TA ACQUIRES PETRO FACILITIES
TravelCenters of America bought the operating businesses of Petro Stopping Centers for $70 million and simultaneously leased 40 Petro travel centers from parent company Hospitality Properties Trust.
The combined properties total 233 facilities in 41 states and Canada.
Both truck stop brands will be operated separately after the transaction closes, says Thomas O’Brien, president and CEO of TA. “Each of the TA and Petro operations excel at certain aspects of the travel centers business,” he says. “I expect the combined company will benefit by utilizing the best practices of each company.”
Prior to this acquisition, Petro was a privately owned company headquartered in El Paso, Texas. Its majority owner was a Texas family, while affiliates of Exxon Mobil and AB Volvo of Sweden held minority interests. Petro operates and franchises 69 travel centers in 33 states.
TA was spun out of Hospitality Properties Trust as a separate public company in January.
The travel centers operated by Petro generally are newer and larger than the 164 travel centers TA operates and franchises.
Petro assets acquired by TA include franchisee business that provides services to 24 centers operated by Petro franchisees, related businesses, four development sites, inventory and other working capital.
TA funded the $70 million transaction using cash on hand.
Simultaneously with TA’s acquisition of Petro, HPT acquired the remaining 40 Petro travel centers and leased them to TA for an initial net rent of $62.2 million a year through 2024 with renewal options thereafter.
In addition to its purchase price of approximately $630 million, HPT will pay certain costs of this transaction, including prepayment of debt secured by the Petro properties being acquired by HPT and customary closing costs. HPT estimates that these costs may be approximately $25 million.
– STAFF REPORTS
U.S. DOT LAUNCHES CROSS-BORDER AUDIT
The congressionally mandated safety audit of the Federal Motor Carrier Safety Administration’s cross-border trucking program with Mexico has begun.
The U.S. Department of Transportation’s Office of Inspector General announced the audit June 19, to begin immediately.
The initial objective will be to determine whether the FMCSA has complied with the preconditions set by Congress in 2002 and established sufficient mechanisms to ensure that provisional authority is granted only to Mexican motor carriers that can comply with U.S. motor carrier laws and regulations.
The audit will also establish sufficient monitoring and enforcement mechanisms to ensure continued compliance by those Mexican carriers.
Auditors will review written evidence and limited direct observations to identify potential risks, based on experience of safety audits and assessments of internal controls. The audit notice states that full testing of whether the mechanisms are operating effectively can occur only after the cross-border project is initiated.
In February, U.S. Transportation Secretary Mary Peters announced a one-year plan to allow up to 100 Mexican motor carriers to operate beyond the commercial zone along the U.S. border.
According to the Federal Register, the project will be initiated when the first Mexican carrier is granted provisional authority to leave that zone.
Six months after the pilot program begins, the DOT’s inspector general is required to issue an interim report looking at participant selection, any adverse effects on motor carrier safety, and monitoring/enforcement activities. The inspector general also must issue a final report on the same topics within 60 days of the conclusion of the project.
– JILL DUNN
PACCAR’S NEW ENGINE PLANT
Paccar plans to build a $400 million engine plant and technology center in Columbus, Miss. When completed in 2009, the facility will manufacture 12.9-liter and 9.2-liter diesel engines for Kenworth, Peterbilt and DAF. Paccar also produces engines in the Netherlands.
TRUCKER’S INVENTION NOW A MACK OPTION
Mack Trucks is the first manufacturer to offer as an option the Idle Free Hybrid System invented by Overdrive 2006 Trucker of the Year Robert Jordan.
The system uses absorbed glass mat batteries to provide stored electrical power for heating, air conditioning and amenities such as television. The five sealed long-life AGM batteries are housed under the bunk.
The batteries can be recharged by the truck’s alternator when the engine is running, by a shore power connection when the vehicle is stopped, or through a connection to the reefer unit for tractors hauling refrigerated trailers. When the truck is parked, the driver can use battery power or shore power to run heating, air conditioning and amenities. The system provides 12- or 120-volt power.
