Trucks at Work Blog

“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.

“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.

“Truck transportation drives our economy; goods movement fills our stores and supplies our factories. But those benefits come with costs that are causing rapid change.” –Bill Van Amburg, senior vice president, CALSTART

Change is definitely in the air these days in trucking – more so than usual. In the near-term, we’ll be dealing with a revision of hours of service (HOS) regulations by the Federal Motor Carrier Safety Administration (FMCSA) – an overhaul we’ll get into with tomorrow’s post.

Right now, though, let’s look at longer term issue that’s re-shaping this industry – how the truck itself, the very platform for the bulk of freight movements in the U.S. and indeed the world, is undergoing rapid change. Of course, one of the most visible (and expensive) of those changes deals with technology designed to reduce – if not eliminate – truck exhaust pollution.

But there are other factors, too, such as globalization of the truck manufacturing base, the rise of hybrid powertrains, and the integration of telematics into almost every system on a commercial vehicle.

“The trucking industry faces the dawn of a new era [and] the changes surrounding it are daunting, the need for transformation immediate and the challenges multidimensional,” explained Sanjay Rishi, vice president and global automotive/truck industry leader for IBM’s Global Business Services division.

In a new report, entitled The Global Truck 2020 Study: Transcending Turbulence, Rishi and co-authors Kalman Gyimesi, the industrial practice leader within IBM’s Institute for Business Value, and Connie Burek, and IBM business solutions executive specializing in heavy equipment and heavy trucks, say that truck brands known the world over (think Volvo, Peterbilt, DAF, as examples) face the risk of a slow death due to globalization.

[You can view a short video presentation about this report below.]

They also argue that sustainability concerns are bringing “hybridization” to the front and center of truck engineering work, while increased urban development is driving ever-increasing regulation of trucking by government.

“The industry is at a crossroads, unsure of its next steps toward globalization,” Rishi (seen below at left) explains. “Tomorrow’s winners must take decisive actions today in the areas of globalization, brand development, technology integration, partnerships and workforce transformation.”

The authors surveyed both fleet and truck OEM executives across the world and compiled some interesting data on what those worthies see as the major trends affecting the trucking industry.

Globalization is a big one, with 54% of the executives surveyed saying that globalization will be one of the most important external forces impacting the truck industry in 2020, up from 48% today. Truck manufacturers in particular are just beginning to establish their global footprint, according to the survey responses, while light vehicle manufacturers have already fought the hard battles of platform creation, process standardization and the development of global supply chains.

Another big issue that should come to no one’s surprise is this whole concept of “sustainability,” with 48% of respondents saying that sustainability will be one of the most important external forces in 2020, up from 32% today. Environmental and fuel efficiency standards along with new safety capabilities mandated by government regulations will force the trucking industry to change aggressively over the next decade.

Finally, there’s technology; something 71% of respondents said would be one of the most important external forces impacting the industry in 2020, up from 61% today. Technology will not be limited to the trucks themselves, either, but will be embedded in roads and traffic signals to increase the interaction and predictive analytical safety capabilities of these transport carriers.

[To download IBM’s entire Transcending Turbulence report – with all the nice charts and graphs – click here.]

One technology IBM’s experts believe will really re-shape trucking is telematics, which will in their estimation impact everything about commercial vehicles. “Truck manufacturers that effectively employ telematics to build solutions for their customers stand to successfully differentiate and redefine their brands,” Rishi said. “Telematics will reduce service time by allowing remote and faster diagnostics and also will enable prognostic capabilities and proactive servicing.”

IBM’s researchers note that today’s vehicle diagnostic techniques typically require the technician to physically connect to the vehicle. However, it won’t be long before telematics capabilities enable remote diagnostics of a vehicle’s issues – even providing remote “fixes” when possible as well.

They add that truck OEMs are starting to use telematics to provide a real-time remote read of a vehicle’s parameters, allowing for proactive service or other action based on the reading – allowing fleets to pull trucks off the road and into the shop before it ends up on the side of the road with a problem. I’ve written on this topic before and it’s a capability OEMs are trying to broaden more and more with their products.

IBM’s researchers also believe telematics should enable stronger solutions for vehicle safety that have traditionally been addressed through manual methods and training. For example, automated speed controls linked to the navigation system could slow a truck down when its driver approaches blind curves, or automated braking could be applied if a truck approached an exit with too much speed.

The big benefit in accident situations is the use of telematics not only to help avoid them but to record data that will be essential in protecting companies. This is one of the key benefits of “event data recorders” or “EDRs” – a type of “black box” used for accident reconstruction. Right now, such devices are in limited use and fleets and drivers alike deal with concerns over data privacy and how such information can be used in court, but it’s a technology I think will get more widely deployed simply to help fleets and drivers deal with litigation resulting from accidents.

But make no mistake – none of this will be easy. IBM’s Rishi in particular noted that the truck industry, burdened with heavy regulation and excessively cyclical market demands, has found it difficult to embrace major transformation. However, that is exactly what must happen to achieve a healthy, prosperous truck landscape by 2020, he contends.

“The truck industry is in for an interesting ride over the next ten years,” Rishi says. “Macroeconomic factors, such as globalization and economic stability, are forcing nations, industries and enterprises to reexamine policies and business practices to survive. The global labor force is changing profoundly in age, location and the way people work.”

He notes that truck companies face changes in the very environments in which their products function. Urban centers are developing rapidly, and space – or lack thereof – is a considerable concern. At the same time, government entities are exerting more and more controls over the movement of people and goods, Rishi explains. “Trucking companies must tread carefully in this ever-evolving ecosystem, all the while keeping in mind the growing focus on corporate social responsibility,” he notes.

