The Roemer Report On-Line, June, 2002

READY FOR INSPECTION?
Since September 11, the Federal Motor Carrier Safety Administration (FMCSA) has been on a mission to visit as many hazmat carriers as possible to heighten their level of awareness about potential terrorist activities. These visits have not resulted in any compliance reviews or enforcement actions; they are intended only to increase safety awareness.

In particular, FMCSA officials are focusing on hazardous materials and package control, en route security, technical innovations like surveillance systems, and communications. Special attention is being placed on personnel safety, with officials reviewing the names of drivers in order to identify any personnel linked to terrorist countries. FMCSA officials also are discussing management's prerogatives on fingerprints, photos, and state social security number referrals. Once the FMCSA completes this initial round of meetings with hazmat carriers, motor carriers can expect subsequent meetings that may not be so agreeable; FMCSA officials are planning to increase the number of vehicle and driver inspections over the next two years. And they are well equipped to do it.

Since September 11, the number of government officials trained at the FMCSA training center has increased dramatically. Officials are concentrating on driver and vehicle inspections, drug interdiction, intelligent transportation systems, highway safety, and other issues. Roemer Insurance urges all its customers to assume they will receive such a visit and prepare accordingly. Also, keep in mind that driver attitude during inspection is extremely important, as is company attitude in response to the inspection.

TRUCKS NOT THE CULPRIT: With so much attention on truck emissions lately, it may come as a surprise to some that emissions from heavy trucks accounted for a mere 4 percent of the total greenhouse gas (GHG) emissions generated in the United States in 1999. The largest transportation-related source of GHG emissions came from passenger cars and light-duty trucks, accounting for more than 16 percent of GHG emissions. According to a recent report by the Environmental Protection Agency, GHG emissions in the United States rose almost 12 percent between 1990 and 1999. The bulk of this increase came from CO2 emissions from light-duty trucks and coal-fired power plants. Electric utilities and other power producers accounted for about 40 percent of GHG emissions. Transportation activities accounted for 27 percent.

HAZMAT SAFETY: In 2000, more than 3.1 billion tons of hazardous materials were transported throughout the country, resulting in 17,514 hazmat incidents that lead to 13 fatalities, scores of injuries, and damages totaling nearly $73 million. Ohio experienced the most hazmat incidents in 2000, followed by Texas and then California. Texas has the most shipments of hazardous materials in the United States, followed by Louisiana, California, Illinois, Pennsylvania, Georgia, and Ohio. With 800,000 hazmat shipments per day and the present threat of terrorism, the nonprofit American Society of Safety Engineers has developed a brochure, "Hazardous Materials Safety Information Guide," which is intended to provide helpful information to the public and businesses. The free brochure can be downloaded at www.asse.org.

In the mid 1980s, Congress set up State Emergency Response Commissions (SERCs), which designate Local Emergency Planning Committees (LEPCs) in communities across the country. Operated through the Environmental Protection Agency, LEPCs consist of local emergency service personnel, occupational safety and health professionals, and local officials who plan responses to chemical accidents. To locate your LEPC, you can check the EPA's web site at www.epa.gov/ceppo/lepclist.htm. The web site also has available free business software, called "Tier Two Submit," which allows companies to record hazmats on their premises. Once the information is recorded, it is submitted to SERCs, LEPCs, and local fire departments so they can better plan for emergency scenarios.

INSPIRED DRIVERS: If you want motivated drivers who want to succeed, then you need to help them reach their professional and personal goals. Understanding that drivers have individual needs and working to help them meet those needs will put your company one step ahead of the competition. Consider Abraham Maslow's hierarchy-of-needs model. Maslow theorized that people must first achieve their basic needs before they can advance to a higher level of needs. Maslow identified these five levels of needs: (1) basic needs like water, food, and shelter, (2) security and protection from harm, (3) social desires, such as friendship and a feeling of belonging, (4) self-esteem-the search for status and recognition, and (5) self-actualization-reaching one's full potential. Once a lower level need is met, the person can advance to the next level. A driver whose basic physical needs are not met-one who lost his home in a fire-will not fully appreciate a patch for a year of safe driving. A driver suffering from a serious illness will not be interested in a better truck when he is preoccupied with his health. By listening to individual drivers and discovering their needs and goals, you can find ways to encourage their success. Give the tired driver a chance to rest; help the homeless driver find a place to live; help the ill driver find options for a quick recovery. Help drivers' meet their goals and your company will be filled with successful people. A company filled with successful people can mean only one thing: a successful company.

