Insure My Rig

Insurance For All Your Commercial Trucking Needs. www.InsureMyRig.com. Please contact us today for a no pressure and speedy quote. Contact Us Or call today 888-931-1934 Our decades worth of experience will make your purchase of commercial insurance easier on you!

The Roemer Report On-Line, April 2001

TRUCKING MAY TURN AROUND BY JUNE: Because the trucking industry's biggest customer, manufacturing, is in recession, trucking is too, say analysts. The good news, though, is that trucking will be among the first to feel the results when the economy gets back on track later this year, according to the more optimistic viewpoints. Of course, no one can predict with certainty when the economy will regain its vigor, but some believe the Federal Reserve's interest rate cuts will turn things around by June. "Then these carriers will thrive like never before," predicts one expert. "The list of negatives these companies have had to get past is unprecedented. I see '02 as being a very good year." In addition to the downturn in manufacturing, trucking has had to contend with high diesel fuel costs, increases in driver pay, higher insurance premiums, and credit problems linked to the low values of used trucks. An economic recession occurs when at least two consecutive quarters show a drop in gross domestic product. So, technically, the United States is not in a recession, whereas manufacturing is. But this is just a "minor interruption," believes one analyst, who predicts a
5 percent growth in GDP by year's end. In the truckload sector, 2001 and 2002 could be good years at least for the strongest companies, according to stock analysts A.G. Edwards & Sons and BB&T. They believe the current trucking hardships could force some weaker companies out of business, allowing the stronger ones to enjoy their own accounts as well as those of their failed competitors.

EPA POLLUTION STANDARDS UPHELD: In a defeat for trucking and other industries, the U.S. Supreme Court recently upheld the Environmental Protection Agency's (EPA's) right to set air pollution standards without considering the cost to business. In the opinion, Justice Antonin Scalia wrote that the Clean Air Act directs the EPA "to identify the maximum airborne concentration of a pollutant that the public health can tolerate…and set the standard at that level." The high court also upheld the EPA's authority to issue regulations, ruling against industry arguments that the agency improperly assumed legislative authority that belongs to Congress when it set tougher standards on smog and soot in 1997. Still, the justices maintained that the 1997 standards were contradictory and should not be implemented. The issue will go back to the U.S. Court of Appeals. In a related development, the White House decided to proceed with a Clinton administration plan to drastically cut the amount of sulfur in diesel fuel by 2006 (refer to last month's Roemer Report for details). The Bush administration had ordered a review of the regulation in January, and opponents of the plan had hoped that a review would result in a repeal, or at least changes, to the ultra-low sulfur rule.

SMOKING TRUCKERS GET DOUBLE WHAMMY: Truck drivers live 15 years less than the average person, according to a recent study. Irregular hours, lack of exercise, poor diet, and smoking contribute to their shorter life spans. While no one knows for sure how many U.S. truckers smoke, a look into any truck stop restaurant suggests that it is far more than the general population. Over 24 percent of males smoke and 22 percent of females. Each year, some 430,000 Americans die from smoking or being exposed to cigarette smoke. Every smoker has heard the grim list before: smoking is directly linked to lung disease, coronary heart disease, and cancers of the lungs, larynx, esophagus, mouth, and bladder. But truck drivers who smoke in their cabs are perhaps at even greater risk of developing these illnesses. They get a double dose of toxins by inhaling smoke directly from the cigarette and by breathing in their own second-hand smoke that remains inside the cab. Donna Reynolds, a spokeswoman for the American Lung Association says, "Truckers are breathing in toxic air inside their own truck. If the air outside contained the same pollutants a trucker breathes in when smoking in a cab, the EPA would be regulating [the air quality] and would not allow it." But quitting smoking is one of the most difficult things a person can do, says Reynolds. Just consider that the average smoker who has attempted to quit has tried to do so five times. For information on quitting smoking or for more information on the health effects of smoking, visit the web site www.cdc.gov/tobacco or www.lungusa.org.

