Industry news

| December 12, 2008

FREIGHTLINER TO USE SCR FOR 2010
United States, said Chris Patterson, president and CEO of Freightliner Trucks.

The SCR usage would be only for “our self-manufactured engines, marketed today as Detroit Diesel and Mercedes-Benz,” Patterson said, referring to engines made by Detroit Diesel and its sister brand Mercedes-Benz.

Competing heavy-truck engine makers have said they plan to use existing technology – exhaust gas recirculation or, in the case of Caterpillar, its proprietary ACERT technology – to meet standards in 2007, though they have not indicated firm plans for 2010 standards. Detroit and Mercedes heavy-duty engines now use EGR.

The Freightliner plans were mentioned by Andreas Renschler, head of DaimlerChrysler’s Commercial Vehicle Division, during a meeting in Germany. DaimlerChrysler owns Freightliner and its Detroit Diesel subsidiary.

“DaimlerChrysler sees selective catalytic reduction, using urea as a post-combustion catalyzing agent, as the optimal technical solution to the challenge of meeting the Environmental Protection Agency’s announced restrictions on NOx and particulate matter for 2010 and beyond,” Patterson says.

“We are working with other engine producers, and with fueling infrastructure owners, to assure the agency that this approach meets both the letter and the intent of the regulation.”

Urea is a crystalline solid found naturally in human urine but also synthetically produced for industrial purposes, for example the making of plastics and fertilizer.

SCR pumps urea into the exhaust stream, reducing the NOx back into nitrogen and oxygen.

The system has a urea tank on the truck that must occasionally be refilled by the driver.

Engine makers have shied away from SCR in part because of the requirements of creating a sufficient nationwide distribution of urea.

Cummins will announce its decision on emissions technology for 2010 during the second half of 2006, says company spokeswoman Cyndi Nigh.

“SCR is a viable solution for 2010 when it is combined with cooled engine gas recirculation,” Nigh says.

Volvo is using EGR and SCR in Europe, says Peter Karlsten, Volvo president and CEO. SCR seems like the best choice for 2010, he says, “but we haven’t made up our minds yet.”

Mack spokesman John Walsh says, “SCR is certainly one of the technologies we’re strongly considering for 2010.”

Comment from Caterpillar was unavailable at press time.
-STAFF REPORTS


CRETE DRIVER WINS TCA PHOTO CONTEST
K. Colin Robertson of Lincoln, Neb., a Crete Carrier driver, is the winner of the Truckload Carriers Association’s eighth annual Truck Driver Photo Contest. Robertson receives $1,000.

  • Second place and $750 went to Dean Coffman of Bellingham, Wash., who drives for Holland Enterprises of Fargo, N.D.

  • Third place and $500 went to Sandy von Cords, a driver for Western Distributing Transportation of Denver.
  • Fourth place and $100 went to Gerry Harker of Wyoming, Mich., who drives for Van Eerden Trucking of Byron Center, Mich.
  • Fifth place and $100 went to John DeMaria of Fairplay, Colo., who
    drives for Ronadero.

  • Sixth place and $100 went to Ryan Avenarius of Dubuque, Iowa, who drives for Simon’s Trucking of Farley, Iowa.

-LANCE ORR


TIRE PRICES ALSO ON THE RISE
Always a big expense, tires are becoming even more costly as the price of raw materials, especially oil, goes up.

Just as truckers have no choice about paying the passed-down cost of diesel fuel – which surged 34 cents in a single week after Hurricane Rita to a record $3.14 a gallon – spokesmen say the tire industry has no choice but to pass along its own soaring costs.

“It takes about 22 gallons of oil to manufacture a new commercial tire and seven gallons to build retread products,” says Goodyear Tire & Rubber spokesman Dave Wilkins. Each $1 increase in the per-barrel price of oil costs Goodyear $20 million, he says.

“In addition, natural rubber prices hit a 12-year high and surged about 40 percent in a 60-day period this summer,” Wilkins says.

Output from the major rubber-producing nations is expected to remain level or drop, while demand remains high among tire manufacturers worldwide – including those in China, where expansion likewise is driving up prices in global oil markets.

