MotorTruck September-October 2009

Motortruck

SEPTEMBER/OCTOBER

2009

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

F O R

F L E E T

O W N E R S

Can you

PACK The Room?

When the driver shortage resumes, you’ll need a competitive HR strategy to get the drivers you need. Find out if yours fits the bill with our fourth annual Driver Satisfaction Survey

SPECIAL INSIDE: Our Annual GREEN TO GOLD SUPPLEMENT. Thinking and acting green isn’t easy, but it can be profitable.

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contents September/October 2009

Volume 78, No. 5

COVER S T O R Y

Can you

Pack the Room?

When the driver shortage resumes, you’ll need a competitive HR strategy to get the drivers you need.

Find out if yours fits the bill with our fourth annual Driver Satisfaction Survey.

FEATURES

25

CUBE VS. DENSITY An in-depth look at competing LTL pricing schemes.

28

SO HAPPY TOGETHER Industry analysts have given their thumbs up to the MacKinnon-Walker deal.

GREEN TO GOLD SUPPLEMENT Special Insert Our third annual Green to Gold supplement comes as transportation companies prepare for both economic renewal and a carbon-constrained future. Learn how the transportation and logistics industry intends to cope with government cap-and-trade rules, how fleets are taking advantage of Energotest to evaluate fuel-saving technologies, how one company’s businessfirst, earth second strategy is driving sustainable transportation practices, and hear the case for alternative climate control units.

DEPARTMENTS VIEWPOINT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Are we really on the verge of an economic upswing?

COMPETITION WATCH . . . . . . . . . . . . . . . . . . . . . . . 6 MacKinnon Transport and Walker Group merge in summer’s most sizzling acquisition; Transforce picks up retail solutions division of ATS Andlauer Transportation Services; Cavalier Transportation partners with Milan Express; and more.

MY HR SPACE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Temporary foreign workers help to solve driver shortages, but they present some unique needs.

TAKING CARE OF BUSINESS . . . . . . . . . . . . . . . . . 12 Get the most out of your employees with creative motivation.

EQUIPMENT WATCH . . . . . . . . . . . . . . . . . . . . . . . 14 Eaton reveals newest generation of UltraShift automated transmissions; Cat, Navistar merge to create NC2; Daimler confirms $9K surcharge for new engines; and Navistar announces 2010 pricing while clearing up “misinformation” about Advanced EGR technology.

INSIDE THE NUMBERS . . . . . . . . . . . . . . . . . . . . . 30 How far did Canadian railway carloadings drop in June? When can trucking expect to come out of a recession? How often are shippers conducting modal reviews? Plus: the main reasons why shippers divert freight from truck to rail.

SEPTEMBER/OCTOBER 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

SEPTEMBER/OCTOBER 2009

VOL. 78

Dare we trust the latest economic predictions?

A

ll of a sudden, after months of one depressing economic announcement after another, there seems to be a heck of a lot of good news about the Canadian, US and global economies.

Do the executives of the many beleaguered trucking firms across the country finally have reason to hope? Can we (dare we) trust in the economists’ predictions? It’s not like they haven’t been wrong before.

We recently discovered Lou Smyrlis, the global economy can be MCILT Editor just as synchronous on its way lou@transportationmedia.ca up as it was on its way down.

For example, the recently worth repeating published TD Bank Financial “The recovery is for real and Group’s global quarterly ecoworries about a double-dip nomic forecast was enthused will likely prove unfounded.” to point out that relative to – Craig Alexander previous forecasts, the ecoDeputy chief economist nomic rebound is coming in TB Bank Financial Group about one quarter earlier, is twice as strong, and potentially will be sustained twice as long if the leading indicators are correct. Asia, Europe and even the US are all on the rebound it seems.

Canada’s economy grew for the first time in 11 months in June, an encouraging signal that the country’s first recession in almost two decades is over.

True, the June growth of 0.1% was less than the consensus economist forecast of 0.2%. And Statistics Canada did revise the first-quarter retreat from the previously reported 5.4% to 6.1%, making it the worst quarterly contraction on record since 1961 and muting the June numbers somewhat because they relate to an even lower starting point than initially thought. But after so many straight months of bad news, we’ll take 0.1% growth, thank you very much.

TD Bank Financial Group was optimistic that the June uptick in business was one of several indicators of the Canadian economy showing signs of a budding recovery. Of particular interest to transborder carriers who have taken a beating the last couple of years, is the boost in Canadian exports during June and July and the forecast that they will grow a sharp 25% in the third quarter, marking the first time in two years that exports will contribute to the country’s economic growth.

Canadian firms also imported 11% more machinery and equipment in July, which TD believes will lead to an annualized increase in business investment

Editorial Director Lou Smyrlis (416) 510-6881

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

adam@TransportationMedia.ca

in these goods for the third quarter.

David Newman, senior vice-president with National Bank Financial, told transportation professionals attending the recent 23rd annual Transportation Conference in Toronto that he’s been looking for “absolute and sequential increases” in economic indicators that historically bode well for increased freight activity and he’s been finding them of late. For example, the ISM New Orders Index, which measures new manufacturing orders, is looking better and better. He figures that by year end, once any lingering inventory has cleared, we will be in the sweet spot where we will start to see freight grow. No bull market mind you, but a definite sign the worst is behind us and there is modest growth to look forward to.

Of course, 73% of our exports of goods and commodities remain US-bound, so the Canadian recovery will be greatly impacted by the pace of the recovery in the US. But economists believe that market is also starting to look much better. The very sick patient with an unclear prognosis that was the US economy at this point last year, is up and starting to walk around.

The recession erased an incredible 3.9% of US real GDP, but economists are expecting our largest trading partner to have rebounded with 4% (annualized) growth through the third quarter this year.

It all sounds positive, but there a few things that should be checking our optimism. The global banking sector may be on the mend, but it’s still battered enough to act as a drag on economic growth. It’s doubtful banks have recovered enough to adequately keep up with the historical lending demand from companies looking to grow during the economic recovery. And we already know what banks think of trucking companies. Getting access to the capital necessary to boost growth through mergers and acquisitions may remain difficult for at least another year. Further appreciation of the dollar against the US greenback through 2010 will challenge our ability to sell goods to the US, which will dampen transborder shipment growth. And the consumer on both sides of the border is likely to remain reticent to return to his pre-recession spending as long as unemployment remains high.

The end result will likely be that the economic recovery, beyond perhaps a brief burst at the end of this year, will be quite gradual compared to the past.

TD Bank Financial predicts 2.5% GDP growth in 2010 before we get to 3.1% in 2011. Unfortunately, growth of at least 3.0% is required to fully engage the trucking industry. mt @ARTICLECATEGORY:129;

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NO. 5

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.

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CompetitionWatch MACKINNON TRANSPORT has acquired the WALKER GROUP, including LE WALKER TRANSPORT and MID AMERICA FREIGHT SYSTEMS. Together, the companies will operate more than 1,300 pieces of equipment out of MacKinnon’s head office in Guelph, Ont. “Our combined organization will be well-positioned from an equipment and personnel standpoint,” said Evan MacKinnon, president and CEO of MacKinnon Transport. “At a time when many trucking companies are economically challenged, we are fiscally robust and poised to respond quickly as the economy rebounds.” Company officials said they will streamline service delivery and exercise opportunities to increase business growth. The combined entity will be jointly owned by MacKinnon and Walker Group president Julie Tanguay. MacKinnon will serve as president and CEO of the organization, which will operate under the MacKinnon Transport banner. Tanguay will be executive vice-president of sales and will spearhead sales efforts for the entire fleet. “While both companies are recognized leaders in the dry van and flatbed markets, our customer base is quite diversified with little duplication. We are strategically positioned to respond rapidly to changing markets and customer requirements,” added Tanguay.

TRANSFORCE has picked up the retail solutions division of ATS ANDLAUER TRANSPORTATION SERVICES, which generates revenues of about $120 million per year using 165 owner/operators. ATS’s healthcare division is not part of the deal. “This transaction demonstrates TransForce’s strategy of growth through selectively acquiring leading companies with strong leadership,” said Alain Bedard, chairman, president and CEO of TransForce. “ATS Retail Solutions is an excellent strategic fit with our existing Canpar and ICS Courier businesses. Consistent with our approach to acquisitions, it will operate as an autonomous business and ATS president and CEO Michael Andlauer will continue to play a leadership role as chair of a group specifically focused on courier solutions. We look forward to working with Michael and his team.” The transaction is conditional upon the signing of a definitive agreement and other closing conditions, which are expected to be completed by Oct. 1. In other Transforce news, chief financial officer Salvatore Vitale has stepped down from his position and left the company. He has been replaced by Bedard who will serve as interim CFO in addition to his current positions.

CAVALIER TRANSPORTATION has partnered with Tennessee-based MILAN EXPRESS to provide its customers with improved access to a number of states in the southern and mid-western US. Cavalier announced the partnership provides a “premium transborder service” between key US states and the Ontario and Quebec markets. The companies will focus on LTL shipments and also offer truckload, expedited, warehousing and logistics services. Included in the offerings will be an overnight LTL service between Chicago and the Greater Toronto Area, according to the companies. Cavalier says the partnership will also allow it to better serve customers wishing to ship to destinations in Milan’s extensive service network in Illinois, Indiana, Ohio, Kentucky, Tennessee, Mississippi, Alabama, Georgia, and the Carolinas.

MULLEN GROUP saw its revenue drop 18.6% in the second quarter compared to the same three-month period last year, according to its latest filings. The revenue decline stemmed from lower revenues in both the trucking/logistics segment as well as the oilfield services segment, Mullen reported. On the trucking side, the company said the decrease in revenue is attributable to the continuing recession and its impact on freight demand, especially in western Canada. Net income for the second quarter was down 10.6% to $17.8 million. For the six-month period ended June 30, Mullen says it net income was down 30% to $48.8 million compared to the same period of last year.

CLARKE INC.’s freight transportation segment suffered a 22% decline in revenue in the second quarter of 2009, the company reported in its latest financial filings. Freight transportation revenue totalled $43.5 million in the second quarter, down from $56.1 million over the same period in ’08. For the six-month period ended June 30, Clarke’s freight transportation segment saw revenue drop 19% compared to the same period in 2008. As a whole, Clarke reported net income of $16.8 million in the second quarter and $6.7 million for the six-month period ended June 30. In 2008, Clarke reported Q2 net income of $12.4 million and $10.3 million for the six-month period.

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

6

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YO U SA I D I T. . .

“I would imagine that Joe Public has an opinion of the stereotypical trucker. If they knew the diversity of walks of life that truckers come from, they would generally be amazed. I know our fleet includes airline pilots, firefighters, homemakers, grandmothers, a veterinarian, an engineer, and on and on.”

– Steve H. responding to Harry Rudolfs’ blog, Why truckers truck.

“It doesn’t appear that the Ontario Government, Serco, DriveTest or the SteelWorkers Union cares in any way about their effects on Ontario residents. It’s one thing to affect a 16-year-old from getting his/her G1, but when an AZ or DZ is required to get off of EI and get on with life, all I can say is “Enough Already.”

– K. Boyer responding to James Menzies’ blog, New commercial drivers, driver instructors held hostage by DriveTest strike.

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.

8 motortruck

What’sOn

Our latest WebTV content from Transportation Matters includes an exclusive interview with the founder of Convoy for a Cure, an up-close-and-personal look at Canada’s first plug-in hybrid terminal tractor, and more from our interview with Canada’s Owner/ Operator of the Year winner. Plus: live coverage of a DriveTest strike protest in downtown Toronto.

web news

: blogs Come and debate the issues at our Blogs section on trucknews.com Trucknews.com pleased to welcome Ray Haight to its ever-expanding list of bloggers. Haight is a second-generation trucker whose career has seen him managing one of Canada’s 50 largest trucking companies, as well as chairing the Truckload Carriers Assocaition, the Professional Truck Drivers Institute, and the North American Training and Management Institute, to name a few. Haight is currently CEO of ATBS Canada and Fleet Executive is delighted to have him join its ranks.

Managing editor Adam Ledlow shares some lessons learned from children’s book, Brutus the Big Red Truck.

Caravan Logistics’ Kevin Snobel encourages positive communication between driver and dispatcher.

Editorial director Lou Smyrlis sings the praises of Nulogx’s new freight index.

We now tweet!

Follow us on Twitter: Twitter.com/AdamLedlow Twitter.com/JamesMenzies Twitter.com/LouSmyrlis

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

m

the human edge

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H

R

a world of opportunity Temporary foreign workers help to solve driver shortages, but they present some unique needs

A

yr Motor Express already knows what an acute driver shortage looks like. The fleet, based in Woodstock, N.B., is the largest employer in town, and it is counted among 57 trucking companies in the Upper St. John River Valley who compete for employees.

It shouldn’t be too surprising that the search for long-haul drivers involved reaching beyond local borders. Way beyond. For the past several years, recruits have come from as far away as Belgium, France, Germany, the Netherlands and other European locales.

With the help of Business New Brunswick’s Population Growth Secretariat, Ayr has been successfully recruiting temporary foreign workers who have honed their skills as truck drivers in countries like these. Unlike immigrants – who should be part of every longterm recruiting strategy – the temporary foreign workers receive clearance to apply their skills in Canada for a limited period of time, specifically to help offset an acute shortage.

The importance of both categories of workers will continue to grow. According to Statistics Canada, low birth rates among the Canadian-born population, combined with an aging workforce, mean that immigrants will account for all the net growth in Canada’s labour force as early as 2011.

“At a time when Canada’s labour force is becoming increasingly multicultural, immigrants and temporary foreign workers represent a largely untapped source of potential employees,” says CTHRC executive director, Linda Gauthier. “These individuals offer a great diversity of education, training, on-the-job skills and life experiences that can enhance any fleet.”

