Trucks at Work Blog

“Taking a pragmatic approach, we will go on to be a smarter player in the challenging U.S. express market.” -Frank Appel, CEO of Germany‘s Deutsche Post World Net, the parent company of DHL.

Sometimes, you just gotta shrink to survive - and partner with former competitors, too. That‘s the conclusion Germany‘s Deutsche Post World Net reached concerning its money-losing DHL express operation in the U.S., but it‘s a lesson I think many domestic trucking companies can learn something from as well.

I mean, let‘s face it: when you‘re faced with either reducing the size of your company or going out of business entirely, which option do you pick? It‘s also got to be galling for DHL to forge a deal with erstwhile rival United Parcel Service to handle a big chunk of its air express shipments, but again, what other choice is there to make? DHL is on track to lose $1.3 billion this year, so something had to be done - and done quickly - to staunch the bleeding.

Frankly, it‘s pretty gutsy to play the cards Deutsche Post got dealt this way - straight up, with a minimum of spin. They took a cold, unsparing look at the reality before DHL and made the decisions that should allow it to survive and return to profitability down the road - preserving jobs in the process, I might add. They didn‘t have to do it this way - they could have sold DHL off to the highest bidder and washed their hands of the job losses that followed. Yet they didn‘t do it.

OK, so let‘s look at this in a little more detail. Under the plan, DHL and UPS agreed to develop a contract whereby UPS provides airlift for DHL Express U.S. domestic and international shipments within North America. In addition, DHL aligns its U.S. express infrastructure to existing shipment volumes by redesigning its ground linehaul network to better match capacity with customer requirements (that‘s a convoluted way of saying it‘s reducing the number of trucks in its fleet). The impact on service levels will be minimal with less than 4% of shipments affected, noted Frank Appel, CEO of Germany‘s Deutsche Post, allowing DHL to remain focused on delivering international and domestic express products while keeping a strong commitment to the U.S. market.

Here‘s how the plan breaks down:

1. DHL reduces its infrastructure network capacity by approximately 30% overall, first by consolidating and closing smaller sorting facilities into modernized, larger stations, resulting in reductions of approximately 34%. Next, it‘ll reduce pickup and delivery routes by 17% and further “rationalize” its ground linehaul network by 18%.

2. The contract between DHL and UPS to get airlift for DHL Express U.S. domestic and international shipments within North America, which also reduces overhead and other administrative costs. UPS should start providing airlift late this year.

3. DHL and UPS are also pursuing an 10-year airlift contract that would create a single airline partner for DHL Express in the U.S., allowing DHL to continue operating its courier and ground network as well as pickup and delivery services to its customers across the country.

“We have promised to relentlessly focus on improving financial performance and … I am confident we have found a sustainable way forward for U.S. Express in the best interest of customers, employees and investors,” he noted in a press release. Deutsche Post added it‘ll cost $2 billion to restructure DHL‘s U.S. operations, yet those efforts should save DHL around $800 million in 2010 and around $1 billion by 2011.

“The U.S. express market remains one of the most challenging marketplaces worldwide in light of the current economic downturn,” said John Mullen, CEO at DHL Express. “Our future focus will be where customers have told us they need to do business the most. Our … restructuring will enable us to bring a new level of reliability and increased service performance to our international and U.S. domestic customers while cutting unnecessary costs such as maintaining infrastructure that customers don‘t ask for.”

It‘s tough to face an unpleasant reality like this, no doubt about it. But it sure seems the wisest course is the one Deutsche Post and DHL are taking, to not only face it but also make plans to deal with it, rather than just folding up the tents and walking away.

“Boeing recognizes that algae biomass holds tremendous potential for use as jet fuel, and it fits into our plan to guide aviation toward commercially viable and sustainable fuel sources - fuels with substantially smaller greenhouse gas footprints that do not compete with food or require unacceptable quantities of land and fresh water resources.” -Billy Glover, managing director-environmental strategy, Boeing Commercial Airplanes.

Did anyone ever think we‘d come to this: examining the potential of lowly ALGAE to be major source of fuel for the world‘s transportation system.

That‘s what will be the topic of discussion at the second annual Algae Biomass Summit in Seattle, WA, October 23-24 this year, hosted by the Algal Biomass Organization (ABO), whose charter is to help accelerate the development and commercial application of algae biomass. Boeing‘s Billy Glover, quoted above, is the co-chairman of the group‘s steering committee, which is aimed at raising the profile of algae as a potential fuel source for global transportation systems.