On Oct. 3, Goodyear announced a temporary 30 percent reduction in North American tire production because Hurricane Rita disrupted supplies of raw materials, though all its tire plants continued to operate.

Raw materials account for more than 30 percent of a tire’s costs, and the costs of those materials are expected to climb at least 17 percent this year, says Kurt Danielson, Bridgestone Firestone’s director of commercial marketing for North America. Retail price increases can’t keep pace with those costs, Danielson says.

“It’s not only raw materials, but everything else – shipping, the cost of doing business – is up dramatically,” Danielson says. “2006 will be tough from a supply viewpoint.”

Bridgestone increased truck tire prices 5 percent in 2004, then twice again this year: 7 percent in January and 8 percent in May. On Sept. 15, Bridgestone Firestone announced another round of increases for “passenger and light truck, truck and bus, and agricultural and off-the-road tires,” effective Nov. 1, but Bridgestone’s truck tire division later said its prices would be unaffected by that increase.

“Raw materials increase daily,” says Clif Armstrong, commercial marketing director for Continental Tire North America. “Raw materials are extremely volatile, and that affects everything we do.”

Continental increased truck tire prices at least twice in 2004, Armstrong says, and twice again in 2005. A third increase of up to 7 percent was passed to dealers as of Oct. 1, but how soon dealers raise their prices is uncertain because of varying inventories.

Michelin representatives declined to discuss tire pricing.
-JILL DUNN


HIGHWAY WATCH TANKER ALERT
Highway Watch is asking all members to report any suspicious activities involving hazmat tank trucks.

The request came after reports of vehicles moving erratically around fuel tankers and individuals photographing or videotaping the trucks:

  • A Highway Watch member in the Midwest reported that one of his company’s petroleum drivers saw a car pull alongside his placarded tanker. Someone in the car took pictures.
  • While unloading fuel at a gas station, a member in the Southeast was approached by a couple asking detailed questions about gas delivery operations.
  • A member in the Midwest reported a couple in a car taking pictures of his tanker.
  • A member in the Midwest saw two men in a van taking pictures of a terminal tank farm.
  • A car’s occupant was reported photographing a member’s tanker in the Midwest.
  • A man was seen taking pictures of a member’s fuel operation before getting into a car and following the member for a few miles while taking photos.

Preliminary analysis showed no pattern to the incidents, Highway Watch says. Those wishing to make a report should call Highway Watch at (866) 821-3444.
-LANCE ORR


FUEL GOUGING SUITS FILED
Florida, New Jersey and Tennessee filed price-gouging lawsuits over retail fuel prices, while 44 state attorneys general continued an investigation into price spikes after recent hurricanes.

Meanwhile, the Federal Trade Commission is investigating whether “forms of illegal behavior have provided a foundation for price manipulation,” says John Seesel, an FTC associate general counsel.

New Jersey filed four lawsuits against oil companies Hess, Motiva Shell and Sunoco and against independent gas-station owners selling Citgo, Hess, Shell and Sunoco gasoline, acting Gov. Richard Codey announced Sept. 26.

Pump prices spiked overnight as Hurricane Katrina made landfall, but afterward, when oil prices fell several dollars a barrel, gas prices decreased only slowly, says Kimberly Ricketts, state consumer affairs director. “There seems to be a speed aberration that even Einstein would have difficulty understanding,” she says.

Darci Sinclair, a spokeswoman for Royal Dutch Shell and its subsidiary, Motiva, says the company is reviewing the charges. “Shell and Motiva have a history of being sensitive to price changes during significant events,” Sinclair said.

Hess says its prices were less than competitors’ before and after Katrina, when the fuel price paid by retailers changed minute to minute. Competitors raised prices “immediately and dramatically,” while Hess raised prices only in increments in response to wholesale cost, Hess says. After Hess learned that more than one increase in a single day violated state law, it has since complied, the company says.

Efforts to reach Sunoco for comment were unsuccessful.

Florida’s attorney general filed suit against the Tallahassee-based gas station Swifty Stars, and Tennessee’s attorney general filed suit against Chattanooga’s Tip Top market.
-JILL DUNN


PORT PAYS TRUCKERS TO UPGRADE RIGS
In an effort to curb air pollution around the fourth-largest container port in the nation, Oakland, Calif., port officials unveiled a new program that gives truckers money for new trucks.

