Diesel Hits Record Highs

| December 12, 2008

In late June and early July, the pump price of diesel reached a record high for three weeks in a row. The national average retail price of a gallon of diesel increased 6 cents, to $2.408, for the week ending July 11. That’s a 66-cent increase from the same week of 2004.

At 11 truck stops, the midsummer pump price surpassed $3, says Chris Lee, marketing director of ProMiles fuel-tracking software. “We were concerned when it went over $2,” Lee says. “Seeing it push over the $3 mark is something that the industry never really considered.”

Moreover, the traditional summertime escalation of the price of gasoline over the price of diesel has not happened this year. Many analysts believe it is unlikely to happen at all, partially because of the increasing demand for diesel in the new industrial behemoth, China.

“There has been a 3 to 4 percent demand growth increase in diesel, and gasoline is a tad under 2 percent,” says Denton Cinquegrana, market editor for the Oil Price Information Center.

Rising diesel prices have many causes, but turmoil in Iraq and Afghanistan is not one of them, he says.

“The war isn’t having an effect on it,” Cinquegrana says. “The demand for diesel is strong around the world. Where the U.S. uses mostly gasoline, most other countries use diesel.”
That demand could sharpen if hurricanes continue to tear through the Gulf of Mexico, the site of many oil production facilities. “I think we are seeing a temporary spike due to the hurricanes,” Lee says.
–LANCE ORR AND ANDY DUNCAN


TRUCKING TOGETHER
Landstar owner-operators Harold and Helen Eanes of Christiansburg, Va., former Overdrive Truckers of the Month, are featured in As Long As We Both Shall Live, a documentary project by photographer Robert Fass that focuses on married couples who have been together for at least 40 years. “The movie stars, you know, they get all the press and so forth,” Helen told Fass, “but I think there are a lot of people just like us, that are together and will be together for as long as they live.” The project will result in a book and a touring exhibition. Visit www.longmarriedcouples.com.


OVERDRIVE WINS 8 EDITORIAL AWARDS
Overdrive won eight awards from the American Society of Business Publication Editors, which recognizes the best writing and design among trade journals.

Three awards came at the national level, two of them first-place Gold Awards. Overdrive competed in the top circulation category, over 80,000, against many of the nation’s leading trade magazines.

“These awards show that Overdrive’s editors and designers continue to give our owner-operator readers the business and technical information they need to succeed,” says Publisher Brad Holthaus. “No other trucking industry magazine won more than four awards in this competition.”

Among Overdrive’s sister publications, Truckers News won three regional awards and one national award, and Commercial Carrier Journal won three regional awards.
Overdrive’s national awards were:

  • Gold in the how to category, for the “Matchmaking” package, which contained stories by Linda Longton and Tim Barton about choosing a carrier.

  • Gold in the staff-written column category for Max Heine’s Dollars & Sense column.
  • Bronze in the information graphics category, which recognizes charts, graphs and other explanatory material.

Overdrive’s regional awards were:

  • Gold in the special section category for “Self-Help Toolbox,” about tips for personal and professional improvement. The stories were written by Laura Crackel, Longton, Carolyn Magner and Katie Hines.

  • Silver in the special section category for “Road To Riches,” which contained stories about owner-operator income, by Sean Kelley, Heine and Crackel.
  • Gold in the how-to category for “How to Replace Wheel Seals,” by Paul Hartley.
  • Bronze in the how-to category for “Ten Scary Scenarios,” about how to respond to unusual on-the-road emergencies, by Magner and illustrator Tony Brock.
  • Gold in the computer-generated front cover category, for the “Fighting Back” cover, about fuel surcharges, designed by Brock.

-LANCE ORR


HIGH PAY, HIGH RISK: DRIVERS NEEDED IN IRAQ
KBR, a subsidiary of Halliburton, will be at the Great American Trucking Show, Aug. 25-27 in Dallas, to recruit drivers to haul cargo in Iraq and Afghanistan.

“We are not a trucking company. We need drivers in support of the military in Iraq, Afghanistan and Kuwait,” says Melissa Norcross, a spokesman for KBR’s government and infrastructure division.

