Monday, October 31, 2005

Does the NY Times have a fact checker?

NY Times:Wal-Mart to seek Energy Savings

Embracing energy-conscious and environmentally conscious goals will help both the company's bottom line and its customers' needs, H. Lee Scott said in an interview Monday.
His goals, he said, are to invest $500 million in technologies that will reduce greenhouse gases from stores and distribution centers by 20 percent over the next seven years; increase the fuel efficiency of the truck fleet by 25 percent over the next three years and double it within 10 years, and design a new store within four years that is at least 25 percent more energy-efficient.
The trucks in Wal-Mart's fleet, the nation's largest, have a fuel efficiency of about 6.5 miles per gallon. "They can do at least 13," said Amory Lovins, chief executive of the Rocky Mountain Institute, a nonprofit organization that serves as a consultant to companies on energy efficiency and has performed work for Wal-Mart. "They are a big enough buyer to get truck suppliers' undivided attention."

Transport Topics News: Wal-Mart Reportedly Set to Improve Fleet Efficiency
Wal-Mart is ranked No. 2 on the Transport Topics 100 listing of private North American carriers. According to company data, it has about 6,750 trucks and 44,500 trailers.

The largest truckload for hire carrier (Schneider National) Operates about twice as many tractors (14,000) and a few thousand more trailers (48.000 trailers and containers). The largest private package carrier (United Parcel Service) operates more than 10,000 tractors and 80,000 trailers (plus over 60,000 smaller trucks). The largest Less than truckload carrier (Yellow Roadway) uses more than 17,000 tractors and 88,000 trailers. In 2005 over 200,000 Class 8 trucks will be sold in the United States. The top 100 for hire carriers according to Transport Topics operate over 350,000 trucks. There are over 20 million Commercial trucks in the US.

Wal Mart is a big fish, but in a giant pond. Fuel is the second largest cost to motor carriers after labor. If the market has not moved trucks to better fuel economy how is a Wal Mart going to move it with its control of less than 1% of the market?

Sunday, October 23, 2005

GM and the independent trucker

GM has been in the news a lot lately. GMs sales have been in the dumps for many years. Today they have to use incentives to move cars at a loss. Why do they keep making more cars than they can move at a profit? Because they have a lot of fixed costs that they can't get rid of. Under their contracts with the UAW they have to keep paying workers for the duration of the contract as well as the benefits and pensions for former workers have to be paid. So in order to keep the money flowing they have to move metal even if they lose money on the deal, sort of a slow motion Ponzi scheme. Your money for your new GM car is in part paying the costs for the cars GM sold years ago.

How does this tie into truckers? Independent Truckers have high fixed costs: truck payments (typically over $1k/month), insurance, plates and permits. The variable costs aren't cheap either (70-100 gallons of fuel a day at over $3 a pop), tolls (over $40 for a truck to get across Chicago), and an engine overhaul runs about what you'd pay for a decent used car. Yet they still run for less than their true costs. Why? the same reason GM does what it does. If they stop they will be steamrolled by their fixed costs. Freightliner doesn't care if you're making money, they just want their payment on the due date. The Independent doesn't want to lose their business that they have invested years in building so they just keep running faster on the treadmill. Of course sooner or later it will catch you, hence Delphi and the record truck repossessions the last two years.

That's Good

HURRICANE IMPACT: Truckload surprisingly good
Despite the massive economic shock of hurricanes Katrina and Rita, which most notably led to a severe spike in diesel fuel prices, the initial spate of earnings reports from truckload carriers indicate the segment isn’t suffering financially in the third quarter.

