The Roemer Report On-Line, April, 2004

A LOOK AT THE NEW HOS RULES: Although it's still early to predict the overall impact of the new hours-of-service rules, a survey from LogisticsTODAY.com polled its readers about how the rules are affecting costs. Of the 597 respondents, 22 percent said they experienced increased stop-off charges for multi-stop truckload; another 22 percent experienced increased wait-time charges during loading and unloading; 17 percent said there was no significant change in costs;13 percent said they had less leverage in negotiating carrier rate increases; 12 percent said rates are higher since truckload capacity is tighter. Despite the costs, the Federal Motor Carrier Safety Administration (FMCSA) says truckers are trying to do the right thing when it comes to following the new hours-of-service rules. The FMCSA has received thousands of questions on its toll-free hotline. “We're hearing thoughtful questions and witnessing a sincere desire to follow the new regulations,” said an FMCSA administrator. The majority of questions concern the sleeper-berth exemption, the 34-hour restart provision, the definition of a 14-hour workday, and procedures for recording hours in driver logbooks. You can call the FMCSA hotline with questions at (800) 598-5664.

THE STATE OF TRUCK SALES: When it comes to truck sales, there's good news and there's bad news. The good news is that truck sales are way up over this time last year. The first two months of the year saw a 40 percent increase in sales over the same two months last year. In fact, this February experienced almost a 50 percent jump in sales over last February. Ward's Automotive, which tracks eight major truck manufacturers, found that all companies posted significant increases for the first two months of the year . For example, Freightliner, the leading seller, experienced almost a 43 percent jump during January and February, compared to the same months last year. If you're in the market for trailers, however, get ready for the bad news: Prices are rising. Wabash National Corp. recently announced its plans to increase prices of new trailers by 4.5 to 6 percent . The reason? The costs of steel, aluminum, and wood have gone up. Steel prices have soared 30 percent in just two months. “The amount of cost increases we are currently experiencing requires us to pass through these increases to our customers,” said William P. Greubel, Wabash President and CEO. Greubel said his company plans to pass “a substantial portion, if not all, of the increases” on to customers. And don't count on any relief soon, as steel prices are not expected to come down anytime in the near future.

TRAFFIC WOES: Congestion on America's highways is at its worst. The country is close to having one registered vehicle for each man, woman and child. The estimated cost of congestion is $70 billion annually in lost productivity and wasted fuel, compared to $65.5 billion just two years ago. One carrier estimates that congestion could add as much as a 10 percent increase in shipper freight bills. New York City is one of the worst cities for truckers. Not only does the Big Apple suffer the usual daily gridlock, parking tickets, and tolls, but last year, it endured repeated “orange” threat alerts, a power blackout, Tropical Storm Isabel, and more than its share of snowstorms. In fact, it's so bad that some carriers, like Con-Way Transportation Services, refuse to go there. According to a recent study, the other most congested U.S. areas include Los Angeles, Washington, D.C., San Francisco-Oakland, Miami, and Chicago . The study also found that Salt Lake City and Columbus, Ohio, are experiencing the greatest growth in congestion since 1988. The federal government should do two things to help fight congestion, according to Douglas G. Duncan, president and CEO of FedEx Freight: Invest more in highway infrastructure and return authority over vehicle size and weight to the states, so longer combination vehicles will be permitted on some highways. Not helping matters, contends the Owner-Operator Independent Drivers Association (OOIDA), is the portion of the Senate highway bill that calls for toll roads in three states. OOIDA says that making interstate lanes into toll roads will put more vehicles on local roads, “which are at least four times more dangerous than interstates.” OOIDA contends that toll roads would increase congestion in nearby communities and increase road maintenance costs on nearby roads, as motorists take detours to avoid the tolls.

