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Brian Straight is an award-winning journalist living out one of his boyhood dreams. Having joined Fleet Owner in May of 2008, Brian is the managing editor of Fleet Owner...more

Archive for March, 2009

Finally, some strings

WagonerSo, Rick Wagoner is out as Chairman and CEO of General Motors at the request of the Obama administration, who replaced him with the company’s COO, Fritz Henderson.

As far as I’m concerned, it’s about time the government took responsibility for all the bailout money going around. The automakers are in trouble, we all know that. And we all know the reasons, not the least of which is poor management. If management was not a problem, the companies would have been better positioned to weather the current economic storm. I’m not saying they wouldn’t be in trouble, but they may be better prepared and not in need of bailout money just to survive.

Rather than building for the future, companies, including the automakers, built for the present, maximizing profits for shareholders. Now, those same shareholders, who’ve lost the majority of their portfolios because of short-sighted management, want their money back.

The bailout money is supposed to do that, or at least help accomplish that goal. But until now, all that government green has been given to institutions with virtually no strings attached, leading us to fiascos like the AIG bonus mess.

Now, finally, there are strings attached. And Wagoner is paying the price.

It’s simple, follow the law

All the wrangling over the cross-border trucking program that was officially ended recently seems like nothing more than politics to me. And that’s a shame.

While President Obama’s signature on a 2009 omnibus appropriations bill stopped the funding for the program, effectively killing it, he has pledged to work with Congress and the Mexican government to come up with a new program.

Here’s a simple suggestion to everyone involved: Let’s not let politics get in the way.

Several groups, notably the Teamsters, opposed the project, claiming that Mexico does not have the same high standards for truck safety as the U.S. True.

Others, including some Senate Democrats, see the program as taking away American jobs. According to an article in the Wall Street Journal, when asked if Congress would approve of a program created by Secretary of Transportation Ray LaHood, one Democratic aide said, “I don’t see it happening, it poses a threat to American jobs and security.”

Well, so does angering Mexico. According to that same article, U.S. exports to Mexico totaled $9.8 billion in January. We can’t afford to lose that market due to high tariffs. That will cost Americans jobs.

Once we navigate through all the political posturing, the solution is quite clear, and quite simple.

If you or I travel to a foreign country, we must abide by the rules and regulations that society enforces. Just because one activity is legal in the U.S. does not make it O.K. to do the same in, say, Italy. The same applies to trucking across borders. If Mexican fleets want to do business in the U.S., they simple have to abide by U.S. law, including any applicable safety and hours-of-service laws while operating in this country. The same applies to U.S. fleets operating in Mexico.

It’s a simple solution, just one clouded by politics.

Safety is good, training is better

Mack Trucks announced last week plans to provide Bendix’s upgraded adaptive cruise control to its Roll Stability Advantage safety system at the Mid-America Trucking Show.

Fleet Owner Senior Editor Sean Kilcarr has a video on the product here.

I’m all for safety, and this product sounds like potentially a life-saver. Basically, it’s designed to detect if the truck is following too closely to the vehicle in front of it and will throttle down the engine, apply the engine brake or if needed, the truck’s foundation or service brakes.

I’m a firm believer in technology and if technology can make driving safer, we need to take advantage of that. My concern, though, is training. Many people believe truck drivers are not adequately trained now. With the addition of more technology, even technology designed for safety reasons, into the cab, the potential for training to slack off further is there.

The accounting department and CEOs may justify cuts to training budgets by purchasing new technology, but that’s the wrong approach. Despite the advances in technology, training needs to keep pace. For every new item installed, new training needs to be implemented. Fleets can’t lose sight of that fact.

The truth is, like everything else, the technology is only as good as the people using it. We can’t rely on technology to protect us from ourselves. Instead, we need the technology to supplement what we already know and act as a second line of defense.

The more fleets remember that, the safer we will be.

Hitting the open road

Owners of Harley-Davidson motorcycles now have a new toy to play with – an International LoneStar.

That’s right, Navistar announced the debut of a limited edition (only 250 will be made) Harley-Davidson LoneStar sleeper at the Mid-America Trucking Show. According to Navistar, the truck includes authentic Harley headlamps and leather seats that feature the same bar and shield that appear on Harley motorcycles.

Harley truckAvailable in just one paint scheme – the Harley deep black with silver and orange – the truck is decked out in chrome and includes some 40 customization options. It’s pricey, though, pegged at $155,000 base according to the New York Times. But for a true aficionado, that shouldn’t be a problem.