In addition, technology continues to progress at breakneck speeds, with the truck of 2020 functioning in ways vastly different than today’s vehicle – with telematics and hybridization at the heart of these new functions. “Furthermore, technology progress is not limited to the vehicles themselves but extends to capabilities that will increasingly be embedded in roads, traffic signals, etc., allowing them to interact with trucks,” Rishi says.

As a result, the challenges facing the trucking industry – manufacturers and fleets alike – are complex, and overcoming them will take a significant transformation; one that will require strong leadership and decisive actions, he stresses.

“There is little time to waste,” Rishi warns. “The impact of the recent economic crisis will subside, but it could have longer-term implications for those who fail to invest in the future.”

”The end goals of security and efficiency are not mutually exclusive.” –Stephen Russell, chairman, CEO and founder of truckload carrier Celadon Group, from testimony this week before the House of Representatives

We all know cargo shipments of all stripes need tighter security, against theft, terrorist infiltration, and to illicitly move drugs and other narcotics around the globe. The speed bump in all this, however, is the impact on transport efficiency – something that directly impacts logistics costs.

For global and domestic supply chains built up “just-in-time” deliveries of any number of goods, delays for anything are an anathema to be avoided rigorously. Yet that of course is precisely what tighter security translates into: delays in transport until documentation is checked, cargoes inspected, etc.

But is this necessarily so? Can tighter security and transport efficiency successfully co-exist? Stephen Russell, chairman, CEO and founder of truckload carrier Celadon Group believes they certainly can – if approached in the proper manner.

In testimony this week before the subcommittee on border, maritime and global counterterrorism –

part of the homeland security committee within the U.S. House of Representatives – thinks current cargo security programs such as the Customs–Trade Partnership Against Terrorism (C-TPAT) program, the Free and Secure Trade (FAST) program for cross-border shipments, plus the wider use of the Automated Commercial Environment’s (ACE) electronic manifest system, all work very well in terms of “segregating” freight for federal agencies.

“Segregation” in this context is a good thing, because it allows federal agencies to get freight manifests ahead of time from carriers they know are following tight security rules.

Yet it also comes as no surprise, either, that there are glitches as well – the biggest being the way the physical infrastructure at border crossings, in particular, are just not designed to handle such “segregation.” Often times, commercial trucks are jammed cheek-by-jowl with everyday motorists, creeping slowly up to the border crossing point despite having CTPAT status, electronic manifests already processed, etc.

“Manufacturers, retailers, warehouses and, most importantly, consumers, continue to count on trucks to get the goods and products they need and use each and every day, transporting almost 70% of the value of freight between the U.S. and Canada, and about 80% of the value of U.S.-Mexico freight,” Russell said.

“The biggest challenge trucking companies continue to face with the C-TPAT/FAST program is the lack of ‘true’ FAST lanes – in essence, lanes that extend far back from the port of entry, instead of FAST lanes that begin only a few yards prior to arrival at the primary inspection booth,” he explained. “This results in low-risk C-TPAT carriers being stuck in the same traffic as non-C-TPAT certified carriers. Thus, C-TPAT certified motor carriers with drivers who have undergone FAST background checks are not getting the benefits that were promised for investing to comply with the program.”

“The big benefit touted by these programs was that, once approved, carriers could more quickly pass through border checkpoints,” Martin Rojas, director of international affairs for the American Trucking Associations (ATA) told me. “At most border crossing points, you don’t get that ‘segregation’ until literally a few yards before the inspection station. We think that process should begin farther back – maybe 500 yards; maybe a mile. The thing is to keep low-risk, approved cargoes moving – and not have them mixed in with everything else.”

“Though it is impossible to achieve absolute security without bringing trade to a standstill, we can greatly reduce the potential of being targeted by our enemies by managing risk, increasing security awareness among company personnel, and implementing simple cost-effective security measures,” added Celadon’s Russell.

“Establishing the necessary infrastructure, both physical – i.e. ‘bricks and mortar’ – and implementing technologies helps improve the clearance and throughput of trade with the highest standards of security,” he noted. “For example, through the use of non-intrusive inspection (NII) systems, x-rays and gamma rays are used to capture images of any anomalies within our commercial vehicles. Such technological advances and tools have improved CBP [Customs & Border Patrol] officers’ enforcement capabilities while improving the efficiency and throughput of commercial vehicles across our borders.”

Russell also said that new addendums to the ACE manifest program, such as CBP’s International Trade Data System (ITDS) program, will help streamline to documentation process for cross-border cargo further while improving security.

The ITDS concept is simple, he pointed out: Traders and carriers submit commercially based, standard electronic data records through a single federal gateway for the import or export of goods. As a single information gateway, ITDS distributes these records to the interested federal trade agencies, such as CBP, the Food and Drug Administration (FDA), DOT and others, for their selectivity and risk assessment.

In standardizing the process, ITDS reduces the confusion and complexity of international trade, and speeds the processing of goods, equipment and crews across borders, while giving the government more current and accurate information for revenue, public health, statistical analyses, safety and security activities, as well as significantly reducing data processing development and maintenance costs.

“The development and implementation of the ACE/ITDS is an essential component in accelerating the flow of commerce while also improving the ability of CBP to analyze and target data entries,” Russell said.

These are all good points, highlighting initiatives that could turn the age-old “cargo security versus efficiency” conflict safely and securely on its head.

“Our customer is every municipality that has a wastewater treatment plant. It will provide a value-added product for municipal waste water plants, thereby making treatment plants much less expensive to run and helping local governments throughout the world with their constrained budgets.” –Jeff Hausthor, Qteros co-founder and senior project manager, on his company’s new process for turning municipal and agricultural liquid waste into ethanol fuel for cars

Could be a neat idea, or could eventually turn out to be another technological dead end in the search for renewable sources of vehicle fuel. But a new process developed jointly by Qteros of Marlborough, MA (and what marketing genius came up with THAT unpronounceable name???) and Applied CleanTech (ACT) based in Israel say they’ve developed a solution for turning cellulose from municipal and agricultural liquid waste into ethanol fuel for vehicles.

