Tucker Blog
Showing posts with label Articles. Show all posts
Showing posts with label Articles. Show all posts
Friday, October 28, 2011
New Certified Transportation Brokers on Staff
We are thrilled to announce that three (3) Tucker staff members have recently passed their Certified Transportation Broker (CTB) test, given by the Transportation Intermediaries Association. The recipients each work in the customer service center, and they are: JoAnn Matczak, Matt Riley and Kye Snauwaert. Congratulations, JoAnn, Matt & Kye!
The CTB exam increases the professionalism and integrity of property brokerage, meets the educational needs of brokers, and expands basic knowledge of the brokerage and transportation industry through a rigorous certification program. Former Tucker president, Bill Tucker co-designed the CTB program a quarter century ago.
The CTB exam increases the professionalism and integrity of property brokerage, meets the educational needs of brokers, and expands basic knowledge of the brokerage and transportation industry through a rigorous certification program. Former Tucker president, Bill Tucker co-designed the CTB program a quarter century ago.
Tucker Receives Highest SmartWay Transport Partners Score
It is inherent in the nature of transportation intermediaries like Tucker to be green, by the very nature of our business. Before brokers/forwarders (“3PLs”), motor carriers were very often loaded in one direction, and empty in the other. 3PLs have dramatically reduced, or controlled the carbon footprint of the trucking industry since 1980.
However, to be recognized by the U.S. EPA’s SmartWay Transport Partner program, it takes much more than that. Tucker retains the highest attainable SmartWay score of 1.25. SmartWay’s program is changing, and Tucker is ready for that change. Our utilization of SmartWay carriers continues to improve, and is at an all-time high.
For more information on SmartWay, please contact Tucker. Depending on how much your business uses Tucker for your freight, you may qualify to be a SmartWay Partner already. To learn more about the program, visit: www.epa.gov/smartwaylogistics.
However, to be recognized by the U.S. EPA’s SmartWay Transport Partner program, it takes much more than that. Tucker retains the highest attainable SmartWay score of 1.25. SmartWay’s program is changing, and Tucker is ready for that change. Our utilization of SmartWay carriers continues to improve, and is at an all-time high.
For more information on SmartWay, please contact Tucker. Depending on how much your business uses Tucker for your freight, you may qualify to be a SmartWay Partner already. To learn more about the program, visit: www.epa.gov/smartwaylogistics.
Tucker Wins New Business Awards
In keeping with our 50-year legacy of intensely guarding our information and that of our customers and carriers, we’ll be brief and intentionally vague, but we’re too excited and pleased not to let you know what’s stirring. During the past few months, Tucker has been awarded new business from new customers, and some significant new business from existing customers. Most of this has been years in the making.
The business includes a variety of industries, including energy, healthcare, express freight, chemicals and more, but the common thread is the need for excellence.
Tucker has worked diligently for 50 years to develop the best, most comprehensive and intelligently designed freight brokerage/3PL model in the country. In challenging economic times, we’re grateful for the opportunity to grow.
The business includes a variety of industries, including energy, healthcare, express freight, chemicals and more, but the common thread is the need for excellence.
Tucker has worked diligently for 50 years to develop the best, most comprehensive and intelligently designed freight brokerage/3PL model in the country. In challenging economic times, we’re grateful for the opportunity to grow.
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Earthquake, then Hurricane Irene Test Tucker’s Emergency Operations
For nearly 30 years, Tucker has been honored to be trusted relied on as a first responder, supporting the United States military, FEMA and other U.S. government agencies, and many non-governmental first responders, with emergency trucking, transportation and storage services. We’ve supported emergency relief for hurricanes, floods, tornados, the Three Mile Island nuclear disaster, and Ground Zero on 9/11, to name a few.
A few weeks ago, Tucker’s own emergency preparedness was put through a tough test, when Hurricane Irene was predicted to strike our area directly. Our team prepared and performed admirably, with members from operations, sales and senior management preparing during the days before the storm, going through emergency preparedness, and preparing backups to our backup plans.
While our area was close to Irene’s eye, and we experienced major flooding and some wind damage, amazingly our office never lost electricity or phone service. Business crisis averted! Just a few of our team members lost power at home for up to a couple days. As with every experience, we’ve identified some opportunities for improvement that we’re already pursuing.
As far as natural disasters go, New Jersey is generally insulated from most (Housewives of New Jersey and Jersey Shore television shows, noted). Tornados, hurricanes and earthquakes are exceedingly rare here. Last month, we had all three hit in the same week. Thankfully, our teamwork prepared us well.
A few weeks ago, Tucker’s own emergency preparedness was put through a tough test, when Hurricane Irene was predicted to strike our area directly. Our team prepared and performed admirably, with members from operations, sales and senior management preparing during the days before the storm, going through emergency preparedness, and preparing backups to our backup plans.
While our area was close to Irene’s eye, and we experienced major flooding and some wind damage, amazingly our office never lost electricity or phone service. Business crisis averted! Just a few of our team members lost power at home for up to a couple days. As with every experience, we’ve identified some opportunities for improvement that we’re already pursuing.
