Monday, April 26, 2010

Environmental Trucking - Is this Possible?

Environmental Trucking is not a term that most people think is reality. The conception is that trucks tremendously pollute our air and are tremendously hurting our planet.

While it is true that heavy duty trucks do use a lot more fuel than an automobile, let's look at some facts and then we can see what the trucking industry trends are with respect to protecting our planet.

The chart below shows the Top Ten Sources of U.S. GHG Emissions in 2005.

Coal burning, such as power plants, are the highest polluter of our air and represent 29% of the GHG emmissions. Passenger Cars are second with 17%. Medium and Heavy trucks represent 5%. Power plants also represent a large portion of the stationary gas and stationary oil segments.

The American Trucking Association (ATA) has announced that their new sustainability program has the capability to reduce trucking's carbon footprint by 19% or 900 million tons over the next 10 years.

The more fuel efficient and lower sulpher emitting engines, as well as better truck idling practices will make up the majority of these improvements.

In yet another move towards cleaning up the environment and the relationship of trucking, Navistar recently announced their new electric truck that can go 100 miles on a single charge. Once the charge has been spent, it takes 6 hours to recharge, and the batteries can be switched out in 15 minutes with it's "cassette" like construction.

For a link to the ATA website, click here

It looks like we are on the way for a cleaner environment. For an example of a currently heavy duty electric truck, see the video below.

Monday, April 19, 2010

CSA 2010 Basics

This post is the third in a series concerning CSA 2010 Basics. CSA 2010 is the new safety rating system by the FMCSA. There is a lot of concern over what will happen to shippers and carriers when this new system goes into full effect.

Today's post will discuss the effects on truck capacity as it relates to driver retention and driver recruitment. The information is gathered from FMCSA information.

What Happens if a Driver Incurs the Rating of "Unfit"?

If a driver receives the rating of "unfit", he will no longer be allowed to drive a commercial vehicle. The only thing that the driver can do is wait for some of his points to drop off in the 36 month "history" that will affect his driver score. At this point, most drivers would have to quit.

If a marginal driver is getting close, they CAN lower their overall score with a clean inspection.

The FMCSA has speculated that up to 175,000 current drivers would be declared "unfit" when CSA2010 goes into effect! This is going to put a strain on the current capacity of trucks on the road.

How Will CSA 2010 Affect Carriers Driver Recruitment Efforts?

Carriers will more than likely have a minimum safety rating requirement for hiring and firing drivers. This minimum rating could be mandated by their liability insurance companies. It is speculatated that insurance companies will require a minimum safety score or they will not insure the carriers. Should a driver fall below this minimum requirement, he/she would have to be terminated in order for the insurance company to continue insuring the carrier.

New drivers recruited would also have to follow the same guidelines in order to joing with a new carrier. The driver's safety record will need to be part of every carriers' background check.

Overall - it is anticipated from many sources that there will be a shift in capacity once CSA 2010 takes effect. This WILL affect carriers and shippers alike. The most like effect? Less trucks means higher rates to attract and maintain carriers.

Monday, April 12, 2010

Manufacturing Recovery Bolsters Transportation

Manufacturing recovery now appears to be here for good. There have been a lot of concern as to whether or not this recovery would be short lived and we could dip back into a recession. Shippers and carriers have both been waiting to see - now it appears that we have our answer.

The ISM Manufacturing Index has once again risen in the Month of March. The rate of 59.6 exceeded all 77 of Bloomberg's economists' predictions. Many manufacturers are realizing that their regular transportation carriers are now demanding higher rates in order to keep up with demand - there simply aren't enough trucks to go around.

This raise in the ISM is now the 8th month in a row. Not only is this a sign that our recovery is really happening, but the growth in the number of industries has broadened. In the past few months, 11 or 12 industries were growing while the remaining industries were still struggling. March showed that 17 of the 18 industries in manufacturing showed positive signs of growth. According to Norbert Ore, chairman of the Institute for Supply Management's survey committee, "We have to go back to 2004 to find numbers that are similar to that".

Ore warns that this high growth will be hard to sustain and that it may actually not be desireable for us to continue at this pace. He also indicated that the housing industry is still struggling and will probably still remain slow.

Consumer confidence will continue to play a large part of the economic growth and that comes with the addition of jobs. Mr. Ore indicated that many manufacturers are beginning to hire and the "numbers will come as production picks up". He feels that there will be a dramatic increase in jobs in the later part of the year. Ore goes on, "We have to keep in mind that manufacturers lost about 2.1 million jobs, so there's a lot of ground that's been lost."

For the actual interview with Norbert Ore, watch the video below.

Monday, April 5, 2010

CSA 2010 Information - How Much Will This Cost??

CSA 2010 will be one of the most pronounced changes in the trucking industry since the 1980’s and trucking de-regulation. There’s still a lot of questions going around – most companies don’t understand what CSA 2010 is and how it will affect them. On the surface, this program has very honorable intentions - but at what price??

Let’s start out be figuring out what CSA 2010 is all about. The DOT (Department of Transportation) is introducing a new process for determining a carrier’s safety rating. It’s called CSA 2010. The ultimate goal of CSA 2010 is to reduce the large truck and bus fatalities.

According to the Federal Highway Administration, 1979 realized 6 fatalities per 100 million miles traveled. In 1984 the Roadside Inspection program began and fatalities dropped to just under 5 per 100 million miles. In 1986 the Carrier Safety Rating program was launched and the fatalities gradually decreased to slightly over 2 per 100 million miles. It’s been a pretty remarkable improvement since 1984. CSA 2010 is trying to continue the improvement.

The key differences between the current “Safestat” system and the CSA 2010 system are listed as below:
If you will notice, there are more areas to do inspections on, all roadside violations will count against the driver, results of an inspection may lead to intervention for the carrier, violations are "weighted" as to the riskiness, and this now means that a single driver can severely damage the carrier's rating.

When a single driver can have serious consequences for an ENTIRE carrier, this means that carriers are going to be weeding out non-performing drivers. On the surface this sounds great!

Think about that for a moment, however. If you are a transportation manager, and you have less drivers in the marketplace, does this mean your job is easier or harder to find enough capacity to get your goods moved?? When you do find the carriers and trucks, will this mean a lower or higher rate to get everything moved???? How much will it cost each carrier to keep a more watchfull eye on their drivers?? How much more will it costs carriers to keep up with compliance?? Who is going to pay for all the added administrative costs???

Now you know why CSA 2010 is so important to not just carriers, but everyone who uses transportation to get goods to the market. This doesn't leave too many people out!