“When the opportunity to work together first came about, we were intrigued about designing a long-haul truck that had the sleek forms and unique shapes that are unique to Harley-Davidson motorcycles,” said Ron Hutchinson, senior vp of product development for Harley-Davidson Motor Company. “The collaboration produced a truck that has the innovation of Navistar with the heart and soul of Harley-Davidson. This truck oozes the freedom and spirit of the open road.”

Harley has traditionally relied on simple, straight-forward advertising for its cycles. With this collaboration, it seems they believe people will respond to seeing that iconic Harley branding on an over-the-road truck.

And for the fans of Harley-Davidson that might be truck drivers by trade – and there are likely a lot of those – this is the perfect chance to combine two passions. Don’t miss out.

Border politics

The other shoe has dropped in the elimination of the cross-border program with Mexico. Many people, including Sen. John McCain, R-Arizona, warned that the elimination of the program by the U.S. would have consequences. Turns out they were right, as Mexico has slapped tariffs on almost 90 U.S. exports, mostly industrial and agricultural products, according to Mexico’s state-run news organization.

The cross-border program allowed registered trucks from the U.S. to enter Mexico beyond the normal commercial operating zones and the same for Mexican trucks entering the U.S. Among the proponents of the program were the American Trucking Assns., Caterpillar and the National Association of Manufacturers, which were among 69 organizations last March that said blocking the program would cause retaliation.

Opponents have claimed that allowing Mexican trucks on U.S. highways would create a hazard, as Mexico has less stringent safety requirements than the U.S. Those groups, led by the Owner-Operator Independent Drivers Association and the International Brotherhood of Teamsters, may be right.

But, when it came time to support or deny the program, government officials did not cite safety as the reason. Rather, when asked about the cancellation, White House spokesman Robert Gibbs said “Congress has opposed the project in the past because of concerns about the process that led to the program’s establishment and its operation.”

Gibbs went on to say that President Barack Obama has requested a new program be developed.

If the cancellation of the program was all about the stated reason Gibbs mentioned, shame on the government. In business, it’s the end result that matters, not how you get there. Just because some feelings may have been hurt along the way isn’t a reason to hurt the American people. And that’s what’s going to happen as U.S. goods suddenly become less attractive to Mexicans due to higher prices.

The correct, and most bi-partisan way, to fix the program would have been to retool it, not kill it. Let’s hope that there’s still time to work out a solution the right way, whether that solution may be.

Trucking revolution

A global shift is taking place in the trucking industry. At least that’s what it seems, if a report by Transport Capital Partners is true. According to the report, summarized here by Wendy Leavitt, Fleet Owner’s director of editorial development, says carriers are “thinking outside the box.”

Now, I for one, hate the term “thinking outside the box.” When you think outside the box, it implies that all your other decisions are the same decisions your competitors are making. To make a decision just because everyone else is making the same decision is foolish. It’s the argument you used to make as a child when you wanted to do something. But all my friends are doing it!

Now, companies seem to be taking a different approach. Attacking their current problems with the gusto and long-term thought process needed for survival. Some of the thoughts expressed by trucking companies in this report are probably ideas that should have been in place all the time, such as the idea that fleets do not want to expand capacity to meet short-term demands. Instead, it says, fleets prefer to raise rates rather than add excessive equipment like they did in 2006. The result at that time, of course, was increased business. The end result today is a money drain on equipment, too many people and other increased business expenses.

If they had followed this principle before, there may be many more carriers still operating today. But it’s easy to forget the past. That’s what’s happened in the economy as a whole. The lessons of the Great Depression disappeared through generations. Instead of buying what we could afford, Americans just “charged it.” We bought houses we couldn’t afford because some banker who wanted to make a commission told us we could. We buy diamond rings for our wives that cost 2-3 month’s salary because that’s what the jeweler tells us they cost. We buy and buy and buy with no regard for how to pay for it.

The same thing happened in the trucking industry. Now, though, it seems the surviving companies may be changing their battle plans, not unlike Americans as a group.

The industry is now in the midst of a revolution.

One that hopefully will set us straight for years to come.

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Putting truckers’ safety at risk

Rest areaA small, but growing trend is developing, and it’s not a good one. Virginia has joined New Hampshire in identifying cuts to its rest stops as a way to stem budget losses.

New Hampshire plans to shutter nine rest areas, none of which include truck parking, officials say, while Virginia hopes to shave $12 million from its budget by closing 25 of 41 rest areas, according to Land Line Magazine.

Bad move.

Public cries about truck safety, saying the industry is not doing enough, claiming drivers are skirting hours of service rules – the list goes on and on – will only grow louder if more states start closing rest areas, forcing truckers to either stay on the road – even when they should not be driving – or parking their trucks along the sides of roads and/or in any parking lot available so they can get their required rest. Either way, the safety of the public, and truck drivers, is put at risk.

Is that really the right way to save money?