As far as natural disasters go, New Jersey is generally insulated from most (Housewives of New Jersey and Jersey Shore television shows, noted). Tornados, hurricanes and earthquakes are exceedingly rare here. Last month, we had all three hit in the same week. Thankfully, our teamwork prepared us well.
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Freight Activity Holding Strong
The U.S. freight economy is still good, despite the U.S. credit rating downgrade, ongoing European economic troubles, and a leaderless Congress that can’t pass any important bills. Thankfully, the manufacturing sector is holding its own during a lull in our economic recovery. Good news, for sure.
According to the American Trucking Associations (ATA), truck tonnage declined 1.3% from June 2011 to July 2011; however, July 2011was still 3.9% stronger than July 2010 (YOY growth).
Data reported by TransCore reinforces ATA’s findings, and shows additional insights. According to TransCore’s North American Freight Index, spot market truckload freight volume jumped 22% in July 2011 when compared to July 2010, while July’s volume dropped 24% from June’s volume. But don’t sweat it. TransCore suggests that this is normal market behavior. According to them, in the last 10 years, June to July load volumes in the same calendar year have declined on average 19%, and the predictable June-July decline has exceeded this year’s 24% in 4 out of the last 10 years.
Traditionally, August marks the start of each year’s second and largest “freight season.” Hopefully for the American and world economies, we continue to move forward and upward. Very few recoveries have been exclusively up, up, up, without pauses or hesitations along the way. We may not be in the most robust recovery, but let’s keep it going.
According to the American Trucking Associations (ATA), truck tonnage declined 1.3% from June 2011 to July 2011; however, July 2011was still 3.9% stronger than July 2010 (YOY growth).
Data reported by TransCore reinforces ATA’s findings, and shows additional insights. According to TransCore’s North American Freight Index, spot market truckload freight volume jumped 22% in July 2011 when compared to July 2010, while July’s volume dropped 24% from June’s volume. But don’t sweat it. TransCore suggests that this is normal market behavior. According to them, in the last 10 years, June to July load volumes in the same calendar year have declined on average 19%, and the predictable June-July decline has exceeded this year’s 24% in 4 out of the last 10 years.
Traditionally, August marks the start of each year’s second and largest “freight season.” Hopefully for the American and world economies, we continue to move forward and upward. Very few recoveries have been exclusively up, up, up, without pauses or hesitations along the way. We may not be in the most robust recovery, but let’s keep it going.
Labels:
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Ten Years After 9/11—A Blundering USDOT HazMat Disconnect
Ten Years after 9/11, America, has a spectacularly inexcusable problem regulating motor carriers who haul hazardous materials (“HazMat”). The United States Department of Transportation (“USDOT”) and its bureaucratic dysfunction are to blame.
Under the law, shippers of HazMat freight are required to use only motor carriers who are HazMat certified. Unfortunately, shippers can’t turn to USDOT for timely, reliable information about which carriers are, or are not, certified. What is more, USDOT, the sole source of this kind of information, cannot rely on its own data to determine which motor carriers are authorized to handle hazardous materials. Yes, you read that correctly.
USDOT’s knowledge of certified HazMat haulers is spotty, at best. Shippers seeking to verify a carrier’s certification face substantial uncertainty. Verifying hazardous materials certificates from carriers of course is a good idea, but relying on faxed paper certificates presents risks of forgeries, expired certificates, and other significant risks.
The Federal Motor Carrier Safety Administration (“FMCSA”) is the agency within USDOT that regulates motor carrier safety, except for issuing HazMat certificates. Goodness knows why, but HazMat certificates are issued to motor carriers by the Pipeline and Hazardous Materials Safety Administration (“PHMSA” pronounced “Fim-suh”)—a different USDOT agency. PHMSA is failing in this critical national security and safety responsibility.
PHMSA HazMat data is made available to the public in a file named “REGIS10.” This file is intended to list company names, certificate numbers, and expiration dates and so on, so the public can identify and verify HazMat-certified carriers. Unfortunately, the REGIS10 file is useless, fraught with errors and omissions, with few, if any database rules to prohibit alpha characters to show in numeric-only fields. It’s a disaster. Shippers, law enforcement agencies, and carriers, depend on PHMSA to do its job, so we can all do ours. PHMSA’s failures leave our nation and our citizens on the roadways in harm’s way.
Over at FMCSA, they are busy completely overhauling America’s motor carrier highway safety regime with its new Compliance, Safety and Accountability (“CSA”) program. FMCSA issues and revokes operating authority, and regulates every interstate motor carrier in America, and many intrastate carriers. FMCSA’s CSA program is designed to improve commercial vehicle safety and FMCSA’s ability to review more carriers each year.
Here’s FMCSA’s problem. Partly, because PHMSA’s data is so appalling, the FMCSA isn’t connected to the PHMSA database. This leaves FMCSA in the unenviable position of not knowing what motor carriers are certified HazMat, so it must (gasp!) guess.
CSA more strictly scrutinizes and regulates HazMat carriers, compared to non-HazMat carriers, by design. In order to do this, FMCSA has been forced to develop a system for (literally) guessing which are HazMat carriers. FMCSA’s first attempt at guessing was to count every carrier who self-reported that it hauls HazMat. Wrong! The FMCSA’s second attempt at guessing, announced August 22, 2011, was to track data reported via roadside inspections or safety audits, identifying where a carrier was carrying placarded quantities of HazMat. An ever so faint improvement, but it is still guessing.
