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Roemer Report – August 2006
RECORD YEAR FOR TRUCKING: Last year, trucks in the United States hauled a record-breaking 10.7 billion tons of freight, or 21.4 trillion pounds, nearly 69 percent of all domestic tonnage. Gross freight trucking revenues amounted to a whopping $622.9 billion, which was about 84 percent of the nation’s total freight bill. “Trucking is the driving force behind our great economy,” said Bill Graves, president and CEO of the American Trucking Associations (ATA). The increase in trucking freight about parallels the increase in the nation’s gross domestic product. An economist for the ATA predicts that there will be a slight increase in intermodal transportation this year and that the industry will spend around $100 billion on diesel fuel, compared to about $87.7 billion in 2005. About 8.6 million people are associated with the trucking industry, with the heaviest concentration of motor carriers in the Midwest and in the southeastern states. About 87 percent of U.S. carriers operate six or fewer trucks.
FUEL CONSUMPTION STILL STRONG: Despite record-high gasoline and diesel prices, Americans show no sign of reducing their fuel consumption. One economist explained that “consumption is essentially fixed,” because motorists cannot immediately change their lifestyles (i.e., the vehicle they drive, the distance they drive to work). The fact that sales of SUVs and light trucks continue to be strong suggests that Americans aren’t overly concerned about prices—or they’re simply getting used to them. Gasoline sales at stations continue to increase. Retailers, however, note that sales of food and drinks, which contribute significantly to profits, have dropped since May. Pump prices are around $3 a gallon in many parts of the country, and diesel prices are hovering close to that amount. The world uses roughly 85 million barrels a day—25 percent of which is consumed by the United States. One expert noted that if demand were lower, prices would drop. Also, because of various concerns—tensions between the West and Iran over Tehran’s nuclear program, concerns about possible U.S. hurricanes, and the war in Iraq—most experts do not foresee a correction in oil prices anytime soon. Still, one economist believes fuel prices could drop somewhat this fall, provided there are no hurricanes and provided Iran “tones down the rhetoric” over its nuclear ambitions.
BOSTON’S BIG NIGHTMARE: It started out as a good idea. Boston’s “Big Dig,” formally called the Central Artery/Third Harbor Tunnel project, would place Interstate 93 under downtown and connect the Massachusetts Turnpike to the airport with a third tunnel under Boston Harbor. Officials settled on this massive engineering project as a way to unclog one of the country’s worst bottlenecks. Construction began more than 10 years ago, but it has been plagued by long delays, criminal investigations, flaws, and cost overruns—skyrocketing from $2.6 billion at the onset to its present tab of $15 billion. In a tragic turn, one of the tunnels collapsed last month, killing a 38-year-old woman. Public confidence has been deeply shaken, and talk radio has been flooded with callers who say they are too terrified to travel through the tunnel system. To date, inspectors have found 362 dangerous flaws, including loose bolts, inferior concrete, suspect epoxy-bolt hangers, and flaws in the air ventilation system. A day after the fatal collapse, Governor Mitt Romney signed a bill that gives him broad investigative powers into the Big Dig’s defects. But the underlying problem is not unique to Boston. The Big Dig demonstrates the need for more solutions to the country’s escalating infrastructure problems. Over the next 20 years, the U.S. population will grow 40 percent and transportation activity will increase an estimated 103 percent. “Without a national transportation policy…to maximize interconnectedness while optimizing the cost efficiencies of the various modes of transportation, these problems will only further stress the U.S. infrastructure in the years ahead,” said Patrick Sherry of the National Center for Intermodal Transportation. As he sees it, congestion, capacity, conservation, and connectivity are the main challenges facing the transportation infrastructure.
