Motortruck May-June 2009

Motortruck

Fleet Executive C A N A D A ’ S

B U S I N E S S

M A G A Z I N E

MAY/JUNE

F O R

LEGISLATION Debating the merits of Ontario’s new LCV pilot GREEN TRANSPORTATION Why Volvo thinks now is the time for action PROFITABILITY What’s driving national fleets to regional lanes

Maintenance

Matters An inside look at present challenges and future issues for your shop

2009

F L E E T

O W N E R S

© 2009 MNA(C)I. All Rights Reserved. The Michelin Man is a registered trademark licensed to Michelin North America (Canada) Inc.

Ken England– Owner-Operator

“My MICHELIN® X One® save me more than $200 a month.”

“I don’t think I’ll ever buy another tire but the MICHELIN X One . In fact, I wish I’d gotten mine sooner, because for me it comes down to savings. I save at least $200 a month because I’m getting more miles on less fuel. That’s literally 900 miles on 120 or 130 gallons. And I’ve shaved about 400 pounds off my truck. That means I can carry heavier loads and make more money.” ®

®

“As for the feel and handling? The smoothest I’ve ever had. No more ridin’ in the ruts. You could take my word for it, or you could strap on a set of MICHELIN X One tires and head over Monarch Pass to see for yourself.

Either way, I couldn’t be more pleased...’cause these things are for real.” ®

®

Michelin. Improving your bottom line through innovation—that’s a better way forward.

Visit www.michelintruck.com for more information.

contents May/June 2009

Volume 78, No. 3

COVER S T O R Y

MaintenanceMatters And that’s why we’ve dedicated an entire section to the issues and challenges faced by your shop.

From a candid conversation about running a lean and clean maintenance operation, to the evolutionary steps necessary to change the face of municipal maintenance management, it’s information guaranteed to turn your crank. ��������� 20

FEATURES

16

18

THE TIME IS NOW Concerns about the economy may have supplanted concern about the environment in the minds of many but Volvo execs believe there is no better time to rethink our approach to transportation efficiency.

QUITE THE COMBINATION The OTA and the PMTC worked with Ontario’s ministry of transportation to bring LCVs to Ontario and now their members will be the only ones participating in the pilot.

Some say that’s just not fair, others say it’s exactly as it should be. Read what our experts have to say and make up your own mind.

DEPARTMENTS VIEWPOINT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Is there finally light at the end of the tunnel or yet another oncoming train?

COMPETITION WATCH . . . . . . . . . . . . . . . . . . . . . . . 6 MacKinnon and Bison celebrate important anniversaries, Challenger Motor Freight opens new terminal in BC, Muskoka Transport invests in new technology and more.

MY HR SPACE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Work Sharing agreements offer a valuable alternative to layoffs. Why not share the load?

TAKING CARE OF BUSINESS . . . . . . . . . . . . . . . . . 10 Here’s what you can do to bring about a turnaround for your transportation company. And remember it’s never too late to get started.

27

28

IS THAT THE SMELL OF RECOVERY? Let’s hope Leif Johansson, president of AB Volvo and CEO of the Volvo Group, has a nose for financial prognostication because he believes he’s caught a whiff of the good times returning. Find out why he’s betting the worst is over.

IN FOR THE SHORT HAUL? The length of haul on full truckload shipments has been shifting downwards. Understanding the forces behind the move to regional truckload shipping.

EQUIPMENT WATCH . . . . . . . . . . . . . . . . . . . . . . . 12 Ugly SCR vs EGR war now playing out in US courts, Mascot Parts bucks downward trend with opening of new reman’ plant, Kenworth introduces new truck for vocational and municipal markets, and more.

WHAT’S ON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Get connected to our latest offerings in cyberspace.

INSIDE THE NUMBERS . . . . . . . . . . . . . . . . . . . . . 38 No matter how you slice it, taking action on staff costs during a downturn is hard to avoid.

MAY/JUNE 2009

3

Motortruck

Fleet Executive

is written and published for owners, managers and maintenance supervisors of those companies that operate, sell and service trucks, truck trailers and transit buses.

Viewpoint

MAY/JUNE 2009

VOL. 78

The light at the end of the tunnel is not as bright as we had hoped

Y

ou know things are bad when our National Professional Truck Driving Championship gets cancelled due to a lack of sponsorship.

The popular event was to be held in Abbotsford and Surrey, BC, in September and the organizers were looking forward to a banner event. But, as event chairman Shaun Garvey had to acknowledge, finding sponsors in this economic climate was too tough a task, and there was no other choice but to cancel.

The cancellation, which Lou Smyrlis, MCILT was announced shortly Editor after we heard that the lou@transportationmedia.ca continent’s largest trucking worth repeating company was going to ask “If you don’t toot your own horn, the US government for a there will be no music” bailout (and since changed its mind) is just the latest in – Andrew Miller, what has been a barrage of President ACM Consulting Inc. bad news since last fall. Is there no light at the end of this tunnel?

Actually, there might be. There are positive signals coming in now from a variety of areas.

Over the past two months Transportation Media in partnership with Dan Goodwill & Associates has hosted two educational seminars for both carriers and shippers. The well-attended seminars included a deep dive into the economic outlook and what I heard on both those occasions, the latter one in particular, was encouraging.

The experts are seeing a change in economic conditions after the sharp downfall of the past nine months, according to Carlos Gomes, a senior economist with Scotiabank. That downfall, by the way, has been the sharpest in the post war era.

Gomes gave several examples that indicate the North American economy has hit rock bottom and is ready to gradually climb its way back up.

Automotive carriers may have felt the impact of the recession more than any others. By late 2008 cars were sitting on lots for more than 90 days, when 60 days is the norm. That caused car manufacturers to slash production from 13-14 million annually down to 5-6 million. And that of course had a distinct impact on the number of automotive shipments made available and naturally all the shipments of raw materials and parts that go into making a car.

But Gomes said the auto sector has seen the worst of it and is beginning to rebound.

Lou Smyrlis (416) 510-6881

lou@TransportationMedia.ca Managing Editor Adam Ledlow (416) 510-6890

adam@TransportationMedia.ca

The same can be said of the housing market, traditionally a strong source of business for flatdeck carriers and carriers involved in the transport of housing-related goods. By 2006 housing in the key US market reached dangerous levels in terms of affordability and soon collapsed. That too is changing.

The combination of dropping housing prices and low interest rates are making for very affordable housing right now. But it will take some time to clear off the inventory – houses are still sitting on the market for 10 to 11 months instead of the usual 5-6 months.

In another sign the worst of the recession may be behind us, Canadian exporters expressed optimism during Export Development Canada’s semi-annual Trade Confidence Index. Exporter confidence rebounded from the previous index more strongly than at any other time since the post-9/11 period.

And according to the experts at a recent FTR Associates webinar, the current recession is U-shaped - not V-shaped - and we’re now bouncing along the bottom. Key economic indicators have stabilized and FTR Associates expects to see positive GDP growth beginning next quarter and into 2010.

Good news indeed. But it’s not all good news.

FTR Associates also pointed out that there won’t be a rapid rise from the ashes. And the modest GDP growth they expect to see in the near future doesn’t translate into a quick improvement in freight conditions. The economy has to be growing around 3% before we can get back to a 1% growth in freight, according to FTR Associates.

Truck manufacturers will have to be just as patient during the recovery, if not more so. North American Class 8 truck sales in 2009 will be 43% lower than in 2008, according to projections from ACT Research, and will only recover about half of that decline in 2010. The Class 8 fleet will end 2010 at the oldest average age on record. The company also projected medium-duty sales will be 26% lower in 2009 than in 08 and will grow 11% in 2010. Demand for trailers will also remain weak, according to the forecaster, thanks to the recession as well as structural issues that have increased average trailer life.

But at least the likelihood of a W-shaped recession – where there is a modest recovery followed by another recession – is receding. Gomes said that as long as the fundamentals continue to improve he doesn’t’ see the likelihood of heading back into recession.

Not exactly the strong light at the end of the tunnel we have been waiting for, but at least it’s not another oncoming train. mt @ARTICLECATEGORY:129;

4 motortruck

NO. 3

Editorial Director

Features Editor Julia Kuzeljevich (416) 510-6880

julia@TransportationMedia.ca Creative Director Mary Peligra

mpeligra@bizinfogroup.ca Advertising Creative Directors Carolyn Brimer Beverley Richards

Contributing Editors

Ken Mark James Menzies Ian Putzger John G. Smith Carroll McCormick Harry Rudolfs

Publisher Rob Wilkins (416) 510-5123

National Sales Manager Don Besler (416) 699-6966

Account Manager Brenda Grant (416) 494-3333

Production Manager Kim Collins (416) 510-6779

Circulation Manager Valerie Fraser

Video Production Manager Brad Ling

Research Manager Laura Moffatt

Vice President Publishing Alex Papanou

President Bruce Creighton Head Office 12 Concorde Place, Suite 800 Toronto, Ont. M3C 4J2 Motortruck Fleet Executive is published 6 times a year by BIG Magazines LP, a leading Canadian information company with interests in daily and community newspapers and business-to-business information services.

The contents of this publication may not be reproduced or transmitted in any form, either in part or full, including photocopying and recording, without the written consent of the copyright owner. Nor may any part of this publication be stored in a retrieval system of any nature without prior written consent.

Motortruck Fleet Executive is indexed by Micromedia Limited.

PUBLICATIONS MAIL AGREEMENT 40069240 Return Undeliverable Canadian Addresses to: Circulation Dept. – Motortruck Magazine, Suite 800 – 12 Concorde Place, Toronto, ON M3C 4J2 USPS 016-317. US office of publication, 2424 Niagara Falls Blvd., Niagara Falls, NY. 14304-0357. Periodical Postage Paid at Niagara Falls NY USA. Postmaster send address corrections to: Motortruck, PO Box 1118, Niagara Falls NY 14304.

Member Canadian Business Press.

Subscription Inquiries – (416) 442–5600.

PAP Registration No. 11025 We acknowledge the financial support of the Government of Canada through the Publications Assistance Program towards our mailing costs ISSN Number 0027-2108

Member/Canadian

CompetitionWatch Surprisingly, Canada’s top for-hire carriers (97 companies earning at least $25 million in annual revenues) saw both operating revenue and expenses remain practically unchanged in the fourth quarter of 2008 compared to the previous year, according to a report from Statistics Canada. The 97 Canadian-based trucking companies – each earning $25 million or more annually – generated operating revenue of $2.6 billion and operating expenses of $2.4 billion in the fourth quarter of 2008. The operating ratio (operating expenses divided by operating revenue) remained unchanged at 0.95 in the fourth quarter compared with the same quarter a year earlier.

CHALLENGER MOTOR FREIGHT has announced the opening of a new 10-acre terminal in Aldergrove, BC. The new location comes complete with driver amenities and offices and more than doubles its previous space, in order to accommodate further growth in the west, the company stated. The new terminal houses truck maintenance and service facilities and in-house refuelling capabilities. It also complies with the US C-TPAT security program with advanced yard safety. The company said the new facility poises it to grow its regional business in B.C., Alberta, Washington State and Oregon with its fleet of tandem, tridem and quad-axle trailers.

Challenger began operations in the west 14 years ago primarily as a service to one of Canada’s largest couriers.

MACKINNON TRANSPORT marked its 80th anniversary in June. Leslie MacKinnon purchased his first used straight truck on June 4, 1929, according to the company, so he could haul livestock and supplies for the local farming community in Caledon, Ont. In 1946, MacKinnon hauled its first load of Armco Drainage products and by the late 50s Armco accounted for nearly 100% of the company’s business, leading to MacKinnon’s move to Guelph in 1960 to be closer to its main customer.

BISON TRANSPORT also celebrated an important birthday in June: its 40th. The company, owned by Duncan M. Jessiman, has risen from modest beginnings to become one of Canada’s top transportation companies. The business began in the late 1960’s when Duncan’s father Peter started running a local cartage and warehouse operation in Winnipeg that became Jessiman Brothers Cartage Limited. Duncan soon learned the ropes of the family business and after graduating from the University of Manitoba, he started up his own company, Bison Transport, in May 1969. Though it began as an 18-truck, 32-employee operation, Bison now operates more than 1,050 tractors, 3,000 trailers and almost 1,600 professional drivers and transportation staff. Operating terminals throughout Canada, Bison operates several divisions, including dry van, long combination vehicle, refrigerated, asset-based logistics, intermodal, and warehousing and distribution.

MUSKOKA TRANSPORT will be using in-cab scanning in an effort to improve productivity. The carrier teamed up with Shaw Tracking to implement the program. Muskoka said in-cab scanning will allow its drivers to manage paperwork through a simple incab solution. In-cab scanning allows drivers to send scanned documents from inside the cab within a matter of minutes, eliminating the need to find, and pull off at truck stops. The company says it has already installed the scanners and trained its drivers on their operation. Muskoka is also now looking to shorten its billing cycle.

