“Shutting down the ports in defiance of the contract and the arbitrator’s order in no way benefits an already-fragile U.S. economy.” –Steve Getzug, spokesman for the Pacific Maritime Association, the group representing 29 ports on the U.S. west coast.

In case you missed it, there was a “May Day” work stoppage at all the ports on the U.S. west coast last week on May 1, as 15,000 members of the International Longshore and Warehouse Union (ILWU) stayed home between 8 a.m. and 5 p.m. ostensibly to protest the ongoing war in Iraq. However, the May Day work stoppage is in actuality an annual event conducted by the ILWU and it shows that labor still has some pretty big muscles to flex, especially in the transportation industry.

It’s also worthy to note that the union went ahead with its plans despite a ruling by the Coast Arbitrator – essentially the Supreme Court on the waterfront, according to Steve Getzug, spokesman for the Pacific Maritime Association (PMA), which represents the ports – that ordered the ILWU to treat May 1 today as a normal work day.

“This work-stoppage, illegal under the ILWU-PMA contract, comes just two months prior to the expiration of the current labor agreement,” noted Getzug in a press statement last week. “Today’s actions raised the question of whether this was an attempt to leverage contract negotiations.” He also expressed concerns that the ILWU might use slowdowns as a negotiating tactic when the current six-year labor contract expires on July 1 this year.

This is a bog deal because the west coast ports represent a critical linchpin in the U.S. economy. Since 2002, overall container volume is up 45% and as a result, west coast port operations (including non-containerized cargo such as bulk and autos) now support eight million U.S. jobs and contribute 11% of the U.S. gross domestic product (GDP). The domestic business impact of West Coast port trade is $1.3 trillion – roughly equivalent to the GDP of Canada or Mexico.

Needless to say, the longshoremen have some serious clout out there on the west coast – and good pay to boot. The average full-time wages for fully registered port workers are $136,000 a year, and their benefits package, including pension and health care, costs more than $50,000 per worker. Why, you may you ask, do they get so much? Answer: necessity. These folks unload all the goods coming from Asia into the U.S. – goods that are partly the result of efforts to outsource manufacturing to cheaper locales overseas. Without the longshoremen, commerce grinds to a halt – as do many of the global supply chains many companies here in the U.S. rely upon.

The need for labor – and the need to treat it well – is occurring in trucking as well, to an extent. More than 7,000 members of the International Brotherhood of Teamsters union, for example, just ratified a new labor contract with DHL Express – a company owned by German giant Deutsch Post. That follows a pact approved at UPS Freight – the former Overnite Express – covering 10,700 Teamster members this past April. Both of these deals are the first new national pacts negotiated by the Teamsters in more than 30 years, the union noted.

We’ll be seeing more of this, I think, as labor gets scarce not only in trucking but in the U.S. as a whole as the “baby boom” generation retires and is replaced by the far smaller “Generation X” population.

“Look at the overall demographic shift here – you have 78 million baby boomers that start retiring in 2008 being replaced by Generation X, which is comprised of only 45 million workers,” says Richard White, VP-marketing and communications for the Automotive Aftermarket Industry Assn. “Basically, you have a lot of people retiring very soon and not enough people to fill the jobs they are leaving.”

Trucking is especially feeling this pinch. According to the American Trucking Association (ATA), the industry is short 20,000 drivers annually right now compared against the amount of tonnage it hauls – which will grow to 114,000 by 2014 if current conditions remain unsolved.

This is but one reason why the balance of power may shift to the labor side of the ledger fairly soon in this industry – and none too soon for many drivers in the long-haul segment of the market. Yet it also may not be a huge negative for trucking, if handled correctly: lord knows, UPS has managed to become a more than nimble competitor in the freight world with its unionized workforce. Look at the Teamsters deal with DHL Express, also: it’s five-year contract (which expires on March 31, 2013) offers annual wage and benefit increases, including $8.35 over the term of the contract for pick up-and-delivery and clerical workers; all health-and-welfare and pension funds are maintained for current employees; and a cost-of-living adjustment, or COLA, applies to all employees.

