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Roemer Report – November 2008

Fuel is Biggest Concern: The American Transportation Research Institute (ATRI) has released its annual survey of the top 10 critical issues facing the trucking industry and what to do about them. It’s no surprise that fuel prices and the economy take the top two spots. Diesel prices reached unprecedented levels this year, with fuel costs replacing labor costs as the top operating expense for most carriers. Now in its fourth year, the survey recorded the economy as the second greatest concern, the first time the economy appeared on the top-10 list of critical issues. The ailing economy has felt the effects of inflationary pressures, declines in consumer optimism, decreased manufacturing output, the mortgage crisis, and the credit crunch. The driver shortage/retention ranked third this year, with many in the industry recognizing this issue is on temporary hiatus and will resume once the economy rebounds. The remaining issues in order of concern are: government regulation, hours-of-service rules, congestion, tolls/highway funding, environmental issues, tort reform, and onboard truck technology. ATRI’s findings and recommendations, commissioned by the American Trucking Associations (ATA), can be found at www.atri-online.org. “The annual ATRI survey proves invaluable in helping us chart a course of action for the future,” said incoming ATA chairman Charles “Shorty” Whittington.

Americans Scale Back: Americans have been spending less this year, but as the recent credit crunch further threatens the economy, Americans are becoming downright frugal. Spending on everything from vehicles to food to clothing has dropped. Everyone feels “poor,” one financial consultant said. And that translates into plummeting auto sales, empty restaurants, and fewer doctor visits. A recent survey found 22 percent of consumers said they are visiting doctors less, and 11 percent said they’re scaling back on prescription drugs to save money. The percentage of people who say they plan to buy a car in the next six months has fallen to 5 percent, the lowest figure since 1967, when the Conference Board started asking the question. Casual dining restaurants, which have already taken a beating because of a glut of such restaurants, are facing even tougher times. The good news, however, is that with more consumers eating in, food is flying off grocery store shelves, with shares of big food companies having risen about 17 percent this year. The entertainment sector remains optimistic about sales of movie tickets, DVDs, and video games since consumers tend to want entertainment in tough times. Some are calling for a massive public education effort to encourage saving, much like the anti-drunk-driving and anti-smoking campaigns that fundamentally changed public perceptions. A focus on thrift could turn Americans into savers rather than spenders, and that could give the economy a boost over the
long haul.

From Vets to Truckers: Troops 2 Truckers, a new career transition program, targets those serving in the U.S. Armed Forces for post-service civilian employment in the trucking industry. As part of the Troop Transition program, the initiative not only helps provide employment for troops but also will help meet the industry’s need for drivers as the economy improves. Kevin M. Denny, CEO of Troop Transition, said, “Hundreds of thousands of drivers will be needed in the coming years. This huge demand for labor can be met partly by troops that leave military service and are in need of jobs. Just as importantly, they are people who have a track record of discipline, are drug-free, clean cut, loyal and mission oriented—everything a trucking company would want in a driver.” Troops 2 Truckers is unique because trucking industry employers are the ones who develop the curriculum to ensure the new hires meet and exceed employment qualifications. Service personnel receive training while still on active duty, and military tuition assistance covers all the training expenses. More than 200,000 service members are honorably discharged each year, and 85 percent of them serve four years in the military in place of college. That means many have not had any education or training that would help them find jobs outside the military. “Our objective is to eliminate some of the hurdles these veterans face and provide transitioning service members with professional commercial trucking industry training, CDL certification, and a real job offer at zero out-of-pocket cost,” said Denny.

