Trucks at Work Blog

“The global recovery is threatened by intensifying strains in the euro area and fragilities elsewhere. Financial conditions have deteriorated, growth prospects have dimmed, and downside risks have escalated.” –from the International Monetary Fund’s World Economic Outlook update this month

“Optimism among U.S. industrial manufacturers regarding the prospects for the U.S. economy over the next 12 months rose to 30% in the fourth quarter of 2011 – up from only 5% in the third quarter of 2011.” –from PricewaterhouseCoopers’ fourth quarter Manufacturing Barometer survey

For truckers trying to read the economic tea leaves to figure out what direction freight volumes might be headed in, there isn’t much clarity to be found of late.

For example, take the quotes above – one from the latest World Economic Outlook update compiled by the International Monetary Fund (IMF) and the other gleaned from a quarterly survey of manufacturers conducted by global consulting firm PricewaterhouseCoopers (PwC).

They only scratch the surface of the iceberg in terms of uncertainty plaguing the global economy right now, as portents of doom are being issued right alongside a sudden surge in confidence about the business opportunities ahead.

The gloom of course derives from the still precarious sovereign debt situation in Europe; a region of the world the IMF now believes is headed for a recession this year. The international entity slashed its economic growth outlook for the “Euro zone” this month, predicting a drop in economic output of 0.5% for the region in 2012 – a decline of 1.6% from its outlook last year – and only meager growth of 0.8% in 2013, a decline of 0.7% from previous estimates. more

“Our economy spends over $300 billion a year on imported petroleum and the cost in economic activity in this country over the last couple of decades has been measured in the trillions of dollars of lost purchasing power.” –Frederick W. Smith, president and CEO of FedEx Corp. and co-chairman Energy Security Leadership Council

It’s no great surprise that energy policy took a front seat in President Obama’s State of the Union address for the third year in a row. And certainly no shock should be registered that many of the policies advocated by the president in his speech contradict the actions of his administration over the past three years as well.

I mean, how else is one to hear and read of his goal to “boost domestic oil and natural gas production” when projects such as the Keystone XL pipeline are tabled, offshore drilling permits are banned, and the President himself again calls for the cancellation of tax breaks for oil and gas companies – even as such tax breaks are established (and federal loans given) to the so called “green” energy sector?

Well, that’s how it goes when energy and politics collide.

Yet no amount of political bickering can obscure the most salient (and frightening) fact about energy as it relates to our country: it remains one of our most vulnerable weak spots. Thus anything we as a nation can do to not only reduce energy consumption but change the kinds of energy we consume remains a welcome target for the U.S. to aim at.

“Oil plays a role in almost everything we do,” explained retired U.S. Air Force General John W. Handy, former Commander of the U.S. Transportation Command and co-chairman of the Energy Security Leadership Council (ESLC); a group which seeks to wean the U.S. off foreign oil import. more

“Citizens now trust one another more than they do established institutions.” –Richard Edelman, president and CEO of global public relations firm Edelman, in the company’s 12th annual trust and credibility survey

Is it any surprise that faith in government institutions worldwide is on the rocks? Or that trust in business, particularly CEOs, is waning as well? I’d think that neither finding would shock anyone at this point, considering the utter economic and political mess we’ve been wading through over the last three years – particularly as, in many respects, the mess isn’t going to be cleaned up any time soon.

Leafing through the 2012 Edelman Trust Barometer – the global public relations firm’s 12th annual trust and credibility survey – you’ll find that blame for the financial and political chaos of 2011 is being placed squarely on the doorstep of government, with trust in government falling a record nine points to 43% globally. more

“Gen Y consumers clearly view their automobiles as more than just a way to get from point A to point B. They see them as a way to stay connected around the clock – and they’re willing to pay it.” –Joe Vitale, global automotive sector leader, Deloitte Touche Tohmatsu Limited

A survey conducted by Deloitte LLP that I referenced last week concerning a “generational shift” in terms of the appeal of hybrid vehicles also revealed something else as well – a growing expectation amongst younger folk for their vehicles to incorporate the same type of computing power available from their home PC systems and smart phones.

In commenting on the survey, Joe Vitale (at right)– global automotive sector leader at Deloitte Touche Tohmatsu Limited, a division of Deloitte LLP – referred to this expectation amongst the younger generation of consumers as the desire to obtain a “smart-phone on wheels.”

“Gen Y consumers prefer automobiles that are an extension of their social-media and digital lifestyles,” Vitale added. “[They] clearly view their automobiles as more than just a way to get from point A to point B. They see them as a way to stay connected around the clock – and they’re willing to pay it.”

Deloitte’s survey found that “in-dash technology” is the most important part of a vehicle’s interior for a majority (59%) of the Gen Y consumers polled by the firm, with almost three-quarters (73%) seeking “touch screen” interfaces. more

“Gen Y’s strong affinity for hybrid vehicles could make it the generation that leads us away from traditional gasoline-powered vehicles.” –Craig Giffi, vice chairman and automotive practice leader at global consulting firm Deloitte LLP

Could the ongoing shift between generations help foster greater acceptance – and thus wider acquisition – of hybrid vehicles? That seems to be one of the conclusions from a recent survey conducted by global consulting firm Deloitte LLP.

Craig Giffi, vice chairman and automotive practice leader at Deloitte, noted that the firm’s annual survey of Gen Y consumers (now in its fourth year) found that a strong majority (59%) of Gen Y respondents prefer an “electrified vehicle” over any other type of car or truck.