Ayr was successful in its search for drivers who had experience with different terrains, changing weather and border crossings.

“There are some slight differences, but they understand the business of trucking,” says Ralph Boyd, Ayr’s manager of human resources and special projects, noting how successful candidates demonstrated a strong work ethic. Granted, there are some practical issues to address. Ayr requires its temporary foreign workers to hold a passport that is openly accepted by the US, and to demonstrate necessary language skills.

But the fleet also needed to take some unique steps to ensure the new workers could successfully integrate into the organization

To find a HR Essentials workshop in your region contact:

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motortruck

and the community as a whole.

“The biggest thing that we found is, when dealing with foreign workers, they left their home country, their family, their friends behind. You become their attachment,” says Boyd. That means helping with tasks such as opening a bank account, taking road tests, helping children to get into schools and even working with spouses to find jobs and connect with other members of a cultural community.

Language barriers and cultural differences – if not properly managed – can create tension and friction in the workplace.

Recruiting efforts that cross international borders can also make it difficult for fleets to demonstrate the due diligence that comes with validating past employment history, checking references and assessing language skills.

The CTHRC has a series of tools to help fleets address the related needs. The popular Your Guide to Human Resources includes two new modules that specifically support the hiring of immigrants and temporary foreign workers. Each module includes tools and templates to address recruitment, cultural awareness, orientation and integration.

The guidance can be particularly important given that the hiring of temporary foreign workers will require a fleet to interact with several government departments, all of which are identified in the CTHRC’s Report for Employers on Hiring Immigrants and Temporary Foreign Workers. This is a step by step guide that details federal and provincial government immigration programs, processes, costs and time frames.

There are other costs as well. Those who hire temporary foreign workers as truck drivers must pay for all recruiting costs, transportation to and from the foreign worker’s home country, provincial medical coverage for the first 90 days, and worker’s compensation.

There may also be the need for a deposit to ensure that appropriate and affordable accommodation is available for the drivers when they arrive in Canada. But Boyd suggests that more fleets should embrace workers from outside their borders.

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

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inside the numbers

Employment in the For-Hire Transport Sector (x1,000 employees) Air 86.8 0

200

400

600

800

Marine 33.5

Employment Breakdown for the For-Hire Trucking Industry (x1,000 employees)

Rail 34.3 Truck 374.0

Medium and large fleets 160.2

Total 814.8 Small Fleets 26.0

0

200

400

600

800

Owner/Operators 88.0 Delivery Drivers 102.0 Total 376.2

1200

Average Weekly Earnings in Trucking by Province 0

50

100

150

200

250

300

350

400

1000

Employment Breakdown of Company Drivers

by Region and Fleet Size

YUKON $1045

300 B.C. $897

250

ALBERTA $898

SASKATCHEWAN $771

200

MANITOBA $804

ONTARIO $813

150

QUEBEC $701

NEW BRUNSWICK $629

100

NOVA SCOTIA $781

200

50

P.E.I. $640

400 0

NFLD. & LAB. $689

600

350

CANADA AVERAGE $803

800

400

Employment by Medium and Large Fleets

Employment

by Small Fleets

Employment by Owner/Operators

Maritimes

6,527

1,348

3,961

Quebec

20,463

5,603

11,564

Ontario

35,462

4,433

23,462

Prairies

24,553

4,232

17,388

B.C. & Territories 8,431

2,845

9,911

TOTAL

18,461

66,286

95,436

0 STILL A PEOPLE INDUSTRY For-hire transportation may require a great deal of technology, but human resources remain an integral part of all modal operations, as the latest data from Statistics Canada indicates. If bus, taxi and other similar transport sectors are included with the truck, rail, marine and air modes, more than three-quarters of a million Canadians are employed by for-hire carriers of one type or another. Trucking makes up 46% of the transport industry’s total, and medium and large for-hire carriers employ 43% of the total number of for-hire industry employees.

Although Ontario has the lion’s share of employment, notice the importance of the Prairie provinces. Note also the strength of weekly earnings in Alberta and British Columbia in comparison to the rest of the country.

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 september/october 2009 11

TakingCareofBusiness

get the most out of your employees Motivation is the spark that ignites success

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teve Jobs, the computer genius who co-founded Apple Corp., is a very charismatic leader of technical people. When his group was designing Apple’s new Macintosh computer, Jobs flew a pirate flag over his building. Its purpose was to signify his team’s determination to blow the competition out of the water. Rather creative motivation.

Good leaders and managers have creative ways to motivate their employees.

Robert Waterman Jr. wrote about Chiyoshi Misawa, founder and president of Misawa Homes – the largest homebuilder in Japan. At least once every decade he “dies” to arrest the momentum of out-ofdate assumptions and policies. He sends a memo to his company that formally announces “the death of your president.”

This is his way of forcing the whole company to rethink everything. When employees resist change because they are used to the old way of doing things, Misawa declares: “That was the way things were done under Mr. Misawa. He is now dead.

Now, how shall we proceed?”

People can be motivated with threats, fear, example, reward, recognition, etc. I believe threats are overrated and misunderstood. Fear works for a while. However, when people are mature, experienced and professional, they will not regard mistreatment and claims of absolute authority as a source of inspiration.

One of the most powerful motivators is peer pressure. That’s what the armed forces use to motivate soldiers. What makes an 18-year-old kid risk his life in combat?

It sure isn’t because he thinks his platoon leader is such a prince. One of the main reasons is because his buddies will think

he’s a coward if he doesn’t go with the flow. But peer pressure, despite its powerful impact as a motivator, is – like the other motivators – imposed from outside sources. It tends to work best on young people because their personal set of values is not yet fully formed and are more easily influenced by others.

I think one of the best motivators, the one that is most likely to stick with you – even for a lifetime – is the one that comes from within. If you’re looking for a oneword description of a truly motivated person, I’d say “self-starter.”

But let’s face it: no one is able to be up every minute of every day. How do you overcome the inevitable drag on your spirits of doing tasks you hate but have to be done?

I do it by playing a trick on myself.

It’s the old peas/pie routine. (That is, you have to eat your peas if you want a piece of pie). If I have to do something I don’t like, I make it a point to be especially nice to myself later by doing something I really do like. I think about the possibilities the whole time I’m plowing through the monthly inventory reports and 90-day-plus receivables. Then, a few aspirins later, I’m ready to give myself a new golf club, dinner out, or whatever mad and capricious delight strikes my fancy at the moment.

Recognition is another great way of motivating us to achieve more than we ever thought possible. For the record, I have yet to receive my first note from someone telling me that I’m giving him or her too much recognition.

Predictably, money is still one of the top motivating factors.

A manager who had just returned from

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.

a motivation seminar called an employee into his office and said, “Henceforth, you are going to be allowed to plan and control your job. That will raise productivity considerably, I am sure.”

“Will I be paid more?” asked the worker.

“No, no. Money is not a motivator, and you will get no satisfaction from a salary raise.”

“Well, if production does increase, will I be paid more?”

“Look,” said the manager, “you obviously do not understand the motivation theory.

Take this book home and read it. It explains what it is that really motivates you.”

As the man was leaving, he stopped and said, “If I read this book, will I be paid more?”

Motivation is the spark that ignites success. mt @ARTICLECATEGORY:3361;

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Helping

you ďŹ nd

your way!

Transportation Matters Watch Online Thursdays

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trucknews.com/video

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 avoiding dangerous intersections, low-traffic roads and low weighticon: as the truck moves along, the icon will move along too; the limit bridges. EastStreet tends to avoid oddly-named streets, favour map refresh rate is user-selected. 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 commitment to now offer the trucking indus- Cat/Navistar name new Eaton unveils new UltraShift for 53-foot trailers, height and weight restrictions and more than routes; e.g., optimised for truck size, number of stops, material trylandmarks the best possible transmission automated alliance 16,000 toll roads. transmission Its full-color maps clearly show like automated being hauled and the shortest route.NC2 V.13 Global will also answer the solution for a variety of applications,” said Eaton has introduced a new generation of More details are emerging joint schools, hospitals, railroads and bodies of water. obligatory truck routing questions that keep truckersabout out ofthe trouStaci Kroon, senior vice-president genitsInUltraShift automated transmission. venture transaction between Navistar November 2005 the ProMiles Software Development ble.“We wantand to get the truck restrictions, time-of-day restrictions, eral manager of Eaton’struck transmission The UltraShift PLUS familyProMiles of transmisInternational and Caterpillar, which Corporation (PSDC) released XF V.12 of its heavyroutes business. through cities, one way streets, no right turn, no leftwill Thereupdated are hundreds of etc.,” individual sionsmileage featuresand new automated clutch techtruck routing software which, among other turn, Bowieconsays. now operate under the name NC2 features, updates toshift zip and postal codes, the road dataProMiles V.12LLC. cannot currently be used on a figurations available, soAlthough customers can XF nologyincluded and intelligent selection Global base, road restrictions, HAZMAT roadthe fees, and palm pilot, e.g., pictures a map, state choose transmission that’s bestusers suitedcan fore-mail trips; software that employs graderestrictions, sensing, toll The joint ventureofwas firsttext, announced the interface to ProMiles dispatch partners such as Maddocks, or province breakout, to other computers, including palm pilots. weight computation and driver throttle their application and powertrain, Eaton says. in June 2008 and will operate out of the Tailwind, FreightLogix, and Axon.V.12 venturearea. into street routing will inThe new UltraShift The PLUScompany’s family in-firstChicago commands to make more intelligentand shiftthe Owner/Operator version TruckMiles routing and mapping program also boasted clude major Canadian and US cities; add more in of cludes six platforms: Linehaul Active decisions, according to the company.

Al Saltiel, PSDC formerwill vice-president MT GPS-compatibility. future builds.

The new series has been several years in Shifting (LAS) available in overdrive marketing with Navistar, has@ARTICLECATEGORY:865; been named Although ProMiles and TruckMiles reside on the users com@COMPANYINARTICLE:024637996; 024644511; 024664030; and direct Multipurpose High president of the new entity. the making, with Eaton it in updates, puter; i.e., the databases aredeveloping frozen between there isdrive; an Carroll McCormick is anand awardPerformance (MHP); Multipurpose Excooperation with North American truck “Together, Navistar Caterpillar exception for fuel pricing, explains ProMiles Canada president winning writer who has been covering tremeallPerformance (MXP); Vocational have moved this project from concept makers so each model specifically Mark Bowie.

“When youisbuild a routeengiwe consider the fuel transportation industry issues and Construction Series (VCS); Vocational totechnologies neered to bealong integrated intoyour its intended reality in for little more one year,” prices at stops that route, MPG, fuel capacity and startmore thanthan a decade.

Multipurpose Series (VMS); and Vocational says powertrain configuration. ing fuel level in your tanks, and suggest the best places to buy fuel.

HeSaltiel. is based in Quebec.

Daily“The pricemany updates via themodels Internet keepour fuel prices current.”

Extreme Performance (VXP). different reflect Another newly-named executive in-

EquipmentWatch

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

14

motortruck

SEPTEMBER/OCTOBER 2006

19

EquipmentWatch cludes Bob Iacullo as chief financial officer of NC2. There have also been appointments for business units such as product development, sales and marketing, dealer operations, production, supply chain, and parts and service, the company has announced.

“NC2 will produce and market a full line of commercial on-highway trucks for markets outside of North America,” says Saltiel. “Customers will benefit from the unparalleled depth and scope of support provided by Navistar and Caterpillar’s global dealers.”

Both Navistar and Caterpillar have contributed three people to NC2’s board of directors, which will be chaired by Cat president Doug Oberhelman. Navistar Truck Group president Dee Kapur will serve as lead director from Navistar.

NC2 will manufacture and distribute commercial trucks globally, initially focusing on Australia, Brazil, China, Russia, South Africa and Turkey. Both cabover and conventional trucks will be sold under the Cat and International brands.

Here in North America, Navistar and Caterpillar will continue to develop a purpose-built heavy-duty Cat vocational truck which will be sold and serviced through Cat’s North American dealer network. The company says the North American trucks will be slated for full production by mid-2011.

Daimler says the surcharges reflect costs associated with adding SCR, but will be

offset by fuel economy improvements compared to ’07 engines.

Daimler confirms $9K surcharge for new engines Daimler Trucks North America (DTNA) has announced its trucks equipped with EPA2010-compliant Cummins ISX15 engines will come with a $9,000 emissions surcharge.

The surcharge is identical to the one DTNA will charge for trucks with its own heavy-duty Detroit Diesel engines. Both Detroit Diesel and Cummins will use selective catalytic reduction (SCR) exhaust aftertreatment systems to reduce NOx to EPA-mandated limits.

Shell Lubricants september/october 2009

15

EquipmentWatch Navistar announces 2010 pricing: $6K for mid-range, $8K for big bore Navistar has announced that vehicles with mid-range engines such as the MaxxForce 7, MaxxForce DT, MaxxForce 9 and MaxxForce 10 will include a $6,000 non-discountable emissions surcharge.

Trucks with big bore engines such as the MaxxForce 11 and MaxxForce 13 will increase in price by $8,000, the company announced.

Unlike any of its competitors, which are each relying on the exhaust aftertreatment system selective catalytic reduction (SCR) to meet 2010 emissions standards, Navistar has developed an “incylinder” solution it calls Advanced EGR. It’s simply an expansion of the company’s current exhaust gas recirculation technology.

“Meeting stricter EPA emissions levels in 2010, unfortunately, comes with a higher price,” said Jack Allen, president of Navistar’s North American Truck Group. “Though we have given our best effort to minimize costs related to the robust design and development of 2010 MaxxForce engines to ensure pricing is manageable for our customers, prices will increase commensurate with our technology path and our effort to remain competitive in the marketplace.”

