“In the truest sense, freedom cannot be bestowed; it must be achieved.” –President Franklin D. Roosevelt

You know, despite all the trials and tribulations besetting trucking today, this is a great industry to be part of. The people working in this market – the drivers, technicians, dispatchers, safety directors, the whole shebang – are some of the most interesting you’ll ever meet, and meeting them is truly one of the best parts of my job.

Let me tell you, it’s an honor and a privilege for me to be a journalist dedicated to covering all aspects of trucking. It’s full of patriotism, loyalty, friendship, and countless other positive virtues that don’t always get reflected in what you see in the newspapers and on the TV screen. That’s why I put together the short slideshow below, to honor those character traits on display in this industry, yet rarely ever given a second thought.

(And yours truly gets a cameo appearance this time around!)

Have a great Fourth of July holiday everyone – and for those of you that’ll be on the job, putting miles on the highway this weekend, safe journeys to you.

“The climate issue and increasing fuel prices make energy use and energy efficiency some of the most important societal issues of our time.” –Leif Johansson, CEO of Swedish truck maker Volvo Group.

There is no doubt that with diesel fuel nearing a $5 per gallon average in the U.S. and roughly $10 equivalent per gallon in Europe, just about any technology designed to improve vehicle fuel efficiency is getting vetted like never before.

Topping the list is hybrid technology – the by now familiar system wherein a gasoline or diesel motor exists side-by-side with an electric motor and battery pack, working as a compete unit to improve fuel economy by operating the vehicle part of the time (usually in urban stop-and-go environments) on electricity alone. Hybrid cars and light trucks are now legion across the landscape, with hybrids making steady inroads into the medium-duty arena along with prototypes now being tested for heavy trucks.

(An early version of Volvo’s medium-duty hybrid truck, the ‘I-Sam.’)

Just this week, the U.S. Department of Energy (DOE) and the Swedish Energy Agency agreed to jointly expand financial cooperation with Volvo to fund research and development of advanced drivelines for commercial trucks, for both hybrid systems and alternative fuels.

The DOE and the Swedish Energy Agency are providing a three-year grant to the Volvo Group worth a combined $18 million for the development hybrid technology and drivelines for alternative fuels – extending a one-year research and cooperation agreement signed between the Volvo Group and the Swedish and U.S. governments back in June 2007. Volvo is chipping in $18 million of its own money into the project, pushing funding up to $36 million total.

“This cooperation is aimed at reducing the use of fossil fuels by heavy vehicles through research and development projects in the areas of energy efficiency,” said Leif Johansson, CEO of the Volvo Group, in a press statement. “The transportation industry has a special responsibility and this research and development co-operation with the U.S. Government is crucial in our efforts to develop the drivetrains and technology required by both our customers and society as a whole.”

However, there’s still a big question to be answered in all this: can hybrids provide cost-effective fuel efficiency for the long term, with no adverse environmental impact? For while the fuel savings are definitely there, the extra cost of the electric motor, driveline, and batteries coupled to the eventual disposal issue of the batteries themselves raises several thorny problems that still need to be worked out.

New York based consulting firm ABI Research took a look at this issue and found that while hybrid technology has the ability to deliver efficiency, fleet managers and operators need to evaluate in careful detail the costs and benefits of hybrids.

“The main fuel economy benefit from hybrid technology comes from the capture and reuse of kinetic energy,” says ABI Research principal analyst David Alexander. “Two central forms of storage under development and available at present are hydraulic and electrical. Both require significant investment in additional systems, so realistic evaluations and estimations must be made as regards fuel savings in order to calculate the benefits.”

As the cost of oil and related fuel products – especially diesel fuel – continues to rise, owners and drivers are looking for new technology to get more miles per gallon, period, Alexander notes. With daily media coverage over oil prices and global warming, together with the marketing messages from the largest consumer vehicle manufacturers, it is easy to assume hybrids are the solution. The facts, however, suggest something else, he warns: that the return on investment can vary dramatically depending on factors such as the type of hybrid, cost of fuel, and the typical usage cycle.

For example, full hybrid powertrain systems for commercial vehicles are not normally designed to be retrofitted to existing vehicles, though there are some that can be installed as a complete replacement for an existing engine and transmission. Conversely, depending on the technology, the cost of parts and installation can be close to purchasing a new vehicle – so this approach generally is only used to produce low numbers of vehicles for evaluation. New options becoming available include mild hybrid idle-stop systems that can be retrofitted to particular vehicles, Alexander says

“Fleet managers should beware of the hype and stick to cautious testing to ensure that fuel economy improvements occur for their typical drive cycles,” he continues. “Drivers with the most to gain will be operating on a frequent stop–start cycle, and, depending on the existing powertrain, may benefit from a mild hybrid retrofit. Otherwise, the better option may be simply to factor-in the purchase of some hybrid vehicles for specific applications as the fleet ages over time.”

(More of his thoughts are available in ABI’s Commercial Hybrid Electric Vehicle report.)

Yet fleets should also take heart that other issues related to the cost of hybrids – especially insurance – are now being addressed.