No guess will ever be as effective or justifiable as getting the data cleanly and clearly from PHMSA—the source of the problem, err, data. Then yes, by all means supplement that HazMat certified data with roadside inspections, audit findings and hazmat permits.
Under the law, shippers of HazMat freight are required to use only motor carriers who are HazMat certified. Unfortunately, shippers can’t turn to USDOT for timely, reliable information about which carriers are, or are not, certified. What is more, USDOT, the sole source of this kind of information, cannot rely on its own data to determine which motor carriers are authorized to handle hazardous materials. Yes, you read that correctly.
USDOT’s knowledge of certified HazMat haulers is spotty, at best. Shippers seeking to verify a carrier’s certification face substantial uncertainty. Verifying hazardous materials certificates from carriers of course is a good idea, but relying on faxed paper certificates presents risks of forgeries, expired certificates, and other significant risks.
The Federal Motor Carrier Safety Administration (“FMCSA”) is the agency within USDOT that regulates motor carrier safety, except for issuing HazMat certificates. Goodness knows why, but HazMat certificates are issued to motor carriers by the Pipeline and Hazardous Materials Safety Administration (“PHMSA” pronounced “Fim-suh”)—a different USDOT agency. PHMSA is failing in this critical national security and safety responsibility.
PHMSA HazMat data is made available to the public in a file named “REGIS10.” This file is intended to list company names, certificate numbers, and expiration dates and so on, so the public can identify and verify HazMat-certified carriers. Unfortunately, the REGIS10 file is useless, fraught with errors and omissions, with few, if any database rules to prohibit alpha characters to show in numeric-only fields. It’s a disaster. Shippers, law enforcement agencies, and carriers, depend on PHMSA to do its job, so we can all do ours. PHMSA’s failures leave our nation and our citizens on the roadways in harm’s way.
Over at FMCSA, they are busy completely overhauling America’s motor carrier highway safety regime with its new Compliance, Safety and Accountability (“CSA”) program. FMCSA issues and revokes operating authority, and regulates every interstate motor carrier in America, and many intrastate carriers. FMCSA’s CSA program is designed to improve commercial vehicle safety and FMCSA’s ability to review more carriers each year.
Here’s FMCSA’s problem. Partly, because PHMSA’s data is so appalling, the FMCSA isn’t connected to the PHMSA database. This leaves FMCSA in the unenviable position of not knowing what motor carriers are certified HazMat, so it must (gasp!) guess.
CSA more strictly scrutinizes and regulates HazMat carriers, compared to non-HazMat carriers, by design. In order to do this, FMCSA has been forced to develop a system for (literally) guessing which are HazMat carriers. FMCSA’s first attempt at guessing was to count every carrier who self-reported that it hauls HazMat. Wrong! The FMCSA’s second attempt at guessing, announced August 22, 2011, was to track data reported via roadside inspections or safety audits, identifying where a carrier was carrying placarded quantities of HazMat. An ever so faint improvement, but it is still guessing.
No guess will ever be as effective or justifiable as getting the data cleanly and clearly from PHMSA—the source of the problem, err, data. Then yes, by all means supplement that HazMat certified data with roadside inspections, audit findings and hazmat permits.
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Tuesday, May 3, 2011
Preparing For Tight Trucking Capacity
Add Lead Time, Flexibility and “Attractiveness” to Your Operations
Tucker has successfully navigated through several recessions and recoveries in our 50 years. Use our insight to help your company leverage the marketplace for competitive advantage.
Transportation Fundamentals are Improving Quickly – Important Implications
1. During the recession, the trucking industry reduced its size by more than 15%
2. Truck tonnage increased dramatically in 2010 vs. 2009. LA/Long Beach Port reported largest ever year to year gain in December 2010. Tonnage has continued to increase in 2011.
3. Analysts are referring to 2011 and 2012 as an impending “crisis” period for finding available trucks.
4. When trucks become harder to get, it leads to higher prices, as the nation experienced from 2003-2006. Analysts expect strong pricing power has begun returning to carriers in 2011, through 2013.
5. Carriers are carefully evaluating customers and “firing” some, if there is not enough return on their service investment.
6. To “keep the revenues in-house” carriers may double-broker freight, giving it to another carrier to haul. This often is illegal, and does erase any due diligence and SOP understanding the shipper instilled in the carrier. In times like these, take measures to ensure zero incidents of this. 7. Last minute notice usually means higher prices, because carriers are booking trucks easily and quickly.
8. New Regulations Further Threaten Trucking:
a. CSA 2010, the DOT’s new carrier safety program places enormous burden on driver behavior, forcing as high as 10% of drivers from the industry, to avoid detrimental carrier scores.
b. New Hours of Service may reduce productivity by 7%-9% in 2011, if released with changes.
c. Electronic On-board recorders (EOBRs) electronically enforcing driver hours, with zero tolerances for added time.
Tucker has successfully navigated through several recessions and recoveries in our 50 years. Use our insight to help your company leverage the marketplace for competitive advantage.