Eighty truckers, all owning rigs built in or before 1986, will receive $25,000 each toward new tractor-trailers.

“We are really trying to get the oldest and dirtiest trucks out of here,” says Tim Leong, a port environmental scientist. “We looked elsewhere to see what other successful programs are going on in California and found this one.”

When the port expansion project began more than 10 years ago, the port authority pledged to spend almost $9 million to reduce air pollution in and around the complex.

Making trucks cleaner has been the final part of that agreement and the most difficult to accomplish.

Previously, the port offered truckers money to equip their rigs with new engines, but the offer was largely ignored because the retrofits did not increase the value of the rigs and cost truckers downtime.

The program is expected to cost about $2.9 million. For more information, call the Replacement Truck Program hot line at (510) 627-1380.
-LANCE ORR


TEAMSTERS RECRUIT OWNER-OPERATORS
Four hundred sixty owner-operators, some motivated by a logjam of freight from hurricanes Katrina and Rita, have signed up at the Teamsters’ Miami hiring hall, a union representative says.

Local 769 opened Sept. 20, and truckers have held signs outside the Port of Miami encouraging others to join, says Jim Stewart, international representative for the Teamsters’ port division.

Intermodal port truckers have complained for years of poor pay and working conditions, and shutdowns have occurred at ports nationwide during diesel spikes.

This fall’s hurricanes are expected to result in a backlog of freight being diverted to East Coast ports, Stewart says. The union expects to open other halls in Charleston, S.C., and Savannah, Ga.

“This storm has motivated a lot of people,” Stewart says. “They’ve got all this freight coming their way.”

The union seeks intermodal truckers serving the Port of Miami, Port Everglades and local rail yards, says Mike Scott, Local 769 president.

“We are taking applications from drivers who have canceled their independent contractor leases or who are not currently leased to motor carriers,” Scott says. “Hundreds of drivers are telling us they want to work as employee owner-operators with all the rights under U.S. labor law to which other employees are entitled.”

Members’ seniority is based on when they register with the hiring hall. The union expects to announce a list of carriers who have committed to hiring Teamsters. Union representatives are negotiating with carriers in Miami and Charleston, Stewart says.

“Every one of the companies who said three months ago they would sell the company if its drivers went union are now sitting down and talking with us,” Stewart says.

Establishing a hiring hall in Miami was recommended this past spring in a city report after an owner-operator protest in 2004 brought the Port of Miami to a standstill.
-JILL DUNN


DELAYS NOT AS COSTLY IN NEW CALIFORNIA LAW
California Gov. Arnold Schwar-zenegger signed legislation Sept. 22 prohibiting ocean carriers, railroads and marine terminal operators from imposing excessive charges on motor carriers when they are delayed by events beyond their control.

Such events include port gate closures, labor disruptions, unanticipated equipment diversions, terminal congestion – even weekends and holidays.

“By prohibiting the assessment of fees on truckers which are triggered by time-sensitive events beyond their control, this new law should serve to better allocate the costs of operations,” says Curtis Whalen, Intermodal Motor Carrier Conference executive director.

Bill Graves, American Trucking Associations president and CEO, hopes other states will follow California’s lead. “This law will hopefully improve the operational and work environment of the port trucking community,” Graves says.

The law also prohibits intermodal marine equipment providers from terminating or suspending the motor carriers’ equipment interchange rights when the carriers exercise their rights to take disputes to a third party.
-LANCE ORR


SON’S NOMINATION EARNS TRUCKER A STATEWIDE HONOR
Owner-operator John Ruthvin of Frederick, Md., was named 2005 Maryland Worker of the Year by Dickies workwear.

Ruthvin has run BR&B Enterprises with his father-in-law for 20 years. Ruthvin’s son, Christopher, nominated him by writing an essay for the Dickies 2005 Worker of the Year contest.

“Most of the time he works over a 50-hour week and still has to come home every night and do his paper work and pay bills. He is a great man who doesn’t always get the thanks he needs,” wrote Christopher.