Drivers sign up for one year of service but can come home whenever they want if conditions in the war-torn areas get too rough for them, Norcross says. KBR will pay the driver’s flight over and the return trip, regardless of when the driver decides to head home, she says.

Pay is usually two to three times what the drivers make in the states, Norcross says. Drivers work 12-hour shifts seven days a week and get straight time, overtime and hazard pay because they are working in a war zone.

“All convoys are escorted by the Army,” Norcross says. Still, the job is very dangerous. Sixty-eight Halliburton employees have been killed since the company began sending people over. Twenty were truck drivers.

“Our recruiters try to talk people out of going over there,” Norcross says. “They need to know up front what they are getting into. We don’t want anyone to go over and feel like they don’t know what they are getting into.”

The drivers will haul anything the military needs, from medical supplies to heavy equipment, Norcross says. “What they tell us to haul, we haul. We do everything at their direction.”

Living conditions vary, but drivers often live in a tent with eight to 20 people, Norcross says.

As reported by Truckers News last year, some American truckers in Iraq, working for various contractors, earn tax-free annual salaries as large as $120,000. Many have complained of unexpected dangers and hardships, including 40-year-old trucks that lack sufficient armor.

Thomas Hamill, a Halliburton convoy commander, might be the most famous trucker to return from Iraq. After insurgents attacked his convoy, Hamill was taken prisoner and held for 24 days before escaping.
-LANCE ORR


HIGHWAY COMPROMISE INCLUDES TOLL RESTRICTION
Conferees trying to iron out differences between the House and Senate versions of a federal highway bill adopted a Senate provision that would prevent tolls on existing interstate lanes.

The provision does allow, however, the construction of new truck-only toll lanes on I-81 in Virginia. The American Trucking Associations opposes that toll project but supports the compromise provision anyway, viewing one toll project as better than a flood of countless such projects.

“Findings show that half of all trucks would take parallel roads to skip the proposed I-81 tolls, and that is dangerous because those roads are not built for that kind of traffic,” says Darrin Roth, ATA’s director of highway operations. The ATA also considers interstate tolls a form of double taxation, Roth says.

The issue is unlikely to go away. Both Senate and House versions call for creation of a national commission to study how interstates and other federal-aid highways should be funded.

Still in doubt is the mandatory fuel surcharge included in the House bill but not the Senate bill. The Owner-Operator Independent Drivers Association and the Truckload Carriers Association support the surcharge; The American Trucking Associations, the U.S. Chamber of Commerce and the Bush administration oppose it.

Differences among the House, Senate and White House have forced the long-term highway funding bill that formally expired in 2003 to be extended eight times, the most recent extension being approved June 30.

President Bush has said he would veto any highway bill with a price tag greater than the House’s $284 billion. The Senate version was $295 billion; the conferees reportedly have settled on $286.5 billion.
-STAFF REPORTS


TEAMSTERS RECRUITING PORT OWNER-OPERATORS
Eight hundred owner-operators pledged to join the Teamsters’ first owner-operator hiring hall when it opened in July in Miami, and the union plans to open more locals at East Coast ports and Midwest rail yards during peak cargo season.

Jim Stewart, who works with the union’s port division, says Miami will be the union’s test site. “It will take a large number of drivers to make it happen,” Stewart says.

Organizers hope to open a second hall at the port of Charleston, S.C., where up to 450 owner-operators have signed pledge cards.

About six carriers have said they will hire Teamsters if the locals open, Stewart says.

“Some companies are willing to open up offices in ports that don’t have terminals there because they see the advantage of a large, stable work force,” he says. “Sometimes it’s easier for an out-of-town company to take the first step.”

Owner-operators are leased as independent contractors and do not fall under the authority of the National Labor Relations Act, which protects employees’ right to organize and collectively bargain.

Court cases have yielded mixed results when owner-operators have taken non-union carriers to court to claim employee status, Stewart says.

The Teamsters requires its members to work for only union companies and charges maximum monthly dues of 2.5 times a trucker’s hourly wage.

