Logbook – December 20081

No April Fools’ joke: $4 diesel
At press time March 17, the national average per-gallon price of diesel was $3.974, or $1.293 more than in the same week of 2007, and had been above $3 for six consecutive months.

The U.S. Department of Energy forecast $3-plus diesel at least through the end of 2009, and buyers on the East and West Coasts already were paying more than $4 a gallon.

The per-barrel price of oil, meanwhile, surged to $111.80 a barrel March 17, a new record.

“In the past month alone, diesel prices have increased over 50 cents per gallon,” American Trucking Associations spokes-woman Tiffany Wlazlowski said March 13.

Carriers are responding by slowing trucks down, buying fuel in bulk, cutting deadhead miles, doing more frequent maintenance, installing auxiliary power units and buying software that locates the cheapest fuel along any route, Wlazlowski said.

Jumps in crude prices typically are accompanied by a slackening of demand, but that has been slow to happen in this cycle, said Doug McIntyre, U.S. Department of Energy senior oil analyst.

“What can you do but pay what they say?” said Tony Tobar of Amarillo, Texas, an owner-operator leased to Fikes Truck Line. “I’m lucky that I’m with a company that gets a discount. I’m wondering when people will say enough is enough.”

“The biggest factor as to why diesel is more expensive is the price of crude,” said Ron Planting, economist for the American Petroleum Institute, the oil and gas industry’s trade association, who noted that the price of crude oil 10 years ago was $15 a barrel.

The early-spring spike in pump prices has surprised many analysts, who note that supplies have been increasing. U.S. fuel production hit a record high in 2007 as refinery capacity expanded for the 11th straight year.
– Jill Dunn and Ashley Vice

Safety devices merit tax break, makers say
Congress has been urged to rapidly pass a bill that its promoters say will save a significant number of lives on American roads by making truck drivers and their tractors and trailers safer.

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The Motor and Equipment Manufacturers Association and the Commercial Vehicle Safety Alliance are urging Congress to hurry to give a tax break to carriers that install approved safety devices on their tractors and trailers.

At a Feb. 25 press conference at the Washington, D.C., offices of MEMA, companies that make the devices argued that providing tax incentives to carriers would save lives by significantly accelerating the rate at which the equipment became available on trucks and trailers. Without tax incentives, they argued, a tight economy might significantly delay the adoption of such devices in large numbers of trucks.

The tax credit provided in the bill, H.R. 3820, would equal half the cost of the installed devices up to $1,500 per device, $3,500 per vehicle and $350,000 per carrier.

Approved systems include a brake stroke monitor, lane departure alarms, collision alarms (including blind spot alarms) and a vehicle stabilizer.
– John Latta

Truck repos double in 2007
Repossessions and liquidations of tractor-trailer trucks increased 110 percent in 2007 from the year before, according to Nassau Asset Management’s NasTrac Quarterly Index.

Nassau tracks equipment trends as part of its business providing collections, repossessions and remarketing services to the nation’s leasing and finance industry.

“We are seeing a very significant correction in the market,” says Edward Castagna, president of Nassau, based in Westbury, N.Y. “Even in a category such as construction equipment, where the 12-month total showed a decline, repossessions were up significantly in the second half of 2007.”

A key cause is the decline in homebuilding, which affects a number of peripheral business sectors, most of which use trucks.

“From the forest to the sawmill to the construction site, along with the movement of people in and out of those homes and the delivery of appliances and furniture to the home, there are trucks involved in every step of the process,” Castagna says. “The rings continue to expand out of the housing epicenter.”

In addition, hours restrictions and other government regulations, rising fuel costs and competition placed greater financial strain on businesses that use trucks, Nassau reports.

Low interest rates in the past few years and significant sales of the remaining trucks with 2006 engines, as compared to the less proven ’07 versions with tougher emissions standards, led to an increase in late model trucks on the market, driving down prices in the used truck market, Nassau reports.
– Staff reports

Fatality statistics at record lows
Three of the primary measures of fatal accidents involving large trucks fell to record lows in 2006, according to the U.S. Department of Transportation.

Newly released Federal Highway Administration vehicle mileage figures showed that the large truck involvement rate in fatal crashes, the large-truck fatality rate and the fatal crash rate for large trucks each declined to its lowest level since the DOT began tracking large truck safety records in 1975.

