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The Roemer Report On-Line, September 2003

TRUCKING RECOVERY ON TRACK: Things could change by year’s end, say experts, but all in all, the outlook for trucking is good. One industry analyst says the economic outlook is much better today than it was a year ago. Jeff Chung says consumer spending is up and many trucking companies are posting strong revenues and earnings for the first half of the year. J.B. Hunt, for example, said its second quarter revenue rose 30 percent compared to the same period last year, and its net income jumped 40 percent. LTL carriers are seeing gains too, with Old Dominion Freight Systems, for instance, posting nearly a 19 percent rise in revenue and a 63 percent jump in net income for the first six months of the year. Much of those profits, acknowledged Chung, are the result of cost-cutting measures over the last two years. But, he points out, freight levels are now starting to pick up. And because carriers have cut costs so much, any increase in freight demand, however slight, will boost the bottom line. Uncertainties that existed at the beginning of the year—the war in Iraq, situations in Venezuela and the Middle East—are settling down into some level of normalcy. While the mounting federal deficit is a concern to some, Chung said that at least in the short term, deficit spending should help the economy. Now all we need, he said, is an increase in business spending and more consistent increases in manufacturing before we see big improvements in transportation.

NEW LAW PUNISHES DROWSY DRIVERS: New Jersey is the first state to enact legislation charging drivers with vehicular homicide when they cause a fatal accident due to drowsy driving. Under the National Drowsy Driving Act of 2003, commonly known as “Maggie’s Law,” prosecutors can charge a driver who has not slept for at least 24 hours with vehicular homicide, a second-degree crime punishable by up to 10 years in prison and a $100,000 fine. According to AAA, 24 hours of sleep deprivation produces the same effect on the body as a blood-alcohol level of 0.10 per-cent, the legal threshold for drunken driving in New Jersey. Chances are the impact of the law will not be huge since proving that a driver hadn’t slept in a day will be difficult. Still, if the law catches on in other states, “you can bet that truck drivers will be among those prosecuted most frequently,” predicts Avery Vise in Commercial Carrier Journal. Vise writes that “establishing lack of sleep could be easier in the case of a truck driver than with an automobile driver. Logbooks, receipts, and depositions of truck stop employees could be enough to make a case.” If courts extend the concept even further, they could hold owners, managers, or dispatchers criminally liable for a death caused by a drowsy truck driver. The trucking industry would do well to acknowledge that driver fatigue is a serious concern—for all drivers—and not shy away from suggesting that “unregulated, unmonitored automobile drivers may be the real problem,” writes Vise. Maggie’s Law was named after Margaret McDonnell, a 20-year-old college student killed by a driver who had not slept for 30 hours. He was ultimately fined $200 for reckless driving, the maximum sentence.

SAFETY PRACTICES FROM THE TOP: The Federal Motor Carrier Safety Administration recently funded a study examining safety issues in the trucking industry. Researchers at the University of Maryland questioned management at 148 of the safest U.S. motor carriers to find common elements in their safety practices and attitudes. Here’s a look at the findings: (1) Defining highway safety. Companies queried said that complying with safety regulations is critical to meeting their safety goals, but that it does not completely satisfy their objectives. Managers feel strongly that customer service, employee relations, and a culture that listens to employee’s safety concerns are all critical to highway safety performance. (2) Reviewing applicants’ safety records. Not only do the safest fleets find out whether job applicants had any chargeable crashes, speeding violations, or drug or alcohol violations, they also set a maximum number of acceptable moving violations and crashes. Carriers also road test drivers and look for “honest, reliable, and self-disciplined” applicants who can work without constant supervision. (3) Training on the road. The safest fleets consider on-road training and evaluation to be superior to classroom training. Most fleets surveyed do their own training, allowing them to have a “strong influence over safety management decisions” and consequently greater respect from employees. (4) Rewarding drivers. Motor carriers queried said they reward safe drivers. Likewise, drivers who engage in unsafe behavior undergo discipline and additional training. (5) Maintaining equipment. An overwhelming 90 percent said the most important thing they do to promote safety is maintaining defect-free equipment. And most managers agreed that cost should not be considered when maintaining vehicles.