Ports have become more volatile in the past two years, with shutdowns occurring nationwide, especially when diesel prices spike. Owner-operators complain of unsafe equipment, excessive wait time, low wages and unfair charges by carriers.
-JILL DUNN


DIESEL RETROFIT BILL HAS BROAD SUPPORT
A broad range of supporters backs a U.S. Senate bill that would establish grants and loans for the voluntary retrofitting of diesel engines to reduce emissions.

On June 16, U.S. Sen. George Voinovich, R-Ohio, introduced the Diesel Emissions Reduction Act of 2005, which would distribute more than $1 billion over five years. The bill has been sent to the Environment and Public Works Committee.

The bill has the endorsements of the Engine Manufacturers Association, the Clean Air Task Force, the Diesel Technology Forum, the Union of Concerned Scientists, the Environmental Protection Agency, Cummins and Caterpillar. Its seven co-sponsors include Sens. Hillary Clinton, D-N.Y., and Jim Inhofe, R-Okla., who chairs the Environment and Public Works Committee.

The EPA would distribute 70 percent of the funds.

Current regulations only address new engines, Voinovich says. “The estimated 11 million existing diesel engines have a long life ahead of them and need to be addressed as well. The Diesel Emissions Reduction Act of 2005 will provide pivotal funding through national and state-level grant and loan programs for the voluntary retrofitting of existing diesel engines.”

Another U.S. Senate bill, introduced by Gordon Smith, R-Ore., and Blanche Lincoln, D-Ark., would give a 5 percent tax credit to buyers of 2007 trucks with cleaner diesel engines.
-JILL DUNN


ROADCHECK REPORTS REDUCED VIOLATIONS
The Commercial Vehicle Safety Alliance Roadcheck 2005 reported lower violation rates and a record 60,562 inspections performed.

The truck and bus inspection was held June 7-9 at 1,348 points in North America.

CVSA reported that both vehicle and driver out-of-service violation rates fell for the first time in three years, from 23.9 percent in 2004 to 22.6 percent for vehicles and from 5.0 percent to 4.5 percent for drivers.

In the United States, the vehicle out-of-service rate fell to 23.3 percent from 25 percent last year, and the driver out-of-service rate fell to 4.7 percent from 5.3 percent. In Canada, the vehicle out-of-service rate fell to 17.4 percent from 20.5 percent in 2004, and the drivers’ rate fell to 3.0 from 3.1. CVSA has not released the figures from inspections performed in Mexico.

Brake adjustments or other brake system problems were the main cause of out-of-service orders. While most violation rates fell, the violation rate of hazardous materials haulers increased.

For hours of service checks, 3.8 percent of the inspections conducted in the United Sates resulted in an out-of-service violation, up from 3.4 percent in 2004. That number fell in Canada, from 2.5 percent to 1.3 percent.
-CHRISTINE GREEN


CHANGES PRESCRIBED FOR MEDICAL CERTIFICATIONS
The Federal Motor Carrier Safety Administration plans to propose a rule in 2006 to electronically link a truck driver’s medical certificate to his commercial driver’s license.

“Right now, drivers have a driver’s license and a piece of paper that says they are medically qualified. Our proposal is to merge the truck driver’s medical information with the CDL data system,” Annette Sandberg, FMCSA administrator, said at a recent public meeting in Washington, D.C.

The federal rule has not been formally proposed, but Indiana and Arizona already have similar rules.

FMCSA also would like to establish a national registry of certified medical examiners by 2009, Sandberg says. FMCSA then would accept as proof of driving fitness only examinations conducted by someone on the registry.

Such a registry is one of the initial goals of the newly formed National Academy of DOT Medical Examiners. Other goals include establishing national standards of driver fitness and a standardized test to determine the proficiency of the medical examiners.

The academy was formed after the National Transportation Safety Board declared that “serious flaws exist in the medical certification process for commercial vehicle drivers.” For more information on the academy, visit this site.
-LANCE ORR


TEXAS LIFTS IDLING RESTRICTION, ADDS TARP REQUIREMENT
Texas Gov. Rick Perry has signed into law a bill to allow idling during rest periods and another bill that makes transporting untarped loose material a fineable offense. Both are effective Sept. 1.

