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Oil Prices Shatter Records: Oil prices surged to an all-time high of $114.08 per barrel last month. The escalating prices have been attributed to a steadily depreciating U.S. currency, investors who are purchasing oil because returns have outpaced stocks and bonds, and an unexpected drop in crude inventories. U.S. truckers are coping with the price increase as best they can by lowering speeds and using auxiliary power units when the truck is idling, but American Trucking Associations president and CEO Bill Graves wrote to government officials, saying that “Even with these efforts, it is easy to see why many trucking companies are reporting that higher fuel prices have greatly suppressed profits, if they are making a profit at all. We are not only concerned about fuel’s direct impacts on our industry, but also its effects on the nation’s economy, which is likely to be in a recession.” Graves wrote to President Bush requesting that he release oil from the Strategic Petroleum Reserve to stimulate the economy. The nonpartisan, nonprofit Consumer Watchdog has also made that request, as have legislators on both sides of the aisle. Despite the high oil prices, there is a silver lining. A partner at ACT Research Co. said, “Carrier profits remain surprisingly buoyant. Trucker’s profits got creamed in Q1 this year…but the data shows truckers are doing better, relatively speaking.”
Potholes Plague Nation: Cities across the country are dealing with more potholes than they’ve seen in decades. They are having a hard time keeping up with repairs for two main reasons: the country experienced a tougher winter than usual, and asphalt is an oil-based product, making it costlier than ever. Some city departments have been forced to postpone construction projects because potholes are a more pressing concern. East St. Louis, for example, is filling only the bigest holes and ignoring others that are still large enough to puncture a car’s tires and break axles. Since December 1, Chicago has filled some 120,000 potholes, about 50,000 more than the same period last year. Lake Shore Drive is so pockmarked that Chicago officials say they will lower the road’s speed limit to 40 mph this summer, compared to its usual limit of 45 mph. Indianapolis is paying $52 per ton for asphalt, versus $40 per ton last year. “It’s going to create potholes down the line because paying $12 more a ton means we can pave less miles, and therefore the roads aren’t in as good shape,” said a spokeswoman for the city. With prices for fuel and asphalt both climbing, using heavy equipment to fill potholes is prohibitively expensive. Road departments are concerned about what will happen if next winter proves as severe and if oil prices continue to climb. “Some streets may not get patched at all,” said an East St. Louis city official.
Congestion Pricing Still Alive: Last month, New York City’s plan to charge drivers extra tolls to enter the most congested parts of the city failed because of strong opposition from local Democrats who said the fee would be a hardship to the city’s poor. Despite the plan’s failure, other U.S. cities are considering congestion pricing. San Francisco, Washington, D.C., Miami, Minneapolis, Seattle, and Houston all have announced plans for congestion pricing or have plans in the works. David Lewis, author of a report on congestion pricing, advocates that the federal government reward states using congestion pricing with greater federal highway grants. Lewis maintains that if Congress adopts his proposal, the idea of charging drivers for entering traffic-clogged metro areas could spread nationwide, reducing congestion and increasing the economic benefits of a faster travel time. The goal of congestion pricing is twofold: to reduce congestion by discouraging drivers from getting into their vehicles and to raise money for transportation needs. Congestion pricing has taken hold in European cities such as London, Rome, and Stockholm. In London cameras take pictures of license plates, and drivers pay the charge either before or on the day of travel. Since London began the program in 2003, traffic has fallen in the city by 20 percent and traffic speeds have risen by 37 percent.
