Daimler’s CEO: Business-savvy owners will survive
Reports of the demise of the owner-operator have no basis, said Chris Patterson, outgoing president and CEO of Daimler Trucks North America. “Every time there’s a downturn you hear this.”
Patterson spoke with Overdrive editors during the Mid-America Trucking Show, shortly after he announced plans to retire June 1. He will be succeeded by Martin Daum, who is head of operations at Daimler’s Mercedes-Benz plant in Woerth, Germany.
While the current economic climate is hurting fleets and owner-operators alike, Patterson said, some owner-operators are better positioned to deal with the downturn. “The guys that are in trouble are driving trucks powered by 600-hp ACERT engines. If they endure, they’ll have to get on a different program to make money,” viewing trucking more as a business and less as a lifestyle, he said.
Patterson sees little chance of a pre-buy by carriers seeking to avoid the more costly 2010 model trucks featuring new low-emissions technology. He even suggested carriers might be “better off waiting for new engines because of fuel economy.” Once the economy picks up, “fuel will be back to $3 to $4 per gallon,” he predicted, making fuel economy top of mind for truckers again. Daimler projects its 2010 Detroit Diesel engines using selective catalytic reduction will use 5 percent less fuel than previous models.
When the economy rebounds and carriers need to add trucks or replace aging equipment, they will have little choice but to buy new because “there won’t be enough reasonable trucks available to meet demand,” Patterson said. Currently, there are ample used trucks equipped with EPA ’04 engines, but when carriers are ready to buy, those trucks will be “getting pretty long in the tooth,” he said. Beyond that, much of the surplus capacity has been sold offshore.
Those who might want to buy trucks may not be able to get financing. “Daimler is a very strong company and can still borrow and lend money,” Patterson said. But qualifiying for credit is harder now. The situation is “especially difficult for owner-operators,” whose personal finances may make them poor credit risks, he said.
– Linda Longton
TSA issues warning to U.S. truckers in Mexico
The U.S. Transportation Security Administration is warning tuckers of danger while doing business in Mexico.
Mexican drug cartel violence along the U.S.-Mexican border has significantly increased in recent years, including robberies, homicides, kidnappings, and carjackings, with notable spikes in Tijuana and northern Baja California. The U.S. Department of State has issued a travel alert for U.S. citizens in Mexico.
“Truck drivers may face an elevated risk of being a crime victim as their loads represent a potentially easy payoff for criminals,” says Don Rondeau, director of the TSA’s Highway Information Sharing and Analysis Center. “We’re strongly urging American trucking companies and owner-operators to exercise extreme caution when making deliveries or pick-ups along the Mexican border.”
He advises truckers to report in with operations headquarters or dispatchers at every scheduled or non-scheduled stop. They should also provide dispatchers with detailed location and next destination information.
Navistar’s CEO says trucking key to economy
Trucking is key to a turnaround of the U.S. economy, Dan Ustian, chairman, president and CEO of Navistar International, said at the Heavy Duty Manufacturers Association Breakfast & Briefing at the Mid-America Trucking Show.
While headlines focus on what’s wrong with the economy – the housing market, credit crisis, unemployment, consumer spending – “What’s missing is truckers,” he said. “Who knows better the state of the economy?”