Note, too, that this is BOEING we‘re talking about - the billion-dollar global behemoth that makes a wide variety of commercial and military aircraft - not some mom and pop operation trying to sell snake oil (with many apologies for the negative use of the term “mom and pop” by the way.)

(Diesel fuel stock? From this green gloop? Maybe …)

So why is algae getting so much attention? Here‘s what the folks involved with the ABO believe are the benefits this organic substance can bring to the transportation fuel issue table:

Renewable Fuels: Algae are an ideal low-cost, renewable and environmentally progressive raw material that can be converted into biofuels. They can grow rapidly (doubling in biomass in as little as a few hours), require limited nutrients, and can annually deliver up to 2,000-5,000 gallons of fuel per acre of non-arable land.

Environment: Algae do not require fresh water to thrive, and so they will not compete for limited supplies of fresh water. In addition, they can also be used to clean wastewater and to recycle greenhouse gases such as CO2, NOx and SOx. As the algae grow, they can be harvested and converted to next-generation biofuels.

Economic Development: As developing nations continue to look for ways to spur economic development, algae-based industries can be a central part of an overall strategy. Many developing nations currently import nearly 100% of their fuel. An algae-based energy strategy provides a way to either reduce oil import costs, create fuel/feedstock export revenue, or both, without competing with food crops.

There‘s serious involvement on the part of the scientific community, too, as Dr. Greg Mitchell from the Scripps Institution of Oceanography and Dr. Phillip Pienkos with the U.S. government‘s National Renewable Energy Laboratory are members of ABO.

“Given the social, economic, and environmental possibilities for algae, and the growing number of companies, technologies and products being developed to address them, it is becoming increasingly important to harness their potential for use across multiple industries now,” said Boeing‘s Glover.

To that I say, let‘s see where the research takes us.

“Guard against the prestige of great names; see that your judgments are your own; and do not shrink from disagreement; no trusting without testing.” - Lord John Emerich Edward Dalberg Acton

Trust may be a rare and fragile commodity in trucking these days, but this is so for some very good reasons. I don‘t have to sit here and write stories about how freight brokers have betrayed a trucker‘s trust, delaying or even defaulting on payment for a delivered load - that‘s a story you‘ve all experienced first hand, sad to say.

Nor must I re-tell tales of shippers being deceived by fly-by-night truckers, lumpers fleecing drivers, or any number of broken relationships within this industry. We‘ve seen them all before and will see them again, unfortunately, for these are just everyday hazards in business, much less trucking‘s world.

I talked to Bob Voltman, executive director of the Transportation Intermediaries Assn. (TIA), about this very topic a few years ago and while he pointed out to me that trust works 99% of the time in transportation, the consequences when it does NOT work out can be severe.

“That 1% could put a small carrier out of business or cause a shipper‘s factory to shut down,” he noted. That‘s why when TIA was formed in 1978, the first thing its 14 original members did was to formulate and sign a code of ethics. “To us, ethics is a badge of honor; it’s the ‘Good Housekeeping‘ seal of approval. It tells the market that we agree - of our own free will, without government oversight - to follow a set of rules regarding payment, conduct, etc.,” Voltman explained.

“For there are no cops on the business beat in transportation - no enforcement of contract rules like what we have for trucking and railroad safety,” he added. “It‘s still a market where a great deal of trust is needed in order to function properly - trust between the shipper, the freight broker or third-party logistics provider and the carrier that services will be provided and paid for.”

Professor Jerry Osteryoung with the college of business at Florida State University also has some thoughts on this from a broader perspective, though he readily admits these aren‘t the happiest of thoughts, which I‘ll let him explain in more detail. Professor Osteryoung, the floor is yours:

“After reading this, many people will think that I have been dropped into a big pit of pessimism; however, I really hope that every reader will understand the message I am trying to get across: Trust should always be monitored. For you can never assume that it is there and that it will always be reciprocated.

In business, we have to trust that our staff is being honest with us and that our employees are protecting our assets. There is just no way for any entrepreneur to be completely protected from employee theft at all times. If we were to make a business theft-proof, the rules and regulations would be onerous, taxing and so detailed that nothing would ever get done. There are just always going to be penetrable holes in our theft shield. That being said, however, trusting in employees too much will allow you to relax the theft shield to a point where it becomes very dangerous.

All of us have frailties and weaknesses, and I just might have the most. If you put enough temptation in front of some people, they will steal from you, and they will continue this dishonest behavior until it is stopped. After all, if an employee gets away with stealing once, they will think that they can do it over and over and never get caught. It is the job of the entrepreneur to minimize the temptation to steal.

