The Roemer Report September 1984

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America is giving birth to a new age of prosperity, due to mature in the 1990s. This is the view of economists who subscribe to the 50-year boom-bust cycle theory, They look for a growth pattern lasting 25 to 30 years succeeded by a slowdown of approximately equal length. Generally, four phases comprise each 50-year cycle although each stage may con­tain its own small peaks and valleys…(1) Prosperity. A healthy boom launched by technological innovation, this period is exemplified by the two decades following World War II.(2) Recession. During this phase, business begins to suffer as profits decline and inflation rises.(3) Depression. This means 10 to 15 years of hard times featuring soaring unemployment and plummeting in­vestments.(4) Recovery. Businesses typically spend at least a decade acclimating themselves to tough economic conditions by adopting new cost-cutting, efficiency-boosting measures. Gradu­ally. profits climb, and entrepreneurs set the stage for prosper­ity. Many economists believe that this is the current status of the United States--with Western Europe lagging behind. America will be the "growth pole" in this recovery, they say, citing as

evidence the strength of the dollar and the steady influx of foreign currency…No one can explain exactly why these 50-year cycles tend to occur, but innovators clearly play a key role in every upswing. Microelectronics and bio-genetics are among the fields spawning breakthroughs in this boom.

STEEL GETS IMPORT PROTECTION: Our readers in the steel hauling business have been living amidst a shrinkage in the domestic steel market…created in part by the heavy inroads made by imported steel products. The slippage In domestic steel shipments may be stabilized through an announcement by President Reagan that the Administration will seek to actively persuade overseas steel exporters to voluntarily limit their

U.S. shipments and reduce what are considered unfair trade practices for a 5-year period. The Administration says negotiations on these voluntary trade restraints with importers could cut imports of finished steel products from the current 24 percent to 18.5 percent of the U.S. market. U.S. Trade Representative William Brock says that this is a goal and not a guarantee. Labor and management in the domestic steel industry were pushing for firm restrictions limiting foreigners to 15% of the U.S. market. The precise impact on trucking will depend on how tough the enforcement is. These moves should give domestic producers a breather, but it wont solve their fundamental problems. These include: excess production capacity, costs which are higher than foreign producers, lagging technology, tough competition from domestic mini-mills and a reduction of demand from big customers like the automakers.

BIG RIGS UNWELCOME ON OLD INTERSTATES:"Giant" trucks may soon disappear from outmoded interstate roads with lanes narrower than 12 feet, inadequate shoulders and no acceleration and deceleration lanes. Although truckers deny reports that bigger rigs endanger motorists’ lives, the House of Representatives acted in August to selectively ban them. The Senate is expected to pass a similar, administration-backed bill, which will authorize the Department o

Transportation o prohibit larger trucks from those sections of the highway seen as dangerous. Congress recently opened all interstate highways to trucks with single trailers up to 48 feet long and tandem trailers up to 28 feet each, and allowed trailer widths up to 102 inches. This generated protests from a number of states. The pending legislation, originally sponsored by Representative Geraldine Ferraro, would be most welcome in those states.

THE MYTHOLOGY OF THE INDEPENDENT TRUCKER: The public's "cowboy" perception of the independent trucker could be altered by the book Independents Declared: The Dilemma of Independent Trucking, to be published soon by Cornell University Press. Author Michael Agar of the University of Maryland researched his subject by rolling across America with his interviewees. Conclusions? Despite the Hollywood-hyped image of self-employed truckers, they see themselves as small business people trying to operate $100,000 tractor-trailers with declining rates and increasing expenses. The financial squeeze is on, and their income is largely determined by circumstances beyond their control. They must depend on trucking companies for freight and rates, shippers for loading, customers for offloading, mechanics for repairs, and government for regulations. The so-called independence of these truckers is actually a distinction of working conditions, says Dr. Agar. For example: Work is in trips, not shifts; work space involves states, not office or factory; community is a bunch of stops, not a town. Although many truckers hit the road to avoid assembly-line jobs, they do not think of themselves as truIy independent. Still, their solitary lifestyle, special jargon, and flexible schedule set them apart from blue collar counterparts -- who often believe the grass must be greener when viewed through the windshield of an 18-wheeler.

ELECTRONIC "PASSENGERS" SEEK THE DRIVER'S SEAT?: Electronic devices capable of monitoring truck drivers have been installed in the tractors of hundreds of U.S. fleets. Although resented as intrusive by many drivers, the new controls have guided fleet managers to dramatic cost cutting. Depending on their particular features, the electronic systems may do everything from controlling cruising speed to recording the duration of off-loading. At the end of every run, the truck's electronic device is plugged into a computer for a detailed printout of the trip. This allows fleet managers to analyze expenses precisely. Customers who formerly disputed driver logs about unloading, for example, are now confronted with irrefutable evidence of dock delays. If drivers are speeding, shifting improperly, etc. -- the printout indicates, and the driver is counseled. Several companies report fuel savings of one mile per gallon or about 20% overall-- which fully justifies the $1400-per-tractor investment in the electronic devices, they say. Several years down the road, microcomputers are expected to become standard equipment in new trucks. They will improve driver comfort and safety, and feed up-to-the-minute trip information to the fleet manager back at home base. The cost of such microcomputers may postpone their industry-wide use into the 1990s, however.

SUPERFUND NOT A BLANKET ON ENVIRONMENTAL IMPAIRMENT: “Superfund,” the tag hung on the federal government's 1980 Act to clean up toxic materials problems, should be familiar to truckers who haul such products. Many of them, however, are under the mistaken impression that they need no insurance coverage other than for sudden and accidental spills. In fact, the Environmental Protection Agency moves aggressively against polluters In any “incident” or release of toxic waste, no matter who is at fault. The Superfund covers clean-up costs when the liable party claims it is unwilling or unable to do so. After the Superfund finances the clean-up, however, the E.P.A. will try to recover the money. An accused polluter must demonstrate that it exercised due care to avoid liability. Such liability could include governmental pollution removal costs, other necessary costs of responding to pollution incidents, and damages to natural resources. Claims may be filed up to three years after discovery of the damage, and triple damages may be assessed for failure to obey a cleanup order. We think recent political development and environmental pressures on the E.P,A. clearly signal more vigorous enforcement actions…a trend that should be anticipated by motor carriers in this business. W.F. Roemer has insurance programs available to provide coverage for other than sudden and accidental incidents Ieading to environmental impairment liability.

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