Fireman’s Fund Insurance Co. for example, recently introduced new vehicle replacement coverage for commercial fleets – insuring the full replacement cost of vehicles that are total losses for up to their first three model years – with a key additional “hybrid upgrade” endorsement as well.

The hybrid endorsement enables policyholders to upgrade to a hybrid model (or its equivalent) during the first three model-years in the event of a total loss. This is an attractive choice for those businesses that want to protect the value of their assets, reduce their energy costs, and protect the environment, says Bob Steele, product director-commercial business for Fireman’s Fund, with both of these coverage enhancements applying without a deductible.

“If a policyholder’s two-year-old pickup truck is stolen from his delivery fleet, or crushed by a fallen tree, he can replace the truck with a new one. If he chooses the hybrid option he can upgrade to a more environmentally friendly hybrid model,” Steele noted. “Many fleets are opting for hybrids and alternative fuel vehicles to reduce fuel costs and pollution. This helps them keep doing that.”

More information is available from Fireman’s Fund on their website.

So while a lot of questions still need to be answered about hybrids, the technology is gaining rapid acceptance among vehicle operators of all shapes and sizes – and may indeed prove to be a vital piece of the fuel efficiency puzzle in the long term if the cost and battery-disposal issues get worked out. We’ll see how this all plays out in the coming year.

“In today’s dynamic global business environment with enhanced technologies and vastly extended supply chains, companies are often confused by the many logistics options available to them.” –John Fitzgerald, vice president of global sales & marketing for Seko Worldwide

Competing in the transportation and logistics market today has never been tougher. That’s why it pays to try and find ways to peek into the minds of your customers — the shipper — to figure out what their needs are when it comes to handling their freight needs.

Truckers especially need all the insight they can get – both for-hire and private fleets alike – because trucking gets increasingly marginalized in the global freight world of today, viewed many times as a commodity rather than a valuable service.

(Photos courtesy of Seko Worldwide.)

Third party logistics firms are but one of many entities that’ve reshaped the freight world since trucking got deregulated back in 1980. These companies – referred to by the slick acronym ‘3PLs’ – carved out some valuable real estate in global freight markets by offering shippers a chance to transfer transportation management to their shoulders. Many big trucking companies now offer logistics divisions now as well, to make sure they can give their customers the same freight management options as the 3PLs, while preserving – if not increasing – volumes from their customer base.

John Fitzgerald, vice president of global sales & marketing for Itasca, IL-based 3PL Seko Worldwide, recently put together a neat one-page guide to help shippers figure out if outsourcing their transportation and logistics functions might be a wise move to make. Truckers should read this over, for it’ll give you an idea about some of the issues shippers are facing as they try to maintain efficient supply chains despite higher fuel prices and increased scrutiny of cross-border freight.

(John Fitzgerald’s advice for shippers provides good intel for truckers too.)

“While outsourcing of supply chain services is still increasing despite the weakened economy, the decision for a company to outsource to third party logistics providers is not an all or nothing proposition, and requires an in-depth evaluation of its entire supply chain process,” says Fitzgerald.

“Before making a decision on how to best implement a supply chain management process, companies should evaluate their own cultural alignment, core competencies and business capabilities,” he notes. “A company’s cultural alignment and cross-departmental capabilities, especially as they relate to technology, will provide the seminal factors in determining whether it should keep supply chain management services in-house, outsource them to a third party logistics provider, or employ a combination of both.”

Fitzgerald suggests six paradigms that shippers should abide by when making an outsourcing decision:

Determine the State of Your WMS System. How state-of-the art is the WMS [warehouse management service] system you have in place? If your company is consistently out-of-stock with finished products for your customers, your in-house system probably does not have the IT [information technology] capabilities to avoid poor lead times and missed shipments for your customers. You need to outsource or lose customers. If, on the other hand, your company has the wherewithal to provide the proper implementation of an enhanced and robust IT infrastructure, you may be able to realize cost-savings and efficiencies by avoiding the need to outsource your logistics functions.

Take a Good Look at Your Production Facilities. If you find that your production facilities are down for long periods of time and your logistics operations are not flexible enough to meet the requirements of after-hours deliveries and expedited service, you may have no choice but to pay the extra costs by outsourcing your logistics process on top of paying for large overhead for an inflexible logistics operation. If your in-house logistics operation is already funded as a core competency, however, you may already have a competitive edge. Flexibility is the key here.

Evaluate Your Delivery Date Success. If the targeted dates for your time-sensitive product launches are not consistently being met, it is a good indication your internal staffing and facility capacity cannot keep up with your customer demand. Your company probably requires the assistance of a 3PL. If, on the other hand, your company properly funds your logistics department and you are already an industry leader in supply chain efficiency and service, you are probably realizing economies of scale with regards to your warehouses, fleets etc., and can probably maintain these operations in-house.

Assess Your Overhead and Fixed Logistics Costs. If these expenses are squeezing your bottom line, you may realize virtually instant savings by consolidating your warehouse operations with a “shared” facility operated by a 3PL. This can enable you to move fixed costs to a variable expense, which provides flexibility in responding to market dynamics. If your company culture includes logistics as a driving force in your overall operations, you can probably adequately leverage these expenses in-house.