One entrepreneur had a very trusted employee steal from her. The entrepreneur thought that this employee was always looking out for her best interests, and as a result, she allowed too much trust to develop between them. She inadvertently found out that this very trusted employee had been stealing from her for over five years.

While the theft was awful in terms of the monetary loss, the betrayal of trust was what shook this entrepreneur‘s values and foundation to the core. She had a fundamental belief and expectation that if she looked out for her staff, they would look out for her. When this belief collapsed, she just seemed to lose her bearings and confidence.

With time, she eventually did recover, but her trust foundation was never fully restored. What she did gain as a result of this situation was an insight into the unreasonableness of her initial assumption. Trust is not always a two-way street.

She is doing very well now, but she clearly understands that no trust can ever be 100%. She set up a number of additional checks and balances in order to reduce the potential for theft as much as possible, and she is so much more cautious about limiting the amount of blind trust.

This is a lesson that every business entrepreneur can benefit from. No matter how long an employee has worked for you, you still need to be cautious, as employees and situations change. Limit trust and utilize checks and balances to protect yourself and your business. You cannot assume that your trust will be reciprocated.

In addition, trust issues are not limited to direct monetary theft. Entrepreneurs must trust that employees are doing their jobs as intended. Even things like incorrectly priced bids, unauthorized overtime on the time clock and missing office supplies are all indirect violations of trust.”

As usual, you can reach Professor Osteryoung by e-mail at jerry.osteryoung@gmail.com or by phone at 850-644-3372.

“It is clear there have been dramatic safety improvements over the last 20 years and, in large part, this success has been the direct result of an increase in roadside inspections and enforcement.” -Stephen F. Campbell, executive director, Commercial Vehicle Safety Alliance

Every year, the Commercial Vehicle Safety Alliance (CVSA) helps sponsor a 72-hour roadside safety “blitz” by federal, state, provincial and local inspectors at over 1,000 locations across the U.S. and Canada to conduct comprehensive North American Standard Level I Inspections. This year‘s event kicks off June 3, so you now have fair warning to make sure your trucks are up to snuff as they hit the highway.

This year also marks the 20th anniversary of these annual roadcheck safety events, so it‘s worth noting the vast improvement that‘s occurred in terms of truck equipment safety over that time span.

Stephen Campbell, CVSA‘s executive director, noted that when Roadcheck was launched in 1988, there were 4,885 fatal crashes involving large trucks, resulting in 5,679 fatalities in the U.S. That equated to 4.12 crashes per 100 million miles, along with 94.4 people injured and 215.2 people killed per 100 million miles. Fast forward to 2006, he said, and those metrics show dramatic improvements: 2.24 crashes per 100 million miles (an 84% improvement), 47.4 injuries per 100 million miles (a 99% improvement) and 134.4 fatalities per 100 million miles (a 60% improvement).

“While we certainly have a long way to go and we can never be satisfied until we have zero deaths, it is clear there have been dramatic safety improvements over the last 20 years and, in large part, this success has been the direct result of an increase in roadside inspections and enforcement through the Motor Carrier Safety Assistance Program (MCSAP),” Campbell said in a recent press statement.

It‘s also worthy to note that the federal government is providing a lot more funding for the MCSAP effort, to the tune of $197 million last year, compared to $50 million in 1988. Annually, there are more than 3.5 million roadside inspections conducted across North America, said Campbell. “Roadcheck gets to the core of what CVSA stands for: uniformity and reciprocity of commercial vehicle inspections and enforcement activities,” he stressed. “It is through programs such as this that we are able to demonstrate to the public that we are getting results.”

Still, there are areas that need improvement - and not just in terms of equipment safety. Last year, 7,708 inspectors at 1,449 locations across North America performed 62,370 truck and bus inspections and one of the metrics they found increasing revolved around hours of service (HOS) violations by truck drivers. For the second straight year, the number of drivers placed out of service increased from 5.6% in 2006 to 6.2% in 2007 - the highest Roadcheck driver out of service rate since 1999, said Campbell - with 65.9% tagged for hours of service (HOS) violations. This compares with 57.1$ in 2006.

However, is this all due to willful logbook violation or are some drivers still confused about the complicated new rules put in place since 2004? CVSA‘s figures shoe that only 11.4% of those drivers placed out of service falsified records of their duty status, down from 12.4% in 2006. That indicates to me that there‘s still a lot of confusion out there about HOS rules that needs to be cleared up myself.

Still, remember that 93.8% of all drivers last year passed roadcheck inspections, with 78.5% of all commercial vehicles passing as well. Those are some pretty good numbers. Let‘s hope we keep seeing such positive results after this year‘s round as well.

