Trucks at Work Blog

“The existing federal transportation funding structure often acts as an impediment to our future. We need to turn it around and make it into an enabler.” –Martin Sabo, co-chairman of the National Transportation Policy Project and a former U.S. Congressman

I’ve previously written about the efforts of the National Transportation Policy Project (NTTP), forged by the Bipartisan Policy Center (BPC), to significantly retool the over-arching federal policies that guide (and, more importantly, fund) how roads, highways, bridges, and multitude of other pieces that make up the U.S.’s transportation infrastructure.

A speech by one of the NTTP’s co-chairs reminded me last week that, even though Congress has put off voting and further work on the $500 billion “highway bill” that guides transportation spending, there’s a desperate need to chart a new course on how, where, and why all that money gets spent.

As my boss, Editor-in-Chief Jim Mele, so brilliantly noted in his monthly column back in October (no harm in praising the boss, is there??!!) there are an awful lot of fingers and special interests in the pie that is transportation funding these days – which ends up leading to all kinds of inefficiencies and waste when it comes to transportation infrastructure.

That’s why straightening out the policies that eventually guide the implementation of the highway reauthorization bill – whenever that occurs – is so critical, noted Martin Sabo, co-chairman of the National Transportation Policy Project and a former U.S. Congressman from Minnesota, in speech on this subject last week in his home state.

“Existing national transportation policy fails to recognize and reward innovation,” he said. “Funds are typically distributed with little to no analysis of their potential costs and benefits. This system, combined with insufficient funds to even adequately maintain our existing infrastructure, results in a transportation system that is losing effectiveness, directly impacting our nation’s global competitiveness.”

[To view video clips of Sabo’s remarks, click here and here.]

The structure of the current federal transportation program makes it hard to use federal funds to advance regional and national goals, and also fails to encourage adequate planning on a metropolitan or regional scale, said Sabo – making it challenging for metropolitan regions to use federal money to solve their transportation problems.

“The current federal transportation law expired on September 30th and is now operating under extensions of current law until a new bill can be passed,” he added. “We have an important, timely opportunity to reshape federal transportation policy to providing state and metropolitan regions maximum flexibility to spend federal transportation dollars in a way that advances national goals.”

Without rehashing all the details of the NTPP’s plan for reforming surface-transportation policy – a report released back in June, dubbed Performance Driven: A New Vision for U.S. Transportation Policy – Sabo boiled it down to three key points:

• Agree on clear national objectives for spending federal transportation dollars;

• Develop measures to evaluate whether these national objectives are being advanced; and then

• Adjust funding to reward good performance with respect to those measures.

“This is a common-sense approach, but one that will be challenging to execute,” Sabo said. “But it could not be more important to our economy, safety, environment, and even national security.”

Perhaps this last comment is a tad over the top, but I think Sabo nailed the fundamental issue here: transportation is a major beam providing support to the U.S. economy, and needs to be treated as such; not in a piecemeal, pork-barrel fasdion. So it’s past high time that we try to reshape the policies driving how we maintain, expand, and fund our transportation networks in this country so we end up with as highly efficient a system as possible, while keeping both initial and long term costs under tight control.

“Our nation’s highway system benefits all Americans, even those who are not drivers. However, in recent years, user revenues are paying for a smaller share of the pie. That means the broader population is paying a bigger share.” –Marcus Peacock, director of Subsidyscope, a project under the aegis of the Pew Economic Policy Group

Here’s a thorny issue to consider in the ongoing debate over how to pay for transportation infrastructure: the increasing role of “non-user” monies to fund highway maintenance and construction needs.

In a detailed analysis of highway funding sources conducted by the Subsidyscope project – an initiative of the Pew Charitable Trusts’ economic policy group – highways are increasingly paid for by “non-user” fees, including sales, income and property taxes. The report shows that in recent years, these revenues are funding a greater share of highway construction and maintenance projects, with a corresponding decrease in the percentage of user contributions – including gas taxes, vehicle registrations and tolls.

[I’d like to note here that, despite the high-wattage brain power employed by Pew, they keep referring to HTF funding in this study as being derived from “gas taxes.” Um, folks, ever hear of something called “diesel” perchance? Now, I was only a lowly history major in college, but even I figured out there’s more than one form of petroleum-based vehicle fuel being taxed by the states and the federal government. So I’m changing “gas tax” to “fuel tax” in my post here.]

Pew’s researchers noted that highways – which span over four million miles in the U.S. – are supposed to rely implicitly on the Highway Trust Fund (HTF) as the primary means for financing highways; funding almost wholly obtained from fuel tax receipts. Yet the portion of costs covered by the HTF has declined steadily over the last four decades, meaning government is dipping more frequently into other revenue sources to pay for highway needs.

Various factors account for the shift in funding away from users fees, Subsidyscope found, including the fact that fuels taxes, which are not indexed to increase with inflation, are losing their buying power. [You can see that decline charted below. The orange line on the top — user fees — is declining, while non-user fees — the blue line — are rising.]

As new technologies develop, cars [and trucks, too – gee, you guys DO realize truckers pay fuel taxes, right?] are becoming more fuel efficient, requiring less fuel, and contributing fewer dollars in user fees. At the same time, costs are increasing for both maintenance and new road construction, so there’s a growing disparity between the amount of money raised in taxes and what’s being spent on highways.

The result of that disparity is, of course, predictable – today, Pew found, user fee revenue as a share of total highway-related funds is at an all-time low since the Interstate Highway System was created in 1957

Using Federal Highway Administration statistics, Subsidyscope determined that in 2007, 51% of the nation’s $193 billion set aside for highway construction and maintenance was generated through user fees—down from just a decade ago, when user fees made up 61% of total spending on roads. Going back further, the trend is more pronounced. Forty years ago, user fees amounted to 71% of revenues spent on roads.

As a result, in 2007, non-user revenues contributed $70 billion to the highway system. By comparison, this contribution totaled $26 billion in 1967 (in 2007 dollars).