Diesel Hybrids On The Rise: Heavy-duty engines are getting cleaner by the year. New trucks sold after 2007 must meet strict new standards that filter nearly all the black soot particles and much of the nitrogen oxides that cause acid rain. But that doesn’t mean they burn less fuel. Green diesel engines actually burn more fuel, according to Forbes, and with fleet operators facing a 44 percent rise in fuel costs over the last year, that adds up. That’s why truck manufacturers are paying more attention to diesel hybrids, a technology already embraced by automakers. A hybrid truck can save between 5 and 60 percent in fuel costs, but the hybrid systems save most in vehicles that start and stop a lot, such as delivery trucks, garbage trucks, and buses. Only a handful of hybrid trucks are on the road today, and most of them are test vehicles. UPS has 50 hybrid short-haul delivery trucks, FedEx has 75, and Coca-Cola uses hybrids for deliveries in places like New York City, where heavy traffic prevents them from traveling more than 30 mph. But those numbers will soon rise drastically. Daimler, Eaton, Kenworth, Peterbilt, and International Truck all plan to develop diesel hybrids. Eaton estimates that hybrids will soon make up about 10 percent of all new commercial trucks sales in the
United States.
School Standards May Toughen: The Bush administration has proposed that new truck drivers take classes only through standardized, accredited training programs, but the trucking industry’s not buying it. A vice president at Pitt Ohio Express said, “The accreditation requirements as proposed are onerous, costly, and would undermine the ability of Pitt Ohio to advance and train our own employees for driving positions.” The Federal Motor Carrier Safety Administration (FMCSA) would require entry-level drivers to complete 120 hours of training in an accredited program before receiving a CDL. Current CDL requirements vary from state to state. The FMCSA notes that the rule will give drivers additional skills, but the trucking industry says it would worsen the driver shortage. The problem, they say, is that many companies rely on their own training programs, which are not necessarily accredited. About 40 percent of Pitt Ohio drivers go through the company’s in-house training program. The American Trucking Associations (ATA) supports an enhanced rule but takes issue with the number of hours required for training. The group says it favors a performance-based curriculum, not a curriculum based on an “arbitrary and capricious” number of hours. More important than hours, according to the ATA, is whether a person can operate the
truck safely.
Obese Drivers Face Screening For Sleep Apnea: The Freight Motor Carrier Safety Administration’s Medical Review Board recently recommended that all CDL holders with a body mass index of 30 or greater be tested for sleep apnea. If the recommendation is followed, commercial drivers testing positive for sleep apnea would have to be treated to get certification. The medical review board carries no rulemaking authority but does influence regulatory changes. Sleep apnea occurs when the throat muscles relax during sleep, temporarily closing off air passages and preventing breathing. Left untreated, sleep apnea can cause high blood pressure, weight gain, and excessive fatigue. Treatment can include surgery or the use of a mask that forces air into the passageway during sleep. Overweight people are at increased risk of developing sleep apnea, and many have the condition without realizing it, according to sleep experts. Studies have shown that drivers with untreated sleep apnea have a two and a half times greater risk of being in a crash. Federal regulators can already ground drivers they believe are susceptible to drowsiness, but if implemented, the new rule would give them more authority. Body mass index (BMI) is a method determining a person’s body mass based on their weight and height. To calculate BMI, divide your weight in pounds by your height in inches squared. Then multiple that number by 705. A BMI of 18.5 to 24.9 is considered a normal weight, 25 to 29.9 is considered overweight, and over 30 is considered obese.
Three Leadership Maxims: At age 19, with a $100 loan, Jim Casey started a messenger service that would one day be known as UPS. Casey wasn’t particularly charismatic and didn’t have model looks, but he was a great leader who took an interest in his employees, remembering their names and families. Tom Weidemeyer, who knew Casey for over 30 years, says Casey followed three maxims:
- Loyalty trickles down. Loyal employees create loyal customers and employees. Casey cared deeply about earning employee loyalty and creating a culture of trust and respect.
- Sweat the small stuff. Jim Casey once said that “service is the sum of a lot of little things done right.” He knew that the service experience was where you could lose or gain customers. Although leaders don’t have to know or perform all the details, they must put the people and processes in place that do.
- Vision is everything. When there is no clear idea of where the company is going, chaos will ensue. In the early days of UPS, the company had a simple tagline: “Best service, lowest rates.” This straightforward promise helped organize a company around customer service and efficiency and eventually grow into the world’s largest package delivery company.
Imagination is more important than knowledge.
—Albert Einstein