STATES PONDER SPLIT SPEED LIMITS: Ohio and Illinois have both introduced bills that would eliminate split speed limits. Despised by truckers, split speed limits have been shown to cause more accidents, according to federal statistics . In Ohio, a retired official from the Federal Motor Carrier Safety Administration testified about the dangers of split speeds in order to push for the bill's passage. This is Illinois' second recent attempt to eliminate split speeds. Last year a similar bill passed in both houses but was vetoed by the governor. The AAA Chicago Motor Club and other groups fought the bill, arguing that accidents are more severe when trucks travel at higher speeds. Meanwhile, Georgia and Iowa are trying to take restrictions in the other direction. Georgia is considering a bill that would restrict trucks to 55 mph while other vehicles would be allowed to travel up to 70 mph on rural interstates. In Iowa, a bill would reduce the speed limit from 65 mph to 55 mph for vehicles with a gross weight of more than 10,000 pounds on divided, multilaned highways. The Illinois congressman who sponsored the bill to eliminate split speeds said, “Forty other states have uniform speed limits, which is a very good reason [to change], and the trend is more and more states are moving to uniform speed limits. I think the more education we can get…, the better.”

REDUCED IDLING IN THE WORKS: In an effort to reduce airborne pollutants, the California Air Resources Board (CARB) has drafted a proposal that limits idling time to five minutes for all commercial vehicles over 14,000 pounds operating within the state. Dubbed the airborne toxic control measure, the rule would take effect December 31, 2009. Reactions to the proposal range from cautiously supportive to concerned. One main concern is that few truck stops in the state are equipped with electrification stations. Of the 200 truck stops in California, only about one-fourth is equipped with electrification units. Even so, says CARB official Mike Tollstrup, electrification is not the answer since a shortage of parking spaces exists in California. The real problem, contend some analysts, is that there are no industry standards for alternative means of powering cabs . “From what I see, the industry is working toward the same values as CARB, but from a deployment sense, there are a lot of technologies available but the ideal solution has not jumped out as yet,” said one source. Tollstrup contends that auxiliary power units would pay for themselves in a few years. “Our solution involves a combination of encouraging truck stops to install more electrification units and encouraging carriers to purchase auxiliary power units,” said Tollstrup, who believes “the proposal can go through now—it's just a matter of giving businesses time to invest in the right equipment.”

PROTECTING YOUR LARGEST ASSET: If you have health, home, and auto insurance, as well as a pension plan, you have all your bases covered, right? Wrong, says author Ric Edelman in The Truth About Money . Your biggest asset is your ability to produce an income. A loss of income can be financially devastating. But at least one in five 45-year-olds will suffer a long-term disability prior to age 65, says Edelman, who cites these reasons for investing in disability insurance: (1) The “airbag phenomenon . ” One reason why people are increasingly likely to suffer a disability is because they are less likely to die from illnesses or accidents. Today's medical advances and more sophisticated safety devices, such as airbags, tend to prevent fatalities, but often cannot keep people from getting injured and missing days of work. One study showed that about one-third of families of severely ill patients lost most of their life savings as a result of the patient's illness—despite medical insurance. Twenty-nine percent of families lost a major source of income due to either the patient's or a caregiver's inability to work. (2) The cost . The high cost of disability insurance—1 to 3 percent of your annual salary—proves you need it, says Edelman. Typically, the more expensive a policy is, the greater the probability is that you will use it. Take for example, a healthy 35-year-old nonsmoker with a $250,000 life insurance policy. Should he die, the insurance company would pay $250,000. If he bought a $2,000 disability income policy and suffered a disability, however, the insurance company would pay $2,000 a month for up to 30 years, amounting to $720,000.

THANK YOU GOES A LONG WAY: When a middle-aged man arrived home after running in his first marathon, he found a gift awaiting him from his boss. On his front porch was a bottle of champagne with a card attached. It read: “Congratulations on your achievement. Your willpower is something to be admired.” The man kept the card for years as a keepsake of his personal triumph. The simple yet thoughtful gift left a lasting impression on the recipient, who never forgot his boss's kindness. There are hundreds of ways managers can reward employees for a personal or professional achievement or thank them for their contributions. Some people think money is the best reward—but, truth be told, it's not necessarily the most effective. The problem with money is that it soon disappears, leaving no lasting reminder. Employees say they are most motivated by genuine appreciation in the form of (1) a face-to-face thank you or congratulations, (2) handwritten notes praising good performance, and (3) involvement in decision making.

Too often…we enjoy the comfort of opinion without the discomfort of thought.
—John F. Kennedy