Industry news

At press time, the national average retail price of a gallon of diesel had increased seven weeks in a row, to $2.92, or 73 cents more than the price a year before. Two weeks in April
brought back-to-back 11-cent increases in the national average.

The immediate cause was a spike past $70 in the per-barrel price of oil, fueled by supply difficulties in war-torn Nigeria and Iraq, says Jonathon Cogan, a specialist at the U.S. Energy Information Administration. “There is no excess capacity immediately available that can provide a cushion against potential supply disruptions,” Cogan says.

The increasing belligerence and isolation of Iran, the world’s fourth largest oil producer, “is keeping the prices higher and more voluble than they should be,” Cogan says.

The price spike also has domestic causes, says Ron Planting of the American Petroleum Institute. Refineries in the Gulf of Mexico, for example, are still not up to the production levels they held before the 2005 disasters of hurricanes Katrina and Rita.

The Gulf of Mexico refineries that survived were forced to produce at such a fast rate that maintenance and upkeep were delayed until this spring, Cogan says.

Maintenance will be over soon, “and the refineries will go back to ramping up their productions,” Cogan says. “In the near term, we would expect to see some increased refinery production.”

Lingering winter weather also is having its seasonal effect on diesel supplies, as both diesel and heating oil are made from the same raw materials. If diesel were gasoline, it could be imported from Europe when U.S. supplies run short, Cogan says. “Europe uses less gasoline than it has, so there is a surplus.” But since most automobiles in Europe run on diesel engines, Europe never has diesel to spare.

“The economic figures are still showing very good economic growth,” Planting said. “No one wants to pay more, but as a country, it seems we’ve been able to cope.”

That very economic success contributes to the demand for diesel, which has increased at twice the pace of that for gasoline, Cogan says. The reason: “The economy is moving along at a fairly good clip, and goods produced in the U.S. and imported goods – all of them at some point are moved by truck.”

U.S. officials will seek comment on a proposal to develop an identification card for truckers and other port workers that will cost cardholders as much as $139 each for a five-year period.

Partner Insights
Information to advance your business from industry suppliers

On May 10, the Transportation Security Administration and the U.S. Coast Guard began implementing the Transportation Worker Identification Credential by approving proposed regulations for a biometric-based identification credential for port workers.

More extensive program information will be published soon in the Federal Register. After that, the public will have 45 days to comment. Four public meetings will be scheduled for collecting comments.

“TWIC is designed to ensure that individuals posing a security threat do not gain access to our nation’s ports,” TSA Assistant Secretary Kip Hawley said. “Today’s proposed rulemaking represents a significant milestone towards putting TWIC on the fast track.”

The program is expected to reach 750,000 workers and be funded through user fees. TSA anticipates workers would pay approximately $139 to receive a TWIC.

Workers with current, comparable background checks would pay approximately $105 for the credential.

TSA conducted a prototype test of the credential last year and issued more than 4,000 TWICs to workers at 26 sites in six states.

Ron Faherty Jr., the owner of American Road Line, writes on his website:

“The price of freedom does not come cheap. Every day that we wake and go about our normal lives is made possible because of the sacrifice of so many. The numbers of casualties you hear on the news every day are just numbers to so many of us.”

Faherty is doing something to change that.

His nephew went to high school with Patrick Kenny, a Marine lance corporal who was killed Oct. 6, 2005, by a car bomb in Iraq.

“The story made an impact on me,” Faherty said. “All you hear is the number of soldiers killed, not their names or where they’re from. It’s just a number in the news.”

Faherty asked Kenny’s family whether he could use ARL trucks as billboards to honor the fallen soldier.

Kenny’s family supplied a photo of him in full combat gear and resting against a wall, exhausted after a firefight. Faherty superimposed the photo over an American flag and, at the suggestion of Kenny’s father, added the legend, “Some gave all.” He printed the final product as a 24-inch-square decal that soon will adorn all ARL trucks and tractors.

Bumper sticker versions of the decal can be purchased for $5 each or $10 for three. Revenue will be sent to the Injured Marine Semper Fi Fund, which “provides financial assistance to injured Marines, sailors, and members of other service branches injured while assigned to Marine forces, and their families,” according to its website,

“News traveled fast on a local level here in west Pennsylvania,” Faherty said. “We have sold 1,200 of these stickers in the past month and a half.”

When Faherty started opening the payment envelopes, he found more than just money. “Along came letters from other parents who have lost their children fighting the same war on terror,” he said.

Faherty created the Fallen Heroes website,, as an effort to “bring the families and the trucking companies together.” He hopes other trucking fleets join the cause.

The Port of Long Beach, Calif., was effectively shut down May 1 by “Day Without an Immigrant” protests, the California Trucking Association said. News reports said the Port of Los Angeles also was virtually shut down.

