RSI’s Transportation Insights

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Nobody likes traffic.  Except for maybe a motorcyclist or two who like the thrill of cutting in and out of lanes while passenger cars sit, idling away gas and patience.  Similar to cities such as New York (as the most visible – and costly)  where regular toll fares increase as congestion mushrooms, Los Angeles is considering the addition of a toll lane on three major freeways that would charge drivers based on the amount of congestion on the road. 
Steve Hymon of the Los Angeles Times reported, “Officials here are seeking federal money to put toll lanes initially on three freeways, including the 210 and 10 in the San Gabriel Valley and the 110 south of downtown. The 60 Freeway is next on the list.
The tolls would vary by time of day and be highest during rush hour. Single-occupant cars would probably pay the most to use the lanes,”  (http://articles.latimes.com/2008/apr/14/local/me-roadsage14). 
Economic and environmental concerns top the list of reasons to convert the lanes with advocates arguing that the measure would improve current conditions.  The amount of traffic on the road would inevitably lessen (just like it did when gas prices went up – suggesting that people really don’t want to – or can’t – pay even more to drive.)  Meanwhile, opponents of the measure believe such a toll would tax an already financially burdened lower and middle class.  (More on that topic in a yet-to-be published blog.) 
Similar plans were proposed in San Francisco as well, but were quickly vetoed on August 8th by the San Francisco Transportation.  According to a report in the San Francisco Chronicle, the Authority voted down the plan and will instead  As an alternative, the Authority agreed to take money from the federal gas tax to buy new parking meters that will be used to charge significantly higher rates for parking based on the time of day.

Currently - $213 million dollars from the Federal Government sits on the laps of local and state lofficials. 

A seaport the size of Long Beach and Los Angeles on the West Coast?  Our Southern California ports have become increasingly exposed and strained due to environmental initiatives and urban development,  which Mexico is aiming to both relieve and rival as it plans the construction of its new port.  

Considered to be the country’s largest infrastructure project in history, Mexican government officials including President Felipe Calderon intend to snare Asian cargo traffic and freight it off to the U.S.  The new port would be located in Punto Colonet, which is located roughly 150 miles south Tijuana. 
The Los Angeles Times reported that, “Punta Colonet is expected to have a capacity of 2 million shipping containers annually when it opens in 2014, Mexico’s transportation secretariat told The Times But officials envision it ultimately handling five times that amount. Last year, the ports of L.A. and Long Beach handled 15.7 million containers combined.” (www.latimes.com)
A tiny village, Punto Colonet is currently home to about 2,500 residents who will be visited by President Calderon in coming days.  Calderon, other government officials, and businessmen and women see potential in the location which is not a high traffic area and relatively close to Southern California. While 30 million shipping containers traversed the Pacific ocean last year to West Coast ports (15.7 million to Long Beach and Los Angeles ports combined), Calderon expects Punto Colonet to handle about 2 million containers its first year in action. 
Money to fund the colossal project will be privately funded.  And while overall economic tribulations have hit the logistics industry, it is expected to rebound in the next year or two. Should Calderon’s vision go as planned the port would be open for business in 2014. 

For a long time, putting a dollar value on the cost of car insurance in California has been dependent on zip code, prior claims, and a few qualitative characteristics including gender and age.    Insurance Commissioner Steve Poizner may change these pricing tenets and base premiums primarily on the distance we drive. 
From a risk perspective, it’s statistically proven and logically true that the more one drives, the higher the chances he or she will be involved in an accident.  Aside from the safety benefits though, this provision would have positive economic and environmental impacts as well. 

In a Business Week article, the Associated Press reported, “Two out of three households in the state could save an average of $276 per vehicle, and lower-income people, who generally use their cars less than the middle class or the wealthy, might save even more, said a July study by the Brookings Institution in Washington. However, some high-mileage drivers might see their rates increase by opting for pay as you drive, the Brookings report said.”  (www.businessweek.com)
And the savings continues.  According to the same article, the Environmental Defense Fund estimates that California drivers would save $40 billion in car-related expenses from 2009 to 2020 if only about 8.5 million drivers sign up for pay-as-you-drive policies.  Where’s the pen?   
 
Less cars on the road also means less greenhouse gas emissions – music to environmentalists ears.  It was reported such a move would be equivalent to taking 10 million cars off the road.  Considering there are nearly 5 million cars that travel through Los Angeles a day alone, the improvements in air quality would be significant. 
This means less fuel, smog and ultimately more motivation to really look at alternative modes of transportation.  For the transportation industry – this move would mean less congestion, ultimately leading to greater fuel efficiency (if there’s a reduction in stop and go traffic) and quicker transporting of goods and services.  
A public hearing is set for October 20th – enough time to start reconsidering our driving habits and re-navigating our routes. 

