News From The Industry

| December 12, 2008

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CARRIERS REPORT ACTIVE FREIGHT

In most years, fleets experience a significant drop in freight tonnage from December to January, but freight hasn’t fallen off as much as usual this winter, say some leading carriers.

Schneider National’s Scott Arves told analysts on a Credit Suisse First Boston teleconference that he hasn’t experienced such a small drop-off in freight in the past 10 or 11 years. “We’re seeing solid freight across all segments we service,” he said. “It’s not just retail replenishment.”

Arves and David Parker, head of Covenant Transportation, attributed the freight climate to capacity shortfalls, improved economic conditions and low inventories, among other reasons.

“I’m very, very surprised at how strong the freight has stayed in January,” Arves said. “It’s extremely robust freight.”

Tom Kretsinger Jr., executive vice president for American Central Transport, said his company’s freight has remained strong as well. “It hasn’t tapered off like we expected,” he said.

December shipments and freight expenditures declined slightly over November, according to Cass Information Systems, a company that processes more than $8 billion in annual freight payables.

Other economic indicators showed strong growth in manufacturing. The National Association of Manufacturers predicted Jan. 15 that manufacturing output would increase by 6.1 percent this year, up dramatically from 2003’s 1.4 percent.

The Truck Tonnage Index, compiled by the American Trucking Associations, has been climbing slightly since its drop-off in mid-2000.

- Sean Kelley


THREE ENGINE MAKERS REJECT SCR FOR 2007

With three years left before another round of major emissions hurdles go into effect, several engine makers ruled out at least one technology – selective catalytic reduction – from the 2007 versions of their heavy-duty products.

Caterpillar, Cummins and International Truck and Engine Corp. say they will meet the stricter Environmental Protection Agency emissions standards without relying on SCR. The aftertreatment technology requires ammonia-based urea to be injected into the exhaust to decrease the nitrogen oxide emissions. SCR has been widely discussed in the industry as a potential technology for meeting the 2007 standards and has been used in Europe to meet similar tough standards.

EPA wants diesel engine manufacturers to cut in half the amount of NOx they produce by 2007; further cuts will be imposed in 2010. International, Cummins, Caterpillar, Detroit Diesel, Volvo and Mack had to reduce their NOx emissions to 2.5 grams in 2002 as part of a legal settlement. Mercedes-Benz met the same standard by Jan. 1, 2004. But the lower level that manufacturers must meet in 2007, 1.2 grams – along with a lower level of particulate emissions – can be met without resorting to SCR, International, Caterpillar and Cummins say.

“We encourage the EPA to remain technology-neutral and avoid mandating SCR as a future emissions reduction technology,” said Richard Thompson, head of Caterpillar’s engine division. Caterpillar used its own ACERT technology instead of exhaust gas recirculation to achieve 2002 emissions levels.

Cummins officials say the cost of urea and infrastructure concerns would make using SCR cost-prohibitive in North America. Instead, the company will rely on particulate filters in the exhaust system and minor tweaking of its EGR engines to reach the goals.

Cummins says its 2007 engine will look almost exactly like its 2002 engines, of which it has more than 30,000 on the road. The company says only one of those engines has failed due to EGR-related components. The only real difference will be the particulate trap, which will be provided by the company’s FleetGuard filtration and exhaust division.

The engine makers will receive help in reaching 2007 emission goals when, in 2006, another EPA measure kicks in, reducing the amount of sulfur in diesel fuel by 97 percent. The agency says the new fuel will result in the 2007 trucks operating 95 percent cleaner.

“Using ultra-low-sulfur fuel, each of the three engine manufacturers has found it is feasible to reduce in-cylinder emissions of NOx to a level that reduces the burden on aftertreatment in meeting the 2007 federal emissions standard,” says Patrick Charbonneau, International vice president.

- Sean Kelley and Jill Dunn


D.C., N.J. GETTING TOUGH ON CELL PHONES

Using a cell phone in Washington, D.C., could get more costly for truckers and motorists unless they get a hands-free set.

Beginning in July, the district hopes to fine motorists and truckers caught using hand-held cell phones or computers $100. Congress must approve the ban, approved by the district’s city council.

In New Jersey, Gov. James McGreevey was expected to sign a bill that would make New Jersey the second state to ban handheld cell phone use while driving.

The bill specifies the law is enforceable only if an officer stops a driver for another offense, such as a traffic violation, according to the state assembly’s website. Tickets are $100 to $250; the driver loses no points off his driver’s license for the offense.

The law allows drivers to use a handheld cell while driving in an emergency. It also permits police and other emergency workers to use handheld phones while on duty.

The assembly passed the ban 65-9 on Jan. 12, with nine members abstaining. In 2002, the Senate unanimously passed a ban as well.