Hot out of the film editing lab from the “just for fun” file …

For those who couldn’t make it to the Mid America Trucking Show this year, I put together a slide show to recap some of the sights from the convention hall floor to the parking lot outside. Enjoy and have a safe Memorial Day weekend!

(If you like the music, check out The Corrs online … they are a great Irish band that fuses traditional folk music with modern rock.)

“I was so busy making a living that I didn‘t have time to make a fortune.” -Ted Griller, veteran truck driver, who has spent 24 of his 32 years on the road with Cowan Systems and its predecessor, W.T. Cowan Inc.

It wasn‘t a great day for snapping photos - gray skies kept spitting rain at regular intervals - but it was the only one in my week that worked for a drive an hour north to visit the headquarters of Cowan Systems LLC, a regional truckload carrier based outside of Baltimore, MD, that operates primarily east of the Mississippi River, north to Maine, and south to Florida.

Cowan specializes in providing dedicated fleet service, mainly for beverage and other retail customers. Its fleet consists of 800 three-year-old and newer trucks, predominantly Volvo VN tractors (making up about 80% of the fleet), along with 450 owner-operator trucks - all pulling some 2,600 new 53-ft. lightweight plate trailers, most equipped with wide-base tires on their axles.

They’d just finished building this gorgeous new HQ building (like something straight out of Frank Lloyd Wright‘s sketchbook) but the interesting thing to me was the huge glass wall that let visitors look into the operations room, where the dispatchers and load planners plied their trade. Few companies like to show off that part of their business, yet here it was on display with pride.

It should be noted that Cowan is, in many ways, an “old dog” doing some new tricks here. Though technically founded in 1994 by Joseph W. Cowan, its origins date back over 80 years to 1924 when Joseph Cowan‘s father established W. T. Cowan, Inc., an LTL carrier providing service throughout the Mid-Atlantic states. As deregulation occurred within the trucking industry, W. T. Cowan, transformed into an irregular route truckload carrier, expanding its focus to become a specialized truckload carrier in the 1990s, leading to its “rebirth” as Cowan Systems.

Dennis Morgan, Cowan‘s COO, dropped down for a chat to follow up on a discussion we‘d had about the impact fuel prices are having on his company‘s business. Then he walked me into the operations room to meet Ted Griller, one of Cowan‘s long time drivers (and the spitting image of rock and roll star Ted Nugent, I might add.)

(Ted Griller, fueling up.)

Now, this is when you typically find out what a trucking company is really like - when its executives meet with senior drivers. An example that sticks in my mind is when I visited Celadon Group a few years back and Stephen Russell, its founder and chairman, took me into the driver‘s lounge for lunch, obviously at ease. Drivers dropped by to ask questions as we talked, on a first name basis with Russell, and a couple of new drivers asked him where they could find a supervisor to talk to. “You can talk to me,” said Russell. “And what do you do, dude?” the driver said. “I‘m the chairman - can‘t go any higher than me,” he replied nonchalantly.

The same thing occurred at Cowan. Ted and Dennis spoke on a first name basis and when Dennis felt Ted should have a new ball cap and pullover emblazoned with the company name, he didn‘t send Ted to get it - he asked one of the supervisors to do it. And I stress “asked” by the way; Dennis didn‘t order anyone about, just a simple “Would you mind getting Ted …” and that is all it took. Gee, too bad other business executives can‘t act with such simple class.

So then Ted and I drove around the area, with me talking photos and asking him a lot of questions that he more than cheerfully answered. A former merchant marine sailor and one-time wedding photographer, Ted told me he thoroughly enjoyed being a truck driver, while recognizing just how hard it can be on families.

“It‘s hard when you are gone for two or three weeks straight - it takes a lot of understanding and patience within a family to accept that, and it‘s not always possible,” he told me. “You also must realize that, hard as this job it cane be, it‘s not the toughest. You and I could buy a truck tomorrow, then start hauling freight and earning money. Commercial fishermen, now, they can spend loads of money on a boat, equipment, and crew … then come up completely empty. That‘s a lot riskier profession.”

Not that trucking is easy today, especially with diesel fuel at $4 and even $5 a gallon in many parts of the U.S. now. “We‘re attacking fuel from a number of different angles. Fuel surcharges are important but they are always subject to being renegotiated,” Dennis Morgan told me. “Many shippers are trying to lower them to reduce their exposure to higher freight costs - that‘s not good for anyone in trucking; neither carriers nor owner-operators do well with fuel surcharge cuts as diesel fuel continues to spike.”