Subsidyscope also addressed another tricky issue when it comes to highway funding: the fact that not all user fees collected are made available for highway purposes. Of the 18.4 cent per gallon federal tax on gasoline, for example, 2.86 cents are allocated specifically for mass transit projects. Another 0.1 cent per gallon is used to pay for environmental cleanup resulting from leaking fuel storage tanks. Also, from 1990 to 1997, the federal government also set aside a portion of taxes on gasoline, diesel and other fuels to reduce budget deficits.

However, according to Subsidyscope calculations, even if those funds were fully devoted to highways, total user fee revenue would only have accounted for only 65% of all funds set aside for highways in 2007 – down from 84% in 1997 and 77% in 1967.

Also, noted Pew’s researchers, the amount of federal gas tax allocated to highway purposes has not increased since 1997 and states have had trouble increasing fuel taxes to keep up with inflation. So, in addition to a decline in user fee revenue, federal dollars are declining as a share of total highway funding – meaning state and local governments are taking on a higher share of road costs, and thus are increasingly reliant on alternative sources of revenue.

One of these sources – aside from income and property taxes – is borrowing through bond measures, which made up almost 13% of highway funds available in 2007, Subsidyscope found. This number has fluctuated over the years. Moreover, the use of bonds to fund roads varies widely from state to state. Subsidyscope considers bonds separately from user fees and other revenue because it is not clear which sources of revenues will be used to repay the bonds.

What does all this mean for trucking? Well, I think you can bet your bottom dollar that this report is going to buttress calls for higher fuel taxes – something many groups, truckers included, already support. Yet the real issue won’t be raising fuel taxes – it’ll be making sure said taxes don’t get siphoned off to fund other stuff, the way other sources of funding are now being tapped for highways.

“This research quantifies how the mutual goals of resource conservation and emission reductions could be advanced by allowing Maine to apply state weight laws to its Interstate highways.” –Mike Card, president, Combined Transport, Inc.

I’m sure the howling is only beginning over the American Transportation Research Institute’s (ATRI) recent analysis touting the benefits of expanding the federal gross vehicle weight (GVW) exemption, based on the allowance for higher truck payloads in the state of Maine.

No doubt this is a far more complex issue than merely boosting allowable gross tonnage per tractor-trailer to 100,000 pounds versus the federal limit of 80,000 pounds on interstate highways. Drivers worry about hauling more freight for the same or less pay; state and federal highway officials are concerned about the impact higher tonnage per combination vehicle may have on roadways and bridges. So-called safety groups, of course, will be outraged at the thought of heavier vehicles operating next to everyday motorists.

Yet for all those issues and the glaring fact that ATRI is the research arm of the American Trucking Associations (ATA) – thus making it not exactly an impartial source – the data gleaned from this study is pretty compelling and is definitely worth mulling over as we try to figure out ways to make our freight transportation networks more efficient and environmentally friendly at the same time.

Mike Tunnell, ATRI’s director of environmental research and the principle investigator for this analysis of Maine’s pilot test of higher truck weights, took two 100,000 pound, six axle tractor-trailers (the trailer getting a third axle in order to handle the higher tonnage), both equipped with a 485-hp Cummins engine, and ran them through two detailed simulations: one truck taking state roads, the current route allowed in Maine for trucks in excess of 80,000 pounds, with the other taking the highway, in this case I-95.

The results are pretty interesting:

• Though longer, the truck using the I-95 highway route actually completed the journey in less time – anywhere from 26 to 33 minutes faster. This is due to the overall speeds of the vehicle, with the one on the highway averaging 60 to 62 mph, with the one on the state road going 38 to 42 mph.

• Less fuel was consumed as well by using the highway, anywhere from one to two gallons. In an interesting side note, just stopping at all the traffic signals on the state roads alone was responsible for consuming an extra gallon per trip.

• In terms of overall fuel efficiency, though the I-95 route was longer by about five miles in either direction, the 100,000 pound rig on the state roads posted 14% to 21% better fuel economy than its opposite on the state roads.

• Carbon dioxide (CO2) emissions – the most recent boogeyman in the climate debate – decreased anywhere from 6% to 11% with the heavier truck taking the longer, higher-speed highway route, compared to the local state roads. Again, stopping at traffic signals came with penalties, in this case boosting CO2 emissions by 6% alone.

• Particulate matter (PM) and oxides of nitrogen (NOx) and non-methane hydrocarbons (NMHC) emissions declined 3% to 8% by taking the longer highway route as opposed to navigating the shorter but slower stop-and-go state road route.

Extrapolating these findings over a week’s worth of heavy truck operations in Maine also resulted in some pretty significant efficiency improvements and environmental benefits. By putting 100,000 pound trucks on a longer highway route, total fuel savings could range from 338 to 675 gallons of fuel per week; CO2 emissions would decline by 3.4 to 6.8 metric tons per week, along with 33.8 to 93.8 fewer grams of PM and 8.3 to 24.8 fewer pounds of NOx and NMHC.

So, is allowing higher truck weights of 100,000 pounds on highways – trucks equipped with six axles to reduce the impact of that extra tonnage on roads and bridges, while adding braking power – the “silver bullet” we’ve all been waiting for in terms of how to further reduce fuel consumption and air pollution from heavy trucks?

In a word … NO.

Allowing higher truck weights is but one part of an effort to rethink and retool how we move freight in the U.S. Certainly, allowing tractor-trailers to carry more payload would boost productivity and require fewer trucks on the highway – a way, perhaps, to offset any reductions in drive time as the Federal Motor Carrier Safety Administration (FMCSA) embarks on a two-year effort to re-analyze hours of service (HOS) regulations.

Yet concerns over hauling more for less pay and how heavier vehicle weights affect highway safety are only two of a plethora of issues that arise when talk of boosting federal GVW limits begins in earnest – and they must be satisfactorily addressed, or the effort to raise tractor-trailer tonnage limits won’t go any farther.

“Many states and localities have laws specifically prohibiting activities such as using a cell phone or sending a text message while driving. In addition, several states have laws that hold drivers accountable for distractions that could contribute to an accident.” –Stephanie Rahlfs, an attorney and editor with FindLaw.com

As efforts start ramping up across the country to combat texting and cell phone use while driving motor vehicles, another question is popping up – what constitutes a “distraction” while behind the wheel, anyways?

