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.

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.

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.

Owner-operators Struggle to Keep Business Afloat

Owner-operators Struggle to Keep Business Afloat
Wednesday, March 19, 2008

Trucking’s owner-operators have been hit with high diesel prices, cut loads, and lower shipping rates. The self-employed drivers are almost going bankrupt and seem to be at the risk of losing their jobs.

The housing decline and less consumer spending have cut into loads, and the extra trucking capacity at hand is causing freight rates to spiral downward. In addition, diesel prices, which are always higher in winter, have experienced an astronomical spike, doubling over the past four years.

According to the Department of Labor, nearly 9% of the nation’s 3.4 million truck drivers are independent owner-operators. John Saldanha, who teaches logistics at Ohio State University, said that trucking will be deeply affected if owner-operators ever lose their jobs; the trucking scene will turn into a group of regional and national oligopolies that, once the economy revives, would send shipping prices higher.

On the other hand, business looks far more promising for the large public trucking companies as they have had their stocks climb since January. Big trucking companies, like J.B. Hunt Transport Services Inc. and YRC Worldwide Inc., tend to buy everything from fuel to tractors in bulk; as such, thousands of gallons of diesel are bought at a time on the commodities market to be stored later on.

In the end, owner-operators are left feeling neglected and on the fringe more than ever. In order to survive in the business, truckers call for caps on diesel prices, or tax credits for them and further constraint for intermediaries who broker truck loads.

Annually, rumors of a nationwide truck strike circulate. In January, some truckers kept their trucks off the road for a week in the hope that a week’s strike might be what they need to not ultimately lose their jobs.

Trucking Companies Hit by Elevated Diesel Fuel Prices

Trucking Companies Hit by Elevated Diesel Fuel Prices
March 13, 2008

Local trucking companies are faced with the ordeal of having to adapt to the constantly fast-climbing fuel prices across the nation.

Rich Ferguson, terminal manager of Brilliant-based Fraley & Schilling Inc., conceded that, with elevated diesel fuel prices, the company’s ability to profit has been deeply affected. However, he said that his company has not resorted to cutting down the number of available trucks like other companies in the tri-state area have. Actually, the company is enjoying a very strong run in business in the area and is actively seeking more drivers.

Still, with diesel prices rising, it has become increasingly difficult for his company to recover those costs. Ferguson added that recent economic conditions are to blame for the decreased demand for trucking services in the Midwest. He expressed his concern over how the weak dollar makes imported goods more expensive and consequently how it is getting in the way of importing more goods from other countries.

Ferguson pointed out that Fraley & Schilling Inc. is indeed facing two problems when it comes to demand. The first of which is owing to the fact that the trucking service is not in high demand as it was before, and this subsequently affects the company’s ability to fix the prices of its services. The second is that the demand for trucking service is usually Truckingsubstandard in some areas around this time of year. The demand for transporting building products, for instance, has waned off at this time of year.

Facing a battle of his own is Joe Stenger, chief executive officer of Barnesville-based J.W. Stenger Trucking, who mentioned that the elevated price of diesel fuel has hit his company. A key component of the company’s variable cost of operation, diesel fuel’s increased cost can be passed along as fuel surcharges. However, erratically fluctuating fuel prices are causing this once stable system to spin out of control. He added that with the fuel surcharge often being lower than it should be, the company’s profits have diminished. Still, the company does not make any fewer deliveries as it transports a wide variety of goods.

Besides passing along fuel surcharges, Stenger is actively conserving fuel. New ways of preserving fuel are being examined, and with no-idle systems and satellites having been set up in each of the company’s trucks, drivers will not have to run their trucks while resting overnight and their performance will be closely monitored as well.

Stenger and Ferguson share the same point of view regarding the fact that elevated diesel costs will not cause shortage of goods, and consumers, they believe, should not be concerned about rationing products. There are still many trucks available to transport goods, and the supply will always be there. Stenger also acknowledged the fact that consumers will have to pay considerably higher prices for living necessities and goods delivered by his company, and these higher prices may prove to be a hurdle for them. Consumers will resort to rationing only when they are unable to pay the goods’ higher prices, and rationing will eventually be common for most families once credit card companies do not step in for help.