The companies are using Qteros’ Q Microbe and ACT’s Recyllose production process to make ethanol from sewage sludge – creating a potential one-two combination punch that solves fuel source and sewage disposal problems in one shot.

ACT says it spent six years developing its integrated sewage recycling solution, with the high cellulose and low moisture content of the Recyllose produced by its process helping to generate more efficient ethanol production.

Here’s the real trick to all of this: By using ACT’s feedstock production process in combination with Qteros’ Q Microbe, they say, allows an ethanol production plant to produce 120–135 gallons of ethanol per ton of Recyllose.

That means positive economics for the production of cellulosic ethanol could be viable at a smaller scale – meaning a wastewater plant that handles 150 million gallons a day (roughly serving a population of about 2 million people) could be sufficient to supply a smaller-scale ethanol plant with cellulose.

Jeff Hausthor, Qteros’ co-founder and senior project manager, says one of the reasons this can be done is due to the low amount of “lignin” in Recyllose.

Lignin is a major component of plant cell walls that is difficult to degrade and thus can inhibit the efficient conversion to ethanol.

However, the Recyllose stock material improves cellulosic plant operational efficiency 20% over higher lignin content feedstocks – thus leading to more efficient and profitable ethanol production at smaller volumes, Hausthor notes.

“It also helps answer the question of what municipalities can do with their sewage sludge,” adds Israel Biran, ACT’s CEO. “That’s a major challenge now facing every wastewater treatment plant operator.”

Now, is this a silver bullet for both our petroleum dependency and wastewater treatment problems? No way, no how – at least not yet. But it sure has some interesting possibilities – and it’s one of the closest things yet I’ve seen to a way to make fuel from our daily waste stream. That’s why I for one am hoping this – or some version of this technology – pans out in the very near future.

“While there is more accounts receivable stress than a year ago, our data suggests that confidence in sales may be starting to return. The increasing rate of payment yields more fluid cash flow for all stakeholders in the supply chain – cash that is so desperately needed to fuel organic business growth and a sustainable recovery.” –Jim Swift, president and CEO of Cortera

Here’s some really welcome data in time for the long holiday weekend: cash flow within the supply chain is increasing and is heading back towards pre-recession levels, according to data gathered by information firm Cortera.

While it’s certainly not time to pop any champagne bottle corks, this is a very positive sign especially for truckers, as faster payment of freight bills translates into monies to pay off equipment, fund salaries, and cover a myriad of other expenses.

“Just as the flow of goods is critical to the health of the U.S. economy, so too is the flow of cash through the supply chain critical to keep those goods flowing,” Jim Swift, Cortera’s president and CEO, told me.

“While the flow of goods is driven by sales, the flow of money is largely influenced by a company’s confidence that those sales will continue,” he said. “Strong confidence in sales normally spurs companies to invest in growth initiatives. On the other hand, a lack of confidence in sales causes companies to conserve cash and slow payments to suppliers.”

Cortera’s Supply Chain Index or “SCI” tracks late payments against agreed upon terms, measuring late accounts receivable (Late A/R), excessively late accounts receivable (Late A/R >30 days), and overall average days beyond terms (Average DBT). All three measures showed a spike in starting in October 2008 that directly coinciding with the financial markets meltdown and peaked in December of 2008 – going from a little over 7.2 days average DBT to nearly 10.8 days average DBT.

But the firm’s September SCI now indicates a continuing reduction of A/R stress and improved cash flow throughout the overall supply chain, as well as the 4th consecutive month of decreasing receipt of invoice payments beyond terms (measured in average days beyond terms), with average DBT dropping to just north of 8.4 days. Not great, of course (hence the unwillingness on my part to break out the champagne) but far better than the sluggish rate of cash flow in the not-so-distant past.

Cortera’s SCI measures payment activities of approximately 350,000 businesses that include manufacturers, distributors & wholesalers, retailers, services, and transportation companies. And the recent positive trend in the firm’s SCI is good news for all of them, Swift noted.

“There are two parts to this increase in the supply chain cash flow rate” he explained to me. “The first is that, obviously, companies now have an improved ability to pay their bills faster. But second – and this almost more important – there’s a lot more confidence out there among companies that they will be paid; convincing them, in turn, to pay their bills faster. It’s this kind of psychology that is critical to the process of speeding up cash flow.”

So, at its roots, Cortera’s SCI is a measure of financial confidence – and its recent figures indicate that, while there is clearly more accounts receivable stress than a year ago, confidence in sales may be starting to return. And that is definitely a good trend any way you look at it.

“A tremendous amount of change has taken place in our world and it‘s not clear that all of the turmoil is behind us. You have to wonder how long these conditions will last, and what our economy and businesses might look like when the storm clouds finally pass.” – David Wangler, president and CEO, TMW Systems

It’s been a topsy-turvy world of late for truckers large and small; of that, I am sure no one out there has any doubts. The question that needs answering now is: what will trucking’s future from here on out be like? More importantly, can truckers survive in it?

David Wangler, president and CEO of TMW Systems, tried to answer this and other questions about the future of trucking in his keynote address at his company’s 2009 TransForum user conference being held this week down here in Nashville, TN. He drew several interesting conclusions from the current freight environment and what it portends for the future – some of which you may agree with, and some you may reject.

