Motortruck Fleet Executive March/April 2012

Motortruck

Fleet Executive C A N A D A ’ S

B U S I N E S S

SOCIAL MEDIA Unleash the power of Twitter

MARCH/APRIL 2012

M A G A Z I N E

HUMAN RESOURCES Hook the best candidates in the talent pool

F O R

F L E E T

O W N E R S

MANAGEMENT Top tips for playing peacemaker

FUELLING GOT YOU DOWN?

UP

See how engine makers plan to make trucks that boost fuel economy and lower emissions

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March/April 2012

Volume 81, No. 2

contents

COVER STORY 28 FUELLING UP GOT YOU DOWN?

See how engine makers will be making trucks that boost fuel economy and lower emissions as early as 2014.

30 MAD ABOUT MAINTENANCE

2010 engines reclaim some lost fuel economy, but still struggle with maintenance needs.

Features 14 SWIM FASTER

page 10

The transportation industry needs to swim faster to catch the best job candidates in the post-downturn recruitment pool.

16 COOLANT’S OTHER HALF

How much consideration should maintenance managers be giving to the water portion of coolants?

18 CONTENT MARKETING

Is your business lacking broad market awareness? Learn to compete with the big boys through effective content marketing.

20 CELADON’S COMING

Is your trucking company in trouble? Celadon may be interested as the carrier brings its acquisition strategy to Canada.

23 GREEN TO GOLD

The latest in fuel economy, alternative fuel and motor oil options from the likes of Shell and Navistar.

page 30

Departments THE VIEW WITH LOU…6 Why the time is right to break the industry’s reliance on costly crude.

COMPETITION WATCH…8 Trimac buys up portions of Northern Resource Trucking, Fortress Transport; Mullen Group investing millions in equipment replacement; TransForce finalizes Quik X deal; and more.

THE BOTTOM LINE…10 Why Twitter is the most powerful social media tool – and the only one that can directly get you business.

page 12

TAKING CARE OF BUSINESS…12 Resolving conflict can be one of the most challenging tasks of an effective manager.

We offer six tips to help you keep the peace.

EQUIPMENT WATCH…33 Volvo product wins 2011 TWNA Technical Achievement Award; Great Dane overhauls entire trailer line; ATDynamics introduces RollTail trailer tail for roll door trailers line; and more.

DASHBOARD…36 TransCore’s Canadian Freight Index starts 2012 with slight uptick in January results; freight costs continue to rise for tenth consecutive month; US truck tonnage settles in January after December surge; and more.

INSIDE THE NUMBERS…38 How many shippers will be putting their freight up for bids this year?

Plus: with fuel surcharges on the rise, is a shipper backlash looming?

trucknews.com

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WHAT’S ON TRUCKNEWS.COM Brought to you by the editors of Truck News, Truck West and Fleet Executive

BLOGS You said it...

Contributing editor James Menzies ponders whether the days of the trucking tycoon are a thing of the past.

“I think they are. When you go to shows, they are geared for everyone but the driver.

They have them for higher ups and maintenance staff. Companies spend tens to hundreds of thousands of dollars on their booths and a lot have nothing to do with our industry. So attendance is low for these shows. When will a show be geared for drivers and only drivers?”

On-road editor Harry Rudolfs goes in search of a former Canadian trucking powerhouse: Smith Transport.

Dan Goodwill and Associates president Dan Goodwill gets a driver’s perspective on the current state of trucking.

—Troy Huntington’s Facebook comments on whether truck shows are becoming obsolete.

Web TV:

Transportation Matters SUPPLY CHAIN CANADA:

SCL Canada and CITA have teamed up once again for the 45th annual Supply Chain Canada conference. Watch to learn more about this year’s event.

SEEKING STABILITY:

Volvo demonstrates some of its active safety systems and introduces Volvo Active Brake.

CAT SNEAK PEEK:

Toromont Cat hosted at open house to showcase its CT660 and provide a sneak-peek at other Cat products coming to the vocational market.

CSCSC’s VIDEO RECRUITMENT PROGRAM:

The Canadian Supply Chain Sector Council is targeting young talent with its recently-launched video profile series.

FOLLOW US ON TWITTER @TruckNewsMag @AdamLedlow @JameMenzies @LouSmyrlis @JuliaKuzeljevic @KathyPenner Fleet Executive editors are now on the Find us on Facebook facebook.com/trucknews

4 FLEET EXECUTIVE ❙ March/April 2012

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radio! For a list of stations and on-air times go to truckerradio.com.

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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.

THE VIEW WITH LOU

Why the time is right to break the industry’s reliance on costly crude

A

verage fuel surcharges increased in 2011 by just shy of 40%, the second year in a row that surcharges increased after having fallen sharply in 2009. It should come as no surprise then that Canadian shippers, although the vast majority of them continue to pay fuel surcharges, are starting to grumble about them.

The Shippers’ Pulse Survey, a joint project we undertook with the Canadian Industrial Transportation Association this January, uncovered some gripes that should be cause for alarm. For example, almost 30% of shippers no longer think fuel surcharges are necessary (even though fuel costs are on a steep rise). More than 60% see fuel surcharges as a source of profits for their carriers, rather than as a neutral cost pass-through. More than half of the group thinks carriers should move to market rates that include fuel surcharges.

Already about a quarter of shippers have taken the matter into their own hands and developed their own fuel surcharge index that they require their carriers to use.

While it’s natural to want to shout at the apparent unfairness of it all – after all, trucking did lose a good quarter of its small carrier base a little over a decade ago when diesel prices spiked and carriers were caught without fuel surcharges in place – perhaps it’s best to take a different approach.

Perhaps it’s time to break the industry’s reliance on diesel and being victimized by all the politics that drive its pricing. Transport companies using a variety of fuels to power their fleets would be less exposed to surging oil prices.

Of course, until now that was just talk; it wasn’t reality.

But that is starting to change and, in some instances, that change may pick up steam quickly.

As contributing editor James Menzies, who was among the more than 750 transportation professionals attending the recent Green Truck Summit in the US, points out, the general sentiment is that alternative fuel vehicles have moved beyond the “science project” stage and are now delivering acceptable paybacks when placed into the appropriate applications.

Natural gas may be the best of several alternative energy examples.

MARCH/APRIL 2012

VOL. 81 NO. 2

Lou Smyrlis, MCILT, Editor lou@transportationmedia.ca

Although there have been pioneering efforts to move to natural gas, which costs about $1.50 per equivalent gallon less than diesel, two of the biggest barriers to transitioning the long-haul trucking industry to natural gas have been the cost of the equipment and availability of the fuel. But in the US, those two obstacles are being addressed by an innovative arrangement between truck maker Navistar International and gas supplier Clean Energy Fuels. The companies jointly announced a program that will allow a customer to purchase natural gaspowered trucks from Navistar at no more than the cost of a diesel equivalent and then pay for the technology through slightly inflated gas prices over a five-year period, while still enjoying fuel costs significantly lower than diesel. To participate in the program, customers will have to agree to purchase most of their fuel through Clean Energy’s rapidly growing US fuelling network. Clean Energy has vowed to open 70 liquefied natural gas (LNG) fueling stations in the US by the end of 2012, with another 100 to follow in 2013. And for its part, Navistar has promised to develop a natural gas version of every one of its medium- and heavy-duty products.

