Dec 1, 2005 12:00 PM, By Charles E Wilson
AT THE end of December, an era comes to a close when Cliff Harvison retires as president of National Tank Truck Carriers Inc, the trade association that represents the for-hire tank truck community. Harvison spent more than 40 years with the association, which is an affiliate of the American Trucking Associations.
During his tenure, Harvison served as one of the most articulate defenders of the tank truck industry. He led NTTC through some of the industry's most trying times, from establishment of the Department of Transportation in 1968, to deregulation of the motor carrier sector in the late 1970s, to increased federal oversight of hazardous materials transportation.
Harvison was just the second NTTC president. He followed Austin Sutherland, who not only was one of the founders of NTTC but also started the magazine that evolved into Bulk Transporter. Harvison will be succeeded by John Conley, who has served as NTTC vice-president since 1989. The NTTC staff also includes Tom Lynch, vice-president and general counsel; Fritz Mead, director of meetings and member services; Laura Niel, controller; and Joan LaTouche, secretary.
While Harvison will be officially retired on December 31, he's not totally stepping away from the association. He will serve as a consultant to NTTC for the next five years, working on a variety of projects, such as expanding the NTTC political action committee.
Bulk Transporter recently spoke with Harvison about his more than 40 years at NTTC. He looked back on how the tank truck industry has evolved and some of the key issues that faced tank fleets.
BT: What year did you start at NTTC?
BT: What attracted you to NTTC?
Harvison: I needed a job. Seriously, though, I was working at the Central Intelligence Agency at the time. The NTTC opportunity came along at a time when I was already planning to leave government.
Another tenant in the apartment where I was living in Alexandria (Virginia) asked me about my future plans and set up the initial interview with Austin Sutherland.
BT: What was it like working with Austin Sutherland?
Harvison: The great thing about my predecessor was that he was a teacher. He came from a family of teachers. One of the greatest things he told me was that it's not important to realize ‘that’ something was done. It's more important to understand ‘why’ it was done.
The most significant thing Austin ever did for me came about in 1966. I had been with the association for a year, and (President) Lyndon Johnson decided that he wanted a Great Society, and part of that Great Society would include the creation of a Department of Transportation.
Austin called me in one morning and said, “that SOB [meaning Lyndon Johnson] wants a Department of Transportation.” Up to that point, the only federal entity regulating transportation had been the Interstate Commerce Commission. Austin went on to say: “I don't want to see you in the office. I want you down on Capitol Hill. I want you to go to every hearing at the House and Senate relative to the creation of the Department of Transportation — what they are going to do; how they are going to do it. Again, it's more important for you to know why it happened than to know it happened.”
I took almost three months and did nothing but attend those hearings. It was the most valuable thing that anybody ever did for me. It enabled me to see what the problems were in transportation and hear from all sectors of the transportation community.
BT: Why did President Johnson and the Congress believe that they needed a transportation department?
Harvison: Basically and very candidly, the reason was that Ralph Nader had written a book “Unsafe at any Speed.” He spotlighted what he believed was a glaring weakness, on the part of the federal government, to protect people from automobile accidents and what have you.
Now I saw through all of that right away, as did many other people. Many of Nader's assumptions were ludicrous. Still, he sold the book. More importantly, he sold a bill of goods to the United States Congress. And that's why you have the DOT today. It had nothing to do with economic regulation, nothing to do with hazardous materials regulation, nothing to do with transportation planning, or highways, or anything else.
BT: When did we start to see hazardous materials transport regulation?
Harvison: We really began to see hazmat regulations during the early 1970s. There's an interesting link between the events of that time and the creation of today's Department of Homeland Security. Who's staffing the Department of Homeland Security? Well, refugees from the DOT.
Go back to the founding of the Department of Transportation in 1968. Where did they get the people to staff this new DOT? They got them from the Interstate Commerce Commission. They brought in people with a solid reputation in safety regulation.
We had a series of hazmat accidents, most of them rail accidents. These incidents drew the public focus to transportation safety issues. It wasn't that we were seeing more accidents; it was more that public expectations had been raised.