(Dennis Morgan, Cowan’s COO.)

He said that while not every shipper tries to cut the fuel surcharge they pay, far more are doing it than before. “So if we get a lower surcharge, we have to get higher linehaul rates, because we need to offset the high price of fuel,” Morgan noted.

Cowan is also trying to buy fuel smarter - buying bulk fuel for terminals that have filling stations and negotiating with fuel stops/truck stops to get volume discounts. “Bulk fuel purchases saves us 10 to 15 cents off the street price of fuel,” he said. “We instruct our drivers to fuel up at terminals or at certain truck stops to get the lowest price we can.”

Drivers are a key resource, Dennis explained. “We try to be as involved with the drivers on fuel economy as we can,” he said. “For example, when the new trucks with ‘07 engines came into the fleet, we had a safety meeting with our drivers to go over how they are geared completely differently. You have to shift them differently to reach the ‘sweet spot‘ for the best fuel economy. We‘re also focused on idle time reduction and are looking at slowing our trucks down.”

Cowan also spent the last several years converting its fleet from a ‘heavy‘ to a ‘light‘ spec - using aluminum wheels on its tractors, for example, and spec‘ing lighter trailers, using wide-base tires on the axles. But that ‘lightness‘ aimed at productivity improvements, not fuel economy gains as such, Dennis noted.

(The wide-base tires on Cowan’s trailers helps cut down on weight significantly.)

“Our trailers could haul 8% to 10% more freight - basically hold 50,000 pounds instead of the 45,000-pound average for truckload carriers,” he said. “Basically, you ship 10 pallets and the 11th is free - what we call ‘windfall freight‘ for the customer. But while the tractor and trailer are lighter, we add in more freight, so we‘re not gaining any fuel economy benefits from that.”

Right now, Cowan is staying away from fuel hedging - seems like too much of a guessing game, to Dennis‘ eyes. “Instead we‘re trying to cut down on empty miles and out or route miles; more focused route management on our part,” he said. “We‘re testing software right now that map out the most fuel efficient routes for our trucks and overlay the lowest price diesel fuel stops over those routes: and it would stay up to date on pricing changes. It‘s reputed to save us five cents a gallon by using it but we‘re just considering it for now. We‘ve shied away from software like this in the past but with the price of fuel the way it is we‘re looking at everything.”

Dennis noted that, for the last year and the 20 years prior to it, drivers were the carrier‘s number one cost. “This year, however, it is fuel,” he said. “You never cover the entire added cost of fuel, even with surcharges: you never recoup the cost of empty or deadhead miles. The spread between what is covered and what‘s not continues to grow as the price of fuel rises … and it eats materially into our margins. While our business volume is the same versus last year, our costs are a lot greater. On average, we get a fuel surcharge of 50 cents a mile and $1.50 average rate per mile. That‘s still not enough to pay for the higher price of fuel.”

It‘s tough, that‘s for sure, but Cowan is getting by - and by working with its drivers, saving fuel and improving productivity where they can. That‘s a good thing to see, all in spite the tough times this industry is facing.

“What customers really need when it comes to their trucks are dependable, qualified technicians.” -Vaughn Allen, vice president-product and customer support for Navistar Truck Group.

Finding technicians these days, much less training and keeping them at trucking dealership and fleet maintenance depots for the long haul, is getting harder all the time. That‘s one reason we‘re seeing a lot more “technician rodeos” designed to raise their collective profile and give them some much needed public props.

Last week, for example, Navistar held its second annual Service-Technician Rodeo at the Universal Technical Institute (UTI) in Glendale Heights, IL, to compete in air conditioning, brakes, drive train, electrical and preventative maintenance scenarios for a range of commercial trucks, along with issues involving Navistar‘s I-6, V-8 and V-6 engine lines.

(Navistar’s tech rodeo winner, Per Meling, with his game face on.)

To compete in eight key areas of commercial truck and engine service, Navistar dealer technicians had to have Automotive Service Excellence (ASE) certification for the U.S. or Canadian Provincial Licensing for Canada, along with company certifications as well. Out of a population of 8,004 Navistar dealer technicians (a number that does not include the 5,000 or so body shop and Idealease techs that fall under Navistar‘s large maintenance umbrella) only 342 were eligible, according to Vaughn Allen, vice president-product and customer support for Navistar.

From those 342, about 250 took the rodeo online qualifying exam on March 6 and out of that group, eight technicians got the chance to compete at Navistar‘s rodeo this year. “Only an elite group are allowed to participate in this event,” Vaughn told me in a phone conversation last week. “It‘s a head-to-head, hands-on test of their technical skill and speed. The competition tests not only their practical know-how but their theoretical knowledge as well.”

