February 2002

SURHCARGES ADJUST AS DIESEL PRICES FALL

As diesel fuel prices fell to their lowest level in more than two years, several fleets announced cuts to their fuel surcharges.

Con-Way Transportation Services cut its fuel surcharge to zero for the two weeks in December in which the average cost of diesel stayed below $1.15 per gallon. Con-Way pledged to do so again whenever diesel is that cheap.

Meanwhile, FedEx and UPS trimmed their surcharges, but not to zero. Both Con-Way and FedEx announced new surcharge formulas, Con-Way’s keyed to diesel prices, FedEx’s to jet-fuel prices.

A perennial topic among owner-operators, fuel surcharges are common even outside the transportation industry. Large hotel chains such as Hilton, Hyatt and Marriott added temporary ones to their room bills in 2001, while students at the University of Maine pay $3.50 per credit hour to cover winter heating bills.

The needed surcharge in the trucking industry in 2002, says Tom Tranovich, president of American Trans-Freight in Morrisville, Pa., won’t be for fuel but to cover another “abnormal, almost knee-jerk” price increase: insurance. “Rates were going up even before Sept. 11, but that accelerated the process,” Tranovich says. “The insurance spike will be as big as, if not bigger than, the fuel spike. There are no economies of scale where insurance is concerned.”

– STAFF AND WIRE REPORTS



AVOID SALT LAKE CITY OR PLAN AHEAD

Organizers of the Winter Olympics, Feb. 9-24 in Salt Lake City, warn truckers to plan ahead if they hope to avoid traffic headaches. Travel times through the most congested areas at peak times may be three or four times normal.

The entire Salt Lake City area is affected, including I-84, I-15 between Ogden and Provo, I-80 between Kearns and Park City and the entirety of I-215. Truckers who can avoid that corner of the state altogether, such as east-west haulers who can take I-70 to the south or I-90 to the north, are urged to do so.

Otherwise, the recently expanded I-15 is expected to be the least congested artery, while I-80 is expected to be the worst, with four logjam intersections between I-215 and U.S. 40. Truckers in the area can get traffic updates by dialing 511.

For more information, including recommended hours of travel keyed to a map, visit olympics.utahcommuterlink.com and click “Businesses,” then “Long-Haul Trucking.” At the bottom of the page, truckers will find this note:

“Long-haul trucking companies will transport many of the supplies that will contribute to the Games’ success. We recognize all you do to add to this event and to the strength of our state and national economy. Thank you for your support in helping America ‘Light the Fire Within’ and host a wonderful, safe 2002 Olympic Winter Games.”

– ANDY DUNCAN



GPS SATELLITES OPEN TO ATTACK

America’s network of global positioning satellites, used not only by the Pentagon and the telecommunications industry but also by truckers and carriers for navigation and shipment tracking, is vulnerable to disruption by terrorists, according to a report by a prominent private research institute in Washington.

“President George W. Bush should immediately add the Global Positioning System to the current list of vital national infrastructure and assign responsibility for its security to the U.S. Department of Defense,” says the Heritage Foundation report “Defending the American Homeland,” which also calls for more of the satellites to be put into orbit.

The low-power signals transmitted by GPS satellites are vulnerable to interruption by widely available jamming equipment, according to the report, developed in the wake of Sept. 11 by a panel chaired by L. Paul Bremer III, former chairman of the National Commission on Terrorism, and Edwin Meese III, U.S. attorney general under President Reagan.

The report’s 25 recommendations include a call for a missile defense system such as that advocated by President Bush because enemy missiles could target not only cities and ground installations but GPS satellites as well. The report is online at www.heritage.org.

– DONNA PIERCE



RISING PREMIUMS ARE AN ‘INSURANCE CRISIS,’ ATA SAYS

A survey of 1,000 trucking companies shows their liability insurance rates went up by nearly a third in 2001, with the biggest increases coming after Sept. 11.

Overall, fleet premiums were up 32 percent for the year, according to the American Trucking Associations survey. Some companies, though, were much worse off. In the wake of Sept. 11, one insurer jacked its rates 1,000 percent.