The Teamsters added that the deal should help save DHL money, as its lost billions since purchasing Airborne Express in 2003, including $900 million last year. “Creating a national contract was a complicated undertaking and our members have shown that it was worthwhile work,” said Brad Slawson, co-chair of the Teamsters national negotiating committee. “Not only were we able to negotiate significant economic gains for members, this agreement provides job security by allowing DHL to better compete in this tough industry.”

And the freight market is only going to get tougher in the months ahead.

“It’s all too common for middlemen in the trucking industry to push shippers to pay fuel surcharges, but only pass along a portion of those surcharges, or none at all, to the truckers who are actually transporting the goods and paying the fuel bill.” –Todd Spencer, Executive Vice President, Owner-Operator Independent Drivers Association.

It’s no secret that fuel surcharges are an absolutely critical piece of the trucker’s survival kit these days. Without some quick, turn-key financial mechanism for offsetting skyrocketing fuel prices, carriers and owner-operators would find themselves broke in a hurry.

Yet most shippers don’t like fuel surcharges, largely because they feel – and there is some truth to this – that they are getting “double billed” for freight service. That’s not to say shippers reject the whole concept of fuel surcharges, mind you – indeed, forward thinking companies like Wal Mart use them as incentives. For example, carriers that become certified under the Environmental Protection Agency’s SmartWay program actually get a bigger fuel surcharge from the colossal retailer (talk about an incentive for going green!)

(Fuel costs are putting a huge dent in the wallets of big carriers and independents alike.)

On the whole, however, there is a kernel of truth in the shipper complaint about fuel surcharges. Look at some recent earnings reports and you’ll see. For example, Werner Enterprises reported that revenues increased 2% to $512.8 million in first quarter of 2008 compared to the same period in 2007 … but if you take out money gained from fuel surcharges, its revenues actually DECLINED 6% to $417 million in first quarter this year compared to the same period last year. That’s almost a $100 million swing in revenues, based solely on fuel surcharges.

One complaint from small carriers and owner-operators – and this is very true – is that many brokers charge shippers a full fuel surcharge for moving freight … yet then only pass through a small part of that to the truckers themselves. That’s a nice way to make a tidy piece of change, but it sure leaves a hole in the trucker’s wallet.

The Owner-Operator Independent Drivers Association (OOIDA) has fought this kind of business tactic for years and has also lobbied hard (but unsuccessfully) for a mandatory fuel surcharge for trucking. That effort got torpedoed several years ago, but now OOIDA is taking a roundabout stab at it again by supporting legislation to pass through the entire surcharge to whomever pays the fuel bill. This makes some sense, but it’s bound to encounter some heavy resistance, I think.

Called the “Truthful Reliable Understanding of Consumer Costs” or TRUCC Act, introduced into Congress by Senators Olympia Snowe (R-Maine) and Sherrod Brown (D-Ohio), it requires that 100 % of fuel surcharges levied on shipping customers be passed through to whoever actually pays for the fuel to haul the shipper’s goods – in most cases, that’s truckers, says Todd Spencer, OOIDA’s executive VP.

(Freight’s gotta move — and that requires trucks to burn fuel, no matter how you look at it.)

“This bill will go a long way toward helping truckers survive the brutal cost of fuel,” he notes. “And it will provide needed assurance to shippers and ultimately consumers that higher shipping costs are actually because of higher fuel prices and not gouging by greedy middlemen.”

He stresses that fuel surcharges have long been the primary mechanism for trucking companies to respond to increased fuel costs. With diesel prices consistently rising, shippers are paying more now in fuel surcharges to get their freight moved than they ever have before. “It’s all too common for middlemen in the trucking industry to push shippers to pay fuel surcharges, but only pass along a portion of those surcharges, or none at all, to the truckers who are actually transporting the goods and paying the fuel bill,” Spencer says.

