A caption in my last post pointed out that John F. Kennedy viewed reading The New York Times as perhaps more enlightening than poring over government intelligence reports.
I am not privy to CIA or other such “intel,” but from where I sit so-called “newspapers of record” remain a great source of both hard news and especially news analysis. And in this digital age, you may not even have to fork over a buck or more to read these publications as many, including The Times, make their entire content available free of charge online.
Case in point: A piece by Larry Rohter in the edition for August 3rd, “Shipping Costs Start to Crimp Globalization,“ explains how the massive spike in fuel costs is already leading some global manufacturers to rethink their supply chains including where they manufacture their goods in the first place.
“Many economists argue that globalization will not shift into reverse even if oil prices continue their rising trend,” Rohter writes. “But many see evidence that companies looking to keep prices low will have to move some production closer to consumers. Globe-spanning supply chains — Brazilian iron ore turned into Chinese steel used to make washing machines shipped to Long Beach, Calif., and then trucked to appliance stores in Chicago — make less sense today than they did a few years ago. ”
Supporting his argument, Rohter points out that the Swedish-based global home-furnishings giant Ikea opened its first U.S. factory in May and some electronics firms that departed Mexico for the lower wages paid in China are now coming back to our southern neighbor “because they can lower costs by trucking their output overland to American consumers. ”
“Made in China” labels may become less ubiquitous due to global fuel costs.
Ah, yes, that word: trucking! Rohter observes that the industries most likely to be affected by the upturn in transportation costs are those producing heavy or bulky goods that are expensive to ship relative to their sale price.
As an example, he states that China’s steel exports to the U.S. “are now tumbling by more than 20% on a year-over-year basis, their worst performance in a decade, while American steel production has been rising after years of decline.” He says that “motors and machinery of all types, car parts, industrial presses, refrigerators, television sets and other home appliances could also be affected.” And he adds that “industries that require relatively less investment in infrastructure, like furniture, footwear and toys, are already showing signs of mobility as shipping costs rise.”
You don’t even have to read between those lines to see opportunity knocking for truck fleets to haul the inbound and outbound freight these manufacturing plants of all type will generate, right here at home.
While business leaders and investors may count on an army of economists or other financial tea-leaf readers to help them gauge the health of our nation’s economy, I bank on the American trucking industry.
Just as they say in regards to presidentiual elections “as Ohio goes, so goes the nation,” (at least until Clinton took the Buckeye State in this year’s primary…) I say as trucking goes, so goes the economy!
I am by no means the genius who figured that out but it has been proved time and again– going back for me to when I first started reporting on this industry in the economic recession of 1980-81– that trucking is the leading indicator of when the economy is about to slide into a downturn of one degree or another and also when it is about to climb back once more.
The proof, as a math whiz might say, is in the numbers. Alright then, check out this bellwether chunk of data: The American Trucking Associations’ (ATA) is reporting that its advanced seasonally adjusted “For-Hire Truck Tonnage Index” increased 1.3% in June– marking it second consecutive month-to-month gain (it rose 0.5% in May).
ATA says the seasonally adjusted index was 5.4% higher compared with June 2007, marking its eighth consecutive year-over-year increase. What’s more, “this improvement was the largest year-over-year gain since January 2005, just surpassing the 5.3% jump in January 2008.”
That’s not really red ink: DOT map shows just what highway freight density looks like in tons
I don’t speak much in numbers but those numbers sure sound good to me. ATA chief economist Bob Costello is more cautious as is the wont of economists– none of whom can afford to be labeled cockeyed optimists. In my defense, though, I will point out he characterizes the June tonnage reading as “solid” and says it aligns with “several anecdotal reports from motor carriers.”
Nonetheless, Costello forthrightly suggests it is a “close call” whether the economy will dip into a recession later this year or will only “significantly” slow down.
“It seems that truck tonnage is once again leading the U.S. economy,” Costello says. “During the 2000-2001 cycle, trucking pulled out of a recession before the aggregate economy fell into one. Unfortunately, truck tonnage could slow later this year as the overall economy is expected to be quite weak in the fourth quarter and the first quarter of next year.”