Examine Your Company’s IT Capabilities. If your in-house technology is unable to adapt to your growing supply chain needs, you should consider outsourcing your company’s logistics data and integrating it with that of a 3PL that specializes in customized supply chain solutions. Rather than waiting years for a new system to be developed internally, you may find that outsourcing both the technology and logistics process to a suitable 3PL will generate cost savings, while expediting the supply chain. On the flip side, if your company fully understands the entire supply chain process and how it fits with your core competencies, you may already possess the in-house ability to optimize your supply chain management procedures.

Evaluate Your Company’s Customs Compliance Readiness. With the implementation of the Customs Modernization Act, compliance assessments and audits became widely used as a tool to maximize compliance and provide uniformity. Regular assessment of import compliance processes and procedures require an evaluation of the overall effectiveness of the Customs Compliance Program, employee education and training programs, and operating procedures. If your company is unable to develop compliance and cost goals, formal policies, training programs, internal revenues and supplier compliance programs, the selection of a suitable 3PL to provide the required skill sets to establish a process-based compliance function is critical.

“Ultimately, following an in-depth evaluation of the entire supply chain process, many companies find that including a mix of in-house and outsourced logistics functions may provide the best solution for them,” says Fitzgerald. “In a global economy, where there is no set criterion for supply chain success, companies have to carefully analyze their requirements and determine what logistics processes are best suited to meeting their specific and unique global distribution needs.”

Here’s the clincher, one that truckers need to pay attention to: “Cost is always important, but ultimately the success of any global supply chain management process relates back to client satisfaction as a means of achieving customer focus and growth in market share,” says Fitzgerald.

So not only are we talking about meeting the shipper’s needs here, were talking about how meeting their needs helps the shipper meet THEIR customer’s needs – be it the grocery store shopper, clothes buyer, etc. Understand the supply chain issues and you may get a key or two for unlocking the concerns shippers have about it in the back of their minds. That in turn may give you an opening to bring new solutions to the table and thus win you more business. For in these rough and tumble economic times, finding ways to drum up and keep more business is vital to survival.

“It is clear the safety message is being heard and that the increased enforcement presence is making a difference.” –Stephen F. Campbell, executive director, Commercial Vehicle Safety Administration (CVSA)

I’ve been on a safety kick here for a while, and I’m going to stay on it for one more post, if you don’t mind.

Yes, the Dow Jones plummeted 350 points last week and, yes, oil futures are now trading north of $143 per barrel, so the challenges facing trucking are growing by the day. Yet this industry keeps improving its safety record, despite an environment conducive to people skimping on vehicle maintenance, which often directly leads to safety issues. That’s what the numbers gathered by Roadcheck 2008 tell me, anyway.

Despite concerns that a weakening economy combined with ever-increasing fuel prices would push safety to the bottom of the list for commercial motor vehicle fleets, a recent check on the industry shows the lowest rate of out-of-service vehicles in two decades, according to Stephen Campbell, executive director of the Commercial Vehicle Safety Alliance (CVSA), not-for-profit organization devoted to promote commercial motor vehicle safety and security by providing leadership to enforcement, industry and policy makers.

This year’s Roadcheck event – an annual “safety blitz” conducted across the U.S. and parts of Canada for the last 21 years – recorded a 23.9% vehicle out-of-service rate for Level I inspections. This is the principal barometer used to measure compliance and it is the lowest seen in the 21-year history of Roadcheck, noted Campbell in a pres statement.

From June 3-5, 9,148 CVSA and Federal Motor Carrier Safety Administration (FMCSA) certified inspectors at 1,683 locations across North America performed 67,931 truck and bus inspections. Some 52,345 out of the total were North American standard Level I inspections, and both the total number of inspections and Level I inspections were records for the annual Roadcheck event. Here are the results:

79.2% of all commercial vehicles passed the inspection, with 20.8% placed out of service (a decline from 21.5% placed out of service in 2007).

82.4% of vehicles carrying hazmat loads passed the inspection, and 17.6% were placed out of service (17.7% were out of service in 2007).

87.8% of passenger-carrying vehicles (buses) passed the inspection, and 12.2% were placed out of service (12.3% were out of service in 2007).

For all commercial vehicles: 94.7% of drivers passed the inspection, and 5.3% were placed out of service (6.2% were out of service in 2007).

For hazmat-carrying vehicle: 97.6% of drivers passed the inspection, and 2.4% were placed out of service (3.5% were out of service in 2007).

Passenger-carrying vehicles (buses): 95.5% of drivers passed the inspection, and 4.5% were placed out of service (3.8% were out of service in 2007).

Campbell noted that, for drivers, the 5.3% overall out-of-service rate represents a 14.5% improvement over last year’s rate – a significant jump – and that hours of service (HOS) compliance rates improved, reversing a trend from the past several years. In 2007, 66.3% of drivers placed out of service were done so for hours of service violations – that dropped to 55.6%. Just 3.8% of all drivers inspected in 2008 were placed out of service for an HOS violation, down from 4.9% last year.