Vietnam was a factor. For the first time in my life, this was an event that caused the body politic to question the actions of the federal structure. People, mostly young, found that they could grab media attention by questioning the actions of government. In addition to the war, they questioned transportation safety and environmental factors.
BT: What was the industry like at the time?
Harvison: The industry was highly regulated in terms of price and entry. There were probably about 120 carriers, virtually all of whom were petroleum haulers. Two major tank truck carriers — Matlack and Chemical Leaman — dominated the industry. Keep in mind that the chemical transport sector had not yet developed to the levels we see today.
BT: How did the industry change in the decades since and was it for the better?
Harvison: It was absolutely for the better. First of all, the industry benefited an awful lot from the research and development done by the trailer manufacturers in terms of introducing new alloys for tanks. People like Larry Botkin (Fruehauf Inc) and Dave Fellows (Trailmobile/Heil) brought out new and more versatile products that enabled the carriers to expand the range of cargoes hauled. Working with some very talented people at the Manufacturing Chemists Association (later the Chemical Manufacturers Association and now the American Chemistry Council), the manufacturing community came up with new and safer designs for trailer construction that really fostered the development of the chemical transport sector.
Aluminum was just beginning to come into fashion for cargo tanks. There was no technical reason keeping fleets away from aluminum tanks. Simply put, there was no regulatory uniformity and no preemption of local and state rules. There were no comprehensive hazardous materials regulations like we have today. There were MC codes, but they were not imposed upon local jurisdictions. At the time I came into the industry, two of the nation's largest cities (New York and Los Angeles) both prohibited aluminum cargo tanks. The tanks had to be steel.
BT: What have been some of the biggest challenges faced by the tank truck industry over the years?
Harvison: The biggest challenge for me was the lack of uniformity and federal ability to preempt state and local regulations affecting interstate transportation. The Hazardous Materials Transportation Act of 1990 established the DOT (Department of Transportation) as the number one regulator in the country.
The drive toward preemption and uniformity in hazardous materials handling and transport began in the mid 1970s. It took almost 15 years for it to be accomplished with the 1990 Act. I was very privileged and very fortunate to be a part of that lobbying effort.
Basically today's law says that DOT will publish regulations, and (absent extraordinary circumstances) those regulations will be uniform throughout the country. So, a driver can pick up a load of chemicals at DuPont in Wilmington (Delaware) for transport to Houston (Texas) and there will be no regulatory barriers along the way that would prevent him from completing that trip.
BT: Over the years, as the trucking industry developed, was there a concept of preemption at DOT or anywhere else in the United States?
Harvison: No there was not. In the early 1980s, we began to meet with state and local representatives, the National Council of State Legislatures, the National Urban League, and other organizations that were resisting the concept of hazmat regulation uniformity. They wanted the power to regulate hazmat to remain at the local level.
Industry achieved uniformity essentially by buying off the opponents. State and local governments wanted money for training emergency responders and for training the cadres of state police who would enforce the hazmat regulations. We said fine. We could do that. That's how the Hazardous Materials Transportation Trust Fund came about with the registration fees collected by DOT from hazmat carriers and shippers.
BT: Are those funds being used well?
Harvison: Overall, I'd say yes. There are some problems and issues with individual states.
BT: Are we at risk of losing the DOT preemption authority and hazmat transport uniformity?
Harvison: I think there is a certain risk of losing that. I don't think it's a high risk. HMTA was weakened in the latest highway bill, but we're not going to return to the way things were prior to 1990. There are a number of members of Congress who believe DOT preemption is an infringement on state's rights. It's not.
BT: What other challenges did the tank truck industry face during your years at the helm of NTTC?
Harvison: The hold harmless agreement is to me one of the prime challenges. It was one of the first significant issues the association faced when I took over management of the NTTC. If I failed at anything during my years at NTTC, it is the fact that we could not eliminate that problem.
Hold harmless is not a statutory problem. Statutes can be amended. The issue really speaks to a political philosophy. If a carrier wants to sit down with his customers and sign an agreement that sheds or takes on liability, that carrier is perfectly free to do so. Many companies sign those agreements because their competitors are doing so. It's very difficult to walk away from business over a hold harmless clause. It's easier today because capacity is tight, but carriers did not have much of an option at the time I started with NTTC.