Costello adds that trucking capacity has “tightened significantly” as high fuel prices drive some carriers out of the market. At the same time, carriers have reduced fleet sizes. He notes some carriers have even shipped their trucks to foreign buyers in Eastern Europe and Central and South America– and he expects these trends are “likely to continue in the near term.”
I figure the economy– which is no monolith but a living, breathing entity with literally millions of nerve endings constantly interacting and reacting– is even as we speak re-organizing itself Medusa-like into something stronger and more flexible and thus much better configured to deal with the changes now roiling both the national and global socioeconomic fronts.
My personal bet is that this pickup in freight now being reported foreshadows a gradual return to better times for the US economy.
To go yet further out on a limb– to where economists dare not go– I further wager that the recovery will gain momentun once we have elected a new President this Fall. I know which one I want to see win, but the point here is that both “presumed nominees” are clearly leaders who will not shirk from the tasks at hand. Simply put, I think having either of these leaders in the Oval Office will help shift our economy back into high gear by next year.
The challenge for fleet owners will be how to manage between now and then. That will require being as well-informed as possible about all the winds of change buffeting our economy– starting but certainly not ending with the trucking industry.
“I don’t think the intelligence reports are all that hot. Some days I get more out of The New York Times.”
The time to begin writing an article is when you have finished it to your satisfaction. By that time you begin to clearly and logically perceive what it is that you really want to say.
– from “Mark Twain’s Notebook” by Samuel Langhorne Clemens
All of us here at FleetOwner are rather pumped having just learned the editors and designers on staff will soon receive no less than six “Azbee” awards for editorial excellence from the American Society of Business Publication Editors (ASPBE). Founded in 1964, ASBPE is a professional association for editors and writers employed in the business, trade and specialty press (or in what we unromantically call today “the media.”)
Four are national awards: Feature Article (”Fuel: Diesel & Beyond,” Aug. ‘07); Special Supplement (our special annual “13th” issue Can You Survive? , ” Nov. ‘07); Annual Buyers Guide (”Annual Specs & Buyers Guide,” Oct. ‘07), and Front Cover Design (”Annual Specs & Buyers Guide,” Oct. ‘07).
The other two awards are for the Northeast Region, which includes all publications based in Boston, New York and Philadelphia. FleetOwner is being recognized for the categories of Editorial/Editor’s Letter (”Editor’s Page,” July and Aug. 2007), and Front Cover Design (”New Models,” July 2007).
In any line of work it’s always nice to receive the equivalent of a standing ovation for your efforts but it is ever more satisfying when the applause comes from your professional peers.
We daresay this recognition should also please our readers. The multiple national Azbees in particular reflect the impact the combined efforts of the entire editorial and design team delivers not just now and then, but issue after issue, month after month in print, and day after day online.
Yes, OK, we like to win awards as much as the next guy.
But above all, we take pride in knowing what we do is all about you.
People around my age– let’s be kind and call them late-stage baby boomers– and definitely those who are older may recall a phenomenon from their misspent youth or further back in their carefree childhood: The Gas War.
Back when “service stations” (how quaint a description is that?) gave away embossed drinking glasses and other consumer detritus to lure customers in to tank up, proprietors sometimes sought to drum up sales a tad more dramatically by engaging in a little friendly price war with neighboring stations. Suddenly, gas wasn’t 30 cents a gallon, it was 29, then 28 and oh my gosh, weren’t those the good old days for anyone with wheels to take them places?
I know it’s not nearly the same thing but now in this summer of our discontent made ugly winter by this fuel crisis, I say we can take heart in a wonder of the wonderful worldwide web: a feature on the MSN Autos site that pulls up retail gas prices by zip code!
Yes, this will be of little use to centrally fueled fleets but it may come in handy for anyone managing a fleet, especially of gas jobs, who does not have a fuel card or other such program in place to secure discount pricing. Regardless, it should be of great service to anyone out there seeking to gas up a personal vehicle for as little as possible without wasting gas by riding around looking for the lowest price.
