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Coping With Fuel Costs: With Hurricane Katrina’s impact on energy prices and the government’s newly released fuel price forecast, the American Trucking Associations (ATA) has revised the industry’s projected fuel costs for 2005. The ATA now predicts motor carriers will spend an unprecedented $85 billion on fuel this year, up $23 billion over last year. “These projections highlight the severity of the situation we are now facing,” said ATA President and CEO Bill Graves. Immediately after the hurricane, diesel prices shot up by as much as 60 cents per gallon in some parts of the country. The prices are expected to have a ripple effect on the economy, with the increased shipping costs being passed on to retailers and consumers. The Minnesota Trucking Association surveyed members to determine if they were using any fuel price benchmarks, other than the weekly diesel reports from the Department of Energy, to calculate fuel surcharges. Some members said they were implementing surcharges based on regional average rather than national average, while others said they track daily fuel prices and assess the customer based on actual costs. The survey also found that some carriers have been:
- implementing surcharges on deadhead miles
- instituting a rate freeze in exchange for agreeing to the carrier’s fuel index
- implementing a reefer unit fuel surcharge
- requiring all drivers to fuel at specific truck stops
- renegotiating the fuel surcharge with customers or discontinuing
the relationship
Truckers Give Helping Hand: Truckers have contributed greatly to Hurricane Katrina relief efforts by transporting water, food, clothing and other necessities to the Gulf Coast. One week after the hurricane, the Department of Transportation secured more than 1,600 trucks to deliver more than 3,700 loads of goods to survivors. “Volunteers are coming from everywhere,” said a spokesman for the American Trucking Associations. Big companies like Schneider and UPS are doing their part, but just as important are the smaller companies and individuals that often go unnamed. Four Truckers, a company in Morgantown, North Carolina, for example, has teamed up with the local United Way to collect and deliver clothes to hurricane survivors. The company is donating space for clothing, drivers’ time, and trucks to the effort. “We’re just trying to do what we can,” says a spokesman for the company. “The average person wants to do something.” Two independent truckers from Vermont led a convoy of 35 trucks loaded with four and a half million pounds of supplies to Gulfport, Mississippi. “Some of these guys stepped up to the plate when they volunteered to go down there with lesser equipment than we have,” said one of the independent drivers. The drivers handed out provisions straight from their trucks. “It really touches your heart, when they are looking for a shirt, a bar of soap or a toothbrush,” said a trucker, who vowed he’d do the trip again in a second.
New HOS A Lot Like Old: The Federal Motor Carrier Safety Administration (FMCSA) issued new hours-of-service rules with only one change affecting long-haul truckers. The only other notable revision affects short-haul operators. FMCSA
administrator Annette Sandberg said the changes were intended strictly to reduce fatigue-related accidents, which cause 5.5 percent of large truck crashes. Changes to the rule include:
- CMV drivers who use the sleeper berth exemption must rest at least eight consecutive hours in the sleeper berth and take another two-hour break—either in the sleeper berth, off-duty, or in any combination of the two.
- Short-haul operators who are not required to hold a CDL (such as delivery drivers) and who work within a 150-mile radius of their starting point may extend their workday by two hours twice a week. In addition, these drivers will not be required to keep logbooks, as short-haul drivers are involved in less than 7 percent of fatigue-related fatal truck accidents. To date, the rules remain unchallenged, but it is expected that they will end up in court. Trucking companies say the sleeper berth rule creates logistical problems, especially for team drivers, and safety advocates charge that the revisions don’t go far enough and should have increased the number of off-duty hours.