I mean, heck, I’m always sipping on coffee or some sort of heavily caffeinated beverage while driving me old ugly minivan – it’s the only way for me to survive occasional wee-hour trips I’ve gotta make up to Baltimore Washington International airport. So does drinking coffee count as a “distraction”? And if we start cracking down more generally on “distracted driving,” is this the kind of thing that results in a traffic ticket?

It’s an important question to ask because yet another study shows that drivers readily admit to engaging in all kinds of “distractive activity” behind the wheel – some that I would consider innocuous (such as drinking coffee) while others are downright scary (surfing the Internet while DRIVING? Are you KIDDING me?)

According to a new national survey by FindLaw.com, nine out of ten drivers say they have engaged in what the pollsters considered “distracting and potentially dangerous activities” while driving. The most common of these “activities” are:

Drinking coffee or other beverages - 81%

Eating - 76%

Talking on a cell phone - 66%

Sending or receiving text messages - 29%

Applying makeup - 11% (21% of women drivers)

Sending or receiving email - 8%

Reading a book or newspaper - 7%

Surfing the Internet - 5%

The FindLaw.com survey – conducted using a demographically balanced telephone survey of 1,000 American adults, with a margin of error of plus-or-minus 3% – also found certain distracting activities are particularly prevalent among younger drivers. More than half of drivers between the ages of 18 and 34 say they have sent or received a text message while driving, while one out of ten admitted to having sent or received emails or surfed the Internet while behind the wheel.

And yet … drinking coffee behind the wheel counts as “distractive activity”? I mean, sure, if you drop it or try to mix in cream and sugar while blasting down the asphalt at 70 miles per hour, I can see that as a major distraction. But, heck, if we’re going to ban drinking beverages behind the wheel, is nose picking not far behind? (Not, to paraphrase the great Jerry Seinfeld, that there’s anything wrong with that!)

“When investing, pessimism is your friend, euphoria the enemy.” –Warren E. Buffett, chairman, Berkshire Hathaway

It’s been a rough year – one of the worst in my lifetime, at least – and most of the trucking experts I talk to think next year will only bring more of the same. That being said, though, 2009 is certainly NOT the worst year on record in the U.S. and though hard times are here to stay for a while, there is that unique liberation that comes from knowing you are at the bottom; for when you are at the bottom, there is no way to go but up.

Warren Buffett is, of course, a past master of profiting not only during the good times but from the down cycles as well. He’s also a man that needs no introduction, as he’s perhaps one of the most successful investors in U.S. history. While Buffett and his company, Berkshire Hathaway, garnered huge headlines earlier this month for the $44 billion deal to acquire the Burlington Northern Santa Fe Corp. (BNSF) railroad – the largest single acquisition in Berkshire Hathaway’s existence – they aren’t newcomers to the world of freight by any means.

In fact, Berkshire bought trailer leasing firm XTRA Leasing back in 2001 for many of the same reasons that it acquired BNSF – transportation is one of those “must have” wheels in any economy, and, in the words of Eric Starks, president of research firm FTR Associates, “You want to buy when you’re at the bottom and this is as close to the bottom as you can go.”

Yet Buffett is also something of a throwback (a term used here in a very positive way) when it comes to investing and the conduct of business in general. You can buy any number of books about him and his business beliefs, but they are really very basic – something that, in this day and age of increasingly indecipherable world of acronyms, complex risk-assessment algorithms, and obtuse regulatory language, should be closely examined by truckers large and small.

In good years and bad, Buffett and his partner Charlie Munger focus on four simple goals – and you can read this in any of his letters to the company’s shareholders:

(1) Maintaining Berkshire’s Gibraltar-like financial position, which features huge amounts of excess liquidity, near-term obligations that are modest, and dozens of sources of earnings and cash;

(2) Widening the “moats” around our operating businesses that give them durable competitive advantages;

(3) Acquiring and developing new and varied streams of earnings;

(4) Expanding and nurturing the cadre of outstanding operating managers who, over the years, have delivered Berkshire exceptional results.

He also references a lesson learned from fellow investor Ben Graham: “’Price is what you pay; value is what you get.’ So whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”

One of Berkshire’s “bedrock” pieces of its vast portfolio is stock in electric utility companies. Yet it’s not about milking such companies’ dry of their cash flow. Take a look at how Berkshire manages ownership of MidAmerican Energy.

“In 1995, MidAmerican became the major provider of electricity in Iowa and by judicious planning and a zeal for efficiency, the company has kept electric prices unchanged since our purchase and has promised to hold them steady through 2013,” said Buffett. “MidAmerican has maintained this extraordinary price stability while making Iowa number one among all states in the percentage of its generation capacity that comes from wind … growing from zero to almost 20% of total capacity.”

Yet MidAmerican has not paid a dividend since Berkshire bought into the company in early 2000. Rather, the company’s earnings have been reinvested to develop the utility systems its customers require and deserve, said Buffett. “In exchange, we have been allowed to earn a fair return on the huge sums we have invested,” he noted. “It’s a great partnership for all concerned.”

Paying attention to the needs of customers generates profits: not rocket science, you know, but something many big wigs in finance routinely ignored on Wall Street as the U.S. headed towards the brink of economic collapse last year. Buffett also noted that maintaining a good business reputation also helps when federal regulators inevitably become involved, as well.

“It is they, rather than selling shareholders, who judge the fitness of [utility company] purchasers when transactions are proposed,” Buffett explained. “There is no hiding your history when you stand before these regulators. They can – and do – call their counterparts in other states where you operate and ask how you have behaved in respect to all aspects of the business, including a willingness to commit adequate equity capital.”

When MidAmerican proposed its purchase of PacifiCorp in 2005, regulators in SIX states immediately checked MidAmerican’s record in Iowa, he said.