Navistar also took the opportunity to take aim at “misinformation” it says has been circulated by some of its competitors.

Specifically, Navistar addressed fuel economy, SCR operating requirements, reliability and residual value.

Fuel economy: Claims that SCR will deliver better fuel economy than Navistar’s in-cylinder solution are based on Class 8 onhighway applications under optimum conditions, said Allen. He said Navistar’s 2010 engines will have fuel economy “equal to or better than” its current offerings. He said he’s also confident

16

motortruck

Navistar’s fuel economy will rival that of any SCR engine when you factor in the cost of urea (or diesel exhaust fluid, which is actually a mixture of urea and water). Also, Allen pointed out Navistar will compensate for any loss of fuel efficiency within the engine by improving the efficiency of the entire truck package, focusing on factors such as truck aerodynamics and rolling resistance.

Operating requirements: Despite claims to the contrary, Allen said SCR will be onerous for body builders, customers and drivers as it occupies frame rail space and requires drivers to actively monitor DEF levels and seek out sources of the fluid while on the road. He also said there will be incremental repair costs for the hardware and software associated with the SCR system, all of which is avoided by using Advanced EGR. Reliability and durability: Questions about the ability of the 2010 MaxxForce engines to deal with increased heat output are unfounded, according to Allen. He said the new MaxxForce engines inherently run cooler than their predecessors. “The combustion temperature has been lowered so the thermal stress on the engine is actually lower,” he explained. The cooling system has been improved and now features a two-stage EGR cooler. “We are putting more exhaust into the air intake, but we’re not putting more hot exhaust into the 2010 engines,” Allen explained. “In fact, our air intake temperatures will be lower than our current engines.”

Residual value: Allen also confronted claims that Navistar’s engines will have little resale value as the majority of heavy-duty engine manufacturers commit to SCR. “Our belief is that the technology to meet emissions is going to continue to evolve post2010 to a non-liquid urea-based solution,” he said. He compared SCR to technologies such as VCRs and Walkmans which were eventually replaced with “more advanced, more customer-friendly” technologies and he pointed out “there are a number of high-tech companies today” testing technologies that would meet the required NOx levels without urea-based DEF. Navistar officials also announced that 2010 field testing is well underway, and that EPA2010-compliant versions of the big bore MaxxForce 11 and 13 engines will have racked up more than five million miles of real-world testing before their launch.

Navistar also touched on its ongoing lawsuit against the EPA, which accuses the agency of changing the rules mid-game, benefitting engine manufacturers using SCR. The original EPA SCR guidance document issued in 2001, for instance, declared that only systems that are 100% compliant with 2010 NOx limits 100% of the time would be considered. The latest guidance issued by EPA, however, allows SCR systems to operate up to 1,000 miles without DEF in the tank and for up to 70 minutes without thawed DEF during cold starts, according to Navistar’s interpretation.

“In our mind, that’s not 100% compliant 100% of the time, that’s a loophole and it’s a loophole that in 2001 the EPA specifically said it wasn’t going to allow,” charged Allen.

DRIVER SATISFACTION SURVEY

Can you

PACK The Room?

When the driver shortage resumes, you’ll need a competitive HR strategy to get the drivers you need.

Find out if yours fits the bill with our fourth annual Driver Satisfaction Survey

SPONSORED BY MICHELIN NORTH AMERICA (CANADA) INC. CONDUCTED IN PARTNERSHIP WITH THE CANADIAN TRUCKING HUMAN RESOURCES COUNCIL

Page 18 DRIVER SATISFACTION SURVEY

FROM THE FOUNDING SPONSOR

Since 1889 Michelin has been bringing innovation to mobility. From the first demountable bicycle tire, to inventing the radial tire, to the Michelin X One single truck tire, we’ve brought innovative solutions to the mobility needs of humankind. Michelin is a world-wide manufacturer whose tires are recognized for their quality, durability, reliability and performance. We manufacture tires for every type of vehicle, including airplanes, automobiles, bicycles, earthmovers, farm equipment, heavy-duty trucks and even the space shuttle. We also publish travel guides, maps and atlases for Europe, Asia, Africa and North America. Safety and innovation remain driving forces behind our continued success.

Michelin is pleased to have the opportunity and proud to be the Founding Sponsor of Transportation Media’s 2009 Driver Satisfaction Survey. The North American economy runs on trucks and understanding the driver’s view is a key to making sure trucking is safe, effective and efficient for everyone. Driven by a constant will to innovate, we are proud to help provide a long-term response to issues pertaining to mobility.

Michelin is committed to an approach of balanced and responsible long-term development. Our expertise is tires, but we recognize that trucks do not run without professional drivers who need to be heard and understood. The study that follows makes a significant contribution toward understanding the conditions, the environment and the expectations of today’s professional truck drivers. Please take the time to read this story. Drivers deserve this attention and together we can all work towards A Better Way Forward.

FROM THE SUPPORTING PARTNER

Our Industry, Your Council!

The Canadian Trucking Human Resources Council (CTHRC) is dedicated to working in partnership with the stakeholders to develop products and services that will assist our industry recruit, train and retain the human resources needed to meet current and long-term requirements.

CTHRC activities are limitless as we listen, learn, research, educate, train, guide, inform, mediate, facilitate, speak and so much more in our efforts to assist as the industry moves forward. We are so pleased to have the opportunity to once again be the Supporting Partner for the Motortruck Fleet Executive 2009 Driver Satisfaction Survey. We strongly believe that you can’t get to where you’re going without understanding where you are and that includes knowledge of professional drivers’ opinions.

CTHRC is proud to work on behalf of the 500,000 employees and 50,000 businesses that form one of the most vital sectors of the Canadian economy. We are a 67 billion dollar a year industry that operates 24/7.

As commonly noted if you got it, a truck brought it and for this we say to the members of the trucking industry, Thank you!

Can you pack the room?

Understanding what drivers need to feel appreciated and motivated is the start to a post-recession growth strategy “Good captains in fierce storms are made” is one of the first sayings I remember learning as a child and it has stuck with me these past four decades. The ability to handle adversity is the true test of a professional or a business enterprise and what separates the winners from the pretenders and wannabes.

If we buy into the belief that ultimately a trucking company is only as good as its people, and its driver force in particular, then the economic uncertainty and tumultuousness of the last couple of years have proved to be the perfect storm in which to test our mettle.

How have our driver relations fared in the maelstrom of cutbacks, wage freezes and layoffs? Are our drivers still feeling engaged, enthused and motivated to help us tackle the challenges and seize the opportunities to come when the economy improves?

If not, do we know how to get them back on our bandwagon?

These are some of the most critical questions a fleet owner or manager has to answer in the months ahead.

And we want to play an important role in helping you find answers to those questions.

For the fourth straight year our research division,Transportation Media Research, has spent several months surveying company drivers and owner/operators across the country – through e-mail and at industry shows. We wanted to know how satisfied they are in their jobs, which parts of their job provide them with the most satisfaction and which the least? We wanted to get to the heart of critical questions such as which parts of their job drivers most strongly feel should be recognized and rewarded; which areas they want to receive more training; and the relative importance they attach to having a say in a range of management decisions. Our research also looked at how often drivers changed jobs and, when doing so, what would make them choose one company over another.

Research of this scope and breadth is a considerable annual undertaking and would not have been possible without the help and support of our founding sponsor, Michelin North America (Canada) Inc. and our supporting partner, the Canadian Trucking Human Resources Council (CTHRC). It speaks to their commitment to this industry that they have chosen to support such research year after year.

Our greatest thanks goes out to the company drivers and owner/operators across the country who took time out of their very busy schedules to respond to our questionnaire. Thank you for making our research project a success once again.

We hope the results of our survey are considered by both fleet managers and the drivers they employ in the spirit in which our research was intended and conducted: as a good starting point towards better understanding the driver-fleet manager relationship and what is required to make it most effective.We also believe that good research is meant to evolve over time and so we ask for your feedback on our effort and any changes or additions you would like to see made in future years.

Lou Smyrlis Editorial Director

DRIVER SATISFACTION SURVEY Page 19

T

here may be no better test of a company’s human resource strategies than a recession. When times are good and the raises, bonuses and other forms of recognition are flowing, it’s easy to believe you have the work force motivation and loyalty you desire. But try maintaining a positive attitude within your driver work force when slumping revenues force you into cutbacks, layoffs and other difficult decisions that wreak havoc on employee morale – definitely not for the faint of heart. Yet communicating effectively and maintaining positive relations with your driver work force is not only important to a fleet’s survival during tough economic times but critical to positioning it to seize the opportunities of the eventual economic turnaround.

Most sectors of the trucking industry have been in a freight recession for more than two years now. Heading into 2010, this is a battered industry with company valuations dropping by more than 40% from their pre-recession values. Many tough choices have had to be made, with more to come. Understanding how this has affected driver job satisfaction was an

important objective of our fourth annual Driver Satisfaction Survey, conducted in partnership once again with CTHRC. Employee retention, of course, is only half of the human resource equation.

Recruitment is the other half and our survey once again pays close attention to the factors that make company drivers and owner/operators choose to work for one carrier over another. The carrier bankruptcies, mergers and downsizings, experienced over the past couple of years may have temporarily done away with concerns about a shortage of qualified drivers. But don’t be fooled into thinking that a more generous labor pool is a trend sure to continue into the future. Tracking the growth of the transportation industry over the past 30 years

Respondent Profile and Survey Methodology

Distribution by Employer Type For hire fleet: 65%

Government fleet: 1% O/O: 11%

Private fleet: 20% Driver Service: 2%

Geographic Distribution

in contrast to the growth of the Canadian economy over that time period clearly shows that when the good economic times return, trucking booms.

And that will likely mean a relatively quick return to the pre-recession difficulties of finding good qualified drivers.

Back in 2006, at the tail end of the continent’s economic expansion, extensive CTHRC research found that almost 60% of industry employers considered the driver shortage as one of their top two concerns, up from the 50% who said likewise in 2002. The research showed industry employers had good reason to be worried as job vacancy rates increased to 12.3%, compared to the 9.6% vacancy rate identified four years previous.

Such a high job vacancy rate translated into an immediate need for 12,000 new drivers of tractor trailers.

So how are truck drivers faring in the worst recession to hit our companies since the Great Depression? Well, most economists believe our economy hit bottom at the mid-point of the year.

Perhaps the best we can say about this year’s survey results is that driver morale has also hit bottom and so is

Prairies: 17% BC: 14%

Maritimes: 7% Quebec: 6%

Ontario: 57%

Over the course of the past year, company drivers and owner/operators were invited to participate in our fourth annual national Driver Satisfaction Survey in a variety of ways. E-mail invites were sent to a subset of the circulation of Truck News and Truck West. Invitations to participate were also provided at leading industry shows. The survey was made available in both French and English.

In total, the responses of about 200 professional drivers are included in this survey. Fifty five percent of our driver sample consisted of company drivers and 45% of owner/operators. Sixty five percent worked in the for-hire fleet sector; 20% in the private fleet sector; 3% worked in a government fleet or a driver service, and 11% worked for an owner/operator. While 57% were based in Ontario, the survey included representation across the country. Seven percent were from the Maritimes; 6% from Quebec; and 31% from Western Canada.

The average age for survey respondents was 50, with 25 years of driving experience. During that time our average respondent worked for 6 different companies and has spent the last 7 years with their latest employer..

The vast majority of company drivers (96%) drove solo.

Pay by the mile/km was the most common form of payment for our survey sample with 50% of drivers reporting that’s how they were paid. Pay by hour (22%) and by trip (22%) were the second most common forms of payment for our survey sample. Other forms of payment included by the tonne, and by salary.

Page 20 DRIVER SATISFACTION SURVEY

hopefully ready for a bounceback.

The continuing drop in job satisfaction is impossible to ignore. It is down to a paltry 3.13 out of 5 this year, compared to 3.48 last year and 3.66 for the two years previous to that.

Whereas two years ago job satisfaction rate could be considered a solid “B”, 3.13 is barely a “C”. For the first two years of our survey almost two-thirds described themselves to be either “satisfied” or “very satisfied” in their driving jobs. Last year that dropped to slightly more than half being likewise happy with their driving jobs. This year that’s

down even further with only 42% being satisfied. And while last year we reported alarm that a full fifth of the people behind the wheel now considered themselves either “unsatisfied” or “very unsatisfied” in their jobs, that level is now up to almost a third reporting dissatisfaction with their jobs.

It’s not enough, however, to know that job satisfaction is dropping. To have any chance to deal effectively with the situation it’s important to first be able to identify which aspects of the job are suffering the most and which are faring the best. For the third year in a row we asked

Figure 1

Importance of having a say in management decisions (on scale of 1 to 5) Dispatch - 4.12 Maintenance - 4.38 Benefit package - 3.79 Equipment spec’ing - 4.08 Customer service - 4.08 Cost cutting - 3.91 Safety improvements - 4.18 Fuel management - 4.08 Security - 3.90 0

1.0

2.0

3.0

4.0

5.0

Degree of importance deemed by respondents

Importance of rewards and recognition (on scale of 1 to 5)

Figure 2

Fuel efficient driving - 4.19 Accident-free mileage - 4.55 On-time delivery - 4.46 Customer service - 4.41 Learning new skills - 4.15 Business suggestions - 4.04 Minimizing cargo damage - 4.35 Aiding driver recruitment - 3.00 0

1.0

2.0

3.0

4.0

Degree of importance deemed by respondents

5.0

survey participants to rate their satisfaction with 12 different aspects of their job, ranging from pay and recognition to stress and growth opportunities with the company. This is what we found: • Although it’s not surprising that satisfaction levels have dropped across the board, the depths that these satisfaction levels have fallen to in several areas should be of great concern Of the 12 different job factors, only one was rated above 3.50 or, put more simply, given a B grade. Drivers once again gave their highest rating, a 3.57 out of 5 to the “degree of respect and fair treatment” they felt they received from customers.