The Great American Trucking Show that is!  This summer’s event will be held August 21st through Saturday the 23rd in Dallas, Texas.  This year marks the show’s 10th anniversary and there will be no shortage of celebrations.  Even better - RSI will be exhibiting all three days in booth# 11028!
Did we mention the party?  Special attractions include the Pride and Polish Truck Beauty Competition, Educational Seminars sponsored by TMTA, the 4th annual Fleet Form, special appearances by the Chrome Shop Mafia, free concerts from top country music artists, and exhibits from leaders in the heavy duty trucking industry according to www.gatsonline.com. 
 
Nearly 50,000 people are expected to attend, and for those who can’t, the show can be heard in daily podcasts featured on http://www.midnighttrucking.com/.  In addition to an exhibit hall featuring hundreds of companies (including RSI – don’t forget), concerts, and contests, there will be discussion forums and educational seminars.   The feature forum titled, Just for Fleets: Steering past obstacles to success will be held Thursday August 21st.  Items to be discussed include:
 - Fleets’ fuel saving measures
 - Key financial tactics
 - Managing risk
 - What’s happening in safety
 - Negotiating in a tough market
 Fleet owners and operators will especially benefit from this particular forum as the focus is on their ability to thrive given current economic conditions and industry specific challenges. 
 

And there will be prizes!  The Midnight Trucking Radio Network is hosting one of the top contests at the Great American Trucking Show where one registration enables one to win $1,000 Cash, a pair of Caterpillar Boots, a set of Alcoa-Dura Bright Wheels and the Sweet Freedom Custom Truck.  

All in all – it will be an informative and fun and if you’re in the Dallas area be sure to stop on by – ya’ here!

While most forms of mass transportation and lauded for their environmental benefits, they’re not noted for convenience and comfort.  And despite their positive impact on the environment (by way of simply reducing the number of emissions emitters on the road), anyone who’s stood by a bus or ridden the subway know they can  - well – stink.  Stinky factor aside, buses are going hybrid and the trend is catching on. 

According to Hybridcenter.org, a hybrid bus is, “Hybrid bus technology is similar to that used in hybrid cars and trucks, with options for both parallel and series drive train designs.   These buses employ similar technology including regenerative braking, electric motors, and battery storage.  One main difference is that most hybrid buses are coupling diesel-fueled engines with electric motors instead of the typical gasoline-electric hybrid configurations available in light duty vehicles. ”

The benefits of a hybrid bus are similar to those of a hybrid passenger car.  Hybrid bus studies have shown the vehicles reduced particulate emissions by as much as 85%.  Hybrid buses though function both on diesel and electric engines, meaning their route plays a significant role in how much they actually reduce emissions. 

Hybrid buses benefit from reduced fuel consumption as well.  Hybridcenter.org stated, “There are reports from transit agencies of fuel economy improvements of 10 percent all the way up to 50 percent, depending on variables such as series or parallel hybrid design, system optimizations, and the type of bus route.”

Hybrid technology is being matched by even more resourceful and environmentally creations incuding water powered cars.  The future will surely reveal an increase in hybrid buse usage as the green movement charges on.

The Wall Street Journal reported the Cross-Border Truck Program that gives Mexican trucks open access to U.S. roads along the Mexican border will run for at least another two years.  In all - only 37 trucking companies total (both U.S. and Mexican companies combined) have participated in the program. 

The original goal of the Cross-Border program was to reduce shipping costs and open new channels of profitability in the trucking industry.  Congress has criticized the program claiming U.S. jobs are at risk because Mexican truckers can operate at lower rates than U.S. counterparts.  According to the Department of Transportation, the project is designed to give American companies their first-ever access to the highly lucrative business of moving goods across the southern border. That access is giving growers and manufacturers a more efficient and profitable way to ship American goods into Mexico.

In March, U.S. Transportation Secretary Mary E. Peters advocated support for the program, stating, “Whatever their reason, this is no time to let the politics of pessimism dim the promise of prosperity for hundreds of thousands of American drivers, growers and manufacturers. We should be looking for every chance to open new markets for our drivers, to find new buyers for our products, and encourage new consumers for our produce.” 
In addition to the light participation, safety concerns are still tantamount and members of congress are not remaining quiet.  In an interview with the Associated Press, Senator Byron Dorgan, D-ND, called the extension a “reckless arrogance for the law” by the Bush administration.

Dorgan said, “This dispute is about the administration’s effort to allow long haul Mexican trucks into this country in a way that I believe compromises safety on American roads.”