Idle Free uses a Xantrex Prosine 2000W inverter/charger to control and regulate electrical power, as well as to charge both the Idle Free batteries and the truck’s batteries. The Odyssey AGM 31 batteries have the ability to run the air conditioner for 10 hours with an outside air temperature of 90 degrees.
Mack’s complete climate control package includes a Webasto diesel-fired heater and a Dometic HVAC unit.
The total weight of the system, including five batteries, inverter, HVAC and controls is 370 pounds, less than many auxiliary power units, Mack says.
Jordan, a resident of Juneau, Wis., has been idle-free since 1999. The U.S. patent holder’s accolades include gold medals from the Minnesota Inventors Congress.
– JILL DUNN
TOO MANY TRUCKS, SAYS ATA ECONOMIST
Up to 120,000 too many Class 8 trucks are on the road, the chief economist of the American Trucking Associations told fleet executives on June 5 in Tuscaloosa, Ala. He was among speakers at the 18th CCJ Trucking Symposium, organized by Overdrive’s sister publication, Commercial Carrier Journal.
“In less than a year we went from tight capacity to overcapacity,” Bob Costello said, primarily because fleets bought lots of trucks in 2006 to avoid the lower-emission 2007 engines. “Many of you have seen what that means with shippers” in rate negotiations, he said.
At the same time, truck tonnage tumbled 1.7 percent in 2006 because of a slow housing market that meant fewer heavy flatbed loads. “If we haven’t hit the bottom of that trend, we’re darned close,” Costello said.
After unprecedented growth in 2005, trucking revenue has slowed, although Costello predicts a modest increase later this year and much stronger long-term growth.
Red flags would include another downturn in the housing market, an increase in interest rates or a continuing increase in the inventory-to-sales ratio. A high ratio means less freight to haul.
Don’t expect fuel prices to stabilize anytime soon, Costello said. Boom countries India and China together have 37 percent of the world’s population but consume only 11 percent of the world’s oil, so their energy demands will increase. Meanwhile, the United States will become only more dependent on OPEC, which controls 61 percent of oil reserves, Costello said.
Productivity in trucking has fallen in the past four years, Costello said. One reason is congestion, a growing problem even in mid-sized cities. The top 200 bottlenecks alone cost trucking $7.8 billion annually, he said.
Given productivity constraints, “The biggest challenge is not the slowdown we’ve got going on right now,” Costello said. “It’s are you going to be able to haul 31 percent more freight in 2017 than you can now?”
– LINDA LONGTON
TRUCKER BUDDY FOUNDER DIES
Trucker Buddy International founder Gary King, 61, died June 8 at his home in Elkhorn, Wis., following an extended illness.
After serving in the U.S. Air Force, King drove trucks for more than 30 years before retiring in 1993. In 1992, while an owner-operator leased to Dart Transit, King began writing postcards to classrooms. From that grew Trucker Buddy, a pen-pal program that educates elementary school children about the trucking industry.
A memorial fund has been set up. Contributions can be sent to: Gary King Memorial Fund, care of Monona State Bank, P.O. Box 6500, Monona, WI 53716.
– Kristie Busam
SMALL FLEETS FACE CHALLENGES
Despite significant challenges from federal regulations and big-fleet competitors, small carriers are here to stay, said Dave Owen, president of the National Association of Small Trucking Companies.
“We have 400 entities a week applying for authority,” said Owen, addressing the CCJ Spring Symposium June 5 in Tuscaloosa, Ala.
The small fleet can attract and retain drivers locally, offering a family atmosphere and a personal connection, said Jeff Wilmarth, president of Silver Arrow Express, a 25-truck fleet in Rockford, Ill. Drivers “want to be able to come in the door and you know them by name,” Wilmarth said.
The speed-governor petitions from the American Trucking Associations and Road Safe America come “from a group that supports very large carriers, who have found it economically feasible to govern trucks,” Owen said. “The tradeoff of that is they can’t find drivers who want to drive a governed truck.”
On the other hand, as the driver population rapidly ages among less-than-truckload and private carriers, Wilmarth said his drivers are being lured away by the incentives made possible by good freight rates. One new hire, who Wilmarth thought was happy, left Silver Arrow after only three months to join a private fleet, citing a better benefits package.
