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The Roemer Report On-Line, June 2001

STAY TUNED FOR SATELLITE RADIO: This summer, some lucky truckers will be able to listen to the same radio station for the entire drive. There will be excellent reception, few commercials, and 100 channels to choose from. What makes all this possible? Satellite radio, a service costing about $10 per month and requiring an antenna and a receiver (not a satellite dish). The receiver will be available in retail stores for $150 to $300 and also will be an option on some newer trucks. How will satellite radio work? Two companies plan to offer the service. Sirius Satellite Radio and XM Satellite Radio will broadcast music stations from their own studios; third parties, such as CNN and National Public Radio, will broadcast talk shows. The companies will send signals to satellites by dishes at the studios. Each channel will feature a specific program, focusing the likes of rock, country, Christian, talk, news, sports, or weather. In addition, each company will offer a channel geared specifically toward truckers. "Our trucking channel will serve truckers in a way they have never been served before," says the director of programming for Sirius. It will air 24 hours a day and offer truckers a "listening playground." Insiders believe that satellite radio will be a tremendous tool for driver retention and could be used as a reward for safe driving. No one can predict with certainty how popular satellite radio will be among truckers. But if the already-existing satellite television is any indication, satellite radio will be in high demand. One company offering satellite TV says, "This has been extremely popular with drivers. We have offered the program for three months now and already 20 percent of drivers are utilizing it."

HURRY UP AND WAIT: You don't have to live in one of the largest cities to know how frustrating traffic congestion is today. Sitting in traffic has become commonplace throughout the United States. While Americans spent about 11 hours idled in traffic annually in 1982, they now spend upwards of 36 hours each year waiting for traffic to move. In Los Angeles, where U.S. highways are most congested, residents last year spent about 56 hours a year on congested roads. According to a study by the Texas Transportation Institute, traffic congestion creates costly problems, including $78 billion in wasted time and burned gasoline. The study indicates that new highways, as well as mass transit, haven't kept pace with the surge in new housing and business. Another research group predicts that the increasing congestion could have detrimental effects on the economy. It says an inadequate highway system for the movement of goods would jeopardize the high quality of life Americans have become accustomed to. Some advocacy groups say the solution to congested highways, however, is not more roads. In large cities where mass transit is an option, they advise residents to hop on a train or bus to alleviate some of the bumper-to-bumper traffic.

PUTTING A PRICE TAG ON CRASHES: Each accident involving a truck costs on average $76,000, according to a study by the Federal Motor Carrier Safety Administration. That figure is reflected in 1999 dollars and includes trucks with a gross weight rating of more than 10,000 pounds. Costs measured in the study included medical charges, emergency services costs, property damage fees, lost productivity costs, and a monetary value assigned to a decrease in quality of life. The study also found that trucks with two or more trailers had the highest crash-related expenses, averaging $117,309 each. Trucks with one trailer averaged $84,588 per accident, and bobtails amounted to $74,695 apiece. Fatal crashes cost the most with an average of $3.4 million per accident, according to the study. Analysts say the number of fatal truck crashes is decreasing, but injuries continue to rise. Still, thanks to high-tech safety devices and air bags, trucks and four-wheelers alike are becoming safer on the whole, say experts. Also, urban congestion causes traffic to move more slowly so that more vehicles are traveling at slower speeds when accidents do occur.

RAILROADS FOCUS ON INTERMODAL: With the slower economy and a decline in their traditional carload business, railroads are investing in intermodal facilities, hoping to attract customers and boost revenue. And so far, the plan seems to be working. The last five years have set records for the amount of intermodal freight hauled. Intermodal is no longer considered a substitute service, but a "legitimate revenue source for the railroad," says the president of the Intermodal Association. In an effort to woo customers, rail companies are focusing on superior service. For example, Burlington Northern Santa Fe (BNSF), which handles more intermodal traffic than any other railroad, lets shippers purchase a service guarantee for domestic shipments. For each load that does not arrive on time, the shipper receives a 100 percent refund. In the last year, BNSF has handled about 1,000 loads under the guarantee and has had to refund only 15. Steve Branscum, BNSF's vice president for consumer products says, "Our service guarantee is attracting new customers who have traditionally shipped only over the road." The potential for rail companies to divert traffic from highways could be big. Some studies suggest the total intercity truck market, which currently is $10 billion, could rise to as much as $90 billion. But railroads insist they don't see truckload motor carriers as competitors. "Our philosophy is that the motor carrier has to become a customer or partner rather than competitor," says Branscum. "I think we will ultimately land on that and will create an environment where the motor carrier wants to use our services."