“They also carefully evaluated our financing plans and capabilities,” Buffett noted. “We passed this examination, just as we expect to pass future ones. There are two reasons for our confidence. First, Dave Sokol and Greg Abel [MidAmerican’s top executives] are going to run any businesses with which they are associated in a first-class manner – they don’t know of any other way to operate. [Second] we know that our business behavior in jurisdictions where we are operating today will determine how we are welcomed by new jurisdictions tomorrow.”

[For a little insight into Buffett’s view of business behavior – specifically integrity – watch the video below from as speech he gave over 2 years ago. While the video quality isn’t that good, the message he’s trying to convey comes through loud and clear.]

This is all part of Berkshire’s long-avowed goal is to be the “buyer of choice” for businesses – particularly those built and owned by families. “The way to achieve this goal is to deserve it,” said Buffett. “That means we must keep our promises; avoid leveraging up acquired businesses; grant unusual autonomy to our managers; and hold the purchased companies through thick and thin – though we prefer thick and thicker.”

That circles back to another crucial principle Buffett believes in: A promise is no better than the person or institution making it. “As Ben Franklin once said, ‘It’s difficult for an empty sack to stand upright.’ We focus on blocking and tackling, day by day, doing the little things right and never getting off course,” Buffett noted. “We never want to count on the kindness of strangers in order to meet tomorrow’s obligations. When forced to choose, I will not trade even a night’s sleep for the chance of extra profits.”

And yet amid all the bad economic news this year (and the still ongoing wars in Afghanistan and Iraq we’re involved with), Buffett remains an optimist – echoing the great Winston Churchill in this regard, when, during the truly dark days of World War II, with Nazi bombers raining death night after night on England, he had this to say: “For myself, I am an optimist. It does not seem too much use being anything else. For a pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”

“Never forget that our country has faced far worse travails in the past,” noted Buffett. “In the 20th Century alone, we dealt with two great wars – one of which we initially appeared to be losing – a dozen or so [financial] panics and recessions; virulent inflation that led to a 21.5% prime rate in 1980; and the Great Depression of the 1930s, when unemployment ranged between 15% and 25% for many years. America has had no shortage of challenges.”

Yet without fail, however, we’ve overcome them, said Buffett. In the face of those obstacles – and many others – the real standard of living for Americans improved nearly seven-fold during the 1900s, while the Dow Jones Industrials rose from 66 to 11,497.

“Compare the record of this period with the dozens of centuries during which humans secured only tiny gains, if any, in how they lived,” he stressed. “Though the path has not been smooth, our economic system has worked extraordinarily well over time. It has unleashed human potential as no other system has, and it will continue to do so. America’s best days lie ahead.”

“I want everyone … to know that the United States is one of the most open economies in the world, and that’s not going to change. Our borders will remain open for the world’s products. But that commitment will be met by a renewed focus on doing more to ensure the competitiveness of U.S. companies in foreign markets.” –Gary Locke, U.S. Commerce Secretary

Trade is a sore spot for many in this country, and for some very good reasons – especially in terms of the U.S.’s ongoing trade deficit, which creates all kinds of fiscal havoc within our economy.

Yet trade is also vitally important to our economic health, for without foreign markets, our manufacturers would have only a very limited market for their goods – and that would, in turn, limit demand for freight services, thus walloping trucking right between the eyes.

That’s why reforming U.S. trading practices is something much on the mind of U.S. Commerce Secretary Gary Locke of late. Whether you agree with his view of things or not, Locke is the man in charge of executing the trading policies devised by the Obama administration, so it’s well worth paying attention to what he says on the subject.

And though we’ve witnessed a bump in exports of late, the U.S. still suffers from a pretty significant trade imbalance. In September – the latest month for which statistics are available – the Commerce Department’s U.S. Bureau of Economic Analysis found that U.S. exports increased by 2.9% to $132.0 billion since August 2009, while imports increased 5.8% to $168.4 billion – a $36.5 billion trade imbalance that obviously hurts our nation’s bottom line

Yet Locke is a firm believer that we cannot abandon international trade because of this imbalance. Rather, he thinks what we need to do is make reforms on our side of the ledger to correct this imbalance back to the U.S.’s favor.

“Our nation has tremendous potential to create and sell more products and services to foreign markets, [but] this is not as easy as it sounds,” he said in a speech before the National District Export Council Conference earlier this month. “In these difficult economic times, there are voices here at home and abroad joining the chorus of protectionism. History has already rendered its verdict on the utility of turning inward and closing off markets; these measures do not work and they reduce living standards for us all.”

Locke noted that exports are already a growing and substantial part of the U.S. economy, accounting for almost 13% of our nation’s gross domestic product [GDP] – almost three times as high as it was in the 1950s, with exports also accounting for over six million manufacturing jobs alone.

With that in mind, the Obama administration is planning to pursue what it calls “five key strategies” in the months and years ahead to help reform trading efforts here in the U.S. – resulting, hopefully in more business abroad for U.S. companies and, by extension, more freight to be hauled from U.S. factories to U.S. ports for shipment overseas. These five strategies are:

• Ramping up the Department of Commerce’s trade promotion activities across the globe;

• Reforming the business visa process in the U.S., so foreign buyers can visit the U.S. more easily to examine our wares;

• Reforming the U.S.’s export control system, which governs trade in defense and military items, as well as the dual-use products that are designed for civilian purposes but often have military applications;

• Ensuring U.S. companies receive the same rigorous intellectual property protections overseas that they would at home;

• The formation of the Trade Promotion Coordinating Committee (TPCC), which brings together 20 federal agencies and departments to develop a government-wide strategy for expanding trade and promoting American exports.

These are some pretty big and complex tasks for all sorts of government bureaucracies not known for their ability to eliminate red tape or be particularly nimble, yet it is the game plan Locke said he’s going to try and follow during his tenure as Commerce Secretary.

“Right now, U.S. companies aren’t anywhere near maximizing their export potential; today, less than 1% of America’s 30 million companies export – a percentage that is significantly lower than all other developed countries. And of U.S. companies that do export, 58% export to only one country,” he explained in his speech.