Port Moody, BC’s WHEELER TRANSPORT has earned this year’s Best Carrier Performance safety award from the Canadian Petroleum Products Institute (CPPI). It’s a step up for the company, after winning last year’s CPPI Improvement Award for Reduced Product Mixes. Wheeler Transport, a fleet with about 100 pieces of equipment between trucks and fuel tankers and a branch in Kamloops, credits three safety initiatives for rising to the top spot. One of those initiatives is a safety bonus for all Wheeler Transport drivers, a straight percentage of the gross. Another key ingredient to Wheeler Transport’s safety program is a full-time health and safety officer. The third successful initiative is the company’s implementation of the Smith Defensive Driving traffic safety course, a program promoted widely in the US, and by a few oil companies on this side of the border.

Flat truckload rates, 1-3% rate increases for LTL carriers, increased trucking bankruptcies and declining truck sales are a few things SCHNEIDER LOGISTICS experts see when looking ahead to the remainder of 2009. The company issued its annual State of the Transportation Industry Review 2008, which also explored what lies ahead for transportation companies in 2009. Looking at the US economy in general, Schneider is not expecting a rapid recovery. The report suggests truckload rates will remain flat in 2009 and it may be 2010 before truckload carriers begin to see rates swing upwards.

For daily COMPETITION WATCH news go to www.trucknews.com or subscribe to our bi-weekly e-newsletter.

6

motortruck

m

the human edge

y

H

R

share the load Work Sharing agreements offer a valuable alternative to layoffs

T

he TANDET Group has faced some tough choices in the midst of the current economic downturn, and few of them were more troubling than the decision to reduce payroll costs.

After all, skilled employees are vital to the future of any business.

But the company discovered an alternative to layoffs in the form of the federal Work Sharing program – an initiative that offers Employment Insurance benefits to those who agree to a shortened work week.

The program’s Employment Insurance benefits are capped at 55% of average insured earnings up to a maximum of $447 per week or $89.40 per day. After a few calculations, The TANDET Group discovered that participating workers who agreed to a 20% wage cut and a day off each week actually took home almost the same amount of pay that they would have received if wages had simply been cut by 10%.

“Everybody wins,” says human resource manager Catherine Magill.

Workers are also able to maintain other benefits including vacation days and the right to Employment Insurance benefits in the event they need to be laid off before the program is completed. The company, meanwhile, retains skilled employees for the days when they are required.

Participants in the program can be called in to work during “Work Share” days for up to six consecutive weeks.

“We are hearing about people who are volunteering to take holidays without pay, or working a specific number of days without pay, but this program offers an option that many fleets may not have thought about,” says Linda Gauthier, executive director of the Canadian Trucking Human Resources Council.

There has also been an unexpected benefit to the initiative. It has shown participating employees that they are seen as vital to the future of the company, Magill adds. “It gave the employees the message that ‘You are one of my key employees. You are here because we need you to be here on the other end.’”

The program itself isn’t new, but the related administrative burden has been eased. It has also been extended to last between six and 52 weeks. Applicants simply need to fill out a limited amount of paperwork and submit a brief Recovery Plan to demonstrate that the reduction in hours is temporary and unavoidable. This plan needs to include: • Business Description – a general 50-word description about the or-

To find a HR Essentials workshop in your region contact:

8

motortruck

ganization, the length of time the company has been in Canada, head office address, the number and location of branches, a comparison of sales over the last two years, and a list of typical clients, customers and markets served. The plan also needs to reference the organization’s history with HRSDC/ Service Canada programs.

• Employee Description – showing the number of unionized and non-unionized employees, along with the full name of any applicable union and local number.

• Plan for Recovery – outlining the reasons for the work shortage, its expected duration, steps that will be taken to generate business to alleviate the challenge, and a description of measures that were taken to overcome the downturn in business before applying to the Work Sharing program. There also needs to be a reference to reduced hours, layoffs or other adjustments to the workforce that have taken place before this assistance was required, and a description of identified alternatives to a Work Sharing Agreement.

“It is very well communicated. They allow you to fax everything.

They accept scanned documents,” Magill says, noting how she was also able to submit a single application for five separate operating companies. The application process was approved within weeks, participating employees had their Claimant Reports (Employment Insurance Cards) within days of the company’s approval, and Service Canada assigned her a specific contact person.

The ongoing paperwork merely includes a basic Utilization Report that lists the hours employees would usually have worked, the actual hours worked, and the number of hours that were covered by the Work Share program.

There are some restrictions, Gauthier stresses. Critical management positions such as a director of operations would not be eligible, and participating employees need to agree to the strategy.

But this can be a welcome alternative to layoffs.

For more information about the terms and conditions of the Work Sharing program, and to download related forms, go to: http://www1.servicecanada.gc.ca/eng/epb/sid/cia/grants/ws/desc_ ws.shtml The Canadian Trucking Human Resources Council (CTHRC) is an incorporated not-for-profit organization that helps attract, train and retain workers for Canada’s trucking industry. For more information, visit www.cthrc.com.

AMTA www.amta.ca

PEI Trucking Sector Council www.peitsc.ca

Ontario Trucking Association www.ontruck.org

Trucking Human Resources Sector Council, Atlantic info@thrsc.com

S

p

a

c

e

inside the numbers

SKILLS AND KNOWLEDGE GAPS CAUSING FAILED CLASS 1/A TESTS Other 2%

Knowledge test 31.4%

DEMOGRAPHIC PROFILE OF CLASS 1/A TEST PARTICIPANTS On-road test 64.7%

Female Male

Under 25 years old

Close to a quarter of Class 1/A test participants have to take the licensing test more than once. Individuals who failed the test were asked in which areas of the test they felt they were insufficiently qualified. The majority (64.7%) mentioned they had not performed well in the on-road test. Close to a third indicated they were weak on the knowledge test (although they had to pass it to get this far.)

The most frequently mentioned skill areas in which participants felt they had insufficient knowledge or experience included pre-trip inspections (36%), shifting and transmission (30%) as well as backing (28%). Individuals who attended a training school, especially a nationally-accredited school, were less likely to have failed their test.

TRAINING SOURCES OF NEW ENTRANTS

6.6% 93.4%

16.7%

25-34 years old

27.3%

35-44 years old

32.2%

45-54 years old

19.1%

Over 55 years old

4.7%

Older Males continue to dominate truck driving positions with males making up more than 93% of the people taking their Class 1/A Test, according to research conducted for the Canadian Trucking Human Resources Council.

Younger participants under age 25 accounted for only 17% of the total, compared to the 56% who were older than 35. This would suggest that trucking remains a second career choice for many licence holders.

Private Training

62.7%

Public Training School

25.3% Family or Friend

On-The-Job 6.7% Trucking Association 2.7%

13.3%

Driving a $100,000 piece of road equipment is no easy task and motor carriers are rightly concerned about new entrants to the industry having the proper training. Research conducted on behalf of the Canadian Trucking Human Resources Council found that the majority of new entrants learned driving skills at either a private (62.7%) or public training school (25.3%). Yet still one fifth of new entrants are coming into the industry with just informal training, learned from family and friends or on the job. Also interesting is the fact that a large number of new entrants (63.5%) indicated that they required additional training in certain areas, such as regulations, backing, coupling and uncoupling, shifting and defensive driving.

Saskatchewan Trucking Association www.sasktrucking.com

British Columbia Trucking Association www.bctrucking.com

Manitoba Trucking Association www.trucking.mb.ca

Camo-route www.camo-route.com

Or Contact the Canadian Trucking Human Resources Council, info@cthrc.com or 613 244 4800 may/june 2009 9

TakingCareofBusiness

never too late to get started What to do to affect a turnaround of your transportation company

W

ith the downturn of the economy, I decided that 10 things might be helpful in assisting you in upgrading your transportation company. Here are some examples of things you can do.

1. Ask your customers what’s important to them Talk with your existing customers – don’t just assume. Pick up the phone or send an e-mail and ask, “What can we do better for you or your company?” In today’s environment, they may have changed priorities. Your customers will be delighted you phoned. How about doing a customer survey? Using Survey Monkey or Question Pro and posting the answers on your Web site says you are listening to your customers.

2. Be Strategic In this downturn, many businesses are thinly funded and thinly staffed. Consequently, businesses get into the habit of reacting.

Most of us spend too much time putting out fires instead of guiding our businesses efforts as they “happen to us.” Make every action to create the business you want, not the business that happens. Bring in your team and write down some strategic objections and visualize the strategy in action.

It will help your company get focused on its key objectives. Set objectives with your employees, not just your managers. Write down these objectives and tack them up to the bulletin board. Ask people if they think you’re all on track.

3. Differentiate your business from your competitors Even if you are in an age-old segment of the transportation industry, you can differentiate it. This exercise should be done by writing down the phrase “our company, a business known for________.” Trying to come up with a new definition that distinguishes your company for its uniqueness in 25 words or less will help you in your task.

Share this information with your managers

10

motortruck

and employees. Remind them what makes your company unique.

4. Partner – Where it makes sense “No man is an island.” That is especially true for all businesses. How can you work with suppliers, customers or complimentary companies to achieve your common objectives? If the partnership of efforts can not be articulated in a few bullet points, do not spend time on it.

5. Learn a new technology The sheer number of applications available for the transportation business, especially online applications, is now so great it feels impossible to keep up with them. Do not give up because you feel overwhelmed.

Learn one new thing yourself. If you have been holding back from learning how to design a brochure or learning how to upload video from your flip camera to YouTube, now is the time to learn. Pick just one at a time. Get good at whatever you picked. You will gain confidence that will help you tackle other technologies and software applications later on. Encourage your staff to do the same.

6. Start a newsletter Do whatever it takes to get a newsletter started. You can have multiple newsletters from different departments in your company sent to customers. Remember that e-mail is best used for communicating with existing customers and contacts. Use a simple e-mail marketing program like “Constant Contact”, “Vertical Response”, or Campaigner” to manage your subscriber database and compose professional looking e-mails. Just get started. Remember, “Out of sight, out of mind.”

7. Cement relationships with key customers It is far less expensive to get a new sale from an existing customer, than to go out prospecting afresh to close a new customer.

Mark Borkowski is president of Mercantile Mergers and Acquisitions Corporation.

Mercantile is a mid-market M&A advisory firm focused on the sale of privately-owned business.

Mark can be contacted at (416) 368-8466 ext. 232 or mark@mercantilema.com.

Make sure your relationships are strong.

Work on them. In a recession, customers are your life vest. Consider holding an annual customer conference.

8. Automate a process We are always running into issues when it comes to accounting and invoicing that take up more time than we like.

9. Spruce up your working environment A cluttered workspace leads to a cluttered mind. It will make all of your employees feel better about their environment and themselves.

10. Network, network, network Online networking has replaced over 75% of in-person networking. You can reach lots of people you have never met and start up a relationship. You would be surprised how effective Twitter, Facebook and LinkdIn use can create more Web site traffic What things are you going to do to improve your company this year? mt @ARTICLECATEGORY:3361;

How do you thrive despite hostile driving environments and brutal economic conditions? Get a smarter tire program. With premium, best-in-class retreads. Backed by legendary service. Bandag. The company that has been leading the precured retreading industry for over 50 years. ROLL SMART.

X FIND OUT HOW BANDAG COULD SAVE YOU 10% OR MORE ON TIRE COSTS. SEE BANDAG.COM/SAVE. ©2008 BANDAG — ALL RIGHTS RESERVED

EquipmentWatch Ugly SCR vs EGR war now playing out in US courts An ugly legal battle is unfolding in the US Circuit Court of Appeals for the District of Columbia, as Navistar challenges the EPA’s acceptance of selective catalytic reduction (SCR) as a feasible solution for meeting EPA2010 emissions standards.

In a recent ‘Statement of Issues’ court filing, Navistar pointed out that when the 2010 emissions rules were first developed in 2001, the “EPA decided that urea SCR technology would not be available to meet the 0.2 g NOx standard for the applicable model year.”

“The EPA made an express ‘infeasibility’ determination for SCR technology,” Navistar said in its filing. It went on to say the EPA ruled out SCR because of: a lack of infrastructure to deliver urea at the pump; a lack of standardized method of delivery of urea; a lack of adequate safeguards in place to ensure urea is used throughout the life of the vehicles; a lack of safeguards to ensure drivers replenish urea; concerns for public safety; and other concerns.

So when the EPA warmed up to SCR and formally accepted it as a viable EPA2010 solution, Navistar charged that the “dramatic change” imposes “entirely new regulatory requirements.”

Naturally, all other heavy-duty engine manufacturers which have chosen to use SCR to meet 2010 emissions requirements are backing the EPA. Volvo and others have filed an ‘amici curiae’ petition to participate as “friends of the court.” This move was protested by Navistar, prompting Volvo to issue a statement to the media yesterday after sections of its Web site were reportedly used

by Navistar to support its case.