What’s important, though, is that Wangler believes trucking must undergo a major transition – moving away from past practices to develop new ones that emphasize, in part, surviving on limited growth in freight volumes for the foreseeable future. That formed the heart of the “sustainability” theme in his presentation – with “sustainability” focused not so much relating to “green” environmental programs, but more so on how to help trucking businesses survive over the near and long term.

“While environmental issues are obviously important to our long-term health and well-being, I think most of us are also concerned about the sustainability of our businesses in a turbulent domestic and global economy,” Wangler said. “The question is; will we be able to sustain, not only our livelihoods, but our standard of living and our expectations for the future? Will we be able to pass along our vision of endless possibilities to our children and our successors?”

He posits the most popular definition of “sustainability” comes from a 1987 United Nations conference, where the participants defined “sustainable developments” as those that “meet present needs without compromising the ability of future generations to meet their needs.”

Sounds simple enough, but since 1987 a tremendous amount of debate has occurred at the federal, state and local levels as well as across academia on what it means to create a sustainable society, Wangler stressed.

“The direct tie back to the business community is the increasingly popular notion of a ‘triple bottom line’ that concurrently increases profits, improves the planet and improving the lives of people,” he explained. “But what does that definition of ‘sustainability’ really mean for a logistics business, or a trucking company, a ready-mix manufacturer or a maintenance and repair operation? “

When it comes then to the question of business sustainability, Wangler believes three questions need to be asked and answered:

1. Are there really only two choices for our businesses: Grow or Die?

2. Is it true that numbers don‘t lie? Or can we misinterpret them to the same effect?

3. If we continue to do things the same way, are we really crazy to expect different results?

“If we accept that all ecosystems have a ‘carrying capacity’ in terms of population growth, energy consumption, etc., and if we consider industries are also ‘ecosystems,’ then in terms of business sustainability, what does ‘carrying capacity mean?” asked Wangler.

In the case of the freight industry, he said, the business “ecosystem” consists of freight to be shipped, trucks and trailers, fuel, drivers and the roadways that carry them. “It certainly seemed that 2 or 3 years ago we were running out of drivers and space on our highway system,” Wangler noted. “But with the dramatic economic downturn of the past year, we now find ourselves without enough freight to challenge either of those constraints. “

He pointed to the American Trucking Associations (ATA) monthly freight index as a way to track the rise and fall of trucking’s fortunes over the last nine years. ATA‘s index took year 2000 freight volume as a baseline and assigned that year a value of 100 – thus, a value of 115 would indicate a 15% increase in freight volumes.

In the beginning of 2003, the index was around 104. By 2006, just three years later, it was 115, and then it stayed between 112 and 115 until the fall of 2008. A sharp decline then began in October of 2008 and continued into 2009, driving the index all the way back down below 100 in March of this year. “If you were to graph the index, it resembles the same frown that many people have been wearing since last March,” Wangler noted.

He also pointed to a report from analyst Stifel Nicolas last month for potential investors in truckload and intermodal stocks that put the trends we‘ve been seeing over the past few years into a broader context.

Starting with de-regulation in 1980, truckload and intermodal businesses have shown fairly consistent year-over-year growth, fueled by the consumer‘s seemingly boundless appetite to build houses and acquire goods, lots of available credit and the emergence of big-box retailers.

Retail chains like Lowe‘s, Best Buy, Target, and Wal-Mart developed a logistics-based supply chain delivering products primarily manufactured in Asia. This helped to keep prices low, further stretching our buying power, said Wangler.

“And so it seemed as if this increasing consumption might continue indefinitely, immune from economic contraction, even though the industrial sector of our economy went through several slowdowns and continued shrinkage,” he said. Of course, what happened instead is that the bottom fell out of everyone’s house of cards.

So what does our business “carrying capacity” look like today? “Consumer buying, which makes up about two-thirds of the U.S. economy, has slowed dramatically on the heels of higher unemployment. People are saving more. They no longer feel comfortable spending so much of their disposable income,” Wangler said. “Their houses are now more like places to live in, rather than 30 year certificates of deposit with 15% interest rates. Many of us are also concerned about massive increases in government spending and the accompanying deficits which may devalue our currencies. “

In the end, it’s hard to imagine a “V” shaped recovery right back to “the good old days” when credit markets, housing markets, and even the automotive markets were hitting on all cylinders. Instead, manufacturers and retailers are still cutting back on inventories, trying to catch up with lower demand. Shippers continue to re-engineer their supply chains, decreasing lengths of haul and removing complexity and cost.

“In basic terms, the amount of freight moving across North America‘s roadways is much less than it was just 12 months ago,” Wangler said. “The ‘carrying capacity’ of our economy for profitable freight movement has fallen dramatically, and as an industry, we have no power to reverse it – we can only seek to adapt.”

This is where the “transition” for truckers needs to occur, he explained. “In order to sustain our businesses in this new environment, we‘ll have to become more cost-effective, more nimble, and more competitive to make a profit moving the freight that is available. Growth may no longer mean doing more of the same things that we did before, it‘s more likely to mean reconfiguring our businesses to do new things in new ways.”

Wangler believes the term “right-sizing” may have new relevance for the strategic thinking of truckers these days – and for one, he does not believe that if you can‘t make companies bigger, they‘re on a path to extinction.

He pointed to the revitalization of Youngstown, Ohio, as an example – an American steel town that with a population of 168,000 in the 1950s that seemed destined to grow forever, with city leaders back then envisioning the city being home to a quarter of a million people by the end of the century. Instead, by the 1980s, the steel industry had gone into a tailspin. Today, only a single, large steel mill is left and the city’s population is half of what it was in 1950.

[You can watch this part of Wangler’s speech below — I apologize for the poor audio quality; CNN I am not!]