(Close inspection is part of the trade.)

Per E. Meling of White‘s International Trucks in Greensboro, N.C., won the top honors at Navistar‘s rodeo this year and he exemplifies what Vaughn believes the truck technician for today and tomorrow looks like.

“Today, it‘s all about situational awareness,” he told me. “It‘s a different game, because you learn something new, a new technique, every day in this business. So much of a truck is electronically controlled that it‘s a much more ‘point and click‘ type of solution-finding environment. It‘s more about following the processes and becoming a specialist in certain key areas. Like hospital doctors today, there are no real ‘generalists‘ anymore - everyone becomes an expert in a specific area, like spinal surgeons, radiologists, etc.”

Etienne Van Niekerk, service education manager for Navistar, added that the learning really never ends anymore for technicians. They are constantly getting new information via the Internet, DVDs, and the classroom, plus it‘s broken down into what he calls “just in time” and “just in case” information.

“‘Just in time‘ information is situational - delivered as a technician works on a particular problem, when the repair isn‘t going like it should be,” Van Niekerk explained to me. “‘Just in case‘ information is more broad, addressing different areas outside the specific skill set of the technician, should the repair issue widen into new areas.”

Either way, Van Niekerk said that the ever-increasing complexity of trucks is making technicians much more reliant on information sorting like this than ever before - creating a shift from turning wrenches to a more ‘point and click‘ type of work mode.

“It‘s impossible for one person to know every system on a truck; that‘s creating information resources available at the technician‘s fingertips is so vital,” Vaughn added. “And it‘s why following the process and sifting through the layers of a repair issue to find the root cause is so important today. Recognition of those challenges and the ability of out technicians to overcome them is but one reason why we are holding these rodeos.”

“But are these really accidents? I argue that they are not. These events do not just happen as an accident. They are predictable and preventable. These accidents do not need to occur.” -Bruce Moeller, from “Driving Me Crazy: Stories from the road.”

As soon as I started reading Bruce Moeller‘s book, I wanted to throw it away - far away. But you can‘t do that on a jam-packed airliner at 39,000 feet (unless you risk explosive decompression) and, frankly, I needed to read it - painful as I knew it would be.

You see, Bruce‘s book - entitled “Driving Me Crazy: Stories from the road” - opens with his own personal tragedy, the one that eventually drove him to write this book and one that every parent like myself utterly fears. In 1985, he lost his 18-month old daughter to sickness and hospital malpractice in South Korea - alive and joyous as all toddlers are one minute, gone the very next. He relates how it took him over two decades to recuperate from that searing loss, to change his worldview, to start over with a new mindset - one focused on trying to reduce the needless carnage on our highways.

But I just didn‘t want to go there. Not only did the book jump-start all the latent worries about the well-being of my own three girls back home, it also ramped up my fears about where I was going - to Reno, Nevada, where my brother lay in intensive care following a 150-foot vertical fall off a cliff while extreme skiing. What was his prognosis? How extensive the physical and mental damage? Do I have to contemplate signing a “do not resuscitate” order? These were the very last things I wanted to think about.

[Things turned out far better for me. My brother suffered no brain or spinal trauma, and is now poised to be discharged from the hospital - after sustaining 12 broken ribs, two dislocated shoulders and a small facture in one of his neck vertebrae. He also ripped the nerve bundle controlling his right arm out of his spine, so he‘ll most likely lose use of that arm permanently … but a small price to pay after skirting death by mere inches.]

Yet these are things we must think about. As Bruce detailed in his book, every day you drive a vehicle, or ride in one, you not only take your life in your hands, you put your life in other people‘s hands. With nearly 43,000 highway fatalities each year in the U.S. alone, Bruce contends we are facing an epidemic that must be stopped - something he reiterated to me when I talked to him over the phone not long ago.

(Bruce Moeller believes accidents can be significantly reduced via improving driver skills.)

“Look back at the risks our society just won‘t accept,” he told me. “We don‘t accept airline accidents, which can kill 200 people at one time We don‘t accept terrorist attacks, like September 11th, when over 3,000 lost their lives. Yet we accept the fatalities that result from driving. We need to change that.”

Looking at it another way, those 43,000 fatalities on our highways every year translates to about 3,583 a week, or 117 a day. If a commercial jetliner were crashing every day with all hands killed, we‘d be up in arms. Yet its equivalent occurs every day on our roadways and it elicits nothing more than a collective yawn.