Like the other state winners, Ruthvin wins more than $500 in cash and prizes.

Dickies announced its national 2005 American Worker of the Year is Tim Carroll of Bartlett, Tenn., a security-company accountant who also remodels homes in low-income Memphis neighborhoods.

Carroll wins a 2006 Dodge Ram 1500 Quad-Cab pickup truck and an all-expense paid trip for two to the Grand Ole Opry in Nashville.

Thousands of entries were submitted for the contest.
-LANCE ORR


CEO TO PAY $1.26 MILLION TO SETTLE STOCK-TRADE SUIT
While neither admitting nor denying any wrongdoing, Swift Transportation CEO Jerry Moyes agreed to pay $1.26 million to settle a federal Securities and Exchange Commission lawsuit over insider stock trading.

Swift announced Sept. 21 that it has been advised by the SEC that no action would be taken against the company in connection to Moyes’ stock trades.

In May 2004, Moyes purchased 187,000 shares of company stock in the two days before Swift publicly announced better-than-expected earnings and a share buyback.

The executive made an unrealized $622,000 profit.

The next month, Swift’s board forced Moyes to place his gain in a trust. That money – plus interest and a civil penalty equal to that amount – makes up the $1.26 million settlement, according to Swift officials.

“We are pleased this matter is behind us, and looking forward, we will continue to concentrate on improving our operating results,” says Robert Cunningham, Swift’s chief operating officer.

Moyes stepped down as Swift’s president in November 2004 and will step down as CEO at the end of this year.
-STAFF REPORTs


INTEREST GROWING IN BIODIESEL
In a single week this fall, Minnesota became the first state to mandate a 2 percent biodiesel mix for all diesel fuel, a Texas company announced plans to build a biodiesel plant, and California Gov. Arnold Schwarzenegger signed a law allowing public agencies to use vehicles that can run off biodiesel blends.

Record prices at the pump for traditional diesel have made biodiesel’s price more competitive and its stable resource base more attractive.

TexCom plans to build and operate a 30-million-gallon-capacity biodiesel plant at LBC Houston’s bulk liquid storage terminal. Plans call for the plant to be fully operational by October 2006.

The American Biofuels plant in Bakersfield, Calif., will expand to produce as much as 10 million gallons of biodiesel annually by the end of the year, according to published reports.

Further plans will boost production to 35 million gallons anually.

Biodiesel is a clean-burning alternative diesel fuel made from soybeans, agricultural oils and fats or recycled restaurant grease. It can be blended with petroleum diesel to be used in diesel engines with little or no modification.

Minnesota’s 2-percent law was passed in 2002 but did not go into effect until the state could produce the necessary amounts of biodiesel.

The state now has three working biodiesel plants that can produce a combined 63 million gallons per year, says Ralph Groschen of the Minnesota Department of Agriculture.

Pumping nothing but biodiesel is Carl’s Corner truck stop on I-35 south of Dallas.

Owner Carl Cornelius and country music legend Willie Nelson are backing BioWillie, a 20 percent biodiesel blend made from vegetable oils. “Trucks get more pulling power with it,” Cornelius says.

Cornelius says the French-German inventor Rudolf Diesel always intended his invention to run on vegetable oil as well as petroleum.

“We’re going back to doing what the engine was designed for,” he says.
-LANCE ORR


VOLVO ANNOUNCES 2007 ENGINE FAMILY
Volvo Trucks North America will meet 2007 emissions standards with a complete family of diesel engines that includes new 11- and 13-liter models, in addition to the 16-liter Volvo D16 introduced earlier this year.

“These new engines are designed to surpass the excellent record of the Volvo D12, while also giving our customers the ability to fine-tune their engine choice, based on their application and other requirements,” says Peter Karlsten, president and CEO of Volvo Trucks North America.

The engines will be available for inspection by customers during the first quarter of 2006.

Volvo also will continue to offer customers the option of Cummins ISX engines, Karlsten says. Currently, about 60 percent of Volvo’s truck customers spec Volvo engines, 40 percent Cummins engines.