While most of the mills have been torn down, the city has thousands of empty buildings and it still has 535 miles of roads that need to be maintained and kept free of snow and ice all winter. Like other Midwestern cities in similar straits, Youngstown tried to find some big employers to replace steel, such as prisons (both private and public), while also re-developing some of the former steel-mill sites into industrial parks. Yet none of those efforts ended up replacing jobs that vanished along with the steel industry.

Then in 2005, Youngstown elected Jay Williams, a former city planner, to be their mayor. He addressed the city’s problems with a radically simple concept –if the city removed its unused buildings and large chunks of un-needed infrastructure, it could then focus on improving its services and better align its expenses with tax revenues.

By reducing its obsolete infrastructure, the city could position itself for a much more sustainable future, one that might include a new era of growth, but not one that desperately needed growth to ensure its survival.

“Youngstown‘s approach to a future without foreseeable population growth is controversial,” said Wangler. “Accepting that a city is going to shrink, and even planning to help it shrink seems like a rejection of the American idea of progress, where a bigger city means more jobs, more tax revenues, better education, and better services.”

Yet he stressed that the “carrying capacity” of a city, or its ability to sustain its residents, is ultimately determined by its tax base, with the infrastructure needs of businesses and residents have to be balanced against available tax revenues.

“For decades, professors of urban planning have taught that the inability to grow a city‘s population is a terminal condition; all city planning strategies must revolve around growth, and city leadership should focus on stimulating that growth,” Wangler explained. “So is Youngstown just preparing for its extinction, or is it emphasizing quality over quantity? Well it‘s early in the new ballgame, but … it’s choosing an improved quality of life for its citizens by seeking creative alternatives to conventional growth.”

This idea of shrinking instead of growing in order to be more profitable is something that must wend its way into trucking, Wangler believes. “Typically, [trucking] companies thrived for years by putting as many trucks on the road as possible and working to keep every truck on the road every day,” he said. “Unfortunately, declining freight volumes meant that more and more of those road miles were empty and unpaid miles.”

In recent work with several carriers, Wangler said TMW found that by eliminating just 3% of the least profitable loads from their freight network, the re-assigning the right resources to the remaining freight movements, they increased revenue per mile and overall margins, moving less freight and running fewer trucks. Most importantly, the total profit increased by 5% in real dollars.

“Doing less work could actually make more money,” he said. “They focused on the more profitable loads out of current business and parked trucks that became idle when they dropped their least profitable freight. Though they were generating less revenue, they began making more profit – a crucial step in helping them re-structure their business operations for a more sustainable future.”

Freight, by its very nature, exists in a codependent environment, Wangler said, with the delivery of one load creating open capacity to accept another. “Good trucking operations try to minimize the empty miles and the time between these subsequent loads, but geography and freight density conspire against this,” he said. “So the true picture of profitability has to consider truck movements before and after any individual load.”

And Wangler pointed out that there are still quite a few motor carriers whose strategy in the face of falling rates and increased competition seems to be “wait and hope” … “wait” for a capacity correction to let them increase rates and start making money again, and “hope” that they can keep the doors open and the lights on until then.

“But passively waiting for the up portion of an economic cycle is truly not a way to sustain your business,” he said. “As a wise man once said, ‘hope is not a strategy.’”

“As we advocate a new strategy on exports and challenge the new isolationism, we must also make it clear that much more than trade is at stake. At stake is America’s leadership in the world-our geopolitical relationships and our national security.” –Thomas J. Donohue, president and CEO, U.S. Chamber of Commerce

It’s no secret that trade and trucking are inextricably linked; you simply cannot have one without the other. For commerce to occur, it needs some form of transportation to move goods bought and sold, imported and exported, from manufacturer to distributor to consumer – and trucks provide the lion’s share of that movement in the U.S., handling some 71% of overall tonnage.

The flip side is also true – if there is no commerce, there is almost no need for trucks (outside of the needs of fire and rescue services, military operations, etc.) Trucks were created to serve the engine of commerce, because these machines could do so tirelessly and with greater efficiency, first in comparison with horses, then surpassing even the mighty locomotive with its flexible mobility.

Now, however, trucks and trade are finding themselves pitted against one another on our southern border with Mexico as the fiery debate continues – rising to yet another fever pitch – over whether to allow Mexican trucks to operate on U.S. roads in the name of more efficient commerce. The arguments also involve a wide range of topics – from equipment safety and driver linguistic capability, to the raging battle Mexico is fighting against a whole host of criminal enterprises on its border with the U.S., most them involving drug cartels.

At the end of the day, though, the issue of Mexican trucks is one at its heart grounded in trade and jobs. Would allowing Mexican carriers to operate on U.S. roads result in American job losses? That is the big concern.

The U.S. Chamber of Commerce claims such American job losses are occurring now because the border is NOT open to Mexican trucks, as the border closure has resulted in a growing trade war between Mexico and the U.S. This claim is part of a larger battle against what the group feels is a growing trend in “isolationist thinking” in the U.S. on the subject of trade.

“In the eye of this storm, the first instinct is to turn inward and to protect the remaining businesses and jobs,” noted Thomas J. Donohue, president and CEO of the U.S. Chamber in a speech this week at the Michigan chamber’s 2009 Future Forum & Annual Meeting. “But that’s an approach that simply won’t work. In a new, more competitive global economy, we need to expand our engagement with the world – not shrink it.”

[You can watch Donohue deliver part of that speech below.]

The U.S. Chamber recently released a study, entitled Trade Action — or Inaction: The Cost for American Workers and Companies to show how, from its point of view, a variety of anti-trade initiatives are costing the U.S. in terms of export market opportunities and jobs.

The study makes several big claims – ones that not everyone agrees with, but are worth thinking about nonetheless.