New York passed a similar law in 2001 that fines first-time violators $100.

McGreevey has strongly supported the ban. In a Dec. 15 press release, the Democrat governor cites a 2002 Quinnipiac University poll indicating that 85 percent of state voters supported a handheld cell phone ban.

A year ago, U.S. Sen. Jon Corzine introduced a bill to ban cell phone use while driving. The New Jersey democrat’s bill was immediately referred to the Committee on Environment and Public Works, where it remains.

- Jill Dunn


FDA TO BAN EPHEDRA

The U.S. Food and Drug Administration will ban dietary supplements containing ephedra because it poses an “unreasonable health risk.”

Ephedra products, usually marketed as dietary aids or “energy” enhancers, are widely used as stimulants. They can be found at the checkout counters of many truck stops.

On Dec. 30, the FDA issued a consumer alert on the product and announced it would ban supplements this spring. California, Illinois and New York already have similar bans in place.

Ephedra’s main active ingredient is ephedrine. Manufacturers have promoted it as an aid to weight loss, sports performance and increased energy.

But the FDA says it found ephedra was effective only for short-term weight loss and that it is an adrenaline-like stimulant that has been linked to heart problems and strokes. Other studies have found it raises blood pressure and creates stress on circulation, the FDA says. Many deaths have been linked to the drug.

Metabolife, one of the 62 companies that received FDA notification, said in a prepared statement that “millions of consumers … have used ephedra dietary supplements” safely.

- Jill Dunn


OWNER-OPERATOR TAKES RULE TO COURT

An owner-operator in Louisiana has begun a one-man fight to overturn the new hours-of-service rule.

Last month a U.S. District Court judge scheduled a hearing for Robert “Bob” R. Fezekas, who initially filed a handwritten complaint against the Federal Motor Carrier Safety Administration, though he now has legal representation.

Fezekas, a veteran trucker leased to Southern Intermodal Xpress, says he decided to take on FMCSA because he was not aware of any trucking associations or organizations battling the issue in court.

A FMCSA representative did not return a telephone call seeking comment.

- Jill Dunn


SWIFT PURCHASES MEXICAN CARRIER

Swift Transportation Co. has acquired an additional 51 percent interest in Trans-Mex Inc., giving Swift 100 percent ownership of the Mexican truckload carrier.

The purchase price for this 51 percent interest was $31 million, consisting of $11 million in cash and 942,155 shares of Swift common stock.

Trans-Mex is one of the top five international trucking companies operating in Mexico. Through this acquisition, Swift becomes the only U.S. trucking company with a 100 percent ownership interest in a Mexican carrier.

“We formed this venture four years ago to offer excellent service to our customers with cross-border freight,” says Jerry Moyes, chairman and chief executive officer of Phoenix-based Swift. “The financial and service performance of Trans-Mex has exceeded our expectations. As contemplated in our original agreement in 1990, we have acquired the remaining ownership interest in this carrier. We expect Trans-Mex will continue to grow as we expand with our customers’ needs.”


ANOTHER FLORIDA TRUCKER WINS BIG

For the second time in seven months, a trucker became a millionaire playing the Florida lottery.

Donald Ritacco, 48, of Fort Lauderdale, won the $1 million top prize from the Florida Lottery’s $1,000,000 Cash Spectacular Scratch-Off game, according to a lottery news release. He became the game’s ninth top prize winner after redeeming his ticket Dec. 15.

Ritacco plans to continue his job hauling equipment for boat shows with Show Management of Fort Lauderdale.

He chose to receive his prize in 20 annual installments of $50,000.

On May 13, Lindsay Randall, who drove for Cypress Truck Lines of Jackson, redeemed his ticket for an estimated $20 million Lotto drawing. The 49-year old Fort White resident opted to take his money as a lump sum.

- Jill Dunn


MUSIC, TRUCKING LEGEND DAVE DUDLEY DIES

Dave Dudley, whose 1960s “Six Days on the Road” is a legend among truck drivers and a top country music hit, died Dec. 22. He was 75.

Trucker and radio disc jockey Big Al Weekly, who recorded a hit with Dudley in 2002 called “Driving Trains,” says one of the best is gone. “Dave Dudley is the father of trucking music,” Weekly says. “‘Six Days on the Road’ is the song that made the headlines. It was No. 2 on country charts and No. 1 in the trucking world.

“One thing you need to know about Dudley – it didn’t matter if you were a bum on the street or president of the United States, he treated you with class,” Weekly says.

Dudley died in Danbury, Wis., of an apparent heart attack.

Dudley recorded more than 70 albums during his career. He released “Dave Dudley, American Trucker” in 2002, following the terrorist attacks on New York and Washington, D.C. The album featured songs that warned terrorists who might mess with truckers.