Transportation Fundamentals are Improving Quickly – Important Implications
1. During the recession, the trucking industry reduced its size by more than 15%
2. Truck tonnage increased dramatically in 2010 vs. 2009. LA/Long Beach Port reported largest ever year to year gain in December 2010. Tonnage has continued to increase in 2011.
3. Analysts are referring to 2011 and 2012 as an impending “crisis” period for finding available trucks.
4. When trucks become harder to get, it leads to higher prices, as the nation experienced from 2003-2006. Analysts expect strong pricing power has begun returning to carriers in 2011, through 2013.
5. Carriers are carefully evaluating customers and “firing” some, if there is not enough return on their service investment.
6. To “keep the revenues in-house” carriers may double-broker freight, giving it to another carrier to haul. This often is illegal, and does erase any due diligence and SOP understanding the shipper instilled in the carrier. In times like these, take measures to ensure zero incidents of this. 7. Last minute notice usually means higher prices, because carriers are booking trucks easily and quickly.
8. New Regulations Further Threaten Trucking:
a. CSA 2010, the DOT’s new carrier safety program places enormous burden on driver behavior, forcing as high as 10% of drivers from the industry, to avoid detrimental carrier scores.
b. New Hours of Service may reduce productivity by 7%-9% in 2011, if released with changes.
c. Electronic On-board recorders (EOBRs) electronically enforcing driver hours, with zero tolerances for added time.
How to Weather the Tight Capacity Storm? Be Attractive to Carriers and Drivers.
1. Save freight costs by booking in advance. It maximizes carrier efficiency in pre-planning their trucks.
2. Maximize Communication & Lead Time = Minimized Expediting Costs. With two or more days notice, expediting needs are reduced dramatically, and maximizes the number of carriers available.
3. Maximize flexibility. Offer drop & hook/drop trailer, expand loading/unloading hours, etc.
4. Get the truck first. A powerful lesson learned from 2003-6 was first learned in kindergarten. The early bird catches the truck. The earlier, the better. Book the truck first. It’s simple and effective.
5. Be more attractive than other shippers. With plenty of freight choices available to carriers and drivers, be attractive. While Tucker always pays, and pays quickly, it takes more to remain “attractive” including: fast loading, flexible scheduling, clean freight, respecting drivers’ time and treating them as professionals.
1. Save freight costs by booking in advance. It maximizes carrier efficiency in pre-planning their trucks.
2. Maximize Communication & Lead Time = Minimized Expediting Costs. With two or more days notice, expediting needs are reduced dramatically, and maximizes the number of carriers available.
3. Maximize flexibility. Offer drop & hook/drop trailer, expand loading/unloading hours, etc.
4. Get the truck first. A powerful lesson learned from 2003-6 was first learned in kindergarten. The early bird catches the truck. The earlier, the better. Book the truck first. It’s simple and effective.
5. Be more attractive than other shippers. With plenty of freight choices available to carriers and drivers, be attractive. While Tucker always pays, and pays quickly, it takes more to remain “attractive” including: fast loading, flexible scheduling, clean freight, respecting drivers’ time and treating them as professionals.
When customers know expectations and anticipate challenges, they can work within their own organizations and with their clients to better manage and adapt service and operations effectively.
Prepared for you by Tucker Company Worldwide, Spring 2011
Prepared for you by Tucker Company Worldwide, Spring 2011
Wednesday, December 9, 2009
Tucker Company Named “Top 100 3PL” Again in 2009

Once again, we wish to thank our customers and the readers and editors of Inbound Logistics Magazine for recognizing Tucker Company Worldwide as a Top 100 3PL (third party logistics company). Though Tucker has achieved this important recognition over the past several years, the excitement and pride our people feel gets better reach year.
Thank you to our customers and to our carrier friends. Without your support, we wouldn’t be here.
69% of Carriers Screened Do Not Meet Tucker’s Safety Standards
Tucker’s general counsel and director of risk management, Darin Day, has reported to our management that in the past few months, a whopping 69% of the motor carriers reviewed for compliance, safety and fitness did not meet Tucker’s standards. In recent years Tucker has taken a nationally recognized leadership role in reevaluating carrier screening, selection, and ongoing risk management, including by writing and speaking regularly on the subject. Today, both shippers and brokers/3PLs may be found liable for accidents caused by the carriers they hire, despite carefully drafted carrier contracts with aggressive indemnity provisions and other measures designed to protect shippers and freight managers from liability. Put simply, courts are saying that the responsibility for safety cannot be delegated. The duty of reasonable care in operating a fleet of trucks rests with the carrier, but the duty of reasonable care in selecting carriers rests with the companies who hire them. Essentially, only 30% of the nation’s motor carriers meet Tucker’s safety requirements. Many larger competitors are simply too big, too decentralized, or they believe their stock prices will be harmed too much, to “turn on the safety switch” at their organizations. At Tucker, we’re thankful to be doing our part for highway safety and to enhance our customers’ risk management efforts. Additionally, since we’ve been operating in this new fashion for nearly four years, we have enjoyed a competitive advantage by building a carrier base that is competent and reliable (as always) but also less likely to expose a shipper, or Tucker, to risk.