The big fleets are collecting fuel surcharges that are keeping problems at bay for now. As shippers adapt to the new pricing environment freight flows will shift, taking many profitable loads off the market. Witness Intermodal reaching record levels even as rail traffic falls. The shift to shorter hauls (and thus lower utilization) and other realignments will pinch margins in the medium term. Of course small fleets and owner operators who do not have the leverage to pass on fuel costs will be leaving the industry involuntarily as the brutal economics of today's trucking industry catch up with them. Intermodal can't grow without more rail infrastructure and rail cannot generate sufficient ROI to attract capital. Long term the drop in competition will probably improve the profitability of the carriers left standing.

Sunday, October 16, 2005

A real tragedy

Bus, Truck Crash kills five:AP
OSSEO, Wis. - A bus carrying high school students home from a band competition crashed into a tractor-trailer that had jackknifed on the interstate early Sunday, killing four adults and an 11-year-old girl, officials said.

Twenty-nine others were injured, some seriously, troopers said.

"It's a terrific tragedy and loss to our school and community," said Chippewa Falls schools superintendent Mike Schoch. "Our community is stunned by it."

The semi had gone off the shoulder of Interstate 94 and jackknifed, and was blocking the westbound lane, Wisconsin State Patrol Capt. Douglas Notbohm said.

"I don't know how much opportunity there was for braking action," he said. The bus slammed into the overturned truck, but it didn't roll or catch fire, patrol spokesman Brent Pickard said.

It was the first of four buses carrying about 140 students and 15 to 20 adult chaperones, Schoch said.

Bus driver Paul Rasmus, 78, of Chippewa Falls, died in the crash. The identities of the other victims — two men, ages 48 and 24, a 51-year-old woman and the girl — were withheld pending notification of their families.

The semi driver, employed by Whole Foods Market Group of Munster, Ind., was en route from Indiana to Minnesota, Notbohm said. The driver was hospitalized with non-life threatening injuries.

Officials didn't know why the truck went off the shoulder and overturned. The driver told investigators he had not fallen asleep, Notbohm said, and Pickard said the road was dry at the time of the crash.

Two things, Bus Hours of Service standards have not been changed even though freight standards have been tightened (though not enough). A driver hauling toilet paper is required to take more time off between shifts and to work shorter days than a driver carrying 16 to 90 souls. Second, Technology to prevent run off road accidents and improve night vision is out there. The costs to install such systems surely are less than the liabilities the Grocery chain that owned the truck and charter bus firm will incur from this tragedy.

Wednesday, October 12, 2005


Get Religion: Why is the Bush Burning?

Journalists must realize the leadership of the Republican Party knows that pro-life, traditional religious believers — Democrats, as well as Republicans — have nowhere to go in an era in which, to paraphrase Maureen Dowd, the Democratic Party’s only iron-clad value is the defense of Woodstock. So the Republican establishment can treat cultural conservatives the way the Democrats treat labor unions.

As Bush I learned to his sorrow eventually they get wise to it—for a while.

Saturday, October 01, 2005

I'm game, are you?