PROCEED WITH CAUTION: School bus drivers take railroad crossings seriously. It’s as though they expect to see a train every time they approach a track. The rest of us could learn a lesson from these cautious drivers, according to the Federal Railroad Administration (FRA). In the United States, tractor-trailers alone collide with trains more than nine times per week—and that’s not counting the many more close calls, says the FRA. Motorists, regardless of what they’re driving, are 40 times more likely to die when their vehicle collides with a train, as opposed to colliding with another vehicle. According to the FRA, tractor-trailers and trains collided 100 times during the first four months of 2003. Seventy-five of those collisions occurred at public crossings, while the remaining 25 occurred at private crossings, which are typically located on privately or commercially owned property. Almost half of all collisions take place where automatic warning devices like flashing lights and lowering gates do function properly.

THINKING OUTSIDE THE BOX: At the annual conference for the American Association of Exporters and Importers, one executive warned that a nuclear bomb the size of a football is not science fiction—the former Soviet Union was making such devices years ago. And that’s precisely the kind of device that could make its way into an international shipment of, say, beer. In theory, a terrorist could mount a football-sized nuclear device on a concrete skid shielded with lead and tucked inside a container of Heineken beer, said Bill Kelly of Science Applications International Corp. Law-abiding, established trading partners like Heineken could be the unwitting victims of such a terrorist plot. Terrorists can be expected to try to target freight containers that won’t raise alarms. Since money is no object for them, they could, in some countries, conceivably bribe their way into tampering with freight. Those things considered, says Kelly, selective screening of freight is not enough. All it takes is one device hidden in a shipment of a trusted shipper. So what is enough? Automated cargo inspection technology is part of the answer, says Kelly. Currently in development is a low-cost sensor that detects when a box has been tampered with. Another part of the answer is radiation portals like the one that monitors 8,000 vehicles a day along the U.S.-Canada border. These portals sense nuclear devices concealed on freight vehicles that pass through them. Another effective technology uses gamma-ray technology to “photograph” the inside of containers while in transit. Mexico is buying such a system to screen all containers moving in and out of the country. One of the biggest challenges, however, may be a change in mindset. After all, the biggest concern before 9/11 was keeping things in the box, now the concern is keeping things out.

INCENTIVES FOR GOOD HEALTH: When it comes to human behavior, incentive goes a long way. More and more businesses today have turned to incentive programs to help employees adopt healthy lifestyles. Their efforts are due, in part, to steadily rising health care costs. To reduce skyrocketing health claims, employers offer rewards to workers who take the proper steps to manage their health. Currently, one of the most popular incentive programs focuses on disease management. For example, employees who participate in a disease management program can receive copay discounts on medications used to treat their chronic conditions, such as high blood pressure, or diabetes. Disincentives, on the other hand, are used less frequently by businesses. In these cases, smokers might incur a higher medical premium or a driver who was in an accident and didn’t wear a seat belt might receive lower medical benefit payouts. Johnson & Johnson is one organization that has profited from incentive programs. Over the past nine years, Johnson & Johnson has offered its employees a $550 medical plan discount if they participated in a corporate wellness program. Since the program began, the company has saved $8.5 million and its employees reduced their health risks in eight of 13 health-risk areas, such as high cholesterol and hypertension.

LESSONS FROM A RED HORSE: At a family reunion, a nine-year-old girl sat at a table drawing horses with her new colored pens. Her first horse, a nice blend of blues, yellows, and greens, kneeled in a field of grass. Her next drawings were similar—well-drawn, colorful horses engaged in some sort of action. The girl gave her drawings to various family members. An uncle, who praised the girl’s work, jokingly asked her where his drawing was. “What color do you want?” she asked him. He suggested red, and the girl went to work. What she gave him was very different from her previous drawings. This horse was monochromatic and stationary; it didn’t have the same vigor and beauty as her previous drawings. The uncle thanked the girl and she went back to work. On his way home, the man realized why his red horse didn’t measure up to the others. Here is what he did wrong: (1) didn’t clearly communicate what he wanted, (2) didn’t tell her what he liked about her previous efforts, (3) didn’t monitor her progress, (4) didn’t involve her in the planning, and (5) didn’t motivate her to produce her best. It’s the same with people who work for you. To get the best from them, to keep them engaged and passionate, you must give them all the information necessary to succeed—and give them plenty of leeway to put their own personal stamp on the project. Also, don’t forget what the uncle did right: (1) told her that he liked her previous drawings, (2) avoided micro-managing, and (3) thanked her for the drawing.

From what we get, we can make a living; what we give, however, makes a life.—Arthur Ashe, U.S. tennis pro.