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From the Editor fo Truck News
Volume 2, Issue 26 Nov. 29, 2011

Welcome to Hooked Up, a bi-weekly industry newsletter that provides commentary and analysis on the news, equipment, management, maintenance and community issues that you care about - all in a quick-hit format.

IN THIS EDITION OF HOOKED UP...

I know your time is valuable, so if you’re not interested in any of the following subjects, go ahead and hit delete and I’ll catch up with you in two weeks with some info you’ll hopefully find more relevant…

Are we seeing a manufacturing ‘renaissance’?
Why side guard suggestion is silly
CSA already making a difference
A sleep apnea update you won’t sleep through
‘Good Samaritan’ trucker gets paid; attackers still roam free
This safety-conscious driver wants to work for you
The new trade-in equation and its effect on capacity
A skirt unlike any other?
Electric vehicles: Save now, pay later
Trucking Tweets of the Week
Delivering trailers full of food
Why big shippers have lost their pricing edge

News...

THE ECONOMY AIN’T SO BAD: The other day, I sat in on a Toronto Trucking Association luncheon featuring Benjamin Tal, super-economist with CIBC World Markets. You’ve seen Benjamin quoted in any number of Canadian national newspapers. He had some interesting things to say about the economy. For one, he indicated US manufacturing is actually experiencing a “renaissance,” having posted gains in 25 consecutive months. He attributed this to consumers in emerging markets, who are hungry for quality, brand name goods. Go figure.

“I’m talking about the Y Generation in China, 200 million young Chinese people who have never experienced poverty in their lives. Their propensity to consume is higher than the average American teenager and what they want is not junk; the junk they send to us. What they want is quality products and brand names,” Benjamin said. Think about this for a second: consumers in India and China want brand name, American-made goods and are willing to pay a premium for them, while we gobble up their cheap, plastic crap. It’s not the first time I’ve heard this; I’ve also been told that workers on Chinese and Indian construction sites will not be seen with anything other than US-brand name tools, the best of the best. It’s a status symbol.


THE #1 EXPORT: Even more surprising, Benjamin said the #1 US export to emerging markets is toys. TOYS! Have you walked through a Toys R Us lately? Everything there is stamped with ‘Made in China.’ We are sending our quality, made-in-North America toys to China while they are shipping us their plastic crap (my house is filled with the plastic crap). And we wonder why we have problems? Chinese and Indian consumers are buying quality, brand name goods and we as consumers are making all our buying decisions based on price. How is this going to work out for us? How is it going to work out for you as truckers? If current trends hold true, manufacturing may well return to Canada and the US, but the goods will invariably be shipped across and out of this continent while imports from Asia will continue to flood our own market via the ports.

I don’t see this trend reversing anytime soon. As far as toys go, it’s a challenge to find North American-made, quality, handcrafted toys. My wife is partial to the Melissa & Doug line, which seemed to be just that, but a quick search revealed that in 2006, the company that was started in an American garage employed 200 Americans and 1,000 Chinese. It’s remarkable to think the growing Chinese and Indian economies are actually throwing North American manufacturing a much-needed lifeline.


OKAY, BACK TO BEN: Benjamin Tal also told TTA members not to confuse today’s economic uncertainty with the environment that preceded the Great Recession. While a global financial collapse led to the 2009 recession, Benjamin said today we have “recessionary fears” leading to market uncertainty. “It’s very tempting to compare the situation (today) to 2008; very tempting but wrong,” he said. In Canada, Benjamin said the situation is pretty good. However, he also said there are some underlying concerns beyond the rosy picture our political leaders have painted for us.

“Statistics are like bikinis,” he said. “They reveal a lot but what they don’t reveal is very valuable.” (Who said economists don’t have a sense of humour?) While our overall economic situation is comforting - and the envy of most in the developed world - Benjamin said 40% of Canadian economic growth over the past 20 years has been generated through government spending, and it’s unlikely the government will continue spending at its current pace. Consumers are sitting on their wallets, so it’ll be up to the private sector to drive Canadian economic growth forward, Ben concluded.