The idling law, supported by the Texas Motor Transportation Association, allows truckers to idle to power a heater or air conditioner when complying with rest periods mandated by the hours of service regulations. The new law supersedes the Texas Environmental Quality Commission’s regulation that would have allowed cities to limit idling to five minutes.

However, the new legislation prohibits drivers, even while using the vehicle’s sleeper berth, to idle in a school zone or within 1,000 feet of a public school during school hours. It sets a maximum fine of $500 for violations. The law expires in September 2007, when stricter emission standards begin.

The Texas Natural Resources Conservation Commission repealed a rule Dec. 1 that affected the eight-county Houston/Galveston region. That rule prohibited trucks weighing more than 14,000 pounds from idling more than five minutes April 1 to Oct. 31 each year.

The other new law requires tarps for commercial hauling of sand, gravel, rock or refuse and attaches a $25 to $500 fine for violators.
-JILL DUNN


TONNAGE GROWTH NOT AS STRONG AS IN 2004
The American Trucking Associations’ primary industry indicator rose in May as tonnage volumes increased slightly because of modest economic growth.

ATA’s advanced seasonally adjusted for-hire Truck Tonnage Index rose 0.7 percent in May to 115.1, following a 0.9 percent drop in April. May’s reading means tonnage is up 15.1 percent since 2000.

Year-to-date, the tonnage index was 3.2 percent higher than the same period in 2004. That puts it in line with 2005 forecasts that the index will grow 3.0 percent to 3.5 percent.

ATA Chief Economist Bob Costello says tonnage growth is good, but this year will not reach 2004 levels, when the economy was growing at a faster pace. Tonnage volumes are more modest this year because of a wide disparity among production levels for certain commodities. For example, domestic steel production is slipping, which could be a drag on tonnage figures going forward.

“The economy continues to decelerate from last year, but we are not in a significant downturn,” Costello says. “However, growth in freight volumes will be modest for the rest of this year compared with 2004, when our tonnage index grew 5.7 percent. I still believe there will be a favorable supply-demand market this coming fall freight season despite the moderation in volumes.”
-MAX HEINE


INTERNATIONAL TOUR HAS URBAN FOCUS
“Taking It to the Streets,” a truck tour hosted by International Truck and Engine Company, showcases 20 International trucks, including the CXT, the world’s largest production pick-up truck.

The tour will have an urban delivery focus, featuring trucks such as the 4000 Series. There will also be dump trucks, other work trucks and the 8000 Series heavy truck favored for regional hauls.

International also will introduce its CF Series cab-forward trucks that have greater visibility and maneuverability. All the trucks will be available for test drives.

There also will be ride-and-drive courses, remote-control courses, show-only financing and warranty specials, Irwin tools skills competitions and sweepstakes to win a CF Series truck and a NASCAR race package that includes meeting NASCAR champion Kurt Busch.

International will demonstrate its Aware Vehicle Intelligence, a telematics system that enables a fleet manager to monitor truck routes, performance, maintenance, security and fuel.

Upcoming tour stops include Washington, D.C., on Aug. 10-11 at FedEx Field, and Atlanta on Aug. 31 and Sep. 1 at Georgia International Convention Center.

The tour offers visitors lemonade and, while supplies last, T-shirts.

The project is supported by Irwin Industrial Tools, Road Ranger, Allison, Michelin, Caterpillar and Cummins. More information about the tour is available at this site or by calling (866) 483-2001.
-CHRISTINE GREEN


DETROIT DIESEL TO GET MILLIONS IN GRANTS
The U.S. Department of Energy will provide Detroit Diesel Corp. $27 million in grants to help fund two proposed programs to improve thermal efficiency while meeting 2010 emission regulations.

Detroit Diesel aims to develop technology that improves thermal efficiency through the proposed High Efficiency Clean Combustion and Exhaust Energy Recovery programs.