Moreover, Gen Y consumers heavily favor hybrid gasoline-electric vehicles (57%) over pure battery electric vehicles (2%) or vehicles with a traditional gasoline-only powertrain (37%). more

“A lack of harmony in the political process is limiting our ability to accomplish the big things that are required to re-build America’s infrastructure.” –Mark Gerencser, executive vice president with global consulting firm Booz Allen Hamilton

It’s no secret that our nation’s infrastructure – from its four million miles of highways to its 55,000 drinking water plants and over 160,000 miles of high voltage electrical transmission lines – is in pretty rough shape.

In particular, truckers (of course) know better than anybody the abysmal condition of our roads and bridges – including how much more crowded they keep getting year after year – yet, like many others, are baffled by government’s inability at both the federal and state level to fix the problem. more

“CFOs are worried about the spillover effect from the European [sovereign debt] situation into global consumer and capital markets. They appear to believe that the longer we continue without effective solutions, the more likely and more pronounced the collateral effects will be on other established and emerging economies around the globe.” –Sanford Cockrell III, national managing partner for the CFO program at global consulting firm Deloitte LLP

Truckers are well aware of how “spillover,” as characterized by Deloitte’s Sanford “Sandy” Cockrell (seen at right) in the quote above, can impact the freight business.

I mean, just take the effort to reduce truck exhaust pollution over the last decade for example. Fleets were so concerned about the cost and reliability of 2007 emission-compliant trucks that it sparked a tremendous surge in new truck sales ahead of the compliance date, despite a nose dive in freight volumes – the first of many warnings about the impending arrival of the “Great Recession.”

As a result, record levels of North American Class 8 factory shipments in 2006 and 2007 – some 371,916 and 201,278 brand new units, respectively – plummeted to only 119,714 by 2009, according to data tracked by FTR Associates. And the impact of that artificial spike lived on for years; indeed, it’s created used truck inventory issues that will remain in force well into 2014.

So when CFOs across a range of businesses start worrying about how the negative “spillover” from Europe’s sovereign debt crisis might hammer the global economy – and thus the freight volumes associated with economic activity – it warrants the attention of truckers on this side of the pond. more

“With the new package, the engine runs in its sweet spot at any given speed, never straying from its sweet spot at any point from zero through top speed.” –Ed Saxman, product manager–powertrain, for Volvo Trucks North America (VTNA) commenting on the OEMs new integrated “XE13” integrated powertrain package introduced in late 2011

“Integration” is a hot topic of late in trucking circles, as OEMs and fleets alike seek ways to drive down fuel consumption while simultaneously maintaining or even improving overall vehicle performance. Indeed, I spent several days last week with some of the top executives from Daimler Trucks North America (DTNA) discussing this “integration” trend and what they’re doing along in that area.

Now, integration is nothing new in the truck OEM world – indeed, Landon Sproull, chief engineer for Peterbilt Motors Co., told me in a recent interview that “integration” is at the core of what truck makers do for a living, both in the past in the present; taking a range of disparate parts, from axles to transmissions and engines, and packaging it all together on a chassis frame.

The difference today, though, is that OEMs and fleets alike are keeping the pressure on to wring every smidgen of efficiency out of trucks of all shapes and sizes today in search of savings no matter how small – whether it’s by burning less fuel, lengthening service intervals, or reducing downtime for maintenance. And that’s where this new emphasis on integration comes into play.

Take Volvo Trucks North America’s (VTNA) new XE13 (with the “XE” standing for “exceptional efficiency”) powertrain package unveiled in September last year.

It combines Volvo’s proprietary I-Shift automated manual transmission (AMT) and D-13 engine with modified software in a VN Class 8 tractor model to allow the vehicle to “cruise” down the highway under load at 65 mph with the engine only cranking at 1150 rpm – about 200 rpm less than the average truck sold today, noted Ed Saxman, VTNA’s product manager–powertrain.

“Customers gain about a 1.5% fuel efficiency improvement for every 100 rpm of ‘downspeeding’ like this, so fleets specing the XE13 package can expect up to a 3% fuel economy improvement when compared to another overdrive transmission in a similar operation,” he explained. more

“This is about doing something that saves money and people time out on the highway. We’re using innovative techniques to speed project delivery and get more for every dollar we spend.” –John Njord, executive director, Utah Department of Transportation

If you want a quick understanding of why building highways, roadways, and vehicular bridges in this country is so expensive — and so complicated — just watch the video below concerning the Utah Department of Transportation’s (UDOT) I-15 CORE Project.

Even though this huge highway project is an example of how new techniques and processes are being deployed to make roadway and bridge construction faster, safer and cheaper (relatively), the price tag is still astounding: $1.725 billion for a 24 mile stretch of roadway and bridge work.

The I-15 CORE Project is Utah’s largest highway construction effort to date – in no small part because it involves the movement of a fully-built 3.8 million pound bridge, a move that will set a world record. more

“The complexity of diagnostic codes has gotten tremendous – even technicians struggle with them. And there’s only going to be more of them developed over time.” –Tim Tindall, director of component sales for Daimler Trucks North America’s Detroit subsidiary

I always find the “back stories” about how a particular piece of truck equipment or technology came into being at times pretty interesting, as almost nothing in this industry ever follows a straight line from idea to development and on into reality.

Take the “Virtual Technician” real-time diagnostic system service that comes standard on all EPA 2010-compliant Freightliner brand trucks equipped with Detroit diesel engines (it’s an optional feature on Western Star trucks).

Tim Tindall, director of component sales for Daimler Trucks North America’s (DTNA) Detroit subsidiary (which makes not only Detroit diesel engines but heavy and medium-duty truck axles and possibly an automated mechanical transmission or “AMT” as well in the near-future) told me at a media event DTNA held here in Miami that “Virtual Technician” got its start back in 2008 as the company’s engineers struggled to find a way to keep tabs on the inner workings of the company’s selective catalytic reduction (SCR) emission control system during field tests. more