“Ten percent of the workforce came into the ports, so they were affected,” said Stephanie Williams, the association’s senior vice president.

Hundreds of thousands of immigrants, mostly Hispanics, staged protests, work stoppages and boycotts nationwide May 1 to demonstrate Hispanic economic clout and protest illegal-immigrant legislation passed by the U.S. House. The bill, HR 4437, would make being in the country illegally, or assisting an illegal immigrant, a felony.

“The pulse of the population is right for this,” said independent owner-operator Armando Gonzales of Rancho Cucamonga, Calif. “It’s a really hot time. HR 4437 is an attack against Hispanics in general.”

A group of truckers calling itself the Los Angeles Troquero Collective (“troquero” is Spanish for trucker) advocated the strike in hopes of bringing about immigrant amnesty, the right of all truckers to unionize and a 25 percent salary increase.

News reports said half the construction workers in Florida’s Miami-Dade County failed to show up for work, while Goya Foods, a Hispanic-owned company based in New Jersey, suspended deliveries everywhere but Florida.

The effect on trucking, as on other industries, seemed to depend on the region.

“It had absolutely no impact,” said Bill Webb, president of the Texas Motor Transport Association.

The American Trucking Associations also said May 1 it hadn’t heard of any problems.

The American Trucking Associations will join the Washington Trucking Association in filing an amicus brief with the state’s Supreme Court in a case involving overtime compensation for interstate drivers.

Washington does not follow the federal law that exempts drivers from overtime pay, and instead requires overtime, or its equivalent, for work in excess of 40 hours per week.

The issue in the case is whether the 40-hour limit is based only on hours worked in Washington or total hours, including work in other states. The associations will argue that under the statute, overtime is triggered only when more than 40 hours are worked within Washington.

Alternatively, they will argue that if overtime eligibility is computed based on hours worked in other states, the statute would violate the Commerce Clause of the U.S.
Constitution by being unduly burdensome and an impermissible extraterritorial regulation and would be pre-empted under federal law because of its effect on motor carrier rates, routes and services.

The National Transportation Safety Board concluded that the principal cause of an accident that killed eight people in Illinois was the tractor-trailer driver’s failure to slow as the truck approached vehicles waiting at a toll plaza. A contributing cause, NTSB said, was the intermittent traffic backups at the plaza.

The investigation determined that the truck driver did not notice traffic slowing and that a collision warning system might have prevented the accident. NTSB, therefore, reiterated its previous recommendations issued in 2001 calling for the National Highway Traffic Safety Administration to create standards for collision warning systems and to require their installation on all newly manufactured commercial vehicles.

“It’s terrible to see an accident like this when we have the technology to prevent it,” said NTSB Acting Chairman Mark Rosenker. “It’s time to put those technologies to work – saving lives.”

However, some trucking associations have opposed mandating the gear, which can cost in excess of $3,000. “They have a tendency to promote overconfidence in the driver,” Todd Spencer, vice president of the Owner-Operator Independent Drivers Association, told the Chicago Daily Herald.

NTSB recommended guidelines on toll plaza design that emphasize electronic toll collection to reduce queuing.

The board also called on the Department of Transportation and NHTSA to conduct more research and, eventually, a rulemaking on how to deal with the large weight differences between heavy trucks and other highway vehicles.

Freightliner Custom Chassis will produce more than 100 hybrid electric-powered walk-in vans for FedEx Express and other customers in 2006.

Designed for lower emissions and better fuel economy, the vans are built on an MT-45 SR chassis platform from Freightliner Custom Chassis and have a gross vehicle weight rating of more than 15,000 pounds.

FedEx Express, which initiated the program, already is operating 18 of the vans in Sacramento, Calif.; Tampa, Fla.; New York City and the District of Columbia and expects the vans to become a mainstay of its medium-duty delivery fleet.

The hybrid-electric vehicles are powered by “an electric motor through an energy storage device developed by Eaton and a Mercedes-Benz MBE904 diesel engine from Detroit Diesel,” says Mike Stark, of Freightliner Custom Chassis. Utilimaster also was involved in the engineering.

The companies claim a 50 percent improvement in fuel economy and a 90 percent reduction in emissions.

Repossessions and liquidations of tractor-trailer trucks nationwide have been high for the past five quarters, but repossessed trucks are finding buyers quickly, reported Nassau Asset Management, which serves the equipment finance industry.

Nassau’s data indicates that truck repossessions and liquidations began to rise in the first quarter of 2005. On a quarter-over-quarter basis, repossessions rose 61 percent in the first quarter 2005; 30 percent in the second quarter of 2005 and 32 percent in the third quarter of 2005. The third quarter of 2005 was the peak in terms of volume, but repossessions were up 145 percent over the fourth quarter of 2004.