Although that is heartening (even though it also shows a slight deterioration from years past) it also means there is nothing else about their job that drivers find satisfying enough to give it a B grade.

• Several important areas slipped into dangerous territory, slipping uncomfortably close to receiving a failing grade.

These included the “amount of pay and benefits” graded at 2.93 out of 5, the “amount of job security” and the “amount of job training” both graded even lower at 2.71; the “quality of supervision received on the job”, ranked at 2.86 and the “amount of independent thought and action exercised on the job”, graded at 2.97. The last point is an interesting one because the ability to have a degree of independence on the job is greatly valued by drivers and received a much higher satisfaction rating (3.55) just last year.

• And there were a couple of areas graded at 2.5 or less out of 5 this year, which translates into a D grade. These included driver satisfaction with the “amount of recognition received for strong performance” graded at 2.50 and the “opportunity to grow with the company”, receiving the lowest grade at 2.38.

• At the same time, drivers rated their satisfaction with “the amount of stress” in their jobs at 2.73 out of 5, again a drop from the previous year’s 2.94 and the 3.06 out of 5 rate from two years ago. Other markers of job satisfaction, such as enjoying their workmates and the “feeling of accomplishment from

DRIVER SATISFACTION SURVEY Page 21

doing the job” also dropped from previous years, down to 3.27 and 3.09 out of 5 respectively.

Every year we also ask drivers to rate how concerned they perceive their employer to be in meeting their needs.

Here too we ask them to rate 12 different areas of importance, ranging from getting them home on time to rewarding strong performance. In years past we noted some slight deterioration in driver perception about management concern in several areas. What’s most remarkable about this year’s survey results is that we found deterioration in 11 of the 12 areas and the one area that did not conform to this pattern (paying you on time) simply held steady. It’s no surprise during these tough financial times that survey respondents would be less convinced their management was concerned about “offering job security”, “providing a competitive income” and “rewarding strong performance”. It’s no surprise either that drivers would be less convinced this year about management’s enthusiasm for “making sure equipment is modern”; after all, Canadian truckers are currently operating the oldest fleet in recent memory. But it is disappointing to see drivers becoming increasingly less convinced about management’s concern about “getting you home when promised”, “giving enough time to complete trips” and “making sure equipment is safe”.

Although none of the last three areas mentioned received a failing grade, there were marked drop offs from past years’ results. And just as puzzling is the low rating given by drivers about management concern over “meeting with you regularly.” After all, that one doesn’t really cost anything.

We take the survey one level further by asking respondents to directly rate the performance of their supervisors. In keeping with the trend for the year, all five of the areas surveyed showed deterioration. For the third year in a row, drivers scored their supervisors lowest when it came to asking for their opinion (2.57 out of 5), which was a considerable drop from even last year’s ranking. That was followed by their supervisor’s demonstrated ability to “give credit for a job well done”, “be fair to all drivers” and “following up on concerns.” Supervisors’

not have agreed with. Drivers responding to our survey showed particularly strong interest in having a say in their fleet’s maintenance strategies (4.38 out of 5); safety improvements (4.18); dispatch (4.12); equipment spec’ing (4.08) and customer service (4.08).

Being rewarded in a number of areas

ability to treat drivers with respect (3.28 out of 5) received the best grade but, as noted, it too showed a drop.

Drivers unquestionably want to have a say in management decisions. If anything, during the recession this interest has intensified, perhaps in response to tough changes they may

Areas receiving training

Figure 3 Driving skills - 53% of respondents Defensive driving - 52%

Business skills - 24% Fuel efficiency - 49% Completing paperwork - 74% Maintenance - 62% Safety regulations - 65% Injury prevention - 58% Customer service - 53% Company policies - 71% Managing family issues - 46% Career path - 26%

0

10

20

30

40

50

60

70

80

90

% of respondents

Figure 4

Rating of employer concern in meeting driver needs (on scale of 1 to 5) Getting you home when promised - 3.30 Giving you enough time to complete your trips - 3.41 Making sure your equipment is safe - 3.85 Making sure your equipment is modern - 3.42 Providing adequate safety training - 3.35 Providing adequate training in new technologies - 2.96 Seeking your advice on equipment purchases - 2.27 Providing a competitive income - 3.30 Paying you on time - 4.32 Offering job security - 3.04 Rewarding strong performance - 2.92 Meeting with you regularly - 2.69

0

1.0 2.0 3.0 4.0 Degree of importance deemed by respondents

5.0

Page 22 DRIVER SATISFACTION SURVEY

Items included in total compensation

Figure 5

Individual bonus - 57% of respondents Profit sharing - 9% Stock options - 1% Personal career development - 7% Scheduled days off - 56%

0

10

20

30

40

50

60

70

80

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% of respondents

Rating of supervisor (on scale of 1 to 5)

Figure 6

Asking your opinion - 2.57 Treating you with respect - 3.28 Following up on your concerns - 2.90 Being fair to all drivers - 2.80 Giving you credit for a job well done - 2.74

0

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Degree of importance deemed by respondents

Job satisfaction (on scale of 1 to 5)

Figure 7

3.13

0

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Degree of satisfaction deemed by respondents

Top 5 reasons drivers would consider working for another carrier

Figure 8

Better money - 83% of respondents Better benefits - 48% Better rewards program - 22% Better career opportunities - 34% Better scheduling - 28%

0

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30

40

50

% of respondents

60

70

80

also remains important to drivers. Top among the areas they would like to receive rewards and recognition for their efforts include, accident free mileage, ontime delivery, customer service, and minimizing cargo damage.

Previous CTHRC research found the hiring of new employees in trucking prior to the recession lagged behind the rate at which drivers were being lost.

New hires were accounting for 17.6% of the workforce, compared to the share of drivers who quit (13.3%), were terminated (8%), or retired (3.2%). That last reason for losing drivers is sure to gain in importance as well. The average age of the drivers responding to our survey was 50; Retirement rates, according to the CTHRC research have increased three fold since 2002. When the economy resumes its stride and trucking companies start growing again, driver retention and recruitment are certain to be important barriers to growth.

Our survey also asks drivers to list the main reasons they would consider working for another carrier. In each year of our survey, not surprisingly, better money is the most often cited reason with 83% of respondents admitting that thoughts of a fatter paycheque do make them consider alternative employment. Better benefits (48%) and better career opportunities (34%) round out the top three reasons cited. But incentives such as better rewards (22%) and better scheduling (28%) also rank in the top five.

The longest, deepest recession trucking has experienced in decades has certainly masked one of our industry’s greatest challenges: attracting and retaining qualified drivers. But a decent labor pool from which to draw from is a luxury that is certain to be short lived. As CTHRC research indicates, half the carriers it surveyed back in 2006 were struggling with a shortage of Class 1/A drivers and as a result almost three quarters of them had to refuse or delay the movement of goods because of that and almost 40% had to delay or cancel expansion plans.

As many a trucking CEO will attest, in times of growth those who have the drivers win. We hope our survey data and analysis will help you in putting together a winning driver and recruitment strategy.

90 @ARTICLECATEGORY:861; @COMPANYINARTICLE:030874631; 029994284;

Discover how far good HR will take you

Yo

ur Gui HUMA de to Is your trucking company being held back by staff with an overwhelming N RESO URCES workload? Learn modern recruitment and retention strategies with Your Guide to Human Resources: Practical Tips and Tools for the Trucking Industry. The CTHRC’s guide teaches you how to find drivers who are the right fit for your fleet and then protect profit by reducing turnover. Application, orientation and evaluation templates are all available on the Toolbox CD, along with practical information to tune up your company and reach new horizons. To order Your Guide to Human Resources or to find an HR Essentials seminar nearest you visit www.cthrc.com.

Practica l Tips and

Our Industry. Your Council!

This project is funded by the Government of Canada’s Sector Council Program.

Tools for the

Trucking Industry

Your HR Toolbox

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

Charles Musgrove– Director of Operations Dillon Transport, Inc.

“MICHELIN ® X Ones ® are our competitive advantage.“ “We switched to X Ones ® when they first appeared on the market primarily for the weight savings. What we got, in addition, is outstanding fuel economy. Our trucks are getting 6.3 mpg, which translates to about 4% or $300,000 in fuel savings annually. Add that to the $350,000 in extra revenue from our weight savings and our X One ® tires have contributed greatly to our success at Dillon. Plus maintenance is easier, cheaper and faster with no inside dual and we love the fact that X Ones ® symbolize our innovative and green operating practices, helping us get bids through the SmartWay partnership. For us, the decision to put X Ones ® on our fleet was a no-brainer.”

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Profitability

is there a better LTL pricing scheme?

The long and winding road to cube- and density-based pricing

BY DAN GOODWILL

F

reight pricing has been an interest of mine for many years, particularly the pricing of less-than-truckload freight. This somewhat ambiguous category encompasses shipments weighing typically between 100 and 10,000 lbs. A white paper entitled, The Path to DensityBased Pricing: Connecting Domestic LTL Pricing to the Global Supply Chain, published by SMC3 in 2008, places the current status of LTL pricing in the US in context: “Over the past two decades, globalization of the supply chain, industry consolidation, and competition in the freight transportation marketplace have brought sweeping changes to the less-than-truckload (LTL) industry. In this era of dramatic change in our nation’s business climate, there is one system that has not experienced any fundamental alteration – the industry’s traditional classification-based rating structure…A holdover from the railroad era of the early 20th century, the classification-based pricing system is confusing to the non-expert, costly to implement, and difficult and burdensome to manage. Furthermore, some argue that it produces pricing that bears little relationship to actual transportation costs and that it hinders the LTL industry’s ability to compete against air freight and parcel carriers.

“The United States is the only country using a freight classification-based pricing system for LTL shipments; the rest of the world uses density measurements to drive transportation pricing. While many recognize the shortcomings of class-based pricing and have weighed the advantages of moving toward a density-based pricing methodology, real barriers to change remain. For one thing, freight classification has been the industry standard for more than 70 years. Changing this entrenched system would require nothing less than an industry paradigm shift.

“Pricing for international oceanic and air freight has long been based on cube and weight calculations. The rest of the developed world, including Canada, Mexico and European countries, uses density measurements to set transportation prices. The United States is the only country where a segment of the trucking industry uses a class-based rate system as the basis for transportation pricing.”

A couple of years ago, I became aware of a new LTL pricing methodology called cube-based pricing (CBP). At the time, it struck me as a clever way of simplifying the complex National Motor Freight Classification system, by creating a system that correlates the pricing of LTL freight directly with the space occupied on a trailer, and of bringing the pricing of LTL freight in the US (and to a lesser degree in Canada) more in line with how freight is priced in many parts of the world.

I wrote a piece on this topic back in 2007 (Cube Based Pricing – The Scoop on the new LTL Pricing System) that became the most frequently read posting on my blog.

To this day, that blog continues to receive a significant number of readers on a monthly basis. Clearly the piece struck a chord with thousands of shippers and carriers.

Cube- and Density-Based Pricing Since there was so much interest, I thought it would be enlightening to revisit this topic to see how far cube-based pricing has progressed over the past two years. This time I will explore the current status of two similar LTL pricing methodologies: CBP and density-based pricing. Under a density-based system, dimensional weight measurements combine the physical volume and the weight of a shipment to determine shipping costs. Density is computed by dividing the weight of an item by the september/october 2009

25

Profitability product of its dimensions in length, width and height, which determines its volume.

The typical unit of density measurement is pounds per cubic foot in the English system, and kilograms per cubic metre in the metric system. Cube refers to the cubic space occupied on a trailer and this pricing approach reflects essentially the same set of parameters.

While there are likely a number of companies developing and refining a version of one or both approaches, I will focus specifically on the DBP product from SMC3 and the CBP product from The Visibility Group.

Both companies are based in Atlanta, Ga. I reviewed the most recent sales collateral from both companies on these topics and interviewed Danny Slaton, senior vice-president of business development for SMC3 (www.smc3.com), and Hank Mullen, president, and Lynnette Guess, CEO, of The Visibility Group (www.thevisibilitygroup. com). Here is what I learned: Both companies have been hard at work on developing and refining their respective products. Neither product has gained any level of market acceptance, although both products are being used on a very limited

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26

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basis. Slaton indicated that seven to eight carriers are using the pricing tool, primarily for import/export. In his view: “The pricing methodology will gain traction as global trade increases and companies require the cost of shipping LTL freight from Beijing to Toronto. As more companies seek to link their global ERP system to their TMS system and these systems are linked to emerging weighing and measuring technologies, the data points required for density formulas will be commonplace. This convergence of technologies will further enable the adoption of DBP.” Mullen’s take was similar to Slaton’s.

There are no carriers or shippers that are using CBP exclusively. However, Mullen is seeing companies use their NMFC pricing system and their CBP systems in parallel.

Guess added that, “When we developed cube-based pricing, we saw the need for a transition model whereby a carrier and shipper can map dimensional attributes to existing freight pricing. We developed this transition model to allow the shipper to provide dimensional data and for the carrier to analyze this data. Our thoughts were that this analysis would lead to a pure cube-based pricing system that is simple and efficient.”

This is allowing shippers and carriers to compare their LTL rates under both methodologies to see how and where the rates vary.

Mullen also mentioned that there is some interest among a group of 3PLs, since they are less comfortable with the intricacies of NMFC pricing and are seeking ways to facilitate their LTL pricing functions.

The reasons for the slow adoption were outlined very clearly in an e-mail received from Jim Graham, director of TBB Logistics.