Consider this as well: Motor vehicle accidents are the leading cause of death for 15 to 19 year olds at 41.4%, far and away surpassing homicide (13.7%), suicide (11%) and cancer (5.2%), according to statistics gleaned from the Journal of Safety Research.

“Here is where I want to challenge the convention thinking,” Bruce says in his book. “Are these incidents really inevitable? If we can anticipate financial consequences based upon empirical data and project these onto an expected simulation of the future, why can‘t we do the same thing with the behaviors that cause crashes in the first place? Why can‘t we anticipate them, then either reduce or eliminate them?”

Now, point of full disclosure: Bruce is president and CEO of DriveCam Inc., a global driver risk management company that‘s in business to make a profit. Their digital video technology is designed to record risky driving behavior and help fleets across the spectrum (government, private, for-hire) reduce accident exposure.

Yet his book isn‘t about that. It‘s focused on the far larger (and more important) topic of getting people to recognize that losing 43,000 lives a year in the U.S. - along with 127,000 annually in Europe - to vehicle crashes simply should not be acceptable to modern day society, period.

(Preventing this is what Bruce’s book is all about.)

“You don‘t understand the amount of suffering a family goes through when you lose someone to a highway fatality, especially a child. I know what that feeling is like; I‘ve been there,” he told me. “Just because vehicle fatalities happen one or two at a time should not obscure the larger picture - crashes kill a lot of people. My feeling is that if we can put a man on the moon, if we can explore space on a regular basis, we can solve this crisis. This is a deadly, serious business.”

But until we, as a society, accept the seriousness of this problem and are willing to take steps to address it, the dying won‘t stop.

“U.S. consumption of liquid fuels and other petroleum [products] are expected to decline in 2008 by about 190,000 barrels per day as a result of the economic slowdown and high petroleum prices.” -from the Energy Information Administration‘s short-term energy outlook published May 6.

With diesel fuel at over four dollars a gallon throughout much of the U.S. - hitting the $5 mark in California - and gasoline pricing not far behind, it would seem a big stretch to even bring up the term “silver lining.” Yet besides record-setting pump and oil prices (which closed above the $128 per barrel mark yesterday) there‘s another statistic to consider as well - the first reduction in U.S. imports in 30 years.

(Photo courtesy of the Penn Jersey Truckstop)

True, the drop is pretty small: According to the Energy Information Administration (EIA), the U.S. imported 57.9% of its oil in the first quarter this year, down from 58.2% over the same period in 2007. Yet that 3/10ths of 1% marks the first time since 1977 that this country reduced oil imports - due largely to high prices and the current U.S. economic slump, but also to the rising use of ethanol, biodiesel and other biofuel products, along with higher average vehicle fuel economy, noted Guy Caruso, the EIA‘s administrator.

Caruso‘s agency also recorded these statistics: while world oil consumption is projected to grow by 1.2 million barrels per day (bbl/d) in 2008, after accounting for increased ethanol use, U.S. petroleum consumption is projected to fall by 330,000 bbl/d this year. By 2015, if these trend lines hold, the EIA projects U.S. petroleum imports could drop to 50% of all oil consumed.

I know, I know: none of this provides much relief to the wallets of truckers rapidly being emptied at the refueling island. And the way things are shaping up, truckers should expect to keep paying some steep prices for diesel in the coming months.

(Photo courtesy of Petro Stopping Centers.)

“The oil supply system continues to operate at near capacity and remains vulnerable to both actual and perceived supply disruptions,” said the EIA last week. “The supply and demand balance for the remainder of the year is tighter. World oil markets are particularly tight during the first half of 2008, with year-over-year growth in world oil consumption outstripping growth in non-Organization of the Petroleum Exporting Countries (OPEC) production by over 1 million bbl/d. The combination of rising global demand, fairly normal seasonal inventory patterns, slow gains in non-OPEC supply, and low levels of available surplus production capacity is providing firm support for prices. The flow of investment money into commodities markets and ongoing geopolitical concerns in a number of producing countries, including Nigeria, Iraq, and Venezuela, have contributed to crude oil price volatility.”

However, consider these numbers, gleaned from Jim Angel and Fred Hammer‘s recent presentation at the National Private Truck Council‘s (NPTC) annual convention last month: In 2007, the total cost of diesel fuel used to move freight totaled $112.5 billion for the trucking industry … yet shippers paid over $65 billion in fuel surcharges last year.

That meant truckers paid out $47.5 billion for fuel, which is lower than the $53 billion it shelled out for fuel in 2003. It‘s not cause for a party (for $47-plus billion out of pocket is a wallop on the bottom line no matter how you look at it) but it‘s easier than footing a nearly $113 billion tab let me tell you.