“Navistar’s most recent filing demonstrates that the other engine manufacturers must have the ability to participate in this case as

12

motortruck

friends of the court. This is necessary to refute misinformation Navistar has presented to the court,” said Jim McNamara, spokesman for Volvo Trucks North America.

“This includes Navistar’s desperate attempt to mislead the court by taking information from Volvo Trucks North America’s Web site out of context to reach a wildly inaccurate and misguided conclusion.

The whole point of using exhaust aftertreatment is to meet the 0.2 g NOx requirement, while delivering to the customer excellent fuel economy, performance and reliability. And better fuel economy means a reduced CO2 footprint, courtesy of SCR. Massive EGR can’t deliver these benefits.

“Navistar, of course, admits its technology is unable to reach the 0.2 g NOx limit. There is absolutely no benefit to society, customers or the environment in the approach Navistar has deliberately chosen to confuse this very important issue.”

Navistar has developed an in-cylinder solution for EPA2010 which does not require exhaust aftertreatment. It plans to roll out engines in January, 2010 that will initially exceed the 0.2 g NOx limit by cashing in emissions credits the company has earned by reducing emissions beyond requirements in previous years.

Navistar will then continue to tweak its solution to get it down to the 0.2 g limit by the time its credits run out, expected to happen sometime in 2012.

Who said Ontario manufacturing is dead?

Mascot Truck Parts bucks the trend with opening of new reman’ plant

By James Menzies Mascot Truck Parts recently merged its three Ontario plants into one – but don’t mistake the consolidation as downsizing.

The parts remanufacturer, which was acquired by ArvinMeritor in December 2007, has moved into a new state-of-the-art, 100,000 sq.-ft. headquarters and remanufacturing plant. Previously, the company had three Mississauga locations and considerable time was spent shuttling people and parts between them.

Glenn Hanthorn, president of Mascot Truck Parts said the company was putting “lots of miles” on cars running between the three plants.

“It wasn’t very efficient,” he said, during the grand opening of the new location on Admiral Drive. “The consolidation allows for quicker decision-making and reduced cycle-times as well as consistent processes for all products.”

The move has increased production capacity for axle carriers and transmissions by about 20%, the company said.

In the midst of a severe recession and everyday talk about the demise of Ontario’s manufacturing sector, Mascot Truck Parts stands out as a refreshing success story. The new plant is bright, vibrant and most importantly – busy. When the plant was opened

What’sOn

In May and June, TMTV takes a tour of Mascot Truck Parts’ state-ofthe-art remanufacturing facility in Mississauga and talks to early adopters of hybrid commercial vehicles at the City of Hamilton’s Green Fleet Expo.

Plus: exclusive results from the Energotest 2008 tests and coming soon, highlights from this summer’s truck show circuit.

: blogs Come and debate the issues at our Blogs section on trucknews.com

YO U SA I D I T. . .

“The government is making things harder for themselves by trying to implement a new form of an existing rule. A medical and driver skill requirement has been in place for years and to me is quite satisfactory. The only thing that should change is possibly the frequency at which these qualifications must be met as the driver ages. Again I feel it is a case of not enforcing existing rules.

I can appreciate the goal the government is trying to achieve, I just can’t conceive their methods of achieving it.”

– David Robson, responding to James Menzies’ blog, “Senior Drivers: The Minister Responds.”

Motortruck has published a comprehensive guide for transportation, logistics and purchasing professionals, called “Inside the Numbers” – a snapshot of expectations for shipment volumes, rates, surcharges and capacity concerns based on detailed research of shippers operating in several industries. To find out how to order this valuable information, visit: trucknews.com/inside.

web news

Trucknews.com is pleased to welcome yet another blogger to its ranks: Gagan Goraya. With more than 13 years of experience in information technology and management, Goraya’s expertise spans a variety of topics, including software development, system architecture and design, E-commerce, data mining, and business process improvement.

Look for his blog posts in the coming weeks and months!

Dan Goodwill of Dan Goodwill and Associates looks into why national truckload carriers are making moves in regional haul markets.

Contributing editor James Menzies reprints a letter from Ontario Transportation Minister Jim Bradley, responding to Transportation Media’s coverage regarding testing for commercial drivers aged 65 and over.

HeadlineNews Get the latest information on trends, new products, mergers and legislation in our Headline News section at: trucknews.com. may/june 2009

13

EquipmentWatch to the media Apr. 29, it was humming with activity. Everything from differentials to transmissions and steering gears was being remanufactured at the plant and Hanthorn said so far, no layoffs have been necessary at Mascot.

Mascot’s beginnings can be traced back to the 1930s when it served primarily as an auto wrecker. In the 1960s is began specializing in truck parts and it then evolved into an all-makes remanufacturer. In 1989, it adopted a wholesale strategy that remains in place today, selling to OEMs, independent shops and dealerships.

Since Mascot didn’t compete with its customers by selling direct to the end-user, the company’s strategy allowed it to focus on helping its own customers grow their own businesses, Hanthorn explained. The lone exception to the rule is a “repair and return” service offered to owner/operators.

O/Os can bring in a faulty transmission and have it back within a day, Hanthorn explained. “That’s a huge part of our business,” he said. The typical turnaround time for a transmission is just five to six hours,

MERCANTILE MERGERS & ACQUISITIONS Mercantile Mergers & Acquisitions Corp­ oration are a mid-market M&A brokerage firm. The company specializes in the purchase and sale of mid-market companies, including the Transportation industry. In ad­­dition, the company advises on business valuations, mez­ zanine, and equity financing, management buyouts, restructuring of debt, family busi­ ness re-capitalization and workouts.

Contact (in confidence): Mark Borkowski, President at: (416) 368-8466 ext. 232 or mark@mercantilema.com Mercantile Mergers & Acquisitions Corporation 14

motortruck

according to the company.

In addition to its Mississauga plant, the company operates remanufacturing facilities in Edmonton, Moncton and Montreal.

The company’s success caught the attention of ArvinMeritor, which saw in Mascot an opportunity to gain a foothold in segments of the aftermarket where it didn’t already have a presence.

Terry Livingston, general manager – North America, for ArvinMeritor’s Commercial Vehicle Aftermarket, was onhand at the grand opening celebrations.

He explained that the all-makes nature of Mascot was appealing.

“We don’t focus only on our own product,” he said. “We focus on other peoples’ products as well, which extends us beyond our own product lines. Our market increased and it let us into revenue cycles that, frankly, we would have been outside of.”

ArvinMeritor has been impressed with the professionalism of the company, which Livingston said will be leveraged across its global operations.

“We want to take the spirit, the knowledge and the expertise we have here and transplant that out to other areas,” said Livingston. “We need the wind in the sails that these guys provide us.”

That’s high praise for a company that remains modest, yet proud of its humble beginnings. Hanthorn admitted he never thought he’d see the day that Mascot was entertaining the media. In an interview that aired in an episode of our WebTV show Transportation Matters, Hanthorn said the ArvinMeritor acquisition was “the best thing that’s ever happened to us.”

The monthly output of Mascot’s new plant is truly impressive: 350-450 transmissions; 640-650 differentials; and 525 steering gears. The company has about 11,000 pieces of equipment available through its network of 30 North American distribution points. The new Mascot headquarters also houses a customer support centre, which handles 500-700 calls per day.

ArvinMeritor expands its remanufactured products ArvinMeritor has announced it has expanded its remanufactured products line to include Allison automatic transmissions as well as all-makes power steering gears and pumps.

The remanufactured transmissions will be sold under ArvinMeritor’s Mascot product brand name and will include the following models: AT, MT, HT, 1000, 2000, 2400, 3000 and 4000 series automatics.

They are remanufactured to OEM engineering specifications, the company says.

The remanufactured steering gears and pumps will include more than 600 parts numbers from brands such as Vickers, Hoburn, Luk, Sheppard, Eaton, Saginaw TRW and ZF, the company announced.

ArvinMeritor said expanding its remanufactured product offerings will provide customers with excellent performance, service life and product support “at a fraction of the cost of new components.”

“Remanufacturing also provides the environmental benefit of extending the productive life of a part that might otherwise be scrapped,” said Doug Wolma, general manager of remanufacturing, Commercial Vehicle Aftermarket for ArvinMeritor.

Pro Force Marketing to represent Fontaine brands Pro Force Marketing is now representing Fontaine International and Fontaine Parts Connection across Canada, the companies announced at the Atlantic Truck Show.

Fontaine International is a fifth wheel manufacturer and Fontaine Parts Connection is its aftermarket subsidiary.

Pro Force is a specialized sales and marketing agency focusing on the Canadian trucking industry. It’s based in Winnipeg and has field reps placed throughout the country, the company says.

The companies say Pro Force will act as an extension of Fontaine, offering a fullrange of Fontaine No-Slack fifth wheels

EquipmentWatch and genuine replacement parts along with service, support and training.

“We couldn’t ask for a better partner as we continue to expand our presence in Canada,” announced Toby Harris, vicepresident of sales and marketing with Fontaine Parts Connection.

“It is an honour to represent the Fontaine International and Fontaine Parts Connection lines,” added Chuck Fritsch, general sales manager for Pro Force. “Fontaine has a reputation for quality products and customer support. By combining our resources, we’re confident that Pro Force will help Fontaine grow its business in Canada.”

For more info on Fontaine, visit www. fifthwheel.com or call 800-874-9780. For more on Pro Force, visit www.proforcecanada.ca or call 204-837-9800.

Class 8 product line and features a large panel for installation of body controls and gauges. The T470 comes standard with

Kenworth’s Driver Information Center and it’s available with an extended day cab option.

Kenworth introduces T470 truck for vocational, municipal applications Kenworth has introduced a new mediumduty truck aimed at vocational and municipal applications.

The T470 is available for order immediately, with production set to begin in July, Kenworth announced.

“Kenworth is expanding its product line while other truck manufacturers are exiting the market,” said Gary Moore, Kenworth assistant general manager for marketing and sales. “The T470 offers Kenworth durability and performance that is serviced by our… dealer organization for snowplow, dump, mixer, winch, refuse, and other heavy frontaxle vocational and municipal applications.”

The truck is powered by a 9-litre Cummins ISL engine with 345 hp and 1,150 lb.-ft. of torque, the company says. It’s available with a range of manual and auto transmissions, 12,000-22,000-lb. front axles and 21,000-26,000-lb. single rear axles and 40,000-46,000-lb. rated tandem rear axles.

The front is configured for easy installation of a front engine PTO, Kenworth says, and halogen projector lamps light the way.

The interior borrows from Kenworth’s may/june 2009

15

GreentoGold

the time is now

Volvo issues call to action on sustainable transportation B y

C

L o u

oncerns about the economy this year may have supplanted concern about the environment in the minds of many but Volvo Group North America believes the time is right for rethinking our approach to transport efficiency and truck productivity.

A large part of the reason that environmental concerns seem that have slipped in priority since the global economic meltdown in the final quarter of 2008 is the perceived cost involved with thinking green.

Companies fighting just to make payroll from week to week find it hard to justify expenditures they believe to have a much longer-term impact.

But Leif Johansson, president of AB Volvo and CEO of the Volvo Group, argued during a seminar on climate change policy hosted by Volvo in Boston recently, that when we think of environmental sustainability initiatives we often get it wrong, distorting our judgement calls in the process.

“We think it’s going to cost too much. Sustainability to me is reducing costs and having a more sustainable business,” Johansson told the large gathering of Volvo dealers and customers attending the event. And he wondered out loud if the industry is not making a mistake in promoting the new hybrid vehicles as “green” alternatives rather than as simply a more efficient way to operate.

In addition to Johansson, the seminar included presentations on sustainable transportation from Bill Graves, president and CEO of the American Trucking Associations, John Heywood, a professor of mechanical engineering and director of the Sloan Automotive Laboratory at the Massachusetts Institute of Technology, and Scott Kress, senior vice president, sales and marketing, for Volvo Trucks North America.

Buying into the need to move towards more sustainable transportation practices is one thing, actually figuring out what that entails is SPONSORED BY:

S m y r l i s

quite another, however, Heywood pointed out during the seminar.

“And unfortunately the challenge is harder than we think,” Heywood added.

Adding to the challenge for the trucking industry will be some pressing trends. It is currently estimated that the total amount of freight in the US will increase 26% by 2020 compared to 2006 (yes, the recession will eventually come to an end.). Under the current structure, that would require a similar increase in truck population to keep pace.

The American Trucking Associations forecasts a 40% increase in the Class 8 truck population by 2018 compared to the 2000 population. And considering US surface transportation still largely functions on a transportation infrastructure built in the 1950s, that will only add to the current gridlock.

“We can’t base what we do today on what we did or thought yesterday. Things have changed and transportation has not moved as fast as everything else. We have a productivity gap. Infrastructure and equipment are not growing as fast as freight tonnage,” said Kress.

In what Volvo billed as a call to action for the US trucking industry and public policymakers, Kress said new thinking and new investments are needed so truck transportation can be efficient and cost-effective now and in the future.

