Tank Truck Industry Eyes >By Mary Davis
Apr 1, 1999 12:00 PM
The year 2000. In the vernacular - Y2K. Will it be busines as usual for fleet management information systems, or will it be the year of the computer bust? One thing is for sure, nobody's ready to wager the farm on one or the other.
A few people in the tank truck industry are feeling fairly confident that 1999, too, shall pass. However, everyone is concerned because many manufacturing, transportation, and administrative computer systems are dependent on 1900-1999 date-oriented software.
Companies, once they became aware of the situation, began upgrading their systems to correct the problem. Modern Bulk Transporter discussed the progress with four companies and representatives of several tank truck industry associations.
Some managers had the foresight to act quickly once they realized that meeting the demands of Y2K required planning and implementation like any other company project. Bill Glanzman, general manager of information services for Linden Companies Inc, says the Linden, New Jersey, business is expected to be one of the companies that will be ready to celebrate the New Year. Company managers had already projected a computer program upgrade, so the expense that was incurred was in the budget. "We are in the process of fully upgrading with new desktop software and installation of new servers," he says.
In addition to the in-house work, the company has received numerous queries from customers asking about Linden's ability to be ready for 2000. As a result, a written response was developed to explain the company's compliance status.
Linden Bulk Transportation Company Inc, a subsidiary of Linden Companies, was slow in developing an initial computer system, which paid off when the Y2K concerns arose, says Glanzman. Since most of the equipment was installed in the mid-1990s, it is expected to require less upgrading, and what is already in place will be compliant.
Similar confidence is voiced by bulk division managers at Schneider National Inc, Green Bay, Wisconsin. "We believe we are one of the leaders in this effort," says Scott Arves, bulk division vice-president and general manager.
Schneider National started an upgrading program in 1997 and expects to be fully compliant by June 1. Company representatives have testified before members of Congress on the subject as it is related to transportation. Their expertise was sought because of their foresight, Arves says.
The company was also at an advantage because the systems were originally developed in house. Most of the updating has been conducted by Schneider personnel with only a few consultants called in. Arves estimates 29,000 hours will have been spent in the process at a cost of about $1.8 million.
However, he adds that in the event operations are interrupted by incidents outside the company's control, emergency plans are in place for calling in additional people, moving functions to other sites, and providing emergency equipment such as generators for power failures.
At J&M Tank Lines of Atlanta, Georgia, the planning process began two years ago. Arnold Roberts, vice-president of accounting and finance, says the company consulted with its software provider early on. He estimates $50,000 has been spent to bring the system into compliance.
"We have done a quick test and also will load software onto a rented machine and run test data through it," he said.
"In the beginning, we asked a lot of questions to determine what was needed. With our provider's help, we identified what we had to do early on.
"We made sure that we were on the version that our provider has that is 2000 compliant. We also called vendors that provide us services to be sure that their systems are compliant."
Although managers feel confident J&M Tank Lines will be Y2K safe, contingency plans haven't been overlooked. The company is prepared to operate without the use of computers if necessary.
Fred Nichols, president of Computer Support Inc, Mechanicsburg, Pennsylvania, agrees that TEOTWAWKI (the end of the world as we know it) is not certain, yet the situation warrants preparation. He predicts that about 20% of the companies in the industry have completed testing and are compliant. They will coast into the next millennium with few transitional technological bumps. Nevertheless, he reminds other managers to take a strong lead in being sure programs will function when January 1, 2000, arrives.
"The companies certainly need to be the ringmaster in this three-ring circus," he says. Although Nichols expects 20% to have addressed the Y2K concerns, he worries about the five percent that will totally ignore the situation or will procrastinate too long. "They will try to rig something at the last minute that won't work," he adds.
The other 75% will be installing systems this spring and summer - and a few will be wrapping it up in the fall, so they should be ready, but it may be close.
"The thing is that resources are going to be really tight as 1999 comes to an end," Nichols says. "Managers underestimate the amount of work that it takes to put one of these systems in place. We think that it will take about three months on average, depending on what is required. Time also is needed to do the data conversions and train employees on the new systems by January 1. It becomes a very interesting human relations problem and can affect the productivity of the company."