In Canada, Shell’s Canadian Green Corridor, the company’s first large scale LNG project in North America, launches this spring. Initially employing a mobile refueling unit to service the needs of fleets running the Edmonton to Calgary corridor, the company also has agreements in place with three Flying J stations in the corridor for them to supply LNG starting in the third quarter of this year. And, if there is sufficient interest, Shell is looking to expand far beyond the Edmonton-Calgary corridor. (For more info, see our stories in the Green to Gold section.)

I’m willing to bet that if the industry moved aggressively to finally curb rising fuel costs, shipper concerns about fuel surcharges would melt away. FE – Let’s continue the conversation on transportation issues.Join me at two special events coming this spring:the Supply Chain Canada conference, May 8-9, International Centre, Toronto (go to www.supplychaincanada. com to register), and also the Carbon Economy Summit, June 6, Metro Toronto Convention Centre (go to www.carboneconomysummit.ca to register).

Editorial Director Lou Smyrlis (416) 510-6881 lou@TransportationMedia.ca Managing Editor Adam Ledlow (416) 510-6890 adam@TransportationMedia.ca Features Editor Julia Kuzeljevich (416) 510-6880 julia@TransportationMedia.ca Creative Director Stephen Ferrie sferrie@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 Mary Garufi Video Production Manager Brad Ling Research Manager Laura Moffatt Vice President Publishing Alex Papanou President Bruce Creighton

Head Office 80 Valleybrook Drive Toronto, ON M3B 2S9 Motortruck Fleet Executive is published by BIG Magazines LP, a division of Glacier BIG Holdings Company Ltd., a leading Canadian information company with interests in daily and community newspapers and businessto-business information services.

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

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ISSN Number 0027-2108 (print) ISSN Number 1923-3507 (digital)

6 FLEET EXECUTIVE ❙ March/April 2012 Member/Canadian Business Press

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Motortruck

Fleet Executive

COMPETITION WATCH

TRIMAC TRANSPORTATION has entered into an agreement to acquire 29% of NORTHERN RESOURCE TRUCKING. The cash and share transaction is valued at $9 million. Trimac said the deal is expected to close on or about March 19. Northern Resource Trucking serves the uranium mining industry in Northern Saskatchewan. The companies have worked together for years, with Northern Resource serving as a subcontractor to support key Trimac customers. The company has about 80 tractors, 140 trailers and 150 drivers and owner/operators and is based out of Saskatoon, Sask. Trimac has also entered into a letter of intent to acquire a majority interest in the parent company of FORTRESS TRANSPORT. The closing of the transaction remains subject to customary terms and conditions including the parties entering into a definitive share purchase agreement and the completion of due diligence. Fortress, based in Guelph, Ont., provides dedicated bulk transportation deliveries throughout central Canada and the US with a focus in hazardous and non-hazardous transportation of liquid chemicals, petroleum products, and dry chemicals. The assets of Fortress include 54 tractors and 130 trailers.

MULLEN GROUP is allotting about $25 million in capital towards purchases for its trucking/logistics segment, to be used “primarily” to replace trucks and trailers. In its 2012 capital expenditure plan, Mullen said it would be buying about 60 trucks and 200 trailers this year. It will also be adding to its “pipeline on wheels” by adding equipment to its fluid hauling fleet. Mullen Group said in a release it is confident about 2012, so much so it is increasing its overall capital spending to $100 million, not including any acquisitions. The company also plans to invest in facilities, including the development of an industrial park in northeast Edmonton, which will facilitate the multimodal movement of industrial and energy-related products. Mullen also said it would be looking for acquisitions in the oilfield services as well as the trucking/logistics segment. “There are significant issues and challenges that continue to dominate the headlines, events well beyond our control. Here at the Mullen Group we are taking an optimistic view that 2012 will be another great year for our organization and we intend on taking full advantage of the opportunities,” Mullen said.

TRANSFORCE has announced it has finalized its acquisition of QUIK X. Quik X and its network of 17 centres across Canada and the US boasts annual revenues of about $200 million. Included in the deal are about 325 independent contractors and more than 600 employees, TransForce announced. “This acquisition further enhances TransForce’s density and capabilities in the niche expedited LTL market. Quik X is well recognized for its leading-edge technology and highly qualified employees. More importantly, its asset-light business model should provide a solid return on our investment and create additional shareholder value,” said Alain Bedard, chairman, president and CEO of TransForce.

CONTRANS GROUP has acquired dry-bulk trucking business WILBURN ARCHER TRUCKING out of Norwood, Ont. The company has provided specialized transportation services using pneumatic tanks and hopper trailers since 1994. The acquisition represents annual revenues of about $14 million, Contrans announced. “There are relatively few opportunities to acquire dry bulk trucking businesses in Ontario,” said Contrans’ chairman and CEO Stan Dunford. “We are pleased to add the Archer business to our existing group of bulk companies. Archer’s dry bulk business has grown through a reputation for high-quality service and responsiveness to their customers. We believe there will be operating efficiencies from having the Archer business in our group of companies. We look forward to working with the Archer customers, staff and drivers.”

LONESTAR WEST has added five trucks to its corporate fleet over the last quarter. As of Dec. 5, Lonestar had added three hydrovac trucks, two vacuum trucks, to its existing fleet of 24 trucks. Officials say the company anticipates that several additional trucks will be added in the current quarter. “We are adding to our fleet to meet strong customer demand,” said James Horvath, Lonestar president and CEO. “The additions to our fleet will not materially impact gross revenues in the current quarter, but are expected to have a positive impact in our next quarter and beyond.”

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BOTTOM LINE

LIFE OF THE PARTY Why I believe Twitter is the most powerful social media tool and the only one that can directly get you business

By Mike McCarron

T

witter is far and away the fastest growing social media site (even more than Facebook). Two hundred and fifty million times a day, someone “tweets” a 140-character message telling their followers, “Here’s what I’m doing.” It’s the central theme of Twitter.

Frankly, I never got it. Other than my immediate family, I have zero interest in what someone else had for dinner, regardless of how many Oscars they have on the mantle.

Even more confusing to me: why would anyone have one iota of interest in the mundane details of my life when I barely do?

Fast forward two months and I’ve done the proverbial 180-degree turn. My perception of Twitter now is that it’s the most powerful social media tool and the only one that can directly get you business.

If social media is a cocktail reception, Twitter is the life of the party; the smartest and most entertaining person in the room – no doubt in my mind.

Twitter is a real-time information hotline. It instantly gives you access to the latest scoop on people, places, and things. At the social media party, it eliminates the “small talk.” It makes it easy to identify like-minded people regardless of how off-the-wall your interests may be. It allows you to meet people at lightning speed so you can begin sharing ideas, growing your business network, and forming a new type of community.

Here are just a few of the things that I’ve learned the last two months trying to be life of the party with Twitter as my date:

What do I say?

At the beginning, say nothing. Simply join Twitter to follow interesting people and get a flavour for how this powerful tool can work for you. Like most baby boomers who aspire to stay hip by embracing new technology, I found Twitter to be far less intimidating than expected. Even if you never send a single tweet, there is still tonnes to learn and a lot of fun to be had just being at the party.

How do I say it?

Think short, positive, and engaging. Old news is old news and no one cares that you just had double cheese and sweet peppers on your veal sandwich. Share valuable information and content, making sure to add something relevant before you hit the “send” button.