Yet there remain several concerns. Brakes continue to be the dominating vehicle out of service defect, comprising 52.6% of the total vehicle defects – way too large a number, in my mind, as brakes are the single most important safety component on a commercial truck. Yet it’s worthy to note that the percentage of vehicle out of service defects that were brake related has declined noticeably over the last few years, down from a high of 56.6% in 2004.

Also on the negative side, the number of safety belt violations rose inexplicably this year, and rather dramatically too – from 829 in 2007 to 1,226 in 2008. After all the focus that’s been put on safety belt usage by commercial drivers, it baffles me that the number forgoing their use should rise – especially since it’s a costly fine.

Aside from that, though, trucking’s total safety picture continues to sharpen nicely – and all during one of the roughest economic patches this industry has faced in decades. I only wish more outside of the industry would take note of these positive developments.

“A significant problem we are noticing in recent years is the practice of manually adjusting self-adjusting brake adjusters. If you have a brake that is over-stroking and it has a self-adjusting or automatic brake adjuster, you more than likely have a problem with the brake or the adjuster. If you readjust it, you aren’t fixing the underlying problem.” –Stephen F. Campbell, executive director, Commercial Vehicle Safety Alliance (CVSA)

Despite all the advances in safety technologies discussed in my last post, when you really get down to it, there’s really but one – and some would say only one – absolutely critical safety system on today’s commercial truck: the brakes. Without properly functioning brakes, every other safety device on the vehicle – collision-warning radar, anti-rollover devices, etc. – is pretty much rendered moot. (Except for the seat belt – if your brakes fail, you better be wearing it!)

Back in May this year, the Commercial Vehicle Safety Alliance (CVSA) helped sponsor the “Operation Air Brake” campaign with local and federal-level law enforcement officials across 45 states and provinces across the U.S. and Canada during a 12-hour surprise inspection blitz. Some 11,908 vehicles were inspected, along with 93,751 brakes, and the results point to the industry’s need to refocus its attention on basic brake maintenance, I think

Here’s the tally of the Operation Air brake’s findings:

9.9% of vehicles placed out of service for brake adjustment defects

8.3% of vehicles placed out of service for brake component defects

15.8% of vehicles placed out of service for brake related defects

9.4% of brakes with manual brake adjusters placed out of service

3.8% of brakes with self-adjusting brake adjusters placed out of service

4.7% of all brakes inspected placed out of service for brake adjustment defects

“Poorly adjusted or defective air brakes reduce the braking capacity of large vehicles and further increase their stopping distance,” said Stephen Campbell, CVSA’s executive director. “Even under ideal conditions, the stopping distance of commercial vehicles can be twice as far as that of cars and other smaller vehicles. Having defective brakes increases the risk to the driver and any passenger, as well as to others traveling the roads.”

In a recent issue of the Technology and Maintenance Council’s Fleet Adviser Newsletter, Kevin Kuhn, fleet shop maintenance manager for the TravelCenters of America noted that “manually adjusting auto slack adjusters can give operators a false sense of security about the effectiveness of the brakes. Adjusted auto-slacks will likely go out of adjustment again soon after their adjustment and manually adjusting auto slacks does not fix the underlying issue with the braking system.”

Brakes are the basic foundation block for commercial vehicle safety systems of all types, so if they don’t work properly, the safety of the whole vehicle is compromised – not to mention those traveling alongside it. It just goes to show that, just as in sports, you’ve got to keep focused on the fundamentals in order to sustain a high level of successful performance.

And on another note, from the “do as I say, not as I do” file …

I just wanted to draw some attention to AB 2800, a section of Proposition 103 heading for California’s statewide ballot. A group called Consumer Watchdog is all in a lather over this piece of legislation as it would allow insurance companies to put black boxes in the cars to monitor speed, mileage, etc., and thus charge certain drivers higher premiums based on their driving habits.

“The insurance industry would pick driver’s pockets and peer into their cars with this bill, headed to the Senate Insurance committee this week,” said Carmen Balber of Consumer Watchdog. “It would allow insurance companies to require drivers to install ‘spyware’ in their cars that tracks speed, acceleration, location, time of day, mileage and other data. Under the legislation, consumers who refuse to give up their privacy would pay higher rates.”

Sponsors say the bill would encourage motorists to drive less by lowering insurance rates for lower mileage and it would also give discounts to drivers who put black box technology in their cars. “Insurers want to know where we drive, when we drive and how long it takes us to get there, but they shouldn’t get to charge more to Californians who won’t accept their spying,” said Balber. “AB 2800 just lets insurance companies charge drivers more for refusing to let them pry in their cars.”

Oh, I get it: black boxes are OK for commercial trucks, but not consumers. It’s OK to monitor the performance of commercial truck drivers, but not the average motorist – that’s “spying.” I think ALL vehicles, tractor-trailers down to cars, should have black boxes – then we all get measured to the same highway safety standards. This legislative effort will show us if the motoring public is willing to be subject to the same black boxes they want for truckers … or if it’s a case of “do as I say, not as I do” all over again.

