lest passengers stop using taxis, drivers' income has dropped, on a national average, by nearly $4,000 annually.

When times are tough, more people need the help of charities. And, normally, Americans volunteer their time and resources to help others. Across the country, more than half of Meals On Wheels programs, which deliver meals to home-bound seniors, have reported a loss of volunteer drivers. Volunteers pay their own fuel and many can no longer afford to do so. Similarly, organizations with transportation budgets set their prices last year. The budgets have long since been exhausted.

Remember the old pictures of kindly firemen rescuing the family cat stuck in the elm tree? Reports have begun to surface of a few volunteer fire departments that have closed. Others are responding to fewer emergencies. They need to save expensive fuel for major emergencies only.

America will continue to move. It is a way of life. But, what will be the price?

Fuel for the Truck; Fuel for the Trucker

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Fuel for the Truck; Fuel for the Trucker
July 20, 2008

Ever heard of Breezewood, Pennsylvania? If you're a trucker traveling through the state, you're probably familiar with this quarter-mile strip located at the junction of I-70 and the Pennsylvania Turnpike – places to eat and places to re-fuel. But, there's more than meets the eye in Breezewood. Nestled between the rigs is one tractor trailer that doesn't seem to move much. It is the mobile chapel of Rev. Shannon Rust. Truckers can re-fuel their rigs and also re-fuel their souls.

According to the Trucker's Friend National Truck Stop Directory, an industry publication, there are more than 230 chapels located at truck stops across the nation. This number has almost doubled in less than a decade.

Long hours on the road, alone with one's thoughts, can leave a person anxious and searching for answers to the milieu of problems that have become all too common today in a troubled industry. While truckers employed by major companies still enjoy a relative degree of job stability, the independent truckers are going through rough times. Meeting expenses is the task at hand. Many truckers are spending longer tours away from home in order to make ends meet. However, the price of these trips is steep emotionally as well as financially. Problems at home have to be addressed long distance. The worry of bills in arrears always looms. The question of the next job is continually on the horizon.

Seeking peace of mind has become an intrinsic part of traveling the road. Helping the truckers deal with loneliness and worry is the task of these mobile preachers. The number of truckers visiting these truck-stop chapels is growing. Truckers are making time for prayer as well as food and maintenance. Preachers like Mr. Rust are serving an important role in keeping America moving.

Next time you're traveling the Interstate and your personal fuel gauge is starting to run low, keep your eyes open for one of America's soul re-fueling stations. The service is friendly and efficient, and you can always afford to fill your tank.

Railroad Superiority?

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Railroad Superiority?
July 20, 2008

In the age of rising fuel prices, there is much scrutiny of the nation's transportation system. As the saying goes, desperate times call for desperate measures.

Although many Americans feel that they are hostage to foreign powers that control the flow of crude oil, they are yet to widely endorse alternatives. One school of thought promotes alternate fuel sources. Other opinions support re-examination of the ways America moves people and goods. In either case, as America's dependence on foreign produced items continues to grow, transporting these goods is major business.

A prime example is the transport of container goods. Short haul transport is best managed by truck. However, as distances grow, and America is by no means a small country, so do the options. When time is the primary concern, air freight is the preferred mode of transport. However, air transport is far too prohibitive, both in terms of cost and capacity, for large loads. The choice is either truck or railroad.

The US interstate highway system is quite extensive and is home to thousands of transport vehicles, as well as private. However, the number of trucks is continually growing, requiring expansion of the roadways due to sheer capacity and the necessary maintenance. Construction of additional lanes, to accommodate the increased volume, will cost taxpayers billions of dollars. As transportation bonds are but one of a plethora of proposed legislations that are presented to the voting public, choices have to be made and questions are raised. Could alternate modes of cargo transport serve the needs of the American consumer? Does an increase in road traffic have negative environmental effects? Are other resources being under utilized?

Proponents of railroad transport have the answers to these questions. They feel that America lags far behind European nations in terms of railroad usage. While it is true that the distances are far greater between points in the US, it still does not negate the fact that railroad lines are dedicated modes of travel, virtually undisturbed by other vehicles. Supporters state that rail transport is far more efficient than trucks and certainly would save taxpayers money. Industry analysts claim that increased train usage could greatly reduce the number of trucks on the nation's roadways, thus reducing fuel consumption and contributing to a healthier environment. Similarly, the costs associated with increased rail usage are far less than the costs necessary for upkeep and expansion of the roadways.