“With our increasingly interconnected world—where 95% of consumers reside outside our borders—global markets can help revive the fortunes of U.S. companies and spur future economic growth. We can do a lot better,” he said.

But as the Commerce Department seeks to open up markets for American companies abroad, Locke said the U.S. must also acknowledge it has room to improve when it comes to increasing the secure flow of goods, services and people across our own borders. “That’s why business visa reform is my second trade priority,” he stated. “The U.S. often makes it too difficult for foreign company executives to enter here to do business—a shortcoming that has had a tangible cost for American businesses by shutting out some of their best customers.”

For example, Locke noted that Boeing recently had to delay the delivery of a $250 million freighter because an inspector from the Chinese aviation authority didn’t receive his visa on time. “Historically, processing for these types of visas could be done in a matter of weeks but recently the time has stretched to as much as four months in some cases,” he said. “I have also created a departmental task force that will keep national security paramount while working to further improve the business visa process.”

Yet another area where red tape is challenging American businesses – and American security – is the nation’s export control system, governing trade in defense and military items, as well as the dual-use products that are designed for civilian purposes but often have military applications.

“Our current export control system was designed in the 1950s to prevent sensitive technologies from falling into the hands of adversarial nations that were relatively easy to identify,” Locke explained. “Today, our global economy is far larger and more integrated, and nations’ economic and security interests are more nuanced. But our export control system has not kept up. As a result, we now face a situation where U.S. companies are being shut out of promising markets and promising partnerships with foreign companies, even when they are close allies.”

He noted it’s reached a point where the undeniable appeal of U.S. technology is often outweighed by the time and effort foreign companies must endure to obtain it. “This is a serious problem that compromises U.S. security and damages our economic competitiveness,” Locke stressed – and it’s why the Obama administration began in August an attempt at a broad-based interagency review of the U.S. export controls system.

Locke said the Commerce Department’s Bureau of Industry and Security—which has jurisdiction over dual use export controls—is immediately exploring two reforms: Eliminating dual-use export license requirements for allies and partner nations and implementing a fast-track procedure for the review of dual-use export licenses for other countries that do not pose a significant “military proliferation” concern.

“These two reforms could affect more than half of the 20,000 licenses Commerce issues each year,” he said. “But … we need to reallocate resources to focus more targeted controls on highly sensitive item—and to reduce controls elsewhere where they serve no useful security purpose and make no sense.”

Then there’s the intellectual property protection issue. “Despite America’s remarkable dependence on innovation for future growth, the current system for protecting U.S. intellectual property (IP)—both domestically and internationally—is fraying at the seams,” Locke noted. “Every year, American companies in fields as diverse as energy, technology, entertainment and pharmaceuticals lose between $200-$250 billion to counterfeiting and piracy. That is simply unacceptable.”

He believes there are a series of steps the Commerce Department can take to improve America’s IP regime, from reforming the U.S. patent office to helping shape upcoming congressional intellectual property legislation. “But, fundamentally, our efforts need to begin with better enforcement,” Locke stressed. “Enforcement of trade agreements is a key element in the plan to rebuild support for trade. We must ensure that U.S. stakeholders reap the full benefits of these agreements, and that our exporters know that we will protect their interests.”

Finally, he added that there is one final step that must be taken in order to increase the amount of goods and services that America sends to foreign markets: using every lever of the U.S. government to promote exports.

“Whether that involves our State Department writing a letter on behalf of an American company that wants to do business in Russia, or our Department of Energy helping to facilitate renewable energy partnerships between U.S. companies and the Chinese government, every federal department has a role to play in promoting American business,” he explained.

The new Trade Promotion Coordinating Committee (TPCC), which will coordinate the efforts of 20 federal agencies and departments to develop a government-wide strategy for expanding trade and promoting American exports, is seen as a critical part of the government effort to bolster trade abroad, said Locke.

“It will address issues such as: increasing exports for small and medium-size businesses; expanding access to emerging markets; capitalizing on promising new industries like clean energy; and improving our advocacy abroad to make sure our companies aren’t subjected to unfair competitive practices,” he said.

Now, will any of these strategies work? That remains to be seen. But one thing is for sure – as trade goes, so goes freight. And it would surely be a better boon to truckers – and the nation’s economy – if more of the freight they carried were headed to ocean ports for export, rather than imports from ocean ports for U.S. distribution.

“Trucking is not necessarily a competing type of transportation in many cases but a part of a transportation network that helps to make commerce work successfully where and when working together. One feeds into the other … the other sometimes being even water-borne delivery. This is a concept that only those integrally involved in the movement of freight really understand. I suspect that most people have never thought about it.” –Allan Berger

I trade some very enlightening emails with readers on a variety of subjects, and recently a real good one came from Allan Berger about how trucking really shouldn’t be viewed as a “stand-alone” mode of transportation anymore – and why it’s far more valuable when viewed as an “integrated” part of the supply chain

To illustrate his point, Berger told me about visits he made several years ago to major air cargo hubs such as Memphis, TN (home to FedEx), Louisville, KY (United Parcel Service’s base of air cargo operations) and the former Airborne Express’ central location in Wilmington, OH (an air hub that fell on hard times when DHL retrenched last year).

“There were slews of tractor trailers not owned by these three express carriers’ at all three sites that were dedicated to bring in freight by 2:00 a.m. and leaving with freight after 2:00 a.m.,” he recalled. “And 2:00 a.m. was a madhouse at all three places as planes started landing as if coming back from a massive bombing mission. But that’s when I learned that UPS ‘red’ did not mean next day UPS Air, and the Fed Ex Next day did not mean it shipped on a Fed Ex plane, and that Airborne’s equivalent service did not necessarily mean all of their freight would be shipped by air – all despite their names.”

This isn’t a criticism, Berger stressed. Rather, he pointed out that obligation of each express carrier is to deliver their freight – be they envelopes, packages, pouches, boxes, etc. – within the time frame that represents the service paid for.