ISO 9001:2000 Re-Certified
Tucker is pleased to announce that we remain ISO 9001:2000 certified again for 2009-2010. Tucker first became ISO certified in 2008, a reflection of our commitment to always work to improve our management processes, so necessary as our business continues to grow and mature. Our teams have improved processes in areas as diverse as billing accuracy operations account management and customer on-boarding. The increasing teamwork of our people and the wide variety of significant output improvements continue to demonstrate that a Quality Management System and, particularly, ISO certification are well worth the investment.
Signs of Life? Act Now to Access Capacity Tomorrow
Anecdotal evidence and our experience here at Tucker suggests that capacity is tightening up in certain freight lanes. The data agree, albeit in an “economist kind of way.” ATA reported September Truck Tonnage dropped 7.3% — the smallest year-to-year drop in almost 12 months. Most economists do not expect to see true transportation recovery until later in 2010,all of us are pleased to see small pockets of recovery, for the first time in over a year. If you are a shipper or user of motor carriers, act now to build new relationships and improve old ones. When capacity gets tight next year, it will be far too late for you to secure capacity. Act now. Tucker can help you immediately. In fact, this message has been so well received by shippers, that Tucker’s growth in new and returning customers is nearly 20 weeks ahead of last year’s pace. Many shippers are rushing to find safe, reliable and responsible carriers they can use when demand tighens. That’s our job. Call us today.
Wednesday, January 16, 2008
Rising Diesel Prices Smack Businesses - Philadelphia Inquirer
By Henry J. Holcomb
Inquirer Staff Writer
Like many trucking executives, Steve O'Kane faces a tough question these days on diesel fuel: How much of the soaring cost can he or his customers absorb?
"The situation is volatile in an upward direction," said O'Kane, chief executive officer of A. Duie Pyle Inc., the West Chester-based fleet of 700 trucks and 1,600 trailers. "There is a lot of speculation on how high is high and probably as many opinions about that as people you are willing to ask."
Diesel fuel prices are soaring, and some experts say the cost of a gallon will roar past $4 this summer.
This has far-reaching impact on business. Consumers will feel it, too. Diesel propels shipping and construction, and many diesel-powered cars, SUVs and pickup trucks are headed to market.
The price of diesel in the Mid-Atlantic region last week averaged $3.51 a gallon, 95.2 cents higher than a year ago, according to a government report issued Monday. That is down 4.4 cents from the previous week, the usual post-holiday lull.
Rising fuel prices are pushing thousands of trucking companies close to the edge, threatening to diminish transportation resources when long-term forecasts say the amount of goods shipped will double by 2010.
The trucking industry is already beset by driver shortages and talk of new tolls and toll increases, said Jeffrey Tucker, who is chief executive of the Tucker Co., a Cherry Hill logistics firm, and a director of the National Industrial Transportation League.
"If the economy stays iffy much longer, thousands of carriers will go out of business," Tucker said.
He and others report increasing pressure to cap fuel surcharges that pass along price increases to shippers.
Why is this happening? The price of crude, the raw material for gasoline and diesel, shot up last year, from $51 a barrel to the current $90-plus range. And faster-than-usual economic growth overseas is pushing demand. In China, the economy grew more than 11 percent last year, and the Bank of China said last week that similar growth was expected this year.
Meanwhile, U.S. environmental concerns have produced laws requiring cleaner diesel that costs more to produce and gets fewer miles per gallon.
Stephen Schork, editor of the Schork Report, a daily energy newsletter published in Villanova, said the refining capacity had fallen so far behind demand because, until a few years ago, diesel profit was insufficient to attract money for expansion.
"Diesel actually sold for less than the cost of crude as late as 2000. When you can't sell a product for more than crude," Schork said in an interview yesterday, "the economics don't attract investment in adding capacity."
Unless a recession slows demand, Schork said, it will be two to five years before diesel supply catches up with demand.
Things could get worse. The full impact of $90-plus crude has not reached the pump, Schork said. And Canada is using more of the diesel supply it has exported to the United States, which could mean turning to more-expensive sources. "It's one thing to ship a product down a pipeline from Canada. It's another proposition to charter a vessel and ship it across Atlantic," Schork said.
In the meantime, the transition to federally mandated ultra-low sulphur diesel adds costs, Schork said. Having two grades of diesel adds distribution and tankage costs and the risk of spot shortages.
Sunoco Inc., this region's largest refiner, is spending $285 million to convert an unused hydrocracking unit at its Philadelphia refinery to a hydrotreater that reduces sulphur from previously acceptable levels to the required level of less than 15 parts per million.
Charles T. Drevna, president of the National Petrochemical and Refiners Association, insists his members have been working hard to meet demand. But, he said, government requirements for fuel-efficient cars and trucks and for gasoline blended with biofuels are creating "major problems fraught with uncertainties."
Refiners cannot make diesel without making gasoline. "The arithmetic is the challenge. Does it make economic sense to invest in capacity when that capacity could be stranded?" Drevna said.
According to the U.S. Energy Information Administration, a barrel of crude oil (42 gallons) yields 19.4 gallons of gasoline and 14.6 gallons of a group of similar products - diesel, jet fuel, kerosene and heating oil. The sulphur content allowed by law is the difference in these products. (The rest yields gases, chemical components and other products.)