Nassau President Edward Castagna cites high fuel costs as a major factor, but he believes that the upswing reflects a positive trend: industry growth over the past few years. There are more financed vehicles on the road as the industry rebounded from the 2001 downturn, and more vehicles often means more repossessions and liquidations.

The number of highway fatalities in 2005 was 43,200, more than 2004’s figure of 42,636, according to a preliminary report from the National Highway Traffic Safety Administration.
Norman Mineta, U.S. transportation secretary, noted that 55 percent of passenger vehicle occupants who died in 2005 were not wearing seat belts.

“We have the tools to prevent this tragedy,” Mineta said. “Every car has a safety belt, every motorcycle rider should have a helmet, and everyone should have enough sense to never drive while impaired.”

The report projects a final 2005 fatality rate of 1.46 deaths per 100 million vehicle miles traveled in 2005, up from the record low of 1.44 in 2004.

The report also projected the eighth straight annual increase in motorcycle fatalities: 4,315 in 2005, 7.7 percent more than the year before, when 4,008 died.

Once again, FedEx and Qualcomm have made the ranks of Fortune magazine’s “100 Best Companies to Work for in America.”

At No. 64, FedEx made the list for the ninth consecutive year. Based in Tennessee, the air and ground transport company has more than 212,000 employees in the United States, the most of any company on the list. FedEx is also one of the most diverse companies and ranked first in job growth, the magazine reported.

At No. 23, Qualcomm made the list for the eighth straight year. Based in California, the wireless company provided stock options to all new employees last year and paid for on-site Princeton Review prep classes for employees hoping to attend graduate school, the magazine noted.

The No. 1 company on the 2006 list is Genentech, a cancer-fighting biotech company in San Francisco.

The Highway Watch program announced May 4 that its training and recruitment information will be featured at all stops in America’s Traveling Truck Show, launched in April by Randall-Reilly Publishing.

The show is making three-day visits to Petro Stopping Centers nationwide. The last stop on the tour is Weatherford, Texas, on Aug. 17, the week before the Great American Trucking Show in Dallas. A complete schedule is available here.

“We are very excited to have Highway Watch bring its important message of safety and security to our America’s Traveling Truck Show attendees, America’s truckers,” says Robert Lake, vice president of Randall-Reilly’s truck stop division. “American truckers are patriotic professionals who play a vital role in the anti-terrorism effort.”

Highway Watch is a national program that uses the truckers to help monitor America’s highways in an effort to prevent terrorists from using large vehicles or hazardous cargoes as weapons. The program is administered by the American Trucking Associations under an agreement with the U.S. Department of Homeland Security.

Paccar CEO Mark Pigott is No. 6 on Forbes magazine’s annual list of best-performing business executives.

“This is wonderful recognition for the company and is a direct reflection on the integrity and dedication of Paccar’s 22,000 employees,” Pigott said. Paccar owns Peterbilt and Kenworth.

To generate the pay-versus-performance rankings, Forbes evaluated the stock performance of 189 corporations against the compensation paid to their chief executives.

In a separate list, “What the Boss Makes,” Forbes ranked the CEOs of America’s 500 biggest companies by total compensation in the most recent fiscal year. On that list, Pigott ranked No. 192 with $7.63 million. Other CEOs of trucking and trucking-related companies on the compensation list include:

No. 96, Eaton’s Alexander Cutler, at $14 million.
No. 206, Goodyear’s Robert Keegan, at $7 million.
No. 217, Cummins’ Theodore Solso, at $6.5 million.
No. 288, Caterpillar’s James Owens, at $4.3 million.
No. 297, Goodrich’s Marshall Larsen, at $4.1 million.
No. 300, Expeditors International’s Peter J. Rose, at $4.1 million.
No. 367, Navistar International’s Daniel Ustian, at $3 million.
No. 459, United Parcel Services’ Michael Eskew, at $1.3 million.

Thousands of truckers, Teamsters and other workers rallied at ports in Miami, Los Angeles, Houston and Oakland, Calif., in April as part of a seven-union campaign for better conditions for workers and tighter port security.

The Change to Win coalition, formed when the seven unions left the AFL-CIO, is the unions’ campaign to organize workers in several industries, including transportation. Jim Hoffa, Teamsters president, has focused efforts in trucking not only on better pay, safety and working conditions but also security.

The six other unions are the Service Employees International Union, United Here, the Food and Commercial Workers union, the Laborers’ union, the Carpenters union and the United Farm Workers of America.

President Bush nominated John Hill to be the new administrator of the Federal Motor Carrier Safety Administration.

Hill now serves as assistant administrator and chief safety officer for the FMCSA.
The FMCSA is also filling its deputy administrator slot. U.S. Transportation Secretary Norman Mineta has appointed David Hugel to the position.