Kress noted that statutory and regulatory limits on truck capacities haven’t changed in years. Population and economic growth lead to increased demand for freight transportation, yet infrastructure investment has not kept pace and hundreds of significant freight bottlenecks can be found across the US, which cost the overall economy tens of billions of dollars each year.

Kress challenged stakeholders to investigate the answers to several questions.

“Do different limits on trailer weight, size and permissible com-

GreentoGold binations offer improved efficiency while reducing road congestion? What are the advantages to using longer combination vehicles (LCVs) and under what circumstances are the benefits the greatest?”

He noted that more productive trucks would consume (1520%) less fuel, contributing to less demand for foreign oil while also reducing emissions, especially greenhouse gases such as CO2. In fact, according to Kress, they have a better safety record than the corresponding tractor/single trailer combination predominant in today’s freight hauling.

In recent years Volvo has also sought to examine the viability of moving away from diesel power towards alternative fuels that can meet the power needs of today’s heavy duty engines without contributing to the build up of greenhouse gases in the atmosphere the way that diesel does. One of the major advantages of the diesel engine is that it does not have to use conventional diesel fuel or other fossil-based fuels. Through the introduction of some sophisticated technology and minor modifications the diesel engine we’ve come to rely on can be adapted to run on a wide range of renewable fuels that emit no excess carbon dioxide in powering a vehicle.

Volvo is currently testing 7 different alternative fuel sources – biodiesel, synthetic diesel, dimethylether(DME), methanol/ethanol, biogas, biogas-biodiesel and hydrogen-biogas. It is comparing and contrasting the benefits and drawbacks of these seven alternative fuels in a variety of critical areas such as climate impact, energy efficiency, land use efficiency, fuel potential, vehicle adaptation, fuel cost and fuel infrastructure.

It has performed a great deal of ground breaking work, yet as Johansson acknowledged, the headway being made towards the production and distribution of renewable fuels on a major scale has so far proved disappointing.

There seems to be “lots of very good talk, very little investment,” he said.

Investment is also a major issue when it comes to updating the road infrastructure. But where will the money come from? Will the Obama administration make an honest attempt to fix the nation’s infrastructure problems? The best ATA’s Graves could do was “a maybe”.

“The problem is the Highway Trust Fund is broke and investment in infrastructure is not going to happen unless we pay more,” Graves said adding a fuel tax increase could support infrastructure investment but there appears to be no support for such among US politicians – Republican or Democrat.

“We get told not only ’no’ but ’hell no’”, Graves said.

Volvo’s goals in launching its more productive trucks initiative was to facilitate the dialogue around the use of more productive trucks and to change public policy on truck combinations. However Johansson pointed out that programs aimed at meaningfully trans-

forming the transportation system could take 10 to 20 years to reach fruition. ”We need political direction that keeps that in mind,” he said.

Johansson said when it comes to driving change, government can use either taxation or the dynamic of the market, through cap and trade programs. Although he is admittedly ”very positive” on the theory of cap and trade programs, pointing out they had been used to good effect in combating acid rain and CFCs, he said he doesn’t favor one over the other.

(A cap and trade system is a market-driven mechanism that sets ceilings for carbon output and lets companies that come in under the limit sell credits to those that don’t, allowing them to keep on polluting – for a price. The long-term impact, however, is to reduce overall carbon and create an economic advantage for those companies willing to be greener than their competitors. That in turn drives investment and research dollars into renewable energy and efficiency.) ”Theoretically cap and trade, as is used in Europe, is most efficient. But it’s difficult for politicians to see how individual industries interact under the cap and trade bubble. That has meant it has been a very cautious enterprise. There is very little impact at the beginning and in a downturn the value of credits would go down.”

Johansson also challenged the industry to stop thinking of regulation and environmental controls as negative.

“It’s actually the other way around,” he reinforced. ”Companies cannot be in contradiction to what society thinks is the right way to go.”

When challenged by one reporter that some people, particularly in the US, remain skeptical that global warming is a reality (or at least a man-made reality) Johansson said it’s important for science to keep digging for answers but added that the ”laws of natural science are not a democratic issue. Science does not work that way. Most people used to think that the world was flat.”

The long timelines involved was also central to remarks made by Heywood from the Sloan Automotive Lab. He said the path forward must include finding ways to improve, conserve and transform energy use, and it’s critical that all three approaches be employed.

He said that in order to stave off the ruinous effects of global warming, current estimates are that by 2020 we need to be capable of levelling off our fuel consumption; by 2035 we need to have in place new technologies and fuels on a scale that can make a difference; and by 2050 we need to be at a point where we are making significant reductions in energy use.

“If we don’t start today with a sense of urgency we are going to run out of time,” Heywood cautioned before adding that ”The opportunities are real. We shouldn’t get discouraged but we are going to have to work very hard.” mt may/june 2009

17

GreentoGold LCVs: ‘The single most cost-efficient mode of road transportation’ Proper spec’ing and training are keys to successfully operating LCVs B y

I

nterest in Ontario’s Long Combination Vehicle (LCV) pilot project ran high at this year’s Canadian Fleet Maintenance Seminars (CFMS).

And according to Ron Madill, weights and dimensions coordinator for the Ontario Ministry of Transportation, there are already more fleets expressing an interest in running LCVs than the pilot will allow. He told CFMS delegates that the province is hoping to issue the first of 100 permits to carriers beginning in July. The permits will be non-transferrable between carriers, but they won’t be vehicle-specific. A carrier will be required to keep the original permits in the LCV’s tractor whenever it’s on the road, Madill said. The permit will be accompanied by three supporting documents: a list of LCV-approved routes (mostly 400-series highways); a list of safe-havens where LCVs can be safely parked; and approved origin and drop-off locations, which will be specific to the carrier.

No detours will be allowed, even in the event of a road closure. If the 401 is shut down due to an accident and vehicles are 18

motortruck

J a m e s

M e n z i e s

being rerouted onto secondary roads, LCVs will be required to remain parked on the highway until it reopens, Madill explained.

While Ontario won’t allow LCVs to operate during the three winter months, there’s still the risk of encountering poor weather and dangerous road conditions. Madill said carriers must be careful not to dispatch LCVs if there’s bad weather in the forecast.

If a truck does come across unexpected bad weather such as high, gusting winds, the driver should “cautiously proceed to the next emergency area and hold there until conditions improve,” said Madill.

Drivers will undergo rigorous training before they’re turned loose with two 53-footers in tow, according to Madill. The training course is still being developed by the Canadian Trucking Alliance (CTA), and will include: pre-qualification testing on subjects such as pre-trip inspections and Hours-ofService; a full-day in-class training session; yard training on assembly and disassembly; and at least 1,000 kilometres of on-road training with a qualified instructor.

To qualify, drivers will need five years’ ex-

perience operating tractor-trailers and they’ll have to maintain a “relatively clean” driver’s abstract and undergo annual recertification.

They’ll also have to be recertified if they switch carriers, according to Madill.

Two types of LCVs are approved for use in Ontario: A-Trains and B-Trains. A-Trains use a tandem axle converter dolly to connect the two trailers while B-Trains use a tridem lead trailer with a fifth wheel extension. The B-Trains require slightly more room to manoeuvre, since they only have one articulation point whereas A-Trains have two. In all cases, the heavier trailer must be the lead trailer.

As for the tractor, it will require: an engine with at least 425 horses; front wheels capable of a 40-degree wheel cut; an air compressor with 16.5 cubic ft./minute capacity; and an air dryer capable of keeping the entire air system free of moisture. The trucks will be limited to 90 km/h – and non-compliance with that or any other condition could be costly. Fines for breaking even the most minor permit requirements will range from $200 to $20,000, said Madill.

“We will be looking to suspend or re-

advertisement

HOW DO YOU SPELL TIRES FOR YOUR FLEET? H-A-N-K-O-O-K

In an age of unlimited competition and deepening recession, we can agree that having the right parts at the right price is the first step in staying competitive. On that note, we are introducing our brand to you because of our strong belief that we can make your fleet more competitive.

Here is who we are and how we can help your fleet.

and fleets in North America. Secondly, the U.S. Environmental Protection Agency recognized the reduced rolling resistance of AL07+ steer tire, Z35a drive tire and TL01 trailer tire, and certified the tires with EPA SmartWay. The certified Hankook tires provide improved fuel economy and reduced costs to your fleet.

Fact : Hankook Tire is a global company, not an overseas company.

Hankook Tire is the 7th largest tire manufacturer in the world with one of the fastest growth rates in the industry*.

With great success and satisfied customers all around the world, the company grew and transformed itself over the years. Hankook Tire now develops commercial tires in 5 R&D Centres around the world, including the Akron, Ohio technical centre where engineers develop tires that are suitable for the road conditions of your next trip.

Fact : Hankook Tires provide tremendous value to fleets.

Hankook tires are very cost effective in comparison with similar quality products and have been well-recognized for their value. Call us today to find out how much you can save with Hankook products and how they can deliver better value to your fleet. The news you hear about Hankook Truck tires will be some of the best news for your fleet in 2009.

* Modern Tire Dealer, 2008

Fact : Hankook Tires are recognized for technical innovation.

The dedication to engineering quality products in recent years caught the attention of prestigious organizations.

First, Hankook Tire supplies original equipment tires to International Trucks and I.C. School Buses on drive and steer positions. The tires meet and exceed the requirements of the respected company and continue to satisfy drivers

Fact : Hankook medium truck tires are available – at your dealers AND directly from us.

In addition to our national distribution network, Hankook Tire Canada Corp. now offers a competitive fleet program to regional fleets. If you have an inquiry about our product, service or program, please give us a call at 1-800-843-7709.

The commercial sales manager will be more than delighted to help you.

So, how do you spell tires for your fleet?

H-A-N-K-O-O-K

Tame the Road

AL07+

AH12

DL01

Hankook Tire Canada Corp. 30 Resolution Drive, Brampton, ON L6W 0A3

Tel : 1-800-843-7709

GreentoGold braking system that is 100% efvoke permits if you’re taking fective when you are pulling an short-cuts,” Madill warned. empty converter behind a fullyParticipating carriers will loaded A-box,” said McCubbing. be required to provide docu“There always tends to be a slight mentation of compliance with amount of lock-up and the tire all the permit conditions upon wear that goes along with any MTO’s request. lock-up situation.”

More details on the equipment The air system also takes a requirements for LCVs are availbeating in LCV applications, able at www.mto.gov.on.ca. thanks to the exposure of hoses It may seem like an onerand valves to road grime and ous compliance burden, but the spray. McCubbing said Bison benefits are worth the effort equips drivers with a spray lube, according to Ian McCubbing, which has proven to extend air Edmonton terminal manager valve life. with Bison Transport, which has NOT ON THE SAME PAGE: LCVs have their benefits but also Proper driver training is esbeen running LCVs for nearly six their challenges. Even in the Prairies, where they have been legal sential to extending LCV equipyears out west and racks up 1.3 for some time, there is still a lack of harmonization among the ment life, McCubbing explained. million miles per month with its provinces. Making a long weekend delivery, for example, is no Drivers should be given ample turnpike doubles. easy feat since Alberta, Saskatchewan and Manitoba all have time to complete pre-trip inspecMcCubbing estimated Bison different long weekend restrictions. tions and must look for potential reduces its greenhouse gas emissions by 32% by using LCVs when compared had many electrical problems on its problems such as bent pintle eyes at connection points. During hook-up, inattentive drivto two traditional five-axle configurations. LCV equipment.

“We have a system with as many as three ers can easily break pintle eyes, pinch air lines Bison averages 5.4 mpg on its turnpike double fleet compared to 6.8 mpg over the light cords and the corresponding connec- and bend dolly legs, warned McCubbing. rest of its long-haul fleet. Citing a study by tions,” explained McCubbing. The wiring on Something as simple as forgetting to release Woodrooffe and Associates, McCubbing said the rear trailer and convertor dolly is con- the dolly brakes before backing up a few removing LCVs from dedicated LCV routes stantly exposed to road grime and spray, lead- inches can cause considerable damage to the in Alberta would result in an 80% increase in ing to electrical problems. (In Ontario, this dolly assembly.

Despite the burdensome restrictions five-axle truck traffic. Overall, using LCVs shouldn’t be as worrisome since LCVs aren’t and inevitability of equipment damage, provides about a 40% cost savings for Bison, permitted to operate in the winter).

Most trailer damage occurs in yards, where McCubbing said, “LCVs are the single most McCubbing explained. cost-efficient mode of road transportation.

However, he admitted there are chal- space is limited, according to McCubbing.

“Drivers without experience are usually Every carrier should be interested in making lenges in running LCVs. “The same operating conditions that make trying to turn too tight or they have not taken this pilot a success as it will add benefit and turnpikes safe can also cause some of the big- the time to ensure all air lines and electrical profit to a well-run operation – well-run being connections have been properly secured,” he the key.” gest challenges,” he noted.