The 2006 fatal crash rate for large trucks stood at 1.93 fatal crashes per 100 million vehicle miles traveled, breaking the previous low of 1.97 in 2002. The large truck involvement rate fell to 2.12 involved trucks per 100 million vehicle miles traveled, down from 2.21 a year earlier. The fatality rate declined to 2.24 deaths per 100 million vehicle miles traveled, down from 2.34 in 2005.
– Staff reports

NAFTA trade rises in 2007
Trade using surface transportation between the United States and its North American Free Trade Agreement partners Canada and Mexico was 4.9 percent higher in 2007 than in 2006, reaching an annual record of $797 billion, according to the Bureau of Transportation Statistics of the U.S. Department of Transportation.

That rate of growth, however, was lower than the 8.9 percent increase from 2005 to 2006.
– Staff reports

Con-way turns back speed governors
Con-way Freight announced March 9 that it has turned back the speed governors on its 8,400-tractor fleet in a move to improve fuel conservation and reduce carbon emissions. The company adjusted the engine governors to 62 miles per hour, down 3 mph from previous settings.

The move is expected to reduce consumption of diesel fuel from its over-the-road tractor fleet by nearly 3.2 million gallons annually while eliminating approximately 72 million pounds of carbon emissions from the environment, the company says.
– Staff reports

Dart contractor is TCA’s top owner-operator
Dart Transit contractor John Gill, a former Overdrive Trucker of the Month, was named the grand prize winner in the Truckload Carriers Association’s 2007 Owner-Operator of the Year contest, sponsored by International Truck and Engine and Overdrive. His top prize: a new International 9000i tractor with a Cummins ISX 500-hp engine. Gill’s honor was announced March 3 at the TCA annual convention in the Bahamas. Gill has contracted with Dart for more than 25 years and has logged more than 3 million accident-free miles. Look for more on Gill and his prizes in our May issue. At the same event, MacKinnon Transport driver Doug Ladds won TCA’s 2007 Company Equipment Driver of the Year contest, sponsored by Detroit Diesel and Truckers News. His prizes include a new Dodge Ram pickup.

Bush tours Volvo’s alt-fuel display
President Bush toured a display of Volvo alternative fuel vehicles March 5 at the International Renewable Energy Conference in Washington.

The trucks are designed to run on a variety of renewable fuels, ranging from natural and synthetic biodiesel that can run in today’s engines to more exotic liquid and gas fuels that would require vehicle modifications to make them practical, clean and efficient. Refinery and distribution networks also would have to be built.

Mack, a Volvo brand, showed off a heavy-duty electric hybrid dump truck designed to recover energy from the brakes and exhaust to run engine accessories and help in acceleration.

After receiving a tour of the booth from Volvo AB Chairman Leif Johansson and Mack Trucks President and CEO Paul Vikner, Bush gave the conference’s keynote address.

“The more sources of energy we have, the less influence any one of them, such as oil, has over the United States’ security and prosperity,” Bush said. “Renewable fuels are some of the most promising new sources of energy because they are clean and because they can be regenerated.”

Bush noted the Energy Independence and Security Act of 2007 mandates the production of various renewable fuels as well as improved efficiency for automobiles, lighting and appliances.

Critics argue the mandates don’t go far enough, and California has sued the U.S. Environmental Protection Agency in an attempt to implement stricter rules on motor-vehicle emissions.
– John Baxter

Two companies settle with CARB for nearly $100,000
Two companies have settled with the California Air Resources Board for nearly $100,000 for failure to comply with state clean truck laws.

ValleyCrest Companies of Calabasas settled with CARB for nearly $65,000, while Hartwick & Hand of Victorville settled for $31,125.

According to CARB, ValleyCrest neglected to properly inspect its diesel truck fleet for excess smoke emissions during 2006 and 2007, resulting in violations in the following cities: Cypress, San Diego, Pleasanton, Sacramento, Fillmore, Sunol, Farmington, Sylmar, Santa Ana, Redwood City, San Jose, Gardena, Aliso Viejo and Modesto.