The impact of new environmental laws is significant, several trucking executives said. New trucks with required clean-air equipment are getting one mile less per gallon than 2006 models. That is a 16.6 percent decline, from six to five miles per gallon.
High diesel prices are cranking up interest in fuel-saving technology.
The nation's biggest diesel-fuel users saw the problem coming a half dozen years ago. UPS Inc. now spends a third of its $3 billion annual capital budget on information technology, mostly to conserve fuel. Its route-planning technology reduces left turns, which use more fuel, and cuts miles driven by 28.5 million a year, said spokesman Norman Black.
Norfolk Southern, one of three major railroads serving Philadelphia, is working to reduce the 519 million gallons of diesel it burned last year. Its big Conway complex in Western Pennsylvania is testing a yard locomotive with three truck engines instead of one big railroad powerplant. One, two or all three of the diesel engines come online to generate more electricity and turn traction wheels as the load increases, said Tim Heilig of Atlanta, the railroad's chief mechanical officer.
Norfolk Southern is also developing a system called Locomotive Engineer Assist Display Event Recorder, or LEADER. It analyzes the length and weight of the train, along with the topography and curvature of the track ahead, and recommends fuel-efficient throttle settings. And, using new automated controls, Norfolk Southern is evaluating the fuel savings of putting locomotives at the middle and end of trains, instead of just at the front.
In Europe, more than half the automobiles now have diesel engines, which get more miles per gallon and last longer, and there are signs that the engines could soon gain favor in the United States, Schork said.
"There have been tremendous technology strides since the noisy, smelly, hard-to-start diesel cars that turned off Americans in '70s," Schork said. "Diesels are cleaner and friendlier now."
What is not clear, he and others said, is how friendly the price of diesel will be as the oil industry races to catch up with - but not overtake - demand.
Inquirer Staff Writer
Like many trucking executives, Steve O'Kane faces a tough question these days on diesel fuel: How much of the soaring cost can he or his customers absorb?
"The situation is volatile in an upward direction," said O'Kane, chief executive officer of A. Duie Pyle Inc., the West Chester-based fleet of 700 trucks and 1,600 trailers. "There is a lot of speculation on how high is high and probably as many opinions about that as people you are willing to ask."
Diesel fuel prices are soaring, and some experts say the cost of a gallon will roar past $4 this summer.
This has far-reaching impact on business. Consumers will feel it, too. Diesel propels shipping and construction, and many diesel-powered cars, SUVs and pickup trucks are headed to market.
The price of diesel in the Mid-Atlantic region last week averaged $3.51 a gallon, 95.2 cents higher than a year ago, according to a government report issued Monday. That is down 4.4 cents from the previous week, the usual post-holiday lull.
Rising fuel prices are pushing thousands of trucking companies close to the edge, threatening to diminish transportation resources when long-term forecasts say the amount of goods shipped will double by 2010.
The trucking industry is already beset by driver shortages and talk of new tolls and toll increases, said Jeffrey Tucker, who is chief executive of the Tucker Co., a Cherry Hill logistics firm, and a director of the National Industrial Transportation League.
"If the economy stays iffy much longer, thousands of carriers will go out of business," Tucker said.
He and others report increasing pressure to cap fuel surcharges that pass along price increases to shippers.
Why is this happening? The price of crude, the raw material for gasoline and diesel, shot up last year, from $51 a barrel to the current $90-plus range. And faster-than-usual economic growth overseas is pushing demand. In China, the economy grew more than 11 percent last year, and the Bank of China said last week that similar growth was expected this year.
Meanwhile, U.S. environmental concerns have produced laws requiring cleaner diesel that costs more to produce and gets fewer miles per gallon.
Stephen Schork, editor of the Schork Report, a daily energy newsletter published in Villanova, said the refining capacity had fallen so far behind demand because, until a few years ago, diesel profit was insufficient to attract money for expansion.
"Diesel actually sold for less than the cost of crude as late as 2000. When you can't sell a product for more than crude," Schork said in an interview yesterday, "the economics don't attract investment in adding capacity."
Unless a recession slows demand, Schork said, it will be two to five years before diesel supply catches up with demand.
Things could get worse. The full impact of $90-plus crude has not reached the pump, Schork said. And Canada is using more of the diesel supply it has exported to the United States, which could mean turning to more-expensive sources. "It's one thing to ship a product down a pipeline from Canada. It's another proposition to charter a vessel and ship it across Atlantic," Schork said.
In the meantime, the transition to federally mandated ultra-low sulphur diesel adds costs, Schork said. Having two grades of diesel adds distribution and tankage costs and the risk of spot shortages.
Sunoco Inc., this region's largest refiner, is spending $285 million to convert an unused hydrocracking unit at its Philadelphia refinery to a hydrotreater that reduces sulphur from previously acceptable levels to the required level of less than 15 parts per million.
Charles T. Drevna, president of the National Petrochemical and Refiners Association, insists his members have been working hard to meet demand. But, he said, government requirements for fuel-efficient cars and trucks and for gasoline blended with biofuels are creating "major problems fraught with uncertainties."
Refiners cannot make diesel without making gasoline. "The arithmetic is the challenge. Does it make economic sense to invest in capacity when that capacity could be stranded?" Drevna said.