MORE TO AVL THAN MEETS THE EYE: Since wireless communications and automatic vehicle location (AVL) technology entered the market 10 years ago, their popularity has increased among large and small fleets alike. While originally used to ensure that trucks traveled proscribed routes and adhered to schedules, AVL data is now being used for many more functions. Here's just a sampling: (1) Tracking shipments. Customers can log onto the Internet and see in real time exactly where their freight is and gauge whether it will be delivered on time. (2) Recording mileage data. AVL data can provide mileage and state-line-crossing information necessary for fuel tax reports. (3) Tracking time. AVL systems can log when a truck arrives at a client's site and when loading or unloading is complete. The logs then help the carrier determine detention charges. (4) Creating a sense of security. Drivers feel safer knowing that their vehicle can be located immediately if there is an accident or breakdown. Once drivers work for a company with AVL capability, they won't want to work for a company without it, say recruiters. (5) Boosting productivity. Drivers don't have to make time-consuming check calls, and, if paid by the mile, they can thereby increase their earnings. (6) Locating stolen trucks. AVL systems make it possible for law enforcement personnel to find stolen trucks and, with any luck, the freight as well. (7) Ensuring hours-of-service compliance. Fleet managers can match locations on log sheets with the recorded AVL data. (8) Establishing fuel networks. Managers can cut out-of-route mileage and take advantage of fuel vendors' volume discounts through fuel networks.

STICK TO SAFETY: Due to a 1992 Federal Highway Administration (FHWA) ruling, all truck trailers built after December 1, 1993, must have specified amounts of reflective tape. A study conducted by the National Highway Traffic Safety Administration (NHTSA) found that the tape prevents as many as 350 highway deaths and 7,800 accidents each year. Starting this month, heavy trailers built before 1993 must also have reflective tape. Once the tape is put on all trailers, the number of injuries will drop by between 3,100 and 5,000, according to the NHTSA study. The study also concluded that reflective tape reduced side and rear collisions in the dark by 29 percent and side and rear crashes resulting in injuries and fatalities by 41 percent. The vice president of engineering at the American Trucking Associations (ATA) said the report is "really good news for the trucking industry," since it shows the industry's efforts are paying off. Most trailers have a life expectancy of between 10 and 15 years, so many in need of retrofits are near the end of their life. But some pricier trailers, such as cryogenics trailers, can be on the highway for as many as 30 years, said the ATA's vice president.

CUSTOMERS HELPING THEMSELVES: The passive customer is almost extinct. Today's activist customers not only know what they want, they expect value, service, and quality to be a standard part of an organization's way of business. And they expect expediency in all of these elements. Businesses that want to serve today's customers should consider digital technologies that give their customers nearly everything they need to do business with them. From e-commerce, to 24-hour telephone help lines, to self-service kiosks, activist customers depend on technology to provide them with superior value and service. Companies not using digital systems should consider how many of the following digital activities their customers can do themselves: (1) Can they find detailed information about your products and services? (2) Can they place an order themselves? (3) Can they check on the status of an order? (4) Can they make comparisons among products? (5) Can they find answers to their technical questions? (6) Can they read what other customers say about your products and services? The more questions that you answered no to, the greater the chances that both you and your customer are suffering, due to inefficiency and frustration. While you don't need to convert to an entirely digitized operation, many simple programs can help your customers help themselves.

Quality in a service or product is not what you put into it. It is what the client or customer gets out of it.
-Peter Drucker