Trucking Economist Predicts Strong Outlook for Industry

After a “false start” rebound in 2003, trucking can expect a stronger and more sustained recovery this year and beyond, forecasts Bob Costello, chief economist of the American Trucking Associations.

“This industry’s definitely back,” said Costello, addressing motor carrier executives in May at the Randall Trucking Symposium 2004 in Tuscaloosa, Ala. He cautioned that continually rising costs will counter much of the strong demand for trucking.

Costello said manufacturing productivity should grow as much as 5.5 percent this year and up to 6 percent next year. Factory orders for durable goods are up 17.5 percent from a year ago.
One clear sign that manufacturing needs to increase – and will do so on a longer basis than last year – is that inventories are depleted. The ratio of manufacturing inventory to sales is virtually flat, “the lowest it’s ever been in history,” Costello said.

Truck tonnage in the first quarter of this year is 7 percent higher than a year ago. “The talk of so many carriers is it’s only getting stronger,” Costello said. “Truck tonnage is definitely going to be over 6 percent growth this year,” Costello said.

Large carriers were the first to bounce back after a downturn that saw thousands of carriers go out of business. But now there are signs that small carriers, too, are getting more business. Trucking lost a lot of freight to the railroads during the downturn, but there are signs of freight shifting back to trucking.

All carriers will have to deal with the rising costs of insurance, driver wages, fuel and equipment, as well as lost productivity due to the new hours of service.

Not only are fuel prices at record highs, but the price volatility of recent years appears to be here to stay. The difference between the average national price and recent prices on the West Coast has increased dramatically due to California’s “boutique” fuel requirements, and the lack of a single national fuel standard compounds problems for the industry. “We need a good energy policy coming out of Washington,” he said.

It appears compliance with the new hours regulations has hurt productivity about 3 percent, based on fleet reports, Costello said. If that’s true, the industry needs to add 60,000 trucks just to meet current freight demand.

“Capacity is tightening day by day,” he said. And given the rising costs and the difficulty of a carrier with no experience record getting insurance, “Barriers to entry are higher than they’ve been in years.”

The symposium is presented by Randall Publishing Co.’s Trucking Media Group, which publishes Commercial Carrier Journal, Overdrive, Truckers News and eTrucker.com.
-Max Heine


Illinois Fees Drive Truck Registrations to Neighboring States
Illinois’ loss in truck registrations has been gained by bordering states, charges the Mid-West Truckers Association, which blames the migration on Illinois’ higher registration fees and recent loss of tax exemptions.

Under the International Registration Plan, Illinois interstate truck registrations have dropped by more than 25,000 in the last three years, according to a recent association statement. Neighboring states, including Indiana and Missouri, have witnessed a sizeable increase in registrations, it said.

The 2005 Illinois interstate trucking registrations are now at an eight-year low because carriers have relocated, closed or cut back, the association stated. The state now has 16,852 fewer interstate truck registrations than the previous year, while the number of registered IRP carriers in Illinois has decreased by 2,718. When Democrat Gov. Rod Blagojevich took office in January 2003, he found the state $5 billion in the red. To fix the shortfall, the former congressional representative went after what he labeled loopholes.

The Legislature passed much of Blagojevich’s budget plan, which included SB84. That bill originally eliminated the “rolling stock” sales tax exemption on rail, air and trucking, but only trucking was left in the bill when it passed.

That exemption is now allowed only on trucks purchased after July 1, 2003 that log more than 51 percent of their miles outside Illinois. The legislation also axed the sales tax exemption for repair and replacement parts on trucks, unless at least 51 percent of the truck’s miles are out-of-state.

On July 1, a commercial registration fee became effective, requiring owners of trucks weighing more than 8,000 pounds to pay a fee equal to 36 percent of the owner’s registration fee – an increase of $50 to $1,005 annually. That’s on top of a 40 percent registration fee hike the state implemented in 2000.

Those with IRP plates are affected also, but they will pay an apportioned percentage based on mileage in Illinois.

This year, legislators drafted four bills to repeal or phase out these fees, but only two bills survive. Since Feb. 24, HB 412 has been in the Senate Rules Committee, and HB 852 was re-referred to the House Rules Committee on Dec. 22.
-Jill Dunn


Florida, California Launch Fuel Price Probes
At least two states, Florida and California, have launched investigations concerning soaring fuel prices.

Florida’s attorney general subpoenaed eight major oil companies as a start to a formal antitrust investigation over rising gasoline prices.

On May 27, Attorney General Charlie Crist announced he had subpoenaed BP, Chevron-Texaco, Conoco-Phillips, Citgo, Exxon-Mobil, Marathon Ashland, Amerada Hess and Motiva Enterprises, a division of Shell Oil.