In closing, he urged participating carriers For one, there’s a lack of harmonization said. Bison has also struggled with tire life on among neighbouring provinces. Making its converter dollies, since regulations require to focus on preventive maintenance and to a long weekend delivery on the Prairies is the converter to have operational brakes even be diligent in training drivers and mechanics. no easy feat, for instance, since Alberta, when there isn’t a second trailer attached. “Pre-trips, post-trips and routine inspections Saskatchewan and Manitoba all have differ- This causes the converter wheels to lock up, will avoid disaster,” he said. “Spec’ for the jurisdiction you will operate in and pay attenshortening tire life by as much as 20%. ent long weekend restrictions.

“We haven’t been able to find an anti-lock tion to the small things.”

On the maintenance side, Bison has mt 20

motortruck

good‌

A PAT ON THE BACK NEVER FELT SO Every year the Canadian Business Press recognizes publications that excel in writing and graphic design. The Transportation Media Group is proud to be part of an elite group.

Top five Canadian Business Website for the fourth straight year: trucknews.com Top five finish in the Best Resource/Infrastructure Article: James Menzies, Truck West Top five Canadian Business Website: Canadian Transportation & Logistics: ctl.ca Gold Award in the Best Resource/Infrastructure Article: Adam Ledlow, Canadian Transportation & Logistics Silver Award in the Best Cover Category: Mary Peligra, Adam Ledlow, Lou Smyrlis, Motortruck Fleet Executive

Canadian Transportation & Logistics and Motortruck Fleet Executive were the only two transportation publications to receive gold or silver honours during the 2009 awards ceremony.

Transportation Media Group

Fleet Executive

WEST

in a location and needs to get from, say, 123 Main, Connecticut to In late 2006 or early 2007 PSDC will introduce street routing 456 Renè Lèvesque, Montreal, the dispatcher simply keys in the with the release of ProMiles XF V.13.“We have always had truck two addresses.The system returns the narrative driving directions, routing at higher levels and routing to major streets in Canada and miles between the two points, estimated driving time and the digthe US. But when you get down to side streets, turn by turn, this ital map,” Ashburn explains. “The goal is to provide, not only the is something we haven’t done yet,” Bowie says.“Currently you can estimated miles and driving times from A-B, a common use for paylook up a street address, but when you get to the corner of Yonge ing a driver or setting a rate, but also to deliver safe, accurate, easyand Lawrence, say, V.12 does not give you routing directions to to-follow commercial routing instructions.”

Wanless, two blocks away but the street is visible in our map.”

Information of interest to commercial drivers is included; e.g., A truck’s current location will be displayed on the map as an differently traditional stationary sources of along, “Ifthe they warns CTA Cap-and-trade will hurt low-traffic roads avoiding dangerous intersections, and lowthan weighticon: as the truck moves icondon’t,” will move along too;CEO, the David limit bridges.

EastStreet tends to avoid oddly-named streets, favour map refresh rate is user-selected. carbon emissions as part of any carbon reducBradley, “at the very least Canadian trucks trucking industry: ATA left turns and provide routes that are easy to follow.

It also has data Like V.12, V.13 will be able to simultaneously project several tion regulatory program. could be barred from operating into and out The American Trucking Associations (ATA) for 53-foot trailers, height and weight restrictions and more than routes; e.g., optimised for of truck size, number of stops, for material California which accounts $37 billion in has told a Congressional committee that cap16,000 toll roads.

Its full-color clearly show like tobeing hauled and the shortest route.

V.13 willCanada, also answer the delaytwo-way trade with and further and-trade emissions programs will bemaps damaging CTAlandmarks urges feds encourage schools, hospitals, railroads and bodies of water. obligatory truck routing questions that keep truckers out of trouing significant GHG improvement in Canada.” to the trucking industry and consumers. use of green technologies In November 2005 the ProMiles Software Development ble.“We want to get the truck restrictions, time-of-day restrictions, Specifically, California’s regulation Tommy Hodges, ATA first vice-chairman, Truckingtruck Alliance (CTA) is eyeCorporation (PSDC) released ProMiles XF The V.12Canadian of its heavyroutes through cities, one way streets, no right turn, no left comes into effect in 2010 and will phase in requiresaid truck a cap-and-trade scheme included in the ing California’s stringent emissions rules for mileage and routing software which, among other updated turn, etc.,” Bowie says. for existing tractors and on trailers with American Clean Energy and Security Act of heavy-duty trucks and suggesting Canada folfeatures, included updates to zip and postal codes, the road dataAlthough ProMiles XFments V.12 cannot currently be used a model years up to 2010.

Afterwards, there 2009base, willroad increase fuel prices and jeopardize low suit or risk having its trucks banned from restrictions, HAZMAT restrictions, toll road fees, and palm pilot, users can e-mail trips; e.g., pictures of a map, text, state the interface to ProMiles dispatch partners such as Maddocks, or province breakout, to other computers, including palm will be further requirements forpilots. tractors built the economic viability of trucking companies. the Golden State.

Tailwind, and Axon.V.12 and the Owner/Operator Thethe company’s first venture into street routing will inafter 2011.

“Fleets areFreightLogix, extremely sensitive to rapidly The Alliance has told feds that version TruckMiles and operating mapping program alsoweights boastedand dimensions clude major Canadian cities;and PSDC willofadd more Tractors trailers model yearin2010 and shifting operating costs routing given thin Canada’s laws should and US MT GPS-compatibility. future builds. gas-re- before will require retrofits with SmartWaymargins,” said Hodges. “These margins con- be revisited to allow for greenhouse @ARTICLECATEGORY:865; Although ProMiles and TruckMiles reside on the users com@COMPANYINARTICLE:024637996; 024644511; 024664030; tinue to be chipped away, given the numerous ducing technologies. Referring to California’s approved technologies such as low rolling reputer; i.e., the databases are frozen between updates, there is an is an award- components. sistanceMcCormick tires and aerodynamic and unprecedented costs being imposed upon greenhouse gas reduction regulations as “rev- Carroll exception for fuel pricing, explains ProMiles Canada president winning writerand whotrailers, has been covering New tractors model year 2011 and the industry to reduce emissions from trucks.” olutionary,” the CTA said Canada should Mark Bowie. “When you build a route we consider all the fuel transportation industry issues and newer, will have to be SmartWay-certified to The ATA contends that mobile sources, react by working towards embracing the prices at stops along that route, your MPG, fuel capacity and starttechnologies for more than a decade. suching as fuel commercial trucks, should be treated CTA’s enviroTruck concept. operate in California. mt level in your tanks, and suggest the best places to buy fuel.

He is based in Quebec.

Daily price updates via the Internet keep fuel prices current.”

IN BRIEF...

GreentoGold

The Shippers’ Magazine www.ctl.ca Distributed to over 18,000 Shippers across Canada.

22

motortruck

SEPTEMBER/OCTOBER 2006

19

GreentoGold

POINTCOUNTERPOINT Ontario is restricting participation in its LCV pilot project to carriers belonging to the Ontario Trucking Association and the Private Motor Truck Council, the two associations which championed the initiative. Recently Joanne Ritchie, head of OBAC, wrote a column in our sister publication Truck News criticizing the decision as unfair to carriers who don’t belong to these associations.

We reproduce her column here along with the reaction from OTA chair Julie Tanguay.

S

Membership pays

No apologies necessary

Why Ontario’s LCV program should have been made open to any carrier with the safety rating to back up their “commitment to safety”

Of course the carriers from the associations who invested their time, money and experience in making LCVs possible in Ontario, should be the ones to participate in the pilot

By Joanne Ritchie, executive director, Owner-Operators Business Association of Canada

By Julie Tanguay, president/CEO L.E. Walker Transport Ltd Chair Ontario Trucking Association

o, Long Combination Vehicles (LCVs) are finally coming to Ontario, and with them comes a new twist on the old economic regulation theme.

In days gone by, the Public Commercial Vehicle Act (PCV) kept up-and-coming carriers from encroaching on lanes dominated by established carriers. Now we’ve got Ontario’s new LCV pilot project. The Ministry of Transportation (MTO) unveiled a program that could quite possibly be advantageous to any number of carriers (and shippers) in the province – large or small – but only a select few will get the chance to compete.

MTO bills the pilot program as a private sector initiative led by the Ontario Trucking Association (OTA) and the Private Motor Truck Council of Canada (PMTC), and if you don’t belong to either organization, you won’t be pulling LCVs any time soon.

MTO will grant up to 100 LCV permits to as many as 50 carriers who have demonstrated proven commitments to safety, have at least five years trucking experience, carry at least $5 million liability insurance, and have a safety rating of ‘Satisfactory’

I

t is unfortunate Joanne Ritchie uses her column not to inform or participate in constructive dialogue on LCVs and other issues, but to take shots at other industry groups for getting things done, most notably the OTA. It all smacks of so much sour grapes that normally I would not bother to respond, but I think your readers deserve better.

Let me begin first by saying that I am the owner of a relatively small, family trucking business. Ritchie’s continued assertion that OTA is a “club” exclusively of large carriers is pure bunk. Second, it is worth reminding people that LCVs are not for everyone. There are clearly many situations and many types of freight where they will not be able to be used. But, where they can, the potential for improved productivity is significant. OTA has always subscribed to the view that the industry should not stand in the way of productivity enhancement. There is a healthy dose of self-preservation behind this thinking. Ontario, more than ever, needs to retain and attract direct investment (and that means customers for truckers).

By contributing to a more productive supply chain, LCVs can play may/june 2009

23

GreentoGold Joanne Ritchie Continued

or better – which could prove interesting. A couple of the carriers one might assume to be shoe-ins for the program currently have only ‘Conditional’ ratings, and many others are rated ‘Satisfactory-Unaudited.’

MTO claims that the initial 10 participants in the pilot program will have at least one previous year’s experience operating LCVs. I can’t imagine where we’ll come up with 10 Ontario-based carriers with a year of LCV experience, but I guess OTA, PMTC, and MTO know something the rest of us don’t. Subsequent entrants will be chosen by a lottery, with each winner granted only two operating permits. That, MTO says, will maximize participation and prevent any carrier from gaining unfair competitive advantage.

How ironic that MTO is worried about carriers gaining a competitive advantage in the market, when the pilot project, by its very nature, limits participation to just a small portion of the province’s carrier population. I can think of a number of small “non-member” carriers – and owner/operators even – who might do well pulling LCVs. There could be a real niche market opportunity, for example, for a small operator to run a “tractor service” pulling doubles from drop yard to drop yard for other small carriers. Though it’s a viable business model in other jurisdictions, Ontario-based carriers who don’t belong to the right club will never get that chance.

There’s another twist here that further limits the pool of potential applicants to those with very deep pockets. Prospective LCV haulers will have to pay for engineering studies of public thoroughfares leading to and from terminals and drop yards to the primary highway system.

The way it was described to me, if Carrier X completes a study, it remains the property of that carrier. In the name of “fairness,” if Carrier Y then comes along and applies to run an LCV over the same route, it will have to satisfy MTO’s requirements by paying for another study of that same route.

That’s just plain silly, but it gets better.

If any work is required realigning an intersection to allow for the wider turning radii of these 40-metre long (131 ft.) combinations, the carriers will have to pay for that too. So, once a consortium of carriers has bought itself an intersection, what happens to subsequent entrants who want to use that access way? Tolls? Rent?

Pro-rated payments on the work – in perpetuity?

Another possibility, I’m told, is dedicated drop-and-hook facilities, located near enough to the primary highways that roadway alterations would not be necessary. From what we have been able to ascertain, MTO won’t be paying for anything here, so the door is obviously open for carriers who own the facilities to charge rent or fees for drop-and-hook operations.

24

motortruck

Julie Tanguay Continued

a role in doing that. So, we applaud the Government of Ontario for what it is doing.

In terms of pricing, Ritchie’s mention of two-for-one specials shows a lack of understanding of how most carriers view LCV pricing and does us all a potentially great disservice by building erroneous expectations amongst shippers who may read her column.

But, her chief complaint and the one I would like to focus my attention on is that only OTA members can participate in the on-road pilot of LCVs expected to commence this summer. As the headline to her column states: Membership has its privileges.

I could not agree more and as OTA chair I make no apologies for the fact that the carriers from the associations who invested their time, money and experience in making LCVs possible in Ontario, should be the ones to participate in the pilot – so long as they meet the stringent permit conditions. As a carrier, I have no tolerance for free riders who want all the benefit of what OTA accomplishes, but don’t contribute a dime to the cause. Often it can’t be helped – for example, all carriers are benefitting from the exemption OTA obtained from the Michigan Business Tax – but on an issue such as who gets to participate in a pilot, why should my money, paid out in membership dues to OTA, be used to benefit a non-member?

The official announcement of the LCV pilot was very recent.

However, OTA’s efforts to gain permission for LCV use in Ontario began three decades ago. Those who are even remotely aware of the issue, know how difficult and frustrating a process it has been.