The crux of the problem is that independent, small business truckers seldom deal directly with shipping customers as most of the freight they haul is acquired through third-party logistics companies or through larger trucking companies they are leased to as independent contractors. Mid-size trucking firms often have contracts with shippers for “front hauls,” but depend entirely on brokers for “back hauls” and it’s these small and mid-sized trucking firms that are being hit hard by diesel prices that now average $4.21 a gallon.

Now, the last time such legislation came up – OOIDA looked for not only a mandatory pass through but also a mandatory fuel surcharge for the entire trucking industry starting back in 2001 – it got heavy resistance from shippers and carriers, too. The American Trucking association resisted it, because the trade group said at the time that it had not been demonstrated that failure to pass through fuel surcharges to owner-operators truly exists, thus deserving Congressional intervention.

“To the extent that motor carriers are able and willing to negotiate with shippers for fuel surcharges and collect such surcharges, those surcharges are generally passed on to those responsible for paying for fuel – if such party is not the carrier itself,” the ATA said back in 2005 right before the legislation got quashed. “Responsibility for payment of fuel costs is an item to be negotiated as part of the owner-operator lease between an owner-operator and a motor carrier. Due to the driver shortage, owner-operators are in a position where they have considerable bargaining leverage.”

The ATA also said it didn’t know of any statute or regulation that prohibits the ability of owner-operators to negotiate either a rate that covers the owner-operator’s fuel expense or a fuel surcharge. “They are in the same position and have the same ability to ask,” the group said.

Some 40 groups opposed the last fuel surcharge legislative effort, including the U.S. Chamber of Commerce, the National Industrial Transportation League (NITL), the Transportation Intermediaries Association (TIA), the National Association of Manufacturers (NAM), and I’d expect at least some of them to oppose this one.

One thing is for certain, though: fuel costs are turning this industry on its head. In 2003, the trucking industry paid $52 billion for fuel. This year, it’s going to be north of $135 billion, according to projections from the ATA. Just 10 years ago, diesel hovered around 90 CENTS per gallon. Today it’s over $4.21 and may go higher still. Fuel is now the number one cost – surpassing employee wages and benefits – at many carriers now and it looks like things may only get worse where fuel is concerned in the near future.

“Red-hot steel prices, combined with record diesel fuel costs, are making construction unaffordable.” –Ken Simonson, chief economist for the Associated General Contractors of America

As I’ve said in this space before, our surface road network is in dire need of a big makeover and expansion effort. Any trucker can tell you that. The problem now is that the cost to repair the roads – much less build new ones – is skyrocketing spaceward at a rapid clip. That means just when we desperately need to start fixing our highway infrastructure, our tax dollars won’t go nearly as far as they’ve done in past years.

“The PPI [producer price index] for inputs to construction industries – materials used in all types of construction plus items consumed by contractors, such as diesel fuel – soared 2.1% in March alone,” said Ken Simonson, chief economist for the Associated General Contractors of America (AGC). “That jump was propelled by a staggering 24% increase in diesel fuel costs and a 5.5% rise in prices for steel mill products.”

(Photo courtesy of P.B. Laminators Inc.)

“Unfortunately, there is worse to come,” he added. “Steel suppliers have been burning up the wires announcing huge price increases and canceling previous quotes. And the Energy Information Administration reported last night that the average price of highway diesel crossed the $4 per gallon mark in all regions for the first time, with a 10-cent increase in the national average just in the past week, to $4.05 per gallon. These figures won’t show up in the producer price index until next month, but contractors are paying them now.”

All this at a time when the Highway Trust Fund is going broke and transportation infrastructure funding is way, way off from where it needs to be.

More than half of U.S. urban interstates are now congested, according to research compiled by the HNTB Companies, and it’s projected that next year federal Highway Trust Fund revenues will no longer be sufficient to fully fund planned federal transportation spending.

Also, according to the National Surface Transportation Policy and Revenue Study Commission published earlier this year, all levels of government in the U.S. are spending less than 40% of the $225 billion to $340 billion needed for highway upkeep. As one HNTB employee commented in the survey, “Not all funding can be spent on new facilities while existing facilities are in poor shape and functionally obsolete.”