“As to how the package arrives on time is left up to the carrier,” Berger noted to me. “If it makes more financial and logistical sense to use trucks for certain freight between and two cities – for example from Wilmington, OH to Columbus, OH, or from Wilmington, OH to New York City – then the freight might go by truck. If it’s longer distance, UPS might elect to [send it] truckload to, say, the West Coast; or put it on an intermodal train rather than use air or trucking.”

The point, he said, is that when shippers ask for overnight, next day, second day, next business day, etc., all they REALLY care about is that the package is delivered when it has been contracted to be delivered – however it happens.

“Carrier pigeons are okay if that works also,” Berger said. “That means trucking is not necessarily a competing type of transportation in many cases but a part of a transportation network that helps to make commerce work successfully where and when working together.”

That “working together” philosophy is partly behind the recent creation of the North American Council for Freight Efficiency (NACFE). Guided by the Rocky Mountain Institute, this council’s ultimate goal is to find ways to move the same amount of freight currently shipped in North America, but only use half the energy. It’s a tall order, no doubt – one that require a lot of rethinking where trucking is concerned.

[In that vein, Mike Ogburn, a vehicle consultant with RMI, talks about how even fundamental measurements of transportation energy efficiency – “fuel economy” parlance – can be difficult to gauge with accuracy.]

Another big conundrum is changing the public perception of trucking and the freight-carrying industry as a whole – because public perception is driving the political process in ways that can be detrimental to trucking’s efficiency; something that also significantly affects the environmental impact of trucking as well.

[John Woodroffe, head of the University of Michigan’s Transportation Research Institute (UMTRI) safety analysis division, talks about that impact below.]

Finally, it’s also important to recognize that trucking is a very complicated industry – something that often times gets overlooked in the oversimplified freight calculation of moving goods from point A to point B. With emission regulations making the cost of even the most basic of Class 8 tractors equal to that of a Ferrari in some cases, it’s important to recognize in a broad sense how that affects the overall cost of moving freight.

[Amory Lovins, chief scientist and chairman of the Rocky Mountain Institute, shares some thoughts on that subject line below.]

For these reasons, being an “integrator” within the supply chain could prove very beneficial to trucking in a lot of ways – as well as help the transportation chain maintain both efficiency and environmental goals at the same time. It’s a line of thinking worth exploring in days and months ahead.

“Ptolemy was an amazing cat. Terri and I estimate he had an understanding vocabulary of over 300 words. And we would both swear he knew our names and would try and pronounce them whenever we returned to the truck. He just was amazing.” –Tim Brady, author, consultant, and business editor of American Trucker magazine, on his one-time travelling companion back in his days as an owner-operator in the moving & storage industry.

I’m going off on a feline tangent today for, frankly, I need a break from the steady drumbeat of horrible news offered up on cable television and online. [The Fort Hood, TX, shootings that left 13 dead is one that stands forth – a tragedy show that drove the news cycle for days on end. I still can’t believe something this awful actually happened.]

When the gloom starts piling up on me, one of the curatives I turn to is our pet cat Woody. As a child, the curatives were dogs – lots of dogs, of all breeds. To some ears, it may sound strange, but I’ve always found interacting with my pets to be a soothing stress reliever; uncomplicated by the realities of our often chaotic human existence.

The author John Grogan in his best seller Marley & Me really hit the nail on the head when he described the importance of his bond with his crazy Labrador Marley:

“Was it possible for a dog to point humans to the things that really mattered in life? Things like loyalty, courage, and devotion. And the things that did not matter, too? A dog has no use for fancy cars or big homes or designer clothes. A waterlogged stick will do just fine. A dog judges others not by how they look but by who they are inside. A dog doesn’t care if you are rich or poor, smart or dull. Give him your heart and he will give you his. It was really quite simple.”

Though cats are VERY different creates than dogs, they most definitely share those virtues of loyalty, courage and devotion. That’s why it’s no surprise to me that many truckers have cats and dogs as travelling companions on the road; they offer, in my view, a friend that is always there for them, that looks out for them, that never leaves them in the lurch.

Some such “road pets,” if you will, also serve as inspiration – especially the twelve-pound Applehead Siamese trucker cat Ptolemy, the travelling companion of my editorial compatriot Tim Brady and his wife Terri Jenkins-Brady.

Though Ptolemy passed on over four and half years ago, he’s come back to life as a character in a Christmas tale Terri co-wrote with fellow author Harold Konstantelos (also someone with trucking in his background) called Three Wise Cats: A Christmas Story.”

It’s a lovely book (I had the privilege to read an advanced draft – and oh what an antidote it is for the negative news cycle!) about how the wise old Ptolemy sends forth three cats – Abishag, Kezia, and Ira – on a quest to “follow a star of unusual brightness that was seen in the heavens, indicating an event of earth-shaking importance.”

I am sure you can see the plot similarities to another story that has three humans following a certain star to a certain town with a certain stable. But this version adds a fourth traveler to the mix; a rat by the name of Asmodeus, who can hear of no glorious thing without wanting to spoil it. Thus the stage is set for a long journey fraught with peril and dangerous adventures.

Though Ptolemy in this Christmas tale does not join this band of felines on the road for their adventure, the antics of his real-life namesake – who travelled with co-author Terri Jenkins-Brady in her husband’s tractor-trailer for years on the road – influenced the characters in this story to a high degree.

[As an aside: I LOVE the name Ptolemy, which is pronounced “Tall-oh-me” where the “P” is silent. There are TWO great figures in history that bear this name, by the way. The first Ptolemy was a general under Alexander the Great and went on to found the Ptolemaic empire in Egypt as well as the great library in Alexandria. The second Ptolemy was a Roman mathematician and astronomer. I’ll let you decide which one the Bradys named their cat after!]

One of the greatest things about the real-life Ptolemy, Tim Brady told me, was his protectiveness. He would hiss and snarl at anyone that approached the truck unless it was Tim or Terri. Consequently, when getting the truck serviced or washed, Ptolemy got placed in his cat carrier and stowed in the sleeper. Yet though some might look down on what they’d describe as an “unfriendly cat,” to a trucker out on the road in unfamiliar places, such behavior can be a boon.