In addition to the financial penalty, ValleyCrest employees responsible for compliance with the state’s truck emissions inspection laws must complete training through the California Council on Diesel Education and Technology. Emissions control labels must be properly affixed to engines, and all applicable employees must be instructed on how to comply with California idling restrictions by February 2009.
– Staff reports

Feds want $175,000 from two fleet owners for driver scheme
The U.S. Justice Department wants to seize $175,000 gained by two trucking companies as a result of a visa fraud scheme that sent former Missouri state representative Nathan Cooper to federal prison.

In papers filed in U.S. District Court, the government laid claim to $50,000 from Cal-Ark International of Little Rock, Ark., and $125,000 from Pullen Brothers and Coldway Logistics, two Sikeston, Mo., companies owned by Jerry Pullen.

Assistant federal prosecutor Andrew Lay is seeking to seize money the companies already have turned over to U.S. Customs and Border Protection during the course of settlement negotiations.

Both Cal-Ark and the Pullen companies allegedly benefited from the services of dozens of illegally employed foreign truck drivers in 2005.

Cooper, formerly a Republican representing Cape Girardeau in the state capitol, is serving a 15-month term in federal prison in Marion, Ill., for his role in the scheme. Acting as the attorney for the trucking companies, Cooper sought temporary, seasonal work visas for permanent full-time drivers and set up sham companies to mask the drivers’ true employers. Cooper also paid a $6,000 fine and forfeited $50,000 to cover the estimated gain he received for handling the paperwork to make the alien truck drivers appear legal.

Neither Pullen Brothers nor Cal-Ark face criminal charges.
– Staff reports

Report: Mexican trucks too few to assess now
Too few fleets have participated in President Bush’s cross-border trucking program to produce statistically reliable data, said the inspector general of the U.S. Department of Transportation.

Calvin Scovel III, in a congressionally mandated interim report, told U.S. senators March 11 he could make no definitive judgments about the program’s safety as a result. Moreover, almost 93 percent of the crossings the authorized Mexican fleets had made into the United States were just to the 25-mile-wide commercial zone along the border.

Scovel also reported:

  • A quality-control measure to ensure that driver’s licenses and truck inspection decals are checked at the border has not been implemented.
  • An independent evaluation panel is measuring whether the project is adversely affecting truck safety in the United States.
  • A Mexican database containing reports on vehicle insurance and driver violations is being developed, but currently this information is available only if in company records.

According to the Federal Motor Carrier Safety Administration, at press time 18 Mexican carriers had authority to operate a total of 62 trucks in the United States, while six U.S. carriers had authority to operate a total of 46 trucks in Mexico.

During the March 11 hearing, U.S. Sen. Bryon Dorgan, D-N.D., told Transportation Secretary Mary Peters he still expects the program to be stopped: “There will be consequences for a federal agency that ignores the law. We’ll come up to appropriations, and I am an appropriator. This issue is not over. The U.S. Congress will have the last word.”

Dorgan sponsored an amendment contained in a 2008 omnibus funding bill that was signed into law Dec. 26 by President Bush. “None of the funds made available under this Act may be used to establish a cross-border motor carrier demonstration program,” it read.

The FMCSA maintains the amendment’s wording bars it only from creating any new cross-border projects, not from continuing the program started Sept. 6.

Dorgan, U.S. Sen. Arlen Specter, R-Pa., U.S. Rep. Jim Oberstar, D-Minn., and U.S. Rep. Peter DeFazio, D-Ore., have asked the Government Accountability Office to investigate whether the DOT has disregarded the Antideficiency Act, which subjects a federal agency to civil and criminal penalties if it spends money on something prohibited by law.

Peters and department attorney D.J. Gribben stood by their interpretation of the amendment. Peters said she had discussed continuing the program with White House counsel and the U.S. Department of Justice.

Peters said she would decide in six months whether the program should be expanded. That would be in September, two months before the presidential election and four months before Bush leaves the White House.

Peters also told senators she “would explore options for appeal” if the agency loses a court case filed by opponents.
– Jill Dunn

FBI AGENTS executed search warrants at the Swift Transportation office in Memphis, Tenn., and Swift’s training grounds near Memphis in late February. The issuance of commercial driver’s licenses at both locations was suspended, the Tennessee Department of Safety reported. Swift said it was cooperating fully, was not the target of the investigation, and would continue daily operations unaffected.

