Soaring fuel costs

| August 31, 2006

After fluctuating near $3 for weeks, the national average price of a gallon of diesel passed that mark for the week ending Aug. 7.

The price is likely to go higher in the wake of an announcement by BP that “unexpectedly severe corrosion” in its Alaska pipelines will force a partial shutdown of the Prudhoe Bay oilfield, the largest in the United States.

After BP announced its bad news, oil prices shot up to $77 a barrel, an ominous sign for pump prices.

According to the U.S. Department of Energy, the average gallon of diesel in the week ending Aug. 7, before the Prudhoe Bay problems became known, cost $3.055, an increase of 7.5 cents from the previous week and an increase of almost 65 cents from the same week a year before.

BP announced Aug. 10 that it is continuing production in the Western Operating Area, where approximately 120,000 barrels of oil are being produced per day.

The company has completed shutdown of the Eastern Operating Area, where data from a smart pig run revealed 16 anomalies in 12 locations in one of the oil transit lines on Aug. 4. Subsequent inspections found a small oil spill and revealed five additional holes in the line.

The Department of Transportation stated in an amendment to its Corrective Action Order that it is not aware of any data concerning the current condition of the pipe in the Western Operating Area that it believes would necessitate an immediate shutdown of operations on the line.

BP has focused increased inspections on the WOA, devoting more than 150 personnel to stripping, inspecting and providing 24-7 surveillance of the pipeline. A decision is expected to be made after press time on whether the WOA will be shut down as well.

Production from the eastern half of the Prudhoe Bay field will not resume until it is approved by the DOT. The company stated that it has purchased more than 3.5 million barrels of crude oil to meet BP’s West Coast refineries and marketing needs over the short term, and it expects no disruption of gasoline supplies for California or the West Coast during this time.
Brittani Tingle


Onboard Recorder Proposal Goes to the White House
The Department of Transportation submitted for White House review on Aug. 10, a long-awaited regulatory document related to the use of onboard recorders (EOBRs) for hours-of-service compliance.

Although the precise scope of the proposal is not known, sources said that it is a comprehensive package of incentives and, possibly, proposed requirements that would encourage wider adoption of EOBRs.

“It’s not a one-size-fits-all proposition,” said one source who spoke on the condition of anonymity. What that means is unclear, however. For example, the proposal might approach fleets of different sizes differently. Or it might treat carriers differently depending on, for example, whether they haul hazardous materials or general freight.

The Federal Motor Carrier Safety Administration issued an advance notice of proposed rulemaking almost two years ago in response to a federal appeals court decision that criticized the agency for failing to consider seriously mandating EOBRs. In April, FMCSA said in an update of its regulatory agenda that it planned to issue a notice of proposed rulemaking by June of this year.

Because Congress has not mandated EOBRs, the White House Office of Management and Budget has no formal deadline for completing its review. But Bush administration officials likely would want to show substantial progress as the U.S. Court of Appeals for the District of Columbia considers in the coming months a second round of litigation on the hours-of-service revisions adopted last year.

Last year, the American Trucking Associations voiced conditional support for EOBRs, saying in a resolution adopted by its board that nine issues must be “satisfactory addressed” before the organization could support a federal regulation requiring the use of EOBRs for hours compliance.

To view the advance notice of rulemaking and comments submitted in response, visit this site and search Docket No. 18940.
Avery Vise


TCA Solicits Entries for Driver Awards
The Truckload Carriers Association is accepting pre-applications for the Company Equipment Driver of the Year and Independent Contractor of the Year awards for 2006.

These awards are an opportunity for carriers to honor drivers who have maintained exemplary safety records and who have achieved excellence in their trucking careers.

The Company Equipment Driver of the Year contest, sponsored by TCA and Truckers News, recognizes company drivers who exemplify the best in the industry. Company drivers are selected based on their safety records, work history and past awards and recognition.

The Independent Contractor of the Year contest is sponsored by TCA and Overdrive and rewards owner-operators based on their ability to run a successful business, operate in a safe manner over the public highways and enhance the public image of the trucking industry.

Both awards are open to over-the-road drivers who have driven at least 1 million consecutive, accident-free miles and are employed by a TCA-member company.

This year TCA has narrowed the total list of winners to only five in each category. The winners will be announced during TCA’s convention on March 11-14, 2007 at the Bellagio Resort in Las Vegas.

Drivers must submit their pre-application forms by Oct. 23, 2006. The online pre-application form is at this site.
Brittani Tingle


ArvinMeritor To Discontinue Manual Transmissions
ArvinMeritor will stop making Meritor manual transmissions in January 2007. The company says it will place greater emphasis on marketing FreedomLine automated manual transmissions by ZF of Friedrichshafen, Germany.

The company says it will honor all current manual transmission orders, and all orders received prior to September 2006, provided they are to be delivered no later than January 2007. The company also will continue to support its manual transmissions with parts and service.

Production of FreedomLine transmissions will remain in ArvinMeritor’s Laurinburg, N.C., facility, and the manual-transmission work force will be absorbed into production of other components.

“We are absolutely convinced that we have the most advanced and proven technology solution with the FreedomLine for our North American customers,” Tom Gosnell, president of the company’s Commercial Vehicle Systems business unit, said in a statement.
Paul Richards


InCab University Offers Over-the-Road Degrees
Truckers wanting to further their education while still earning a living as a driver have a new option designed for their lifestyle.