First, the group said the U.S. could suffer a net loss of more than 380,000 jobs and $40 billion in lost export sales if it fails to implement its pending trade agreements with Colombia and Korea.

Second, “Buy American” rules slipped into the $787 billion American Recovery and Reinvestment Act of 2009 – commonly referred to as the “stimulus bill” – would only create a limited number of U.S. jobs, which could quickly evaporate if other countries implement “buy national” policies in their own stimulus programs. If foreign governments lock U.S. companies out of just one percent of this total spending, the net U.S. job loss could surpass 170,000, the U.S. Chamber said.

Finally, the study found that the U.S. failure to implement the Mexican cross-border trucking provisions of the North American Free Trade Agreement [NAFTA] has resulted in $2.2 billion in higher costs for goods, $2.6 billion in lost U.S. exports, and more than 25,000 lost jobs for American workers.

“The U.S. has refused to keep its word to Mexico,” said Donohue. “How can we call on other countries to meet their obligations under trade agreements if we refuse to meet our own?”

However, a lot of groups – especially those represent unionized workers in the U.S. – don’t see it that way at all. “The Chamber gets it exactly wrong on several levels,” said James P. Hoffa (at right), general president of the International Brotherhood of Teamsters. “First, it’s NAFTA that cost at least a million U.S. jobs. Second, Mexico imposed tariffs that are manifestly excessive, and that’s a violation of trade rules. It’s outrageous to blame the U.S. government for Mexico’s disregard for U.S. highway safety standards as well as trade agreements.”

The trade dispute with Mexico stems from the cancelling of the nearly two-year old cross-border trucking program established by the Federal Motor Carrier Safety Administration in early March this year via an addendum to appropriations bill by Sen. Byron Dorgan (D-ND).

“None of the funds appropriated may be used, directly or indirectly, to establish, implement, continue, promote, or in any way permit a cross-border motor carrier demonstration program to allow Mexican-domiciled motor carriers to operate beyond the commercial zones along the international border between the United States and Mexico,” the words of his addendum stated.

Yet after President Barack Obama – who, along with Vice President Joe Biden, opposed FMCSA’s Mexican truck program while serving in the Senate – signed the measure, Mexico went on the trade warpath, slapping higher tariffs totaling $2.4 billion on over 90 goods its imported from the U.S. on everything from strawberries to Christmas trees.

“This is not about the safety of American roads and American drivers. This is protectionism,” said Arturo Sarukhan, Mexico’s ambassador to the U.S., in late March.

That got President Obama (at left) backpedaling pretty fast. “With respect to trade, Mexico is one of our largest trading partners,” said the President in a joint appearance with Mexico’s President Felipe Calderon in April.

“The amount of commerce that flows back and forth creates wealth in Mexico and it creates wealth in the U.S. I have said repeatedly that I’m in favor of free trade,” President Obama noted. “I know that there has been some concern about a provision that was placed in our stimulus package related to Mexican trucking. That wasn’t a provision that my administration introduced, and I said at the time that we need to fix this because the last thing we want to do at a time when the global economy is contracting and trade is shrinking is to resort to protectionist measures.”

To date, though, the trade war continues. The U.S. recently slapped retaliatory tariffs on goods from Mexico, estimated to be $427 million. Though U.S. Secretary of Transportation Ray LaHood laid the groundwork for restating the Mexican truck program in May, nothing has occurred since then, leaving the issue twisting in the breeze.

And it’s exactly this type of “dawdling” on trade issues that, in the words of the U.S. Chamber’s Donohue, the U.S. simply cannot afford to do.

“Today, nearly half of the world economy is centered in the Asia-Pacific region. Fierce new competitors and markets of great opportunity – from China to India to Brazil – are rapidly emerging,” said Doinohue (seen here at right). “These developments are not only reshaping global economics, but they are altering geopolitics. Emerging nations are projecting their commercial influence into other spheres – securing capital and the best human talent, making deals for oil and natural resources, and flexing their economic muscle to advance their strategic interests. “

How is the U>S. responding to the new global race for jobs, markets, influence, and leadership? In Donohue’s view, not well, as the country is not stepping up on the worldwide stage as boldly, as vigorously, or as smartly as we must.

“Our nation faces a fundamental choice,” he said. “In a new global economy, and in the midst of a major economic downturn, do we hunker down and turn inward – or do we act boldly to ensure that America is as preeminent in the 21st century as we were in the 20th century?”

That’s a good question – but it’s one that will not be either easy or simple to answer when it comes to dealing with trade and trucks.

“It’s time to realize we aren’t going to find a free fix.” –Paul Yarossi, president of HNTB Holdings Ltd

A new survey by architecture and engineering firm HNTB Corp. confirmed a none-too-surprising belief among American citizens when it comes to figuring out how to maintain and repair our bridge and roadway networks: while most agree U.S. roads and bridges need help, consensus remains elusive on how to pay for it. Yet what came as a shock to me is that apparently – according to HNTB’s findings, now – we Americans think TOLLS are the way to go to fix our roads.

What???

Needless to say, I started reading this survey with great interest. According to the America THINKS survey commissioned by HNTB, more than two-thirds (67%) of respondents would be willing to spend more money on tolls, taxes or public transit fares if these funds went toward long-term transportation improvements in their area, such as expanding highway capacity or building high-speed rail.

Also, the majority of Americans who say the gas tax is no longer sufficient to properly maintain the country’s roads and bridges is on the rise, up 6% from last survey conducted back in January to 57%. Yet when considered in the context of trying to improve the U.S. economy (which HNTB defined as two consecutive quarters of economic growth), 64% of those polled still wouldn’t support a 10-cent increase in the gas tax – a highway funding mechanism already endorsed by a multitude of studies and interest groups, including the U.S. Chamber of Commerce.