- Sean Kelley



MAGAZINE SEEKING NOMINATIONS FOR TRUCKING FAMILY HONOR
Truckers News has begun its search for the third annual Great American Trucking Family.

The magazine is looking for drivers who have deep roots in the industry. Third-, fourth- and fifth-generation truckers, or drivers with extended trucking ties – spouses, children and other relatives – can enter for a chance to be named the Great American Trucking Family. Industry honors and general civic involvement should be noted, too.

The winner will be announced at the Great American Trucking Show in Dallas, Sept. 10-12. The top family will also be featured in the September issue of Truckers News.

To be considered, send a detailed history of your trucking family to:

GATF c/o Truckers News
3200 Rice Mine Road N.E.
Tuscaloosa, AL 35406

You can enter online at www.truckersnews.com or with a form inside Truckers News.


FMCSA BACKS OFF OF INTERMODAL ISSUE

The Federal Motor Carrier Safety Administration announced it would no longer consider the issue of maintenance responsibility for intermodal container chassis and trailers.

The Truckload Carriers Association said in its Jan. 13 newsletter that the agency’s decision “has put greater pressure on Congress to answer the industry’s claim that responsibility needs to be placed on the parties empowered to control the equipment, not the motor carriers who do not control the equipment.”

FMCSA published notice in the Dec. 31 Federal Register that it was withdrawing from the Feb. 17, 1999, Advance Notice of Proposed Rulemaking relating to the issue.

“FMCSA has determined it is unlikely the agency could craft a rulemaking that would resolve the maintenance responsibility disputes between equipment providers and motor carriers, and be supported with sufficient safety data to prove its necessity, and subsequently its effectiveness,” the agency stated.

It acknowledged that a “significant number of container chassis dispatched from intermodal terminals are later shown to have safety defects during roadside inspection.” But the agency concluded that “the relationship between these defects and accident causation has not been substantiated.”

Forty-five congressional members have agreed to co-sponsor the Intermodal Equipment Safety and Responsibility Act (HB 2863), backed by the American Trucking Associations, the Teamsters and the International Longshoremen’s Association.

Sometimes called the roadability bill, HB 2863 would require intermodal chassis owners to be accountable for inspecting and repairing the equipment. Teamsters have been publicizing the bill around the nation, sometimes having truckers give testimony about accidents or showing how equipment problems can be overlooked under current inspection procedures.

The bill would require that intermodal chassis have a record of inspections and repairs. Chassis in need of repair would be red-tagged and quarantined; assigning a red-tagged chassis to a trucker would become a violation of federal law.

- JILL DUNN


PILOT PROGRAM SEEKS LATINO DRIVERS

The Truckload Carriers Association helped kick off a project in January that aims to fill more American trucks with bilingual Latinos.

The first recruiting and orientation event, which was held in Philadelphia, featured truck driving simulators, as well as representatives from carrier D.M. Bowman Inc., and commercial driver’s license schools.

TCA sponsors the pilot Careers in Trucking Program with the National Council of La Raza, a nonprofit organization that helps Hispanic Americans. TCA has proposed other programs to recruit new truckers, such as one that sought to train and credential drivers under the age of 21. It was dismissed by the Federal Motor Carrier Safety Administration.

If the pilot Philadelphia project is successful, organizers plan to replicate it throughout the nation.

- KRISTIN WALTERS


DALLAS SHOW EXPECTED TO GROW IN 2004

A larger Great American Trucking Show is planned for Sept. 10-12 at the Dallas Convention Center.

“Exhibit space sales are significantly ahead of last year, with new industry leaders committing to exhibit in 2004,” says Alan Sims, director of event sales. Visitors will see more truck and trailer makers, as well as other exhibitors, at this year’s show, he says. Two major concerts – on Friday and Saturday evenings – are expected, Sims says.


SHORT HAULS

INTERNATIONAL TRUCK and Engine Corp. has reached an agreement to deliver more than 1,700 International 4000 Series medium-duty trucks to the United States Postal Service. Utilimaster Corp. will manufacture and install the 18-foot and 24-foot van bodies.

ENFORCEMENT OFFICIALS who conduct safety inspections, audits and compliance reviews at the state or federal level must now meet certification requirements of the Federal Motor Carrier Safety Administration. The new requirement was one of three interim final rules related to a stalled effort to completely open the Mexican border to truck traffic.

THE U.S. SUPREME COURT will decide whether the FMCSA has met its obligations to open the U.S. border to Mexican trucks. The court agreed Dec. 15 to review a lower court’s decision delaying a key provision of the North American Free Trade Agreement – that Mexican trucks be given access to American highways. The Supreme Court will hear oral arguments in the spring; a ruling is expected by June.

BOYD BROS. TRANSPORTATION management is taking the company private by buying the outstanding common stock it does not already own.

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