The HECC program’s goal is to combine several processes that enhance engine combustion into one system that would enable “high efficiency clean combustion across the entire engine speed-load range,” the company says. Project participants will develop engine systems, hardware and controls to improve thermal efficiency, while meeting emissions levels of 2010 and beyond.

In addition to the DOE, the company will also work with the Freightliner Group, Sandia National Laboratory, Oak Ridge National Laboratory and Shell International Gas.

The collaborative Exhaust Energy Recovery program is intended to improve large diesel engine fuel economy while it examines how engine-based technologies can partially recover and convert exhaust energy into mechanical and electrical work.
-JILL DUNN


SHORT HAULS

NATIONAL TRUCK DRIVER APPRECIATION WEEK is Aug. 21-27. For more information, or to share your celebration plans, call (800) 282-5463 or visit this site.

PRESIDENT BUSH raised the U.S. terror alert one level after the July 7 London terrorist attacks, but the increased alert was only for mass transit. Truckers are urged to maintain their vigilance, however.

TRAVELCENTERS OF AMERICA offers new regional menus in its sit-down restaurants with dozens of new items, ranging from blackberry cobbler in the Northeast and fried catfish in the South to grilled salmon salad in the Northwest and enchiladas and tortilla soup in the Southwest.

MIKE RYAN won his eighth consecutive Pikes Peak International Hill Climb on June 28, beating his previous record by almost 20 seconds. Ryan reached the 14,110-foot peak in his customized Freightliner, equipped with Michelin X One tires, by traveling 12.42 miles in 12 minutes, 47 seconds.

YELLOW ROADWAY closed USF Dugan, which it recently acquired as part of its purchase of USF. Regional companies USF Bestway, USF Holland and USF Reddaway will serve the former Dugan routes.

LARRY RATLIFF, a FirstFleet driver from St. Joseph, Mo., was named a Highway Angel by the Truckload Carriers Association for rescuing a woman who was about to attempt suicide off an
I-24 bridge in Illinois.

SCHNEIDER NATIONAL acquired American Port Services, which has facilities at six major U.S. ports. APS is a Savannah, Ga.-based transloading/deconsolidation, warehousing and distribution company. The partnership links both companies’ operations to create a unique ‘port-to-door’ import logistics service, says Chris Lofgren, president and CEO of Schneider.

THE TRANSPORTATION SERVICES INDEX for freight rose 0.1 percent to 112.6 in April, the U.S. Department of Transportation reported. From November 2004 to April 2005, the freight TSI increased 2.2 percent.

THE NATIONAL BIODIESEL BOARD lists hundreds of vending locations under “Buying Biodiesel” at this site and at (800) 841-5849. The board warns that biodiesel, which has a solvent effect, can release deposits accumulated on tank walls and pipes, initially clogging filters.

PEOPLE CAN’T GIVE their full attention simultaneously to sight and sound tasks, says a recent study. Researchers say this supports earlier studies that feed safety concerns over using cell phones while driving. Directing attention to listening “effectively ‘turns down the volume’ on input to the visual parts of the brain,” says Steven Yantis, a Johns Hopkins University psychologist.


HIGHWAY HAPPENINGS

ILLINOIS. New fines for speeding in work zones begin at $375. A second offense is punished with a $1,000 fine and a 90-day license suspension. Hidden camera enforcement means an offender might not know he’s busted until the ticket arrives in the mail.

INDIANA. The speed limit for trucks on rural interstates has been increased from 60 mph to 65 mph.

NEVADA. A new truck-climbing lane will be added to U.S. 395 north of Reno, between McCarran Boulevard and Golden Valley.

OHIO. Ten Ohio Turnpike service plazas are getting wireless Internet service this summer. A $7.95 access fee buys 24 hours of unlimited use.

VIRGINIA. I-95 south of Washington, including the Woodrow Wilson Bridge across the Potomac, is getting a safety makeover, including new guardrails, lighting and high-visibility pavement markers, as well as 16 to 24 inches of new asphalt paving to bank turns more safely. Visit this site.

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