The Alpha Log

by Passenger Service: State troopers ride-along with truckers in crash study

Alt fuels: B.C. and Manitoba implemented mandatory biodiesel rules for this year that are still quite biodebatable. The laws require fuel suppliers to produce “pool averages” of B5 and B2, respectively. As we revealed last year, that means the actual blend at the pump is left free to vary based on customer demand. So, some customers with buying power can demand zero biodiesel content, leaving the supplier no choice but to send the higher blends to more remote, colder regions. Biodiesel and below-zero don’t mix too well. Luckily, B.C. just announced it will soften the roll out of the rule.

Meanwhile, we’ve heard that a proposed national B2 mandate for Canada has been put on ice until some of these issues are ironed out.

Black boxes: Or, as the folks in suits more commonly call them these days, electronic on-board recorders (EOBRs). At last check, U.S. regulators were still working on a rule that would require EOBRs in some capacity. The original proposal floated in late 2008 lacked teeth, however, so most observers think whatever we see on paper later this year will likely include most commercial trucks rather than just the “worst offenders.” Canada too is pressing on with its own EOBR rule and regulators just finished mapping out a “project charter” that will provide the basis for a homemade National Safety Code standard.

CSA 2010: This year, the U.S. DOT will move the goalposts again. A brand new way of monitoring carriers’ safety performances, the new Comprehensive Safety Analysis system kicks in this July. You and your drivers will be graded more stringently than ever before — on a monthly basis — based mainly on data collected at roadside inspections, including (but not limited to) unsafe driving, fatigue, driver fitness, cargo securement and maintenance. In all, there are nearly 3,600 different truck violations. The more infractions, the more frequently drivers will be inspected. And the more inspections, the more likely DOT inspectors will find infractions.

Distracted drivers: The new “tired truckers” as the safety issue du jour. An unprecedented number of provinces and states closed out 2009 with bans on talking and texting on hand-held cell phones while driving. While it’s tough to contest the heart of such laws, some governments have pushed things farther. Ontario, for one, is apparently the only jurisdiction in the free world to ban in-cab CB radios (subject, we’re told, to alternative devices entering the market).

Stateside, things are sure to heat up this year. We (partly) jest, but some “safety advocates” down there seemingly won’t rest until distracted driving laws isolate truckers inside cones of silence and steering wheels automatically grip their hands at the 10-and-2 position.

Electric trucks: While still too pricey for these tight financial times, OEMs report there’s a real pulse for hybrids. This isn’t the year average fleets not named Coca Cola, FedEx and UPS begin loading up on trucks with electric drive systems, but ongoing efforts by industry lobbyists could make it easier to try out one or two. Groups like the Canadian Trucking Alliance (CTA) want some tax leniency for such purchases. Ontario is one of just a few provinces to open up the purse strings a crack, but CTA argues more is needed if hybrid trucks are going to penetrate the market anytime soon.

Fuel Prices: The only constant with fuel prices these days is their volatility. So predicting exactly what they’ll do this year is sort of like trying to predict, oh, let’s just say, the climate over the next decade. The U.S. economy is no longer in a freefall, but it’s still slumbering, meaning that the massive stockpiles of distillate fuel racked up last summer are taking longer to get through; Hence, the lower-than-usual diesel prices throughout the higher-demand winter season. But that inventory is on pace to level off at the brink of real economic recovery, making visits to the pump something worth complaining about once again.

Governors: You know them as speed limiters, but “S” was reserved for something else. Despite the efforts of a handful (and really just that) of truckers to stop it, mandatory speed-limiter laws are a reality in Quebec and Ontario. In fact, hard enforcement kicked in six months ago. At least one other province (N.B.) is working on a similar rule and carriers in B.C. are starting to make noise about wanting that province to follow suit.

Here’s hoping the rollout in other places, if it happens, goes smoother than in Ontario, which, as Today’s Trucking first revealed last summer, doesn’t technically have the ability to ensure “compliant” trucks with active limiters are actually restricted from going faster than the 105 km/h cap.

 

 

Economic rebound next exit?

Hours of Service: Since they came into effect in 2004, the U.S. HOS rules have been as stable as that mattress tied to the roof of the Toyota Tercel sputtering in front of you. As you probably know by now, the U.S. DOT was so impressed with year-over-year trucking safety improvements, that it decided it would scrap the five-year-old HOS standard that arguably helped make those improvements possible.

Under new management, the DOT appeased Public Citizen and the Teamsters and agreed to rewrite the HOS rule. You’ll see the details of the revision in July, quite possibly minus the 11-hour driving platform and 34-hour restart provision.  