Before I forget, a tip of the editorial eyeshade to my pal Alicia Hinds, who alerted me to this site via an email she sent out this morning to a group of friends.
OK, on to the details: Once you get to the MSN page hosting the Local Gas Prices feature, you scroll down just a bit and plug in any zip code.
And presto, up pops a map and a nice long list of stations with their addresses and the retail price posted for each grade of gasoline as well as diesel that they sell. It could not be any easier and judging by the couple of stations I passed on the way into work today and the prices reported for my home zip code, it is accurate.
According to the site, every night MSN Autos receives pricing data compiled by theOil Price Information Service (OPIS) from over 90,000 gas stations. One thing I found interesting was, at least in the case of my home zip, was that the results– 29 of them– were fantastic but they actually spilled into several neighboring zip codes although all stations were a short drive from each other.
So, party like it’s 1968 (click below for how) and find yourself if not cheap gas, at least the cheapest gas!
As someone with no dog in this fight except for journalistic endeavor, what fascinates me the most about the big Caterpillar-Navistar deal, word of which broke this morning, is that among other weightier things, it means the death of one Cat come 2010– the heavy-duty on-highway Caterpillar truck engine in North America– and the birth of another– the Caterpillar severe-service truck.
That’s right! A Cat truck–how cool is that? Well, pretty cool to yours truly anyhow, who entered this business shortly after the Brockway Husky was put to sleep and shortly before the fabled, hand-built Marmon of Garland, TX, fame went to the great truckstop in the sky. And I am sure among my elders still scribbling about trucks there are a few who can rattle off many more names of other dearly departed truck marques.
Yes, it is good to hear that another truck nameplate will be soon be around for us to track in FleetOwner’s annual July New Models issue. .. coming soon to mailboxes everywhere and here online!
I will pause here to salute Cat for all it has done for American truckers as a purveyor of on-highway truck engines.
It has indeed been a good long run for the truck engine guys in Peoria and they have every reason to be proud of their accomplishments as they helped move the state of the art in diesel trucking forward.
I’ll close by recalling one of the first big events I covered as a trucking journalist– the trend-settting “Cat Economy Challenge” of 1981.
That nationwide MPG competition lasted for months and engaged both fleets and owner-operators in a huge contest for prizes and bragging rights. I’m sure it helped sell tons of truck engines.
Click below to enjoy a tribute to one of Cat’s legendary driver-trainers– Phil Hook- whom I first met at the Challenge:
But the Challenge also helped sell an entire industry on how much fuel, and thus money, can be saved just by learning how to drive a truck in a manner that made finely engineered engines perform to their maximum ability.
So here’s to you, Cat: a tip of my very oldest, circa 1981 “gimme cap,” which kinda looks like this one.
–chorus of Weezer’s “Only in Dreams,” words and music by Rivers Cuomo
I’ve never listened to the rock band Weezer so I can’t say whether I have missed anything. But I can honestly say I was touched by the lines above when I went a-googling the lyrics of the band, which was the hands-down favorite of my late colleague Terry Nguyen.
My search was for a kind of link if you will back to Terry so I could somehow, hopefully fittingly, commemerate his tragic death one year ago June 1st and, above all, to illuminate the short yet shining life he led.
Then it struck me that the best way to recall Terry at this time would be to share with you some of his own words.
The passage below was penned as part of an essay Terry wrote in 2007 to win one of the Young Leaders Scholarships presented by the American Society of Business Publications Editors to promising young journalists. He won that prestigious honor but died shortly before it was to be bestowed.
Please pause for a moment and reflect on what this wonderful young man, just 27 at his passing, had to say when he recalled an incident that helped inspire him to be a journalist:
“I vividly remember at UConn [The University of Connecticut] working on a story that had moved me more than any other. A music student was performing a practice recital in front of her classmates when she collapsed onstage and died shortly thereafter. I learned that she played the trumpet with a prosthetic arm. I spoke with her friends, her teachers, university officials, and her father — who at times fought through tears to speak to me. For obvious reasons, it was an extremely sensitive topic, and I got no sleep the night my article was sent to the printer.