In addition, trucking was regulated at the time. If you held a certificate of public convenience and necessity, you had to serve the shippers.
BT: Should a tank truck carrier sign a hold harmless agreement in today's operating environment?
Harvison: In this day and age, no. There's no real reason to do it. And I see increasing reluctance within NTTC's membership to sign those agreements.
BT: Was deregulation good for tank truck carriers?
Harvison: Good news and bad news. Deregulation obviously opened up the marketplace to new ideas and concepts, new ways of setting prices, and new ways of designing services. On the bad side, deregulation literally destroyed the shipper side of the shipper-carrier relationship.
Prior to deregulation, each and every major shipper in this country — whether chemical, petroleum, or food company — had an individual who could make very fundamental shipping decisions. He or she knew the marketplace and had a vested interest in keeping a viable fleet of for-hire trucking at the ready.
Post deregulation, that individual has disappeared. He has been replaced by green-eye-shade types who work in traffic departments, logistics departments, and what have you. By and large, they don't see the carriers' perspectives and don't set policy for their companies.
BT: It almost sounds like you are saying that deregulation was worse for the shippers than for the carriers.
Harvison: I think in the long run, it will be. Between 1984 and 2000, the shippers were out there ruling the roost. They kept telling the fleets: Get lean and mean. Don't have any excess capacity, and so on. The carriers did exactly that, and what do we have today? We have a driver shortage and no excess capacity whatsoever. The shippers got exactly what they wanted. They made their bed; now let them lie in it.
BT: How did the tank truck industry become commoditized?
Harvison: It was one of the results of the deregulation act of 1980. It was purely accidental. The law of unintended consequences kicked in. With the shackles of rates and entry controls removed, virtually all of the major carriers decided that, in terms of service, they could be “all things to all people.” Instead of continuing to concentrate on “what I do best,” they began chasing the same business, and they tried to use rate cuts to gain entry.
BT: Was deregulation a mistake?
Harvison: Yes it was overall. Three basic transportation modes were deregulated in the 1970s and 1980s. The airlines were first in 1978, followed by the motor carriers and railroads two years later. In actuality, the railroads were never really deregulated. The railroads can never really be deregulated because they offer fixed-route service. They're not going to build major new routes.
The only real transport deregulation was for airlines and trucking. When you look at those two modes, we have probably seen more disruption than benefit. It's undeniable. Only in the past two to three years have we begun to see more rational pricing and service levels.
BT: Didn't deregulation enable the tank truck industry to expand and grow?
Harvison: The industry needs profits, not growth and expansion. The best moments for the tank truck industry in terms of profitability and service to customers have been over the last three years.
BT: Will the improved operating environment last for tank truck carriers?
Harvison: I think so. The managerial structure of the industry today is relatively young. They will be around for quite awhile. These are people who have been through some of the earlier years. They have learned from their mistakes and their successes.
BT: Why is NTTC still relevant today?
Harvison: NTTC is relevant because we are the only — only — trade association that exclusively represents the interests of the tank truck industry, and that includes ATA and the state trucking associations.
We also have value to our members because of our ties to ATA. One thing we all have to remember is that 90% of the industry's problems don't start in Washington, DC. They start in the individual states and localities. One of the biggest benefits of our affiliation with ATA is that we have access to the cadre of state trucking association managers. That has been vital.
BT: What does NTTC mean to the tank truck industry today?
Harvison: I would hope that it means a path to success. I would hope that NTTC means that if you come along with us, we will give you the tools you need to build your business. We are not only an advocacy organization, but we are an information provider. Everybody needs information today to run their businesses successfully. NTTC is their number one source in the industry.
We have a staff that works hard, and they pay attention to the issues. It's not a huge staff.
BT: What would you view as your legacy to the tank truck industry?
Harvison: If anything, I'd want people to remember that I ran the association fairly and I implemented a piece of advice that my predecessor, Austin Sutherland, gave me. He told me: Treat your smallest member as well, if not better, than your largest member. I have always tried to do that.
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