RSI’s Transportation Insights

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Large fleet owners have a lot on their mind.  They not only manage the day to day operations of running a business, they manage personnel, inventory, and of course – sometimes as many 200 or more vehicles.  And as any manager knows, each day comes with a few calamities that must be extinguished in order to move forward with the daily responsibilities. 

Common large fleet owner concerns include fuel costs, manufacturing slow downs, and constant maintenance to name a few.  How can fleet owners circumvent these issues and free up time to focus on other demands? 

Diesel Costs

Everyone – and that goes for drivers ages 16-116 – has been hit hard by rising fuel costs.  Diesel fuel in particular has hovered around the $4 mark with no signs of dropping.  Fuel costs can hurt the owner of a large fleet with even the widest margins, eating up hundreds of thousands of dollars in a single year.  What’s a fleet owner to do? 

· Consider alternative fuels and hybrid vehicles
· Retrofit current fleet with fuel efficient technology
· Stop trucks from  idling  
· Provide drivers with better routes

Manufacturing Slowdown

While several sectors of our economy have experienced a production slowdown, the trucking industry and owners of large fleets in particular have had to find ways to compensate for a decelerating manufacturing industry.  If there are no products being produced, trucks are left with nothing to transport.  Until the economy picks up, analysts fear the US truck manufacturing sector will have to cut costs, have to provide longer receivables for their vendors and the small businesses that they contract with.  (http://ezinearticles.com/?Economic-Think-Tank-Worried-About-Truck-Manufacturing-Sector&id=994585).  Considering macroeconomic trends are sometimes out of our control, what can the average fleet owner do?

The solution often lies internally.  Fleet owners may have to shell out a little money, but on things like software, employee training, and alternative services to name a few.  Focus on maintenance that will cut long term costs by not having to replace vehicle parts.  Even consider hiring additional IT personnel for to streamline operations.

Whatever the issues, an individual who can handle a large fleet consisting of vehicles that weigh upwards of 50,000 pounds (and run on engines with 600 horsepower), can take a few punches.  It’s whether or not those punches met with a wily, well-placed uppercut that makes the most impact. 
 

Considering current economic trends – the ones no one wants to read about anymore anyway – it can come as a surprise that an industry is in desperate need of employees.  It was first reported three years ago in an American Truck Association (ATA) report that the trucking industry could be short 300,000 drivers by the year 2014.  Several factors have, and will affect the industry’s loss of long haul, heavy load drivers. 
According to the ATA, it’s demographic trends that will hit the industry the hardest.  Consider the facts:  A majority of current long haul drivers are between the ages of 35-54.  In less than a decade, half of that group will likely retire from what can often be a mentally and physically draining position.   In addition, the ATA reported, “A major
Problem for the trucking industry and the U.S. economy as a whole is that the
annual rate of growth of the overall labor force will slow sharply, from 1.4%
currently to only 0.5% by 2012.” 
 

 Fuel prices have hit fleet owners hard, leaving many unable to provide adequate wages increases.  The situation is compounded by job stresses that include long periods of time away from family and unpredictable schedules. 

The good news is, the industry’s taken notice.  Recognizing regular demographics aren’t going to be available in ten years, companies have begun to target women and couples as potential drivers.  This trend has trickled down, affecting big rig design, position requirements, and more.  Ward Truckload Express is one company in particular that’s reshaping the position to be more desirable – and balanced.  Ward President, Tim Ward said, “Our goal is to provide our drivers with a lifestyle that balances time at home with time on the job.  We are committed to providing excellent income potential and benefits, and we strive to create a pleasant work environment,” (http://www.bigrigjobs.com/Truck-Driving-Blog/?postid=50.) According to the Auto Channel, Ward drivers receive medical benefits, profit sharing, and first year earnings in the $50,000 range.  

Time, economics, and industry evolutions will all impact whether or not positions get filled.  In the meantime, there’s some hiring to be done! 

Rules, rules, rules.  You never liked them in grade school, challenge them at work.  Yet, as drivers, we abide without a peep (usually), and with good intention: to avoid total chaos on the road.  And fortunately, as drivers, not much has changed from the time our parents took their drivers tests.  Three-point turns are still status quo.  Imagine being the operator of a big rig though, and having to deal with constant changes that restrict the number of hours you drive, how much you can haul, where you can sleep, among the lot.

Think your manager is strict?  Check out the most recent rule change courtesy of the Federal Carrier Safety Administration:

10/1 Technical Amendments to Federal Motor Carrier Safety Regulations
8/24/2007 Fees for Unified Carrier Registration Plan and Agreement
7/5/2007 Amendments To Implement Certain Provisions of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU);
6/11/2007 Parts and Accessories Necessary for Safe Operation; Lamps and Reflective Devices
3/6/2007 Parts and Accessories Necessary for Safe Operation: Surge Brake Requirements
 
Furthermore, the Department of Transportation keeps a watchful eye on operators traveling in hazardous conditions, weariness, equipment use, and safe loading practices among others.