Crist requested documentation on gasoline cost, production, inventory and pricing. The subpoenas also require the companies to provide the On-Highway Diesel Fuel Price Survey they file with the U.S. Energy Information Administration.

The companies had until June 30 to respond to the subpoenas.

On May 27, Florida’s average price of unleaded gas was $2.03 per gallon, compared to almost $1.82 a month ago and $1.46 a year before, according to information posted on AAA’s website.
Florida diesel averaged nearly $1.83, while the federal energy department reported that the diesel price for Gulf Coast states was $1.67 per gallon. AAA indicated Florida’s diesel was slightly higher in April and 18 cents cheaper a year ago.

In March, Crist met with representatives of seven major oil companies to discuss price hikes. Soon after, he asked the Legislature to repeal a 1985 anti-competitive gas law.

“We will do whatever is necessary to find out if the companies are violating the law,” Crist said.

California’s Senate has created a bipartisan committee to investigate recent fuel price hikes as forecasters predict gasoline and diesel prices in the state could hit $3 per gallon this summer.

Diesel prices have jumped more than 46 percent from this time last year, and families are paying $100 more per month for gasoline, according to Senate President Pro Tem John Burton, who announced the formation of the Senate Select Committee on Gasoline and Diesel Pricing May 17.

The U.S. Department of Energy reported California truckers paid an average of $2.34 a gallon for the week ending May 17, after prices fell 1.6 cents per gallon. The national average retail diesel price was $1.763 per gallon. That’s less than a penny from the record high of $1.771, recorded March 10, 2003, right before the U.S. invasion of Iraq. AAA reported the national average for diesel is $1.824 on May 19.

While Californians aren’t alone in suffering high prices for fuel, a break in the Suisan Marsh pipeline and refinery shutdowns have exacerbated the state’s problems. California truckers have protested diesel costs in several ports and rail yards since late April.
-Jill Dunn


New Driver Training Regulations Take Effect This Month
The new federal final rule for entry-level drivers of heavy trucks, motor coaches and school buses requires training in driver qualification requirements, hours of service and whistleblower protection.

The Federal Motor Carrier Safety Administration regulation becomes effective July 20, according to a notice in the Federal Register. The new rule also requires that drivers be trained in “driver wellness,” or basic good health maintenance.

The rule affects drivers with less than one year’s experience driving in interstate commerce. Those who started driving between July 20, 2003, and Oct. 18, 2004 must be trained by Oct. 18.

Employers are required to maintain drivers’ training certification while they work at the company and up until a year after they leave the company.

The rule is a response to the 1991 Intermodal Surface Transportation Efficiency Act of 1991, which found private companies provided inadequate training to new drivers of heavy trucks, school buses and motor coaches.

In February 2003, the FMCSA settled a lawsuit with safety groups by promising to issue certain truck safety rules by a series of deadlines after missing congressional deadlines for issuing the regulations.

With the addition of this new rule, the agency has met the lawsuit’s deadlines for hours-of-service regs, training requirements for longer-combination vehicle drivers and background checks on hazardous waste haulers.

The agency now was scheduled to meet the last deadline of the agreement on June 30, which involved setting requirements for authorization to haul hazardous materials.
More information on “Motor carrier safety standards: Special training requirements – Entry-level commercial motor vehicles operators; minimum training requirements” is available at wais.access.gp.gov. The docket no. is FMCSA-1997-2199.
-Jill Dunn


FMCSA to Revamp SafeStat Website
The Federal Motor Carrier Safety Administration will temporarily remove some information from its SafeStat website until it can provide more reliable information.

FMCSA Administrator Annette Sandberg announced June 1 that the agency will remove the Accident Safety Evaluation Area within 90 days. The overall SafeStat score will also be removed because it is affected by the Accident SEA scoring component.

The two areas will return to the website as soon as agency officials are confident that they provide better information.

Although the accident and overall SEAs are removed from public access, FMCSA and state enforcement partners will have access to all SafeStat scores, and carriers will be able to access their scores for their own evaluations.

The changes are a response to criticism of SafeStat in a Feb. 13 report from the Office of Inspector General, said agency spokesman David Longo. Some carriers have also complained about the SafeStat data.

The Accident SEA score is based on crash reports provided by the state. These state reports sometimes do not have a desirable standard of timeliness, completeness and accuracy.

Sandberg said SafeStat is effective in identifying the highest-risk carriers, but “continued display of the Accident SEA risks misleading public users of SafeStat.”

Three scoring components will remain available to the public – Driver, Vehicle and Safety Management SEAs. These scores are based on data that the agency trusts because it is gathered by the FMCSA or provided by states under controlled collection.