“Once we were parked overnight at a truck stop with both Terri and I sacked out in the sleeper,” Tim told me. “Then, at about 3 a.m. Ptolemy came from his nightly post on the right side dashboard and started lightly tapping me on the check. Of course, at 3 a.m. in the morning I found this to be a great annoyance so I shooed him away.”

But being a typical feline, commands such as “no” and “shoo” are routinely ignored – sometimes for the best. “Ptolemy continued to run from the dashboard to the sleeper to tap me on the cheek and then back to the windshield. After this had happened five or six times I finally got up to see what was going on,” Tim said. “Lo and behold, when I looked in the right mirror, two men were running off with my trailer top-hat hubcaps.”

Another time, Tim recalled, he were parked his rig overnight at a high security facility waiting to make a delivery the next morning. As was his routine Ptolemy, would sit or pace across the dashboard like a vigilant guard, always watchful. “The next morning the supervisor of the guards of the facility told us that the cat should have high security surveillance clearance,” Tim said. “The guards who had watch duty overnight indicated in their reports ‘the cat was alert and aware of our every move, any time we drove or walked by the truck.’ I was very pleased, to say the least.”

Tim also noted that when he ordered a new custom sleeper, they had a special vented compartment with and outside access door for the cat box to be placed.

A lot of karma swirled around Ptolemy, too. “He was born on July 12, 1994 on the one year anniversary of Terri’s mother’s death, and the 19th anniversary of my father’s death,” Tim said. “Terri and I estimate he had a vocabulary of over 300 words. And we would both swear he knew our names and would try and pronounce them whenever we returned to the truck. He called Terri ‘Erri’ and me ‘Im.’ He did this the first time when we had been shopping for groceries at a Big Y in Sutton, MA. I think he was a little ticked because we had taken longer than he thought we should have. From that point forward each time we returned he would yowl, ‘Erri, Im.’ Or if he wanted Terri he would yowl, ‘Erri, Erri, Erri.’

Ptolemy passed away on July 14, 2005, two days into his 11th year of life from a perforated intestine caused by cancer. “Terri and I were covering the Walcott Jamboree truck show at the time when this happened,” Tim told me. “It was a tough time.”

Yet here the venerable Ptolemy is again, brought back to life in a Christmas tale, with his trademark guff on display for the world to see; a fitting tribute, I think, to a trucking cat.

“Record-setting revenue drops, high unemployment and far-flung fallout from the housing bust and credit crisis; virtually all states have been stressed by the downturn. We expect that when state lawmakers next spring turn to crafting their new budgets for 2011, many will confront an even tougher set of challenges, as states already have made significant cuts, yet revenues continue to drop, and stimulus funds will be running out.” –Susan Urahn, managing director, the Pew Center on the States

It’s no secret that U.S. state budgets are under extreme stress in this ongoing global economic downturn. The big worry, though, is how many of them are teetering precariously on the edge of fiscal calamity – and how this situation could affect the critical role states play in maintaining our transportation infrastructure.

According to a new report by the Pew Center on the States – a division of The Pew Charitable Trusts – Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin join California (whose statehouse is at right) as the 10 most troubled states. In the report – Beyond California: States in Fiscal Peril – Pew’s research indicates state budget troubles can have significant repercussions, such as: higher taxes or fees; layoffs or furloughs of state workers; longer waits for public services; more crowded classrooms; higher college tuition and less support for the poor or unemployed.

They also pose challenges for the nation as a whole, Pew noted, as together these 10 states account for more than one-third of America’s population and economic output. And actions taken by state governments to balance their budgets – such as tax increases, additional fees for services, and drastic spending cuts – can not only slow down the country’s recovery, but put a big hole in the wallets of businesses and citizens alike.

“A challenging mix of economic, political and money-management factors have pushed California to the brink of insolvency. But while California often takes the spotlight, other states are facing hardships just as daunting,” explained Susan Urahn, managing director of the Pew Center on the States (seen below at left). “Decisions these states make as they try to navigate the recession will play a role in how quickly the entire nation recovers.”

Pew’s researchers identified six major factors that contribute to budget issues for these states: (1) loss of state revenues; (2) the relative size of budget gaps; (3) increasing joblessness; (4) high foreclosure rates; (5) legal obstacles to balanced budgets – specifically, a supermajority requirement for tax increases or budget bills and (6) poor money-management practices.

While the public policy group cautioned that its report is not a comprehensive diagnosis of state fiscal health – demographics, debt burden and public pension liabilities are also major issues – Pew’s research team said it’s an important tool to begin to understand why some states are suffering more acutely from this recession than others.

There are also several big “threads,” if you will, that cut across all 10 states in terms of their fiscal woes; threads that could point to vulnerabilities in others as they try to navigate their way out of the fiscal crisis:

Unbalanced economies. A number of states on the list, including Florida, Michigan, Nevada and Oregon, have struggled in part because their economies have depended so heavily on a particular industry. This reliance on a single sector may have paid off in times past, but it put these states at greater risk when the recession hit. States cannot choose their natural resources, of course, but they can budget and manage for additional volatility that can result from dependence on a particular sector by seeking to diversify their economies.

Revenues and expenditures out of alignment. The severity of the recession has resulted in states across the country facing substantial gaps between what they collect in revenue and what they spend (Gee, does this problem sound familiar to anyone?). Yet of the 10 states in Pew’s study, including California, Illinois, Michigan, New Jersey, Rhode Island and Wisconsin, have a history of persistent shortfalls. “Aligning revenues and expenditures is a key component of fiscal health,” noted Urahn. (Now, if only the President and Congress could understand this …)

Limited ability to act. In most of the 10 states Pew surveyed, including Arizona, California, Florida, Nevada and Oregon, lawmakers’ latitude to respond to the fiscal crisis by raising taxes or cutting spending is limited by their states’ constitutions, ballot measures passed by voters, or other statutory or legal impediments to change.