THE TRUCK GLUT: The trucking industry is starting to feel the painful effects of the glut of unsold, late-model used vehicles. It's gotten to the point where truck sellers are relieved when they can move trucks off their lots with the smallest possible loss. And large fleets, who usually plan on recouping 50 percent of the original cost of the equipment, are getting closer to 25 percent today. Analysts predict a depressed used truck market for another two years or so. All these factors are forcing used truck sellers to offer enhanced warranties, and various incentives like fuel card discounts and deferred payments to attract buyers. Some sellers are turning to the Internet as a way to sell used trucks conveniently and reach a broader market; others prefer traditional auctions, since they usually result in a sale and quickly improve cash flow. In today's market, sellers are doing all they can to minimize the amount of money lost in a sale. Better specs go a long way toward selling vehicles. It's a buyers' market, so "buyers who used to look for 400-hp engines are now looking for 500 hp," says the vice president of one fleet. Also, trucks that have been meticulously maintained are sure to sell. A big mistake, though, say most analysts, is to hang onto trucks for a year or more, thinking the value will improve. "People who thought they would be smart and hold onto their trucks are finding they now have too many miles, and nobody wants them," says the used truck manager for Kenworth Truck Co.

HANGING ON TO DRIVERS: It's a figure that sends chills down the backs of fleet executives everywhere. The average trucking company faces an $8,200 loss when a driver leaves. That amount accounts for advertising, recruiting, sign-on bonuses, lost production due to inexperienced drivers, and lost revenue from trucks without drivers. So why is it so difficult to keep drivers? How can companies get them to stay? Those questions have long plagued small and large carriers alike, which have a turnover rate of nearly 100 percent. But some companies are doing better at retention than the average. And here is what they say helps keep turnover low: (1) Shorter runs. Millis Transfer Inc., a Wisconsin company, finds the biggest factor in keeping drivers is letting them go home each night. The company not only loses drivers to other trucking jobs, but also to other industries. Since the company began offering more localized jobs, turnover has dropped substantially. (2) Pay and benefits. A Tennessee company claims pulling out all the bells and whistles regarding benefits keeps drivers onboard. The company offers a 401(k) plan with matching funds, eye care insurance, a credit union, health insurance, and "the best equipment money can buy." Other companies offer performance and safety bonuses in the form of extra pay or time off and referral bonuses. (3) Top-of-the-line equipment. Millis Transfer maintains that having first-rate equipment "is something our reputation was built on." And that reputation is the company's best recruitment tool. (4) Camaraderie. Promoting camaraderie goes a long way toward driver retention. Millis Transfer offers fun activities that promote close relationships like NASCAR races and football games.

HIGH-TECH SAFETY: From automatic transmissions to anti-sleep units, high technology is providing truckers with a bevy of features that promote safety as well as comfort. And every fleet manager knows that safe drivers use less fuel and put less wear and tear on the engine, adding up to reduced operating costs. Consider the latest high-tech safety features: (1) Collision warning systems (CWS). This advanced technology radar system alerts drivers to potential oncoming hazards, such as stopped or slow-moving vehicles. CWS is especially useful at nighttime and in inclement weather conditions. One company founds its CWS reduced accidents by an average of 78 percent. (2) Side air bags. To reduce injuries from rollovers, Freightliner Corp. has introduced a tubular side air bag system in heavy-duty trucks. "More than half of all heavy-duty truck driver fatalities occur during rollover accidents," says a Freightliner executive. "The tubular side air bag system addresses a leading cause of those deaths-head contact with the vehicle interior." (3) Larger seats. A Wisconsin company designs seats with larger drivers in mind. Extra wide seat and cushions promote comfort, and an automated power adjustment provides a 2-inch height adjustment and 7-inch track adjustment. Also adjustable are armrests, headrest, and front and rear tilt. (4) Automated massage. During prolonged periods of driving, muscle fatigue can reduce strength and coordination, resulting in increased risk of error. An automatic massage system, however, designed by a Canadian firm, was found to relax 90 percent of drivers tested.

BOTTOM LINE ATTITUDES: Does a positive attitude at work really affect an organization's bottom line? Yes, according to a study on productive workplaces by the Gallup Organization. And managers play a significant role in fostering the attitudes that can have far-reaching effects in an organization. For example, the study found that positive employee attitudes are likely to create 50 percent more customer loyalty and are 44 percent more likely to result in above average productivity. Positive employee attitudes also have a significant impact on profits and employee retention. The study revealed that even within one organization, assumptions about the entire company, its employees, and its culture can be incorrect because many subgroups and subcultures exist. Traditional research regarding overall satisfaction and definitions of a "good" workplace fail to address these subgroups. The Gallup consultants say that by using more specific and reliable employee attitude data that addresses these groups, managers and supervisors can have a more direct impact on enhancing business outcomes. By working on the attitudes that need to be improved, front-line managers can first foster positive attitudes among employees, and second, create a more profitable workplace.

You must keep your mind on the objective, not on the obstacle.
-William Randolph Hearst, Publisher