Even last year when it appeared the Ontario government might be open to revisiting the LCV issue, there was an enormous amount of work that first needed to be undertaken to ensure that public concerns and perceptions were addressed. An accord had to be reached with MTO on the permit criteria for LCV operation. It was understood from the outset that the permit criteria would need to be sufficiently strict if they were to satisfy groups like the CAA and the Ontario Safety League. Then, an independent engineering study of the primary (common route) network, to assess the capability of all current on- and off-ramps on the 400 series of highways to safely accommodate LCVs – to identify emergency stopping areas and then contact the facility operators to secure permission for use of those locations – had to be undertaken. Finally, a fair process needed to be established to select the carriers to participate in a one-year pilot.

What was OTA’s role in all of this?

• The OTA LCV Committee (made up of more than 30 carriers and was open to all interested members) led the effort on industry’s behalf, investing countless hours in the process both at the negotiation table and in preparation and follow-up.

When the going gets tough, the tough get smarter If there was ever a time to find ways to run your business more efficiently, now is the time.

So, where do you find accurate information about industry trends and future estimates for shipment volumes, rates and surcharges, so that you can plan your operation accordingly? Where can you find stats that allow you to compare your operation to others, so that you can identify potential problems and opportunities for your own operation?

Look no further. Truck News, Truck West and Motortruck have published a comprehensive guide for trucking and transportation professionals, called “Inside the Numbers” – a snapshot

of expectations for shipment volumes, rates, surcharges and capacity concerns based on detailed research of shippers operating in several industries.

• What can your trucking operation expect in 2009?

• What are the business trends that are changing your industry?

• What are the strategies shippers will be using to stay the course in 2009?

This timely report will provide you with a wealth of knowledge that you can use to make 2009 your most successful year ever.

To Order go to: www.trucknews.com/inside or call 416-442-2122 or 1-800-668-2374

GreentoGold Joanne Ritchie Continued

Either way, this sounds like a cash-for-life scheme to me.

If I was a carrier trading along the Quebec City to Windsor corridor, and hadn’t paid my dues to the right association, I’d be quite concerned at this point. Among the benefits of LCVs – touted

by MTO, OTA, and a prominent shippers’ group – are reduced transportation costs, and ultimately lower prices for consumers.

What do you think that means for freight rates in this highly competitive corridor?

Competing with two-for-one specials could prove an insurmountable challenge for the other players in that market.

I’m deeply troubled that MTO has structured the LCV pilot as a “permit” program, rather than writing regulations that would apply to anyone wishing to engage in this type of business – and could come to the table with the infrastructure investment to support it. Given the public concern surrounding LCVs, it’s sensible to proceed prudently and safely, but I just don’t see the connection between the best operators for the job and membership in certain associations.

This program should have been open to any carrier with the safety rating to back up their “commitment to safety.” Had MTO limited participation to only carriers with ‘Excellent’ safety ratings, like the more than 500 listed in their database – most of them small companies and owner/operators, by the way – I’d have very little to complain about. Instead, we’re likely to see a large number of ‘Satisfactory-Unaudited’ carriers pulling LCVs around this province. For a program with qualification requirements that depend heavily on paper documentation, it bothers me that an MTO audit of a carrier’s facility isn’t even part of the package. mt Joanne Ritchie is executive director of OBAC. She can be reached at jritchie@obac.ca or at 888-794-9990.

For more information about LCVs and other green transportation related issues, check out our GREEN TO GOLD module on trucknews.com. Go to the KNOWLEDGE CENTRES section on the right hand side, scroll down and click on the GREEN TO GOLD link. Inside you will find more features, news, video and blogs about green transportation-related issues.

26

motortruck

Julie Tanguay Continued

• OTA paid the entire bill – which was in the range of $200,000 – to engage the independent engineering consultants to conduct the common route study. This relieved the burden from any OTA member from having to go out and do its own common route study (which would be cost prohibitive for most) and avoided duplicative studies. As such, it also levelled the playing field for all interested carriers. Moreover, OTA has always understood MTO’s position that the pursuit of LCVs is a private sector initiative. We have been seeking permission from them to operate these vehicles under special permit. OTA has been consistent over the years in stating that the private sector, not the taxpayer, should be responsible for funding the required studies and for building/purchasing any additional infrastructure that may be required in order to operate LCVs. • When it came to deciding who should participate in the pilot and have access to permits, OTA felt it only fair that participation in the pilot should be limited to those qualified carriers who had paid for the engineering work – in other words the OTA members. There was nothing stopping other carriers or groups from coming up with the cash and doing their own study; it’s just that no one did. Such is the benefit of belonging to a strong and effective organization as opposed to trying to do things on your own or belonging to groups that don’t have the will, the knowledge, the means or the credibility to deliver.

• Lastly, OTA developed a lottery system, which gave all carriers – again regardless of size, domicile, etc. – equal opportunity of being selected. However, it is important to note that being chosen in the lottery is no guarantee of participation in the pilot. The carriers must first meet all requirements of the permit criteria. And, they are also responsible for conducting individual engineering analyses to verify that LCVs can operate safely between the highway and the ultimate origin-destination of the freight. Ritchie suggests this will lead to duplicative studies of the same routes. In fact, OTA members are already teaming up and working together to jointly conduct and pay for such studies. This is another example of the benefits of belonging to an organization like OTA – chances are there is always someone else in the same boat as you that is prepared to work towards mutually beneficial solutions.

As with all complex issues, there is always give and take. That can be frustrating. It takes a lot of hard work, a spirit of compromise and mutual respect from all involved to reach a satisfactory conclusion. Sitting in front of a computer taking pot shots at those who are prepared to show leadership is easy, but ultimately ineffective and as I said at the outset smacks of sour grapes. The lesson for non-member carriers in all of this is perhaps you should join OTA. mt

Profitability

Smell of recovery in the air?

Volvo execs optimistic about economic upturn

By Lou Smyrlis

H

ere’s hoping Leif Johansson, president of AB Volvo and CEO of the Volvo Group, has a nose for financial prognostication.

Johansson comes to North America every four to six weeks and he believes that for the first time there is “a smell, at least, of a bottoming out and an improvement” to the North American economy.

Johansson was in Boston meeting with customers and clients recently and made a bet that truck sales in the fourth quarter of 2009 will prove stronger than in the fourth quarter of 2008.

Per Carlsson, president and CEO of Volvo Trucks North America, and Scott Kress, senior vice-president of sales and marketing, concurred with Johansson’s cautious optimism while speaking with media at the same event. Both said there is a good deal of “window shopping” going on.

“We see, in general, a higher activity level in terms of quotations and customer contacts,” Carlsson said. He conceded, however, that the starting point is from a very low level of sales historically.

(The first quarter of 2009 in Canada has proven to be the quietest first quarter in terms of Class 8 truck sales of the past decade, coming in about 100 units below the 2002 total. Sales are more than 2,000 off last year’s YTD pace, hardly a banner year in itself, about 3,000 off the five-year YTD average and about 5,000 off the banner year of 2006.)

Another challenge is the number of trucks currently sitting idle.

Kress surmised that perhaps 20% of the fleet is sitting idle and this will affect how quickly fleets are ready to buy new iron. As Carlsson noted, the truck population is getting older, and in fact, at seven or eight years, the age of the average truck may be the highest it has been in some time.

Getting access to credit could be another obstacle. Traditionally, during economic swings, much of the growth has come from smaller and medium-sized fleets making significant additions to their operations. This time around, with trucking companies having lost upwards of 40% of their value and financing institutions too reticent to take chances, will the necessary credit be available?

“I think its going to be a timing issue,” Kress said. “There is a heck of a lot of trucks sitting out there. I could take 18 to 24 months to burn those trucks up. And with some customers, it could come down to when they are actually able to go from a company with a bad credit rating to one that can stand on its feet.”

But Carlsson urged truck buyers considering new purchas-

es to get on with their decisions because the availability of the 2007-emissions compliant engines will be scarce by the end of 2009.

“That’s one message we have for customers: If you would like to buy current technology, you can’t wait too long to buy, because there won’t be availability,” he said. “Customers will have to make up their mind pretty soon or we will be moving on to the 2010 technology…We are already starting to place orders for the 2010 components.”

Volvo, like all North American truck manufacturers with the exception of Navistar, has hitched its wagon to the viability of SCR (selective catalytic reduction) technology to meet the US Environmental Protection Agency’s 2010 emission standards.

Kress and Carlsson were quick to dismiss any concerns that the SCR vs. EGR debate may be sowing confusion in the marketplace and causing buyers to delay their purchases.

“If there was any confusion out there, by the end of January this year the confusion was being cleared up. If I had the top trucking CEOs in a room, they would say the SCR approach is the way to go. The confusion and chatter is behind us,” Kress said.

To which Carlsson added that the fact that the majority of truck makers selling trucks into the North American, European and Japanese markets have all opted to go with the SCR option must say something for the viability of that technology.

When fleets and owner/operators are ready to buy, Carlsson and Kress said they will find a Volvo dealer network that has adapted to the challenging economic situation remarkably well. Kress linked the durability of Volvo dealerships to the decision made eight years ago to turn them into dual brand Volvo-Mack dealerships.

“The dual dealer we knew would be the strongest dealer in the marketplace and I would say we have a pretty good dealer network right now,” Kress aid.

Carlsson also noted that their dealers are doing a good job of hanging on to key staff such as technicians and sales people. mt Lou Smyrlis has 19 years of reporting on industry issues. Lou is the most experienced editor covering Canada’s unique transportation industry. Well known for his insightful reporting and meticulous market analysis, Lou is a frequent speaker at industry events. may/june 2009

27

Profitability

in for the “short” haul

Understanding the forces behind the move to regional truckload shipping

By Dan Goodwill

T

he length of haul on full truckload shipments within the United States has been shifting down for years. The trend became particularly clear to me during some freight bids with which I was involved last year. During the course of these bids, a number of the major US national truckload carriers outlined their companies’ regional truckload strategies and were very clear about their objective to build their regional businesses.

The move from national (e.g. greater than 500 miles) to regional truckload shipping (e.g. less than 500 miles) was precipitated by a number of factors. The freight recession that began in 2006 has resulted in fewer long haul truckload shipments. As fuel costs began to increase, it became very punishing financially to incur out of route miles to chase backhaul freight, particularly when these miles were not all producing revenue. In addition, the intermodal option became more attractive on longer distances, when you consider line haul and fuel costs. As fuel costs were escalating, supply chain managers sought to shorten their supply chain to reduce miles, inventory costs and freight costs.

In 2009, the sharp downturn in shipping volumes is giving this movement added momentum. The national truckload carriers are reshaping their business strategies to address the current market realities.

These carriers are not abandoning the national markets but revising their long haul strategies. As an example, Werner, in its current earnings report, notes that it “is deemphasizing the low asset return, solo driver solution” while seeking “to grow several other customer focused solutions for this market, such as using team drivers, engineered networks of relay trucks, third party brokerage carriers, power only with trucks provided by third party carriers and intermodal.”

Schneider National has also been rolling out its regional truckload business plan. On the heels of what the company said was the successful launch of a regional service in the West last January, the trucking company said it would offer regional service in the South-Central United States. Schneider first launched its regional service to western US customers in January, providing service to a seven-state area: Arizona, California, Colorado, Nevada, Oregon, Utah and Washington.

The new South-Central regional service will add nine states to that list: Texas, Oklahoma, Kansas, Missouri, Arkansas, Louisiana, Tennessee, Mississippi and Alabama.

Regional terminals will be located in Dallas, Houston and Memphis

28

motortruck

and will serve as hubs for customer service representatives and drivers who are dedicated solely to this region of the country. Regional drivers develop regular driving routes, allowing them more time at home and consistent workloads. Heartland Express, another medium distance carrier opened its 10th regional operation in Dallas.

What can we expect in the future? More of the same. Keith McCoy, director of marketing for Prime Inc., a refrigerated truckload carrier, expects retailers to continue to shorten their supply chains by forcing manufacturers to move their distribution centres closer to reduce carrying costs. Higher interest rates and rising fuel costs will likely be major factors in the future. Prime has opened four “mini” centres to address these shifts and has plans to do more.

The shrinking length of haul is apparent from the trucking company results reported in the first quarter. Werner’s average length of haul dropped 13.5% to 469 miles while USA Truck reported an 11.2% reduction to 651 miles.

In Canada, the market dynamics are somewhat different. Certain industry sectors (e.g. automotive, pulp and paper) are very challenged at this time, with a quick recovery not in sight. The severe downturn in the US economy has resulted in significant declines in cross-border truckload movements. As a result, Canadian carriers are seeking out Canadian markets that have growth and profit potential. As an example, XTL, a central Canada based carrier that historically derived over fifty percent of revenues from cross-border freight, outlined at a recent Transportation Company Workshop that it is now expanding its truckload business west to Alberta and British Columbia.