“I bring this particular story up because I learned very early in my career the value of journalism. What I wrote has an impact on how a deceased person will be remembered, and that article is most likely sitting in a scrapbook right now. This example illustrates why I believe journalism is truly a public service — one that’s worth preserving with integrity at whatever cost.”
- Gen. George S. Patton Jr., U.S. Army (1885-1945)
While in recent months everything from speculators to refinery maintenance to the developing world has been blamed for the rapid run-up in fuel prices, it now seems the real issue we should all be losing sleep over– especially ALL branches of our federal government– is whether the world just might run out of oil much sooner than later.
That’s the message I get from some seriously sobering reports in major newspapers this morning. For example, a report by Neil King Jr. and Peter Fristch in The Wall Street Journal reveals that “The world’s premier energy monitor is preparing a sharp downward revision of its oil-supply forecast, a shift that reflects deepening pessimism over whether oil companies can keep abreast of booming demand.”
The reporters explain that the Paris-based International Energy Agency (IEA) is attempting for the first time to gauge the condition of the world’s top 400 oil fields. The findings won’t come out until November…”but the bottom line is already clear: Future crude supplies could be far tighter than previously thought. ”
Oil field sunset– not a pretty picture
The upshot, write King and Fritsch, is that “A pessimistic supply outlook from the IEA could further rattle an oil market that already has seen crude prices rocket over $130 a barrel, double what they were a year ago.”
I know, I know, just what we in America, land of cockeyed optimists, don’t need– more pessimism.
On the other hand, in my book anyway, unhappy news based on actual facts is not cause for pessimism.
It’s cause for action. Just what action is the real question.
That must be answered for all of us by all of those we’ve elected to wield the levers of power in Washington.
And, yes, I know they’re politicians and not miracle workers.
But I am convinced they can do much more than they have and might actually do something more than they have if enough voters applied enough pressure.
And I argue, as always, that the leadership needed to make something happen should start at the top of the Executive Branch– in the Oval Office where the sign used to say “The buck stops here.”
Where’s “Give-’em-hell” Harry Truman now that we need him again?
Just when you think things can’t get any worse, leave it to a Wall Streeter to wreck your holiday weekend– a full two days before it starts.
I know my job here is to comment on trucking but as I don’t own a commercial vehicle, nothing brings the fuel crisis home to me as thumpingly as the price of gas.
Of course gas prices at the pump are affected by many factors– transportation costs (yep, trucks bring it!), taxes, and a real bone of contention in my home state of Connecticut: the legalized thievery known as “zone pricing.”
But I digress… The thing is when plain old regular gas hit $4.00 and then promptly started floating upward to reach the $4.19 range this past week, I was thrilled to hear over the car radio that at least one analyst expected the price to peak Memorial Day Weekend and then if not drop at least slide on back a bit.
Dream on, Dave. That bubble of optimism was spectacularly burst this morning by a piece in The New York Times that revealed an “oracle of oil” (that is the newspaper’s description, not mine), one Arjun N. Murti, an analyst with giant investment bank Goldman Sachs, “foresees a ’super spike’ — a price surge that will soon drive crude oil to $200 a barrel.”
The barrel we are all over
The Gray Lady report states that “A few years ago, rivals scoffed when he predicted oil would breach $100 a barrel. Few are laughing now. Oil shattered yet another record on Tuesday, touching $129.60 on the New York Mercantile Exchange. ”
It goes on to point out that “the grim calculus of Mr. Murti’s prediction, issued in March and reconfirmed two weeks ago, is enough to give anyone pause: in an America of $200 oil, gasoline could cost more than $6 a gallon. ”
Well, I am not laughing one bit and refuse to just pause over this.
I for one am very concerned that the Lamest Duck Adminstration, which still has many levers of power at its fingertips, will actually do anything significant to ease the slow death by oil our economy seems consigned to suffer.