Safe For the Long Haul: How does a trucker reach a million miles or more without getting into an accident? Two truckers offer their advice. Mike Crawford, a long-haul driver in Springfield, Missouri, has driven 2 million miles without an accident. Road King describes his 14-year record as “humbling and a source of pride for the 60-year-old owner-operator.” Crawford says his record is simply a matter of common sense. “Slow down, take your time and keep your composure,” he advises. “I don’t allow myself to get upset about traffic or circumstances that I don’t have any control over.” Crawford believes that truckers need to expect the unexpected, saying he fully expects other drivers to make dangerous maneuvers and road crew workers to fall in front of his truck in construction zones. “If it doesn’t happen, I’m lucky. If it does happen, I avoid an accident, and the construction worker and I are going home safely that night,” he says. Jim Ricks, a short-haul driver in Twin Falls, Idaho, has driven 3 million accident-free miles, and he practices a similar vigilance. He credits his safety record to ample following distances, awareness of traffic, and easy maneuvers. “It takes me a quarter-mile to change lanes,” says Ricks. “I drive the same way in January when the road is covered with ice as I do on the Fourth of July, as smoothly as I can.”

Roads, Bridges Need Attention: Transportation executives may not agree on which presidential candidate to support, but they all agree on one thing: the next president will have to address the nation’s crumbling infrastructure. Trucking, rail, and other transportation groups are unanimous in their support of increased spending on infrastructure. Some experts estimate that upgrading U.S. roads and bridges will take 10 years and $1.2 trillion. The problem, of course, is funding. Currently, transportation projects are funded by a tax of 18.4 cents per gallon on gas and 24.4 cents a gallon on diesel. With people buying less fuel, the tax proceeds have plummeted, and many are calling for a new way to fund highway improvements. That debate aside, industry experts say that investing in transportation would be a good thing for the economy. Pete K. Rahn, the president of the American Association of State Highway and Transportation Officials, said, “We can relieve congestion and create economic opportunity through transportation.” Earlier this year, state departments of transportation identified more than 3,000 highway projects totaling $18 billion that could provide a short-term boost to the economy and a longer-term investment return from increased productivity. “We are talking about good construction jobs being created, jobs that can support a family,” Rahn said.

What Stereotype? They carry laptops, talk on BlackBerrys, work out, and choose healthy fare over fast food. These truckers are busting the myth of the chain-smoking, overweight driver. “The stereotype is that we are these big greasy guys that stink and have potato chips in our belly buttons,” said a 28-year-old driver based in Indianapolis. “There may be one guy out there like that. But we aren’t all that guy.” Atlas Van Lines, based in Evansville, Indiana, recently surveyed its nearly 600 drivers, according to the Indianapolis Star, and found that truckers on average don’t live up to their stereotype and instead are health conscious, family oriented, and tech savvy. In an effort to meet this new breed of truckers’ needs, companies are offering wellness initiatives and classes, such as yoga and Weight Watchers. “We’re hearing more and more from truck drivers that this is a priority,” said one expert. “Just like all the rest of us, [truckers] are changing their behaviors to be healthier.” And when on the road, drivers are health conscious. The Atlas survey found that Subway, not fast-food joints or even truck stops, tops the list of favorite places for truckers to eat. Jason Taylor, 33, says he likes to pick up a sub in the morning and take it to work so he won’t be tempted by the less healthful foods. He also works out at the gym four times a week when work is slow and takes his family on trips with him whenever possible. “People think a trucker is a guy who has no life, lives on the road and smells real bad,” Taylor said. “They are out there. Trust me. But there are alternatives to that.”

The Genius of Making Mistakes: What do investment expert Warren Buffett, best-selling author Stephen Covey, and Nobel Prize winner Gary Becker have in common with Albert Einstein? They all have experienced great failure despite their well-known successes. Buffett bought $358 million in losing stock; Covey had such poor work habits that his career was in jeopardy; Becker spent years developing a theory that ended up completely worthless; and legend has it that Einstein flunked math. Nonetheless, each one of these individuals achieved extraordinary success. Even highly successful people fail. In fact, they know that avoiding risky situations is by far the biggest mistake a person can make. Many of us may lose confidence when something goes wrong, but geniuses don’t waste time and energy blaming themselves. They know that making mistakes offers tremendous learning opportunities. Russian composer Igor Stravinsky summed it up: “I have learned throughout my life as a composer chiefly through my mistakes and pursuits of false assumptions, not by my exposure to founts of wisdom and knowledge.”

Democracy is a process by which the people are free to choose the man who will
get the blame.

—Laurence J. Peter, originator of the Peter Principle