What is clear is the need for increased joint studies by legislators and industrial leaders to define where America is going and how it is going to get there.

Smugglers – Beware!

Smugglers – Beware!
July 20, 2008

There was a time, not too long ago, when smuggling into the United States via the state of Texas was a commonplace occurrence. The Tex-Mex border was a common entry point for illicit drugs and illegal aliens. The common border has been a favorite gateway for smugglers and a cause of concern for law enforcement officials.

Over the years, authorities have increased efforts to curb and curtail smuggling over the border and have become adept at catching smugglers through increased information and more effective surveillance and patrols.

One of the transport methods employed by smugglers has been commercial trucks traveling between Mexico and the US.

Smuggling of drugs and humans is a federal offense punishable by fine and possible short jail sentence. Illicit transport of illegal aliens and drug smuggling in your rig could have your truck confiscated until after the fine was paid. In all, the benefits may have outweighed the risk – until recently.

Changes in federal laws have greatly increased the penalties for illegal transport. However, the strange irony is that the trucker involved in these illegal activities still had a degree of protection under state laws. After paying the fine, or serving a short sentence, the same trucker could get behind the wheel and it was back to business as usual. Texas legislators have put the brakes to this strange turn of events.

Texas has initiated tough new measures to curb illegal transport of humans and drugs. Under the new initiative, federal records of offenses will be made available to the state. The goal is to alert state officials who have the power to revoke and cancel state issued driver and transport licenses. Texas officials have made it clear that their state has declared war on truck drivers involved with illegal activities. A first offense will cost a driver his license for one year. A repeat offense will cost a driver his license permanently.

Since September 2007, seven drivers have been caught smuggling and five licenses have been permanently revoked.

Smugglers – beware. The Texas Border Patrol is open for business.

ATA Presses for a Cap on Diesel Fuel Prices

ATA Presses for a Cap on Diesel Fuel Prices
Sunday, April 6, 2008

On March 27th, the American Trucking Associations (ATA) urged the Bush administration to quickly take measures to ensure that affordable supply of oil is available to the 3.5 million truck drivers and consumers in the U.S. The ATA said as truckers currently face the highest prolonged fuel prices in history, and some motor carriers believe fuel has surpassed labor as their largest expense, the federal government must step in to help bring the price of diesel fuel down.

The ATA recommended the federal government to: stop filling and instead release oil from the Strategic Petroleum Reserve, work with the states’ attorneys general to fight the likelihood of any fuel price overcharge, require all new trucks to install electronic speed limiters set at no more than 68 mph, and set a national maximum speed limit of 65 mph. ATA President and CEO Bill Graves expressed his concern over how increased fuel prices affect the trucking industry as well as the nation’s economy as a whole. Although the trucking industry is doing its best to conserve fuel and limit its consumption, the federal government’s help is still very much needed.

Pressing for immediate action for what is described as a crisis situation, the ATA said it issued letters of late to President Bush, the Department of Energy, U.S. Environmental Protection Agency (EPA), the Federal Motor Carrier Safety Administration, Department of Transportation (DOT), the National Highway Traffic Safety Administration, and the Treasury Department.

The ATA, which represents more than 37,000 member motor carriers, said that the trucking industry is expected to spend a record-high $135 billion on diesel fuel this year, some $22 billion more than last year.

Safe Trucking Companies to be Awarded Fleet Safety Certification

Safe Trucking Companies to be Awarded Fleet Safety Certification
Sunday, April 6, 2008

Aon Risk Services, the retail brokering and risk management services unit of Aon Corporation, has developed the first nationwide fleet safety certification for trucking companies.

SafeFleet Certification, developed by the company's trucking practice, is a performance-based safety certification. The safety performance of trucking companies is measured by comparing a fleet's safety performance to national averages for the trucking industry based on several safety performance criteria, including out-of-service violation percentage, DOT-crash rate per million miles, crash-related injury and fatality rate per 100 million miles, and injury rate that results in lost workplace time per 100 workers.

SafeFleet Gold Certification is awarded to fleets whose safety performance is at least 35% better than the trucking industry average, whereas SafeFleet Silver and Bronze Certifications are awarded to fleets whose safety performance is 25% and 15% respectively better than the national average.

David Mitchell, director of risk control and safety for Aon's trucking practice, said that only about 15% of trucking companies would be able to meet such rigorous certification standards. Trucking companies that do meet those standards, however, are expected to experience improved claims defense and reduced claims costs, better treatment from insurance and reinsurance underwriters, higher driver retention, and increased sales to shippers.