Trucks at Work Blog

“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

“Customers demand a high quality experience across all touch points, starting with their first service experience and continuing over the course of the customer’s lifetime. [Thus] the only way to earn loyalty is through deeper customer engagement.” –Rebecca Prudhomme, vice president of product and solutions marketing, Amdocs

The famous (and often infamous) architect Frank Lloyd Wright (at right) once uttered this simple three-word phrase when he received word that one of his students received a contract to design a building: “Hosanna! A client!”

An excellent documentary of Wright by Ken Burns and Lynn Novick explained why Wright uttered this expression: at its most basic level, architecture is nothing without clients, for nothing an architect constructs within his or her mind or designs on paper will ever be built without a client putting up the money and saying, “Yeah, build that for me.”

In large measure, the same holds true anywhere in the business world. Apple is as successful as it is because people buy its products and rave about the service they receive. Honda and Toyota upended and reordered the U.S. automotive market with them on top because they built better, more fuel efficient products and provided better service for them (and it’s taken almost three decades for U.S. automakers to catch back up).

Yet, apparently, the whole concept of “customer service” which thence leads to “customer loyalty” seems to be lacking in many corners of the global business community. more

“Federal, state and local governments are all taking extra measures to ensure that they are not leaving any corporate tax revenue on the table as many are facing budget shortfalls.” –Frank Lavadera, principal-in-charge of KPMG LLP’s Tax Dispute Resolution Services Network.

I’ll spare you a long soliloquy concerning my own esoteric views on taxation policy (I did WAY more than enough of that where fuel taxes are concerned) to say simply this: don’t be surprised if you get the mother of all audits this year, by federal and state revenue agencies alike.

Because money is extremely tight right now – a problem compounded by the nearly $15 trillion (and growing) national debt, alongside the fiscal devastation wreaked by the Great Recession – the federal government and states are turning up the heat on corporate tax audit activities in their continued efforts to capture more tax revenue, according to a recent survey conducted by KPMG LLP.

This should surprise no one, especially as the still-wretched health of the U.S. residential housing market and high unemployment levels have torpedoed two of the traditional sources of tax revenues at both the national and state level.

Thus the business community (and trucking is certainly a card-carrying member of that group) is finding itself much more frequently in the crosshairs of a variety of taxation authorities these days. more

“The energy landscape ahead is very complex [and] complexity can breed uncertainty, making it difficult for companies and society to identify how best to respond. We can be certain of one thing: there is no ‘silver bullet.’ And solving the challenge will require action by all the players: government, energy providers, industry, and individuals in society at large.” –Gerald Schotman, chief technology officer and executive vice president-innovation, research & development, Royal Dutch Shell

There’s this excellent little vignette at the end of a recent study produced by the Harvard Business Review Analytic Services in association with Royal Dutch Shell that really sums up the unspoken but widely held view (in my opinion) concerning global energy needs in the coming years.

The study – entitled Global Business and the Dawn of a New Energy Reality – polled 1,748 executives across the business world to dissect their views on energy consumption, conservation efforts, and whether they’d actively pursue the use of alternative energy sources such as solar, wind, etc.

What got my attention the most, though came at the very end of the study where an executive at a billion-dollar entertainment corporation, operating from multiple sites, detailed the firm’s “business energy mindset” if you will. more

“Fear less, hope more; eat less, chew more; whine less breathe more; talk less, say more; hate less, love more; and all good things are yours.” –Swedish Proverb

Perhaps one of the hardest things for any small business owner to do – and this is especially true in the trucking community – is “letting go” of responsibility.

Now, this is NOT by any stretch of the imagination an invitation for owners to hand over the keys to their fleet and then go on permanent vacation in the South Pacific.

But “letting go” does mean owners should delegate authority over time to proven staffers, for as a trucking company grows, one person – no matter how talented – simply cannot do it all.

And if one person TRIES to do it all, especially as a business grows, the results can often be less than ideal. more

“CFO [chief financial officer] sentiment is driven by demand. [So] the deepening impact of the European debt crises combined with stagnant employment, continued housing issues and volatile financial markets at home do not bode well for consumer demand anywhere.{thus it’s] little wonder some CFOs are stepping back – even retreating – from their previous growth projections.” –Sanford Cockrell III, national managing partner-CFO program, Deloitte LLP

It’s been quite a mixed bag this past month or so, with a variety of surveys and polls indicating both positive and negative economic trends taking shape in the U.S. and around the world – though, for the most part, most of those findings are negative.

That’s creating an unfortunate “self-fulfilling” prophecy of sorts – and that’s an outcome that doesn’t bode well for the freight sector.