Here’s where things get strange for me, though: Among those willing to spend more on long-term transportation improvements in their area, HNTB’s research found support for higher gas taxes (36%) fell far below more tolls (52%) and public transportation fares (45%). Only higher property, income or sales taxes ranked lower (20%) among traditional infrastructure revenue streams.

Excuse me for a moment – Americans want MORE roadway tolls??? Are you KIDDING me here??? To me, this funding mechanism above all others is the most frustrating one of the lot, leading to more highway congestion and trip delays. This surprise finding is why I read these surveys – you just never really know what the majority is thinking … or why for that matter!

But HNTB’s research indicates exactly that, so tolling – one of oldest funding mechanisms out there, based on the concept that those who use a road or bridge pay for it – appears to have broad support as a way to support surface transportation moving forward.

HNTB’s survey found 82% of Americans believe that tolling should be considered in special, project-by-project situations or as a primary source of transportation revenue. Fewer than one in five (18%) feel it should never be used. Also, nearly seven in ten (68%) would support adding high-occupancy toll (HOT) lanes to existing highways to give drivers the option of using these less congested lanes for a fee that can be adjusted based on the amount of traffic at any given time.

In fact, when asked how to pay for America’s roads and bridges in the future, HNTB said publicly (35%) and privately (20%) run toll facilities, HOT lanes (33%) and other forms of congestion pricing (18%) received more support than an increase in the gas tax (16%) or other new user fees, such as a Vehicle Miles Traveled or “VMT” tax (14%).

A word of caution about the VMT here: HNTB pointed out that this is a relatively new concept being proposed as a potential long-term replacement for the gas tax … and many technical questions remain about how and when it might be implemented.

Most likely such a system would use odometer readings or satellite-based technology to measure how much each vehicle is driven and charge the owner accordingly. However, if VMT were to use a device to record where and when someone drove for the purposes of charging a fee, according to HNTB’s polling. 80% of Americans would be concerned about their privacy.

Let’s note for the record something else: HNTB’s America THINKS survey, conducted by Kelton Research, used an e-mail invitation and online survey to poll a random nationwide sample of 1,000 Americans between July 31 and Aug. 7, with a margin of error at plus or minus 3.1%. Quotas were set to ensure reliable and accurate representation of the total U.S. population ages 18 and over. So all of the above extrapolation of American beliefs when it comes to transportation funding is gleaned from a sampling of 1,000 people; not a lot to hang your hat on.

Still, this survey reveals some interesting thought lines when it comes to how the general public thinks we ought to pay for transportation infrastructure. And one other important thing, too: Americans realize improvements won’t come for free … and that delays could make the problem bigger and ultimately tougher to handle.

“What we cannot do is wait,” noted Paul Yarossi, president of HNTB Holdings Ltd. “America needs a long-term vision of its transportation future [as] delays only increase costs and the deterioration of our infrastructure. It’s time to realize we aren’t going to find a free fix … and Americans understand this concept. So it will be imperative that our multiple modes of transportation are supported by multiple forms of funding.”

“As he has said, the President rejects an absolutist approach or the imposition of a rigid ideology on our problems. Like the world itself, his views are nuanced, not simplistic; practical, not ideological. He understands the complexities and many dimensions of the challenges presented by violent extremism. He understands that preventing terrorists from slaughtering the innocent sometimes requires making very difficult decisions.” –John Brennan, assistant to the President for Homeland Security and Counterterrorism

Security is a big deal in trucking for obvious reasons. All over the world, trucks have been and continue to be used as rolling bombs. On a less explosive but no less nefarious level, they are used to smuggle drugs, weapons, even illegal immigrants across our borders.

Legitimate truckers, of course, provide the most vital transport method for commerce in the U.S. – they haul 80% of our nation’s freight – and as a consequence must be wary of cargo theft attempts, which threaten both the American wallet and on (thankfully) rare occasions, American lives.

From these perspectives, then, it’s important to know how our new Commander in Chief views security in a broad sense – where and what he thinks poses the biggest threats to the U.S., plus how he plans to confront and thwart them. It’s important, too, to get a read on where President Obama stands on this issue now, after he’s been in office for a while. For what’s said on the campaign trail changes in a big hurry – and rightfully so – once you sit in the Oval Office and start getting the reports on what is really going on out there in the world from security experts.

Whether you voted for Obama or not, nor whether you support the President’s approach to national security or not, is almost beside the point. This is the man in charge, the person elected to call the shots. So it’s worthwhile to get an understanding (and please forgive the sport’s analogy here) of the offensive and defensive schemes in his playbook, so to speak.

John Brennan (at right), assistant to the President for Homeland Security and Counterterrorism, discussed President Obama’s view on national security last week in a speech given before the Center for Strategic and International Studies – perhaps appropriately called A New Approach to Safeguarding Americans – and it makes for some interesting reading (you can view the whole text by clicking here).

Brennan, by the way, is no slouch when it comes to national security issues. His title – “assistant to the president” – is the highest one any White House staffer can hold. He’s a 25-year veteran of the Central Intelligence Agency and among his career postings served as station chief for the Middle East from 1996 until 1999. In short, he’s a guy that’s “been there, done that” when it comes to dealing with security issues.

OK then – what, then, is President Obama’s security strategy? And how might it impact trucking?

For starters, President Obama’s administration is focusing on three major “initiatives” in order to better confront the transnational threats of the 21st Century: strengthening the global non-proliferation effort to stop the spread of nuclear weapons; promote food security that fights world hunger and lifts people around the world out of poverty; and bolster the nation’s digital defense against cyber attacks.