“The driver is still the most important element in maintaining vehicle safety. However, [safety] systems can provide the additional split-second deceleration needed to maintain control of the vehicle in an emergency situation.” –Jon Morrison, president and general manager, Meritor WABCO Vehicle Control Systems.

With fuel prices out of sight and freight volumes sluggish at best, it’s easy to take a dim and grim view of the trucking industry’s prospects right now. But one thing that gets overlooked pretty consistently by the motoring public these days, much less the mainstream media, are the huge advances in commercial vehicle safety technology going on right under our collective noses.

It’s not something that’s just happened overnight, either. All the systems now in play – from Eaton’s VORAD radar system and similar offerings from Delphi, up to anti-rollover technology made by Bendix and ArvinMeritor – to new products waiting in the wings add up to a vastly improve working environment for truck drivers and the motorists surrounding them on the highway.

For example, I got the great opportunity to see ArvinMeritor’s OnGuard collision avoidance technology in action earlier this year ahead of the Technology & Maintenance Council meeting in Orlando, FL. [The slideshow below illustrates the kinds of vehicles involved, including some of the participants – especially the ubiquitous David Kolman, editor of our sister magazine Refrigerated Transport.]

Though expensive right now – list price is $4,500 – the system’s forward-looking mono-pulse radar sensor can detect multiple moving and fixed objects at distances up to 500 ft., “locking in” on relevant objects at distances of 275 to 325 ft., which is a three-second following distance at highway speed. If a moving object is detected, OnGuard automatically engages the throttle, engine retarder and service brakes when it senses a likely collision without immediate action from the driver.

Think about that – automatic braking! Just getting all the technology to work properly is a concern, of course, but this system is already on the road in some 200 trucks operated by refrigerated carrier Prime Inc.

ArvinMeritor’s competitor Bendix is hard at work on similar product, a new active cruise control (ACC) system it plans to roll out in the fourth quarter this year. The ACC system ties a truck’s brakes, engine, transmission and the company’s electronic stability program system together with radar sensors so a truck can automatically slow down and come to a full stop if it detects a slowing vehicle ahead. Bendix won’t offer ACC without its full stability control system because it is needed to prevent further control loss issues from developing in emergency braking situations, the company noted.

(Bendix’s electronic stability program or ‘ESP’ is in use on all kinds of trucks, including mixers. This one was available for test drives at MEMA’s safety summit in Washington D.C. last year.)

Yet it’s important to look outside the pure competitive nature of these companies to truly appreciate how far we’ve come in terms of boosting truck safety. All of these firms are working hand-in-glove with the Motor & Equipment Manufacturers Association (MEMA) to get the attention of Congressional lawmakers firmly fixed on the subject of enhancing commercial vehicle safety.

MEMA is holding an annual safety technology demonstration on Capitol Hill next week on June 24, which I’ll unfortunately miss since I will be on vacation. All of these systems, plus many more for the car and light truck arena, are made available for hands-on testing by congressmen and women, along with their various aides. Seeing all of this technology in action is awesome, yet it’s still an uphill battle to get any support for fiscal incentives to get truck owners to invest in it.

(Volvo has made Bendix’s ESP standard equipment on its tractors.)

“Over the next 10 years, we feel there’s going to be a growing appetite for active vehicle safety systems in the U.S.,” Joe McAleese, Bendix president & CEO, said recently. “We believe the best way to drive adoption of safety technology is through incentives, not mandates, because we believe there is substantial payback fleets can achieve from them. And once fleets see that payback, such technology will become ingrained.”

That’s one reason Bendix strongly supported the Commercial Motor Vehicle Advanced Safety Technology Act of 2007 (H.R. 3820) on Capitol Hill last year. That bill offered tax credits of up to $1,500 per system, $3,500 per vehicle and $350,000 per fleet for installing a variety of safety technologies on commercial trucks, but sadly gained no traction among lawmakers.

“Our primary focus is to deliver cost-effective solutions that make the roadways safer,” said McAleese. “H.R. 3820 was just one example of a congressional initiative that could make critical vehicle safety technologies even more accessible for today’s safety-conscious fleets. It is our hope that our participation in MEMA’s legislative summit and similar events will increase the visibility of these important issues.”

As I’ve been in the truck cabs, watching these kinds of safety systems in action first hand, I’ve no doubt they can do an awful lot to improve highway safety for everyone. The tough part is convincing Congress and other major players, like insurance companies, to support them.

I mean, at the ArvinMeritor event in Orlando, one fleet manager actually browbeat his insurance representative into attending so he could witness first hand how new safety technologies could lower the carrier’s risk profile – thus qualifying them for a break on their premiums. It still proved a hard sell, but hopefully it won’t remain so much longer.

“Painting in watercolor is like walking a tight rope; one must achieve a perfect balance between what the paint wants to do and what the artist wants to do, or all is lost.” –Mary C. Taylor

It can’t just be about the money. That’s the conclusion reached by Professor Jerry Osteryoung from the college of business at Florida State University.