Here is what he had to say: “While the cost of some technology changes would slow down or prevent some from wanting to make the change, the real obstacle is FEAR. Fear both with the shipper and carriers, and the fear comes from the feeling, belief or knowledge they will be harmed by the change…(The fear has come from) the transformation of goods to be less dense…(This) has continued to build support by shippers in holding on to the classification process.”

Outlined below are the main fears from both the shipper and the carrier side as

Graham sees them.

Fear 1 for the shipper: You see this fear every time a product is changed from one class in the NMFC to a density. Shippers have enjoyed the stable class for their product and now they are subject to a higher class because their product is less dense.

Shippers know their products have become less dense and therefore would be subject to higher costs if they had to pay on a densityonly basis. The simple fact is products have become much smaller and lighter, but the NMFC process has been slow to actually move to more density classes. Some of this slow reaction time was the hesitation to upset shippers who already saw the NMFC as nothing but a carrier committee to collectively raise charges.

Fear 2 for the shipper: Again, going back into history, shippers would use much more packaging because they recognized their freight was going to be stacked on other freight. The carrier’s equipment was rarely “air ride” smooth, and with heavier products, it needed to be more secure. Also, the outer packaging was designed to protect the innerpackaging and goods. Several things have happened: as freight became lighter and the costs of packaging went up, shippers did not continue to invest in the best packaging.

Also, it became popular to have the outer packaging advertise the product, so it can go directly from the shipping pallet to the shelf or the customer’s vehicle. This has led directly to the shipper requiring the carrier to state “do not double stack” their product.

The SMC3 white paper talks about a pallet of 48 x 40 x 48 being around 54 cu. ft., but in today’s shipping dock, you see considerable freight with the “do not stack” cone, one package on top so the surface is not level, or pallets exceeding 48 inches. With this going on, the shipper is really taking up 48 x 40 x 96 – 108 cu. ft. While there are a few carriers that have rules in place to adjust for this, most shippers have found ways to skirt these rules and are taking up much more space than the actual shipping form. Under a density program, they would have to pay for this space in some manner, which would increase their costs.

Fear for the carrier: The transition of the process from the class to the density rating system places the carriers in a position of

Profitability losing revenue over a considerable amount of time. Shippers which would benefit from the change would make the move quickly, and thus the carrier would see less revenue from these accounts. Those shippers which perceive or know their freight charges would go up would be hesitant to move and would continue to pressure the carrier(s) to rate their shipments under the current class/rate process. Until the field is completely level (all carriers moving to density rating and shippers given little choice), you have carriers working under both systems and not seeing the benefit of shippers sharing equally in paying for the space used.

The move to a density system will take place much quicker and smoother if there is a way for the transformation to be revenue/ expense neutral for the carrier and shipper for an 18- to 36-month period, and during this time, and at least 24 months after transition, there is equilibrium of demand and supply. Then market forces can begin to adjust to the actual purchase of space for distance. If either side has the upper hand, then movement will be very difficult.

7 Steps to Density-Based Pricing In the SMC3 white paper referenced above, seven items are listed as requirements to bring about the change that so many shippers are carriers are seeking. They include: 1. A change management process to bring about a methodical, gradual change.

2. A consensus among shippers and carriers that this will result in greater efficiency over the long term.

3. A standardized methodology with clear rules to ensure uniformity.

4. Revenue parity that does not unduly reward or punish shippers, carriers or third parties.

5. A shipment handling methodology to account for over-dimensional or hazardous products.

6. Automated business processes that account for density and cube across the supply chain.

7. Enabling technologies (e.g. forklift scales) that simplify and speed the implementation process.

In the next issue, we’ll take a look at the mt Canadian Experience.

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.

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Profitability

bettertogether Industry analysts like the synergies and scale created by the MacKinnon-Walker deal

BY LOU SMYRLIS

T

his summer’s most sizzling acquisition announcement – the purchase of the St. Thomas, Ont.based Walker Group of companies

by MacKinnon Transport – is getting two thumbs up by industry analysts who believe it to be the start of further consolidation in Canada’s beleaguered truckload sector.

The deal, announced at the end of August, creates a combined entity that will operate out of MacKinnon’s head office in Guelph, Ont., where the company will now manage more than 1,300 pieces of equipment and employ a workforce of 420 people. The Walker Group consisted of LE Walker Transport and Mid America Freight Systems, both major players in the dry van and flatbed marketplaces in North America. The Walker Group was led by the highly visible Julie Tanguay, current chair of the Ontario Trucking Association.

Tanguay will now have joint ownership in the combined entity and will take on the newly created role of executive vice-president of sales, heading up sales efforts for the combined fleet.

“I think this is a very interesting play for MacKinnon and Walker. I think it’s the right move and I expect more consolidation in the TL sector,” said Elian Terner, a director of investment banking with Scotia Capital.

This also represents a different type of deal than what the industry has seen in the recent past. A lot of the mergers and acquisitions the market saw prior to the recessions involved moves into new market segments for the carriers involved. Over the past year, with access to credit tightening significantly, the activity has focused instead on small opportunistic “tuck-in” type deals.

This one is really more of a consolidation play in a weaker segment of the industry.

“The TL sector has taken a big beating and I’ve got to think TL owners are thinking that to be ready for another business cycle, they’re going to have to pair up with someone. But in terms of attractiveness of TL, it’s not really attractive to any other type of car28

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rier. If a guy is asset-light, he’s not interested in TL; if he’s specialized, he’s not interested in TL,” Terner said. “The TL guys are going to have to solve it on their own and I think MacKinnon and Walker are doing the right thing in being a first mover here.”

Well-known industry consultant Dan Goodwill, a former trucking company executive himself, also praised the deal as a good move with a real chance for success.

“Everything that I read and hear is that the economic rebound is going to take three to four years to get back to where things were. It’s supposed to be a long and bumpy road and slow building up one’s business,” Goodwill said. “If MacKinnon and Walker can retain the revenue, rightsize the business, drive some synergies, and the financials of the deal are solid, this would be a good move.”

Tanguay and Evan MacKinnon, who continues as president and CEO of MacKinnon Transport, believe the acquisition provides the new entity with several advantages as it continues to deal with the current downturn and prepare for the eventual economic recovery, as well as being able to offer new benefits for shippers.

Both carriers are involved in transborder hauls. But Walker’s strength was greater in southbound freight hauls to the US while MacKinnon was stronger in their northbound runs into Canada.

“We are both irregular route TL carriers. We get in places where we are not there every day. And so we rely on freight brokers quite often to reposition our trucks. When we start mixing their customers with ours, there will be less reliance on freight broker freight going forward and we will be able to close up some empty miles. Even 1% fewer empty miles is three-quarters of a million dollars to us,” MacKinnon told Fleet Executive.

Walker’s St. Thomas terminal will continue to operate in the short term, but eventually (likely by year end) will be merged into MacKinnon’s Guelph operation. All

drivers and owner/operators have been retained, but there will be some savings realized in combining support staff.

Both companies deal with some large shipper accounts. The Walker Group has some large food products accounts while MacKinnon deals with some large building materials accounts. Both companies haul liquor, but for different accounts. Adding Walker’s more than 500 pieces of equipment to MacKinnon’s 800 creates a significant amount of capacity, better geographical coverage, and new capabilities.

Tanguay says bringing together MacKinnon and Walker strategically positions the beefed-up new entity in a way that will help it respond rapidly to changing markets and customer requirements. And she adds the customer bases of the two companies were quite diversified with very little duplication of accounts (5% or less).

Terner concurs: “The TL guys service the big box guys and the big box guys are elephants and they like to dance with elephants.

The more scale and concentration you can present, the better positioned you will be for the upswing,” Terner commented.

MacKinnon sees plenty of opportunity for growth within existing Walker and MacKinnon accounts, which are operating at about 60% of normal freight volumes today after two years of freight declines.

In addition to better geographic coverage and more capacity, Walker clients will also benefit from access to MacKinnon’s warehousing offerings.

But MacKinnon believes the greatest benefit to customers stemming from the transaction will be the ability to grow in a financially sound manner.

“There are more and more customers concerned these days that if a company has a financial problem, where is their freight going to be when that happens? As far as a customer looking to develop a relationship for the long term, this is going to make us very financially strong,” MacKinnon said. mt

We’re now on twitter - and we’re pretty cocky about it. twitter.com/adamledlow twitter.com/jamesmenzies twitter.com/lousmyrlis

12.3% 12.3%

That was the percentage drop in Canadian railway carloadings reported by Statistics Canada for June compared to the same month in 2008. The drop in tonnage was the result of decreased freight loadings in both non-intermodal and intermodal railway transportation systems.

Non-intermodal loadings fell 12.1% to 17.6 million metric tonnes in June.

Intermodal loadings declined 13.7% from June 2008 to 50 2.0 million metric tonnes.

40

InsidetheNumbers Transportation Cycle versus the Economic Cycle

WORK ON YOUR PATIENCE When can trucking expect to come out of recession? According to research of the relationship between transportation data and measures of the economy over a 23-year sample period, there is a relationship between changes in the transportation services sector and the recessionary phase of the economic cycle. The transportation sector typically reaches a peak six months ahead of the economy, while lagging by two months at the trough. Consequently, a transportation recession is eight months longer than general economic recessions.

Frequency of modal reviews KEEPING YOUR OPTIONS OPEN Frequent modal reviews can prove essential to ensuring the best modal mix at the best pricing. Four in 10 shippers surveyed by eyefortransport last year reported conducting modal reviews more than twice a year, while another 16% said they did so twice a year.

More than a quarter conducted a review of the modes they employed once a year. But the majority of the respondents conducting regular modal reviews are either manufacturers or 3PLs. Few retailers are as diligent with their modal reviews and 14% of respondents reported they never review their modal options.

30

20

10

0

More Twice a Once a Never than year year 14% twice 28% 16% a year 41%

Main Reasons Cited for Diverting Freight from Truck to Rail

ONLY SO MUCH UPWARD GROWTH Rail is considered to be a viable alternative for more than half of current truck shipments, according to the Canadian shippers responding to our annual Transportation Buying Trends Survey, conducted in partnership with CITT and CITA. And price is the main issue. Almost half of shippers cited price as the main reason they would divert freight from truck to rail. That would indicate that no matter how much upward pressure on rates an expected shortage of truck capacity may cause during the eventual economic upturn, motor carriers have to remain careful about overpricing their services.

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MOTORTRUCK

50

40

30

20

10

0

Poor Trying to Responding Decreasing Increasing Change truck service to rail truck to faster new customer prices prices inventory service or coverage markets requests 12% 49% times 10% 11% 28% 2%

Other 12%

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

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Motortruck

SEPTEMBER/OCTOBER

2009

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

F O R

F L E E T

O W N E R S

G R E E N to G O L D How to profit from green practices sure to drive our economic resurgence

S p o n s o r e d b y P e o p l e N e t C a n a d a , G r e a t D a n e Tr a i l e r s a n d N a t u r a l R e s o u r c e s C a n a d a

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G r e e n to G o l d

NATURAL RESOURCES CANADA Participating in this special green issue of Motortruck Fleet Executive is a compliment to the efforts of Natural Resources Canada through its ecoENERGY for Fleets free program, introducing fleets to energy-efficient practices that can reduce fuel consumption, and its program offering free practical advice on how energyefficient vehicles and business practices can reduce fleet operating costs, improve productivity and increase your competitiveness.

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Great Dane Trailers, the leading manufacturer of semi-trailers, continues to create innovative solutions for today’s trucking needs while also developing environmentally-friendly products. Many of our trailers’ interior panels and scuffband options, including PunctureGuard lining, are made of recyclable materials. Our exclusive ThermoGuard reefer interior lining significantly reduces out-gassing, which greatly improves thermal efficiency and results in fuel savings.

Ongoing collaborative efforts between Great Dane, its customers and industry partners continue to improve trailer aerodynamics, reduce drag and gain fuel economy.

mini GREEN COVER .indd 1

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Are you ready to adjust and thrive in a carbon-constrained future economy?

A

s we begin to get the first glimmers of hope for the resurgence of the North American economy, there are two things we can be certain about: one, the new economy will be significantly different from what we’ve been used to in the past; more government intervention is a certainty, not only in the Obama-led US, but even here under a Conservative government. And two, green practices will begin to figure more and more prominently in the new economy.

Trucking both benefited from and contributed tremendously to the previous economic expansion. The numbers speak for themselves: the amount of freight carried by for-hire carriers from 1990 to 2003 rose 75%. Trucking was a huge contributor to the ability of manufacturers to trim their inventories by 15% from 1992 to 2005 as they employed JIT delivery strategies. The Canadian tractor-trailer fleet grew by a third since the turn of the century as a result.

Is trucking poised to once again play such a definitive role in driving supply chain efficiency in the new economy that’s sure to rise from the ashes of the currently ruined one? The answer to that, we believe, depends on trucking’s ability to adjust to and thrive in a carbon-constrained business climate. Learning to understand and profit from government cap-and-trade programs, answering shipper demands for more sustainable transportation practices and embracing green practices to reduce operational costs will be key ingredients to future success.

Yet at the same time, it’s impossible to ignore the continuing pressure on trucking company profit statements. Investments in environmental projects and programs have to contend with across-the-board cuts in company budgets. This can be a very confusing time for companies trying to reduce their expenses enough to survive the worst economic downturn since the Great Depression, while at the same time trying to keep an eye on the future.

It’s with this in mind that we welcome you to our third annual Green to Gold supplement on transportation practices. In this special issue, you will read about government cap-andtrade initiatives and their likely impact on transportation; how to effectively evaluate fuel-saving technologies; and the financial impact green transportation pioneers are reporting. In addition, we have more information available online at www.trucknews.com.