According to the U.S. Energy Information Administration, a barrel of crude oil (42 gallons) yields 19.4 gallons of gasoline and 14.6 gallons of a group of similar products - diesel, jet fuel, kerosene and heating oil. The sulphur content allowed by law is the difference in these products. (The rest yields gases, chemical components and other products.)
The impact of new environmental laws is significant, several trucking executives said. New trucks with required clean-air equipment are getting one mile less per gallon than 2006 models. That is a 16.6 percent decline, from six to five miles per gallon.
High diesel prices are cranking up interest in fuel-saving technology.
The nation's biggest diesel-fuel users saw the problem coming a half dozen years ago. UPS Inc. now spends a third of its $3 billion annual capital budget on information technology, mostly to conserve fuel. Its route-planning technology reduces left turns, which use more fuel, and cuts miles driven by 28.5 million a year, said spokesman Norman Black.
Norfolk Southern, one of three major railroads serving Philadelphia, is working to reduce the 519 million gallons of diesel it burned last year. Its big Conway complex in Western Pennsylvania is testing a yard locomotive with three truck engines instead of one big railroad powerplant. One, two or all three of the diesel engines come online to generate more electricity and turn traction wheels as the load increases, said Tim Heilig of Atlanta, the railroad's chief mechanical officer.
Norfolk Southern is also developing a system called Locomotive Engineer Assist Display Event Recorder, or LEADER. It analyzes the length and weight of the train, along with the topography and curvature of the track ahead, and recommends fuel-efficient throttle settings. And, using new automated controls, Norfolk Southern is evaluating the fuel savings of putting locomotives at the middle and end of trains, instead of just at the front.
In Europe, more than half the automobiles now have diesel engines, which get more miles per gallon and last longer, and there are signs that the engines could soon gain favor in the United States, Schork said.
"There have been tremendous technology strides since the noisy, smelly, hard-to-start diesel cars that turned off Americans in '70s," Schork said. "Diesels are cleaner and friendlier now."
What is not clear, he and others said, is how friendly the price of diesel will be as the oil industry races to catch up with - but not overtake - demand.
Sunday, October 14, 2007
Rough Road Ahead - Philadelphia Inquirer

Rough Road Ahead
By Henry J. Holcomb
Inquirer Staff Writer
When freight manager Jeffrey Tucker heard the state planned to turn Interstate 80 into a toll road, he wondered, "What next?"
More change is battering the trucking industry than at any other time in the 46-year history of the Tucker Co., a Cherry Hill logistics firm founded by his grandfather.
The proposals - including adding tolls to I-80 and turning the Pennsylvania Turnpike over to private operators - would dramatically alter the two main cross-state routes, truckers and transportation executives say. Meanwhile, the industry faces troubles on several fronts:
Another change in the hours drivers can legally work, arising from efforts to reduce the 5,000 fatalities a year from truck-related accidents, is being battled out in the courts, and the outcome could force higher costs and complex changes.
Trucking companies wrestle with driver turnover rates of more than 100 percent per year and wonder if they will be able to meet the cargo-growth demands in coming decades.
Tightening environmental rules are reducing fuel efficiency and boosting maintenance and new-truck costs.
The nation's highways and bridges are, as one trucking company chief executive officer put it, "in scary, scary shape." They are wearing out and ill-equipped to handle the anticipated doubling of cargo shipments over the next 20 years. The bridge collapse in Minneapolis has intensified concerns about aging roads and bridges. Businesses ponder the impact on their operations if a collapse happened here.
All this is causing complex ripples of problems, renegotiated contracts and schedules.
The time it takes to get fresh produce and fruit to Philadelphia from the West Coast could soon stretch from five days to more than seven, said James P. Storey Jr., president of Quaker City Produce Co.
Pointing to the harvest date on a box early one Sunday, he said that extra time was enough for a market price change that would cost him a bundle.
The impact could extend to rural towns and school districts, where truck stops and other businesses clustered around exits are often the largest taxpayers. When tolls are added to a highway, business at exits is cut in half, according to a University of Maryland study sponsored by the truck-stop operators' trade group, NATSO Inc.
Transportation is still a relatively small part of the cost of what the public buys - about 1 percent to 5 percent for 70 percent of goods shipped, said John E. "Gene" Tyworth, chairman of the Pennsylvania State University's supply chain and information systems department.
Some companies benefit from the toll talk and rising fuel costs. ALK Technologies Inc., of Princeton, has doubled sales of its truck-navigation software. With a partner, Integrated Decision Support Corp., ALK's PC Miler software now provides drivers with up-to-the-minute diesel-fuel prices, gleaned from electronic credit card transactions. It tells drivers how much to buy at each stop to reduce the trip cost.
"This adds up to big money. These guys fill up for 700 bucks or more," said Ed Siciliano, ALK's sales and marketing vice president.
Fuel-cost-per-mile data can be added to another ALK program that tells drivers whether driving extra miles to avoid paying tolls saves money.
Proposals to convert interstates into toll roads in 30 states, including Pennsylvania, are, truckers and shippers say, a money grab to fix state budgetary problems. They express similar views on a Bush administration push to get states to sell turnpikes to private groups.
"This is a dangerous, dangerous trend. The nation's infrastructure is in very, very scary shape for the long term," said Steve O'Kane, chief executive of A. Duie Pyle Inc., a West Chester-based trucking company.
