NTTC annual conference attendees enjoy Baltimore hospitality
Jul 1, 2011 12:00 PM, By Charles E Wilson
AMERICAN history mixed with current events during one of the most upbeat annual meetings National Tank Truck Carriers (NTTC) has held in recent years. Members definitely were looking to the future even as they reflected on this nation's early years.
Turning to current events, NTTC's 2010-2011 chairman Steve Rush reminded attendees that just a year ago, many tank truck carriers were still wondering how much longer they would have to endure a down economy. Conditions have changed dramatically since then.
“Things are much better in the tank truck industry today than they were just one year ago,” Rush said. “We're getting busier and busier, and we are wondering where and how we will be able to find enough good drivers and just how high the cost of equipment will go. We're also seeing a continuing flood of new state and federal regulations.”
Federal Motor Carrier Safety Administrator Anne Ferro touched on some of those new federal rules. She said the agency is following three core principles as it implements a new strategic plan: Raising the Bar.
First, FMCSA will raise the bar for entry to the motor carrier industry. Second, FMCSA's objective is to establish and maintain higher safety standards to remain in the industry. The third and final core principle is to identify and remove the high-risk carriers, drivers, and service providers.
Ferro said there is a high probability that electronic on-board recorders (EOBRs) will be mandated for handling electronic driver logs and other data. She said 95% of the trucking industry would be covered by the EOBR mandate, and a final rule should be published in spring 2012. Carriers probably would have about 2 ½ years to comply.
Rush said mandating electronic driver logs would be a welcome move. He pointed out that NTTC has expressed strong support for EOBRs as a way to make the tank truck industry safer and more productive.
Welcome or not EOBRs will bring new legal concerns for tank truck carriers, as will CSA. Plaintiff attorneys already are trying to use both EOBR and CSA data to gain advantages in lawsuits against trucking companies, according to Robert T Franklin, a partner in the Franklin and Prokopik law firm. He said that even when there is no specific evidence of wrongdoing by a truck driver or fleet, plaintiff attorneys could try to use data from either source to infer a pattern of bad behavior.
With liquid and dry bulk shipments growing rapidly right now, tank truck carriers certainly are looking for ways to boost productivity. The surge in cargo that has the tank truck industry scrambling was a major topic of discussion throughout the annual conference.
Several speakers addressed the vibrant health of the industry, but Bob Costello, chief economist for the American Trucking Associations, put it as succinctly as anyone: “You guys are doing the best of anyone in the trucking industry.”
In his annual economic outlook for the tank truck industry, Costello said tank fleet activity should grow by about 20% this year, compared with 2010. Carriers are busy because shippers are busy. Production of plastics and chemicals is up. Food shipments are increasing.
The downside for tank truck carriers is that they are having a difficult time hauling all of the available loads. The trucking industry overall is 13% smaller than it was before the recession. The growing driver shortage also is impacting fleet capacity.
The traditional truck driver source — white males aged 35 to 54 — shrank by three million over the past decade. Even with the unemployment rate remaining above 9%, fleets can't entice enough people to drive trucks. Low wages were a big reason, according to Kevin Sterling, senior vice-president at BB&T Capital Markets.
A couple of the best drivers in the tank truck industry were on hand to discuss driver issues with the tank fleet executives. Ron Hawkins, K-Limited Carrier, and Robert Weller, Hahn Transportation, are member of the American Trucking Associations' America's Road Team. They both agreed that the key to driver retention starts with treating with respect. In addition, it's important to find the right type of people to driver tanker rigs.
Along with the driver shortage, many fleets remain reluctant to replace equipment, and some fleets are still downsizing. The truckload tractor fleet shrank 16% over the past several years and is expected to grow by just 1.6% this year. Equipment replacement by the trucking industry trailed US gross domestic product six of the last eight years.
Part of the problem is the cost of the equipment. Tractors now cost $37,000 more than they did in 2001, according to Sterling. Maintenance and operating costs are rising.
Fuel costs remain a serious concern truck fleets. The US trucking industry currently consumes 35.6 billion gallons of diesel annually at a cost of around $137.8 billion, according to Richard Moskowitz, American Trucking Associations vice-president and regulatory affairs counsel. It is the industry's highest operating cost.
He added that the trucking industry does have a few options, and one of the best could be natural gas. “The United States is the Saudi Arabia of natural gas,” Moskowitz said. This is a fuel that we can access today as a replacement for diesel, and it is $1 to $1.50 cheaper than diesel on a Btu-equivalent basis.”
Dennis Slagle, president and chief executive officer of Mack Trucks Inc, said fleets are buying new trucks, but most of the purchases are for replacement. Very few new truck purchases are for fleet expansion.
Still, orders have been relatively strong. Manufacturers should build 230,000 to 240,000 Class 8 trucks for the North American market this year. “Orders were up approximately 193% for the first four months of 2011, compared with the same period in 2010,” Slagle said.
Tank trailer production also is growing, according to Theodore J Fick, president and chief executive officer of Polar Corporation. He estimates that the industry will build around 8,900 tank trailers this year.
Greg Hodgen, president of Groendyke Transport Inc, was elected 2011-2012 chairman. Previously, Hodgen was Western Region IV vice-chairman. He is the third executive from Groendyke Transport to serve as NTTC chairman, preceded by John Groendyke in 2002 and Max Barton in 1992.
View more NTTC annual conference coverage >>
© 2013 Penton Media Inc.
Acceptable Use Policy blog comments powered by Disqus