Heavy Duty Trucking:August 2005 Will carriers and owner-operators heed the mandatory speed limiter call?
Jaws were dropping all across the land this past July when the Ontario Trucking Assn. – the largest trucking association in Canada and the third largest in North America – put out a call for mandatory speed-limiting devices on trucks.
Perhaps only slightly more surprising was OTA's call for continent-wide adoption of the policy.
In a statement, OTA indicated that while a North American-wide approach to mandating speed limiters would be optimal, it was prepared to "urge the Ontario government to ensure that at least all the trucks that operate into, out of, and within this province are speed limited."
OTA president David Bradley says this issue has been a topic of discussion around OTA boardroom for some time. It's nothing new, he notes, adding, "In addition to the specific issue of speeding, it is felt that speed is correlated with poor lane discipline, which we are also trying to begin to address."
Several members of the OTA board recently visited a number of European states including the United Kingdom, Belgium, Germany and France on a fact-finding mission, concluding that speeding and lane discipline were not big issues over there.
"The use of mandatory speed limiters works. A speeding truck would stick out like a sore thumb in Europe," says Mark Seymour, CEO of Kriska Transportation in Prescott, Ont. "In the several hundred kilometers we drove over there, I never once saw a speeding truck. In my view, poor lane discipline is a by-product of speeding. In Europe, trucks stick to the inside lane for the most part. It was great to see."
Whether or not that policy can, or should, be adopted in North America is another issue. Critics of the OTA plan are quick to point out that trucks spec'd for efficient operation at higher speeds would take quite a hit being forced to operate at reduced speeds. Drivers, predictably, aren't very receptive to the idea, nor are owner-ops. That group is becoming quite vociferous in it's opposition.
..... but just what constitutes speeding? Ontario's major highways have speed limits of 100 km/h (62 mph). Secondary highways are posted at 80 km/h (50 mph). The provinces of Alberta and New Brunswick have posted limits of 110 km/h (66 mph) on main arteries, while Nevada, New Mexico and seven other states have limits of 75 mph. Trying to achieve consensus on this one would be a monumental task, to say the least.
Ontario's solution? Bradley says he is prepared to urge the Ontario government to go it alone.
That, Bradley says, would require speed limiters on all trucks operating in the province, including outside carriers servicing or transiting the province. That would require some verifiable means of establishing that trucks had an active speed limiter, and it was engaged. So, how would Ontario verify the presence of an active speed limiter on a truck?
"Actually, it does not appear to be all that difficult," Bradley asserts. "Handheld PDA's are already being used that can tell you immediately what speed a truck limiter is set at. There may have to be some modification in terms of who has access to which codes to avoid tampering, but this does not seem to be technically insurmountable."
While Bradley wasn't able to go into a lot more detail, one can see roadside inspections in the province including a speed-limiter verification where the enforcement officer would plug a PDA into the reader port to check the codes on the ECM.
"The direction of the board is clear – speeding trucks, and trucks that sit in passing lanes, should no longer be tolerated," says OTA Chairman Scott Smith, CEO of JD Smith & Sons, a Toronto-based local and regional hauler. "We'll talk to carriers, truck drivers, government, police and motorists to answer questions like what speed trucks should be limited to, how to avoid tampering, how to deal with the fact that there are 60 jurisdictions in North America. But we are of the strong view that mandatory speed limitation for trucks is overdue. The technology already exists on current electronic engines. It just needs to be turned on. We've got the ability, why not use it?"

The ideal would be for US to go to a 65 MPH limit and mandatory speed limiters on all late model trucks and all new vehicles. Given the oil supply issues we are facing, asking everyone to hold it to a mile a minute doesn't seem like much to ask. Speeding tickets are a lucrative business for the States and Municipalities, but I think safety would be better served by officers patrolling the highways than by hiding out staring at a radar gun. Speeding is a stupid problem to have when pretty much every engine is computer controlled and can be limited at almost no cost or complexity. I don't see when enforcement has to be complicated, once a phase in period has passed if a truck is going faster than 65 on flat land (or uphill!) it's in violation, the officer just has two tickets to write. Eventually GPS based "smart" limiters that would be able to match your location to the local speed limit will be available and proven but better to go with what we can safely implement today.

Most truckers' issue with the devices is that they are paid by the mile and so they are taking a pay cut by being limited to fewer miles in a day. Of course speeding increases the chances of career ending tickets and, if involved in accident, devastating liabilities. Driver Pay needs to go up, but letting everyone run at 75 is not the answer.

Why we need a 97K Weight Limit

(Note: I oppose the 51K Tridem/six axle tractor trailer usually associated with the "NAFTA 97K" proposal. A 44K tridem axle grouping weight limit would allow a 97K truck on 7 axles which would reduce pavement damage, increase braking, have a better fore/aft weight balance and still allow a productivity enhancement. Both would have added bridge costs.)