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Highway games

It’s no secret that states, just like the federal government, are having trouble funding infrastructure projects. They have for years, relying primarily on the gas-tax system for funding.

New HampshireBut, leave it to New Hampshire to come up with an innovative plan to provide funding and fix roads and bridges throughout the state. Legislators have advanced a bill to raise the gas and diesel tax by 15 cents per gallon over the next three years, nearly doubling the current 18-cent tax, and raising an additional $111 million dollars, according to Land Line Magazine.

But, that’s not the most interesting part.

According to an article in the Union Leader, written by Charles M. Arlinghaus, Gov. John Lynch has found a way to bypass state law, pump money into the state highway fund and not cost the taxpayers a dime.

According to the state constitution, Arlinghaus writes, toll revenue can only be used to repair toll roads, as it’s a user fee. Apparently, due to a toll increase two years, the turnpike toll fund is flush with cash. That’s where Lynch’s idea comes into play.

He wants to buy a road. Specifically, Arlinghaus writes, a one-mile section of I-95 leading up to the Spaulding Turnpike. The thought, it seems, is to buy the one-mile stretch, turning it into a part of the Spaulding and at the same time transferring $120 million, the purchase price, from the toll fund to the general highway fund, freeing up the money for road repairs throughout the state. Without the purchase, that $120 million, generated by users of the turnpike system, would be unavailable for general road repair.

Maybe if we had more outside-the-box thinkers like Lynch, our roads would be in better shape. Of course, eventually governments would run out of roads to sell to themselves, leading us right back to where we are today.

Government takes short-sighted approach

For fleets interested in pursuing hybrid technologies, now is the time. While money may be tight, fleets with a firm grasp of their financial future can take advantage of several funding options available through the American Recovery and Reinvestment Act.

But, like so many government programs, taking advantage is not easy.

The biggest discount probably comes in the form of hybrid vehicles. The program allocates more than $20,000 – possibly up to 25% of the total vehicle cost according to Peterbilt – toward the purchase of hybrid medium- or heavy-duty trucks.

hybrid_trucks_4_1.jpgBut that’s just the start. According to the NAFA Fleet Management Assn., among the eligible projects are EPA or CARB verified and/or certified retrofit technologies and engines, engine repowers, engine rebuilds, or engine replacements and EPA-verified idle reduction technologies such as auxiliary power units.

In all, there is $300 million for Diesel Emission Reduction Act grants available.

That’s great. But you only have until the end of March to take advantage. And, you must be a public or non-private fleet.

Talk about restrictions.

The money is allocated, so the government easily could have allowed the program to continue until the funds ran out. It chose not to, instead putting a 30-day expiration date on the funding.

Even more troublesome is the difficulty a large number of fleets will have getting the grants. According to the EPA, the grants are available to public and non-profit fleets. That accounts for only about one-quarter of the trucking industry. In order to take advantage of the grants, one of the 633,600 private fleets in the country, almost 75% of the industry, would need to partner with a non-profit, who would submit the request.

Which non-profit is going to be willing to help out a private company right now? Probably not many. Given the restrictions, I am anxious to see how much stimulus this funding will actually create.

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Truck dealer chooses expansion

International ProstarFor all the doom and gloom that seems to exist these days in the trucking industry, one interesting, positive story arrived in my inbox this morning. It’s the story of Diamond Cos. Inc, a new and used truck dealer in Memphis. Diamond, according to the story from the Memphis Business Journal, has just purchased a former Toyota dealership adjacent to its own business on Brooks Road in Memphis.

Now, Diamond is not a single-dealership operation, touting itself as the “largest single-owned International truck dealer organization with fifteen locations across four states,” but the fact that anyone is expanding is news these days.

According to the Journal story, the dealership will utilize five acres of space it has acquired to “stretch its legs,” the company’s president and CEO said in the story.

“It was a good opportunity because we have been cramped for some time, but we wanted to stay in the Brooks Road area,” Dick Sweebe told the Journal. In addition, Sweebe went on to say that Diamond plans a multi-million dollar renovation of the site, set to begin later this month.

For an industry that is suffering with forecasts of lower sales that keep getting lowered with each passing month, at least one dealership sees opportunity.

“This was an opportunity with a piece of property we could buy and, although the timing may have not been perfect from a standpoint of what the overall market is doing, we felt like we needed to buy it or that opportunity would pass and we would be forever landlocked,” Sweebe said.

That’s the kind of investment President Obama is hoping for.

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About

While truck driving has never quite worked out for Brian, commenting on the many facets of the trucking industry is the next best thing. Trucking Straight Talk is designed to engage readers with fresh insight and thoughts on topics important to all the players in the trucking industry.

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