Over the many years of a career teaching a wide variety of business courses, he’s come to believe that business owners cannot just focus on making money to the exclusion of everything else; that, in his mind, is a recipe for eventual disaster.

Osteryoung isn’t out on the fringe on this one, either, as any recent glance at the business community in this country can tell you. Enron? WorldCom? Countrywide? Bear Sterns? All undone by pure naked greed – an all-consuming desire to generate hefty profits at the expense of just about everything and everyone else.

Of course, as many have told me more than once (usually with a wry laugh), you can’t focus exclusively on making money in trucking because there IS no money to be made it trucking. I mean, an industry with a profit margin hovering around 5% – if you’re lucky – doesn’t attract the kind of speculators now making hash out of the petroleum markets.

Yet trucking is a vital cog in out nation’s economy, carrying 70% of all U.S. freight tonnage. Despite that critical profile, most drivers in this industry – especially on the long haul, for-hire side of the ledger – must work long hours (a 14 hour day) for an overage five figure annual pay that fluctuates depending on mileage and keeps them away from home for days if not weeks at a time. Not exactly a winning combination.

Yet most drivers and others involved in trucking don’t do it for the money – they work in this business because they love it on some level. And successful carriers – small and large – stay afloat in this business by treating drivers and the rest of their employees justly – irrespective of the money. That’s the key, Professor Osteryoung believes, for a business to sustain itself for the long haul. Here’s why, in his own words:

“When I was in classes getting my Ph.D. in finance, my professors told me over and over, ‘the purpose of a business is to make money for its owners.’ Unfortunately, I cannot tell you how many times I repeated this mantra to my students over the years. Now, however, I have a very different opinion on the subject.

A firm cannot stay in business just to make money for its owners at the exclusion of everything or everyone else. If an entrepreneur takes the attitude that he or she deserves to make all of the money, the business will suffer and will most likely crash and burn. Just consider who stands to lose the most when a business fails.

Some folks – my former professors included – would argue that the owners lose the most since they have the most at risk. There is no question in my mind that entrepreneurs lose a bunch as they generally have the most invested in terms of dollar amount. They are not; however, the ones hurt the most by a business failure. A business closing is devastating to the employees.

Employees are one of the many entities that have a vested interest in a business’ success. In addition to owners, stakeholders such as employees, vendors, banks and customers have so much tied up in a business. They are vitally concerned with the firm’s well being and will put forth much effort to ensure its success. However, success is impossible unless all of the stakeholders are taken care of.

When a business fails all of the stakeholders suffer. Take for example a financial institution. A financial institution risks much of its depositors’ funds to support a business, and if the company fails, its own financial performance suffers.

If employees are not treated reasonably, the whole business will suffer as both the quality and quantity of work declines. So many entrepreneurs forget how important each and every employee is to the success of the business, and they often fail to treat employees well. If the business should fail, these employees are the ones that are going to pay a very high cost.

My colleague and I recently assisted an entrepreneur who had been operating a business with over 50 employees for a very long time. The business was losing hundreds of thousands of dollars each month, and we tried to give the entrepreneur the resources he needed to turn things around. When the situation failed to improve, we realized that there was only one alternative left: he had to close the business and file for bankruptcy.

Telling this entrepreneur that closing the business’ doors was the best course of action was, by far, one of the hardest things I ever had to do in this job. What made it so hard was not that we had to give the entrepreneur this bad news, but because we knew what a loss it would be for all of the stakeholders, particularly the employees. Through no fault of their own, the staff would lose their jobs.

In my opinion, the purpose of a business is to serve the stakeholders. Businesses must earn money to acquire additional funds and assets, but its staff and other stakeholders are vital contributors to this endeavor. The key is to balance and deliver on the needs of all the stakeholders.”

As usual, Professor Osteryoung puts some interesting thoughts on he table for consideration. You can always reach him by e-mail at jerry.osteryoung@gmail.com or by phone at 850-644-3372.

OK, so we all know I like show trucks, big sleepers, custom paint projects, you name it. So I’ve collected a few that I’ve encountered on the road — as well as some stellar submissions from several OEMs highlighting trucks created to honor our military veterans — for your viewing pleasure below.

Always feel free to send photos in of your own “glam” trucks by the way to me — even if your pride and joy only has a wee bit of chrome, it still makes your rig a unique item on the highway. Safe travels everyone!

“Since the first of this year, U.S. market and economic conditions have become significantly more difficult. Of greatest concern is the unprecedented rise in oil prices, which have more than doubled over the past 12 months alone. [They] are viewed by most experts as part of a long-term trend toward higher energy costs – a structural change, not just a cyclical change.” –Rick Wagoner, chairman and CEO, General Motors

We’re witnessing history in the making when it comes to cars and trucks right now – a massive, almost instantaneous shift away from sport utility vehicles (SUVs) and light trucks among consumers. At the same time, automakers are speeding up efforts to bring more hybrids to the four-wheeler market – not an easy thing to do when vehicle development is a process typically measured in years.