(Photo courtesy of the Las Veags Review Journal.)

Legislation was introduced recently in the U.S. Senate to create an agency and a National Infrastructure Bank to facilitate and fund large federal projects, with a preference for those that leverage private financing and public-private partnerships. Problem is, with costs spiraling upwards so fast, those federal dollars won’t go nearly as far as they need to.

“Public agencies as well as private owners need to adjust to these realities,” said AGC’s Simonson. “Too many of them are still assuming construction costs are rising no faster than the consumer price index (CPI), when in fact the PPI for construction inputs has gone up 6.5% in the past 12 months and 34% since steel prices first surged in December 2003. That is more than double the run-up in the CPI.”

He added that diesel prices are now more than 60 cents a gallon higher than the $3.44 average price for gasoline, putting a triple burden on contractors that use diesel to power off-road equipment and construction trucks, along with fuel surcharges on the thousands of deliveries and backhauls at a large job site.

“As the highway paving season gets under way, asphalt prices also are poised to take off,” Simonson concluded. “Asphalt at the refinery cost 13% more in March than a year ago. But many states and the federal government are running low on highway funds because motorists and truckers have been driving less.”

(This kinda says it all, doesn’t it? Photo courtesy of Eric Siegmund.)

Needless to say, the cost hurdles are getting higher and harder to overcome where transportation infrastructure construction is concerned, so we’re going to need some sharp thinking in the days and years ahead to overcome them.

“Without an adequate transportation system, the nation’s economic growth is at risk.” –Janet F. Kavinoky, executive director, Americans for Transportation Mobility Coalition

So we know the U.S. transportation network is a mess – overused, overstressed, and way out of date. And it’s going to take hundreds of billions of dollars we don’t have (at last check, the U.S. deficit is nearing $9.5 trillion. That’s with a ‘T’ people) to not only fix it, but also actually expand it to carry the expected volume of people and goods without massive gridlock.

(Construction progresses on the new Woodrow Wilson Bridge outside Washington D.C.)

At the risk of flogging a dead horse, I’ll repeat the above synopsis in more detail here – tallied up very well by the just-released report “The Transportation Challenge: Moving the U.S. Economy,” published by the Americans for Transportation Mobility Coalition (ATM), and the National Chamber Foundation of the U.S. Chamber of Commerce.

“If the U.S. declines to invest in transportation infrastructure and ignores the transportation needs of key industry sectors, our economy will become less productive and less competitive,” warns Janet Kavinoky, ATM’s executive director. “The U.S. transportation system is failing to keep pace with the demands of a 21st century economy and a piecemeal approach to improving the nation’s transportation infrastructure no longer works.”

She notes that countries like China are building highways and rail lines, developing ports, and constructing airports while the U.S. transportation system erodes meaning the margin of the U.S. competitive advantage is shrinking. Now, granted: it’s a whole lot easier to lay down a transportation network in a country ruled by a virtual dictatorship, and one that doesn’t adhere to even a tenth of the environmental rules and regulations in the U.S.

But without investment in transportation infrastructure here in the U.S. guided by new policies, the study says our transportation system will fall further behind the growing demand of five major economic sectors — agriculture and natural resources, manufacturing, retail, services, and transportation — that account for 84% of the U.S. economy.

(Photo courtesy of the Texas Transportation Institute.)

Given population growth, shifting demographics and steady economic growth, a high-performance transportation system is a necessity. The U.S. population is projected to grow from 300 million today to 380 million people in 2035, while the economy is likely to double over the next 30 years, as is demand for freight transportation, the study found. Expanding demand and shrinking capacity for both freight and passengers across every mode of transportation raises fears about increased congestion, less reliability, and higher costs, it says.

OK: so what do we do? The report urges policymakers to become much more strategic in planning and investing in the U.S. transportation system. If we do not, our transportation system will become a competitive disadvantage for U.S. industries, and it will be harder to sustain the growth of our regions and the national economy.