Intermodal: Specifically, we mean the cooperative relationship between truck and rail, which, when done right, is one of the most efficient modes of transport there is. By the end of 2009, though, there was lots of static about the balance of freight starting to shift more directly onto the tracks. Warren Buffett’s $34 billion “all-in” takeover of Burlington Northern Santa Fe was the “tell” that had transport analysts figuring 2010 is the advent of a rail renaissance. We’ve heard this before. Rail is poised for bigger things, yes, but its business model is fundamentally different and won’t significantly threaten truck volumes any time soon.

Jurisdictional divide: When it comes to rules and regs, Canada remains Balkanized. The turf wars between the provinces and Ottawa are ongoing and a couple of trucking-related cases before the courts last year added to the confusion. Thankfully, a long-awaited Supreme Court decision recently sent shockwaves through the freight forwarding-logistics sector, in effect confirming the legitimacy of many companies that consider themselves provincial in nature and think they should be governed as such. On the HOS front, meanwhile, a few provinces continue to apply the national standard in their own way, if at all. We still await Ottawa’s reaction.

Kilos: Truckers in both the U.S. and Canada want nearly double on the road. The push to have Long Combination Vehicles (LCVs) approved for highways is picking up steam. So far, most provinces have launched LCV pilot projects and the returning data is encouraging. We’ll likely see the next phase of the campaign this year, which will include more trucks over more kilometers.

The biggest obstacle to these twin 53-footers remains the potential outcry from the Toronto Star-letter-writing segment of the public, but it’s clear that governments recognize the environmental benefits and productivity enhancements the combo units provide. 

Labor: The feeble economy and overall depressed freight demand has masked the once oft-cited truck driver and mechanic shortage. Don’t kid yourself, though. The dynamics are quite real and continue bubbling beneath. Canada — and trucking most specifically — still faces unprecedented demographic challenges, which will reemerge as markets recover. Older workers are readying to retire en masse and most young people quite simply don’t want to do the job the way the system currently demands it. At least not until someone figures out how to do trucking via Twitter.

Money: What’s it worth? If you’re a cross-border trucker who gets the majority of your hauls paid in U.S. dollars, but whose expenses are of the loonie variety, the answer is not nearly as much as this time last year. Teasing parity, the loonie is forecasted to hover just below the US dollar mark for the short term. But as long as the price of oil and other commodities continue to increase and the USD weakens, it’s not unthinkable that the loonie could move past parity by the summer, keeping a lid on any significant export-based rally.

NAFTA: He hasn’t made good on his word to unions that he’ll "renegotiate NAFTA," but the first 12 months of the Obama administration has set a troubling tone for Can-Am trade. Every U.S. president throws his protectionist constituency a bone once in a while, but the “Buy American” clause, the closing of the U.S. border to Mexican trucks, and proposals for “trade corridor” fees or levies have exporters especially irked this time around. Afghanistan and health care have put trade issues on the backburner, but 2010 should really tell us whether the president plans to stand up to protectionist forces during his term.    

Older Drivers: A little Ontariocentric, we’re aware, but with the aforementioned driver shortage likely to become an issue once again, it’s inexplicable that Ontario remains the only jurisdiction in the world, as far as we’re aware, to require truck drivers over 65 to take annual road tests based on nothing except their age. The government softened the burden last fall by allowing those drivers to retest with auto trannys, but groups like OBAC and OTA want the rule scrapped entirely. MTO officials admit behind closed doors the policy is faulty (it’s likely legally discriminatory too) so hopefully this is the year Transportation Minister Jim Bradley does the right thing.

Pollution: It’s as old as the earth itself, but carbon dioxide has been deemed to be a "pollutant" by the Environmental Protection Agency (EPA). Observers think that recognizing CO2 as an “endangerment,” gives enviro authorities the green light, pardon the pun, to pave the way for regulation of GHG emissions from on-road vehicles. It’s unclear how exactly this will impact the trucking industry — whether it’ll place new requirements on fleets or OEMs — but you can bet there’ll be more momentum this year behind carbon tax and cap-and-trade schemes than ever before.

Qualifications: During this period of bargain-basement transport pricing, a lot of attention has been paid to overcapacity. Much of the blame for the glut of trucks on the road is placed on the de-facto "gatekeepers" of our industry. Many carriers continue to question the screening standards of regulators and financiers. The latter, loath to take back valueless iron, have been accused of keeping unstable truckers afloat at the expense of their more profitable competitors. But, as Contrans’ Stan Dunford told us recently, "as soon as that [lender] looks out his window and sees five open spaces, it’s payback." Whether they remember these lessons ­during the next boom is another matter.

Recovery: This promises to be the most overused “R” word of 2010. But is there anything to it? It depends on many things, namely consumer confidence and the avoidance of a double-dip recession. Building off of the last topic, carriers tell us that they expect capacity to tighten a little and freight volumes to edge up throughout this year after the post-gift buying lull in the first quarter. Rates, though? Not so much. At least not right away. As Stifel Nicolaus analyst John Larkin says "Just because volumes are higher doesn’t mean customers aren’t asking for, or getting, discounts." To fix that, please revert to "Q."