HOS UNDER SCRUTINY: The American Transportation Research Institute (ATRI) is seeking feedback from motor carriers about how the 2004 hours-of-service regulations have affected collisions and driver injuries. Earlier this year, ATRI began collecting data to track changes in driver safety performance and measure it against the overall safety impacts of the HOS rules. “The response to ATRI’s first quarter call for carrier data demonstrated how strongly carriers feel about the latest HOS change,” said an ATA spokesman. “With continued participation from those carriers and more, the industry is certain to be provided with a detailed analysis of what the HOS rules changes have meant for safety.” Carriers wanting to submit their comments should contact ATRI’s Virginia Dick at (770) 432-0628 by August 4. Meanwhile, consumer advocate Public Citizen filed a lawsuit in federal appeals court, challenging the HOS rule issued last August, which increased the number of hours commercial truckers can drive in a day. In addition, the Owner-Operator Independent Drivers Association has filed a petition in federal appeals court asking to have the rule reviewed. The Federal Motor Carriers Safety Administration said it will examine the role of drivers’ hours of service and how the regulations affect highway accidents.
ON A GREEN MISSION: Per the Environmental Protection Agency’s mandate, ultra-low sulfur diesel entered the marketplace June 1. Trucking terminals are required to have the new fuel by September 1, and retail stations by October 15. What’s more, smokeless diesel engines will hit the marketplace next year. The cleaner-burning fuel and engines are just the latest in a string of initiatives intended to virtually eliminate pollution from the industry. Here’s a look at a few other initiatives: (1) UPS has begun testing a new hydraulic truck that the EPA calls the “most fuel-efficient and cost-effective delivery vehicle in the world.” The technology increases fuel efficiency by 60 to 70 percent in urban driving and lowers greenhouse gas emissions by 40 percent. Savings could amount to 1,000 gallons of fuel per truck each year, with a net savings of more than $50,000 over the life of the vehicle. (2) Launched in 2004, the Smartway Transport Partnership is a voluntary collaboration between the EPA and the freight industry. The goal is to increase energy efficiency among trucks while reducing greenhouse gases and air pollution. Con-way Freight is the latest company to join the partnership. The company said it will buy greener engines and test more efficient tires. Con-way already has a strict idling policy in place with automatic shutoff after five minutes. (3) Thanks to state and federal grants, Sharon Banks has founded a nonprofit group that helps small truckers get the technology they need—such as auxiliary power units and attachments that reduce wind drag—in order to reduce fuel use. She works mostly with small operations in Oregon, California, and Washington who operate the “oldest and dirtiest” trucks, but who lack the cash for new technology.
DRIVERS VALUE WORK-LIFE ISSUES: At a recent symposium, motor carrier executives agreed that work-life issues are becoming more important to employees, who prefer shorter routes over long-haul trips. Turnover “is the highest it’s been in the nine years I’ve been there,” said one recruiting director, who wants to add more regional terminals to keep drivers closer to home. The president of an Ohio company says he has lost drivers to fleets with more dedicated routes. Paul Williams explains that new drivers are often blindsided by the demands of trucking. “Their families cannot accept the lifestyle change,” said Williams, whose company requires candidates to read a lengthy list of job requirements and sign off on each one. This approach has helped the “he said-she said” issues that arise, said Williams. Still, many drivers see long-haul as only a temporary job—a way of getting into the industry. Regional haulers attending the conference said they experience lower turnover than larger companies because they try to get drivers home more often; they also have more drivers applying for jobs, they said. “The work-life issue has become huge,” said Williams, and executives only expect it to become more important.
U.S. TEENS PITCH IN: Volunteerism is alive and well among America’s youth. A study found that 15.5 million teenagers volunteered last year, contributing more than 1.3 billion hours of service. That means that 55 percent of kids between 12 and 18 years old participated in volunteer activities in 2004. That rate is nearly double the adult rate of 29 percent. “Too often, young people are seen as the recipients of service. Instead, they should see themselves—and be seen—as leaders and assets, who can make powerful contributions to their communities,” said David Eisner, CEO of the Corporation for National and Community Service, which performed the survey in conjunction with the U.S. Census Bureau. In addition, the survey found that 74 percent of teens who volunteer do so through their schools, religious organizations, or youth leadership groups such as 4-H or Scouts. Past research finds that teens who volunteer are twice as likely to continue volunteering once they reach adulthood. “By starting early and unleashing the energy and idealism of young people,” said Eisner, “we can help meet pressing needs and create a generation of lifelong citizens.”
The self is not something ready-made, but something in continuous formation through choice of action.—John Dewey