Putting off tough decisions. (Now here is THE single biggest, thorniest philosophical issue in government today across the globe!!) Several states on the list were unable to muster the political resolve to enact long-term fixes to their fiscal problems. Virtually every state had to make tough decisions this year about where to cut and how to raise additional revenues, including through taxes or fees. But in some states, including California, Illinois and New Jersey, lawmakers punted the responsibility – either by asking their voters or governors to make the call, or by borrowing or using accounting methods to put off the hard choices until later.

To make matters worse, Pew projects the states’ fiscal situations are widely expected to get worse even if the national economy starts to recover. At the end of 2010, federal stimulus money that helped states meet some of their expenses begins to run out. Plus, states historically have their worst years shortly after a national recession ends, when they are coping with higher Medicaid and other safety-net expenses and when revenues lag because of stubborn unemployment, the group said.

When you take all this in and process it from a trucking perspective, you can’t help but ask a single question: what happens to the roads and bridges? If you’re a politician, weighing a reduction in road and bridge maintenance funds against steep cuts to, say, medical care for the elderly or poor, which way might you lean? I can tell you this – roads and bridges don’t go on cable TV news stations to complain about a lack of funding, I tell you.

In my neck of the woods, state governments make bets on Mother Nature being most forgiving and kind to fill in budget gaps – often times raiding funds set aside for snow removal operations in particular. That can backfire awful fast, as no one can predict what Mother Nature may decide to do from week to week in wintertime, or day to day for that matter.

On another level, we’re already seeing a range of fee hikes and the closure of public rests stops along the highways as a result of state fiscal troubles NOW. Yet if things are supposed to get fiscally WORSE in the months ahead, what other cuts might be waiting in the wings?

So as states are forced to deal with an ever rising tide of red ink, those that ply the highways for a living ought to be getting concerned – about things such as higher toll charges, for example. Nothing will be off the table if state fiscal ledgers don’t improve; you can bet your bottom dollar on that … if you have one left, that is.

“We remain committed to hiring those who possess values similar to ours and have served—or are continuing to serve—our country.” –Mike Hinz, vice president of driver recruitment for Schneider National, and Lt. Colonel (retired), U.S. Army Reserve

It’s no secret that respect for the military runs deep in the trucking industry – indeed, trucking actively recruits veterans from all branches of the U.S. armed forces. I’ve met countless veterans that have traded in their uniforms to drive big rigs, repair them, dispatch them, etc.

Travel to any truck show and you will find big rigs festooned with military insignia and their own personal tributes to veterans. With our good men and women in the armed forces still committed to battle in Afghanistan and Iraq, it’s gratifying to know that at least in trucking, their dedication and sacrifice are not shoved onto the back pages of newspapers or overlooked by television newscasts.

It’s also not a surprise – at least to me – that many trucking companies consider military veterans prized recruits, especially for the driver’s seat, because these are typically well-disciplined folks capable of handling what is often times a very tough job. Most servicemen and women are used to working a 12 on/12 off shift, which mirrors the hours of trucking to a degree, and understand how important it is to focus on the small details and get them right every time.

“The drive, tenacity and desire to succeed that delivers success in the military are the same traits that keep us at the top of our industry,” noted Mike Hinz, vice president of driver recruitment for truckload carrier Schneider National and a former serviceman himself.

Schneider is ranked 18th on G.I. Jobs magazine’s annual list of Top Military-Friendly Employers and, like many trucking carriers, has put together a package of benefits aimed exclusively at former military personnel, such as: Extended benefits and differential pay for soldiers deployed 18 months; guaranteed home time for weekend drill and annual training so no vacation time required for drivers; and a “quick-hire” process, allowing active military to apply, interview and be accepted two months prior to separation.

Schneider also participates in five other programs designed to help members of the military obtain employment:

ROTC Pays Program: Schneider partnered with the U.S. Army training command, allowing college students to sign up for an employer of their choice prior to graduating.

Schneider National Veterans Owner-Operator Program: Operated in conjunction with the U.S. Department of Veteran Affairs, the program provides ex-military with the training, mentoring, financial incentives and purchasing power to become an owner-operator.

Apprenticeship Program: Associates are eligible to use G.I. Bill benefits for one year to receive tax-free educational benefit checks from the Department of Veteran Affairs by submitting monthly reports to the Department of Labor.

Army Reserve Employer Partnership: Schneider National and the U.S. Army Reserve work together to recruit, train and employ individuals interested in both serving the nation and pursuing a career in the transportation and logistics industry.

The “Vetrepreneur” Program: Under this program, Schneider offers veterans the opportunity to have their training subsidized, using their G.I. Bill benefits to cover the cost of obtaining their commercial driver’s license at Schneider’s driver training academy.

This is but one example of what one trucking company is doing to help support military veterans once they leave the service. You can be as cynical as you like about it – thinking, “Oh yeah, who wants those jobs, driving trucks and turning wrenches?” – but in these days of 10% unemployment (which spikes at 15% or more in places like Detroit or in parts of the Midwest) just having a chance at a paying job, much less one geared to make the transition out of the military easy and smooth, is a great and good thing.

“To have work is a blessing,” noted retired Lt. Gen. Russell Honore in a speech I attended not long ago, and he’s right. It’s especially gratifying, though to see how many trucking companies are trying to extend work to those that volunteered to serve in the military, knowing that such service might put them in harm’s way.

Indeed, despite the economic downturn, corporate America views access to military talent as a critical long-term staffing strategy, noted Chris Hale, general manager of G.I. Jobs. The military produces 400,000 new civilian workers annually - job seekers who bring a tremendous work ethic, leadership, team-oriented philosophy and accountability to the workplace – attributes that are either impossible or too expensive to teach in a civilian setting, he added.

“Hiring America’s military veterans is a smart business decision,” Hales said. “Sure, it’s patriotic to hire military, but that’s not why corporate America does so. These companies understand how military knowledge, training and real-world experience positively affect their bottom line.”

“In the military, our troops learn how to define a mission, develop a plan, apply resources and execute the plan with superior leadership skills,” added Rick McCormack, G.I. Jobs’ publisher. “This real world experience solving complex problems at such a young age makes our veterans hot commodities to corporate America.”

As it should be — as it should be.