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Not about the number of followers Unless you’re Oprah, Charlie, or Justin, the number of followers means zippo. Bigger parties aren’t better parties.

Don’t make the mistake I did by automatically following every person who followed me. You’ll surely increase your followers but at the same time you’ll be bored out of your mind. The good news about Twitter is that, unlike Facebook, following does not have to be mutual.

Selling is okay My thoughts on this have always been clear. I can’t stand pushy peddlers who use Facebook or LinkedIn for cold calling, but the Twitter ecosystem is different. It seems to tolerate – indeed, encourage – self-promotion. It seems to be built for that.

I’m confident that with Twitter on my arm at the party, I can establish dialogue with customers at a speed only imaginable several years ago. Last I checked, engaging and building rapport with customers works no matter how you do it.

What about trucking?

The opportunities to use Twitter to grow your trucking business and improve your bottom line are unlimited. Attracting converts to your Web site, proactively tweeting followers about the storm that will impact Monday’s delivery, or sending drivers a relevant article from Fleet Executive are no-brainer examples.

My challenge over the coming months is to translate my positive personal experience into a profitable business experience.

Ironically, one of the many pleasant surprises garnered from my early Twitter experience is my view on “What are you doing?” For some odd reason, I’ve accepted the fact that you’re not a total and utter whack job because you follow every move of your favourite celebrity. There’s something kind of cool in knowing that Bono is currently having a cheeseburger for breakfast because he had a few too many Irish whiskeys the night before.

I know a baby boomer trucker who can relate to that.

Parties with real cocktails do still exist. FE Mike McCarron is the managing partner at MSM Transportation (www.shipmsm.com) in Bolton, Ont., which specializes in moving products between Canada and the rest of the world. He can be reached at mmccarron@shipmsm.com or @AceMcC on Twitter. trucknews.com

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RESOLVING CONFLICT Six simple steps to keeping the peace

By Mark Borkowski

O

ne of the most challenging roles of an effective manager is that of “peacekeeper.” Resolving conflicts in the workplace takes negotiation skills, patience, and a healthy dose of emotional intelligence.

Recently, I interviewed Susan Steinbrecher, author, executive coach, speaker, and CEO of management-consulting firm, Steinbrecher and Associates, to gain further insight into the tumultuous world of conflict resolution.

A licensed mediator, Steinbrecher recommends a conflict resolution model that involves six basic steps and three golden rules.

“In any dialogue, there are two fundamental needs that must be met: the ego need and the practical need,” Steinbrecher said. The ego needs are: to be listened to, valued, appreciated, empathized with, involved, and empowered. The practical need, in the case of conflict, is to find an eventual resolution to the conflict.

To address both needs, Steinbrecher suggests employing the three golden rules of engagement: 1. Listen and respond with empathy.

2. Be involved; ask for the other person’s opinions, ideas and thoughts.

3. Maintain and affirm self-esteem.

Remember: 55% of a message from sender to receiver is done so via body language, 38% through tone of voice, and only 7% by word choice. The body, soul and heart cannot lie – unless you are a diagnosed sociopath! So keep these things in mind when responding.

Steinbrecher uses the example of the employer or manager, and employee: the most important thing to keep in mind is that if the employee doesn’t feel that they were heard or that they have achieved a “win” out of the discussion, then they will not be motivated or resolve to change.

“It comes down to compliance versus commitment,” adds

It’s one thing to reduce costs, another to

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TAKING CARE OF BUSINESS Steinbrecher. “Without question, the person involved in the discussion or conflict resolution will be far more committed to the outcome if they feel empowered by it.” As you go through the six-step process, look for ways to weave in the golden rules listed above.

Six steps to conflict resolution

1. Discuss the situation in a respectful manner.

Example: “John, I noticed you’ve been late a few times this week, which seems out of character for you – you’re always so reliable!” Don’t say, “You are always late.” This just gets the person’s back up.

2. Be specific. If you say, “I noticed that on Tuesday, Thursday and Friday you were 30 minutes late,” the person realizes you are aware of the situation and that they have to address the issue. Their explanation is a perfect opportunity for you to listen and respond with empathy. Remember: you do not necessarily have to agree with someone to empathize with them. You are simply attempting to put yourself in that person’s shoes – if only for a moment – not condemning or condoning the behaviour.

3. Discuss the conflict’s impact. Example: “John, I am not sure you are aware of the full impact of the conflict between you and Steve. The other employees are witnessing this, and it is making them uncomfortable…What do you feel is going on?” Remember, you are asking not telling.

4. Ask for the specific cause of the conflict. “John, from your perspective, what is happening here? You get along well with most everyone here, so what is causing the conflict?” Remember to empathize again after their response, rather than say, “Yes, but you’ve got to get along.” The word “but” negates everything positive you just said. If you have to fall on a conjunction, pick “and,” i.e. “Yes, I can imagine the challenge this presents – and we need to come up with a solution. What ideas might you have?”

5. Ask for the solution. For instance, “What do you think you need to do to help solve this situation? What is your next step?” This brings in accountability.

6. Agree on the action to be taken. This step is often missed and it’s the most important one. Think of it as a recap. Example: “So John, what I am hearing you say is that you are going to talk to Steve (discuss details). By when were you thinking of doing that?” The last step is to close on a positive note and ask them to get back to you on the outcome. FE Mark Borkowski is president of Mercantile Mergers & Acquisitions Corporation.

Mercantile specializes in the sale of midmarket companies. Mark can be contacted at www.mercantilemergers­acquisitions.com.

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THE HUMAN EDGE

SWIM FASTER You will have to if you want to

catch the best job candidates in the post-downturn recruitment pool

By Dan Brown

W

hile some uncertainty may shroud Canada’s economic rebound, new data from Statistics Canada reveals that the labour market is starting to show signs of recovery. Hiring freezes are slowly lifting, and companies are once again on the hunt for talent. With this in mind, firms in the transportation and logistics industry need to ensure hiring and interview processes are able to adapt to the shifting economic times, or risk losing out on talent.

While a weak economy presents a large talent pool of typically overqualified candidates, a strong economy presents a smaller talent pool of candidates, many of which can entertain multiple job offers. Although some believe that the talent pool is deep today, it is actually quickly getting shallow and the transportation and logistics industry needs to know how to swim in these changing waters. Think real estate: attractive homes (qualified candidates) receive multiple offers in a strong market, so offers that either take too long or bid too low simply lose out.

Facing high operating costs, continual advancements in technology, along with health, safety and environmental challenges, the transportation and logistics industry is already a highly competitive marketplace. In order to survive under these circumstances, companies need to ensure the right individuals are placed in the right positions.

There are numerous tactical steps companies can immediately put into place to adapt their recruiting practices in the post-downturn market: Move faster and maintain communication: Companies with hiring processes that move at glacial speed simply lose out on talent. Even if a hire decision has not been made yet, keeping up simple communication with candidates, such as updating them on the status of their application, will show potential employees that you are serious about hiring.

Treat candidates like potential clients: Talk about the company with an enthusiasm that would make a potential candidate want to work there. Sell your services, firm and industry the same way you would approach and respect a potential client. Interviewers are walking billboards for 14 FLEET EXECUTIVE ❙ March/April 2012

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a company, so an interviewer that shows up late or lacks respect for a candidate, risks damaging the firm’s reputation.

Any negative experience a candidate has can then be easily broadcast to large networks of colleagues through channels such as Facebook, Twitter, and blogs.