What’s that translate into? Here are some of the report’s recommendations:

– Greater emphasis on economic needs and issues, including attention to regional mobility, in formulating national transportation initiatives.

– Development of a national consensus among citizens, businesses, and political leaders on the importance of increased investment in transportation infrastructure.

– Immediate attention to the approaching deficit in the federal Highway Trust Fund.

–Greater emphasis on investments in a national freight transportation program that would implement highway, rail, and marine transportation improvements to benefit commerce.

–More public investment in infrastructure, using all potential revenue sources, including user fees and other revenues collected at different levels of government.

–Increased use of financing and credit options including tax credits and public-private partnerships, to leverage an estimated $200 billion in private capital available for transportation infrastructure investment.

Another thought that’s been floated as a way to gin up more transportation infrastructure funds is the concept of “congestion pricing.” New York City recently saw such a proposal go down to defeat, but one that I think is deserved. My own opinion here: if you want to raise taxes DEDICATED (I stress) for transportation infrastructure repair and expansion, fine. Throw tollbooths up all over the place to collect that money, forcing traffic to a crawl even on good days. Forget about it.

(Photo courtesy of the Texas Transportation Institute.)

That’s why I think the New York State Legislature rejected New York City’s proposal to charge drivers a fee to drive into parts of Manhattan during most daylight hours. The American Trucking Association (ATA) in particular didn’t like the plan because truck drivers would have paid $21 per weekday, while auto drivers paid just $8, to drive in Manhattan below 60th Street between 6 a.m. and 6 p.m. Truckers have to make deliveries: commuters can choose other forms of transportation.

“Like many areas of the United States, New York’s transportation networks are strained, and the city is searching for a solution to its problem,” said Bill Graves, ATA’s president and CEO, said after the proposal’s defeat. “But congestion pricing schemes are unfair, ineffective and ignore our real transportation needs. While there is a need to heavily invest in infrastructure, congestion pricing does little to relieve congestion and is merely a revenue raiser.”

One thing is for certain: we need to generate some serious coin to bring our transportation infrastructure up to snuff. That would mean more taxes and cuts to a lot of other federally funded initiatives. We may not like these ideas, but frankly, there’s not a lot else we can do. “We have only one option: Invest now, or pay later,” says ATM’s Kavinoky. That’s the truth, the whole truth, and nothing but the truth right there.

“The stock market has forecast nine of the last five recessions.” –Paul A. Samuelson

It’s a pretty funny quote, but also a true one in its way, saying basically that forecasts are nowhere near as accurate as we’d like them to be. That being said, I’m going to throw my hat in the ring and put a few forecasts out there – they might all turn out to be wrong (and I’m praying that more than a few of them are) but at least it’ll provide a measuring stick as to whether 2008 shapes up to be a better – or worse – year than 2007. Here we go:

HOS will stall: With the presidential elections barring down on us in November, don’t expect a final hours of service (HOS) rule to be delivered. Lawsuits from Public Citizen and the Teamsters will continue to bog HOS rulemaking down, leaving it to 111th Congress and a new presidential administration to sort it all out in 2009.

Mexican trucks go home: Congress already stripped funding for the Federal Motor Carrier Safety Administration (FMCSA) cross-border pilot program and though it may find a way to continue, by 2009 it will be shut down. The border to Mexican trucks will most likely be closed permanently in 2009 and vice versa for U.S. trucking, based on my reading of the tea leaves, which is bad thing in my estimation.

Four dollar diesel: I think diesel fuel prices will easily surpass the $4 mark in 2008, probably sooner rather than later, with gasoline following suit. The voracious appetite of the U.S., China, and India for oil is aggravating this and no matter what conservation measures we take as a country, similar efforts won’t take place in China or India, keeping us all in a pinch.

Freight stays sluggish: We won’t see freight volumes recover until the third quarter of 2008, around September, if you ask me. As a result, new truck sales will remain stalled and the shortage of drivers will ease, since there won’t be a lot of freight to move.