Wilmarth said his fleet’s safety record had improved under the new hours-of-service rule, which ends the split-rest period, but Owen said he believes safety will suffer as drivers are pushed to the limit of the 14-hour window.
Owen called the proposal for limited introduction of electronic onboard recorders “a bone the industry has thrown to the regulators to let them feel like they’ve won something or have gotten a little more control.”
– TODD DILLS
FMCSA PROPOSES NEW CARRIER FEES
Motor carriers would pay between $39 and $37,500, depending on fleet size, under a schedule of fees the Federal Motor Carrier Safety Administration has proposed for the Unified Carrier Registration Plan and Agreement.
In August 2005, Congress ordered that the UCR Plan replace the Single State Registration System Plan by Jan. 1, 2007, the date SSRS expired.
Under the 2005 law, the UCR Plan is an organization that will administer the UCR Agreement – an interstate agreement governing the collection and distribution of registration and financial responsibility information for motor carriers, brokers, freight forwarders and leasing companies.
Thirty-eight states participated in the SSRS last year, and all but California and North Carolina will participate in the UCR this year. In addition, Oregon, which did not participate in the SSRS last year, will participate in the UCR.
The proposed schedule, which is the total amount to be paid by the company, is as follows:
- 0 to 2 power units, as well as brokers and leasing companies – $39
- 3 to 5 power units – $116
- 6 to 20 power units – $231
- 21 to 100 power units – $806
- 101 to 1,000 power units – $3,840
- 1,001 and above – $37,500
– AVERY VISE
PRELIMINARY REPORT: TRUCK DEATHS DOWN
Federal figures indicate that between 2005 and 2006, large truck fatalities dropped nearly 4 percent. Overall road deaths declined as well.
Fatalities involving large trucks numbered 5,018 in 2006, down 3.7 percent from 5,212 the year before, according to preliminary figures. Deaths of large-truck occupants in single-vehicle crashes, however, were up 4.8 percent, from 480 to 503.
The overall number of road fatalities is projected to have decreased from 43,443 in 2005 to 43,300 in 2006, says Mary Peters, secretary of the U.S. Department of Transportation. Half of all passenger vehicle occupants who died were not wearing seat belts.
The DOT projects an overall 2006 fatality rate of 1.44 deaths per 100 million vehicle miles traveled, down from 1.45 in 2005.
Pedestrian deaths dropped slightly from 4,881 in 2005 to 4,768 in 2006. Alcohol-related fatalities increased 2.4 percent, from 17,525 to 17,941.
The final 2006 report will be available in late summer.
– JILL DUNN
ATA CRITICIZES REAL ID
The federal Real ID Act is impossible for states to implement and would have “extreme consequences” for many truckers, the American Trucking Associations said in comments submitted May 4.
Passed by Congress and signed into law by President Bush in 2005, the Real ID Act is designed to create national standards for issuing state driver’s licenses and identification cards in 2009. A Real ID would be required of anyone using a driver’s license to board a commercial flight or enter a federal facility.
ATA submitted comments on the U.S. Department of Homeland Security’s draft Real ID rule. “Unfortunately, both the act and DHS’s rule prescribe requirements which the states cannot meet, either in the time provided or with the resources available to them,” the association wrote. “In addition, since the Real ID requirements include commercial driver’s licenses, the rule would have extreme consequences for motor carriers and truck drivers who serve federal facilities and for those facilities themselves.”
Homeland Security should reassess whether a consolidated transportation worker identification credential, or TWIC, can substitute for a Real ID among truck drivers and other transportation workers, ATA said.
The National Conference of State Legislatures and the National Governors Association also have expressed concerns, saying states lack the resources to carry out the Real ID mandate. Some states have adopted measures opposing Real ID.
The American Civil Liberties Union has charged that Real ID will be a bureaucratic nightmare. “By placing personally identifiable information in databases accessible across the country, Real ID makes the information more vulnerable to identity theft and misuse,” says the ACLU.
– JILL DUNN
AVERAGE TRUCK CRASH COSTS $91,112
A new report provides the latest estimates of unit costs for highway crashes involving medium- and heavy-duty trucks.