Consider flexibility in compensation packages: Candidates have the ability to shop around in a strong market, so standards in terms of pay and benefits need to be raised. When it comes to what might appeal to each potential candidate, remain flexible in possibly offering them package options specifically suited to their needs.

“Work-life balance” now strikes a chord with many, and pure monetary compensation is often no longer enough. Creating a personalized approach will not go unnoticed.

Identify the qualities of your candidate: In order to make a hire in a timely-manner, companies must be able to identify the key qualities of an ideal candidate. Having a solid grasp on what to look for in a new hire can mean the difference between securing a hire and losing them to a competitor.

Consider outside help: Sifting through piles of resumes and screening candidates to find those who may or may not be qualified for the job is a time-consuming and laborious process. This is where a recruiting agency can come in to ensure quality candidates are presented and that processes are moving fast enough.

Like with most other vulnerabilities in business, forecasting and planning ahead is essential. A deeper analysis of a company’s overall staffing structure will help identify potential vulnerabilities and solutions towards succession planning and staff shortages. With the amount of strong talent out there now, firms can begin securing key hires to sustain the growth that shippers and carriers have been seeing in recent months using some of the outlined strategies. FE Dan Brown brings international, national and local expertise to his role at Summit Search Group BC (www. summitsearchgroup.com/bc/) as a specialist in recruiting for the industrial and business-to-business sectors. Dan can be reached at dbrown@summitsearchgroup.com. trucknews.com

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MAINTENANCE MATTERS

Coolant’s ‘other half’

How much consideration should you give the water part of the mixture?

By Chuck Carman, curriculum developer, CARS

I

t’s common knowledge that most truck engine manufacturers recommend a coolant mixture of 50% coolant concentrate and 50% water.

With a few exceptions, such as when the truck is being regularly operated in extreme cold climates, the mixture may be adjusted to a 60/40 coolant/water mixture to offer further freezing protection.

There are many different types of coolants available; however, the best practice is to always follow the engine manufacturer’s suggested blend for the engine’s cooling system. This is a predetermined combination of chemicals; the service centre has little to no control over its mixture.

This leaves the water. At 50% of the mixture, it stands to reason that the water is just as important a component as the coolant, but how much consideration is given to it?

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A common belief was that if the water was good enough to drink, it was good enough for the engine. However, this old adage is no longer a safe practice, as water quality has become a serious concern and is a source of contamination for cooling systems. Many of today’s “Extended Life Coolants” (ELCs) are designed to last well over one million kilometres before needing to be serviced. The water must also be able to perform this long without becoming a source of a failure.

So if the water used can become a problem for the cooling system, what should a service facility do? One option is to use only premixed coolant solutions; this way the coolant manufacturer has already selected the water best suited for their product. However, using a premixed product does not always make it easy to provide a proper concentration level after

a cooling system service has been performed or topping up the system.

Each engine manufacturer publishes their recommended water type, including the acceptable level of minerals and other dissolved solids. If a service centre is planning on using its own water supply, whether it is from a municipal water supply or a well, the water should be tested. Many municipal water supplies contain high levels of unwanted solids like salts and minerals as well as other chemicals including chlorine. Well water may be high in minerals such as calcium and iron. These will fall out and build up scale within the system, causing restrictions. The use of softened water is even worse, raising the levels of salt in the water. Salt increases the conductivity of the coolant mixture, increasing the affects of both electrolysis and galvanic action. trucknews.com

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MAINTENANCE MATTERS

Distilled water is often recommended by manufacturers since it has all of the minerals and salts removed. At first glance, this would seem like a good solution, but distilled water has a negative Langelier Saturation Index (LSI), meaning it has the tendency to dissolve minerals from its surroundings, including the metal within the cooling system. A positive LSI would increase the formation of scale. An LSI of between -0.5 and +0.5 will not display excessive mineral dissolving or scale-forming properties. Distilled water is still a better choice than using either hard water or water that has been softened.

The use of de-ionized water is sometimes suggested, however, it is not commonly available and can become acidic when left open to the atmosphere.

Reverse osmosis and filtration are other options. The reverse osmosis process forces pressurized water through a membrane in the reverse order of water’s natural osmosis process, whereby a weaker saline solution will travel towards a stronger saline solution. This process removes contaminates and minerals as the water migrates through the membrane.

Water that is put through a filtration and absorption process can produce very good results. This process is much more efficient than reverse osmosis and steam distilling. Filters like solid carbon blocks are used to “slow-filter” the water. Additionally, technologies have been added to encourage absorption where contaminates break their bonds with the water and adhere to the filter material.

No matter what water supply a service centre uses, the water should be tested before use in coolant mixtures. This ensures that they can gain the most out of the cooling system’s lifespan. In many cases, the use of an in-house reverse osmosis or filtration system may be the most cost-effective, rather than purchasing water or the worse alternative: using water with incorrect mineral levels and intentionally putting bad water into a good cooling system. FE If you have completed any of the Trucks OnDemand courses, the company is asking participants to complete a short, threeminute survey. To access the survey, visit trucksondemand.ca, log-in and under “Account Details,” choose “Participants Surveys” – “Truck Transport Student Survey.”

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MAINT.MATTERMar12.indd 17

March/April 2012 ❙ FLEET EXECUTIVE 17

12-03-23 8:58 AM

PROFITABILITY

PLAY LIKE THE BIG BOYS Building influence through content marketing

By Carl Friesen

L

et’s say you’re with a company that lacks broad market awareness despite having a great set of offerings, a track record of success and satisfied customers.

Your existing customers are ready to act as references, but it’s an uphill battle to convince prospects not familiar with you to give you a fair shot. And as for leads, let’s just say that waiting for your contacts to change jobs is your fastest way to get in front of new companies. Sound familiar?

This is not far from the normal state of affairs for new service providers within established industries. Being innovative is not enough to garner the credibility to compete with more established players, and certainly will not overcome the skepticism most will have toward an unfamiliar name. So how can you rise above the noise of your cold-calling compatriots and claim the higher ground?

This is the challenge the management team at Nulogx, a Mississauga, Ont.-based provider of transportation management solutions, had to grapple with several years ago. As a new name in the market, Nulogx was determined to leverage its technology and information-based processes to deliver value to a broader market. Ultimately, Nulogx needed to highlight the value of

18 FLEET EXECUTIVE ❙ March/April 2012

ProfitabilityMar12.indd 18

good information in transportation decisions and at the same time communicate to the market its capabilities in this regard.

Part of the answer, as described by Scott Irvine, vicepresident of business development at the company, came from a commitment to contribute to the transportation community as whole, including shippers, carriers, and even potential competitors. That’s when Nulogx launched the Canadian General Freight Index (CGFI), the first resource of its kind in Canada. In addition to the CGFI, Nulogx also launched a “thought leadership” program around this effort to help establish the company as a trusted source of information and best practices.

Without realizing it at the time, Nulogx was tapping into the new wave in reaching potential clients via content marketing. As authors Joe Pulizzi and Newt Barrett describe in their book, “Get Content. Get Customers,” content marketing means understanding what people in your market want to know, and then delivering it to them in a relevant and compelling way. This helps the company to become a trusted source of information, and a naturally preferred choice when someone in the market is ready to buy. trucknews.com

12-03-23 8:58 AM

PROFITABILITY

As the book points out, advances in search engine capability, plus the increasing power of the Web as an information source, mean that even a small company can be as big as Microsoft regarding specific search terms, reaching a global market for its products or services.

