NTTC members convene in San Diego for annual conference
Jul 1, 2009 12:00 PM
He said the trucking industry should oppose federal legislative initiatives — including the union-sponsored card check and environmentalist-favored cap-and-trade — programs that would raise operating costs and severely restrict the ability of carriers to remain in business. The industry needs to fight for the current driver hours-of-service rules, and to prevent the diversion of federal highway funds to non-highway programs.
On the other hand, trucking needs to work with government on developing effective strategies to reduce traffic congestion. Government and industry also need to cooperate on alternative fuels and vehicle technologies that are environmentally friendly.
Bob Costello, ATA's chief economist, provided the economic outlook for the tank truck industry. He didn't mince any words, stating that this is the worst US economy in decades and that gross domestic product will drop at least 3.5% in 2009. More than 5 million jobs were lost since late 2008, and household net worth fell 25% over a 10-quarter period (from October 2006 to March 2009).
Trucking in general has been hard hit by this recession, but tank truck carriers have seen the biggest drop (27% in March) in loads. However, tank fleets continue to outperform other trucking sectors even with the decline in freight. “Over all, the economy looks better for tank truck carriers than for the rest of the trucking industry,” he said.
Costello added that he is cautiously optimistic that the US economy is moving in the right direction. Still, industrial production will remain weak well into 2010 and real improvement may not begin until 2011. Inventories of many products are still very bloated, and trucking won't improve until inventories fall significantly.
Truck builders certainly are feeling the pain of the recession, according to Jim Hebe, Navistar International senior vice-president. Heavy-duty truck production dropped 70% since the recession began in 2006.
“We have been hit much harder than the automotive industry,” Hebe said. “However, we don't want help from the federal government. We want the government to stay away, and we will survive.”
Despite the economic challenges, Hebe predicted a smooth transition to the 2010 engines mandated by the Environmental Protection Agency (EPA). He also said that both of the emission treatment systems chosen by engine builders — advanced exhaust gas recirculation and selective catalytic reduction — will meet the EPA requirements.
Regardless of the emission reduction technology used, the new engines will increase new truck prices by $5,000 to $10,000. “I doubt that fleets will be able to recover any of the cost for these new engines,” Hebe said.
Norm Ellis, vice-president, transportation & logistics, Qualcomm Enterprise Services, encouraged tank fleet managers to begin planning now for the economic recovery. The companies that recover fastest will be the ones with the mot far-sighted management. Managers must focus on priorities, show confidence, continuously innovate, seize opportunities, and effectively prioritize available resources.
Jeff McCaig, chief executive officer of Trimac Transportation, was elected 2009-2010 chairman. Previously, McCaig was Region 5 vice-chairman.
NTTC's 62nd Annual Conference and Tank Truck Equipment Show will head for the Windy City. The event will be held May 10-12, 2010 at the Chicago Marriott Magnificent Mile in Chicago, Illinois.
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