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SIDE GUARDS – A QUARTER BILLION DOLLAR ANSWER?: There was recently a terrible accident in Toronto, in which a pregnant mother was run over by the rear wheels of a heavy truck on city streets. It was an awful tragedy that received a lot of media attention in the city and across Canada. Unfortunately, the incident also led to some opportunistic politicking by NDP MP Olivia Chow, who has in the past lobbied for the mandatory installation of European-style “side guards” on heavy trucks and trailers. She has recently renewed those calls with some extra vigor and in the process has gained a lot of support from the non-trucking public. The Canadian Trucking Alliance has prudently pointed out the flaws of her position: that most tractor-trailers don’t drive on city streets where they intermingle with cyclists, and that there’s no evidence that side guards would be effective in reducing fatalities.

The CTA said its position against the mandatory use of side guards has nothing to do with cost, and that’s the politically correct position to take. But I’m not bound to the same rules of political correctness, and so I took the liberty of doing some rudimentary math. Our Transportation Media division estimates there are 227,000 trailers in Canada. Olivia Chow’s own numbers peg the cost of ‘side guards’ at a very vague $690-$2,600 per trailer. Let’s be conservative and apply $1,000 for argument’s sake. We’re then looking at a quarter billion dollar cost to the industry, should all trailers have to be retrofitted with devices that would deliver little, if any, safety benefits. Let’s put this discussion to rest and instead focus on educating cyclists on sharing the roads with big trucks. I don’t know all the circumstances that led to the Toronto cyclist’s death, except that the truck driver was not charged. Too often cyclists pop their i-Pod earbuds into their ears and away they go, oblivious to the traffic around them. Yes, more education might be the answer.

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CSA IMPACTS: The American Transportation Research Institute recently completed a motor carrier study that found most respondents feel CSA is an improvement over SafeStat and that it will effectively remove unsafe carriers and drivers from the industry. The study also found, through a 14-question quiz, that carriers have a pretty good understanding of the new rules. You can download the insightful survey results from www.atri-online.org.

Want anecdotal evidence CSA is improving road safety? Celadon CEO Steve Russell said at the OTA convention that one of his drivers recently crossed into Ontario to pick up a load for Dallas. The trailer sides were bulging and the driver called his manager and said: “I’m not moving that load, because it’s going on my CSA score.” The shipper removed some of the product while the driver waited patiently. “The reality is, before CSA the driver would’ve been halfway to Dallas,” Steve admitted.

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THIS ISN’T ABOUT SLEEP APNEA: Okay, it is. But if I admitted that in the first place, most of you would have passed over this item, having already been inundated with information about the trendy affliction over the past couple of years. Sleep apnea, however, is not a condition to be ignored. Take it from someone who suffers from it and requires CPAP treatment. To me, it is amazing that with such a high prevalence of sleep apnea within our driving ranks, that we are able to maintain such a strong safety record. I knew I needed to get help when I pulled over on the side of the road during a two-hour drive home and asked my wife to drive the rest of the way. I am not a big fan of her driving and to relinquish the wheel to her after what seemed like a good night’s sleep was incomprehensible to me. I was tapping out after two hours’ driving. Fourteen seemed like a Herculean task.

But enough about me. This is a widespread issue that we as an industry are taking a lead in addressing and we should be proud of that. The OTA is developing a program with partner Precision Pulmonary Diagnostics (PPD), which will help carriers implement a sleep apnea screening and treatment program tailored to the trucking industry. PPD has worked with American fleets such as Schneider National and Swift to develop a program customized to the realities of the long-haul trucking lifestyle. The US fleets that have rolled out the program have enjoyed enormous savings, not to mention the improved quality of life of their drivers. It will be interesting to see how the program is priced here in Canada, where our health care system covers nearly all the costs of being diagnosed and treated. I went through the entire process and didn’t spend a cent. A driver with no employee health benefits – an O/O, perhaps – can be diagnosed and treated for no more than about $250 (OHIP covers about $750 towards the cost of the CPAP equipment as well as the sleep study). Here’s a tip for any carrier that does not offer a health care program to O/Os: pay for the additional $250, you’ll get it back and then some, in improved productivity. I guarantee it.


NOT CONVINCED?: I have a hard time extracting my own personal experience from any discussion about sleep apnea. I was pleased to see the OTA Convention featured a real-life professional driver with the condition to speak about his own experience. Swift driver Kenneth Armstrong described how his life has changed since he sought treatment. Before his diagnosis, Ken said he would usually drive a maximum of four hours before shutting down for a two-hour nap. He’d then drive another four hours before taking another nap.