The two scores to be removed will return to public view on SafeStat when the agency completes its quality improvement. This effort includes:

  • Requiring states to list data collection and improvement methods when applying for enforcement funding.
  • The implementation of DataQ, through which carriers can file concerns about the information collected by the FMCSA and the states.
  • The upgrading of the Commercial Vehicle Analysis Reporting System, a crash data improvement and training grant program.
  • Adding a data quality map to SafeStat to help states judge their data quality by seeing how they are rated in timeliness, completeness and accuracy for inspection and crash data.

-Jill Dunn


New York Opens Fourth Shore Power Facility
New York has opened the fourth truckstop electrification site in the state at the Wilton Truck Plaza on Interstate 87.

The New York State Energy Research and Development Authority, the state transportation and federal energy departments, and the privately owned, Maryland-based Antares Group partnered to build the 20-unit shore power system.

The Wilton facility uses a shore power or on-board system similar to the hook-up systems seen at marinas and recreational vehicle parks. The plaza is off Exit 16 of I-87.

Two other state truckstop electrification sites are on the Thruway, or Interstate 90, east of Syracuse. One is eastbound at the DeWitt Travel Plaza and one westbound at the Chittenango Travel Plaza. The fourth site is at Hunts Point Market in the Bronx.

NYSERDA also noted that Caterpillar had partnered with the authority to demonstrate idle-reduction technologies. The Illinois-based company will place 10 Class 8 trucks in New York-based fleets to demonstrate improved fuel economy, shore power and auxiliary power units.

Caterpillar’s MorElectric Technology removes belt- and gear-driven accessories from truck engines and drives them with electric motors. The company is currently field testing the technology, which will be introduced on the market in January.

The initial market product includes a heating, ventilation and air-conditioning module, an engine-mounted, belt-driven 7-kW generator and two idling reduction options: an auxiliary power unit and shore-power plug-in. The APU allows the trucker to use the idling reduction device anytime, but the plug-in can be used where locations are available.
-Jill Dunn


IG Takes Action on U.S.-Mexico Border Safety Again
The U.S. Office of Inspector General recently announced it is conducting an audit of safety inspectors and facilities at the United States-Mexico border.

For the last several years the Federal Motor Carrier Safety Administration has attempted to open the border to Mexican and U.S. truck traffic. The effort is a controversial provision of the North American Free Trade Agreement and has spawned lawsuits, delay tactics and even Congressionally mandated reviews. The OIG action is among the latter.

Congress requires the OIG to periodically review the agency’s border operations to make sure the agency has hired and trained inspectors, provided inspection facilities and developed safety procedures for Mexican carriers in compliance. The OIG issued its last report a year ago in compliance with this rule.

Last year’s report stated the FMCSA had done most of what is necessary to meet these requirements, but this audit will see if the agency has continued to do so. The OIG will conduct the audit at agency headquarters, U.S. border states and other field locations.

The FMCSA has progressed on one “serious gap” noted in the OIG’s 2002 and 2003 report, wrote Debra Ritt, assistant inspector general for surface and maritime programs in a May 13 memorandum. In August 2002, the agency issued an interim rule requiring state inspectors to place Mexican trucks out-of-service for operating without authority or beyond their authority, after the OIG found only two states had passed legislation allowing that authority. However, a 2003 survey reported 31 states had adopted the new operating authority rule.

In June, the U.S. Supreme Court reversed a lower court’s decision that delayed Mexican truck operating beyond the current 20-mile commercial zone until a $1.8 million environmental review is completed.

Public Citizen, the Teamsters, the California Labor Federation and the Environmental Law Federation had argued successfully in court that President Bush granted Mexico-domiciled trucks full access to U.S. highways without sufficient study of the impact the Mexican trucks would have on air quality.

FMCSA began the environmental analysis, which is no longer required to open the border, in October and said the evaluation was expected to take 12 to 18 months.
-Jill Dunn


International to Evaluate EPA Diesel Technology
International Truck and Engine Corp. has partnered with the U.S. Environmental Protection Agency to evaluate agency technology that could prove useful in meeting 2007 and 2010 vehicle emission standards without using nitrogen oxides (NOx) after-treatments.

Jack Allen, president of International’s engine group, said the company is evaluating using “Clean Diesel Combustion” technology, starting with its V-6 diesel-sized engine for sport-utility vehicles and pickup trucks and later considering it for heavy-duty trucks.

The EPA has mandated that every on-highway diesel engine have nearly zero NOx emissions in 2007 and 2010. The agency and International announced their agreement at International’s Melrose Park, Ill., headquarters May 13.

The CDC technology uses in-cylinder control of NOx to reduce or eliminate the need for NOx after-treatment and offers a possible alternative to diesel emission controls, such as NOx absorbers and selective catalytic reduction.

Emissions are reduced in the engine’s combustion chamber without hurting engine efficiency. Early agency testing has indicated CDC in-cylinder NOx emissions are much lower than levels reported by manufacturers.

More technical information on the V-6 being tested will be released this year.