As we’ve always maintained in producing this annual supplement, if you take the time to do it right, you can turn green into gold. n

We are proud to be producing our Green to Gold supplement on 30% recycled paper.

LOU SMYRLIS Editorial Director

september /october 2009 september /october2007

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G r e e n to G o l d

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A Low Carb Diet

15/09/09 1:02 PM

As government policy heads for cap-and-trade rules on GHG emissions, how will the transportation and logistics industry fare on curbing an appetite for carbon?

BY JULIA KUZELJEVICH

4

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T

he environment may be taking a backseat to the economy these days, but that doesn’t mean that the US and Canadian governments have abandoned any moves to ‘put a cap’ on greenhouse gas emissions.

In June, the US government’s House of Representatives passed the American Clean Energy and Security Act by a 219-212 vote. Under the cap-andtrade rules, high emitters will be given or will have to purchase carbon offset certificates. If the emitter doesn’t produce that much carbon, it can sell its certificates in a carbon exchange market to be established by the act.

The cap-and-trade portion of the act is just a small part of the bill and, for now, is directed at high carbon emitters, such as power plants and big manufacturers.

But, according to John-David Phyper, author of the sustainable supply chain book, Good to Green, by the year 2020, there will be a one-trillion dollar carbon market. So how fast does the transportation industry have to get on this bandwagon, if at all?

Today’s market in carbon trading is in its infancy, but consider that in 2008, said Phyper, investors in American and Canadian companies filed a record 57 climate-related shareholder resolutions, seeking emissions reductions and greater disclosure from companies on their strategies to address climate-related business trends.

In March of this year, the US Environmental Protection Agency declared carbon emissions to be a health issue, forcing reporting rules on some emitters.

In Canada, carbon taxes of one kind or another have already been deployed in Quebec and British Columbia. And there is a 2007 federal regulatory framework for greenhouse gas emissions aimed at 20% reduction in GHG from a 2006 baseline, with an

absolute reduction of 150 megatonnes by 2020.

“If you operate a 100 tonne-plus emissions facility in Alberta, now you must report,” said Ian Mackinnon, president of Jomini Environmental.

“If you drive your trucks through the state of Oregon and you emit more than 2,500 tonnes in a year, you will now be reporting to the state of Oregon. It’s essentially a fuel tax. The concern is that you may have to pay at both state and national level,” he said.

MacKinnon added that a marketbased approach to managing greenhouse gas emissions is becoming more widely supported by governments and stakeholders as a costeffective way to achieve climate change objectives.

“We sit on 22 committees and we’re writing the guidelines for the Canadian government cap-and-trade system. We’re working with the US government on programs that they are going through. We also look at operations and we can recommend technologies that have already been quantified. We can verify, one year out, the number of carbon tonnes that can be traded on a voluntary market, and eventully used in a regulated market. We work with the ISO 14064 standard in Canada as the backbone, as well as a couple of standards used in the US,” he said.

Jomini was also involved in drafting the Canadian government’s ISO 14064 Greenhouse Gases standard, a voluntary series of standards developed through an international consensus-based approach involving stakeholders from industry, government, non-governmental organizations and service professionals.

“ISO 14064 is designed to help organizations and governments in measuring, reporting and verifying GHG emissions. It has been approved as the national standards of Canada,”

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said MacKinnon.

Another major player in the mix is IPOG, an interprovincial protocol standards group comprising 93 companies and organizations representing more than 60% of all covered industrial greenhouse gas emissions.

IPOG is dedicated to the design of a domestic offset system that “ensures environmental integrity first and foremost, but also has the necessary flexibility for business solutions that leverage actions across the entire Canadian economy.”

In the voluntary markets, the European Union is currently trading some 70 billion Euros (CDN $110 billion) in carbon credits, at (CDN$20) a tonne.

Voluntary trading in Canada takes place for about $10-15 a tonne, noted MacKinnon.

“We base our programs in Canada on intensity targets, so we’re not crippling growth. At $15 a tonne, people are looking at offsets to sell or offsets for their own business operations,” said MacKinnon of the voluntary market.

“While awaiting the final federal regulations for industrial emitters, (carbon) offsets are the only trading tool available to fill the market void in the current period. Environment Canada projects carbon prices to rise from $25/tonne in 2010 to $65/tonne in 2018. By 2012, there is an expectation for emissions trading in Canada to have evolved to a cap-and-trade system and for the Canadian market to link to a US counterpart scheme,” said Phyper.

Among the cap-and-trade schemes currently in existence, or in progress, across North America, there is the WCI, or Western Climate Initiative, which is a collaboration of seven US states and four Canadian provinces. In September of 2008, the WCI Partner jurisdictions released a cap-and-trade program design, which, when fully implemented, will cover approximately 90% of the economy-wide emissions in the member states and provinces. The program is scheduled to start in 2012, and emissions reporting to begin with 2010 emissions. The WCI Partner jurisdictions include: Washington, Oregon, California, Montana, Utah, Arizona, New Mexico, British Columbia, Manitoba, Ontario and Quebec. Together these states and provinces account for about 20% of the US economy and 76% of the Canadian economy.

The WCI recently sent comments to Environment Canada on the department’s own Offsets System Draft, stating that any harmonization attempts with other North American offset systems must enable

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recognition of Canadian offset credits outside Canada or on recognition of international credits within Canada, to avoid any price differentials “likely to have competitiveness impacts as well as border adjustments under the current version of the American Clean Energy and Security Act.” The WCI went on to “encourage the federal government to adopt an offset limit that ensures emission reductions occur at Canadian entities covered by the cap-and-trade system.” As currently designed, the WCI is concerned that the project registration process may be onerous, requiring significant time and correspondence between Environment Canada and potential project proponents. Furthermore, the federal government intention to operate the system on a cost-recovery basis using fees may be cost prohibitive for project developers, said the WCI. The US-based Regional Greenhouse Gas Initiative (RGGI), meanwhile, comprises 10 Northeastern and Mid-Atlantic states who intend to cap and then reduce CO2 emissions from the power sector by 10% by 2018.

States will sell emission allowances through auctions and invest proceeds in consumer benefits: energy efficiency, renewable energy, and other clean energy technologies.

In the face of cap-and-trade policy and offset schemes, however, an already hard-hit transportation industry is expressing concerns about additional cost and regulatory burdens.

“If GHG reduction is the fight of our lives, there is so much more we can and should be doing today that does not involve increased taxes or complicated capand-trade systems. The industry’s economic goals and society’s environmental goals have never been more aligned,” said Canadian Trucking Alliance CEO David Bradley.

“We also need the federal government to come to the table more and to support enviroTruck. We’d like them to restore programs similar to the previous APU rebates initiative – that program worked with a modest investment from the Government of Canada paying big dividends. Truckers should also receive some of the same accelerated capital cost allowances that other industries receive when they buy environmental technology. They can also play a role in bringing all the provinces together to harmonize standards,” added Bradley.

Fear of what cap-and-trade policies could do to industry costs led the ATA (American Trucking Associations) to draft a letter to the House of Representatives september/october 2009

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Energy and Commerce Committee this summer detailing the trucking industry’s “strong reservations” about the Clean Energy and Security Act. ATA said it believes that trading reform should be passed, implemented and enforced prior to the creation of new carbon commodity markets, and said that mobile sources, such as commercial trucks, should be addressed differently from traditional stationary sources under any proposed carbon reduction regulatory program.

G. Tommy Hodges, ATA first vice-chairman, told the Transportation Media Group, “I don’t know that we feel (as an industry) that we’re targeted, but not enough consideration has been given to the current impact and what that’s going to do to the economy.

We feel it’s the wrong thing to do at the wrong time. The carbon resulting from various loads is not taken into account in the current bill.”

Provisions in the US’s proposed capand-trade program grant oil refiners 2% of the carbon allowances between 2014 and 2016 to help mitigate refinery greenhouse gas emissions, but the 2% allotment ignores carbon emissions from the combustion of petroleum production, which leaves downstream users like trucking companies exposed to sudden fuel price spikes, Hodges pointed out.

Hodges said there are fears fuel prices will go up anywhere from US88 cents a gallon on the diesel side. And another concern is when there are normal fuel interruptions because of fires and shutdowns.

“It just creates a whole lot of uncertainty and unknowns when dealing with projected costs. There’s a lot of dynamics to what happens within the trucking industry – one set of rules doesn’t meet everything. We’d rather see them come down with help and incentives to help meet fuel economy; to raise the productivity of a gallon of diesel. We’ve had mandates against industry for carbon output, we’ve reduced nitrous oxides and particulate matter, but we burn more fuel and it’s well past time to get a more efficient diesel burn from 5.6 to 6.2 to 10 miles a gallon. A 65 mile an hour speed limit would create 200 million tonnes savings in CO2. There are other 6

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ways to handle the problem,” said Hodges, who added that the trucking industry has been at the “forefront” of solutions, such as ATA’s progressive sustainability agenda that will reduce fuel consumption by 86 billion gallons and CO2 emissions by 900 million tonnes for all vehicles over the next 10 years.

Skepticism about cap-and-trade is somewhat justified for some. Noted MacKinnon: “The danger of ‘green washing’ is very real, and only 2% of products are really green. The beautiful thing is that the carbon market exists, but it will not be the panacea to environmental objectives or economic objectives,” he said.

And there are advantages to seeking out sustainable business practices, amidst the hype.

“You can make money by making smart business decisions,” said MacKinnon. “If you do not go out and shake the market yourself, the government will do it for you. If you think you’re going to fly below the radar because you’re not digging it out of the ground, you are wrong. It will affect everybody’s business and all options.”

And, stressed MacKinnon, businesses must be aware of any jurisdictional impacts where they do business.

“We advocate that if a company operates on both sides of the border, they should be able to work back and forth. We’ve put some position papers down in Washington with the goal to harmonize regulations between Canada and the US.” Phyper said you either take the attitude you’re being beaten up or you reposition as a value-added company that will look to maintain costs and lower greenhouse gases.

“Voluntary trading is definitely in place – that’s cosmetic environmentalism – but that doesn’t ignore the big 800-lb. gorilla that you need to optimize logistics. At the end of the day, you need to change your business, and figure out ways to do things more efficiently.”

It remains to be seen what path the carbon markets and cap-and-trade policies will take, but making the most of your ‘carbon opportunity’ can result in a positive change, suggested MacKinnon.

“If I can make a positive change to what is traditionally done in my business, I have a carbon opportunity that can be measured. If I deploy something, it has to be measured to a life cycle to be recyclable.

That’s the participation in the carbon market, that’s the ‘who says.’ The competition wants to see, how did you quantify? What did you do? That’s how you’ll score on the economic end,” he said. n

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15 Contribution to Canadian GDP by Mode 4 TRANSPORTATION: MORE IMPORTANT THAN INDICATED 10

Canadian cities and resources are so geographically dispersed and we are so dependent on trade that we demand a great deal from transportation. Our transportation system has more kilometres of roads per person than almost any other nation, and transportation accounts for more than 5 GDP. That’s actually an inaccurate figure 4% of Canadian because it does not take into account transportation delivered by private fleets. With the contribution of private fleets included in the mix, transportation’s share of the GDP pie is closer to 7%, which places it ahead of industries such 0 construction, and the mining, oil and gas as retail trade, sector, all of which receive a great deal of attention from government. And trucking commands by far the largest share of transportation GDP.

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2

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Air 0.5%

Rail 0.4%

Water 0.1%

Truck 1.3%

Total Trans.

4.1%

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Over the past 20 years, we’ve come to rely an 2awful lot on transportation, and as a result, transportation ranks near the top in terms of per capita use of fossil fuels. From 1990 to 2003, the amount of freight carried by all modes combined increased 1 27%. The very success of our transportation system is what’s leading to its greatest challenge: its sizeable greenhouse gas emissions. But there’s good news too. While overall fuel consumption by the transportation industry continues to 0 rise, the “intensity” with which transport industries are using energy has tended to fall over time. And there have also been significant gains made in reducing pollution that leads to smog.

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Total Energy Use in Canadian Economy (x100 petajoules)

20 15 10 5 0

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Transportation Energy Consumption

by Mode (petajoules)

Mining Manufact. Forestry Construct. Agricult. Resident. Comm. Pipeline Trans.

2.04 25.87 10.56 6.42 17.11 0.20 0.62 2.15 13.44

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THE COST OF SUCCESS Road transportation is a significant contributor to energy consumption, as the chart indicates. The report “Human Activity and the Environment,” produced by Statistics Canada, directly fingers the growing use of heavy-duty trucks to move goods for increasing GHG emissions. From 1992 to 2005, manufacturers were able to reduce inventories as a share of shipments by 15%. But to do so required a lot more frequent deliveries, mostly by truck. The amount of freight carried by for-hire carriers from 1990 to 2003 was up 75%. The number of tractor-trailers registered in 2005 was 32% larger than it was in 2000.

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400

200

0 Road 700

Rail 86

Marine 40

Total Transportation 826

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Researchers from FPInnovations weigh fuel tanks while testing a device at Energotest.

Why fleets have come to trust the Energotest program to evaluate fuel-saving technologies

BY CARROLL MCCORMICK

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Proof Positive N

ature abhors a vacuum and so, it seems, does the trucking industry.

Since the first trials of a dozen fuelsaving technologies, dubbed Energotest 2007, at Transport Canada’s Blainville, Que. test track two years ago, Canadian and even American fleets are coming to trust Energotest trials as a reliable and unique – in Canada anyway – source of road-test data on these technologies.

Robert Transport and Cascades Transport spearheaded the first trials and FPInnovations-Feric in Montreal provided the scientific expertise to run them. Word quickly spread and Feric created Project Innovation Transport (PIT), a sort of subsidiary company fleets could join, allowing them to meet suppliers and organize trials of fuel-saving technologies and techniques of interest to them.