Hugel was to join the agency May 30, serving as acting administrator until Hill takes over the post.

Hugel joins the U.S. Department of Transportation after heading the Maryland Division of Motor Vehicles for the past three years. He replaces Warren Hoemann who left the deputy’s post effective May 13.

June 29 marks the 50th anniversary of the Federal-Aid Highway Act, the law that led to America’s Interstate Highway System.

The American Association of State Highway and Transportation Officials is celebrating the birth of the Interstate by sponsoring a re-enactment of the 1919 military convoy that inspired President Eisenhower to campaign for the Federal-Aid Highway Act nearly 40 years later.

The new convoy begins June 16 in San Francisco and concludes June 29 in Washington, D.C. The only truck stop on the itinerary is Iowa 80 in Walcott, Iowa, where the public is invited to a daylong celebration June 23. For a complete list of stops, visit this site.

In 1919, a convoy of military vehicles drove 3,230 miles from Washington to San Francisco to see how they would perform in the event of an attack at home. The First Transcontinental Motor Train took 63 days to make the trip.

Deeply impressed by the trip was the convoy’s commander, a lieutenant colonel and World War I veteran named Dwight Eisenhower. The poor condition of U.S. roads, compared to the German autobahns he had seen firsthand, convinced young Eisenhower that America needed a better highway system.

The 1919 convoy also proved the worth of Harvey Firestone’s soon-to-be-famous pneumatic tires. The two trucks that Firestone lent the expedition fared much better than vehicles equipped with solid rubber tires. Two Firestone tractor-trailers will join the 2006 re-enactment of the historic trip.

The 24th annual Shell Rotella SuperRigs truck beauty contest is June 22-24 at the Sacramento 49er Travel Plaza in Sacramento, Calif.

Working truck owners will compete for more than $10,000 in cash and prizes. Twelve winners will appear beside their trucks in the 2007 Shell Rotella SuperRigs calendar.

The contest is “a fun way to say thank you to all our loyal Shell Rotella T customers,” said Scott Harvey, a Shell Lubricants marketing manager.

Industry professionals will score the rigs on exterior appearance, design, detail/finish, originality and workmanship. Ribbons will be awarded in categories including Best of Show, Tractor, Tractor/Trailer Combination, Classic, Chrome, Theme, Mural, Lights and People’s Choice.

Entering the contest is free, and each entrant will receive a gift package containing several Shell engine products, a SuperRigs T-shirt and baseball cap, and a 2006 SuperRigs calendar.

Entrants can register on arrival and enter the judging line at their convenience. Judging takes about 20 minutes and will take place between 9 a.m. and 5 p.m. June 22 and June 23, and between 8 a.m. and noon June 24. The Best Lights judging will be held at dusk June 23. People’s Choice voting will take place throughout the event.

The award ceremony will be 1:30 p.m. June 24. Contestants need not be present to win.
More than 90 entries competed in the 2005 event, held in Wildwood, Fla.

BIOWILLIE, Willie Nelson’s biodiesel brand, was honored by the U.S. Environmental Protection Agency in its eighth annual Environmental Awards Ceremony in San Francisco.

The veteran singer and social activist opened his first California biodiesel outlet in San Diego in February. For more information, visit this site.

FEDERAL LAW TRUMPS the effort by the Washington, D.C., City Council to ban hazmat transportation near the U.S. Capitol, the Federal Motor Carrier Safety Administration ruled.
In February, the council voted to temporarily ban hazmat transport within 2.2 miles of the Capitol.

A U.S. DISTRICT COURT has sentenced a Detroit man to a year in prison for helping the sale of fake driver’s licenses, including CDLs. Andre Donaldson, 34, was sentenced April 10 after pleading guilty to the felony charge.

THE U.S. EPA announced it would temporarily adjust its sulfur-tolerance test to smooth the transition to ultra-low sulfur diesel fuel.

The June 1 deadline and the new standard of 15 ppm were unaffected by the Environmental Protection Agency’s announcement, designed only to give labs more time to improve measurements.

AN AUDIT of the Federal Motor Carrier Safety Administration concluded that while it has made progress in its oversight of carrier safety, it needs to be harsher on carriers with repeat violations.

The agency disagreed with the Office of Inspector General’s recommendation that carriers be fined for not filing the data used to rank safety performance.

THE TRUCK TONNAGE INDEX dropped 3.2 percent in March, its second consecutive month of decline, the American Trucking Associations reported. The dip put the index at 110.1, its lowest level since November 2003.

The Business Manual for Owner-Operators
Overdrive editors and ATBS present the industry’s best manual for prospective and committed owner-operators. You’ll find exceptional depth on many issues in the Partners in Business book, updated annually.
Partners in Business Issue Cover