As the largest processor of freight bills in the country, Nulogx has access to a stream of freight transactions representing a significant slice of the Canadian market. This information is current and timely, and is an excellent source of intelligence. The CGFI is based on this data, offered as a free service that is published monthly, charting changes in freight costs for Canadian shippers. It is also used to provide comprehensive benchmarking studies, allowing shippers to see how their costs compare to the market in general. It has also spawned C-level discussions and increased overall awareness of transportation issues at the senior levels of many companies.

The Index now has some 3,000 subscribers – carriers, shippers, consultants, financial institutions, journalists and others (and is included in all Transportation Media publications). It is also presented in regular newsletters and the company blog (Nulogx customers receive more detailed information and analysis not available to regular subscribers).

In September, Nulogx also announced that Ryder System had become a CGFI Data Partner, an important step in achieving its goal of becoming an industry-wide initiative.

In addition to the index information, Nulogx also provides informed comment on shipping trends and best practices.

This information is carried in the blog, the company newsletter, webinars, published white papers, and is posted on trucknews.com. There’s also an annual seminar that brings in outside expertise such as economists, industry experts, as well as shipper and carrier representatives, who provide informed opinions on trends over the coming year with the Index information as a backdrop. The 2011 event saw over 160 attendees, Irvine says.

“We believe that the commitment to provide both our customers and the industry in general with information that is genuinely valuable and helpful needs to come first,” he says.

“If we produce content for the sake of content, we know it will simply be ignored. It takes a lot of work and time, but there are no shortcuts.

“The biggest challenge is obviously creating the content, and investing the time required. At Nulogx we are fortunate to have a number of resources able to contribute to generating content, however, other organizations without this can easily utilize freelance or contract providers to help them create it,” Irvine says. “The most import thing is that it is a continual process. If it is a one-off or an occasional effort, I would be concerned that it would not have any real impact within one’s intended market. trucknews.com

ProfitabilityMar12.indd 19

“The impact of the increased awareness and presence within our market has been very beneficial,” he adds.

“General awareness of our company and our ability to help shippers reduce their costs has risen – doors have been opened, relationships with our current customers have been solidified, the information we have produced has enabled us to continually improve the value we offer, and we feel good about what we are doing.”

A good application of content marketing Nulogx is “spot on for a company in that position,” says Bernie Thiel, partner in Cleveland-based content marketing firm Alterra Group.

“It is creating something newsworthy and of interest to the media, which can help generate greater awareness for the company among current and prospective clients. This is especially important given that its solution is not inherently newsworthy on its own. Nulogx is giving something of value to customers beyond the basic services it provides, which helps strengthen customer relationships.”

Nulogx is establishing itself as a voice of authority in the industry on a topic its customers care about, which helps to differentiate the company from its competitors, Thiel says, adding that the company appears to be very focused on marketing the content through all the channels its using.

“In our experience, companies can struggle with effectively doing both aspects of content marketing – some may create great content, but then let it go to waste because they’re not marketing it effectively. Others may have a great, well-oiled marketing machine, but the content they pump through that machine is weak, half-baked or not especially interesting or relevant to their audience. To be really effective, you need both superior content and superior communication of that content.”

Thiel says that for a company that engages in content marketing, it is key to keep the focus on how what the company provides benefits its customers. It should not focus on features and functions, but rather, how the company’s services help customers solve critical business challenges.

“Business people don’t care about features,” Thiel says, “but they care about how a particular technology product can help them generate insights into their customers’ needs, spot an important trend in their market, or uncover ways they can operate more efficiently. That’s what we call the ‘business utility’ of the product or solution, and communicating that business utility is where content marketing can help.” FE Carl Friesen is principal of Global Reach Communications, helping business professionals get noticed and stand out through helping them publish their ideas. For more information, call 289-232-4057, e-mail carl@showyourexpertise.com, or visit www.showyourexpertise.com.

March/April 2012 ❙ FLEET EXECUTIVE 19

12-03-23 8:58 AM

PROFITABILITY

Is your trucking company in trouble? These guys may want to buy it. Wayne Deno (left) and Steve Russell of Celadon are planning to take a proven acquisition strategy from the US and adapt it to Canada.

CELADON LOOKS TO BRING AGGRESSIVE ACQUISITION STRATEGY TO CANADA

C

By James Menzies

eladon has honed an aggressive acquisition strategy in the US that the company now hopes to bring to Canada, which could present new opportunities for overleveraged fleet owners while potentially growing Celadon’s relevance in the domestic truckload market.

Senior executives at Celadon shared their bold growth strategy with Fleet Executive in an exclusive interview at the company’s Indianapolis headquarters.

Since 2002, Celadon has focused on acquiring carriers in financial distress, relieving ownership of their debt and paying “fair” value for trucks and trailers, which are then sold via Celadon’s own retail business. The company then takes on the majority of its customers and offers employment to any drivers who meet Celadon’s standards. Unlike most other acquisitions, Celadon pays cash so it doesn’t require bank approval and as a result, it can close a deal within days.

While the strategy capitalizes on the misfortune of others, it’s a shrewd tactic that has contributed to the carrier’s driver pool, customers base and ultimately its bottom line. And in most 20 FLEET EXECUTIVE ❙ March/April 2012

ProfitabilityMar12.indd 20

cases, owners of the company being purchased are pleased to be relieved of their personal guarantees, officials said.

The latest example of this strategy occurred just recently, when Celadon acquired troubled Teton Transportation of Knoxville, Tenn. Celadon chairman and CEO Steve Russell said his team first met with Teton on a Wednesday and had closed the deal the following Monday.

“We can act quickly,” he said, noting Celadon’s strong financial situation and substantial cash reserves. “Although there are large carriers based near Knoxville, one would have thought they’d be a natural buyer, but I’d assume they likely would have required bank approval, and you can’t get bank approval in five days. We acted quickly, purchased the tractors and trailers and bought their Knoxville facility.”

Celadon has retained about 80 of Teton’s drivers (it operated 180 trucks) and now has a facility in Tennessee from which to service a newly acquired customer base. Teton was in a desperate situation. Its CSA scores were abysmal and its insurance was coming due in early March. The only alternative to bankruptcy was to find a buyer – and fast. trucknews.com

12-03-23 8:59 AM

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12-03-23 9:02 AM

PROFITABILITY

Russell admitted Celadon has become known as a “buyer of last resort,” but he makes no apologies.

“We buy the tractors and trailers, take over the customers and sell the tractors and trailers at fair value. We sell them as quickly as we can and pay the money to the underlying lenders, or to the owner if they own it. They’re released from their personal guarantees and they walk away happy,” Russell explained.

Ironically, the scheme was developed when Celadon itself was in a state of desperation. In 2002, 70% of its business came from the big three Detroit automakers.

“When you do a lot of business with one customer, you don’t own the customer, the customer owns you,” Russell said. “Our stock was at $2, we were on the balls of our ass, we owed a tonne of money and were on the verge of bankruptcy.

We decided we couldn’t hire 2,500 salespeople to sell more customers so we decided we’d make acquisitions. We couldn’t buy something that was six times EBITDA, because we didn’t have the money; we had to buy weak companies.”

“We’re not going to pay six times EBITDA, but it works for anybody who just wants to get out.”