Kingston, Ont.-based SLH Transport joined PIT in February 2008 and quickly became one of its biggest supporters. It contributed tractors, drivers and trailers to Energotest 2008 and has otherwise contributed equipment whenever needed and referred many suppliers to PIT. SLH has a corporate purchasing policy requiring all products aimed at reducing fuel consumption to be PIT tested. Brent Fowler, vice-president of administration for SLH, has high praise for PIT. “I almost liken it to the CSA standards. We work closely with Feric and trust what it is doing. There are so many products out there and we … [cannot] properly evaluate them. Suppliers of these products should be getting the message that they should go to PIT first for endorsement.”

At the time of writing, PIT had 14 fleets,

including its first in the US: Grand Island Express in Grand Island, Neb. Fleet president Tom Pirne heard about PIT and Energotest this April, contacted Feric and immediately joined PIT. “The problem I have is that so many factors affect fuel mileage. It is really difficult to do realworld tests. How do you know? Feric is an organization that has scientific test methods and uses a test track to take out all the variables that they can,” Pirne explains.

His doubt about the wisdom of a fleet running its own trials is echoed by Alan Klassen, director of fleet assets and maintenance for Yanke Group of Companies, which joined PIT in December. “Say we put on one of these things that change molecules … so you tell the operator we are doing this test and they report that they always work. The operator becomes more conscious of what he is doing and he changes his behaviour. The result is not the result of the gadget. We have seen that time and again. You could invest a lot of money in these types of things and have no return on investment. In a controlled environment, you take the operator out [of the equation].”

This is a refreshing revelation, as designing and running good controlled experiments is no less tricky than running a profitable fleet. “In the past, we have attempted to complete testing on different products, but it is really difficult to take results to the table,” Klassen admits.

“We do not specialize in testing. We are transportation providers.”

Some fleets, including Yanke, decided to send inquiring vendors directly to Feric for testing before entertaining their

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sales pitches. “We get calls every day from people who have these products and devices that will make us a tonne of money … everyone and their dog has come up with a product,” Klassen says. “Now we can have [Feric] do this and make the right decisions.

We tell [vendors] there are a lot of companies involved in PIT. If they have a product that works, they can be sure that [PIT members] will buy it.”

The best Energotest 2007 performers were Michelin’s wide-base tires, which reduced fuel consumption by 9.7%, and aerodynamic trailer skirts, made by Seattle-based Freight Wing and Oakville, Ont.-based Laydon Composites. These manufacturers’ panels, which fit length-wise under trailers, reduced fuel consumption by 7.2% and 6.8%, respectively. Other technologies reduced fuel consumption from 5.1% to just 1.1%.

Energotest 2008 demonstrated again that trailer skirts are currently the best aerodynamic products for improving fuel economy: Freight Wing reduced fuel burn by 7.5% and Quebec-based Transtex Composites’ trailer skirts reduced fuel burn by 7.4%.

Unfortunately, other products fared poorly. Some fuel-line and exhaust-system add-ons managed only –1.3% to 1.9% fuel savings.

Over-the-road fleets are busy installing trailer skirts; e.g., Grand Island got its toes wet installing two trailer skirts and has applied for grants for skirts on its other 300 trailers. Yanke has installed some trailer skirts. Last year, Bison began progressively installing Freight Wing trailer skirts on 850 trailers under a 50/50 cost sharing agreement with Transport Canada’s ecoFREIGHT program. In Quebec, trailers pulled by Robert and other fleets are showing up wearing skirts.

There is more to the Energotest trials than just zooming around the seven-kilometre oval track at 100 km/h, the speed at which most of the technologies to date have been tested. Fleets and Feric have a hit list of “in-house” trials, several of which they ran in 2008. They discovered, for example, that a rig travelling 15 metres behind another rig at 100 km/h burned 8% less fuel, with no penalty for the lead rig. Lifting three lift axles on an unloaded B-train improved fuel economy by 4.7%. A “moose” bumper inflicted a 2% fuel penalty. Fleet managers tasked with explaining to drivers why maximum speeds are dropping will appreciate learning that driving at 95 km/h versus 98 km/h saved 2.0% in fuel. Driving 92 km/h versus 98 km/h saved 5.1% in fuel.

Feric also discovered that pulling a shipping container, versus a closed van and curtain trailer, inflicted a whopping 14.3% fuel penalty. “We knew that containers took more fuel to pull, but nobody would have guessed they would cause [such a] fuel increase,” Klassen says. Feric then used this data to create a calculator that fleets can use to determine how long a trip needs to be before it becomes more economical to transfer the load from container to

trailer and haul that.

Feric expertise has been valuable in making these technologies work better. For example, its researchers improved on manufacturers’ instructions for positioning trailer skirts, raising their performance from 0% to 7%, according to Yves Provencher, business development manager for FPInnovations. Feric also advises PIT fleets on which of the tested technologies are appropriate to their operations.

This year’s trials were attracting so much interest that Feric split Energotest 2009 into two sessions: one ran from May 5-16, with a second set for September. Feric tested 14 technologies in May, including trailer skirts, a wheel balancing system, a diesel booster, a new concept in flatbed trailers and a magnetic device that fits around the combustion chamber. Feric also tested transit buses. The test results have been released to PIT members but will not be released to non-PIT people until 2010.

This fall will see the first stop-and-go trials, designed to simulate in-city operations. “There are some technologies that only work on stop and go driving,” says Bernard Ouellet, a researcher with FPInnovations–Feric. “It is going to be fun.” Feric is working with the SAE test protocol to develop a pick-up and delivery procedure that will match SAE requirements; the constant-speed 100 km/h trials conform with the SAE J1321 Joint TMC/SAE Fuel Consumption Test Procedure – Type II, Recommended Practice.

Energotest has not escaped the notice of the American Trucking Associations (ATA), which is reportedly envious of Canadian fleets’ ability to discuss fuel savings technologies and strategies without running afoul of anti-trust laws.

ATA’s Technology Maintenance Council invited Provencher to speak at its annual general meeting this February. “After the meeting they said ‘wow!’ We are discussing their interest in having us do tests on the impact of truck alignment on fuel consumption, among other projects,” Provencher reports.

The US Environmental Protection Agency’s SmartWay program also got wind of Energotest. “They refer to our results, they send some suppliers to us.

We meet the criteria for their acceptance of our tests. The hope is that Feric and SmartWay will work more closely in the future,” Provencher says.

PIT’s member fleets already represent 3,200 trucks and Provencher predicts that that new members will push that to 4,000 by year’s end.

One thing is certain: Feric and PIT have created a fascinating, effective and respected testing machine. Even though it receives support from several provincial and federal government agencies, it is independent of the political caprice and budgetary fashions that plague some government testing agencies.

“Membership is fairly affordable, especially in light of fuel costs,” Pirne says. n

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Going GREEN For

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How a business first, earth second, strategy helps APPS drive sustainable transportation practices

BY ADAM LEDLOW

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he genesis of “going green” for APPS Transport Group was not something borne out of the post-Al Gore-induced panic about global warming, nor was it forced upon it by government decree. For the Brampton-based carrier, it wasn’t about saving the planet either – it was just good business sense.

“When saving money through using less natural resources became more in vogue and started to be called ‘green,’ speed limiting trucks came to light as more of a green issue than a sensible business issue,” says APPS president, Rob McDonald. APPS first decided to limit its trucks to 100 km/h about 10 years ago, well before any talk about the mandatory use of speed limiters.

The move by APPS could well be used as a catalyst for carriers to measure any future success from limiting speed on their trucks.

As for APPS, the company has reaped considerable rewards since limiting the speed of its fleet. “(With) a single truck, over the course of a year, you can cut down on fuel and maintenance costs by going from 110km/h to 100 km/h by about $7,000 a year,” he says,

“Regardless of what other impact it (speed limiting) has, we’d rather have the fleet operating efficiently than blasting down the highway throwing money out the window.” rob mcdonald, president of apps

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adding that that total can increase depending on the current cost of fuel.

McDonald said that while initially there was some grumbling from drivers about being speed limited, eventually he got them on board. “It took a while, but I think once they realized that it was profoundly a safety issue and a smart thing all around, they slowly came around,”he says. “Regardless of what other impact it (speed limiting) has, we’d rather have the fleet operating efficiently than blasting down the highway throwing money out the window.”

In recent years, since green practices have become almost trendy, the green initiatives already in place at APPS were just expanded on, which is all part of the carrier’s goal of becoming a zero-emission fleet by 2010. McDonald says that the company hopes to achieve that goal through a variety of means.

For one, APPS is slowly converting its fleet to automated transmissions for better fuel efficiency and is also investing in the new zero particulate emission technology for new trucks.

As well, when APPS completed its last truck purchase in December, it opted for 10 new Volvo tractors using the more expensive Environmental Protection Agencyapproved engines – the latest in reduced emission engines and the final step before zero emissions in 2010.

“The trucks were marginally more expensive, but fuel economy was actually a little better and the drivers love them,” McDonald says.

His fleet has also been outfitted with a secondary oil filtering system by Puradyn.

The system spins the oil in a housing, heats it, takes the moisture out, and eliminates virtually all the soot and particulate matter as well. Though not a new technology, APPS has reaped solid rewards from the system, to the tune of 7,000 to 10,000 fewer litres of oil used per year. This translates not only to less money spent on oil, but also less time and money spent on changing the oil, and less sludge produced during a change.

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GREENBACKS “It made a lot of sense from an environmental standpoint,” McDonald says.

Though APPS has a relatively small fleet with about 75 tractors, where possible, McDonald says the company tries to use intermodal instead of trucks. As freight forwarders by nature, the company doesn’t put a lot of miles on its trucks either, meaning they last a lot longer, which has yet another environmental spin-off by sending less “junked” trucks to the scrap yard. “I think the biggest single contributor to greenhouse gas reductions and cost savings has been converting a lot of our customers from road to rail,” McDonald said.

He notes that rail uses about 20% less fossil fuels than a truck and having fewer trucks on the road also eliminates excess traffic.

“The concept there is – and this is something we’ve tried to impress on our customers as well – is that you’re not only taking advantage of the benefits of being an intermodal user, you’re contributing to our environmental wellbeing as well,” he says, adding that APPS has been working in an intermodal capacity for about 10 years now.

APPS’s in-house maintenance crews also work to keep trucks in top operating condition to reduce emissions. So while the company spends more on maintenance, it also saves on fuel consumption and, in turn, reduces pollution.

A simple issue like tire pressure can have a significant impact on fuel usage, he notes.

The company has also taken steps to reduce its fuel consumption through small components like aerodynamic wind deflectors which help reduce wind drag so the trucks burn less fuel.

In an effort to reduce idling time, APPS trucks have been programmed to automatically shut down after five minutes and all drivers are taught to never leave a truck idling.

According to Canadian Centre for Pollution Prevention (CCPP), only about 7% of trucks in Canada use these types of anti-idling devices. In a recent study conducted by the CCPP, reducing idling time by 550 hours over a four-month period saved 2,201 litres of fuel, 6.16 tonnes of GHG emissions, and 1.64 kg of particulate matter.

When the next generation trucks come out in 2010, producing virtually zero NOx emissions, it should be enough to push APPS into the elite group of zero-emission fleets, McDonald says. Though not all of APPS’s equipment will turn over by 2010, by 2015 the biggest part of the fleet will be converted and by 2017 the conversion will be complete.

McDonald has found ways to go green around the office as well, starting by managing the company’s waste output.

“It’s embarrassing to say (but) we used to put wood, plastic, metal and just whatever other garbage in our dump-

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ster...and we were actually emptying it two, three, four times a week.”

He says it’s never a good idea to throw wood in bin, because it takes up a lot of space and it isn’t really “landfill material” anyway. In response to this discovery, APPS began a waste screening program and has reduced the weekly garbage pick-ups to one a week, which McDonald says is “huge” for the company.

McDonald is currently working on a method to process things like scrap steel and aluminum, but hasn’t come up with a solution yet.

The staff is also using reusable consumables wherever possible – from reusing pallets and packing materials, to reusing photocopy paper, to working with clients that use totes for packing freight.

Air flush toilets are the norm around the office these days, and the thermostats on the docks have been set back to avoid heating the outside in the winter or cooling it in the summer. Even something as simple as getting staff to stop printing off e-mails and store things electronically instead has had a big impact on the company’s paper consumption.

“I don’t think there’s anything that you can do which is environmentally positive that isn’t a good business decision,” McDonald says.

Though McDonald shies away from the term “ambassador” to describe the company’s role in leading the green charge, the industry has certainly taken notice of its efforts.

In early 2008, APPS was named a finalist in the GLOBE Foundations annual Corporate Award for Environmental Excellence. The award recognizes shippers, carriers or other transportation service providers that have made an outstanding commitment to sustainable practices. The Ontario Trucking Association also recognized APPS for its decision not to pre-buy ahead of the 2007 engine launch.

But even those awards, prestigious as they are, don’t seem to have been an influence on McDonald’s green choices. He’s unflinching in his stance that a good environmental decision will always have been made as a good business decision first. And ever the nonconformist, McDonald is quite content to save the planet quietly and on his own terms – without getting pressured to change just because it’s popular.

“We sort of do our own thing here. I don’t predicate a lot of our business decisions on what other people are doing,” he says. “If we can convince other people to change the way they do business, to operate smarter and better, then that’s great, but that isn’t the plan. Overall, I think the whole world is saying, ‘Look, if we want to stay here, we’d better smarten up.’” n september/october 2009

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COOLING it

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Alternative climate control units could put fleets on the path towards energy savings and lower maintenance costs

BY JULIA KUZELJEVICH

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W

ith customer demand for ‘greener’ technology on the rise, plus pressures within companies themselves for reduced carbon footprints and cost control measures, there’s no shortage of factors to consider for fleet managers running reefer-equipped vehicles.