“That was my life,” he said. When he was home, he would sleep his entire home time away, waking only to eat a bowl of cereal and return to bed. With CPAP treatment, Ken can put in a full 11 hours of driving and when he’s home, he can actually enjoy some quality time with his family. “I want to encourage all of you in the audience today, this is something you need to look at,” he implored. “It’s going to affect the lives of a lot of people who have it. I’m a safer, more focused driver, more alert, I do a better job, my lane control is much improved over when I was not treated. There are just so many positives that come out of it.” Amen, brother.

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THUGS WHO ATTACKED ‘GOOD SAMARITAN’ TRUCKER STILL AT LARGE: Alex Fraser, the professional driver who was beaten to within an inch of his life on Sept. 21 of last year after stopping to help some stranded motorists, was recently presented with a cheque for more than $10,000, raised by the North American Truckers Guild and collected mostly from within the industry. Still, Alex would prefer to see an arrest made in the case. The funds raised by the NATG were initially offered as a reward for anyone coming forward with information leading to an arrest in the well-publicized beating. A year has passed, and so the Guild felt the money should go to Alex to help offset some of his expenses. Alex has been out of work since the attack and is not likely to ever again drive for a living.

Pictured is Larry Hall, head of the NATG, presenting the cheque to Alex (left). What’s really frustrating about this case is that the RCMP in B.C. has indicated they think they know who is behind the attacks. They simply lack the evidence to proceed with charges. Scumbags usually turn on one another in time, so I was hopeful the $10K reward fund would be enough to lure one of the suspected three attackers to turn in the others. It hasn’t happened yet. I guess it takes a special kind of scumbag to refuse a five-figure payday for the sake of saving his buddies’ behinds. Oh well, I’m glad the money will help Alex with his personal commitments and I’ll still hold out hope that an arrest is made in the future. Incidentally, the media-shy victim granted Truck News an exclusive interview, which ran on the cover of our December issue. You can grab it at the truck stops now, or read it in our digital edition available on Trucknews.com.

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SAFE DRIVER FOR HIRE?: As you can imagine, I get all kinds of e-mails from drivers who have one thing or another to gripe about. The ones that really get me are from the drivers who want to do all the right things and find themselves caught in a messy web that’s very difficult from which to extract themselves. I’m talking about the guys with limited experience, who have a passion for driving and have to hire on with any carrier that will give them the chance to accumulate some miles. The guys who have a strong desire to do things the right way, yet when they bring mechanical deficiencies and safety concerns to management’s attention, are told to shut up and deliver the load. Guys like Denis, who has run 50,000 miles with just such a carrier and fears for his own life, yet also his family’s livelihood, after his continued concerns about running unsafe equipment have been rebuffed by management.

In his words: “I’m new to the trucking industry and only been driving for the last 10 months. The one thing that the school kept pushing was how important doing a proper pre-trip inspection of my tractor and trailer is. Ever since then, I take my pre-trip and post-trip very seriously. A month after school was done, I got a job with a trucking outfit that gave me a chance to prove myself right out of school, which not to many companies would do. Like I said, I do a very precise pre-trip but after a few months with the company I had noticed some incidents where other co-workers weren’t doing any pre-trip or post-trip inspections. I voiced my concerns to my bosses but nothing was done. One morning I was doing my pre-trip when I noticed a co-worker arriving at work who just jumped into his tractor and trailer without doing his pre-trip. As he pulled away, I saw that the fifth-wheel handle was out, indicating the fifth-wheel jaws were open and the trailer legs were up. Of course the trailer separated from the fifth-wheel and slammed to the ground, almost crushing me. Ever since then, I’ve been scared to go to work and I’m always wondering if today is the day I get killed because of the lack of safety on my co-workers’ part?”

Hey, I’ve never met Denis but I hate seeing safety-conscious drivers stuck in an unsafe environment, simply due to lack of miles under their belt, when I know so many well-run trucking companies are starved for just this type of driver. He’s nervous about his current employer seeing this, but if you are safe operator and want to give him a road test and a chance, drop me a line and I’ll pass along Denis’ info. I can’t vouch for his driving but his attitude is right, and if he can get on with a carrier that shares his commitment to safety, he hopes to go on to enjoy a lengthy trucking career, eventually as an owner/operator.

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Equipment...