Wayne Deno, vice-president of operations, Celadon Since 2002, all but one of the 11 trucking companies Celadon has acquired have been in a state of financial duress.

The company has picked up the pace in recent months, finalizing three acquisitions in 2011 and the Teton deal just recently. An investment banker was used in just one of the 11 acquisitions, Russell noted, and that’s because Teton had already solicited its services.

The strategy is only effective when fleets are in a dire position financially; and in the US, at least, there is no shortage of such fleets.

“We’re not going to pay six times EBITDA, but it works for anybody who just wants to get out,” said Wayne Deno, vicepresident of operations with Celadon. When asked if that’s the new reality for trucking companies looking to sell, he said: “I don’t think that it’s new, but it’s a reality.”

Most of the ownership groups that have accepted Celadon’s terms have been pleased with the outcome, Russell added.

Deno said it relieves them from the burden of having to offload their equipment, saves them from the shame of filing for bankruptcy and gives them the peace of mind in knowing most of their employees will be offered continued employment. Most drivers who meet Celadon’s criteria stay on, Russell noted, and in most cases they’re trading in older tractors for brand new trucks – the average age of Celadon tractors is just 1.6 years.

Celadon is now setting its sights on Canada, where it hopes to find similar opportunities to grow its Canadian fleet of 250 22 FLEET EXECUTIVE ❙ March/April 2012

ProfitabilityMar12.indd 22

trucks. When asked what excited him about the Canadian market, Russell launched into a rendition of O Canada – in English and French.

“There have got to be companies in Canada where the owner is on personal guarantees, things are tough, fuel is going up, whatever,” Russell said.

Deno added the company already has a facility in Ontario and needs to add scale to make it more profitable.

“It’s a great place for us to try to grow a little bit,” he said. “Rates in and out of there seem to be decent, we have a terminal up there, we have fixed overhead, and we have allowed it to shrink to the point where we frankly need to put more trucks on up there to make it a good profitable business for us. Trying to grow intra-Canada business internally, you have to find customers from Montreal to Toronto and at the same time find ones going back. When you do it through an acquisition, that all comes pre-packaged and as long as you can retain those drivers, you can do something.”

The perfect match for Celadon, Deno said, would be a fleet with a southern Ontario base and a terminal in Quebec.

Celadon execs would like the company to become involved in Canadian acquisition discussions, which typically involve publicly-traded mega-fleets TransForce and Contrans, and few others. When asked if Celadon was approached about the recent MacKinnon Transport van division sale, which ultimately went to Contrans but at first glance could have been an ideal fit for Celadon, Russell said “No.” Would he have liked to have been involved? “Sure. But I don’t think the typical Canadian company knows us as anything other than Celadon Canada; 250 trucks isn’t tiny, but it’s not big.”

While Canadian fleets haven’t been knocking down Celadon’s door looking for buy-outs, Deno said, “We like to think they think of Celadon Canada as a very small fleet and don’t think of us as a potential acquirer.”

That could change, however, if Celadon gets its way, and the company seems willing to throw the full resources of its American parent behind any opportunities that come up north of the border. Russell and Deno agreed they wouldn’t hesitate to take on fleets with up to 300 tractors, assuming they’d retain 200 of those drivers. And they also don’t plan to stop at one such acquisition if the opportunity is right.

Essentially, Celadon could double or triple its Canadian capacity in short order if it succeeds in finding companies willing to accept its terms.

The repercussions for the industry are significant. Fleets on the brink of bankruptcy now have a new option, one that could free owners of significant debt loads and give them a clean break from the industry. The limited pool of potential buyers in Canada – consisting primarily of TransForce and Contrans – now has a new, well-financed participant with which to contend. And if Celadon’s strategy is successful, it could become a much bigger player in the domestic Canadian trucking market. The sharks are circling. FE trucknews.com

12-03-23 8:59 AM

GREEN to GOLD

Improved fuel economy should not come at expense of engine protection

By Lou Smyrlis

B

lending new low viscosity oils that improve fuel economy is a relatively easy process; ensuring they also deliver engine durability, however, is a tougher nut to crack. That’s the challenge motor oil manufacturers face as they prepare to formulate the new PC-11 category of motor oils intended to help engine manufacturers reduce carbon emissions.

Part of the problem, as Matt Urbanak, a chemist with Shell, explained, is that viscosity of engine oils varies with temperature – the hotter the oil gets, the more its viscosity drops. Heavyduty engines redesigned over the past decade to reduce contaminants have been burning hotter. And there is concern that the engines of the future – which will have to be designed to deal with the US Environmental Protection Agency’s new mandate to reduce greenhouse gas emissions by improving fuel performance – could be running up to 10ºC hotter.

“Benefits of fuel economy should not come at the expense of engine protection,” Urbanak said.

Also interesting is that although the focus in coming years will be on motor oils that help contribute to improved fuel performance, there is no formal heavy-duty engine fuel economy test for motor oils.

trucknews.com

GreentoGoldMar12.indd 23

“It’s simply understood that as you go to lower viscosity oil, that fuel performance will improve. But every company has its own way to generate data and some companies may be a little less stringent than others in how they generate that data,” Urbanak said.

Urbanak said that Shell uses very high standards when it makes its fuel economy claims and that data is showing a measurable improvement in fuel performance when moving to lower viscosity oils such as 10W30s and 5W30s. He outlined a series of tests that Shell has conducted over a two-and-ahalf year period, pitting low viscosity oils against the higher viscosity 15W40 oils the vast majority of the industry currently uses: ❱ The Shell Rotella T5 10W30 product showed a 1.6% improvement in mpg in comparison to the 15W40, using a Class 7, 2006 model-year test vehicle with a six-cylinder engine, under highway driving conditions over more than 2,500 miles. The test was conducted by an independent test facility in Ohio. ❱ The Rotella 10W30 showed a 3.3% mpg improvement versus the 15W40 blend in a Shell-run test using nine Class 7 vehicles (model years 2000 to 2005) and running either Cummins ISC or ISM engines. The trucks were run 40% in the city and 60% on the highway for 13,455

miles. They were switched back and forth between the 10W30 and 15W40 blends every month for 12 months. ❱ The Rotella 10W30 showed 1.57% improvement in mpg versus the 15W40 blend in a test using a Class 8 vehicle running a Detroit Diesel Series 60 engine in on-highway conditions. The test was conducted by Schneider and complied with the SAE J1321 method.

Urbanak added that since the company’s launch of its Rotella T5 in 2009, analysis of its test truck engines, each of which have run over 800,000 miles, has shown excellent liner wear and cylinder liner bore polish protection in comparison to its 15W40 oils while piston ring protection has been on-par.

Tests have also shown excellent piston deposit control at both the top (rocker arm cover) and bottom (oil pan) of the engine after 630,000 miles.

Wear results also look very promising in terms of iron, lead, copper and aluminum wear, Urbanak said. Same can be said for the viscosity control, soot handling ability and TBN retention and acid neutralization capability of the 10W30 oils in comparison with the higher viscosity 15W40 oils.