THE U.S. SUPREME COURT on Feb. 20 unanimously invalidated a Maine law that makes delivery companies responsible for enforcing a state ban on Internet tobacco sales to minors. There is no “public health exception” in federal law that allows states to regulate prices, routes or services of shipping companies, Justice Stephen Breyer wrote for the court.

NAVISTAR INTERNATIONAL announced Feb. 28 that after failed mediation, it has re-filed a breach-of-contract lawsuit seeking hundreds of millions of dollars from Ford Motor Co. Navistar has been the exclusive diesel engine supplier for Ford’s heavy-duty pickups since 1979, but Navistar says Ford has reneged on the contract in favor of Ford’s own 4.4-liter engine, due by 2010.

WRIGHT EXPRESS completed its previously announced $32 million purchase of Pacific Pride, a fuel-card network including more than 1,000 locations in the United States and Canada.

THE TRUCK TONNAGE INDEX increased 2.4 percent in January, reported the American Trucking Associations, which also adjusted its December tonnage increase to 1.5 percent, not the previously reported 4.1 percent. “The economy is either in a mild recession or on the brink of one, and we are hearing anecdotal reports that freight volumes slowed in February,” said ATA Chief Economist Bob Costello.

THE STIMULUS PACKAGE signed by President Bush in February allows businesses to depreciate an additional 50 percent of the cost of equipment bought and put into service in 2008. Since accelerated depreciation has its drawbacks, check with your business services provider for advice on whether to take advantage of this.

ABOUT $15 MILLION will be available for the State Clean Diesel Grant Program during this fiscal year, says the U.S. Environmental Protection Agency www.epa.gov. The program allows states to provide grants or loans to retrofit anti-idling technologies that have been certified by EPA or the California Air Resources Board.

MICHELIN announced it was investing $6.8 million in research and development to reduce tire rolling resistance, including a $1.9 million contract with Clemson University and its International Center for Automotive Research. Michelin North America is based in nearby Greenville, S.C.

TRANSPORT SERVICE of Oak Brook, Ill., will be bought by bulk transporter Kenan Advantage Group of Canton, Ohio, Kenan announced Feb. 19. The acquisition will grow the Kenan fleet to more than 3,100 trucks and 4,100 trailers, including Kenan subsidiaries Advantage Tank Lines, BXI, KAG West, Kenan Transport, Klemm Tank Lines, North Canton Transfer and Petro-Chemical Transport.

A 1 PERCENT SURCHARGE on the sale or lease of all heavy diesel-powered vehicles in Illinois, on road and off road, was defeated in March.

ARIZONA. Construction has begun on a second commercial port of entry in San Luis, south of Yuma. The new port and the Robert A. Vaughan Expressway that will serve it are scheduled for completion by fall 2009.

ILLINOIS. The state’s split speed limit, one for cars and one for heavy trucks, remains unchanged after two different bills that would have eliminated or decreased the difference were defeated in a House committee on identical 5-6 votes.

INDIANA. I-65 between I-80/94 and 15th Avenue in Gary is closed for nine months for construction. For a detour map and project updates, visit www.in.gov/indot and search for “Borman Expressway.”

MARYLAND. President Bush signed a bill naming part of I-395, near Camden Yards in Baltimore, Cal Ripken Way to honor the Baseball Hall of Famer whose entire major-league career was spent with the Orioles.

MASSACHUSETTS. The Route 103 bridge over the Lees River at Swansea is closed and scheduled for demolition, to be replaced by a new bridge at the same site by year’s end. Nearby I-195 traffic is unaffected, but local deliveries may require detours.

NEW JERSEY. GPS devices and online maps reportedly are luring some truckers into a dead end on Fifth Street in Secaucus because the tools don’t show a gate – open only for a couple of hours on weekdays – that separates a residential neighborhood from an industrial zone.

OREGON. Traffic cameras are being mounted at each major Oregon weigh station, including all six ports of entry, to identify any truck that bypasses scales intentionally. Offenders will receive in the mail a Class B misdemeanor citation and a summons to appear in court. The maximum punishment is a $2,500 fine or up to a year in jail; second-time offenders risk suspension of their Oregon operating authority.

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