Clearly carriers on both sides of the border are realigning their strategies to match their capacity to where they perceive the demand to be. As capacity continues to exit the market, it is critical for truckload carriers to apply these precious assets to the geographic areas and lengths of haul that represent the best opportunities for profits. mt

Dan Goodwill, president of Dan Goodwill and Associates, has over 20 years of experience in the logistics and transportation industries in both Canada and the US. He can be reached at dan@dantranscon.com.

e nc na M a ain t te

s

r

e

t

An inside look at present challenges and future issues for your shop

It’s an evolutionary process Hamilton’s Chris Hill outlines how he wants to change the face of municipal maintenance management

By Lou Smyrlis

F

or municipal fleet managers who have grown comfortable with the traditional way they control and manage the services they provide, Chris Hill’s message at the Canadian Fleet Maintenance Seminars (CFMS) served as a wake-up call.

The current approach to municipal fleet management leaves much room for improvement and needs to evolve considerably, according to Hill, who manages the public works department with the City of Hamilton, Canada’s ninth largest city.

“The change we need to make in Hamilton, and I think this may be applicable to many other fleets, is to move away from the impression that the fleet manager is there to control things and stop people, and towards the concept that the fleet manager is there to enable things and help people,” Hill said in speaking to delegates attending the “Today’s and Tomorrow’s Director of Maintenance” session at the 46th annual CFMS. Hill shared a vision of several roles for fleet management in an organization, moving along a continuum that includes four stages, starting at a basic stage that is focused on control and evolves to an advanced stage focused on service. (The four stages are adopted from work

by Barbara E. Quinn and Robert S. Cooke called Shared Services: Mining for Corporate Gold). The evolution of the fleet department through this spectrum moves it from “an inside monopoly with all of the enlightenments of early 20th century industrial establishments to a modern commercial dealership that puts quality of service ahead of everything else,” according to Hill.

The Basic Stage is where most municipal fleets are today, according to Hill, including Hamilton.

“We have made changes for sure, and everyone agrees it’s a lot different now than it was five years ago. But our role in the organization has not changed,” Hill said.

He explained that they still control the budget and have accountability for the expenses on a fleet that includes 250 heavy trucks, such as snow plows, street sweepers, forestry aerial trucks and garbage

30 motortruck

trucks, 200 medium-duty trucks and nearly 400 light-duty vehicles as well as about 500 off-road equipment units, all operating out of nine garages and serviced by 58 people, 30 of whom are licensed fleet technicians.

“Our job is to minimize the charge backs to the users. We focus on economies of scale, which means we don’t really try to be more efficient and the users don’t really try to right-size their part of the fleet. We are kept in check by having to ask for Council approval for

Every second counts.

The OnGuard Collision Safety System uses forward-looking radar to monitor potential collisions and instantly applies Active Braking to help drivers avoid them.

For more information, visit meritorwabco.com. ©2009 Meritor WABCO Vehicle Control Systems

PlatinumShield™ coating extends the life of your brakes. Meritor® reman brake shoes with PlatinumShield coating represent a scientific breakthrough that delivers extended brake life and value.

For more information, visit us at MeritorPlatinumShield.com.

THE POWER OF PLATINUM CONQUERS RUST-JACKING.

©2009 ArvinMeritor, Inc.

it’s an evolutionary process – continued any additional resources, whether it’s money, or staff, or equipment,” Hill said.

How can it be any different?

By moving away from complete control of the fleet and towards the next stage in the evolutionary continuum, which Hill refers to as the Marketplace stage.

Giving up control is sure to be met with resistance, but Hill argues that the control municipal fleet maintenance managers have is illusory in many respects.

“The fleet manager really can’t control the fleet the way others think he or she can, which really means controlling the consumption of fleet resources by the users,” Hill said. “The number one driver of fleet costs is the number of units in service. Take away 100 units from a fleet and costs are guaranteed to go down. But can any of us do that?

I know that if I tried, the answer from the users would be, ‘When are you telling Council which services we are not going to provide?’”

He added there is also no control over how many kilometers the users put on the fleet, which is another critical cost driver.

So in the Marketplace stage of evolution, it is conceded that control needs to be provided by the operating groups and the fleet department is going to concentrate on improving service, Hill said.

He added that users would begin to share accountability for expenses by developing key performance indicator reports that calculate cost per kilometer or cost per hour for individual vehicles and the entire fleet.

“The successful direction of these KPIs will be downward,” Hill emphasized.

Internally, the fleet would measure things such as the number of vehicles in the shop during the day shift compared to the afternoons or night, work orders opened as inspections compared to breakdowns, work orders opened for the same repair on the same unit within 30 days, parts demand fill rate, mean time between failures, and percentage of inspections done on time.

In the next stage of evolution – what Hill referred to as the Advanced Marketplace – more control over the fleet is moved over to the users in the form of the budget. One benefit of doing so, according to Hill, would be significant reductions in the “just-in-case fleet,” essentially old equipment that should be scrapped but isn’t because there is little incentive to do so under current set-ups. Up to a quarter of public utility fleet vehicles are in excess to the needs of the organization, according to some estimates.

“Why are they there?” asked Hill. “Two reasons: first, it’s handy for operating foremen and supervisors, because it eliminates the headaches of planning and scheduling. Second, the cost is buried in the fleet’s budget, not theirs, so they are not held accountable for them.”

Hill pointed out that when the City of Winnipeg moved control of

32

motortruck

the budget from the fleet to user groups, the fleet was quickly reduced in size by about 30% because the users realized they couldn’t afford a “just-in-case” fleet and rationalized.

Hill added that at this stage, service level agreements would likely need to be put in place between users and the fleet department and the move be made to market-based pricing.

Yet service level agreements are not easy to pull off.

“Have very many of you tried to get Service Level Agreements done?” Hill asked the audience. “Do you remember the reaction of the users when you called to ask for a meeting? Shields up, right? How do you get the shields lowered? Meet them on their own turf; managers and supervisors only. You come with a blank pad of paper only, so their ideas and needs get priority. Ask what is the minimum number of units they need in service at the beginning of each day. Your mission is to change your operations as needed to meet their minimum daily needs.”

Moving to this stage will also mean that “the days of the $100 oil change would be over,” Hill emphasized and the maintenance department would recover input costs, which are the employee-related costs, materials, office expenses and overhead by creating lines of business.

He added that in Hamilton those would likely include vehicle rental as a cost per month, repair labour per hour, repair parts and mark-up, sublet work, fuel, driver training, and pool rentals.

The final stage, dubbed the Advanced Marketplace stage, is the creation of a separate business agency, standing alone from users or any other part of the organization and reporting in at a very high level.

The new business entity would be operating in full competition with companies such as Penske, Hertz Equipment Rental and GE Capital which offer similar services. The new business entity would have a profit and loss statement and a return on investment that the city would want to see improve every year while users come in when they have money and stay away when they don’t.

“The fleet manager would be rewarded for doing more work, not punished,” Hill said.

But this final stage may not be feasible for many operations to consider, and in some situations may not even be legally possible.

Winnipeg, however, has moved to this ultimate stage.

Evolving the municipal fleet is no easy task. As Hill acknowledged, he’s had the four-stage evolution chart on his office wall for five years, yet his own operation remains at the Basic stage.

The natural reaction of employees who have worked their entire lives for a monopoly is to go into denial when a change of this magnitude is being contemplated.

“It’s comforting to do that. After all, slow change is the way it has always been,” Hill said. “Changing the role of fleet management divides our colleagues into those who are focused on preserving the past, and those focused on creating the future.” mt

Hands On

Riddle’s recipe for success in the maintenance department

By Lou Smyrlis

T

hese days, a certificate seems to be required for most professions, but a president of a trucking company would be wise to first look at what type of “hands-on” experience an individual has and allow him to work his way up the ladder, says Jim Riddle, who has spent the last 27 of his 43 working years in the truck and trailer business.

The certification can come later for credibility purposes, the popular and outspoken Riddle told delegates attending the Canadian Fleet Maintenance Seminars session entitled, Today’s and Tomorrow’s Director of Maintenance.

Riddle is the director of maintenance for William Day Construction, a group of companies that provide a variety of services ranging from waste collection and dump site logistics to line-haul and general trucking. He is responsible for the maintenance of about 700 units and two maintenance facilities.

“Many companies like ourselves require individuals with handson knowledge of a particular unit or operation,” said Riddle.

Anyone can be trained as to how much time it takes to do a brake job and how much it should cost, Riddle said, but it is the abilities to recognize whether the job is done properly, to accurately forecast the cost of a repair, and to decide if the expense is warranted that is particularly valuable.

Riddle added that while planning is central to effectively managing the maintenance of the William Day Construction fleet, he must also have the capability to react to crucial situations such as “a unit down, no replacement, find parts, fix it, get it back on the road.” Again, something that is not necessarily learned behind a desk.

Perhaps Riddle’s late father explained it best after he toured a repair shop his son was managing: “I don’t know where you learned all this, but it certainly was not in school.”

Other key ingredients in Riddle’s recipe for success in the maintenance shop included: • The ongoing training of licensed technicians and the education of apprentices. His maintenance operation employs many apprentices and encourages training in truck and coach, welding, heavy equipment and bodyman trades. It has also supported its community college (Cambrian) by donating two operating highway tractors, a trailer chassis and some componentry as teaching tools. And Riddle

was also involved with the college’s curriculum advisory committee.

• Educating management about what constitutes maintenance and what makes for neglect and abuse.

He told delegates he created a “show and tell” for the executive team as part of the education process.

“I bring failed components to the boardroom and demonstrate the how, why and why not,” Riddle said, adding that drivers are also impressed when you can demonstrate to them how their actions affect equipment and that goes a long way towards preventing abuse or misuse.

• Encouraging staff for input on cost effectiveness. For example, one simple action taken by their AC specialist is saving the fleet fuel and labour costs. When AC systems are checked, a green vinyl dot is placed on the vent window, indicating correct operation. This allows the maintenance folks to recognize whether a unit is working, simply by viewing the dot. And if the unit is not working, the driver just removes the dot.

• A second life program to optimize the life of equipment. In the William Day Construction fleet, heavy-duty units are used in their designed occupation for several years and then are refurbished inhouse and placed into a lighter duty for their second life. “This is essential to the day-to-day operations because a diversified company like ours is expected to provide a variety of services at a moment’s notice,” Riddle said, adding he’s had to build units to fit customer needs and have them available to work “at the drop of a hat.”

• Knowledge of insurance is also important. Riddle’s maintenance team tends to fix its own units within its complete body shop. It often prepares estimates for adjusters so maintenance staff must understand how things work, determine if the units are repairable and whether a claim should be filed.

• Finally, human resource experience is a prerequisite for a manager.

“Handling of people has got to be one of the biggest challenges out there. Everyone has a different personality and we, as supervisors, are held responsible for the decisions we make,” Riddle said. He advised operating the maintenance department on a personable level, interacting with employees and keeping things light. “This creates a familiar operation but a level of respect and loyalty that shows up well in pride and workmanship, levels of cooperation and dedication from the people working on the floor,” he said. “My staff know that I am not afraid to use my authority but that I am totally approachable.” mt

may/june 2009

33

Shop Talk A candid conversation about running a lean, clean maintenance operation

By James Menzies

T

he popular Shop Talk information-sharing session was back at the Canadian Fleet Maintenance Seminars this year, with an overview of Vehicle Maintenance Reporting Standards (VMRS) kick-starting discussions.

Darry Stuart of DWS Fleet Management and John Sullivan of First Student – both Technology and Maintenance Council stalwarts – hosted the session. VMRS was presented as a way to track shop-related costs and inefficiencies using industry standard codes. About 25% of US-based fleets are using VMRS and others are using some form of the system without even realizing it, Stuart explained, since most maintenance software is based on some variation of the theme.

The goal is to be able to account for nearly 100% of a shop’s parts and labour costs by better tracking them and improving accountability.

Or as Stuart aptly explains: “VMRS is a process of organizing buckets of costs and finding where money is going into buckets every day.”

The premise behind VMRS is that, “Long before costs hit the reports, they’re visible on the shop floor.” One key element of VMRS is the so-called “five minute rule.” If a technician or mechanic has not figured out a vehicle’s problem within five minutes, he should notify a supervisor, Stuart explained. This eliminates the many hours of troubleshooting that are often wasted in maintenance operations that could easily be avoided by seeking a second opinion early in the process.

Using VMRS allows fleets to drill down to identify inefficiencies and using industry standard codes allows fleets to compare costs and establish benchmarks. It is also effective at bridging the gap between maintenance managers and bean-counters, by enabling managers to show money is being well-spent. VMRS allows users to compare work orders to time cards and ensure that nearly 100% of a mechanic’s paid time is being used effectively.

“So often, the (fleet) owner wants to crucify as opposed to manage and lead, and you need to have a defense mechanism,” Stuart said.

34

motortruck

From there, it was time to open the floor for a no-holds-barred griping session. The only ground rules were that specific companies were not to be dragged through the mud or shamelessly promoted.

