Trucks at Work Blog

“We are seeing a shift in culture [as] small and medium-sized enterprises are looking past survival and recognizing that successful sustainability performance translates to long-term success. Many are maximizing sustainability practices by also linking them to short-term goals, such as cost efficiency and competitor differentiation.” –Sandra Rapacioli, head of sustainability for the Chartered Institute of Management Accountants

I’ve talked before in this space about how companies across the business spectrum are trying to use “sustainability” efforts as a way to drive cost-savings, rather than merely undertake them as part of an “environmentally friendly” corporate philosophy.

Of course, the benefit here is if it makes economic sense, more and more companies will pursue them, thus reducing their environmental footprint while saving always-needed dollars – a classic example of the well-worn “win/win” cliché.

[Here’s one an example of the savings the “big guys” can get – in this case, Dell Computer – from sustainability efforts.]

The interesting thing now, however, is that small to medium-sized companies around the world are now boarding the “sustainability” wagon specifically find ways to reduce their cost structure. more

“As many questions swirl about a double dip recession, a large majority of Americans do not even think we’ve come out of the first recession.” –The Harris Poll

The great psychiatrist Elisabeth Kübler-Ross had a saying that went something like this: “People are like stained-glass windows. They sparkle and shine when the sun is out, but when the darkness sets in their true beauty is revealed only if there is light from within.”

I interpret that quotation to mean that, when the going gets tough, only folks that maintain their own creative internal energies can find the power to soldier through. Thing is, based on a number of polls of late, “inner fire” seems to be tamped down among a lot of Americans these days – and that doesn’t bode well for the future of the economy, much less the freight volumes a strong economy produces.

Take a recent survey conducted by the Harris Poll between September 12 and 19 among 2,462 U.S. adults. It found that seven in ten U.S. adults (69%) say the U.S. is still in a recession while one in ten say the U.S. came out of a recession but will now enter a new recession (11%). Only a measly 10% think the U.S. is now recession-free and the economy is growing, Harris found. more

“Let’s use the current crisis to signal an end to 20 years of madness in sourcing strategies. Single sourcing is dangerous. That much is obvious. And 100 sources all competing for the next contract based on piece price is also dangerous, in a different way. When that single source is continents away from production facilities, the danger is magnified. Thus a new sourcing model is needed.” –John Shook, chairman and CEO, Lean Enterprise Institute, Inc.

I came across an interesting “e-letter” this weekend penned by John Shook, chairman and CEO of the business-focused think-tank Lean Enterprise Institute (LEI), and while it’s not about trucks per se, it suggests a radical overhaul in the way companies craft their supply chains – and such an overhaul, if undertaken, would result in a lot more work for U.S. truckers.

“A trend that started in the auto industry in the 1990s and became a tsunami that has now hit the whole industrial world: a radical supply model that outsourced, ‘off-shored’, and ‘single sourced’ from a single suppler often at a single plant thought to be the cheapest location in the world,” Shook explained.

“Before long, even internal operations were held to the same pricing standards,” Shook (seen at right) pointed out. “’Outsourcing’ grew along with ‘off-shoring,’ under the edict, ‘Match the price I can get in China or your contract goes up for bid.’ And up for bid they did go, and out of business they went. First, smaller suppliers closed their doors, at huge cost to OEMs to replace the lost supply of parts and materials. Then they were followed by larger ones.”

As a result, Shook said, supply chain logistics became increasingly complex, with other trends contributing the “madness” as he likes to describe it: more sophisticated software and transportation systems, leading to the rise of third-party logistics or “3PL” specialists.

“Then logistics and even supply chain strategy became outsourced, with outsourcing begetting outsourcing,” he emphasized. “Not unlike the specter of machines designing machines – as in The Terminator – a monster was created. In the end, yet another key competence of manufacturers was lost to specialists whose interests were their own, not the OEM’s, [and] certainly not the customer’s.” more

“Today, we’re seeing that despite an increasing set of cost challenges, manufacturers are realigning their business models to prioritize top-line growth.” –Jeff Dobbs, global head of diversified industrials and partner with consulting firm KPMG

It would be a heartening trend for truckers if manufacturers follow through on what they told global consulting firm KPMG in a recent survey: to wit, despite the sluggish global economy and a myriad of other business challenges, many plan to from their previous emphasis on cost containment to focus on top-line growth as a priority over the next two years.