 The hours of service a truck driver can operate a vehicle was last revised in 2005.  The latest rule maintains drivers cannot operate a commercial vehicle for more than 11 cumulative hours following 10 consecutive hours off duty.  The rules also addresses the number of consecutive days drivers can operate.  And there’s more!

Sitting on the table are more rule revisions that regulate driver’s license testing, minimum training requirements, and the transport of household goods. 
The Department of Transportation noted that fatal accident rates for trucks were down 37 percent over the last 10 years, despite a major increase in mileage driven.  In addition, the American Trucking Association makes the point that drivers are not always sleeping during the ‘non-driving’ hours.  
In any event, as the saying goes (you’ll remember this from your parents), rules are rules.

Earth Day is April 22nd - a day to pick up an extra piece of trash, use less energy, swap old light bulbs for LEDs.  It’s also a day to discover new, green-friendly improvements we can adopt in our daily lives that restore the ecosystems we all depend upon.  Environmental topics are hotbeds for discussion, often pinning good versus bad.  Big Rigs are often perceived as eco-hazards, afflicting roads with harmful emissions while soaking up non-renewable natrual resources.  Sometimes though - it’s too easy to blame the big guy.  In honor of Earth Day, we’ll take a look at strides the trucking industry has taken to improve the environment.    

Biodiesel Big Rigs:

The Environmental Protection Agency backed the SmartWay Transport Partnership, an organization that enables truckers to drive big rigs that run on biodiesel fuel while providing incentives for fuel efficiency improvements and to reduce greenhouse gas emissions.  A cleaner burning fuel, biodiesel is created using renewable resources such as vegetable oil and animal fat.  

 According to Environment News Service, “The EPA is working with 600 partners representing the ground freight industry under the SmartWay Transport Partnership to help establish incentives for fuel efficiency improvements and to reduce greenhouse gas emissions.”
 

Fuel Strategy:

Technology and plain old hard work have resulted in fuel saving strategies fleet owners and truck drivers can both appreciate. 

· Improve aerodynamics
· Reduce overall weight
· Use GPS to improve route efficiency

Even slowing down one mile per hour can boost gas efficiency by 2% per gallon.

Hybrids:
Hybrid trucks run on electricity and can go the distance without costing a dime to fill up. 
Peterbilt and Eaton have partnered to product the hybrid Class 6-7  and Class-8 vehicles that save fleet owners as much as $10,000 a year in fuel costs. 

Whatever you choose to do on Earth Day – make sure it’s something.  It’s an opportunity to take action, learn, and make a positive impact on the environment.  Think of the  eco-friendly semi-truck traveling the distance while actually cutting down on our nation’s fuel consumption and fueling progression for the future.  If the big rig can do something - so can you.

Truck drivers are guided by the light.  Well – at least in the sense that they rely effective headlights to pilot them through dark mountain roads during midnight hours.  While drivers of most vehicles only notice their vehicle’s headlights when one goes out, truck drivers – and fleet owners- should choose carefully when picking out the right light.  We’ll take the time to explore what makes a headlight reliable and right for your budget. 

According to Stephen Bennet of TransportTopicsNewsletters.com, “Many light and medium trucks are equipped with halogen headlamps that either are sealed or have replaceable halogen bulbs. These halogen systems, because they last longer and generate more desirable light, are steadily replacing incandescent sealed-beam headlamps, which had been the most widely used, manufacturers said.” 

Effective headlights are essential for safe driving conditions – both for the truck driver and others on the road.   Uniform beams help drivers see clearly ahead, even in the dark, and also is generally more comfortable on other drivers eyes. 

Light emitting diode lamps (LED) are creeping into the market as well, offering an energy and cost-saving alternative to light the way.  Popular in homes, LED lights have a longer lifespan than incandescent lamps (100,000 hours of operation), which reduces maintenance and labor costs.  In addition, LED lights don’t use much heat like an incandescent light would, resulting in a more focused glare. 

Despite advancements made in headlamp manufacturing, what actually works depends on the driver.  Whether or not a light runs for 100,000 hours is irrelevant if a truck driver cannot see a deer crossing a dark mountain road 40 feet ahead.  Costs are one thing – safety is another - and takes precedence.   The good news is, there are headlamps available that accomplish both, making all on the road (and fleet owners in the office) happy campers.

Claims adjusters are hired to be fair.  Their decisions are ultimately defined by listening, analyzing, and knowing the governing laws.  As an adjuster though – your priority is your insured.  Add the emotional components of the job - the often-challenging working conditions, and situations where fraudster types smell blood admist the $1 trillion the industry earns a year in premiums, and your decisions become that much harder.  Like any industry fraught with money, the insurance industry must deal with its own people - including some adjusters - who pursue what looks to be easy money in lieu of all ethics.  

Claim adjuster fraud is not a new phenomenon in the insurance industry.  On the surface, the job description is straightforward. 
· Respond to claims quickly 
· File the necessary paperwork
· Contact all policy holders and claimants
· Investigate liability
· Evaluate the damage (or manage a field specialist)
· Work with both claimant adjuster and others involved to settle the claim fairly 
· Maintain all actions are compliant with policy and law
· Ensure the insured’s interest as well as the insuring company’s interest are the main priorities.
Amongst the claims adjusters who commit fraud, many do so when cutting checks to claimants.  Commercial adjusters in particular have the ability to approve checks upwards of $20,000.00.  When a couple hundred dollars is added to a large settlement, the red flags don’t always appear right away.   It’s not until that extra two hundred bucks turns into ten thousand dollars a few months down the road that suspicion arises. 