Take a survey of 91 chief financial officers (CFOs) – 75% of whom are from publicly traded companies, with another 75% from firms generating more than $1 billion in revenue – conducted back in late August by global consulting firm Deloitte LLP.

Sanford Cockrell III, Deloitte’s national managing partner for its CFO program, said the survey found that the persistent drumbeat of negative economic news is taking a toll on CFO optimism. In fact, for the first time in the history of this poll, CFOs who are more pessimistic about their own company’s prospects outnumber optimists. more

“While we are always cautious about expressing too extreme a degree of pessimism, we don’t see a lot on the fundamental horizon to encourage much optimism. The key fundamental drivers — entrenched high unemployment, consumer/business de-leveraging, fiscal austerity, and weak housing markets — are all long-term sources of weakness and we don’t expect to see any material improvements in those areas any time soon.” –Brian Dolan, chief currency strategist, FOREX.com

If there’s any sort of silver lining to the stalling global economy and all the perils that condition currently presents for the future, it’s that oil and fuel prices are on the downswing – a happy occurrence, considering the high price projections experts bandied about just a few short months ago.

The issue, however, is whether such fuel price deflation is a longer term trend or a mere blip in the great scheme of things – a prelude before truckers face another long steady rise of prices at the pump.

For now, at least, both diesel and gasoline prices continue to fall. According to the Energy Information Administration (EIA), the average price for diesel fuel in the U.S. has declined from $3.83 per gallon during the week of Sept. 19 to $3.78 per gallon by Sept. 26 and then to $3.74 per gallon as of last week – a drop of four cents per gallon in the last week alone, and nearly 10 cent dive over the last three weeks. However, all that being said, diesel is still nearly 75 cents higher per gallon compared to a year ago at this time, the EIA noted. more

“In what continues to be an uncertain economic environment, organizations cannot afford health care costs growing at 7% each year. While health care reform continues to represent potential systemic change in a few years, employers will continue to shift cost to employees in order to keep company costs to a manageable level.” –John Zern, executive vice president and practice director for health & benefits-the Americas, for Aon Hewitt

It’s a line item that bedevils the budges of businesses large and small across the U.S. these days: the rising cost of health care. This hits trucking particularly hard in a number of ways, for rising health care costs are occurring simultaneously with rising equipment costs, recruiting and retention costs, regulatory compliance costs, just to name a few.

Health care is also more critical in some ways to trucking than other industries because, of course, the health and wellness of truck drivers directly affects their ability to safely pilot big rigs and other commercial vehicles on America’s highways and byways. Thus, making sure drivers are healthy directly impacts the safety of thousands of other motorists driving alongside commercial vehicles day in and day out.

[As an aside, here are few thoughts from Bob Perry, president of Rolling Strong, on the subject of truck driver health and wellness.]

Yet the cost of health care keeps on rising – in fact, out pacing inflation by a wide mark. As a result, many companies across the business spectrum are trying to cope by shifting more of the costs to their employees – at a time, however, when workers can ill afford more bills in the mailbox. For many, the solution is to cut back on health care or do without it completely – and that type of strategy (or lack of one) creates its own set of risks, especially where truck drivers are concerned. 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

“Understand that most problems are a good sign. Problems indicate that progress is being made, wheels are turning, that you are moving toward your goals. Beware when you have no problems. Then you’ve really got a problem. Problems are like landmarks of progress.” –Scott Alexander

We’re conditioned in this country to view all mistakes as terrible, awful things – and of course, in more than a few cases, that’s the right view. We certainly don’t want to hear the word “Ooops” uttered by a commercial jetliner pilot on final approach during a pelting, wind-driven rainstorm, for example; nor is it a word we EVER want to encounter during any form of surgery.

In trucking’s corner of the world, of course, mistakes can often lead to serious consequences, not the least of which are crashes – and any sort of accident involving 80,000 pounds traveling at highway speeds is bound to leave damage in one form or another in its wake.

Yet mistakes are perhaps humanity’s best teaching tool; I myself know this to be true from the other part of my life as a youth soccer coach.

You can talk to a kid until you are blue in the face about the importance of first touch on the ball or properly weighted passes. Yet when a kid makes a mistake in either of those areas in a game, leading to a missed scoring opportunity or – worse yet, for them – a goal for the opposing team, you can BET they will never forget why those skills are critical again.

That’s of course why the concept of soccer PRACTICE exists – to allow players the opportunity to screw up royally and then recognize the consequences of said screw up, without the fear of winning or losing clouding the picture. Indeed, most of the soccer leagues my kids participate in don’t start maintaining divisional rankings until the kids are 11 or 12 years old – largely to give them time to learn, through their mistakes, how to properly play the game. more