“A crisis like this is a real problem for the national economy,” not just for trucking, says ATA President William J. Canary. “Simply put, we move the American economy. If increased insurance rates put us out of business, America stops.”

The biggest premium increases were for automobile haulers, followed by tanker trucks and general freight. Rate increases for reefers were the lowest in the industry.

“The best long-term solution is legal reform at the state and federal levels,” says Fred C. Burns Jr. of Burns Motor Freight in West Virginia, chairman of ATA’s Insurance Task Force. “Today, jury awards not based on any common-sense reality are driving up insurance rates.”

Burns also blames fifty different sets of insurance regulations at the state level and an expensive minority of unsafe drivers and unsafe fleets, which drive up premiums for everyone else.

– ANDY DUNCAN




SHORT HAULS

CHEVRONTEXACO formed Gulf Lubricants Co. The new company will manufacture and direct-market a wide range of lubricants. Customers will be able to order at www.gulflubes.com and a toll-free number, (866) BUY-GULF (289-4853).



CRST FLATBED, a subsidiary of CRST International, added 100 flatbeds to its fleet in November when it signed a partnership with Freeman & Sons, a short-haul flatbed carrier based in Roscoe, Texas. Freeman’s customers are in the building materials and agricultural products industries.



VERN WACHTER, 75, of Vancouver, Wash., owner of Transport Refrigeration Co. and a longtime supporter of the Pacific Northwest Truck Museum, died of heart failure Dec. 24.



RECENT $1,000 WINNERS in the weekly Money for Miles Sweepstakes at eTrucker.com include Phillip Alvey of Richmond, Ind.; Audrey Brouwer of Vancouver, Wash.; Billy Douglas of Andalusia, Ala.; Justine Ellis of Fort Gratiot, Mich.; William Hark of Buffalo, N.Y.; Stephen Harris of Albany, Ore.; Jason Marable of Agency, Mo.; Deborah Lee Patrick of Waco, Ga.; Jerry Shepherd of Eatonton, Ga.; and Terri Taylor of New Lothrop, Mich. One registered user of the site will win $1,000 each week through May.

INDICATORS POINT TOWARD 2002 TURNAROUND

The new year began with a flurry of indicators that the U.S. economy is poised for a rebound, and one of the most hopeful came from the trucking industry. A Commercial Carrier Journal survey of 390 fleet executives found that almost 75 percent of them expect freight volume to increase in 2002. “I look for things to pick up,” says Dean Anderson, director of operations at Smithway Motor Xpress in Fort Dodge, Iowa.

Nearly a third of the executives, moreover, expect to increase their fleet size this year. Among other reasons for optimism:

  • Buoyed by holiday shopping, consumer confidence jumped almost 9 points in December. “Consumers’ short-term optimism is no longer at recession levels,” the Conference Board reported, “and the upward trend signals that the economy may be close to bottoming out and that a rebound by mid-2002 is likely.”
  • Excluding transportation equipment such as big rigs and aircraft, orders for durable goods increased in October and November – the first back-to-back increase in two years.
  • Factory inventories fell in November, the 10th straight month of decline. This is good news for trucking, because when inventories run low, new goods have to be manufactured and trucked in.
  • Factory activity rose in December to 48.2 on the index calculated by the Institute for Supply Management. That’s the best showing in more than a year. An index of 50 or higher means recession levels have been left behind.
  • The Labor Department reported that new claims for unemployment benefits fell in the first week of January. Analysts say it could be a further sign that the labor market is stabilizing after the huge layoffs in the wake of the Sept. 11 terrorist attacks.
  • Statistics aside, individual companies had good news to report. For example, Corning, a major player in the hard-hit telecommunications industry, announced it would reopen four plants.

    “What you’re seeing in the trucking industry is a stabilizing of orders,” analyst Miller Welborn says. That means things are no longer getting worse, Welborn says – a necessary step, of course, toward their actually getting better.

    “Stabilization is good,” says trucking analyst Christopher Brady, who believes the downturn may be bottoming out. “The past month or two definitely have been better than the preceding six months.”