The FMCSA administrator John H. Hill continues to support the program, stating the safety of American roads has not been compromised. 

As a country, can we really digest t more oil-related news? Perhaps if it’s positive. And fortunately for our systems, that’s just what the doctor ordered. Or in reality, the governing bodies that control foreign crude supply and demand. And the good news is…

On July 18th Adam Schreck of the Associated Press reported, light, sweet crude for August delivery fell 41 cents to settle at $128.88 a barrel.” (http://www.thetrucker.com/News/Stories/2008/7/18/Fridaycapscrudesbiggestone-weekdropinmorethan3years.aspx). How long has it been since the U.S. has seen such a significant drop in fuel prices?  Three long, long years of prices that have surpassed the five dollar mark (diesel) and regular fuel that has consistently hovered well above four dollars per gallon.

The snowball effect of positive news spread all the way to Wall Street where stock prices responded accordingly. As a nation, we’ve endured back to back to back record setting barrel prices that have hit consumers, businesses, and related industries across all levels.

Economists, strategists, and oil industry insiders and outsiders are all wondering if this recent drop in fuel prices is significant, and perhaps, the official bursting of the bubble.  Schreck obtained the following insite from Tom Kloza, publisher and chief oil analyst of the Oil Price Information Service in Wall, N.J. , “It’s too early to say we’ve seen the worst of it. We would be Pollyannish if we believe one week represents a trend.”

Whether or not this good news of “cheaper” gas is here to stay is unknown. One thing for certain though, good news or bad, gas headlines are sure to continue making the front page.

The retail and trucking industries are like peas in a pod.  Products need to be delivered - it’s that simple.  The transportation industry provides the vessels, the retailers provide the goods.  It’s supply and demand theory factoring in the means to make supplying actionable.  In recent year’s the retail industry has experienced a boon - reaping the rewards of consistent consumer spending.  Credit crunches and mortgage meltdowns have put a quick and somber end to uninhibited spending, causing retail margins to shrink and leaving trucks with reduced opportunities to deliver. 

The National Retail Federation (NRF) most recently reported sales in March dropped by almost 1 percent, siting economic, gas, and weather issues as influencing factors.  According to an NRF press release on April 14th, “Many retailers felt the brunt of the troubled economy as well. Clothing and clothing accessories stores sales decreased 0.5 percent seasonally adjusted from last month and 2.0 percent unadjusted year-over-year. Sales at electronics and appliance stores decreased 0.4 percent seasonally adjusted month-to-month and 1.0 percent unadjusted year-over-year. ” 

To offset the rising price of fuel, fleet owners have increased the cost of transporting goods.  Consequently, the purveyors of these goods must increase their price point in order to pay for higher shipping costs.   According to a CNBC Nightly News Report, “The trucking industry, which delivers 100 percent of the nation’s
consumer goods, is experiencing the highest prolonged fuel prices in
history. This ultimately will increase the cost of everything that is
delivered by truck.”

Retail and trucking are co-dependent, with prices structured around both industries’ ability to grow profits. 

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. 
 

It’s been a chilly winter.  Record breaking cold in the upper Midwest, snow in the Los Angeles area.  Icy conditions mean warmer coats, hotter cocoa, and a greater sense of caution on the road.  Even the most weather conditioned drivers must elevate their sensors in awareness of the, well, not so aware driver.  Truck drivers especially must rely on experience, skill, and well-timed reaction in stormy conditions.  As a fleet owner, how do you ensure your drivers and vehicles can endure the blustery road ahead?

Depending on the haul, a big rig can encounter a bevy of weather conditions.  One portion of the country may contain sunny skies and mild winds while a winter wonderland could lie a few hundred miles to the North.  As with any trip, preparation is essential. 

A weather-worthy preparation kit should include at the minimum, the following items:

1. A comprehensive first aid kit

2. New ice scraper

3. Tools

4. Windshield washer fluid

5. Jumper cables

6. A bag of salt

7. Chains

Drivers should be well equipped with the skills required to drive in difficult conditions.  This includes fog, sleet, snow, ice, rain, and heavy winds to name a few.  A driver should also know traffic and weather conditions prior to leaving, along with alternate routes in the event roads are closed.

Any shrewd driver requires a well-maintained vessel to safely navigate through treacherous weather.  To start, a truck should have its fluids checked, brakes examined, tires properly filled, while making sure antifreeze levels are sufficient. 

Maintaining a fleet requires adherence to stringent safety standards. And there’s no better time than these frigid winter months to ensure trucks and drivers  are properly prepared for Mother Nature’s bad days.