The Roemer Report On-Line, Dec, 2001

SMALL CARRIERS LAGGING IN WEB SITES: Large motor carriers have invested plenty of resources in getting their businesses online. And with good results-fewer trucks deadheading, shippers feeling more confident knowing where their loads are, and smoother operations in general. Considering those benefits, you would think that smaller trucking companies would follow suit. But only about 35 percent of small and medium-sized trucking companies have web sites, and even fewer use software that can enhance their business efficiency and operations, according to analysts. That could put those carriers at a big disadvantage, especially in the coming years. By next year, 85 percent of all small companies (those with fewer than 10 employees) are expected to conduct all or part of their business through the Internet. In addition, the Internet allows companies to increase revenues by 5 percent annually while lowering costs 3 percent annually, according to studies. A truckload business in El Paso, Texas, however, has experienced an 18 to 20 percent growth in business since going online three years ago. Scott McLaughlin, president of Stagecoach Cartage & Distribution, says the company's web site has reduced the amount of incoming faxes and phone calls, freeing employees to concentrate on more pressing work. Perhaps more importantly, though, is improved communication. Being able to tell drivers about modified delivery schedules can save hundreds of dollars. "Even as a small carrier, I'm able to compete with anybody," said McLaughlin. "Our customers can now get proof of deliveries online, and if they choose to, they can print copies. I can track my loads and know if a delivery will be on time." Every carrier can benefit from going online, say experts, and now is a great time to get started. Small carriers can benefit from the wealth of information the large carriers took years to obtain.

BEEFING UP SECURITY FOR HAZMAT CARRIERS: The Federal Motor Carrier Safety Administration (FMCSA) says it will send field officials to most of the nation's hazmat carriers in the coming months. The visits will not address compliance or enforcement issues, assures the FMCSA; officers simply want to offer suggestions and recommendations on tightening security and heightening awareness of terrorist threats. In particular, field staff will do the following: (1) Encourage carriers to develop and implement a security plan that addresses personal security, hazardous materials and package control, en route security, technical innovations, and communications among other issues. (2) Review a list of drivers and ensure that any originating from a country that supports terrorist activities have undergone detailed background checks. (3) Review hazmat and package controls and discuss lighting, alarms and security systems, ID cards or badges for personnel, the possible need for security guards, security spot checks, personnel training, and other issues. (4) Discuss en route security, such as avoiding high population areas, avoiding tunnels and bridges, and ensuring that hazardous materials are delivered expeditiously. (5) Inform motor carriers of security options, including implementing security training for employees, running criminal background checks on employees with access to sensitive freight, and obtaining fingerprints and photos of applicants during the employment process.

TIGHTER SECURITY MEANS MORE EXPENSES: In Kentucky alone, officers stopped 2,522 hazmat haulers between September 18 and October 31 in an effort to thwart terrorist activities. A new state policy requires that law enforcement officers stop every truck with a hazardous materials placard. Officers inspect the driver's license, vehicle registration, and trip manifest. The inspection can take anywhere from 15 minutes to 2 hours, depending on whether an inspector becomes suspicious. With inspections occurring at weigh stations and on the road, drivers can get stopped more than once in a single day. And all those delays are taking a financial toll. "It's an expense that we hadn't counted on, planned for, and can't put up with for very long," says the president of one hazmat carrier. The American Trucking Associations estimates that the cost of paying a driver to sit in a parked truck is around $72 per hour. That rate is based on a company earning $1.20 per mile with the truck traveling 60 miles in one hour. That's a high cost to absorb, especially now when the economy is weak and profit margins are slim. Not all shippers are willing to share the financial burden. Still, despite the unexpected costs, trucking companies seem to be taking the inspections in stride. A Maryland State Police Sergeant says, "99.9 percent of those we stop understand why. They are a credit to the profession and a credit to the industry."

