The Roemer Report On-Line, December 2005

BIODIESEL: THE NEXT BIG THING? When the diesel engine was invented more than a century ago, its fuel was made of peanut oil, not petroleum. Now because of the high price of diesel, extensive environmental regulations, and government incentives to use biodiesel, there’s renewed interest in making fuel out of soybeans, vegetable oils, and even animal fats. Across the country, farmers, private investors, and huge agribusinesses are building biodiesel refineries and counting on its being “the next big thing.” Biodiesel is typically mixed with conventional diesel, resulting in a blend containing 2 to 5 percent biodiesel. Last year, Congress enacted a $1-per-gallon subsidy for biodiesel use, which has been extended through 2008. Investors are eagerly plunking down large sums of money, betting that people will be clamoring for the fuel in the near future. The American Trucking Associations has only recently embraced biodiesel, when it endorsed the use of the fuel in blends of up to 5 percent, known as B5. But getting truck stops to sell biodiesel and truckers to buy it may be another matter. Many truckers have been concerned that biodiesel would gel on cold days (which it won’t in blends of B5 or less), and truck stops say they will only sell what customers will buy.

CRASH COURSE: A nonprofit research group recently presented findings on its three-year “crash predictor” study, providing trucking companies with valuable information on driver behavior. The American Transportation Research Institute (ATRI) analyzed data on nearly 541,000 drivers in an effort to link past traffic violations and convictions with the likelihood of being involved in future accidents. “We know driver-related factors are involved to a large degree in crashes involving large trucks,” said ATRI Chairman Jim Staley. “Our research now gives us an early warning system, so to speak, where motor carriers can intervene when necessary within their driver force to improve and make a profound impact on safety behavior.” ATRI found that drivers most likely to be involved in a crash are those with the following convictions: a reckless driving violation, 325 percent; an improper turn violation, 105 percent; an improper or erratic lane change conviction, 100 percent; a failure to yield right-of-way conviction, 97 percent; a failure to maintain proper lane conviction, 91 percent; and a past crash, 87 percent. Studies suggest that driver-related factors are a critical reason for the majority of crashes involving large trucks. Therefore, notes the ATRI, “focusing on driver behaviors will have the most profound impact on crash reduction.”

SECURITY RULES PROVE BURDENSOME: While the trucking industry supports the government’s overall goal of security, it says that security programs often miss the mark and are proving to be overly burdensome to the industry. The six-month-old rule requiring background checks on hazmat drivers, for example, is hurting the trucking industry by imposing higher operating costs and deterring drivers from obtaining a hazmat endorsement, say those in the industry. Speaking before a subcommittee of the U.S. House Committee on Homeland Security, Steve Russell of an Indianapolis-based truckload carrier said the hazmat regulation even covers materials that pose no security risks and ends up costing the industry nearly double what background checks for aviation workers cost. Russell called the costs “unacceptably high” and said they serve as a “disincentive to obtaining a hazmat endorsement.” At an American Trucking Associations (ATA) conference in October, trucking executives called on federal officials to reduce the costs of security compliance. One transportation manager said his carrier spends around $400 per driver to obtain all the necessary clearances to transport micronutrients for fertilizer. Expenses, he said, include $98 for federal hazmat endorsement, $150 for a port pass, $50 for a port tractor decal, and $100 for cargo security clearance. And one port does not necessarily accept another port’s pass, which can tack on another $125 or so. ATA says it’s making progress in lobbying the government to reform its security regulations. One goal of the group is to narrow the list of hazardous materials that is considered threatening.