THE NEW TRADE-IN FORMULA: We’ve heard so much lately about the reasons behind the trucking industry’s capacity reduction and much of the conversation centers around the driver shortage and more stringent enforcement (ie., CSA). However, Steve Russell, CEO of Celadon, eloquently described another factor during the OTA’s annual convention. The average over-the-road tractor in the US is now seven years old. In 2006, it was just 4.5 years old. No surprise there, since the recession required most fleets to postpone any buying plans. But couple that with the increasing purchase price of new iron – driven by ever-tightening EPA emissions requirements – and you have a real conundrum.

“In 2006, it cost $95K (for a new tractor). In 2011, a new tractor costs $125K-$130K,” Steve told OTA delegates during a session moderated by CBC business commentator Amanda Lang. “If you look back to 2006, you could trade a three-year-old tractor worth $50K for a new one that cost $95K and you needed a $45K mortgage; it was easy to get. Now, if you trade in a six- or seven-year-old truck, it’s worth $15K-$20K and to buy a $125K truck – you can’t get the mortgages. So, you trade in three to four (trucks) to get one; so a 100-truck fleet is now a 60-truck fleet.” The fact the price of new iron is skyrocketing isn’t news to any of us, but have we considered the trickledown effect on capacity? As Steve said, there certainly seems to be a correlation.

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A NEW TRAILER SKIRT: At the OTA convention, I met up with Jim Reiman, CEO of Aerofficient and Steve Ondejko, president of Onfreight to discuss a new trailer fairing. This is an already crowded space, is there room for another? When I asked Jim what the biggest difference was between the Aerofficient skirt and others already on the market, he said “Ours stay on the trailer, for one.” What I see to be one of the most unique attributes to the skirt is that it is comprised of three horizontal panels, which are hinged together and can be lifted to accommodate dropdown docks or for maneuvering in yards with snowbanks or other potential obstructions. The material is also unique, it’s an injection molded automotive grade thermoplastic polyolefin material that is both durable and lightweight. Jim told me the Aerofficient skirts weight just 105 lbs per side, making them among the lightest in the industry.

So where does Steve from Onfreight fit in? His fleet recently decided to equip all its trailers with the fairings. By way of full disclosure, Steve also has taken a small ownership stake in Aerofficient’s Canadian operations, which really should serve as a testament to his confidence in the device, which he said was thoroughly researched and tested by his own company. Aerofficient has set up a physical presence in Canada with an office in Windsor. For more info on the company, visit www.aerofficient.com.

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SAVE NOW, PAY US LATER: Freightliner Custom Chassis Corp. and Enova have come out with a creative financing option for electric-powered delivery vehicles. The Green for Free program allows customers to purchase an electric drive truck at the same cost of a traditionally fueled vehicle. The customer can then use the fuel and maintenance savings achieved over time to pay for the incremental cost of the technology.

The program is being offered both in Canada and the US and will surely entice some delivery fleets to give electric vehicles a try. Without the substantial up-front cost premium, electric vehicles are now within reach of any fleet that operates within the appropriate duty cycle. Ideal applications include those with regular runs in urban areas where the trucks will return home each night for charging. FCCC and Enova are optimistic their Green for Free program will be a hit. They’re anticipating delivery of 3,000 such vehicles within a two-year period under the program.

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Trucking Tweets of the Week...

Every day I'm on Twitter, scouring the Twitterverse for clever, insightful or outrageous trucking-related Tweets. I'll share some of them here:

@TurkTrucking: I was having a decent day until my dispatcher made me just livid. 2 the point I'm going 2 start looking around.

@ZoomSafer: Driving hazards requiring extra stopping distance: Rain. Fog. Deer (or moose). Texting behind the wheel - it doubles your reaction time.

@mikethedriver: This ladies and gentleman is the raw materials for your soda pop you drink. Enjoy! twitpic.com/7hmjrj

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Community...

18 WHEEL OF CHRISTMAS: The popular 18 Wheels of Christmas campaign is now underway in Western Canada. Each year, Rosenau Transport donates a specially decorated trailer, which is pulled from city to city across the west and filled with food collected by transportation companies of all sorts. That food is then delivered to food banks in each of the regions where the food was collected, ensuring it goes to local families. This campaign just gets bigger every year, and it’s not unusual for volunteers to fill more than one 53-ft. trailer with donated items. If you would like to participate, all you have to do is take up a collection in the office and then call Dale, Colleen or Shirley at Rosenau to arrange a pick-up. You can reach them at 403-279-4204 or e-mail them at 18wheels_xmas@rosenau.org.