In sum, that means investing in new processes and new tooling to produce new and better products – all of which could lead to more freight volumes in the trucking space.

“Many companies emerged from the 2008-2010 [economic] downturn with significantly reduced cost structures, more cash and liquidity, and a laser focus on their customers and markets,” noted Jeff Dobbs, global head of diversified industrials and partner with KPMG.

“These ’survivors’ have the mindset and strategy to define the standard of success in the next five years,” he added. “Companies have learned they can survive the challenges of economic uncertainty, political instability, and historic natural disasters with lean agile operating structures, enhanced risk management practices, and a focus on innovation.” more

“Keeping your fleet equipment clean is a very important part of a company’s maintenance program – both for longevity of the equipment and brand image.” –Jim Hill, president of JIM Mfg., Inc., a manufacturer of mobile brush wash systems

Fall has officially arrived, which means winter is not far off. And with winter, as we all know, comes snow, and thus snow-removal chemicals, which end up upon trucks and trailers large and small.

[And that nice photo at right is courtesy of the Virginia Department of Transportation, which knows a thing or two about snow removal!]

For that reason, giving your equipment a regular cleaning becomes more than just keeping a sharp image out on the highways, where everyday motorists and freight customers alike watch your trucks and trailers roll up and down the roads. For removing those harsh, corrosive chemicals (liquid calcium chloride being the meanest of the bunch) is part and parcel of fleet efforts to lengthen the service life of their trucks and trailers.

“As they travel the North American roads, trucks, trailers, and other commercial vehicles are under continuous assault from acids, bird droppings, insect and animal remains, miscellaneous gunk, road salts and other contaminants,” noted Jim Hill, president of JIM Mfg. in a recent missive.

“In the road war against corrosion, grime and muck, the best strategy to combat the assault is keeping a clean fleet,” he explained. more

“I’m a strong believer in an ‘all of the above’ approach [to U.S. energy policy] … and I believe our policies should reflect five primary goals, many of which favor renewable resources. We should continually strive to make our energy supply more abundant, affordable, clean, diverse, and domestic.” –Senator Lisa Murkowski, R-Alaska, from a speech at the 2011 Renewable Energy Technology Conference & Exhibition (RETECH) being held in Washington D.C. this week

I know, I know: a politician proposing possible solutions for meeting our nation’s energy needs. Is there a more frightening thought?

Just witness the recent (and quite dramatic failure) of Solyndra, a solar energy firm that went belly-up after consuming millions in grant money from the Department of Energy. Already, that singular debacle is forcing Congress to re-evaluate how it invests in clean energy start-up companies, noted Senator Lisa Murkowski, R-Alaska, during a speech at the 2011 Renewable Energy Technology Conference & Exhibition (RETECH) being held in Washington D.C. this week

One would think that RETECH, a conference sponsored by the American Council on Renewable Energy (ACORE), would be a poor choice of venues to discuss “green energy” firm failures, much less a place to tout an energy policy focused on keeping traditional energy sources in play even as “green” resources are brought on line.

But that’s the interesting part about what Murkowski (seen above with Lt. Governor Mead Treadwell in Nuuk, Greenland at the Arctic Council Ministerial meeting earlier this year) believes about the direction energy policy in the U.S needs to follow in the future.

In her view, despite all the rhetoric about Americans trying to lead “greener” lives, we’re still going to need lots of power just to keep the basic pieces of civilization functioning – to heat and cool our homes and businesses, power our computers and lights, while fueling the myriads of machines that move people and products around the world. more

“This study clearly shows that the long-term perspective, value-based decision making and independence from the capital market give family-owned businesses a genuine competitive edge in the marketplace.” –Karena Strella, co-leader for Egon Zehnder International’s U.S. operations

You’d be forgiven for thinking the heyday for family-owned trucking businesses is long since passed in this country.