TransMarkets Technologies, a software and e-commerce provider to the trucking industry, and Chattanooga State Technical Community College announced Monday the official launch of InCab University.

“Using any Internet-enabled PC or laptop, drivers can receive education without ever having to step inside a classroom,” TransMarkets CEO Craig Fuller said.

InCab University is an online and on-demand accredited college degree and certificate program offered through Chattanooga State. This means that drivers can start courses anytime and have 16 weeks to complete them.

Professors for the InCab University have been recruited nationwide and undergo an orientation program to ensure the educator understands the trucking lifestyle.

“We modeled InCab on the success and effectiveness of the GI bill,” Fuller said.

InCab University courses will begin Aug. 15 with 26 courses available. It will expand to more than 100 courses in early 2007.

Degree programs include:

  • Associate of Science (general with an emphasis in behavioral science)

  • Associate of Science (business administration)
  • Associate of Arts ( general with an emphasis in humanities)
  • Associate in Applied Science (fire science technology with an emphasis in fire science management)
  • Associate in Applied Science (management with an emphasis in transporation)
  • Associated in Applied Science (information systems technology with an emphasis in end-user support)

Certificate programs include:

  • Certificate in Wellness

  • Certificate in computer automated design
  • Certificate in Supervisory development
  • Certificate in e-commerce
  • Certificate in Web design
  • Certificate in management (emphasis in transportation)

A degree program and certificate program in homeland defense and security are planned for the future.

In the final phase of development, InCab U tested the program using several drivers from Covenant Transport. “I enjoyed the course offerings, and I know that whether I’m in Las Vegas or Atlanta, a truckstop or rest area, I have the educational opportunity of a lifetime at my fingertips without sacrificing my income,” said Covenant Executive Council driver Stephen Fraser.

Fuller said cost is approximately $250 per course hour. Financial aid is available through Chattanooga State.

Fuller said he believes InCab U will be a great way for fleets to attract and retain drivers.
For more information, visit this site.
Randy Grider


FYI
Hill Confirmed
Before adjourning for its August recess, the U.S. Senate confirmed John Hill as administrator of the Federal Motor Carrier Safety Administration. Hill, who has been with the agency since June 2003, replaces Annette Sandberg, who left the agency in March. Hill previously was FMCSA’s assistant administrator and chief safety officer. Most of Hill’s career – from 1974 to 2003 – was with the Indiana State Police, including a stint as commercial vehicle enforcement commander from 1989 to 1994 and from 2000 to 2003.

Mineta Takes New Job
Norman Mineta has assumed duties as vice chairman of an international public relations and lobbying firm based in Washington, D.C., after more than five years in charge of the U.S. Department of Transportation. Mineta will counsel Hill & Knowlton clients on domestic and international issues, said Paul Taaffe, the firm’s chairman and CEO.

Con-way Sells Expedited Division
Con-way announced July 24 that it will sell the expedited business of Con-way Expedite & Brokerage to Panther Expedited Services. Con-way Brokerage, a separate division involved in truckload sales, will remain with Con-way as part of Con-way Transportation. Proceeds from the sale will be between $7 million and $8 million, Con-way said. Con-way expects the transaction to be concluded during the third quarter and expects no material effect on revenues.

New Love’s
Love’s Travel Stops has announced that truckstop No. 341 in Rolla, Mo., is now open. Located on I-44 at Exit 189, the Rolla truckstop is Love’s 121st travel stop. The company also has scheduled new locations to open in Florida, Indiana, Kentucky and Tennessee in 2006.

Donaldson Products for Mack, Volvo
Donaldson Company Inc. announced that its Endurance Plus family of oil filtration products will now be available for Mack and Volvo diesel engines. The products, which, according to the company, are designed to reduce oil usage by as much as 50 percent, are currently available for use on Caterpillar, Cummins and Detroit Diesel engines. The oil filtration solution is built with Synteq Filtration Media and has an internal additive gel container that installs like a regular filter and requires no system maintenance.

Petro Offers Blood Pressure Monitors
To help drivers become aware of potential blood pressure problems, Petro Stopping Centers has installed free blood pressure monitors at most of its locations nationwide. According to the truckstop chain, the decision to install the monitors was made in response to stricter federal government regulations that now require professional drivers to have blood pressure of 140/90 or below in order to maintain a CDL. The old standard was 160/90.

Ryan Breaks Own Record at Pikes Peak
Big-rig racer Mike Ryan walked away with the trophy and a new record July 1 at the 84th annual Pikes Peak International Hill Climb in Colorado Springs, Colo. Ryan broke his own 2005 record of 12 minutes, 46 seconds and 81/100 seconds with a time of 12.43.667 in the Exhibition Class division. He beat four-time New Zealand B Class truck racing champion Shane Chapman, who finished with a time of 13:36.322.

Tonnage Drops
The American Trucking Associations’ advanced for-hire Truck Tonnage Index decreased for the first time in three months, falling 0.7 percent in June. June’s drop followed respective gains of 2.0 percent and 0.4 percent in April and May. June’s tonnage index was 1.4 percent lower, compared with a year earlier. Year-to-date, the truck tonnage index was down 1.9 percent, compared with the same period in 2005.

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