Daniel Kerr of AdjusterPro,  a business that provides resources to those looking to enter the claims business, reported the following information in an Ezinearticles.com feature, “A hotel manager was arrested for offering $20,000 cash in exchange for a $125,000 insurance claim check on a loss of only $18,000 after Hurricane Humberto. The man in this case was turned in by his adjuster but one can imagine some less ethical claims personnel taking the money and putting in an imaginative claim for $125,000.”
The InsuranceJournal.com focused  on claims adjuster fraud as well in an article depicting an investigation of inflated payments.  According to the article, “Queens, N.Y. District Attorney Richard Brown, joined by Police Commissioner Raymond Kelly and State Insurance Department Superintendent Gregory Serio, announced recently that three auto insurance claims’ adjusters from Nassau County have been indicted on insurance fraud and other charges and accused of unlawfully receiving illicit payments up to $200 in return for submitting to three insurance carriers enhanced vehicle damage and repair estimates totaling nearly $24,000.”
How are fraudulent claim adjusters caught?  The Coalition Against Insurance Fraud is one of several organizations that exist specifically to fight rampant insurance fraud.  In addition, the Federal Bureau of Investigation (FBI) has joined forces with the National Association of Insurance Commissioners, NICB, CAIF, in addition to state fraud bureaus, state insurance regulators, and other federal agencies to combat insurance fraud.  The Coalition Against Insurance Fraud has found the greatest success in fighting fraud have come from referrals.  

If you’re not motivated to report this type of fraud, consider the fact that each family pays on average an extra $300 a year in insurance costs to compensate fraudulent activity.  It’s a problem we need to address - and adjust.

There’s a new sheriff in town.  Well, maybe not a figure, per say, with that kind of authority.  But even still, there’s a new law surfacing as of July 1st, and better to prepare now than later.  What’s that law and who’s going to be affected?

Two new California vehicle codes will go into affect starting July 1st this year.  The codes go as follows (direct from the California Highway Patrol’s Public Relations Office):

The first prohibits all drivers from using a handheld wireless telephone while operating a motor vehicle. (Vehicle Code (VC) §23123). Motorists 18 and over may use a hands-free device. Drivers under the age of 18 may NOT use a wireless telephone or hands-free device while operating a motor vehicle(VC §23124).
Point taken.  It’s well known cell phone usage in passenger vehicles lead to accidents.  But what about truck drivers who rely on CB radios to communicate with their home-base and other drivers?  In the 1930s, inventors dabbled with frequencies in the 27 Mega Hertz range and ultimately created the foundation for today’s CB-10 radios.  It wasn’t until the 70’s however when the trucking industry utilized CB radio as the primary means for truck drivers to communicate with dispatchers and others from home-base.  CB-10 codes were created for drivers to basically get the point across without delving into a full-fledged conversation that may distract the driver from road.  Common codes include:
“Can you give me a 10-13?”
“Looks like a 10-20!”
“10-4”

Are big-rig operators fated to give up the titan of truck driver talk?  Not so fast.  With any law comes exceptions and thankfully, good foresight. 

According to the CHP, “The law does provide an exception for those operating a commercial motor truck or truck tractor (excluding pickups), implements of husbandry, farm vehicle or tow truck, to use a two-way radio operated by a “push-to-talk” feature. However, a push-to-talk feature attached to a hands-free ear piece or other hands-free device is acceptable.”

For now, CB radios are welcomed on the road – as long as you know the code.   

The leather? Luxurious.  Global positioning device?  Standard.  Roomy, one multifunction display, comfortable, easy to control and includes an MP3 player in every vehicle.  Think we’re talking the latest BMW 5-Series?  Mercedes S600?  Nope – we’re talking bigger and better.  Meet the latest Kenworth truck.  Equipped to look like a luxury passenger vehicle, but built for the long haul.

Paccar Inc.’s Kenworth line of trucks have long been an industry favorite.  Sturdy, reliable, and owned by a major player that counts other brands such as Peterbilt   amongst its impressive line of products.  The latest Kenworth to come out of Paccar’s manufacturing plant is outfitted with the technology and design components that make you want to drive the distance.

According to Paccar, “The latest cab features plenty of leg room – belly, knee and elbow room, too. Plus it’s quieter than its predecessor – by about 20 percent. The state-of-the-art dash utilizes multiplexed electronic instrumentation and large, easy-to-reach
switches and controls. The back-lit glare-free gauges with quick-to-read graphics. And the center console with two 12-volt outlets and a perfect place to store your
cell phone, cups and soft drinks.”  Enticed?

A solid semi is the foundation for success.  It can simplify a driver’s job, increasing efficiency, travel time, communication and more.  No matter what the load is that needs to be delivered or received, utilizing the right mode of transportation will steer your company in the right direction.