    Just as the sailor in the crow’s nest was the first to sight land, so flatbed companies are among the first to spot economic shifts because they haul the raw materials used by everyone else. “We are in the front lines,” says Steven Rumsey, CEO of WTI in Tuscaloosa, Ala., who started preparing for tough times way back in 2000, when steel and lumber freight started slowing down.

    Now, Rumsey says, steel and lumber are picking up again. He believes that means landfall is near.

    – ANDY DUNCAN



    TRUCKERS THROW HATS IN THE RING

    Trucker Lyn Curtis Adams of Montgomery, Ala., is running for lieutenant governor on the Libertarian ticket. He says he wants to emphasize the issues of crime and racism, which have been on his mind since his family was victimized in a recent armed robbery.

    “Our problems with racism need to be solved,” says Adams, 33. “Our problems with crime need to be solved. The solution is a greater respect for each other, and it needs to start with our government.”

    Among truckers running for office, Adams has generated less press attention than Tom Rubin of Addison, Ill., who’s staked out a radical position in his bid for the Republican nomination in the 6th Congressional District.

    He faces stiff primary competition. For 27 years, the district’s incumbent congressman, also a Republican, has been Henry Hyde, who is speaker of the House and one of the most powerful men in Washington – and who, at age 76, has no plans to retire.

    “Henry has done a great job in the seat,” says Rubin, 29, “and I appreciate him holding it for me until I get there to claim it.”

    Rubin’s platform, found on www.tomforcongress.com, includes the abolition of the U.S. Department of Energy and the Federal Reserve System, the dismantling of the National Park Service, the end of foreign aid and of federal aid to public schools, the retaking of the Panama Canal, and U.S. withdrawal from the United Nations.

    Rubin is only the fourth primary opponent Hyde has ever faced. “Every time I get a challenger,” Hyde says, “they are either Libertarians or card-carrying members of the NRA. I guess I’m not conservative enough for them.”

    – STAFF AND WIRE REPORTS



    TRUCKER STEERS OUT OF TRAFFIC AFTER BEING FATALLY SHOT

    A trucker hauling half a doublewide trailer on I-45 north of Houston was fatally shot Dec. 14 by a bullet through his windshield. Police suspect Roger Dale Swinner of Alvin, Texas, was a victim of road rage.

    Swinner was being followed closely by his partner, Fabian Dugie of Manville, Texas, who was hauling the trailer’s other half. Dugie was aware of nothing unusual until Swinner’s rig drifted onto the shoulder of the road and stopped in a ditch. Dugie pulled over to find his partner slumped over the wheel and bleeding from the chest. Cpl. Denise Janeway of the Montgomery County Sheriff’s Department says Swinner, who was married and raising a young sister, died a hero. “He saved a bunch of other people’s lives by pulling the truck off the road the way he did.”

    The crime lab says the fatal large-caliber shot came from another moving vehicle likewise traveling northbound.

    A $1,000 reward is offered for information leading to an arrest. Call (800) 392-7867.

    – ANDY DUNCAN


    “For the industry in general to get healthy, our customers must be able to raise prices.”
    – Steve Keate



    SHORT HAULS

    A FATAL HEART ATTACK at The wheel caused trucker Norman Dickerson of Kansas City, Mo., to hit a bridge support on I-70 just east of Terre Haute, Ind., police say.



    TRAILMOBILE TRAILER, which filed for bankruptcy in December, announced it will close its two remaining manufacturing plants.



    FOUR TEENS were sentenced to probation, fines and community service for throwing rocks at vehicles on I-40 in Albuquerque, N.M.



    POLKA BANDLEADER Frank V. Pavlik of Romeo, Mich., a former trucker, died at age 81. Pavlik and his Pav-O-Leers had such a long musical career that several couples hired them for their weddings and for their 50th anniversary parties.



    WESTERN STAR has detailed dealer information at its new website, www.westernstartrucks.com.

    INTERNATIONAL’S KEATE SEES “NO SILVER BULLET” FOR USED TRUCK PROBLEM

    The oversupply of used trucks has given the industry “a serious case of indigestion that we’re going to have to live with until supply and demand come into balance,” Steve Keate, president of International’s Truck Group, told Overdrive.