“We will continue to explore even lower viscosity formulations to deliver fuel economy benefits while delivering the same protection,” Urbanak said. FE March/April 2012 ❙ FLEET EXECUTIVE 23

12-03-23 9:00 AM

GREEN to GOLD

Shell sees long-term future for LNG, hopes Alberta GreentoGold project will prove case By Lou Smyrlis

S

hell sees a long-term future in tonnes in natural carbon gas offsets currently as aand viable optionhe’d for get abouttransportation $240.” and an Alberta That might like prominently a lot of cash projectnotis seem figuring back considering the work and in the company’s plans to showinvestment fleets the involved, but, if nothing else, to it could potential for this alternative dieselgive fuel.a company bragging rights and maybe a marShell’s Canadian Green Corridor, keting tool. On the other hand, theliquefied financial the company’s first large-scale or marketing bottom line may not the natural gas (LNG) project in be North most important aspect of the program, to America, launches in March. Initially some.

The value of fuel saved outweighs the employing a mobile refueling unit value of the credits and it always will,running Arcand to service the needs of fleets told the Sun, but the social value of contribthe Edmonton to Calgary corridor, the uting to a cleaner environment is priceless. company also has agreements in place As for what a trucking company has to with three Flying J stations in the corridor do to comply, Stedeford says COAC profor them to supply LNG starting in the third vides the expertise and does all the work. quarter of this year. By the third quarter of “We basically cometoinbeand do all the innext year, Shell plans supplying LNG stallation,” he says.

“We do an awareness to the network from its own LNG plant session, we put our modems in (the trucks), at the Jumping Pound facility about 30 we capture all the data and we send kilometres west of Calgary. The newreports plant to the company to let them know would produce 0.3 megatonnes perwhere year they need to focus, which operators need aa of LNG. Until the plant is operational, little bit of help in a certain third-party distributor willarea.” be providing Equipment is installed

by COAC to acthe LNG.

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And Shell’s aspirations for converting curately measure fuel consumption. the trucking industry to LNG don’t stop Stedeford says isn’t really the with this project. it It is ready to about build the hardware, though.

“Ours is a behavioural proinfrastructure beyond this corridor if gram,”ishe says. “Sointerest. it’s just trying to work there sufficient with all of the operators to be aware chang“We are not stopping with thisofproject. es they can make that will significantly reduce If you are going to be in this market, the amount ofbe fuelinthat they’re you’ve got to it. We haveburning.” aspirations COAC’s Web site says a normal installato go all the way to the West Coast,” said tion of their equipment into a truck and James Burns, general manager of LNG non-hydraulic lifting equipment, such as transport Americas, at a press briefing. an excavator, is $4,000, including of This year will mark the the firstcost time the setup itself.

That’s a healthy chunk of that Shell’s natural gas production will change for a vehicle, but and Stedeford says outpace its oil production Burns says COAC can help there, too. the company sees that trend continuing.

“We actually do the whole he There are several factorsthing,” making says.

“We come in, we put the program toLNG an attractive alternative to diesel, gether, we suggest the equipment he explained.

The supply of naturalthey gas should put into their units, we can and schedule in North America is abundant has when to doconsiderably it, we can eveninfinance so it’s increased recentit,years, very much a win-win.” as prolific new shale-gas deposits have Truckers who idea where of sellingthere carbeen tapped to find thethe point bon offsets attractive but who may not want is enough to export, rather than relying to surrender independence maygas find on imports oftheir natural gas. Natural is themselves out of luck. also one of the cleanest burning fossil “If someone does it all on well their to own, the fuels, capable of reducing wheel carbon offsets won’t be available because CO2 emissions for heavy-duty trucks by you have to very be inlow the sulphur program,” Stedeford 20%.

It has content, so says.

“So while they might (reduce their SOx emissions are also greatly reduced. emissions) they can’t sell their17% offsetsofunless Road transport uses the it’s gone through some sort of auditing, world’s energy and contributes 25% an of agreed-upon methodology.

Andincrease if they CO2 emissions.

That can only haven’t, they shouldn’t be outclimbs there telling as the world’s population from their customers that they’ve rethe current seven billion to anactually estimated duced (their emissions) by ‘X’ amount.” nine billion by 2050.

It mayneed end upmore beingenergy a moot point “We and before lower too long, anyway, if the so-called CapDan and carbon forms of energy,” said Trade concept becomes a reality in B.C., Arcy, global OEM technical manager something Stededford says is (US), going adding to hapat Shell Global Solutions pen (short of a change in provincial governthat the reality, however, is that by ment, perhaps).

2050, two-thirds of all our energy will basically approach, stillIt’s come froma carrot-and-stick sources currently being where the polluter pays while the seller is used (current engine technologies and rewarded for being green.

Stedeford says the conventional liquid fuels). cooperative already has number of memIt takes decades for aalternatives (such bers across the province. as electric-powered vehicles) to take root, he emphasized. Shell officials believe Other waysand to go green that diesel LNG will be the fuels of Different jurisdictions haveinor2050. are pursuing choice for transportation ways to reduce emissions and fuel use that Shell officials provided fuel mileage

comparisons to diesel for both LNG and don’t necessarily amount to marketing what condensed natural gas (CNG): basically appear to be merely mathematical calculations (carbon 1 gallon of dieseloffsets), gets but 6.5 which mpg; init stead help trucking companies increase their requires 15 gallons to go 100 miles. efficiency in other ways, sometimes offering government rebates help encourage com1 gallon of LNGto gets 3.8 mpg; it panies to become more efficient. requires 28 gallons to go 100 miles.

Alberta’s Trucks of Tomorrow program, for example,of offers rebates to companies 1 gallon CNG gets 1.7 mpg;who it improve fuel efficiency and greenrequires 58 gallons to goreduce 100 miles. house gas emissions by embracing such equipment as cab heaters, power units, Although diesel auxiliary has the obvious and trailer skirts.

Stedeford says the COAC’s advantage in mpg, Burns said what must system also beworks takenbetter, into however. consideration is that The government tried plans on their LNG will be sold at has about 30% below the own to offer rebates and the like, but they current price of diesel, and diesel pricing don’tthe catch on verytowell because of the has potential climb higher stillpaas perwork and trying to figure out what you’re oil supplies continue to dwindle. There is supposed to do for it. Besides, he says, his also the benefit of GHG reductions from group offers extremely aggressiveapricing, so running LNG. Burns estimated payback the cost for people to get the equipment and from the investment in LNG-equipped put it in of will betobetter vehicles two three than years.if they do it themselves.

Plus, they have installers One obstacle is thetrained considerably so companies don’t have to figure how higher current cost of LNG out engineto get it done and whether it’s done right. equipped trucks (up to $50,000-60,000 The in biggest says, is higher cost, positive, or moreStedeford than 50%) and that there’s money in the pocket of the also the need for fuel tanks that weigh trucking company.

“If wecounterparts. can help a trucker more than their diesel reduce his fuel consumption by 10%,” he “We need to get to a tipping point says, claiming that is a conservative estimate, where incremental costs (for switching “then for the amount of equipment put to LNG) start to come down,” we Burns in and our commission charge, the operator conceded. is putting in the bank.

Shell money is teaming up with LNG “As for COAC’s commission, if you engine maker Westport Innovations of don’t reduce fuel COAC doesn’t get anyVancouver to co-market the advantages thing otherto than for theinequipment,” he says. of LNG fleets North America.

“We take (our commission) on the fuel Their initial target market is large, saved, so we bear a lot of the risk there.