Barrack Obama becomes president: There it is, the big roll of the dice. He’ll trounce Hillary Clinton in the Democratic primaries, pick John Edwards as his running mate, and defeat Republican candidate Rudy Guiliani to win the presidency. He’ll also make Oprah a special advisor to the president. Hey, it could happen. Let’s see if I am right.

“Forewarned is to be forearmed.” –Benjamin Franklin

We’ve spent a good part of the year in the trucking industry arguing about the impact of trade with Mexico, specifically the fallout from letting Mexican truckers cross into the U.S. and operate on U.S. roads. But there’s a much larger probelm afoot than what’s going on with Mexico, and while this does NOT mean we should cease debate on Mexican-related issues, we need to start looking at the bigger free trade picture — and what that means not only for the U.S. but the world as a whole.

A recent newspaper column by Irwin Stelzer, a senior fellow and director of The Hudson Institute’s Center for Economic Policy, really crystalized the issue for me. To his mind, trading and immigration issues with Mexico, the housing market meltdown in the U.S., tighter credit, etc., don’t come close to the equaling a much more serious long-term issue — the shift of wealth occuring right now via trade to the nations in Asia and the Middle East, specifically those that are ruled by what amounts to dictatorial oligarchies.

Saudia Arabia, Iran, and Russia in particular are stockpiling wealth by the billions as oil prices inch ever closer to $100 a barrel, while China continues to benefit from its low cost manufacturing enterprises — kept low cost by the still-in-power Communist party. Much of this is helped along with funds from our trade imbalance with these nations, as the U.S. trade deficit topped $763.6 billion last year. We haven’t had a trade surplus since 1991 by the way — and it doesn’t look like we’ll see one again anytime soon.

Now, free trade ostensibly helps countries open their borders to the rest of the world and — hopefully — acts as the springboard to freer, more democratic societies. To this day, however, China, Saudia Arabia, and Iran have all managed not only to stifle the societal benefits free trade is supposed to bring, they are managing to reap ever larger amounts of cash from the world markets at the same time — about $10 TRILLION worth, according to the International Monetary Fund. In the words of Ken Rogoff, former chief economits for the IMF, with that kind of money, those nations aren’t part of the world’s financial system … they ARE the world’s financial system.

China, let it be known, is not only the second largest trading partner now with us — supplanting Mexico — they are the NUMBER ONE trading parter with Iran: the same Iran that is trying to get a nuclear energy program off the ground. Iran is a country controlled by a cabal of mullahs — religious leaders that control not only the political and judicial sinews of that country, but the military as well. Mahmoud Ahmadinejad, Iran’s president, is only a figurehead — the real power in his country never goes up for a popular vote, even a rigged one.

Saudi Arabia, ostensibly a U.S. ally, is another danger — it’s ruling royal family brokered a deal several decades ago with the radical Wahhabi Islamic sect, handing over control of the nation’s religious schools to quell domestic opposition — in effect buying them off. Oh, but at what a price. It’s no wonder that the bulk of the 9-11 terrorists were Saudis when you think about it: they’d been indoctrinated from a young age in jihadist philosophy, if such rank beliefs can even be remotely dignified by the word ‘philosophy.’

Russia, another supposed ally, is rapidly slipping back into the ways of its Soviet past — in fact, Russia’s president Vladimir Putin is a former KGB officer — the KGB being the former Soviet Union’s spy agency and secret police all rolled up in one. He’s been trying to forge ever-closer ties with Iran, too — and both his country and that of the Shiite mullahs controlling Iran are banking billions from the run-up in oil prices.

And then back to China: A nation with about two billion people, with probably the largest military force on Earth. They are beholden to no clean air treaties, no worker safety regulations, nothing. In fact, when the storm broke over defective vehicle tires, tainted seafood, and lead-coated toys, the Chinese executed — you heard me right, EXECUTED — the head of their equivalent to the food and drug administration as a way to say, ‘See? We are battling these problems.’ Talk about the cure being almost as scary as the disease!