At the top of the list, though, is the transnational challenge that poses one of the greatest threats to our national security, said Brennan — the scourge of violent extremists who would use terrorism to slaughter Americans abroad and at home.

“I want to note at the outset that my professional and personal experience has greatly shaped my perspective on how best to confront the challenges we face,” he said. “During a 25-year career in government, I saw first-hand the mayhem and destruction that terrorists wreak. I have seen close friends and fellow intelligence officers—good, courageous, heroic Americans—injured, maimed, and killed in terrorist attacks. Eight years ago this morning [August 6] I read warnings that Osama bin Laden was determined to strike inside the U.S., but our government was unable to prevent the worst terrorist attack in American history that would occur on 9/11.”

The President, noted Brennan, sees confronting the terrorist threat as two related but very distinct challenges: the immediate, near-term challenge of destroying Al Qaeda and its allies—those ready and willing to kill innocent civilians—and the longer-term challenge of confronting violent extremism generally.

“First, the immediate challenge—the persistent and evolving threat from al Qaeda and its allies. President Obama is under no illusions about the imminence and severity of this threat,” Brennan noted. “Indeed, he has repeatedly and forcefully challenged those who suggest that this threat has passed. To Americans who ask why our forces still fight and die in Afghanistan, he has made it clear that al Qaeda is actively plotting to attack us again and that he will not tolerate Afghanistan—or any other country—being a base for terrorists determined to kill Americans. To those abroad who doubt al Qaeda’s motives or murderous history, he said in Cairo ‘these are not opinions to be debated; these are facts to be dealt with.’”

Brennan also pointed out that Al Qaeda and its affiliates are under tremendous pressure. “After years of U.S. counterterrorism operations, and in partnership with other nations, al Qaeda has been seriously damaged and forced to replace many of its top-tier leadership with less experienced and less capable individuals,” he said. “It is being forced to work harder and harder to raise money, to move its operatives around the world, and to plan attacks.”

Nevertheless, Brennan noted, Al Qaeda has proven to be adaptive and highly resilient and remains the most serious terrorist threat we face as a nation. “The group’s intent to carry out attacks against the United States and U.S. interests around the world—with weapons of mass destruction if possible—remains undiminished, and another attack on the U.S. homeland remains the top priority for the Al Qaeda senior leadership,” he explained.

President Obama’s “anti-Al Qaeda” policy, if you will, is simple – disrupt, dismantle, and defeat Al Qaeda and its allies. “That is our mission … and to win this war against al Qaeda, the administration continues to be unrelenting, using every tool in our toolbox and every arrow in our quiver,” Brennan added.

That includes: using U.S. military forces to push the Taliban out of key population areas in Afghanistan; confronting al Qaeda directly in partnership with Pakistan to inflicting significant losses; sharing intelligence resources In East Africa and the Trans-Sahel region to deny al Qaeda safe havens; working with and through the international banking community to deny resources and funding to the al Qaeda network and the businesses that support them; and finally successfully prosecuting terrorists and their supporters in the courts of law.

“I would add one personal observation,” Brennan stressed. “Over the past six months we have presented President Obama with a number of actions and initiatives against al Qaeda and other terrorist groups. Not only has he approved these operations, he has encouraged us to be even more aggressive, even more proactive, and even more innovative, to seek out new ways and new opportunities for taking down these terrorists before they can kill more innocent men, women, and children.”

More broadly – and here is where trucking should pay attention – President Obama is focusing on tighter security for U.S. borders as part of the overall effort to confronting what he has identified as the most immediate and extreme threat to both global and domestic security—the possibility that terrorists will obtain and use a nuclear weapon. “The risk of just one terrorist with just one nuclear weapon is a risk we simply cannot afford to take,” stressed Brennan.

Better homeland security, he noted, includes: enhancing information sharing arrangements with U.S. allies and partners; strengthening partnerships with state and local officials, law enforcement, and first responders; and improving the security of our critical infrastructure, borders, ports, and airports.

“Our homeland security efforts include working aggressively to prevent and prepare for bio-terrorism, which is why the President’s budget makes major investments in our public health infrastructure, including new technologies to detect attacks and new vaccines to respond in a crisis,” said Brennan. “And I would note that our coordinated response to the H1N1 virus—across the federal government, with state and local governments, and with the private sector and the public—and our extensive preparations for the coming flu season will ensure that we are better prepared for any future bio-terrorist attack.”

Finally, though, there is the overarching “mindset” President Obama is pursuing in his national security policies – an effort to establish clear, more precise (and perhaps more narrow) definitions of these challenges.

“This is critically important. How you define a problem shapes how you address it,” said Brennan. “As many have noted, the President does not describe this as a ‘war on terrorism.’ That is because ‘terrorism’ is but a tactic—a means to an end. Confusing ends and means is dangerous, because by focusing on the tactic, we risk floundering among the terrorist trees while missing the growth of the extremist forest. And ultimately, confusing ends and means is self-defeating, because you can never fully defeat a tactic like terrorism any more than you can defeat the tactic of war itself.”

For that reason, Brennan said, the President does not describe these broad security efforts as a “global war.”

“Yes, al Qaeda and other terrorists groups operate in many corners of the world and continue to launch attacks in different nations. And yes, the U.S. will confront al Qaeda aggressively wherever it exists so that it enjoys no safe haven. But describing our efforts as a ‘global war’ only plays into the warped narrative that al Qaeda propagates … reinforcing the very image that al Qaeda seeks to project of itself—that it is a highly organized, global entity capable of replacing sovereign nations with a global caliphate. And nothing could be further from the truth.”

Will these both broad and specific national security strategies do the job? It surely seems they cover all the bases. One thing is for certain, though – trucking will still have to do its part to keep its end of the supply chain safe and secure from terrorist activities.