Yet desperate times make for desperate measures. When the cost of fuel hit $4 a gallon for gasoline and soared over $5 per gallon for diesel in the U.S., it created all sorts of bad karma for everyone. Some 835 trucking companies went out of business in the first quarter alone this year, reducing truck capacity by 3%, due to the spike in fuel costs. It’s hitting everyone in the wallet, which is why public transit agencies are witnessing a big hump in ridership – a 3.3% increase so far, which equates to 85 million more trips at this point compared to the same period in 2007.

People’s car buying patterns are also changing, with all kinds of consequences for automakers – none of the pretty. For the U.S. domestic manufacturers – General Motors, Ford, and Chrysler – it’s a bad patch, for they all committed heavily to building predominantly SUVs and pickups back in the 1990s, when fuel costs bottomed out at 90 cents a gallon. Now consumers are abandoning those vehicles in droves, forcing the automakers to switch their focus to fuel-efficient cars, hybrids, and alternative fuels – probably for good.

“These higher gasoline prices are changing consumer behavior, and rapidly – significantly affecting the U.S. auto industry sales mix,” explained Rick Wagoner, GM’s chairman and CEO, in a speech before analysts in Delaware earlier this month.

(It’s tough navigating the rough economic waters of today, Rick Wagoner will tell you.)

”We at GM don’t think this is a spike or temporary shift; we believe that it is, by and large, permanent,” he said. “Reflecting this rapid increase in oil prices, general economic conditions in the U.S. have changed considerably in recent months. While we remain reasonably constructive on the long-term prospects for the auto industry in the U.S., we view the near-term U.S. economic and auto market environment with considerable caution. These conditions, along with the rapid change in auto industry sales mix, require us to take further actions that will position us for sustainable profitability and growth.”

For starters, GM is green lighting a plan to build 1.0- to 1.4-liter engine, which will be the standard power plant for its new next-generation Chevy compact car. Waggoner also noted GM plans to have 20 hybrid vehicles on the market by 2012, is beefing up investments in two cellulosic ethanol startups to help foster much needed growth in biofuels, and plans to turn its Chevy Volt electric prototype into a mainstream offering by the end of 2010.

(Chevy’s Volt sure doesn’t look like an electric car, now does it?)

The Volt is critical, because it’s an electric car with a small gasoline motor designed to recharge the batteries when plug-in power isn’t available. Dubbed an “extended range” electric vehicle, it could represent a major breakthrough in vehicle design – the ultimate commuter car, so to speak. That would really alter the energy consumption pattern in transportation – if consumers accept it.

“We believe [the Volt] is the biggest step yet in our industry’s move away from its historic, virtually complete reliance on petroleum to power vehicles,” said Waggoner. “We also believe the technical goals of the Volt are not only achievable, but achievable generally within the time frame we previously outlined … and we are convinced that the Volt is an important investment for the future of our company and our stockholders.”

Yet GM also realizes that the shift away from SUVs and light trucks by non-commercial users means other major structural changes are necessary – such as shutting down plants. “We need to address the rapid industry shift away from trucks and SUVs … so, over time, we will cease production at four GM truck assembly plants,” said Waggoner, by 2009 and 2010. That includes GM’s Janesville, WI, plant where the Chevy Tahoe and Suburban, GMC Yukon, and Chevy, GMC, and Isuzu medium duty trucks are built. The Toluca, Mexico, plant where the Chevrolet Kodiak medium duty trucks goes silent by the end of this year, as GM sold its medium-duty line to Navistar earlier this year.

(The oversized Hummer is also on the chopping block, according to GM.)

“To reiterate, timing of all these actions is subject to model lifecycles and market demand. If volumes continue to wane, the timing could be pulled ahead,” Waggoner stressed.

Yet it’s not all bad, stressed Troy Clarke, president of GM’s North American operations. In a talk given at the Brookings Institution, Clarke noted that vehicle sales are actually growing, especially when one looks at the global picture, and that if electric and hybrid vehicles make up a significant part of that growth in the near future, the pressure on petroleum prices may ease up even faster.

“Despite the current challenges of the auto industry in the U.S., globally our industry is in the midst of tremendous growth,” said Clarke. “There are about 820 million vehicles in the world today; roughly 12% of the world’s population enjoys the benefits of automobile ownership and driving. As such, we expect that at least 15% of the world’s population will own a vehicle by 2020 – that’s a billion vehicles. This expansion is being fueled by growth in emerging markets like China and India.”

While Clarke readily admitted such growth creates serious concerns about the automobile’s almost exclusive dependence on petroleum, creating issues with supply and availability, sustainable growth, climate change, and even national security, electrification of the automobile could be a solution to all of them.

“Going forward, we can no longer rely primarily on oil to supply the world’s automotive energy requirements,” he said. “ GM believes that the long-term solution involves a march toward electrification – and the debate has shifted from ‘if’ this would happen to ‘when.’”

(Troy Clarke is trying to look on the bright side of the structural changes now occuring in the automotive industry.)

Parallel hybrid automotive powertrains are an important step on the journey, but the real value hybrids bring to the table is that they allow automakers to develop standards, engineering methods and tools, and real world validation models to further advance all-electric cars.

