Roemer Report – October 2009

TRUCKLOAD VOLUMES IMPROVE: Through the week ending August 21st, the Morgan Stanley Truckload Freight Index showed signs of improvement at a pace faster than normal. According to an item appearing in Outsourced Logistics, the index, which measures truckload demand against capacity, was at the highest level for the year on a seasonally adjusted basis. Unfortunately, said Morgan Stanley, volumes were still weak. The report noted that analysts find current results suggest that truckload demand is unlikely to deteriorate further and could rebound if consumer demand improves. A September 12 report from Rueters said improving U.S. consumer sentiment and a big drawdown in wholesale inventories suggested an economic recovery was picking up speed. FedEx added to the recovery theme when it said profits would be higher than earlier expected, citing an improving economy and fuel prices. Evidence of a durable recovery is coming in from all quarters with economic data, company earnings global growth drivers like China signaling strength ahead.

TRUCKS AND TRAINS TO HOOK UP IN OHIO: Ohio governor Ted Strickland, Congressman Bob Latta and CSX CEO Michael Ward broke ground for a new intermodal terminal in North Baltimore, OH, August 14th. In its press announcement CSX said the new terminal will support the efficient and environmentally beneficial movement of containers between rail and truck. The new Northwest Ohio Intermodal Terminal will employ more than 200 people and open in 2011. According to CSX, the facility is the cornerstone of the National Gateway, an $840 million, multi-state infrastructure initiative creating a freight link between the Mid-Atlantic ports and the Midwest. "This is a great opportunity for northwest Ohio to play a major role in the nation's vital freight transportation network, while creating jobs and boosting the economy of the region," said Strickland. "This terminal will reinforce our state's position as one of our nation's leaders in transportation and logistics."

DIESEL CREEPS UP, CREEPS DOWN: From the end of July, to the end of August the price of diesel fuel crept up nearly a nickel. For the first time in seven weeks, as of September 13th, the national average price for diesel fell, dropping nearly three cents to $2.65 per gallon. The Trucker.com reported September 8th that in true seesaw fashion, diesel dropped while crude oil rose—the most in more than a month. Crude oil prices popped up to $71 after the dollar declined to its lowest level this year. The market, said analysts, is responding to ward off the effects of the falling dollar and hedge against inflation.

GREEN TRUCKING—PART ONE: At the beginning of August, President Obama traveled to Navistar’s Wakarusa, IN manufacturing plant to celebrate a $39 million federal grant to develop and build all electric delivery vehicles. While an all-electric Class 8 tractor is likely not in anyone’s future, Industry Week reported August 17th that drivers of hybrid-powered International trucks and IC Bus school buses have helped Navistar become the first OEM to accumulate more than 5 million real world miles. According to Navistar, depending on the specific application and other conditions, the hybrid trucks and buses can deliver up to 40% fuel savings in tough stop-and-go duty. Meanwhile, Outsourced Logistics reported August 26th that Kenworth’s new T370 hybrid has been busy helping New York City’s air a bit clearer while picking up the trash. The T370 went into service this past spring as the first medium-duty diesel electric hybrid truck in New York’s truck fleet. Kenworth held a press conference August 26th to highlight its T370 Class 7 and T270 Class 6 hybrid trucks. The tractors are available up to 55,000-lb GCW. Kenworth says purchasers may qualify for federal tax credits from $6,000 to $12,000. Detroit Diesel’s BlueTec SCR Technology also posted a milestone. According to Detroit Diesel, by its rollout on January 1st, 2010, BlueTec SCR technology will surpass 28 million miles of testing, making it one of the most proven and tested emissions reduction technologies ever.

LIVE LONG AND PROSPER: The familiar saying, “Without your health, you are nothing,” is ringing true for many during tough economic times and companies across the country are finding healthy employees are happier. Employers, recent reports reveal, are turning to wellness programs to promote healthier lifestyles, and both employees and companies are reaping the benefits. “The most important thing for people to know is that they are respected and cared for, said Rocky Roemer, president of Roemer Insurance. “If you help people to be the healthiest they can be, there will be lower costs on insurance and greater profitability for the company.” Roemer’s remarks appeared in “Toledo area wellness programs healthy in ailing economy,” in the Toledo Blade August 16th. More companies are funding wellness programs, which range from paying employees to quit smoking, to picking up the tab for gym memberships to promote weight loss. Firms are covering such costs, said an Orlando Business Journal article August 31st, with the aim of lowering health care costs and improving worker productivity. Are trucking companies behind the curve on this one? In 2007, the Transportation Research Board published a lengthy report on Health and Wellness Programs for Commercial Drivers. The report observed that what are needed are cultural change and a deliberate shift by the transportation industry toward integrating new models of health, safety, and productivity in a partnership that involves drivers, managers and transport company management. Trucking companies interested in developing employee health and wellness programs, said the report, are still very much in need of guidance and resources on “how to do it.” But, the resources and tools are out there. Meanwhile, the ranks of those getting on board the wellness train are growing, and employees and the bottom line are better for it.

GREEN TRUCKING—PART TWO: Pair a diesel hybrid truck with a renewable fuel source like biodiesel and pretty soon sustainable trucking is a reality, not an oxymoron. In Irvine, KY, Green Earth Biofuels of Kentucky Inc. reports it is patenting a new process technology that allows it to obtain 100% yields from vegetable oil feedstocks, without producing coproducts or a waste water stream. Green Earth Biofuels said the process is not energy intensive, which puts it way ahead of other plants economically, and produces a fuel with an energy balance comparable to methyl ester biofuels. Plans call for the new plant to use soybean oil for its feedstock and produce fuel appropriate for on-road use. “There is enough demand,” said product procurement manager Jeff Sewell, “within a 50-mile radius for 100 million gallons a year.”

SLEEP APNEA CLINICS TARGETING TRUCKERS: Long Haul Clinics LLC, has been adding sleep apnea diagnosis and treatment to its menu of health care services it provides to truckers through its Roadside Medical health clinics. Under an agreement with Pilot Travel Centers, the company operates the clinics adjacent to some Pilot truck stops. Transport Topics’ Dan Leone reported August 31st, that people afflicted with obstructive sleep apnea don’t fully awaken when clearing their obstructed airways, and the reflex usually disrupts sleep patterns. People with chronic sleep apnea, studies prove, are usually overweight, have poor diets and seldom get a good night’s sleep. Sound like your average truck driver? Leone noted that some motor carriers have already started screening drivers for apnea in pursuit of safety and lower health care costs. Schneider National and Swift Transportation are two of the largest now screening drivers. Problem is, to get a proper diagnoses, a driver needs to be observed while he or she sleeps. The on-site clinics offer a convenient way to accomplish that, but Leone reports drivers are not exactly jumping at the chance to spend a night in the sleep lab to find out. Explained Roadside Medical president Bob Perry: “Drivers need therapy and need to be coached through it. It’s not like someone’s trying to pick on them because they are fat.”

You can’t depend on your eyes when your imagination is out of focus. Mark Twain