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The Roemer Report On-Line, August 2003

HAZMAT RULES WORRY FLEETS: APL Logistics conducted an informal survey of its contracted truckload and LTL carriers and found that fleets are far more worried about the new hazmat regulations than they are about the new hours-of-service (HOS) rules. Kirk Williams, the company’s vice president of freight management, said that the definition of hazardous materials is so broad that it encompasses even common household items like hairspray. The new hazmat rules require that all hazmat haulers undergo finger printing and background checks that include a review of criminal, immigration, and FBI records. Due to numerous questions about the expanded rules, the Transportation Security Administration (TSA) recently released more detailed information. According to the TSA, “a driver will be disqualified from holding a hazmat endorsement if he or she was convicted or found not guilty by reason of insanity within the last seven years, was released from prison within the last five years, or is wanted or under indictment” for any of the following: murder; assault with intent to murder; kidnapping; rape or aggravated sexual abuse; extortion; robbery; bribery; smuggling; immigration violations; RICO violations (racketeering); distribution of or possession of a controlled substance; dishonesty, fraud, or misrepresentation; unlawful possession, use, sale, distribution, or manufacture of any explosive device, firearm, or other weapon. “Those requirements create real issues, especially for LTL carriers as they carry a lot of hazmat goods and most of their drivers have hazmat endorsements,” said Williams. “That could hold up their operations as their drivers wait to get certified by the FBI.” By contrast, most of the motor carriers polled said adapting to the new HOS rules won’t be nearly as difficult.

TOUGHER OUT-OF-SERVICE PENALTIES: If the Bush Administration has its way, motor carriers will face stiffer penalties for out-of-service (OOS) violations and false records. As part of the $247 billion Safe, Accountable, Flexible and Efficient Transportation Equity Act of 2003 (SAFETEA), the proposal would double record-keeping violation fines to $500 per day, according to the Truckload Carriers Association. In addition, employers who “knowingly and willfully ignore OOS orders” could receive a year’s imprisonment or up to a $250,000 fine. Drivers who violate OOS orders would also face tougher consequences. First-time offenders could be slapped with a fine of $2,500 or more and a 180-day disqualification. Drivers with a second offense could be disqualified for up to five years and could face a penalty of up to $5,000. Also penalized are carriers that “tolerate widespread regulatory violations, and when caught, declare bankruptcy” and then rename the business to avoid penalties. To view the entire SAFETEA proposal, visit www.fhwa.dot.gov/reauthorization/safetea.htm.

TAXES WELL SPENT? Gary Petty, president and CEO of the National Private Truck Council, believes it’s only a matter of time before the trucking industry faces an increase in federal taxes on diesel fuel. Rather than oppose the inevitable tax increase, says Petty, the industry should try to bargain with the government for something in return. “I know it’s heresy but maybe our deal should be to support an increase in taxes if we get assurances of greater efficiency in our operations,” said Petty. He believes that fleets with good safety records—for both equipment and drivers—should be granted access to lanes or other dedicated space to allow those trucks to bypass heavy congestion and road construction. Recent government studies predict that freight levels will double by 2020, while lane capacity will experience only a negligible increase. “How can you not make improvements in the national infrastructure?” Petty asked. “If our members’ goods are not on the shelf, we don’t make money. We might be willing to pay a little more to get assurances that capacity is there” to move the freight on time. In fact, higher diesel taxes may be just around the corner. The House of Representatives has presented a plan to the White House that would increase fuel tax by 2 cents per gallon each year for six years, doubling the current diesel fuel tax of 24.4 cents per gallon. Petty is proposing that the Federal Motor Carrier Safety Administration run a pilot program in the Washington, D.C. area. He suggested that the safest fleets be allowed to use dedicated lanes or other expedited means to avoid congestion on the Capital Beltway, a 66-mile stretch that is notorious for delaying truckers.