The worst-case scenario can best be described as: business won't be as usual. What was once accomplished with computers will have to be operated manually. "Companies won't be able to print a bill," he says. "They would probably be able to deliver a product, but they won't be able to pay suppliers - not via the computerized systems they have been using." Employees will have to work longer hours to accomplish data processing. All of this will impact the bottom line, even excluding capital investment for equipment and installation.
Planned projects may be put on hold because of the unexpected expense of Y2K compliance, projects which may be as small as a new water cooler or as large as company acquisitions and mergers. Mergers already in place may feel the pinch when integration of systems and personnel are required. Companies that can't meet the Y2K compliance deadline will be forced to maintain unusually high cash reserves for routine administrative functions such as making a payroll.
Finally, a Y2K Armageddon may be a giant lesson in patience. Despite the best plans made by carriers, others may not make the deadline, such as manufacturers, distributors, customers, vendors, utilities, and other businesses.
"I advise everyone to keep a sense of humor," Nichols says. "Plan and prepare the organization to be ready to meet the problems. Do what is necessary. But there may be some things that are just out of your hands."
Joe Mayhew, vice-president for regulatory affairs at the Chemical Manufacturers Association (CMA), reports that a survey of members also shows that about 20% will be ready by the second quarter of 1999. Eight-five percent say they will be ready by the end of the calendar year. Of 190 firms surveyed, 52% responded to the survey, a significant sample for statistical purposes, he noted.
Despite all of this, most people agree that if the product can be loaded into the tank trailer, it can be delivered.
The Y2K computer problem dates to a time when data storage was so expensive that it became standard practice to store only the last two digits of the year. So, computers interpret the year 2000 to mean 1900, and the successive others accordingly.
"While the problem is easy to understand and can seem almost trivial, it is extremely dangerous to underestimate the scale of action needed to correct it due to the vast number of dates that are used in computer systems," warns the Information Technology Association of America.
Carl Johnson, president of the Compressed Gas Association, points out that even if a company is compliant, there are numerous diverse factors that may interfere with production. "The United States, Great Britain, Canada, and other countries have spent billions of dollars preparing for the millennium," he says. "Nevertheless, many other governments and technology researchers throughout the world are just now waking up to the problem. For them, it may be too late.
"Everyone in business should have a Y2K action plan in effect that will help assess what steps would be taken to fix problem areas, lessen negative impact, reduce exposure to potential litigation, and help in seeking recovery for costs in correcting the problem."
Kathee Baker at the National Association of Chemical Distributors (NACD) has provided a list of Internet web sites that may be of help to members and others. Among them are the Small Business Administration at www.sba.gov/y2k; General Services Administration, www.itpolicy.gsa.gov; and Microsoft Inc, 222.microsoft.com/y2k. The Federal Highway Administration also has information about Y2K at www.fhwa.dot.gov.
She noted that the Environmental Protection Agency (EPA) has organized an enforcement policy to encourage prompt computer testing to ensure Y2K compliance. The EPA intends to waive 100% of civil penalties that might otherwise apply for environmental violations caused during specific tests that are designed to identify and eliminate Y2K-related malfunctions. The agency also has stated its intent to recommend against criminal prosecution for violations under similar circumstances.
According to the EPA, this policy is limited to test-related violations disclosed to the agency by February 1, 2000, as well as other considerations.
The policy is subject to certain conditions, such as the need to design and conduct the tests well in advance of the dates in question, the need to conduct the tests for the shortest possible period of time necessary, the need to correct any test-related violations immediately, and other conditions to ensure that protection of human health and the environment is not compromised.
Whether companies will be involved in civil litigation is another matter. While Congress is debating proposals to grant immunity, various interests, specifically trial lawyers, are opposed to government protection. At the same time, many insurance companies are excluding Y2K issues from coverage under general business interruptions policies.
Although there are many technological issues to consider as the next century approaches, managers in the tank truck industry seem ready to face the challenges that may arrive. Companies that have intricate computer systems in place also have managers capable of handling complicated circumstances as well as the day-to-day routine. Just as the wheels have continued to turn on the nation's highways through wars, civil unrest, nature's fits of nature, and economic hardships, it seems probable that they will continue to do so in the new millennium.
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