John Sheikh, a reefer leasing specialist with PLM Train Trailer leasing, says that challenges to fleets using climate control units aren’t few: the need for reliable performance, product integrity, the reduction of trailer downtime, increased driver productivity, lower maintenance costs, fuel economy, the reduction of carbon footprints, and an increased profit margin.

But the true cost of running these units relates to fuel, said Sheikh.

“Carriers are making good strides towards hybrids but are not there yet,” he said, cautioning that hybrids are not to be confused with electric vehicles.

“Hybrid vehicles offer two different energy converters, and two different energy storage systems on board for the purpose of vehicle propulsion,” said Sheikh.

Rick Boily, district service manager with Thermo King, says his company has several options in terms of alternative climate control available now, and is currently testing others for use down the road.

The B100 is an all-electric, temperature control unit, for fresh food application in small vans. With low amp consumption, the unit requires no added compressor or vehicle modifications, is strictly battery powered, and offers road and electric standby operation as an option.

The company’s new T-series, to be launched in the next few months, uses a hybrid smart power option.

“Its exterior skin offers 50% reduced noise with a honeycomb grille that directs noise upward. Panels are made from recyclable geloy plastic,” said Boily, adding that the unit has a robust con-

struction that hides scratches, and offers one body hole size and one bolt pattern for all units.

The T-series offers a Tier 4 diesel engine that runs 10% better on fuel, and has an EMI 2000 filter that reduces waste.

“The hybrid smart power electrical operation has a next generation TK 04 and TK 06 scroll compressor, and the same SR2 controller board that’s been used in trailer application since 2004. There is more parts commonality,” said Boily.

The T-series also offers stationary ‘Over the Road’ hybrid smart power.

“We’ve developed and are testing a smart power option that inverts DC voltage from lithium batteries to AC power.

It will have diesel, hybrid (that can run while the truck is running) and shore power. The unit will also auto switch between modes based on ambient and power supply requirements. It will be smart enough to know which is the cheapest way to go, whether it is plugged in or driving,” said Boily.

By running on electric standby power, and by plugging in the unit at a distribution centre instead of running on diesel, you could save some 71% of your overall costs, based on diesel at seven cents a gallon and electricity at nine cents per kw/h, he noted.

“This doesn’t include the savings you’d get on the maintenance of your engines. This is an option that was very popular in the ’70s and is coming back,” said Boily.

Cryogenics, a technology that’s been offered in Europe for a while, and is being tested in California, offers no engine emissions, and silent and reliable technology, he said.

“Liquid carbon dioxide moves from the tank through an evaporator coil inside the cargo area. Air circulates over the coil. After useful energy is extracted from the carbon dioxide, vapour is exhausted into the atmosphere, and heat

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generated by the vehicle engine coolant.

“It’s ideal for distribution purposes. There are fewer moving parts, and rapid temperature recovery. There is no refrigerant but you have to fill up the tank daily and get about an eight- to 10-hour use, depending on the tank size.

You have to weigh the initial cost against your long term gain,” said Boily of the technology.

Tripac, another technology that’s been out for about four to five years, offers a 1000-hour maintenance interval.

“You can put it in sensing mode so it doesn’t work during out-of-service days. It has automatic start/stop for maximum fuel economy,” he said.

Fuel savings in the future will most likely be achieved through cryogenics technology, electrical engines, compressor technology, hydrogen power fuel cells, and ‘super insulation technology’ that would save gallons of fuel through better thermal insulation, said Boily.

Wayne Scott of Loblaw’s said the company has some 2,000 reefers in Canada, with each running about 10 hours a day. They are looking at two areas of opportunity to reduce their carbon footprint: trailer refrigeration and DC/trailer refrigeration.

“The vision has to be ‘top down’ and there has to be a culture in place. Within our 910 million kg of carbon dioxide footprint in 2008, 25% of that footprint is based on refriger-

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ation,” he said.

Companies like Loblaw’s that are heavily involved in distribution functions with high cube requirements, can only go so far in terms of gaining thermal efficiency through trailer walls, roofs, and sealings, given the fact that thicker walls and sealings won’t fit as many skids.

The company is partnering with Sunwell Technologies to eliminate the diesel engine out of reefers with “deepchill thermo battery refrigeration,” and reduce the amount of refrigerant gases used in their distribution centres.

The technology involves setting up chilling stations at DCs set at the temperatures required for grocery distribution. Thermal storage tanks can hook up to a trailer, then the tanks are plugged in and will maintain the temperature as they cycle through, said Scott, who noted that Loblaw’s wants to reduce its carbon footprint by some 3%.

“This product can maintain 96 hours at a constant temperature of -6 degrees Celsius, with most distribution centre deliveries taking between a five- to six-hour or less delivery window. I’ve got a lot of reefers in the marketplace right now that are single and multi-temperature. I can put this technology into all types of units or I can leave it empty and use it as a dry box. Part and parcel of this is if I can take this into a DC as well, I can use it in my cooling chambers or freezers, and it results in one-tenth of the former refrigeration needed at a DC,” said Scott.

With electric standby reefers, there’s still an electrical carbon footprint, but depending on how electricity is generated where you’re using it, this footprint can vary, he said.

“I can pre-charge this and shut it off, and benefit through a reduction in utility costs when utility rates are high,” said Scott, who noted that Loblaw’s is looking at acquiring 30 to 40% more equipment offering hydro-only or hybrid power.

Jim Clarke, executive account manager for Carrier Transicold, said that when looking at some of the proposed alternatives to climate control, there are still some technological hurdles to overcome with regard to power, limited ranges, cost, and weight issues.

Hybrid reefers, however, could offer a real advantage in terms of savings, he said. There are fewer parts to contend with, there is higher reliability, high system efficiency, and electric standby power. They also have less environmental impact.

“At their core, today’s conventional systems are mechanical. When you adapt these systems through various components to run electric standby equipment, it adds additional weight and complexity, and additional maintenance items,” said Clarke.

Continued on page 14. september/october 2009

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G r e e n to G o l d

Green

before it became mini GREEN COVER .indd 1

15/09/09 1:02 PM

COOLING it continued from page 13.

Hybrid technology is specifically designed with an all-electric architecture, with reliability in mind, to eliminate moving parts, he added.

“A hybrid unit eliminates many of the maintenance elements of mechanical transmission components, such as drive belts, fan shafts, compressor drive shaft, shaft seals, and centrifugal clutch mounted on the compressor of the conventional standby unit. A multi-temperature hybrid unit shows a 30% decrease in maintenance costs. It also only runs when it needs to, so it saves fuel. With a conventional unit, once the engine starts, every component (i.e. compressor, evaporator fan, condenser fan) runs, whether you want it to or not.

Hybrids also use 33% less refrigerant, and have 50% fewer brazed joints,” said Clarke.

While use of hybrid units offers the promise of maintenance savings and lower fuel usage, batteries themselves have their own footprint.

The life span of a hybrid lithium ion battery will depend on how far you deep cycle it, said Boily.

“It might have 400 cycles. What kills batteries is the cycling. Your best option is to keep that battery efficient, keeping the voltage as constant as possible,” he said.

The longer the battery can be kept in service, the ‘greener’ its footprint.

“There is technology that is more expensive, for example the EON Thermo King that contains no acid. It’s completely dry and has a four-year warranty replacement.

But the typical battery today will run oneand-a-half to two years at best,” said Boily.

With regard to what issues might arise if electricity costs spike, as they already have in places like Europe, “It’s a struggle everyone has to deal with,” said Boily.

Boily and the others mentioned in this article were participants at the 46th Canadian Fleet Maintenance Seminar discussing options on the table for alternative climate control that reduce fuel consumption and n harness renewable energy sources.

14

motortruck

Fashionable TRIB makes the case for retread-favouring legislation in Canada

This summer, The Tire Retread & Information Bureau penned an open letter to Prime Minister Steven Harper and all members of the Canadian Parliament. The following is the argument made for mandating retreads.

Dear Prime Minister Harper and all Members of the Canadian Parliament: The Tire Retread & Repair Information Bureau is an international non-profit, member-owned industry association. I am writing today on behalf of our Canadian members in the tire retread and tire repair industries to bring to your attention the tremendous contribution our members make to both the environment and the economy throughout Canada.

Thanks to retreading and properly made tire repairs, millions of gallons of oil are saved every year in Canada while greatly reducing the scrap tire problem by enabling tires to have safe additional lives.

The safety of retreaded tires has been proven and continues to be proven daily beyond a shadow of a doubt by millions of vehicles worldwide, including school and municipal buses, fire engines and other emergency vehicles, commercial and military airlines, taxis, small package delivery services such as FedEx, Purolator Courier and UPS, as well as by Canadian Pacific Railway, OC Transpo in Ottawa and countless other commercial vehicles in both the private and public sectors throughout Canada.

We want to bring your attention to the fact that every major new tire manufacturer strongly supports retreading as part of the life cycle of a tire.

There is even a US Federal Executive Order (13149) MANDATING the use of retreaded tires on certain US government vehicles.

You might also be interested to know that I drive on retreads on my personal car, as does my wife and son on their vehicles.

The purpose of this letter is to both bring all of the above to your attention and to offer to send you our Retread Tire Information Packet, which includes a CD and two DVDs that explain and illustrate in great detail the environmental and economic benefits of retreaded tires.

We hope you will take us up on our offer since the more you know about retreading, the better informed you and your staff will be regarding the huge amount of money that can be saved by your government – on the federal, provincial and local levels – without sacrificing safety, performance or handling.

The retread industry was green long before the word became fashionable. In fact, our industry can boast that a retread tire has one of the highest post-consumer contents of any recycled product, and, refreshingly, the user of retreaded tires will always spend a little LESS than for a comparable new tire.

In these days when every penny of savings counts in government spending, we hope you will allow us to send our materials and that you will speak up for retreading in Canada as a viable alternative to higher priced new tires. It’s the right thing to do.

We will also be happy to arrange a tour of a Canadian retread plant for you and any of your staff members who wish to see and better understand the retread process and to observe how a tire is properly retreaded and repaired.

Our industry also maintains a Speakers Bureau and we will be happy to speak to any public sector or private sector group anywhere in Canada to more fully explain the many benefits retreading and proper tire repairs bring to private and public sector fleets everywhere.

We look forward to hearing from you.

Thank you.

Sincerely, Harvey Brodsky Managing Director, Tire Retread & Repair Information Bureau/TRIB TRIB Tire Retread & Repair Information Bureau 900 Weldon Grove • Pacific Grove • CA 93950 USA 831/372-1917 • Fax: 831/372-9210 • E-Mail: info@retread.org Toll free in U.S. & Canada 888/473-8732 www.retread.org

SMARTTALK FOR URBAN FLEETS WITH FLEETSMART’S SMARTDRIVER IN THE CITY For long-haul highway trucks, forestry trucks, transit buses, motor coaches or school buses, SmartDriver workshops have been available to deliver sound advice to drivers about saving fuel, while reducing their environmental footprint. As FleetSmart expands the scope of its activities, urban fleet drivers of both light-duty (eg. cars, pick-up trucks, small vans) and medium-duty (eg. cube vans, day cabs) vehicles have been identified as another group that can benefit from SmartDriver training. The result is SmartDriver in the City, which has adapted the existing workshop formats to meet the particular needs of this audience.

With the dedicated assistance of a diverse volunteercommittee from the urban transportation community, SmartDriver in the City shares the key points of information from other SmartDriver workshops with additions that are solely applicable to the urban fleet fleet vehicle mix. The significant change is the adaptability of the workshop to meet the specific needs of the drivers, as the information has been packaged into 10-minute segments (tail-gate talks) on a given topic. These “SmartTalks” allow the workshop to be delivered over many shorter segments within regular driver meetings, incorporated into existing training programs or assembled together for longer stand-alone sessions. In fact, certain SmartTalks are specifically designated for light-duty drivers and others for medium-duty drivers.

As with all of the SmartDriver workshops, the intent of SmartDriver in the City is to help companies lower their fuel bills, reduce wear and tear on vehicle components, augment the skills of the drivers which can lower the accident risk, and finally, improve their company image by helping to ensure a cleaner, healthier environment. In order to do this the various SmartTalk modules cover a wide range of topics including:

• • • • • • •

detrimental effects of smog, particulate matter and excessive greenhouse gases maintaining mental and physical health impacts of driver behaviour (ie. speeding, idling, starts and stops, traffic cushions) progressive shifting components of fuel economy gasoline vs. diesel vs. alternative fuels preventative maintenance

All SmartDriver in the City training material is easy to reproduce using the the CD-ROM included in the instructor’s manual. In addition, posters are also made available which can be used to reinforce ideas delivered in each SmartTalk.

Finally, certificates of participation are available for individual modules, with full-page certificates and wallet cards for those complete all SmartTalks relevant to their fleet.

Although fleet managers can spec their equipment for fuel efficiency, without proper driver training, their time, effort and money are not optimized. SmartDriver in the City provides this necessary training, so that we can all win by saving money and helping the environment.

For more information on energy-saving opportunities for urban fleets, contact: ecoENERGY for Fleets (FleetSmart) Office of Energy Efficiency Natural Resources Canada 580 Booth Street, 18th Floor Ottawa, ON K1A 0E4 Fax: 613-952-8169 E-mail: fleetsmart@nrcan.gc.ca

Natural Resources Canada’s Office of Energy Efficiency Leading Canadians to Energy Efficiency at Home, at Work and on the Road

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