HONK FOR HUNGER: Also worthy of tip of the hat this week is Kim Richardson and the entire team at KRTS Transportation Specialists in Caledonia, Ont. They recently collected more than 2,500 lbs of food for the Caledonia and District Food Bank as part of the company’s annual Honk for Hunger campaign. It’s not too late to get involved, as KRTS is still taking up collections at its Caledonia headquarters.

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Worth Repeating...

Rick Gaetz, CEO of Vitran Corp., was a guest at the OTA convention, where he shared a panel with Celadon CEO Steve Russell and Contrans’ Greg Rumble. He candidly discussed how at one time, the smaller shippers with less bargaining power would make a greater contribution to a carrier’s margins, allowing the fleet to more competitively price the freight it would haul for the major shippers. That’s all changed, he said, with the advent of third-party logistics companies, who have effectively served as ‘pricing consolidators’ and leveled the playing field for shippers big and small. In his own words:

“Not long ago, large clients had more leverage negotiating rates and we always had tighter margins on the large pieces of business,” he said. “These smaller clients now, with the emergence of what I call ‘consolidated pricing companies,’ or logistics companies…they play a role for these small shippers and these small shippers are now just one big shipper. The benefit carriers had with these small customers, where quite often they subsidized the pricing of the higher leveraged pieces of business, that doesn’t exist anymore. The margin on the small guys has deteriorated. Every piece of business must be priced right. Gone is the day where something at the bottom is subsidizing something at the top; these smaller folks have an indirect voice now and pricing is tighter than it was five to six years ago.”

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A LOOK AHEAD: Hooked Up will be back in two weeks with more industry news, business tips and colourful quotes from Canadian trucking industry insiders.

- James Menzies is a purveyor of information and editor of Truck News and Truck West magazines. Hooked Up is designed to serve as an information bridge connecting some of the best-informed fleet executives, maintenance managers and professional drivers with the Canadian trucking industry at large. James can be reached at jmenzies@trucknews.com or 416-510-6896. You can also follow him on Twitter at www.twitter.com/JamesMenzies.

Used Equipment For Sale...

Are you in the market for a used truck or trailer? Each month, Hooked Up will feature some used equipment for sale. Please check out this month’s listings to see if you can provide a good home
for any of the featured trucks and trailers To advertise a truck or trailer, contact Kathy Penner at
416-510-6892 or e-mail kpenner@trucknews.com.

Action Trailer Sales

(3) 2004 Utility 48’ Triaxle Reefers
Carrier units, side posts on 12" C/L, Hend. 6' and 10' A/R, front axle lift mounted on a 12" I beam subframe with crossmembers on 8" C/L, heavy duty flat alum floor and side rails, 34" alum. scuff liner, verta-track, overhead rear door.

www.actiontrailersales.com

Arrow Truck Sales

2009 Volvo VNL670
VED13 485hp, 13 speed. Beautiful owner operator spec. Freshly painted frame.
Serviced and ready for work with powertrain warranty. 643K. $73,950.

www.arrowtruck.com

Dependable Tank

2000 Freightliner
c/w 13,000L 4 comp't alum. tank, dual pumping and metering, Midcom, DOT Cert., Tank fully tested and certified. Stock #S665

www.dependable.ca

Glasvan Great Dane

(5) 2008 Ottawa Shunt Trucks
Cummins 200 diesel, Allison auto trans., 12/30 axles, Traction Control, hydraulic 5th wheel, automatic greasing system, road legal model, well maintained.

www.glasvangreatdane.com

Morgan's Diesel Truck Parts

2002 Freightliner FL80
3126 cat., auto, hyd. brakes, 25K on engine rebuild.

www.morgan-diesel.com

Sheehan’s Truck Centre Inc.

Several 1993-2006 Dump Trucks
Single, tandem and triaxle, GMC, IH, Volvo, Freightliner, Mack, alum. and steel dump bodies, auto and std. Call for details.

www.heavytrux.com

Tankmart International

IH 5370 Aircraft Refueller
18,000L, Cummins engine, Allison auto, over & under wing, B/L, good overall condition, just out of service, new safety & B-620. Unit 315

www.tankmart.com

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