So, what do we do? Scrap free trade? Embark on a protectionist economic strategy? I don’t think so, because that would trigger more trouble — and besides, we NEED export markets to help our own economy thrive. But I do think that it should be proof positive that we should begin rethinking just who we do business with and how we do it.

“We continue to work through the sustained weakness in freight demand.” –Robert Weaver, president, P.A.M. Transportation

It’s been a tough year in the freight markets, as you no doubt know so very well by this point. Problem is, it’s looking like the grim times are going to continue for a while — probably well into next year — and that’s going to sustain a lot of negative pressure on the bottom line of many trucking firms.

According to consulting firm FTR Associates, truck ton-miles are forecast to decline 2.2% by the end of this year and rise only a miniscule 0.7% in 2008. “Nearly all economic indicators suggest continued sluggishness for the trucking industry in the near term,” Bob Costello, chief economist for the American Trucking Assn. (ATA), said recently. His group reports that truckload freight volume is down by 2.2% so far this year. “We expect tonnage to remain choppy in the foreseeable future, a trend that started a couple of months ago,” he said.

On top of the this, the very underpinnings of freight flows themselves are changing — and quite rapidly. Typically, fall represented a “peak season” for truck tonnage, as manufacturers and retailers geared up for the holidays, especially Christmas. Over the last two years, however, that’s changed due to the rapid rise in the use of gift cards among consumers. So many people are buying gift cards now that the “peak season” isn’t really a peak anymore.

Comments from Phillip Swagel, assistant treasury secretary for economic policy, about other factors affecting the economy just add to the concerns truckers will face on the road ahead. “Looking forward … the ongoing drag from construction, the problems in credit markets, and higher oil prices have led private forecasters to reduce their projections for GDP growth in the fourth quarter of 2007 and into 2008,” he said in a speech to the Securities Industry and Financial Markets Association this week. “The downturn in the housing sector has not ended as quickly as appeared to be possible at the end of 2006.”

Then there are the cost pressures — especially when it comes to fuel. This week alone, the price for a barrel of crude oil on the world market soared above $93 — and many experts believe prices will hit $100 per barrel before the year is out. You can imagine what that will do to diesel prices. And while forecasters are predicting a warmer-than-normal winter for much of the U.S., energy prices are still projected to rise.

And I don’t need to remind you that home heating oil — which provides much of the winter warmth for homes in the Northeastern U.S. — is made from the same base petroleum stock as diesel fuel. One cold snap, and diesel will take a back seat to home heating oil production. That will push prices up in a hurry.

One thing is for sure from all of this: It’s going to be a rough patch for truckers large and small for a while here. Only thing to do is tighten the belts, hunker down, and keep rolling forward.

“We know how to build and repair roads to last longer, but it requires a greater investment up front. Given the fact that urban travel continues to increase, we must act now to build better roads to accommodate such an increase in travel.” –William Wilkins, executive director, The Road Information Program (TRIP).

The worst thing about the horror show going on in Minnesota is that it never had to happen. Never.

Read William Wilkins’ words one more time up there. He wrote those in 2004 — three years ago now — as part of TRIP’s ongoing, yet ultimately never quite successful, effort to wake up government at all levels (as well as the general public) to the danger posed by our deteriorating highway infrastructure. I’ve written countless stories over the past decade myself tracking the long retreat from adequate highway funding, as both the states and the federal government redirected tax monies elsewhere.

For example, take a step back in time with me again to 2004 and look at figures compiled by the Build Indiana Council (BIC), a coalition of over 500 companies representing the transportation construction industry. Indiana’s state highway construction program went from over $770 million dollars in 2004 down to nearly $300 million in 2006, with projections to remain around $500 million for subsequent years. Yet the Indiana Department of Transportation’s (INDOT) own long range plan warned that it needed investment levels of $1 billion by 2007 and $1.4 billion by 2011 to meet their planned construction programs.

