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The Roemer Report On-Line, January 2000

NEW AGENCY OVERSEES TRUCKING: The trucking industry is bidding adieu to the Federal Highway Administration and hello to the new Federal Motor Carrier Safety Administration, which now oversees truck and bus safety. This is "the culmination of a 15-year effort to see motor carrier safety placed at the same level with the other modes of transportation," said Walter B. McCormick Jr., president of the American Trucking Associations. Transportation Secretary Rodney E. Slater said, "This measure will get dangerous vehicles off our highways, save lives, and help us reach our goal of reducing these fatalities by 50 percent over the next 10 years." The new legislation accomplishes the following: gives states an extra $225 million in funds between 2001 and 2003; establishes a program to certify safety inspectors to inspect truck and bus companies; requires the Department of Transportation to implement improved truck safety regulations, as recommended by the department's inspector general; changes the commercial driver license program so that truck drivers without a valid CDL would face a six-month suspension.

BLAME IT ON CARS, NOT TRUCKS: In a car-truck collision, only one driver is usually responsible for the accident. And chances are, it's the driver of the passenger vehicle. A new study found that 70 percent of fatal accidents between passenger vehicles and trucks are caused by the driver of the four-wheeler. Evaluating more than 5,000 fatal car-truck crashes, the University of Michigan Transportation Research Institute found that passenger vehicles were responsible for 92.5 percent of head-on collisions in the truck's lane, the most common type of car-truck accident. Drivers of passenger vehicles were also more likely to be responsible for other types of accidents. Seventy-six percent of accidents in which passenger vehicles were struck in the side were the fault of the driver of the passenger vehicle; truckers were responsible for 13.5 percent of those accidents, and both drivers were at fault in 8.5 percent of those cases. When trucks were struck from the rear, passenger-vehicle drivers were responsible 76 percent of the time, while truckers were responsible for 4 percent of those crashes, and both parties were at fault 16 percent of the time.

GOOD TIMES FOR TRUCKING: For the country's nearly 600,000 drivers of large trucks, the robust economy means good money and plenty of work. Truckers transport 60 percent of the nation's tonnage and a whopping 81 percent of the value of all freight. Because of the last decade's healthy economy, trucking is bigger than ever. The industry has taken on new functions, like acting as "warehouses on wheels." Many stores and factories, including those that do business online, are cutting costs by reducing or eliminating the warehouses they use to store materials for manufacturing products and for the final products. Thanks to this "just-in-time" method of inventory, revenue was up more than 60 percent this past decade, with the number of big trucks (weighing over 10,000 pounds) up 18 percent to 1.7 million. While trucking is a busy, thriving industry, trucking as an occupation can be trying. One owner-operator speaks for many when he talks about how tough it is today compared to when he started as a trucker 23 years ago. "Everything is on time, on time," these days, he said. Regardless of the reason for a late delivery, he continued, "we get nasty little notes, 'Why didn't you make it on time?" In this fast-paced economy, truckers who have complaints with dispatchers simply can quit and be working for another company within a week. And many dowith the average trucking company's turnover rate of 100 percent annually.

READY FOR EBS? In Europe, dual-piston air discs and electronic braking systems (EBS) are the norm. And most experts believe it's only a matter of time before they're standard in this country. Commercial vehicles in Europe have used EBS since 1996, when Mercedes-Benz made it standard on Actros trucks. "EBS does for brakes what ECUs do for engines," explains one online magazine. "It converts pedal position to an electronic signal, which is then zapped to solenoids that precisely activate the desired components." EBS provides many benefits. It automatically boosts power on poorly performing brakes, providing more stable braking and even wear. If a brake becomes disabled, warning lights alert the driver. Plus, malfunctions can be diagnosed easily with common shop computers. EBS is still mostly unavailable on North American trucks since it should be used with air-disc brakes, which are rare among Class 8 vehicles. While air-disc brakes are acknowledged as safer than drums, they are far more expensive. One fleet owner says he pays an extra $3,000 per truck for air discs and is penalized $3,500 per trade-in. Another obstacle is servicing air discs, since there are few mechanics equipped with the required technical expertise. While air discs have several challenges to overcome, their future in North American trucks is all but certain. Although it won't be easy giving up the fairly cheap and effective drum brakes, experts believe the U.S. trucking industry will start moving to air discs in 5 to 10 years.

WHAT WENT WRONG? An admittedly subjective analysis of the main reasons why carriers fail in business appeared in a recent issue of Commercial Carrier Journal. John Terry, chairman of an interstate carrier, looked at the journal's TOP 100 carriers for 1989 and for 1980 and came up with several reasons for carrier decline. Here are some of his findings: (1) Sold to a financial buyer, not another trucker. Thirty-one carriers of the1989 TOP 100 were acquired by financial buyers, and only four have since prospered. Of the 1980 TOP 100, 41 were eventually owned by financial buyers, with only four doing well. The carriers that survived were the ones that ended up in the hands of truckers, suggesting that truckers knew more about the business than the buyers with MBAs. (2) Deregulation's impact. No surprise here. Deregulation forced many unionized carriers out of business. The wage levels of unionized carriers were about twice that of non-union carriers. (3) Owner-manager succession. "It is more difficult to attribute failure to management succession than other causes," writes Terry. But there are several cases where "the second or third generation of family ownership created the problem." Terry recommends that second generation family members get technical qualifications, such as a CPA or law degree, so they can handle the financial side of the business. (4) Poor management. This category includes everything from being out of touch with pricing or pay levels to clashes of culture and managers who spend too much time on the golf course. (5) Expansion beyond financial resources. Carriers that ran out of money due to expansion usually had an additional reason for failure, such as a recession.

AVOIDING AGGRESSIVE DRIVERS: Last year, the Automobile Association of America reported that one-fourth of Americans say they engage in aggressive driving. Those adults admit to speeding, running red lights, changing lanes excessively, or tailgating. The main explanations cited for aggressive driving include running late and traffic moving too slowly. Other reasons include being angry before getting behind the wheel, traffic congestion, and feeling angry at another driver's actions. The AAA Automobile Club of New York and the National Safety Council offer safe-driving tips geared toward four-wheelers, but considering the increased frequency of road rage, truck drivers would also do well to heed the advice. First and foremost, say the experts, simply avoid aggressive drivers. If someone is flashing their lights or tailgating, get out of the waydoing so can prevent a bad situation from getting worse. If you do something that angers another driver, mouth the words "I'm sorry." Also, know the signs of drunk driving. Drivers may be intoxicated if they travel at excessively fast or slow speeds, suddenly stop or turn, swerve, disregard traffic signals, or drive at night without headlights. Keep a safe driving distance behind drivers who appear to be drunk, and call the police department immediately.

ATTITUDE IS EVERYTHING: An old man lived by the side of the road and sold hot dogs for his livelihood. Because he was hard of hearing, he had no radio. And because his vision was poor, he never bothered with newspapers or television. But he sold the best hot dogs for miles around. He had signs on the highway and on the side of the road advertising his product. Word of mouth spread and more and more people came to enjoy his hot dogs. The old man increased his meat and bun orders and bought a larger stove to handle the boom in business. He even got his son to help him out. But that's when things changed. "Dad, haven't you been listening to the radio or reading the newspaper?" asked the young man one day. "We're in the middle of a terrible recession." That got the father thinking: "My son's been to college. He reads the papers and listens to the news. He ought to know." So the father reduced his meat and bun orders and took down his signs. Sales dropped instantly. "You're right, son," said the father. "There's a terrible recession going on."