    Keate predicted the glut may shrink by 2003 but said “no silver bullet” will solve the problem in the near term.

    Avoiding an oversupply of used trucks in the future will take discipline on the part of truck manufacturers to take capacity out of the system and keep it out, Keate said. “When the economy comes back, and the opportunity is there to sell one more truck, it’s having the discipline to say, ‘No, we’re not going to do it.’ We’re all living with the results of chasing that one last sale.”

    Trucking companies and owner-operators have been especially hard hit, Keate said. “The issue I hear from 10 customers out of 10 is: ‘You have to help me with my used truck value problem. I have trucks that are, on my books, worth $45,000. What can you do for me?’ Quite frankly, I can’t do anything at this point because the market value of those vehicles is $20,000.” The situation, Keate said, has left many truck owners in deep financial trouble.

    Rock-bottom used truck values, coupled with the general economic slowdown, will continue to drive some carriers and owner-operators out of business, Keate said, allowing those remaining to command a higher price for their services. “For the industry in general to get healthy, our customers must be able to raise prices,” he said.

    International may be in a better position than most truck manufacturers, Keate said. “We didn’t take some business on that we could have written over the last couple of years because of the risk associated with used trucks,” he said. “In hindsight, that turned out to be a very smart move.”

    – LINDA LONGTON AND AVERY VISE



    SATELLITE RADIO NETWORKS EXPECT A BUSY YEAR

    In its first two months of operation, the first satellite radio service to go live signed up more than 30,000 subscribers who pay $9.99 a month to listen to the radio.

    XM Satellite Radio also was named Product of the Year by Fortune magazine.

    “In 12 short months, XM Radio has gone from a PowerPoint presentation to the Product of the Year,” President and CEO Hugh Panero announced at the International Consumer Electronics Show in Las Vegas.

    Also at the trade show, XM’s rival, Sirius Satellite Radio, announced plans to launch service on Valentine’s Day in Houston, Phoenix, Denver and Jackson, Miss., expanding to other cities this summer. Nationwide coverage is planned for the third quarter.

    Both satellite radio networks offer subscribers dozens of specialty music and talk channels, including trucker channels, for a monthly fee and the cost of the receiver. For more information, visit www.xmradio.com and www.siriusradio.com.

    – SEAN KELLEY AND MAX HEINE



    VOLVO, INTERNATIONAL CALL OFF ENGINE DEAL

    A plan to put Volvo engines in rival International trucks, announced in May 2001, has been called off.

    “As it has not been possible to fulfill the conditions outlined in the letter of intent, the parties have decided to cease negotiations,” AB Volvo announced in a brief statement.

    According to the original plan, International, a subsidiary of Navistar, was to have bought 12-liter Class 8 Powertrain engines from Volvo. The engines were to have been built in Sweden and installed in International’s North American trucks.

    Several long-term deals have been struck in the past few years between truck and engine manufacturers, but because it involved rival truck makers, the Volvo-International deal would have been unusual.

    – ANDY DUNCAN



    FIERY WRECK KILLS TRUCKER, DAMAGES INTERSTATE

    Prosecutors are considering charges against a teenage automobile driver who cut in front of a tanker truck on northbound I-65 in Birmingham, Ala., causing a fiery wreck that left the trucker dead and the interstate partially closed, likely for months.

    The truck hit the car, flipped and exploded, killing trucker Tim W. Dison, 34, of Killen, Ala. No one was injured in the car, driven by 18-year-old Torey Santos Tubbs of Birmingham. Police said the car had been used in a drive-by shooting two days earlier.

    Heat from the burning rig melted the steel supports beneath an overpass at the intersection of I-65 and I-20/59. All of I-65 was closed while work crews removed the wreckage and the ruined bridge. The southbound lanes will be closed until at least April.

    Dison had worked for Baggett Oil for less than a year. The Tim Dison Family Benefit Fund has been set up by Baggett Oil for Dison’s widow, Karen, and their two sons. Donations can be sent in care of SouthTrust Bank, P.O. Box 1000, Florence, AL 35631.

    – STAFF AND WIRE REPORTS

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