Trains newswire Sept 28 (not a direct link
Presently in Chicago, overweight containers must be unloaded at ports of entry and broken into smaller truckload-sized shipments to comply with federal and state regulations limiting the amount of weight that can legally be transported over public roadways. This leaves customers importing goods to the Midwest with two choices: Sending smaller shipments in containers (not capitalizing on the maximum container capacity), or unloading fully loaded containers at the port and shipping them to Chicago in smaller-sized shipments. Both alternatives are costly and result in additional handling and/or transportation expenses.

One of the inefficiencies in intermodal is the need to make a rubber tire movement to have the cargo split up so it can legally be taken to its destination (and for those that are not transloaded, running 90-97K on 5 axles increases road damage).

Fleet Owner September 05 Roads To Hell part 2
Petty argues that “going to 96,000 lb. GCW alone would add tremendous productivity. In fact, operators have shown that when running in Michigan, where heavier weights are allowed, they can deliver 20% more goods with fewer vehicles than in neighboring Illinois. [Note: Michigan's gross weight limits are much higher than 96K for trucks with enough axles]
“So to not allow heavier combinations makes no public policy sense at all,” he continues. “It's as if we have to reach a crisis in which products are not getting to market before we can force a change in these regulations.”
ATA's Roth points out that the rest of the industrialized world, including Canada and Mexico, have gone to a 96,000- to 97,000-lb. GCW tractor with tridem (three axles at rear) trailer. “By next year,” he notes “ATA plans to have solid recommendations to talk about.”
“The highway bill just passed is essentially a highway maintenance bill,” stresses ATA's Roth. “And the states will not make the kind of investments needed to increase road capacity.
“All this makes changes in size and weight attractive [as a means to increase freight-carrying capacity,” he continues. “And bear in mind that changes only need to be made to actual pavement if truck axle weights, not gross vehicle weights, are increased.
“Bridges are a little different,” Roth notes. “Depending on what vehicle weight and length is determined, some bridges may have to be strengthened or replaced to carry truck traffic. Most Interstate bridges would not have to be adjusted [to carry proposed 96,000-lb. GCW combination vehicles].”

Trucks are unfairly maligned as being subsidised by everyone else. The real story is the magic of deficit spending.
Fleet Owner August 05 Roads to Hell
Road damage caused by heavy trucks may be the most contentious part of the issue, as car drivers blame the big rigs for beating up roads and their owners not paying more money to fix them. The data belies this belief: Trucks and cars both pay about 80 to 90% of their total road costs. Although each group pays the same proportion, it is still short of the 100% each should be paying to keep roads in top condition.

New Toy

Heavy Duty Trucking: Test Ride in Peterbilt 386

We were alerted by Jim Park, our colleague on the Canadian HighwayStar Magazine that he had not achieved very good fuel mileage on his test drive. But he had taken the truck before the roof fairing had been fitted. With that fairing, plus some additional schooling in the optimum technique for driving the ACERT Cats, I did better. When we checked the fuel mileage we were astounded to find we had bettered Jim by 2 mpg, returning an overall of 6.88 mpg for our 346-mile round trip.

The trend seems to be on the new trucks that the RPMs have to be kept in a tight low range. Detroit wants 12-1500 for theirs. I don't know yet where the '07 engines are going to go on Drivability. MPG might have been boosted slightly by going to a direct setup (1:1 top gear and rear end ratio in the 2.6-2.9 range rather than the more traditional .7 top gear and 3.55 rears) and also wide base singles and extra trailer streamlining could make a small improvement. I hope Cat can move forward in MPG in '07 like Detroit and Cummins have indicated they will.

The 386 might be a decent compromise for fleets wanting to be able to convert the tractor to a daycab later on. The 379 is a nice piece of work (they've been building it for years so all the bugs are worked out) and is very popular with drivers. Being a traditional simple design the parts are cheap and easy to obtain (Windshield for Pete 379 is about $40, windshield for the Ultra Aero 387 is near $700 and requires the truck be Out of Service for 24 hours.)