One manufacturer representative kicked things off with a complaint that too many fleets remove a part that’s covered by warranty, stick it on a workbench and leave it there indefinitely. Then they call and complain that it’s taken too long to get the part back.

This brought the discussion back to VMRS, which can help avoid such situations, according to Stuart.

“The part comes off, goes on the bench, goes on the floor and there’s no tagging system,” admitted Stuart. “There’s got to be a process put into place. Warranties are tightening up. We as fleets need to do a better job.”

Stuart said maintenance operations should be run like a supermarket – well-organized and clean. His criteria for a well-run shop is that anyone should be able to walk through it with their dress shoes on, get into their car, drive home and then walk through their living room without getting the rug dirty.

Some in the audience questioned how to get mechanics and technicians to buy into a VMRS system. Stuart summed it up succinctly: “COE – condition of employment.”

“You have to explain to them that they are an important part of the business, they are in control of the money being spent,” he added.

Sullivan suggested to “make it easy for them.” He said using point-and-click systems, laminated coding cheat sheets and other handy tools will ease the transition.

Stuart admitted many mechanics will initially resist the prospect of having their time tracked. But he pointed out, “We have a right to know what they’re doing.”

Another problem that was identified during the session was the unwillingness of managers to give mechanics and technicians enough time to properly get the job done – especially when it comes to wheel-ends. Stuart said if ever there’s a job that shouldn’t

be rushed, it’s those involving wheel-ends. He provides legal consultations to fleets and wheel-offs are usually the worst cases to deal with, he said, while heaping praise on Ontario’s stringent absolute liability legislation that holds fleets 100% responsible for any wheel-off incidents they’re involved in.

“We wish we had that law in the US,” he said. “We preach about the Canadian law.”

Stuart instils a unique philosophy into the fleets he advises in the US: Refuse to place a time limit on preventive maintenance.

“Let them do the job right,” he urged. If one mechanic is regularly taking longer than others, then find out why, he added.

It could be that they need further training or it could be they’re doing a more thorough job than their peers.

With maintenance managers facing cost-cutting pressures from upper-management, attendees asked about the feasibility of moving towards flat-rate pay for mechanics. This was quickly discouraged by both Stuart and Sullivan.

“I worked as a mechanic in a flat rate shop,” said Sullivan. “I know I cut a lot of corners when I was a flat rate mechanic and I don’t want my guys cutting corners.”

Stuart cited the example of a mechanic who’s been assigned a clutch replacement and then detects a leaky seal in the process.

The temptation is to turn a blind eye to the leaky seal when he’s only being paid to replace the clutch.

Naturally, the topic of engine emissions came up eventually.

One delegate complained about problems with diesel particulate filters (DPFs) being rendered ineffective by failing injectors,

turbos, etc. Stuart and Sullivan said they haven’t heard of any widespread problems with DPFs. In fact, they said DPFs have been a non-issue with US fleets, most of which haven’t even switched to the recommended CJ-4 engine oil and have yet to experience any of the feared repercussions, such as the premature clogging of the DPF. Despite their vast experience with US fleets, Stuart and Sullivan said they’ve yet to hear from a fleet that’s had to remove a DPF for cleaning or exchange.

“I’ve yet to talk to anybody who knows when they’re going to have to be changed,” Stuart said of the DPFs. “Nobody has yet had the experience of the cleaning.”

On the topic of 2010 engines, Stuart voiced concern about urea, which will be required by engines using selective catalytic reduction (SCR).

“I’m not upset about 2010 - I believe 2010 is really just a little bit higher level than 2007. But I am concerned about the urea,” Stuart said. “I’m personally not happy about it…I know it’s been used in Europe for eight to 10 years and it seems to work over there. But now we’re going to add an extra tank for urea, buy it, find it, make sure that it’s filled. And this sensor issue, we haven’t been able to get a fuel gauge to work on a truck in 30 years and now we’re going to have a sensor that, when the urea is low, is going to shut the truck down? Well, hopefully that sensor is not the same as (with) the fuel gauge. In the US, we don’t plan on buying a lot of trucks in 2010. Maybe in 2009, but I think most people are going to stay away from 2010.” mt

Volvo Canada awards 2009 Canadian Fleet Maintenance Manager

T

he 46th Canadian Fleet Maintenance Seminars (CFMS) wrapped up May 28 with a luncheon and award ceremony sponsored by Volvo Canada. Volvo announced the winner of its 2009 Canadian Fleet Maintenance Manager, Ben Vandespyker of Active Transport Inc. To qualify for the award, the nominee’s fleet must be located in Canada, must own and operate a minimum of 25 Class 8 vehicles, and must perform a minimum 80% of repairs and maintenance at the fleet’s facilities.

The nominee, meanwhile, must be a Canadian resident with a minimum of five years’ fleet maintenance experience, three of which must be as a full time maintenance manager, superintendent, or director.

The nominee must also be currently responsible for complete fleet maintenance and repair activity.

Vandespyker, a long time member of the Automotive Transportation Service Superintendents’ Association, has been in fleet maintenance for over 50 years, and currently oversees a fleet of 175 tractors and over 400 trailers across three maintenance facilities at Active Transport Inc. He is described as a “caring, generous, reliable, fair mediator with a good ability to listen,” said Don Coldwell, district service manager with Volvo Trucks Canada, who presented the award.

Vandespyker, a father of two children who owns a hobby farm, was called out of the country unexpectedly at the time of the award ceremony. His daughter Lisa accepted the award on his behalf. mt may/june 2009

35

The ABC’s of AGM Your AGM batteries may perform better, but they have unique maintenance needs

By John G. Smith

O

ne truck battery can look like the next. The charged cubes all include positive and negative terminals and they are all called upon to offer the energy for everything from starting requirements to battery-powered HVAC systems.

That is where the similarities end.

Thanks to the absorbent material between the plates of an Absorbed Glass Mat (AGM) battery, these sealed designs resist damage from vibration, will not spill, and can offer 1.5 times as many cycles as a dual-purpose flooded battery.

They may cost twice as much as their flooded counterparts – and can be six pounds heavier – but some test results unveiled during a recent meeting of the Technology and Maintenance Council suggest that the investment may be worthwhile. One fleet compared 68 trucks with flooded batteries to 69 trucks with AGM batteries. Just 34 months later, maintenance teams had replaced 113 of the flooded batteries and a mere eight of the AGM designs.

The advantages don’t end there. A lower internal resistance means the batteries can be recharged in half the time. And an AGM offers a higher capacity and improved power density, says Jeff Coleman, director of OEM sales for East Penn/Deka.

It explains the growing popularity of the AGM batteries in trucks that need additional cranking power or extra cycle life.

Fleet maintenance managers simply need to be aware of the related maintenance issues that emerge.

To start with, AGM batteries should not be mixed with flooded batteries in the same battery pack for an extended period of time.

The batteries will also require different charging and testing procedures, notes Fred Feres, a senior engineering manager at Exide Battery. If the AGM is not damaged, and the Open Circuit Voltage (OCV) is higher than 12.6 volts, the shop can begin load testing. If 36

motortruck

the voltage is lower than that, the battery has to be charged.

When trying to determine the battery’s State of Charge while everything is still on the vehicle, mechanics will need to stop the engine, turn on the high beams, set the fan blower on high for one minute, and then switch off the high beams and blower to allow the battery to rest in an open circuit for five minutes. Then the voltage can be tested.

If the batteries are removed from the vehicle, mechanics will need to apply a load at 300 amps or half the battery’s CCA rating for 15 seconds, and then wait up to 10 minutes before testing the voltage at the battery terminals.

“You can’t use just any charger,” Feres adds, referring to those that are designed for AGM models. The DC voltage needs to be regulated to between 14.1 and 14.6 volts, and the chargers need to automatically terminate once the process is complete.

Charging can be performed on the vehicle, but the better option is to remove the batteries in the shop, he adds.

The charging process should also take place between 15 and 30 Celsius. The best approach is to charge the batteries in parallel, while the output should be rated to provide 10 to 35 amps of maximum charging power per battery. Terminal adaptors should also be used to prevent damage to the threads.

In most cases, charger labels will indicate whether or not an individual piece of equipment can be used on an AGM battery. To ensure everything is okay, connect the charger to a fully charged AGM battery at 12.8 volts or more at room temperature. After three hours of consecutive charging, the maximum voltage should be between 13.8 and 14.6 volts.

There is a learning curve, to be sure, but the industry has adapted to battery changes in the past.

Decades ago, the batteries still had filler caps. Now the hydrometers have been relegated to the bottom of old toolboxes.

Who knows how long flooded batteries will remain. mt

What’s inside a Bridgestone radial?

time

Tires are just the beginning Bridgestone products and programs save precious time so you can invest it where it counts – on growing your business. Ask your dealer or truckstop what else choosing Bridgestone can do for you.

BridgestoneTrucktires.com

0.93 That’s the average operating ratio reported for the final

quarter of 2008 by Canadian

InsidetheNumbers

for-hire trucking companies

Breakdown of Motor Carrier Expenses

with annual revenues of at least $1 million. The operating ratio is a measure of

Other Expenses 15%

operating expenses divided by operating revenue. These

Depreciation

Salaries & Wages 28.5%

6.4%

carriers generated revenues of $7.2 billion in the fourth

Purchased Transportation 11.6%

quarter, surprisingly up 1.7% from the same quarter a year earlier.

7.2% Maintenance Expenses

Fuel (Company drivers) 13%

Owner/Operator Expenses (incl. fuel) 18.2%

SALARIES AND WAGES ARE A BIG COST – NO MATTER HOW YOU SLICE IT

Salaries and wages account from slightly more than 28% of the expenses reported by Canadian motor carriers with at least $1 million in annual revenues. The data is from Statistics Canada and reflects motor carrier revenues in the final quarter of 2008.

Owner/operator expenses (including fuel) are the second highest item at just over 18%. Fuel expenses by company drivers (13%) and purchased transportation (11.6%) are the other two items with more than a 10% share of a typical for-hire carrier’s expenses.

With salaries and wages taking up more than a quarter of motor carrier expenses it’s evident how taking action in this area during an economic slowdown is hard to avoid. However, doing a better job at conserving fuel is also a worthwhile cost saving measure.

“RAIL” REALITIES ABOUT TRANSBORDER FREIGHT Rail acts as both a partner and a competitor for transborder freight as well as for freight intended for our ports to be shipped abroad.

Almost half (47%) of the freight handled by the two Class 1 railroads is related to trade with the US while another 30% is of an international nature. However, Canadian exports were in decline in many sectors important to rail in 2008 led by a whopping 32% decline in the beleaguered automotive sector and significant declines in the forestry, chemicals and industrial goods sectors. The Canadian and US economies are contracting considerably in 2009, so both export and import volumes will take another hit. According to the Railway Association of Canada (RAC) total shipment volumes are down 20% so far in 2009. Vancouver TEUs were down 22% in February year-over-year; Montreal TEUs were down 16% in February year-over-year. Bulk cargo was also down in February year-over-year at both the Port of Vancouver and the Port of Montreal. In response to the freight recession, over 300 locomotives and 20,000 railcars have been taken out of service. The RAC expects rail freight prices to be in decline this year but with capacity being taken out of the market the question is how much of a rise in prices should shippers expect when the economy picks up and capacity tightens.

Fuel for your fleet’s bottom line.

Looking to give your fleet an edge? DURON™-E Synthetic 10W-40 can help reduce one of the biggest items to hit your bottom line – fuel costs.

Here’s how. CJ-4 compliant DURON-E Synthetic 10W-40 helps improve low temperature performance and reduce the need for idling compared to conventional 15W-40 products. Its excellent soot control helps prevent oil thickening, enabling engines to run smoother, cleaner and more efficiently. And that can help you save money.

So go farther with DURON-E Synthetic 10W-40 – the engine oil that helps drive fuel efficiency.

Call 1-866-335-3369 for information on DURON-E Synthetic 10W-40 and how it can help you save money.

E-mail: sales@petro-canada.ca | lubricants.petro-canada.ca

Fight Soot. Save Money. ™Trademark of Petro-Canada

©2008 PeopleNet Communications Corporation.

1.7 MILLION DOLLARS HAPPIER THAN HE WAS YESTERDAY.

Uncovering a significant dollar amount that helps improve your bottom line?

Now what fleet couldn’t use that? That’s what PeopleNet Professional Services finds on average in ROI per client identified. How? By offering a wide variety of consultation programs to help optimize your fleet’s performance. Plus, it’s all backed by the L/100KM guarantee.* More reasons why PeopleNet customers experience a business edge unlike any other. To experience it for yourself, call 888.346.3486 or visit peoplenetonline.ca. *If in a 12-month period your L/100KM fuel savings does not exceed the entire cost of the program then PeopleNet will refund 100% of the Professional Services fee.

THE PEOPLENET BLU

™

L/100KM SCORECARD

allows drivers to monitor and adjust their performance in real time. So now everyone’s contributing to the bottom line.