“City transit buses were the exact right place to start with hybrids: City driving cycles; Thousands of stops and starts per day; High up time and reliability requirements; and enough space to package first generation components. This was a great opportunity to demonstrate big fuel savings potential and that we did,” he said. “Over the past five years, we’ve helped save three million gallons of fuel, and 30,000 metric tons of carbon dioxide emissions.”

This next step represents the transition to a true electrically driven vehicle, Clarke noted, and when you consider that three-quarters of American drivers travel less than 40 miles in their daily commute, a fleet of Volts can have a huge impact on America’s petroleum dependence.

“The best part is an extended range EV like the Volt can do this while saving its owner a lot of money in operating expenses,” he added. “A conventional vehicle that gets around 30 miles per gallon costs about 13 cents per mile to operate. But, when you do the math to convert a kilowatt hour to cost per mile, an extended range electric vehicle like the Volt will cost about 2 cents a mile for electricity from the grid. So it’s not going to be difficult for customers to see the advantage in their pocketbooks.”

There are a lot of challenges to work through, such as further improving lithium-ion battery technology so they’ll last 10 years of life, 150,000 miles in a very rugged and hostile environment. But once that marker is reached, structural change to our transportation environment is really going to accelerate.

“Yes, we want to make an environmental technology statement. But we also want a car that sells and that people aspire to own,” Clarke said. “We want consumers to see the Volt as the game changer it is not only for our business, but for the way the world drives. Once they do, we can build on that success with other creative E-Flex models – but one step at a time.”

All I can say is, let’s hope they get a move on, for oil prices hovering around $140 a barrel is making mincemeat out of all kinds of household and trucking budgets in rapid fashion.

“Trade’s been a buffer; it’s kept GDP [gross domestic product] in positive territory. It’s clearly a cushion.” –Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez, as quoted in the USA Today newspaper.

There’s no question our economy is hurtin’ big time right now – and as you all know so well out there, the trucking industry is feeling more than its share of pain. With oil prices hovering at nearly $140 a barrel, resulting in gasoline costing an average of $4 a gallon nationwide and diesel at nearly $5 a gallon (almost $6 in California), we’re at historic levels of agony in this industry.

The jump to $2 a gallon diesel from a mere 90 cents a gallon back in 2000 – an upward tick that spawned several dramatic big rig protests on Capitol Hill in Washington D.C. – pales in comparison to what’s happening now. Did you know that Americans drove 11 billion FEWER miles in March compared to the same month in 2007? That’s the sharpest monthly drop in driving ever since the federal government began collecting these statistics in 1942. Yet oil prices STILL went up, despite such slackening in demand.

There’s an awful lot ingredients that form the ugly economic stew we’re in right now because of such astronomical oil prices. Don’t forget, it’s taken a long time to get here: roughly 25 years, since the last major oil shock we experience back in 1973 due to the Yom Kippur war in the Middle East. All those long lines at the gas stations around the U.S. came during a time when we imported 33% of our oil. Today, by contrast, we import over 58%.

We also haven’t built a new refinery in almost two decades, which puts a rigid ceiling on our ability to produce diesel and gasoline from raw petroleum. Them in the 1990s, the nation as a whole began buying and driving SUVs and trucks in huge numbers, which significantly drove up fuel consumption in the U.S. China and India’s rapid industrialization of the past decade – and their new-found demand for cars and trucks – is also driving up demand for oil. China’s demand for oil alone should grow 5.5% this year, a by-product of nearly 20% growth across its economy.

Then there’s all the speculation in the oil futures market right now, with billions being funneled into contracts by hedge funds, private equity funds, and other non-regulated investment entities that’s keeping prices up. Deny it all they like, but when U.S. demand for oil drops 5% in the span of several month, yet prices still go up, laws of supply and demand are clearly being bypassed somewhere along the chain.

So that’s all bad, ugly news to be sure. However, there’s a lot of GOOD economic stuff happening, too, thanks to burgeoning trade. Sure, we’re still in a trade deficit since oil is so costly and the dollar is so weak, but exports are running at a fast pace and companies are relocating operations to the U.S. from Europe and other locales because high oil prices are pushing their transportation costs into the stratosphere.

(Boeing is reporting a big rise in jet orders — in part because the U.S. dollar is so weak.)

The 7.8% increase in the U.S. trade deficit this April to $60.9 billion overshadowed 3.3% growth in exports, to $155.5 billion – the biggest jump since February 2004. Leading the way were sales of commercial aircraft, automobiles, and agricultural machinery. John Deere said it sales would jump 30% in South America alone this year. Economists are already revising their growth figures for the U.S. economy based on those strong export numbers, with Morgan Stanley predicting U.S. GDP will increase 1.1% in the first quarter, instead of its earlier projection of 0.9%.

(Containers lined up for export. Photo courtesy of Absolute Freight.)

There’s still plenty to worry about, not the least being the rapid jump in unemployment figures. One state that’s not doing well at all is Michigan, with unemployment at 7.2% and a state economy contracting by 1.2%. But overall, things are better in a lot of economic areas than many think. Let’s just hope the good outweighs the ugly sooner rather than later.