There’s a lamer duck than Howard in DC these days
Barring that, all we can do at work and at home is be as economical as possible and hang on till next January when a new POTUS might show us what a real leader can make happen.
I’ve long been disturbed by how so many people– truckers included– still do not wear seatbelts when in a vehicle. Maybe I am a hopeless Safety Sam but I even tell my kids to stay buckled up when we pull into a gas station or wherever on the off chance that someone may plow into our car while we are assumably safely parked.
Why might I think so? Well, one of many reasons leaps right to mind. Back in my college days, several of my friends and I spent a pleasant if Scotch-soaked evening in our hometown’s Safari Pub (I think every burg worth its salt had such an establishment in the ’70s but I digress). Things got interesting after last call when we all left and headed for our separate cars.
It was raining cats and dogs and foggy to boot and partly due to that and partly due to the ample time he’d just spent with Johnnie Walker, my friend Jim (just like in A.A., no surnames here!) fairly promptly drove the front of his late-model Pinto into a rather high parking-lot curb. His speed was low enough for the little car to look hardly damaged.
But he was not wearing his seat belt and upon impact, his body travelled forward unimpeded and– not being the tallest guy around– his mouth slammed into the steering wheel. That led to a trip to the emergency room where a plastic surgeon was called in (wisely) to sew up the insides of his cheeks, which were cut to ribbons by the orthodontic braces on his teeth.
Lesson learned: Could it be any easier? Just wear the seatbelt and save yourself all sorts of pain and suffering if not worse. As for me, the only place you’ll catch me in a vehicle without being buckled up is in my own driveway.
No wonder I am thrilled to report that Lifeguard Technologies– by far the biggest supplier of seatbelts to trucking– has launched its “Click, Tug and Snug” (CTS) safety campaign to help drive up the use of seatbelts by truck drivers.
If you click below, you can see a sample clip of the nine-minute CTS training video right from here:
If you click here, you will go directly to Lifeguard’s CTS site where you can view four clips from the video to get a fuller sense of its content.
You can order free copies of the video for training purposes from Lifeguard at the CTS site by clicking on the “Contact” tab.
According to Lifeguard, the video is intended to be generic but does include instructions on how to use their Komfort Latch and Sliding Komfort Latch to make wearing seatbelts more comfortable. The company also urges fleets to equip cabs with high-visibility (typically orange) seatbelts to encourage consistent use as they make it is easy to see who’s buckled up at a glance.
And if you– or your drivers– still need convincing as to why everyone should wear seatbelts in every vehicle, take a look at what someone who really should have known better has to say on this topic:
Not at all unlike auto giants GM and Ford– and diesel engine maker Cummins among other manufacturers serving trucking here– North American-based automotive parts suppliers are apparently prospering by going global.
According to a report by The Wall Street Journal today, both Visteon Corp. and TRW Automotive Holdings Corp. have “joined the growing list of parts suppliers reporting improved financial results thanks to cost cuts and efforts to penetrate international markets, even as the outlook worsens for car and truck sales in North America.”
The reporter goes on to observe that “Most U.S. parts makers… have spent the past few years closing plants in North America and moving production to low-cost countries. Most have cut their North American work force.”
So this is really a good news-bad news story. It can’t be all bad for the U.S. economy (and presumably the Canadian, too, given its huge role in auto and truck production) for these North American industrial powerhouses to be doing well financially; it certainly can’t be bad for their stockholders and maybe not even for their customers.
On the other hand, the shift of automobile and auto parts production overseas not only removes high-paying factory jobs from North America, it reduces the amount of that outbound freight available for U.S. and Canadian motor and rail carriers to haul to ports.
I know free-traders would argue that those factory jobs will be duly replaced by high-tech or service jobs including those in the so-called “knowledge sector” and they may be right, although I for one am not entirely sure they are.
But one thing I think everyone in trucking can question is this: Will the automotive freight now being created elsewhere in the world ever be replaced here by anything a truck can haul?
Where have all the parts gone? Gone to overseas many have…
