Tuesday, August 26, 2008

Concerns Continued

Yesterday I blogged the top five concerns of trucking in 2007. Here are the bottom five. I think these are an interesting read but don’t get bogged down with worry. Obstacles can slow us down or be the impetus for more creative thinking. I can’t say I like it, but I know I have grown more through tough stuff than through status quo. As I quoted yesterday it looks like 2008 will be a growth year so be prepared and may hay while the sun shines.

6. Tolls/Highway Funding. As the survey was conducted last year, the industry perceived an increase in the number of tolled roads in the US and the potential for what was characterized as the “balkanization of the US transportation system.”

Murray notes that as this Presidential election year moves on to November, Congressman James L. Oberstar, the powerful chairman of the House Transportation and Infrastructure Committee, is frustrated because he hasn’t heard the word “transportation” come up once from either set of candidates. “He’s getting really nervous,” claims Murray, “since there will be a new administration. One way or the other a new funding bill is coming to guide us for six years and no one seems to be carrying the torch on this one. All the more reason I think highway funding is going to become more prominent than less.”

7. Tort Reform/Legal Issues. “If there weren’t so many zealous lawyers, this might not be as major an issue,” says Murray. “When you look at government statistics, automobile drivers are responsible at a minimum—the smallest number we’ve ever seen—for more than 55% of all truck-automobile crashes. When the automobile driver is responsible for the vast majority of these accidents but the tort law allows you to sue the person with the deepest pockets, it’s very clear that no matter how hard we work to reduce crashes and minimize the truck driver’s responsibility, we’re going to have law suits. It’s essentially an equity issue and tort reform would fix that.”

8. Driver Training/Driver Education. This made the Top Ten list for the first time in last October’s survey report. In the short run, this issue will become more prominent. It will be extremely critical when the industry finally pulls out of this weak economic period. Murray speculates that there will be new regulations detailing minimum driver training qualifications. They will require substantial accreditation, including 120 hours of classroom and 44 hours behind the wheel.

“Trucking companies will have to become accredited schools if they do anything with entry-level drivers,” he says. “It’s sort of the perfect storm. When the next economic up tick hits, there’ll be a major driver shortage again and we’re building a system that almost will not allow us to bring new people into the market. So I expect this issue to go up a notch or two.”

9. Environmental Issues. Anti-idling regulations and other emission reducing efforts are having a strong influence on carriers. “I suspect the thing that’s put Environmental concerns in the Top 10 is its complexity,” says Murray. “For instance, we have air quality issues requiring 200 or 400 pound anti-idling devices which ironically may improve their quality but diminish fuel efficiency. The heavier the truck gets the less efficient it is. So you have almost conflicting Federal policies between fuel efficiency and air quality.”

10. On-Board Truck Technology. Last October’s report was the first in which this issue made an appearance in the Top Ten. “The majority of respondents were not talking about technology mandates,” claims Murray, “but proactive technology solutions. We have tens of thousands of road stability devices hitting the marketplace: lane departure warnings, some of the new collision warning systems, integrated systems. They are bought because they can give really quick paybacks on efficiency and safety. That’s one of the few items on the list because industry is excited about some of the new on-board technologies.”

Looking to results of the next study, Murray says he thinks, “safety, highway finance and congestion are going to be right at the top in 2008 and they are all inter-related to each other. With the new transportation bill in the works, I think we’re going to see some programs that deal with truck funding and truck safety mandate.

Thanks to Greg Williams Director, Financial Analysis and Business Development
of Exel Transportation Services, Inc. for sending me this information.

Moving forward,

Jeff Roach

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