Military Shipping Contract Draws Fire: In an effort to control costs and maximize efficiency, the Department of Defense (DOD) says it wants to award a mammoth shipping contract to a single private company. The contract, estimated at $750 million, would be nearly three times the size of the existing record contract of $320 million, awarded to TNT Logistics and Fiat for European spare parts management. The plan, referred to as the Defense Transportation Coordination Initiative, has received widespread criticism from the transportation industry. A coalition of trucking, logistics, and air forwarding operators and organizations oppose the initiative, saying that not only has the industry been left out of the planning process, but that putting so much power into the hands of a single provider will backfire. The coalition contends that a single coordinator could not provide the same kind of strong service that several operators with specialized services and knowledge could. “The key problem is the ‘all or nothing’ award to one entity,” said one consultant. “We believe the award needs to be made to multiple parties based on lanes and regions. Our goal for the DOD procurement process is that it ensures open and fair competition for government freight. We don’t believe this can be accomplished with an award to a single entity.” The military plans to release a draft RFP this month, a final RFP in January, and a contract in late 2006.
Some Relief In Wake Of Hurricane: The Bush administration announced plans to sell approximately 30 million barrels of crude oil from the Strategic Petroleum Reserve to offset the shortage caused by Hurricane Katrina and to help rein in high fuel prices. This is only the second major oil release. The previous release took place in 1991 when President George H.W. Bush released 17 million barrels of oil to prepare for Operation Desert Storm. The federal and state governments are taking some extraordinary measures to in the wake of Hurricane Katrina:
- Height and weight restrictions eased. Some states are making it easier for truckers to help with the hurricane relief by temporarily easing or eliminating height and weight restrictions. Indiana is not charging permit fees for oversize vehicles that are providing relief efforts. Oklahoma, Louisiana, and Texas issued similar suspensions.
- Tax relief inGeorgia. Georgia suspended state motor fuel tax through September. The temporary action translated into a tax savings of more than 15 cents per gallon and saved drivers an estimated $75 million overall.
- Hours-of-service regulations eased. The Federal Motor Carrier Safety Administration (FMCSA) temporarily eased HOS regulations for tankers carrying gasoline, diesel, and jet fuel.
- Emission standards waived. The EPA issued an emergency waiver of emission standards for diesel and gasoline, allowing retailers to sell diesel that exceeds 500 ppm sulfur content. For updated information on states that have eased regulations, go to www.aamva.org/HurricaneKatrina.asp and click on Hurricane Katrina Emergency Orders.
Costliest Hurricane Ever: The estimated financial costs of Hurricane Katrina keep rising. Risk Management Solutions initially projected insured losses at $20 billion to $35 billion. But now the company predicts insured losses to be between $40 billion and $60 billion, with $125 billion in economic damages. The updated estimates would make Katrina the costliest hurricane ever, surpassing Andrew in 1992, when claims reached $22 billion in today’s dollars. The economic toll is also evident in energy prices, lost jobs, and shattered businesses. Some 400,000 people have lost their jobs, and many of them also are homeless. Consumers are still paying high prices at the pump, and heating costs are expected to skyrocket this winter. The extra cost to consumers is expected to result in lower personal savings and lower purchases for goods and services. But as businesses begin rebuilding and commerce that once belonged to the Gulf region shifts elsewhere, there are some economic benefits. Steel makers expect a short-term lift from the massive reconstruction, and oil and gas producers are reaping huge sums. Large trucking companies also have seen an increase in demand because of Katrina. Schneider National said its truckloads increased 13 percent during the first week of September. Still, the high diesel prices have put some smaller trucking companies out of business and hurt the industry’s overall profit margins.
Count Your Blessings: Researchers divided several hundred people into groups of three. Each group kept a diary. The first group simply recorded events that occurred during the day. The second group recorded their unpleasant experiences, and the last group listed all things they were grateful for each day. Those in the last group reported higher levels of alertness, enthusiasm, determination, optimism, and energy. In addition, that group experienced less depression and stress, was more likely to help others, exercised more often, achieved more progress toward personal goals, and was more likely to feel loved. And there’s more. People in the gratitude group initiated a cycle of kindness in which one kind act encouraged another. The researchers surmised that anyone can increase their sense of well-being and create positive social effects. All they need to do is count their blessings.
Unless we think of others and do something for them, we miss one of the greatest sources of happiness.
—Ray Lyman Wilbur (1875-1949)