The nation needs to rebuild and expand its road system, not use the roads to generate money for other expenses, he and others argue.
The need far exceeds revenue from traditional sources, so new tolls and alternatives such as turning roads over to private operators must be considered, Gov. Rendell argues. His office said last week that Pennsylvania needed an additional $1 billion annually for its roads and bridges even though spending rose from $1.78 billion in 2004 to $2.37 billion last year.
This infrastructure gap is growing nationwide. A study by Deloitte Research, a member firm of Deloitte Touche Tohmatsu, of New York, estimates that "driving on roads in need of repair costs U.S. motorists $54 billion every year in extra vehicle repairs and operating costs. This works out to an average of $275 per motorist each year."
This cost does not include economic losses from workers stuck in traffic.
Making I-80 a toll road "would have a significant impact," said Mike Skousen, a senior executive with Salt Lake City-based C.R. England Inc., a long-haul truck line with major operations in South Jersey. "Normally we have to eat the toll."
Others say pressing too hard to pass toll costs on to a customer would just drive the business to hungrier companies that, they say, often have lower standards for equipment and driver training.
The Owner-Operators Independent Drivers Association says each truck already pays $16,000 a year in federal and state road-use taxes.
By all accounts, the men and women who drive trucks are feeling the most pain from the changing situations.
"The way I heard one driver put it, 'Everybody's trying to get a piece of me,' " said Skousen, whose company employs 4,600 drivers to operate its 3,200 trucks and 5,400 trailers. It operates four driver-training schools to cope with an annual turnover rate of 120 percent.
Local drivers are often paid by the hour, but those on long hauls get a fee per mile, based on the shortest route between points. Detours, delays at loading docks and time stuck in traffic jams cut daily earnings.
"There's no way a trucker can keep a legal log book and make any money," said a veteran trucker waiting for his truck to be unloaded at a South Philadelphia dock, who, fearing future scrutiny, asked that his name be withheld.
So he and others say they must find ways to work around rules to keep truck payments and deliveries on schedule. Sometimes there is no safe place to stop. Other times, pressing on is safer than stopping and getting caught in dangerous weather.
This creativity is producing pressure, from Congress and safety advocacy groups, for electronic monitoring of how much time drivers spend behind the wheel.
Drivers feel the pressure to keep moving and get frustrated when hung up at loading docks, said Tom Stefanopoulos, owner of Norm & Lou's Restaurant, popular with truck drivers bringing shipments to the Philadelphia Regional Produce Market in South Philadelphia. "I've seen guys come in here early on a Sunday and not get unloaded until Monday."
Joe Hobbs, 62, of Chillicothe, Mo., agrees. "These guys here are pretty good," he said, watching his load of Idaho potatoes being unloaded at Quaker City Produce, in the produce terminal.
They started unloading his truck soon after he arrived and were hustling. "But I've sat at some docks eight to 10 hours. If they'd let us count that time as off-duty, that would be OK," Hobbs said. "I could take a nap in my sleeper." He finds such naps restful, he insists, despite the rumble of forklifts loading or unloading his trailer. "When I feel them quiet down, I wake up," he said.
Anette Sandberg, a former administrator of the Federal Motor Carrier Safety Administration and a former chief of the Washington State Patrol, is sympathetic with drivers who feel rested after naps.
"But a lot of scientific studies say if you break sleep into small chunks, you won't get enough restful sleep to focus on tasks. Drivers say trust me, that's how I feel. But that's not data. If they make rule based on how people feel, they'd be back in court," she said, citing lawsuits from Public Citizen, a Washington-based safety activist group.
Ideas on how to make trucks and the cars around them safer abound.
Training comes up often in conversations with industry experts and drivers. "Some companies will give a guy six weeks of training and call him a truck driver," Hobbs said. "I see young drivers fly by in ice and snow, then down the road, there they are, jackknifed and blocking traffic."
The solution is to pay drivers by the hour instead of by the mile, said Todd Spencer, a former truck driver who is executive vice president of the Owner-Operators Independent Drivers Association.
"Truck drivers have to work around everybody else's schedule. Shippers and receivers have no financial incentive to avoid wasting drivers' time," Spencer said.
With all the hassles, Hobbs still loves life on the road. In part that is because he has kept a clean driving record for 27 years and built up enough experience to get on with a top company, Great Plains Transport Inc., of West Fargo, N.D. Every three years, the company buys him a new truck, with a comfortable sleeper cab, and his wife travels with him from time to time.
But he worries about the future. Many truck stops have become places where drivers get knocked in the head and robbed, and there is less camaraderie on docks and rest stops than there once was, he said. Drivers now frequently come from Eastern Europe and Asia and speak little English. "I tried to talk to that man over there. He couldn't understand a word I was saying," Hobbs said.
Tucker, the Cherry Hill logistics firm owner, and others see worrisome trends getting too little attention. "Eventually we who buy things will pay for the inefficiency with higher prices," Tucker said.
State budget problems and other conflicts take the public's eye off the road ahead, Tucker said. "It is," he added, "almost like we're going to have to get to having nothing on shelves to get people to pay attention and prepare for the future."
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