The new Volvo engines are designed with both 2007 and 2010 emissions standards in mind, Karlsten says. As previously announced, Volvo will meet federal emissions standards for 2007 with high-performance exhaust gas recirculation and a diesel particulate filter.
-STAFF REPORTS


CARRIERS CONCERNED ABOUT 2007 ENGINES
Representatives from two major truckload carriers voiced concern about the increased costs surrounding the lower-emissions ’07 engines during a panel discussion at the American Trucking Associations annual meeting in Boston.

“We think we’ll see an additional $18,000 [in operating costs] with this new engine,” said Christopher Lofgren, Schneider National’s president and CEO. That’s on top of the $15,000 in additional operating costs for the ’02 low-emissions engines, compared to previous models. Lofgren adds, “To give ourselves some room, we are buying more tractors than we traditionally would.”

With the ’02 engines, Contract Freighters saw a 7 percent to 8 percent increase in the cost of the truck, $10,000 additional annual fuel costs per truck, and shorter service intervals, said Glen Brown, chairman and CEO. “The jury is still out on durability,” he said. CF held off purchasing ’02 engines until May 2004. “We wanted to change them out before ’07,” he said. “We plan to have the transition complete by the end of 2006.”

Issues for ’07 include the diesel particulate filters needed to reduce particulates to required levels. The filters will need to be cleaned every 150,000 miles at a cost of $75 to $150, panelists said.

Cummins General Manager Ed Pence assured attendees that beyond the DPF, maintenance intervals on the ’07 engines would not change and that performance would be “comparable to today’s products. We’re well ahead of where we were with ’02 engines.”

Another issue: Beginning in 2006, all trucks will run on ultra-low sulfur diesel fuel, which will cost 3 cents to 7 cents more to produce, said Jim McGeehan, global manager of diesel engine technology for Chevron, although the retail margin will be market-driven, he said.

Because low-sulfur diesel has less energy content, fuel economy dropped by about 2 percent in test engines run by Schneider, Lofgren said.

“Our biggest concern is the fuel,” said Kevin Knight of Knight Transportation. “It makes the introduction of the ’07 engines secondary, because we’re going to have to run the fuel no matter what.”
-LINDA LONGTON


SHORT HAULS
A TRUCKERS’ BALL will be held Feb. 18 at the Antique Automobile Museum in Hershey, Pa. Proceeds will benefit the Teddy Bear Fund, which helps trucking families in financial crisis. Visit this site.

TINO REYES of Breckenridge, Texas, an owner-operator leased to Fikes Truck Lines, won a flatbed trailer in Fikes’ annual recruiting contest.

NATIONAL TRUCK DRIVER OF THE YEAR, named by the American Trucking Associations, is Central Freight Lines driver Larry Springer of Holland, Texas, who has more than 4 million
accident-free miles in his 32-year career.

PUBLIC CITIZEN, the Teamsters and other groups filed a petition Sept. 23 asking the Federal Motor Carrier Safety Administration to reconsider the new hours rule. This did not constitute the legal challenge to the rule that many expected, though such an action could soon come.

A $500 tax credit for fuel expenses would be allowed on 2005 tax returns in a bill sponsored by U.S. Rep. Steve Chabot, R-Ohio. The credit would not, however, apply to business vehicles.
short hauls

TO PROTEST FUEL PRICES, hundreds of truckers stopped their trucks Sept. 13 on the shoulder of the Trans-Canadian Highway in New Brunswick. The truckers did not block traffic, and when Royal Canadian Mounted Police asked them to leave, they did so without complaint.

FREIGHTLINER is seeking a buyer for American LaFrance, maker of fire trucks and other emergency vehicles and one of the oldest brands in the automotive industry. American LaFrance was created by merger in 1903, the same year the Ford Motor Co. was founded.

OKLAHOMA VOTERS bludgeoned an ill-timed proposal to raise fuel taxes 8 cents per gallon for diesel and 5 cents per gallon for gas. In the Sept. 13 vote, 87 percent of voters cast ballots against State Question 723.

DAIMLERCHRYSLER donated a 2006 Freightliner M2 with an 18-foot refrigerated van body to Forgotten Harvest, a Michigan charity that delivers perishable food to those in need. The new truck will move 6 million pounds of food annually.

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