The Federal Motor Carrier Safety Administration’s report, “Unit Costs of Medium/Heavy Truck Crashes,” was completed by the Pacific Institute for Research and Evaluation.
Based on the latest data available, the estimated cost of crashes involving trucks with a gross weight rating of more than 10,000 pounds averaged $91,112 (in 2005 dollars). Crashes in which trucks with two or three trailers were involved had the highest costs – $289,549 per crash. The costs per nonfatal injury crash averaged $195,258, and fatal crashes cost $3.6 million per incident.
Safety analysts use crash cost data for a variety of purposes, such as analyzing the effectiveness of a roadway enhancement or comparing the cost-effectiveness of proposed safety regulations.
– STAFF REPORTS
MANY L.A. TRUCKS OPT FOR OFF-PEAK TRIPS
PierPASS says its OffPeak program has diverted more than 5 million truck trips from peak daytime traffic since the program’s start in July 2005. The program has eliminated some costly, polluting bottlenecks at the ports of Los Angeles and Long Beach in California, the company says.
In an average week, OffPeak removes 60,000 truck trips from the freeways during busy commuting hours, the company said.
OffPeak uses a congestion-pricing model that provides an incentive for cargo owners to move shipments at night and on weekends. Cargo owners moving containers at the two ports during peak daytime hours are required to pay a Traffic Mitigation Fee, which helps fund the cost of operating five new night and Saturday shifts at marine terminals.
Local, state and federal officials and business leaders have lauded OffPeak as a model for initiatives to mitigate traffic impacts on communities and the environment.
– RACHEL TELEHANY
DETROIT TOPS SPEED TRAP LIST
Detroit leads a list of the top 10 speed trap cities in the United States, as compiled by the National Motorists Association.
The list was compiled in May, created from the NMA’s SpeedTrap Exchange, a website devoted to identifying the location of speed traps. Cities were ranked by the number of speed traps posted on the website by the public.
The top 10 cities are:
- Detroit metro area
- Colorado Springs, Colo.
- Orlando, Fla.
- Nashville, Tenn.
- Ann Arbor, Mich.
- Albuquerque, N.M.
- Washington, D.C.
- Virginia Beach, Va.
– STEVEN MACKAY
CLUB SAYS MIAMI IS ROAD RAGE CAPITAL
Miami drivers have the most road rage and Portland, Ore., motorists the least, according to the Auto-Vantage auto club.
AutoVantage’s road rage survey involved 2,521 respondents in 25 cities. Miami won its dubious honor for the second year, followed by New York, Boston, Los Angeles and Washington, D.C.
Portland’s drivers were judged the most polite, followed by Pittsburgh, Seattle/Tacoma, Wash., St. Louis and Dallas/Fort Worth, Texas.
The survey defines road rage broadly, including rudeness, speeding and honking.
- Road rage involves male and female drivers equally.
- The most common bad driving behaviors are talking on the cell phone while driving and driving too fast.
– JILL DUNN
Knights of the road
Have you saved a life? Helped a stranded traveler? Rescued a lost pet?
If you or a trucker you know has helped someone in need during the course of your trucking duties, we want to hear from you. Knights of the Road is a new feature honoring the men and women who move America’s freight – while making the world a better place.
To nominate someone, send a description of the incident, your name, phone number, e-mail address and, if possible, a recent print or digital photo of the trucker to:
Overdrive Knights of the Road
3200 Rice Mine Rd., NE
Tuscaloosa, AL 35406
(800) 633-5953, ext. 1080
Please include contact information for any others involved in the incident, including law enforcement personnel.
Truckers chosen for Knights of the Road will receive the original artwork, matted and framed for display.
TAX BREAKS for small businesses are included in a bill signed June 1 by President Bush. For an additional year, until 2010, they can deduct the total cost of business property – such as a new truck or trailer – in the year it is placed into service, rather than depreciating it over time. The amount that can be so deducted in a single year has been increased from $100,000 to $125,000.
CHAIN LAW VIOLATIONS in Colorado are subject to stiffer penalties. A bill signed by Gov. Bill Ritter increases fines, from $116 to $500, for truckers not using chains when chain laws are in effect. It also increases the penalty, from $500 to $1,000, for blocking a lane because of an accident caused by not using required chains.
