Roemer Report – October 2008

WHAT PEAK? This is normally the start of the busy holiday season, when Asian goods inundate West Coast ports and make their way inland to store shelves. But don’t expect to see a peak this year, say transportation experts, who suggest 2008 will look more like mountaintop removal, according to Traffic World. The lack of freight this holiday season could reduce potential earnings for motor carriers, many of whom rely on the autumn peak to make up for slower times during the rest of the year. Last holiday season also experienced a slowdown, due to the sluggish housing market and falling dollar. Much of this year’s slowdown is also blamed on the U.S. housing market, where home values have dropped and construction is down. “Until the construction industry comes back, I don’t think we’re going to have a peak season,” said one transportation expert. Consequently, retailers are managing inventories as tightly as possible. They want to have adequate merchandise on hand for consumers, but they don’t want products left on their shelves after Christmas. One trucking executive said he expects financial gains for carriers only from reduced supply and does not expect freight demand to recover until mid-2009. Thomas L. Finkbiner, of the University of Denver, said to “watch the housing market. When housing comes back, we’ll begin to see shipping come back.”

JOB HOPPERS REMAIN MUM: CDL holders who fail a drug test generally do not inform prospective employers about test results, according to an investigation by the Federal Motor Carrier Safety Administration (FMCSA). The Government Accountability Office (GAO) investigated 37 cases in which commercial drivers had tested positive and then, within a month, had tested negative with another employer. None of the 37 drivers disclosed the positive test results to their prospective employer, and 19 of those drivers were hired, even though the employers explicitly stated that a positive drug test would disqualify them from the job. (When the GAO informed employers about the positive tests, the companies immediately fired the truckers.) Interviews with 12 of the 37 drivers revealed that none had undergone evaluation by a substance abuse professional before applying for a new job, even though such an evaluation is required. According to the Department of Transportation, 1.3 percent to 2.8 percent of truckers test positive for illegal drugs during random testing. But FMCSA Administrator John Hill said that “the Federal Motor Carrier Safety Administration aggressively enforces federal drug and alcohol regulations” and “that these efforts are working.” Hill noted that the number of fatalities involving large trucks dropped nearly 5 percent in 2006.

CRISIS AVERTED: The Senate restored solvency to the Highway Trust Fund by recently voting to transfer $8 billion from the Treasury’s general fund into the trust fund. Had the Senate not come through, the fund, which pays for highway construction and repair, would have run dry last month, according to Transportation Secretary Mary Peters. The fund’s balance has been falling since spring, when highway construction spending rose and the fund’s income decreased; income for the fund is derived from the federal fuel tax. The Senate had tried several times to transfer money into the Highway Trust Fund this year, but Republicans, who called the transfer “fiscal irresponsibility,” blocked the attempts before finally conceding. Peters noted that the best long-term solution for solvency was a highway reauthorization plan that explores funding methods not based on fuel tax. The 52-year-old trust fund provides funding for nearly half of all surface transportation projects. Just three years ago, it had a $10 billion surplus, but because drivers are switching to more fuel-efficient vehicles and driving fewer miles, the fund’s income has dropped drastically. In addition, Congress has not raised the federal fuel tax since 1993, despite inflation and sharp increases in construction costs. The federal fuel tax is 24.3 cents a gallon for diesel and 18.4 cents for gasoline.

TIGHTENING LANGUAGE REQUIREMENTS: Last year, authorities issued more than 25,000 tickets nationwide to drivers with poor English-language skills, according to USA Today. And now the federal government is trying to further tighten the requirements. Most states allow drivers to take their CDL tests in languages other than English, but the Federal Motor Carrier Safety Administration (FMCSA) recently proposed rules requiring CDL applicants to speak English during their road test and vehicle inspection and to eliminate the use of interpreters during the test. Drivers could still take written tests in other languages, where states permit that, and they would not have to be entirely fluent during the road test. “Our requirement is that drivers understand English well enough to respond to a roadside officer and to be able to converse,” said the FMCSA’s Bill Quade. The American Trucking Associations supports the English-language rules for commercial drivers, noting that “it’s not a cultural requirement, it’s a safety requirement.” The rule change, which would likely become effective next year, could have a tremendous impact on the transportation industry. Last year, more than 17 percent of the nation’s truck drivers were Hispanic, as were more than 11 percent of its bus drivers. For now, while the economy is slow, the rule would not have a major impact on hiring drivers, but once the economy picks up, the new rule could exacerbate the driver shortage, which is sure to rear its head again.

TECHNOLOGY BOOSTS SAFETY: Today, more drivers are using seat belts, air bags are becoming standard fare, and driver training is improving. As a result, crash rates for trucks are on the decline. But perhaps one of the biggest safeguards against collision is electronic sensors. According to Road King, almost every crash-risk scenario has a device that will prevent it. Consider the following: (1) Tire blowouts due to poor inflation will soon be a thing of the past. Automatic inflation systems ensure that trailer tires are inflated, and air pressure monitoring alerts drivers when pressures drop in tractor or trailer tires.  (2) Wake-up signals are effective in getting drowsy or distracted drivers back on track. One device, for example, uses optical recognition to determine where a vehicle is within its lane. If the truck makes an unintended deviation without signaling, the device alerts the driver with a rumble strip sound and sensation. (3) Often, by the time a driver detects an imminent rollover, it’s too late to be able to control it. But one company is developing rollover mitigation in conjunction with traction control and stability systems for tractors.

WELLNESS PROGRAM EXCEEDS EXPECTATIONS: Less than two years ago, Con-way Freight launched a wellness program in the hopes that employees would improve their health and the company would save money. The program, in conjunction with Wellness Coaches USA, has received rave reviews from employees, and the results have proved stunning. As many as 95 percent of employees have voluntarily met with coaches for personal health assessments and counseling. “We’ve seen lifelong smokers quitting smoking, employees lowering chronic high blood pressure, overweight employees shedding pounds, and still others discovering and being treated for life-threatening conditions,” said the vice president of safety for Con-way. In less than a year, nearly 831 Con-way employees lost a combined total of 6,269 pounds; more than 170 employees quit smoking; 669 employees reduced their blood pressure from hypertensive levels; and nearly 1,470 employees improved their health through exercise and diet that lowered blood pressure. In just under a year, workplace injuries and related workers’ compensation costs decreased 80 percent, and lost workdays dropped 75 percent. Because the program has far exceeded expectations, Con-way has decided to expand the program to 21 states. 

WANTED: NEW TRAINING METHODS: The next generation of leaders expects to be constantly entertained and engaged. The traditional methods of training won’t cut it. Sitting through lectures and being required to memorize information will leave the younger generation bored and unmotivated. Your people expect information to be in short, quick doses. That means that current training methods are not enough. Training leaders need to make changes that will enhance learning for the next generation. Jean M. Twenge, author of Generation Me, cautions, “Young people learn best by doing. Raised with the Internet and collaborative learning in the classrooms, they’re not used to long, boring lectures. Training seminars will put them to sleep if not interactive.” With that in mind, consider these tips to keep learners engaged: (1) Use interactive training techniques and activities that get people out from behind the desk. Try role-playing and hands-on programs so they can practice new skills and knowledge. (2) Make sure trainers provide guidance but are not the preeminent source of knowledge. If they speak more than 25 percent of the time, consider it a red flag. (3) Use trainers who view themselves as facilitators, not instructors, and who understand that participants can learn as much from peers in the class as they can from the teacher.

Good judgment comes from experience, and experience comes from bad judgment.
—Barry LePatner, U.S. author