SIX-YEAR FREEZE ON BIGGER TRUCKS: The trucking and rail industries announced a truce on one of Washington’s longest and most expensive lobbying campaigns. The American Trucking Associations (ATA) agreed not to lobby for expanded highway mileage for double- and triple-trailer trucks, and the Association of American Railroads (AAR) said it will suspend its counter-campaign to convince voters that bigger trucks are more dangerous. The groups agreed instead to spend their lobbying time and money on freight issues that are mutually beneficial, such as persuading Congress to provide money to increase security, expedite border-crossing clearance, and expand intermodal truck-rail terminals. The two groups also plan to work together to alleviate diesel-fuel emission standards and other costly environmental rules that affect both industries. The agreement reflects the everyday reality that truckers and railroaders are working increasingly together with intermodal. Big companies like UPS, J.B. Hunt, and Schneider are major rail intermodal customers. “Even though rail carriers and motor carriers are competitors in many transportation markets,” said an ATA-AAR statement, “they are also part of an integrated national freight network.”

LACK OF SLEEP BAD FOR HEART: Researchers at Boston’s Brigham and Women’s Hospital have found that too little or too much sleep may be associated with an increased risk of heart disease, the number one killer of U.S. adults. A team of researchers found that sleeping five or fewer hours per night was associated with a 30 percent increase in risk of coronary heart disease, while sleeping six or fewer hours was associated with an 18 percent greater risk. Those sleeping eight hours per night had the lowest rate of coronary heart disease. In an unexpected discovery, the researchers found that sleeping nine or more hours per night was also associated with an increased risk of coronary heart disease. Those who slept nine to 11 hours per night were 38 percent more likely to suffer from coronary heart disease than those who slept eight hours per night. The reason for the heightened health risk for those who sleep more than eight hours remains a mystery. Chronic sleep deprivation, however, is common in today’s society. One third of Americans sleep six or fewer hours per day. Previous research has shown that the effects of lack of sleep include increased blood pressure, heart rate variability, decreased glucose tolerance, and increased cortisol levels.

BRINGING SAFETY HOME: Although staying safe when off the job is really the responsibility of the individual, many businesses are now trying to help their workers avoid injuries in their homes and communities. Their reasons are two-fold. When a business helps promote safety away from work, it extends the caring philosophy that its employees see at work. In addition, such efforts help improve the company’s bottom line. When a worker is injured away from work, businesses must deal with the accompanying expenses such as absenteeism, turnover, medical expenses, and lost productivity. While businesses have seen workplace deaths fall to 1.9 fatalities per 100,000 workers, accidental deaths in the home and community have increased dramatically—21 percent in the last decade. According to a survey by the National Safety Council, 44 percent of companies polled say that they now have a system for tracking the expenses and number of off-the-job injuries. At DuPont, safety professionals have targeted programs to deal with the most common injuries that their employees incur off the job. DuPont hosts programs that deal with falls in the home, defensive driving techniques, personal protective equipment in the home, safe electrical practices, and the importance of a healthy diet and exercise. For off-the-job safety initiatives to succeed, say experts, businesses must actively promote a culture of safety at work and home.

FROM BETTER TO BEST: While solid management helps keep many businesses afloat, world-class management puts businesses far beyond the competition. How can businesses move from being “good” to being the “best”? Here are the key elements of world-class management: (1) Always think outside the box. Management must make innovation a key business practice. Everyone should be constantly asking, “How can we do this better?” Management should continuously look for new ways to solve problems and different ways to accomplish goals. (2) Make every practice a “best practice.” Keep an eye on how competitors and related industries are doing things more efficiently. Adopt new “best practices” to make your organization more competitive. (3) Keep adding to shareholder value. While “value-added” may now be a business cliché, the idea of adding to value still holds true. Adding value can take any number of forms, from improved customer service to cost reduction to cutting-edge technology. Every organization must add significant and measurable value to become a world-class organization. (4) Improve the customer experience. Management should have formal and informal customer satisfaction measurements in place. (5) Continuously reduce errors. While no business can be error-free, management should focus on reducing error rates in all aspects of the organization.

Tact is the ability to see others as they wish to be seen.