THE HAZMAT transportation license of Sabek Transportation of South San Francisco was suspended by the California Highway Patrol. Sabek owned the gasoline tanker that overturned April 29 and ignited a fire that resulted in the collapse of the Interstate 580 connector from eastbound Interstate 80.
CORRECTION. Central Refrigerated Services of Salt Lake City has 700 owner-operators. An incorrect number was published in the June story, “Corrupting a governor.”
“HOLD HARMLESS” clauses in shippers’ contracts with motor carriers will be illegal in Maryland as of Oct. 1. Some shippers have required signed indemnity agreements before carriers were permitted to enter loading facilities, essentially forcing truckers to assume all the risk. The clauses also have been outlawed in Indiana, Nebraska, North Carolina, South Carolina, Virginia and West Virginia.
IN PORTLAND, ORE., all diesel now must contain at least 5 percent biodiesel, a mandate approved by the City Council a year ago.
MOST OFF-ROAD DIESEL must meet the same ultra-low-sulfur requirement now in effect for highway diesel by 2010, the U.S. Environmental Protection Agency announced. The same goes for locomotive diesel and most marine diesel by 2012.
THE LOW-CARBON fuel standard announced in January by California Gov. Arnold Schwarzenegger requires a 10 percent reduction in the carbon intensity of gasoline and diesel fuel sold in the state by 2020 as a means of reducing greenhouse gases. U.S. Sen. Barack Obama, D-Ill., has introduced legislation that would enact the standard nationwide.
FEDEX EXPRESS announced that Azure Dynamics would develop hybrid electric powertrains for its delivery fleet. FedEx Express committed to buy at least 20 hybrid Ford E-450 delivery vans, to be ready by May 2008. The company already has 93 hybrids in service.
TRANS-MEX, a Swift Transportation subsidiary, is one of the first Mexican trucking companies to expedite cross-border cargo by linking to U.S. Customs’ electronic Automated Commercial Environment. The only U.S. fleet to own 100 percent of a Mexican fleet, Swift now handles less than 3 percent of the cargo carried across the border.
HIGHWAY WATCH has been granted $11.6 million from the U.S. Department of Homeland Security for fiscal 2007, more than double its 2006 allocation. Highway Watch trains truckers and others to report security and safety problems and runs an analysis center in Herndon, Va.
RICHARD FILICZKOWSKI of Zion, Ill., a driver for C.R. England, was recognized as a Highway Angel by the Truckload Carriers Association for rescuing an 8-year-old girl from a car as it sank into a pond along I-90 in South Dakota.
32 PERCENT of fleet executives planned to order trucks in the second quarter, according to CK Commercial Vehicle Research’s latest Fleet Sentiment survey.
DARRELL KASNER, owner of Kasner’s Transportation of Arpin, Wis., was fined $1,000 and sentenced to three months in jail after pleading guilty to failing to pay two dump-truck drivers local prevailing wages on a federally funded highway project, as required by federal law.
BRIDGESTONE completed its $1 billion cash purchase of retread giant Bandag May 31. Both brands will remain intact, the company said, as will heavy-duty service chain Speedco, in which Bandag owns a majority interest.
INDIANA. Thanks to the “Super 70” rebuilding, trucks heavier than 13 tons and all vehicles pulling trailers continue to be prohibited from I-70 through Indianapolis. The alternate route for through traffic is I-465. For updates, visit this site.
KENTUCKY. Northbound traffic will be reduced to one lane on the U.S. 41 twin bridges between Henderson, Ky., and Evansville, Ind., at night. The bridge construction project will require lane width restrictions and is expected to last through mid-November.
MARYLAND. Four twin-span bridges on I-68 west of Cumberland, between LaVale and Frostburg, are being repaired this summer. Expect lane reductions.
MICHIGAN. State Police motor carrier patrols will check safety belt use and driver qualifications at weigh stations and rest areas this summer.
VERMONT. The new Missisquoi Bay Bridge across Lake Champlain, just south of the Quebec border, has opened. This connector between I-87 in New York and I-89 in Vermont now has two 12-foot traffic lanes with a 10-foot shoulder on each side.