I mean, just looking at the vicious toll the Great Recession took on trucking. According to Donald Broughton, managing director for Avondale Partners, in the first two quarters of 2008 alone, some 88,000 trucks left the market due to business failures – some 4.5% of the industry’s capacity.

And the pace of bloodletting didn’t let up for years, with 730 trucking companies filing for bankruptcy in the first quarter of 2010m taking 33,360 tractor-trailers off the highways. Not until the first quarter of this year did the death spiral slow down, with “only” 295 trucking companies filing for bankruptcy taking 5,420 commercial vehicles trucks out of the market, Broughton’s data indicated.

Make no mistake here: a lot of those unfortunate failures were small, family-owned entities, which form the backbone of this industry. Just look at these statistics for 2010 compiled by the American Transportation Research Institute (ATRI): in 2010, 96% of all the trucking companies in business operated 20 trucks or fewer, with 88% operating six trucks or fewer. more

“Cordell Hull [Secretary of State under President Franklin D. Roosevelt] once said, ‘where trade crosses borders, armies do not.’ Let me add to his thought: Where trade crosses borders, millions of people can see a better future, and that makes all of us safer. You may call me naive, but I truly believe we must continue the long march to more trade and prosperity. And we have to pick up the pace.” –Scott Davis, chairman and CEO, United Parcel Service, from a speech at the annual National Defense Transportation Association meeting in Phoenix last week

There are many solutions being touted out there to help revive the moribund U.S. economy, the most visible being President Obama’s proposed $447 billion jobs creation package, which includes about $140 billion worth of infrastructure spending.

Yet there’s a distinctively different curative being proposed out in the private sector – one focused on findings ways to boost global trade, largely by reducing tariffs and other barriers between nations.

Now, many in working class America are suspicious – and not without cause – concerning efforts aimed at generating trade, largely as our nation has watched millions of jobs, particularly in the manufacturing sector, depart these shores for the lower-wage climates of China, India, and other far-flung locales.

Then there’s the technological modernization of manufacturing processes to consider: how robotics and software are replacing the need for humans to operate assembly lines and staff factories, a trend that protects people from harm but reduces the need for jobs as well. more

“Some 79% of global risk managers place a high probability that European sovereign crisis will have a meaningful impact on the integrity of the U.S. financial system, with 58% of risk managers indicating a high level of concern about the capitalization of U.S. financial institutions.” –From the latest quarterly Risk Index report compiled by the Global Association of Risk Professionals

Truckers well understand the slumping global economy – particularly here in the U.S. – poses growing risks to their operations, though freight volumes are still doing well, so far, which is keeping America’s transportation sector on far better footing than other industries.

[You can read more about this interesting divergence here, based on the economic analysis provided by FTR Associates during its annual conference in Indianapolis this week.]

Still, viewed from a global perspective, economic risks are rising across the board – and no one knows that better than risk managers themselves; those professional worriers who try figure out just how close to the edge of economic trouble the world is at any given moment.

According to the latest quarterly data released by the Global Association of Risk Professionals (known as “GARP,” believe it or not … strange … I seem to remember Robin Williams playing a character with that same name in a movie back in the 1980s …) lingering structural imbalances and doubts about economic growth and financial system health are creating a negative shift in the outlook among risk managers worldwide. more

OK, OK, it’s not a truck – and of course that’s what I am supposed to be writing about.

But Audi’s just-revealed all-electric car – dubbed an “urban concept” vehicle – deserves a look, even from truck-focused guys like myself.

Audi’s urban concept is a 1+1-seat ultra-light car for congested urban spaces. The neat part thing is that it combines elements of a racing car and “fun” car with the practicalities of an urban transport vehicle to craft what the company believes is a “radical” new concept. more