TAMING THE PAPERWORK MONSTER: Technology has made immeasurable contributions to the trucking industry during the last decade, and now it is attempting to improve one of the most difficult and critical tasks a manager faces: maintaining adequate cash flow. Perhaps one of the most obvious ways to improve cash flow is to manage days sales outstanding (DSO)-the average number of days your customers pay after you deliver their loads. While many managers focus on the time between sending the invoice and receiving payment, many neglect to focus on the period between delivering the load and sending the invoice. In fact, many small carriers may benefit greatly from a low-tech solution: using an overnight or two-day delivery service to deliver paperwork faster. Cutting delivery time from seven days to one or two may be the only solution necessary.

Larger motor carriers, however, may benefit from a more sophisticated system. One 200-truck carrier in Florida relies on a software package that combines overnight document delivery and outsourced workflow and imaging services. "Our goal is to invoice the customer the day after delivering," says the company president. In addition to faster bill presentment, workflow and imaging services can increase productivity and reduce labor costs, allowing companies to add trucks without requiring additional overhead. But workflow and imaging systems do much more than manage DSO. Workflow systems can streamline business processes, measure employee productivity, track billing statistics (like cost per billing), and customize invoice requirements for each customer. Imaging allows dispatchers to view archived shipping documents easily and answer shippers' billing questions while on the telephone. Once workflow and imaging systems are in place, some carriers take it all online, giving customers immediate access to shipping documents on the company web site. This further speeds up the collections process, since customers can download documents from the web site instead of calling the carrier.

FEDERAL PLAN ON ITS WAY? President Bush recently met with industry and labor leaders to push for a federal insurance plan for terrorism, warning that without a plan, the economy would have a difficult time recovering from another attack. The lack of a federal terrorism insurance plan is already causing construction projects to be canceled and raising the costs of borrowing, said Bush. The House passed a bill that would create a federal loan program to cover aggregate losses of more than $1 billion. Action is stalled in the Senate, however, where lawmakers are debating a bill that would have the federal government cover 90 percent of terrorism-related losses exceeding $10 billion for one year, with the option of a second year with a $15-billion threshold. Since September 11, many insurers have excluded terrorism coverage from property and casualty insurance policies and have significantly raised premiums. That often results in those increased costs to be passed on to other industries, such as increased bridge tolls for trucking. In January, an American Trucking Associations survey found that the average premium for primary insurance increased 37 percent after September 11 and rates for umbrella policies increased 120 percent. That compares to average increases of 30 percent for primary and 87 percent for umbrella policies before September 11.

GENTLE PERSUASION: Managers spend a great deal of time influencing others. However, how they choose to influence their staff can significantly affect productivity and profits. Some managers mistakenly believe that persuasion involves direct orders or deal making. In reality, effective persuasion is much more subtle. Employees led by effective persuasion feel free to choose their actions. Managers who successfully influence others develop a true support system that boosts morale, creativity, and, ultimately, the final product or service. Here are some basic elements of effective persuasion: (1) Be credible. Employees must view managers and their viewpoints as credible and trustworthy. If a manager doubts his own confidence and abilities, the employees will doubt them too. (2) Establish common ground. Never assume that your staff understands the advantages of what you're trying to persuade them to do. Explain in detail that what you are doing is of shared concern. Address the concerns and feelings of others when making a persuasive argument. (3) Show them the evidence. You need compelling evidence to win over employees. Spell out every advantage and intended outcome in your evidence. Convince them with facts that they understand and believe. (4) Show some emotion. Managers who truly believe in their position can persuade others through their emotions, excitement, and sense of urgency that their project is worthy and credible.

Success is not getting on top-but how you bounce on the bottom that counts.
-U.S. General George Patton