EPA has “partnered with several automotive and engine manufacturers to evaluate the production feasibility of this technology,” according to the agency website.

Daniel Ustian, head of International’s parent company, Navistar International, said diesel engines last longer than gas engines, emit less carbon dioxide than gas and offer more torque. Diesel is also safer because it’s less flammable than gasoline, which is one reason school buses and ambulances use it. Diesel provides up to 60 percent better fuel economy than gas.
-Jill Dunn


Study Finds Small Doses of Caffeine Work Best to Combat Drowsiness
New research indicates frequent, small amounts of caffeine promote wakefulness better than one huge cup in the morning.

The research, conducted at Harvard Medical School’s Division of Sleep Medicine, was published in the May 10 issue of Sleep journal.

Charles Czeisler, a professor of sleep medicine at Harvard, said people might fight drowsiness better by drinking about a quarter cup of coffee frequently throughout their workday.

“Most people take a huge jolt of coffee in the morning to jumpstart their day; they get the super grande latte from Starbucks,” Czeisler said. “Their caffeine levels soar only to fall as the day progresses in the face of rising sleepiness.”

The research indicated persons on the low-dose caffeine did better on cognitive tests and exhibited fewer accidental sleep onsets, or microsleeps. Tests showed that subjects given a placebo experienced microsleeps nearly 2 percent of the time during the scheduled wake episodes, compared with 0.3 percent of those drinking caffeine.

Still, the people who had caffeine reported feeling sleepier more than their placebo-taking counterparts. The study’s authors said that could indicate caffeine helps keep you awake but does not replace the restorative effects sleep provides.

Sixteen male test subjects were in sequestered private suites, free of time cues, for 29 days. The researchers scheduled the groups to live on a 42.85 hour day with 28.57-hour wake episodes meant to copy schedules common to doctors and military or emergency services personnel.

The extended day was designed to disrupt their circadian system (the body’s internal 24-hour clock) while maximizing the effects of sleep deprivation.

“Low Dose, Repeated Caffeine Administration for Circadian-phase Dependent Performance Degradation During Extended Wakefulness” can be viewed at www.journalsleep.org. u
-Jill Dunn


FYI
Tonnage Index Hits Record
The American Trucking Associations’ advanced seasonally-adjusted Truck Tonnage Index increased 2.2 percent to a record high 160.8 in April. This was the third straight increase and the seventh in the last eight months. In March, the index rose 1.6 percent.

The index is pegged to a base of 100 in 1993, meaning tonnage has increased 60.8 percent since then.

Oshkosh Acquires Jerr-Dan
Oshkosh Truck Corporation, a manufacturer of specialty trucks and truck bodies, has agreed to acquire 100 percent of the stock of Jerr-Dan Corporation, a manufacturer of towing and recovery equipment, from an affiliate of Littlejohn & Co for $80 million.

Jerr-Dan will operate as a wholly owned subsidiary of Oshkosh Truck Corporation and will be part of the corporation’s fire and emergency business.

Driver Distraction Legislation
The California Senate has passed a bill that would fine motorists for unsafe driving resulting from smoking, adjusting the radio and other distractions. Senators passed the bill 22-14 May 18, and it was read that same day in the state Assembly. No further action has been taken on the measure at press time. Police could stop a motorist if they are engaging in one of nine distracting activities that results in unsafe driving. Activities include smoking, eating, drinking, grooming and personal hygiene tasks. First offenders could be fined $35. If they repeat the same offense within two years, the fine is $150.

New Love’s Opens in Houston
Love’s Houston Travel Stop, located on I-610 East, Exit 24A is now open. The facility is Love’s 97th Travel Stop and is the third of 13 new Travel Stops scheduled to open in 2004.

Pilot Partnerships
Nebraska-based Bosselman Companies entered into a license agreement with the Knoxville, Tenn.-based Pilot Travel Centers, signaling the intent to rebrand four Bosselman Travel Centers in Nebraska and Kansas as Pilot Travel Centers.

The locations are: I-80 and exit 312 (Grand Island, Neb.); I-80 and exit 257 (Elm Creek, Neb.); I-80 and exit 107 (Big Springs, Neb.); and I-70 and exit 252 (Salina, Kan.).

Montana-based Town Pump Inc. also has entered into a license agreement with Pilot. The locations are: I-90 at I-15 (Rocker); I-90 at Hwy. 200 (Bonner); I-15 and U.S. Highway 2 (Shelby) I-90 and 8th Avenue North (Columbus); I-94 and South Haynes Street (Miles City); I-90 and Highway 287 (Three Forks).

2005 MATS Dates
The management group for the 34th annual Mid-America Trucking Show has changed its show dates to March 31 through April 2, 2005. The show will take place at the Kentucky Fair and Exposition Center in Louisville, Ky. More information is available at www.truckingshow.com.

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