Fred Hammer, corporate transportation manager for Shopko Stores - a grocery chain based out of Wisconsin that operates 38 tractors and 400 trailers - also noted that high prices are driving fuel conservation efforts like never before at his fleet and many, many others. By really focusing on a broad fuel savings strategy - which includes efforts to reduce deadhead miles, analyze vehicle performance to boost miles per gallon and decrease idle time, offer drivers incentives to reduce fuel consumption, plus cut down out of route miles and boost vehicle productivity, Shopko cut its fuel expenditures by 9.5%. If fleets continue to reduce fuel consumption metrics like this across the industry, oil imports - especially from nations hostile to us such as Iran, Saudi Arabia, Nigeria, and Venezuela - will continue to fall.

Of course, there‘s also a lot of speculation going on in the global oil market right now, too, not unlike what happened in the U.S. housing market, which is adding to the big price increases we‘re seeing. If that bubble collapses, leading to oil pricing drops and thus lower fuel costs, we need to make certain we don‘t revert to our oil, fuel-guzzling ways. The EIA, for example, predicts that we will return to slurping behavior, as it believe by 2030 imports will make up 54% of all the oil the U.S. consumes, despite falling to 50% in 2015. We must make sure that once we pass the fuel spikes of today, we don‘t end up back in the same old habits tomorrow. We‘ll see what happens.

“Affliction comes to us all, not to make us sad, but sober; not to make us sorry, but to make us wise; not to make us despondent, but by its darkness to refresh us as the night refreshes the day; not to impoverish, but to enrich us.” -Henry Ward Beecher

The temptation in trucking is to focus on just the immediate tangibles day in and day out: equipment, fuel, drivers, terminals, etc. One thing, however, that gets overlooked quite a bit is all the “invisible” infrastructure that‘s required to keep a company going - whether you‘re running one truck or a thousand. That infrastructure, by necessity, involves people doing a lot of non-driving and non-freight handling work - dispatchers, load planners, accounts receivable clerks, accountants, lawyers, administrative assistants … the list goes on and on.

Among many owner-operators and even some small fleets, spouses and other family members provide that critical infrastructure. And any way you look at it, someone‘s got to keep track of all the paperwork required in trucking - health forms, DOT inspection reports, background checks, logbooks - much less make sure the fiscal books are ready every year at tax time.

Professor Jerry Osteryoung from the college of business at Florida State University has some thoughts about this “business infrastructure” and why having a plan to put it in place is vital for entrepreneurial businesses, which trucking certainly is. So I‘m going to let him put some thoughts and issues out there for you to think about. Professor Osteryoung, the floor is yours:

“One of the most important tasks for each and every entrepreneur is to ensure that adequate infrastructure is in place to both operate the business and allow the business to grow. By infrastructure, I mean the people, money and things that are so necessary for operating a business.

Infrastructure is so essential because it allows a business to serve its customers. Both important and critical, infrastructure also costs money! It is something that must be funded continually. We were assisting a medical office and its doctor, who was working extremely hard. He was acting as both a medical professional and a business manager, and because he had no training in business management, he was sinking rapidly. He was about to implode from the stress of having insufficient time to do both his medical work and run his office.

On the personal front, he was spending so much time at the office doing the bookkeeping and the many other chores that the staff just did not have time to handle, that his family was suffering badly from his lack of time with them. The man simply had no life of his own, and because of all the work he was doing, he always felt as though he was letting someone down.

When we first met this doctor, he wanted our advice on a number of issues, but the most critical was clearly an inadequate infrastructure. He just did not have the necessary staff to allow him to function and survive.

Initially, we recommended that he hire an office manager to take the workload off of him. However, he was very reluctant to do this as he thought that he could not afford the position. Over the years, he had grown his practice by hiring staff for specific jobs rather than by planning for the overall infrastructure. This lack of planning was having a detrimental effect on his and his family‘s lives.

We were able to show him how to easily cover the office manager‘s salary by reducing excessive costs, and he went ahead and began interviewing for an office manager. While this assistance project is still in process, there is no question in my mind that once this doctor hires an office manager, his life will be so much better.

Infrastructure is critical to each and every business. It just cannot be added in a ‘willy-nilly‘ or unplanned fashion. Infrastructure must be planned in advance and put in place through a strategic plan. This will flesh out necessary details, such as what the infrastructure should look like and when additions to it should be made.”

You can contact Professor Osteryoung by e-mail at jerry.osteryoung@gmail.com or by phone at 850-644-3372.