 

 

 

Will 2010 be the year MTO ends its discriminatory
age-based retest rule?

SCR vs EGR: It’ll be a while before we see who wins the epic engine war or whether it’ll be a draw, partly because there will be no demand for the foreseeable future. For those of you too buried in your bills to have followed the events of the last few months, Navistar is the only engine maker that opted against selective catalytic reduction to meet EPA’s 2010 emissions standards (although, as Today’s Trucking first learned a few weeks ago, they may be hedging their bet ).

They sued EPA as an indirect attempt at delaying the Jan.1 deadline, but it doesn’t appear likely that strategy will work. Navistar’s heavy-duty diesels don’t meet the standard just yet, so it’ll use emission credits to sell its new engines for the next few months, at least, buying it more time to meet EPA’s numbers or fight on in court.

Tankers: Cylinder trailers appear to be under a lot of scrutiny by safety officials. As we reported last fall, Obama’s truck regulators seem bent on implementing rules that would make tankers far more expensive. One proposal requires purging of so-called "wetlines" which are located underside on petroleum containers. It would also require retrofits and ban wetlines on all future tankers. (Industry folks say the rule is costly and puts workers at risk). Then at the last minute, authors of the hazmat safety bill inserted a provision to examine ways to cut down on cargo tank rollovers as well. Separately, NHTSA is working on a rule that could make electronic stability control mandatory on trailers, beyond tankers. Expect a proposal later this year.

Urea: Required for 2010 SCR engines, the liquid is more accurately named Diesel Exhaust Fluid (DEF) in North America, but good luck coming up with something better for "U." A year ago at this time, there was plenty of speculation that industry wouldn’t be able to build the infrastructure to produce, supply and sell urea-based DEF in time to meet 2010 truck demand. While customers won’t be pining for more expensive 2010 engines for a while, chemical producers, OEMs, and truckstops have done an adequate job of ramping up. Rumors that DEF would cost up to $7 a gallon have also proven to be far-fetched. It can be had for about three bucks.

Vehicle weights & Dimensions: When it comes to environmentally sustainable transportation, governments talk a good game but are agonizingly slow in ­making life easier for truckers to adopt green-friendly technologies that make actual business sense.
Promoting hybrids and LCVs are lofty goals, but shorter-term, policy makers need to close the gulf between older VWD regs and modern, affordable fuel-saving devices like single, wide-base tires; APUs, and aerodynamic trailer add-ons like skirts and boat tails as promoted by CTA via its "Envirotruck" concept. Will truckers be given a break for buying this stuff in 2010? It might be cheaper than flying all those bureaucrats and NGOs to Copenhagen.

Windsor: Sure, there isn’t much in the air here except diesel exhaust but over the last few years the political drama in this border town has become to transport writers what the fictional town of Salem is to Stephen King. There’s no shortage of weird events to scribble about. So, is 2010 the year shovels get in the ground for a new truck bridge to Detroit? Will American trucking mogul and owner of the private Ambassador Bridge, Matty Moroun, continue to launch scuds at the public bridge process? These and many other questions answered in the next episode of As Windsor Turns.

X-rays: Since 9-11, crossing the border has been about as fun as crawling under your trailer and measuring the brake pushrod on a January morning. Weak cross-border volume has shortened queues a great deal, but the myriad of draconian security protocols persist. And don’t expect relief in 2010. In December the Government Accountability Office gave Customs a failing grade for its weak attempt to meet a Congressional requirement that 100 percent of U.S.-bound cargo containers be scanned by 2012. Meanwhile, abuse by a few smugglers of the C-TPAT-FAST system has some officials calling for tighter controls on that front as well.

YRC: Every month that passes without the yellow submarine sinking indicates that the LTL giant could survive after all. The beleaguered carrier, one of the world’s largest, has been fighting off shark-like pricing attacks from competitors who’ve been smelling blood for months. With the help of some "creative" maneuvering by lenders and creditors, though, Yellow has managed to stay afloat. Its future, or lack thereof, has significant impact on the North American LTL sector with possibly over 15 percent of ­market capacity up for grabs. Or will the band play on for YRC?

Zzzz: Obstructive sleep apnea (OSA) is quickly becoming the most scrutinized fatigue-related issue in the industry. U.S. regulators are working on a screening rule and if that happens, we’ll have to come up with a "made-in-Canada" solution that passes muster with the Americans. Treatment for OSA comes mainly in the form of CPAP machines, which are effective but existing models are bulky and uncomfortable for some people. Upon seeing one for the first time, this writer’s five-year-old asked his grandfather why he "has to sleep with a vacuum cleaner on his face." Drivers with OSA will undoubtedly have similar questions and regulators should spend the year crafting a reasonable answer.

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