PUT ON A HAPPY FACE: Trucking carries a number of obvious perils with the job, but one of the most significant problems truckers face today seldom gets much attention. New studies show truckers are three times as likely to suffer from serious depression than the general public. Many of the factors associated with trucking are exactly what make truck drivers more prone to depression. Truckers spend long periods away from home and family, they have little control over their career, and the profession itself elicits little respect from the public compared to other jobs. Add to that lack of sleep, poor diets, and little exercise and it's easy to see why truckers are more prone to chronic depression. According to a recent survey, a full 30 percent of owner-operators said depression affects their personal or professional lives. Unfortunately, many truckers fail to get help with this problem. According to a Rand Corp. survey, depressed workers accounted for $44 billion in decreased productivity in 1990. Untreated clinical depression is a serious problem. It can heighten safety concerns, particularly since depressed people often have problems sleeping and concentrating. Truckers who have received help for clinical depression say treatment has made a world of difference. As one trucker who received treatment explains, "It takes the darkness out of living."

NO RESOLUTION IN SIGHT FOR NAFTA: President Bush wants to allow Mexican trucks on U.S. highways next month, but the Teamsters union, representing American truckers, strongly opposes the idea. The union says that the September terrorist attacks reinforce the need for safe vehicles entering the country. Even before the attacks, President Bush faced opposition on the issue, with the House passing a ban on Mexican trucks and the Senate calling for tougher safety measures and more inspectors at the border. Bush opposed both bills, and Mexican President Vicente Fox warned that honoring NAFTA was crucial to U.S.-Mexican relations. Congress plans to work on a compromise soon, but Bush threatened a veto if the bill fails to open more roads to Mexican trucks. Under NAFTA, the United States agreed to open its border to Mexican trucks by January 1, 2000. With opposition from union and safety groups, that never happened. Instead, Mexican trucks are limited to a commercial strip along the border. If the Bush Administration gets its way, Mexican trucking companies that claim to comply with U.S. safety standards could operate in the country for up to 18 months while their claims are verified. Since the attacks, inspections at the border have intensified, but customs inspectors do not look for safety problems.

INSURANCE RATES TO INCREASE INDUSTRYWIDE: It was inevitable that after the events of September 11, insurance premiums would increase. With the insurance industry hit by claims from the terrorist attacks estimated to total $70 billion to $100 billion-or more-experts predict that liability, property, workers' compensation, medical, and life insurance rates all will rise. Some sectors of the trucking industry will experience greater increases in premiums than others. For example, motor carriers that haul dangerous or expensive cargo requiring higher insurance limits can expect big increases-provided they can even get coverage. Hazmat carriers especially face increased premiums. The president of one motor carrier says his company was facing mounting premiums before the attack, and now he is concerned about renewing his policy in 2002. "There are very few insurance markets we can go to. There are very few (insurance) carriers that want to insure this kind of risk," he says. Worse yet, if insurance companies do not get backing from their re-insurers, some players will be forced to exit the transportation insurance niche, driving rates higher still. In addition, motor carriers stuck with high insurance premiums may have a hard time convincing shippers to share the increased expense via insurance surcharges. But someone will be biting the bullet. "We're going to take a hit," says Cliff Harvison, president of National Tank Truck Carriers, "and it's probably going to be considerable."

COURTESY IN CYBERSPACE: Somewhere along the line, communicating through e-mail lost some of the common courtesy associated with more traditional forms of communication. To maximize the potential of e-mail communication-whether it's courting a prospect or answering a consumer's inquiry-businesses should follow these computer etiquette rules: (1) RSVP immediately. People who use e-mail expect instantaneous communication. When you receive a message from a customer or prospect, make sure you respond within 24 hours. (2) Use proper references. When replying to an e-mail request or question, always refer to the original message the prospect sent. (3) Be succinct. E-mail is not the medium for lengthy responses. Make your replies brief and fact-filled. If you must send attachments, limit them to two at one time. (4) Make contact easy. While a consumer may make his initial contact via e-mail, he may also want to speak to you in person. Therefore, always include your phone and fax numbers, as well as your mailing address in your responses. (5) Make it clear. E-mail messages should follow the same rules of grammar used in any type of correspondence. Check your spelling and grammar before hitting that send key.

Roemer Insurance wishes you a safe and joyous holiday season and New Year.