THE FUTURE OF SAFETY? Imagine driverless buses cruising down magnetized streets and parking at stations. How about vehicles text-messaging each other to steer clear of the pothole ahead? Or maybe eyeglasses that determine when the wearer is on the verge of falling asleep so that a speaker box loudly proclaims, “You are too drowsy to drive safely!” These very real innovations were featured last month at the annual World Congress on Intelligent Transport Systems. Conference participants say they are trying to use technology to squeeze more vehicles onto already-crowded roadways in safe and time-saving ways. The technology that generated the most buzz was vehicle-to-vehicle communications—equipping vehicles with sensors and wireless technology so they can share information about hazardous road conditions and react more quickly than their human drivers. At a GM display, a driver climbed into a Cadillac equipped with what the company called “sixth sense.” When a vehicle passed the Cadillac and then stalled abruptly in front of it, the Cadillac screeched to a halt—without the driver’s help—just inches from the other car’s bumper. GM’s “sixth sense,” expected to cost around $200 per car, is at least five years away from market. Most of the technologies on display are not available to U.S. consumers, though many innovations have been introduced overseas. The level of automation in the United States “is nowhere near what they have in Europe and Japan,” said one researcher. “Automakers here are reluctant to make technology that takes cars out of drivers’ hands….If something goes wrong, you have a class-action lawsuit. The U.S. is a much more litigious environment.”

UPDATE ON NEW ORLEANS: Cargo entering the Port of New Orleans, the world’s third largest port, is now at nearly 45 percent of pre-Katrina levels. Consequently, the Port has put out a national call for truckers to help rebuild the local economy. Before the hurricane, the Port had about 1,000 truckers hauling 1,500 loads on a busy day. Now the city has about 150 drivers hauling 450 loads per day. Many New Orleans truck drivers lost their homes, their rigs, or both during the hurricane. Some of these drivers have moved away from the area. What’s further exacerbating the driver shortage is the massive federal trash-hauling efforts in the city. New Orleans has an estimated 22 million tons of debris, which could take years to clear away. Almost 3,000 dump trucks are clearing waste in neighborhoods where residents have moved back. “The people of the City of New Orleans and the surrounding areas are working tirelessly to rebuild their lives, their communities, and this economy,” said New Orleans Port Director Gary LaGrange. “Drivers who want to be a part of rebuilding of this great city and this region would be welcomed with open arms. Many trucking companies are putting together very competitive packages for qualified drivers.” Those interested in participating in the cleanup can contact the Louisiana Motor Transport Association at (225) 928-5682.

BEWARE OF E-HIJACKING: Data security in trucking needs to be tighter in order to guard against a new type of crime referred to as “e-hijacking.” With e-hijacking, hackers can gain access to shipping documents and truck performance data as information is transmitted electronically. At a recent trucking safety and security seminar, the CEO of a data security consulting firm gave examples of recent e-hijacking events to illustrate why trucking security needs to be tighter. Consultant Stephen Spoonamore told of the 3.9 million banking records stored on backup files that UPS was shipping from New York to Texas. “These tapes were not lost—they were stolen,” said Spoonamore. “Not only were they stolen, the theft occurred by altering the electronic manifest in transit so it would be delivered right to the thieves.” He noted that UPS, the shipper, and the receiver spent four days blaming each other for the loss before realizing it had actually been stolen. Another incident involved a fleet of 350 trucks shipping hazardous materials and relying on telematics to download and track vehicle operating data, such as engine speed. An “enterprising” law firm, says Spoonamore, downloaded four months of operating data on each truck and proceeded to sue the trucking firm for speeding violations, using the carrier’s own data as proof of speeding. “What’s important to remember here,” said Spoonamore, “is that there is no such thing as ‘security’ in the data world; all data systems can and will be breached. What you can have, however, is data custody so you know at all times who has it, if they are supposed to have it, and what they are doing with it.”

GIFTS FROM THE HEART: One of the most satisfying aspects of the holidays is being able to light up someone’s face with a gift. But truth be told, material gifts are not always as well received as we hope they will be. Happily, we can give those less tangible gifts from the heart that are sure to be appreciated. Here are just a few ideas: (1) Goodbye snow. When shoveling snow from your sidewalk, do a neighbor’s sidewalk too. Your kindness will not go unnoticed. (2) Lend a hand. Ask an elderly neighbor or someone who cannot drive if they would like a ride to the grocery store, bank, or some other destination. (3) Show that you care. Deliver a fresh batch of cookies or donuts to your local fire station or police department. (4) Thank the troops. Many web sites tell you how to send letters and care packages to U.S. soldiers. Check out treatsfortroops.com and booksforsoldiers.com among others. (5) Share a holiday meal. Invite someone who doesn’t have a family or who is far from home to share a holiday dinner with you.

Wishing you a safe and joyful holiday season and prosperous New Year
—From all of us at Roemer Insurance