In addition, BIC said local roads and bridges across the state face dire problems without the funding to address them. There are nearly 3,700 local bridges that are structurally deficient or obsolete, and close to 90% of county pavements are considered rough by industry standards. Local governments need an additional $200 million annually over the next decade simply to address these problems, the group noted.

According to TRIP’s research, one out of four of the nation’s major metropolitan roads – interstates, freeways and other critical local routes – have pavements in poor condition, resulting in rough rides and costing the average urban motorist $400 annually in additional vehicle operating costs.

At the same time, overall travel on urban roads increased by 35% from 1990 to 2002, with large commercial truck traffic growing at 51% over the same time period. TRIP warned that overall vehicle travel is expected to increase by approximately 42% and heavy truck traffic by 49% by the year 2020, requiring more road construction funds to handle that extra volume.

Before the I-35 bridge collapse in Minnesota, the arguments about highway funding were going up another notch as many states — Pennsylvania chief among them — sought to lease their toll roads to the private sector as a way to generate the extra funds necessary for road and bridge repair. That controversial plan, of course, raised a lot of ire both among truckers and regular motorists, who felt their fuel tax money should already be taking care of the problem. Perhaps the biggest beef trucking has about fuel taxes is that half the states put that revenues in their general funds — meaning it’s NOT reserved for highway repairs and construction.

Now, of course, this is all going to change — bridge inspections are going on all over the country at a furious rate, and politicians are falling all over themselves to get on TV and declare that more road funding is imminent. All too late, of course, for however many people ended up dying when the I-35 bridge collapsed.

(The toll is at five now, but is still expected to rise as divers examine the cars the fell to the bottom of the Mississippi River. My heart and prayers go out to all the families that lost loved ones in this calamity.)

We’ve got to get two things through our collective thick skulls: that our highways and bridges are in poor shape and that it will take a lot of time and money to correct the problem. That also means we as a nation must stop taking our highway system for granted. For example, in my neck of the woods, lawsuits held up plans to replace the crumbling Woodrow Wilson I-95 highway bridge spanning the Potomac river for YEARS as people argued over the size of the bridge, how high it should be, and the ‘noise impact’ construction would have on the local community. All while a bridge built in the late 1960s literally crumbled under traffic volumes it was never designed to handle.

We should have taken the repair needs of our bridges and highways more seriously, but we didn’t — it took a catastrophe that robbed people of their lives to wake us up. That’s the real tragedy here.

I don’t know about you, but when I start looking at all the economic data and analysis produced in this country on a daily basis, my eyes start glazing over and my head begins to hurt. That’s a snarky way of saying that it’s hard to figure out in ENGLISH what shifts in housing starts or the consumer price index mean for the trucking industry.

That being said, here are the names of three economists you need to keep handy: Martin Regalia, Bob Costello, and Jim Meil. Regalia is the chief economist for the U.S. Chamber of Commerce, Costello serves in that same function for the American Trucking Association, while Meil is the chief economist for Eaton Corp.

These guys are superb at what they do, but more importantly, they make it all understandable in layman’s terms — even the very complicated stuff. That’s why you see their names pop up on our web site and in our pages here at FleetOwner pretty often.

And all three have a talent for working humor into their presentations, so hearing them ‘live’ is actually better than reading the reports they produce.

Trucking executives and fleet managers will likely have more access to Meil and Costello simply because the bulk of Eaton’s business is truck-related and Costello, of course, represents trucking’s biggest lobbying organization. Regalia deals with U.S. business on a much broader scale, so he only tuns up occasionally at trucking functions.

While Costello is ostensibly the economist for truckers, bear in mind he’s limited in many ways by anti-trust laws from giving a complete economic picture for trucking, especially when it comes to the impact economic tides and turns have on rates.

In any event, if you see any of their names pop up on the agenda of a convention or conference you plan to attend in the future, make sure you go hear what they say — I promise you, you’ll get very clear, concise, and useful picture of how overall economic trends impact your business.