Not sophisticated fleets making regional only that but, because we have the adminisruns in Alberta. trative ability, we can help smaller compaShell officials appreciate that nies who can’t afford all the administrative Canadian fleets will need to be costs of setting thatthe whole infrastructure convinced to up make switch to LNG to follow the required methodology.” and so the company says it will make So is this money-making available toprogram them ataleast one LNG proptruck osition for trucking companies faced with a for one-week tests. tough, or is it aup way to The uncertain company market, is also teaming with entice truckers into signing over their soverequipment manufacturers to raise interest eignty pieces of silver? Or is it both? in the for fuel30among railways, miners and Only time will tell. mt the marine shipping sector. FE

motortruck

24 FLEET EXECUTIVE ❙ March/April 2012

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trucknews.com

12-03-23 9:00 AM

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12-03-23 9:03 AM

GREEN to GOLD

Navistar partnership with Clean Energy takes sting out of cost of NG-powered trucks

By James Menzies

T

wo of the biggest barriers to transitioning the long-haul trucking industry to inexpensive natural gas – the cost of the equipment and availability of the fuel – have been addressed through a new partnership between truck maker Navistar International and gas supplier Clean Energy Fuels.

The companies jointly announced a program that will allow a customer to purchase natural gas-powered trucks from Navistar at no more than the cost of a diesel equivalent and then pay for the technology through slightly inflated gas prices over a five-year period, while still enjoying fuel costs significantly lower than diesel.

To participate in the program, customers will have to agree to purchase most of their fuel through Clean Energy’s rapidly-growing US fuelling network.

Clean Energy has vowed to open 70 liquefied natural gas (LNG) fuelling stations in the US by the end of 2012, with another 100 to follow in 2013. And for its part, Navistar has promised to develop a natural gas version of every one of its medium- and heavy-duty products, so customers can choose the product that best fits their requirements, making natural gas viable in virtually every trucking application.

Typically, natural gas-powered trucks cost tens of thousands more than their diesel equivalents. The higher up-front purchase price has prevented many fleets from making the transition to gas, even though the fuel costs about $1.50 per equivalent gallon less than diesel.

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Under the Navistar/Clean Energy program, customers will commit to purchasing their natural gas through Clean Energy’s facilities and will pay a premium on that gas for the first five years or until the incremental cost of the NG technology has been covered.

For example, a trucking company that commits to purchasing 1,000 gallons of natural gas a month through Clean Energy may pay an extra $500 per month for a six-year period until it has covered the cost of the technology, all the while still paying considerably less than the cost of diesel. Ideally, the program will allow the industry to transition to natural gas-powered vehicles without relying on government handouts, explained Dan Ustian, chairman, president and CEO of Navistar.

“This is going to work far differently than any other program in this field for alternative fuels,” he said. “It can stand on its own and stand very tall and that’s why it’s going to be successful.”

Added Jim Hebe, senior vicepresident of North American sales operations: “If you do business within this alliance of companies, your cost to go from diesel to natural gas is zero.”

It’s a compelling proposition, since the cost of natural gas is significantly lower than diesel and expected to remain that way. Fleet Executive asked Hebe if Canadian customers would qualify, to which he said: “We can make something work.” In order to purchase a qualifying amount of natural gas through Clean Energy’s US-based sites (it does have some stations located in B.C.), it would seem

the program would best fit Canadian fleets running north-south routes.

The program has already won the support of a major US carrier, and it’s a big one at that. Jerry Moyes, chairman and CEO of Swift Transportation, was on-hand at the announcement and expressed an interest in taking part in the program. Moyes noted Swift buys about a million gallons of diesel every day and welcomes the opportunity to move to a less costly fuel.

“We’re very excited about the potential of natural gas. We’ve been testing it for about a year with a couple different products and we like what we see,” Moyes said. “There is a savings to it.

We’re very restricted on the product we can buy today, which is what is holding us back, but we’re making progress in that arena…I think within three to four years (NG) could be up to 30-40% of our fleet.”

Former oil tycoon turned natural gas crusader T. Boone Pickens was also at the announcement, commending both Clean Energy (of which he’s a stakeholder) and Navistar for making gas more accessible to the long-haul trucking industry. He said new fracking technologies have made low-cost natural gas more widely available than ever before. He said there is at least an untapped 100-year supply of natural gas in the US. “The cheapest fuel in the world is in the US, so this opportunity cannot go unused,” he said. “We’ve got to get off OPEC oil and this is the first step to accomplishing that.” FE trucknews.com

12-03-23 9:00 AM

GREEN to GOLD

Work has begun on new PC-11 motor oil category

By Lou Smyrlis

T

he development team of motor oil, additive and engine manufacturing experts tasked with creating the new PC-11 heavyduty motor oil category has now held its inaugural meeting and begun the long process that will culminate in new motor oils by Jan. 1, 2016.

“A typical category takes about four years to develop and the next four years is going to be tight, but it is doable,” Dan Arcy, global OEM technical manager for Shell Global Solutions (US), told transportation journalists gathered for a special briefing on the future of lubricants held recently in Park City, Utah.

It will be about 10 years since the current motor oil CJ-4 category came out in January 2007 at the 2016 formulation deadline. Up until 2010, motor oil manufacturers had to come up with a new oil category every time new engine emissions standards mandated by the US Environmental Protection Agency (EPA) had to be met.

But the CJ-4 category was good enough that it could meet the 2010 emissions mandate without changes. That won’t be the case this time around as the EPA pushes engine manufacturers in a new direction: reducing greenhouse gas (GHG) emissions. Lower viscosity engine oils is one of several levers which engine manufacturers want to have at their disposal to be able to reduce GHG emissions from their engines, Arcy explained.

During that first meeting, the team began considering the tests, criteria and limits that will drive the new category.

Since CJ-4’s introduction in 2007, there have also been changes in engine hardware with more expected as engine manufacturers move towards engines with lower GHG emissions. As a result, the testing protocols used on the CJ-4 oils may not be the most representative of future conditions motor oils will have to meet.

Arcy said engine manufacturers essentially want the new category to be split into two subcategories: one that

trucknews.com

GreentoGoldMar12.indd 27

preserves historical heavy-duty oil criteria and which is backwards compatible, and one that would be focused on improving fuel economy, which may or may not be backwards compatible. “That’s the details that still need to be worked out. It could be a year or two before we know,” Arcy said.

Likely, there will need to be two different motor oils produced to meet the requirements noted above. What is certain at this point is that the motor oils engineered to improve fuel efficiency will need to be lower viscosity oils such as 10W30s or 5W30s.

Shell is already claiming a 1.6% improvement in fuel performance with its Rotella 10W30 formulation versus its 10W40 and Arcy said he is seeing “a small change” in the industry moving towards lower viscosity oils. He pointed out that both Volvo and Mack are currently factory filling with 10W30.

In addition to improving fuel performance, engine manufacturers want the new oils to improve on several other areas, including: Oxidation Stability – This is the ability of the lubricant to reduce oxidation, which occurs as engine temperatures rise, turning the oil acidic and causing it to thicken. Arcy said the next generation of engines could be running as much as 10ºC hotter, which would cause oxidation to double if a new motor oil formulation was not concocted to deal with this new challenge.

Shear Stability – This refers to the oil’s ability to reduce shear as a result of mechanical shearing. There is evidence, according to Shell officials, that the higher temperatures and pressures in today’s engines may be shearing oils enough to drop them out of grade after a certain amount of mileage.

Biodiesel Compatibility – There is no industry standard currently to test motor oils that will run in engines using biodiesel. With an expectation that the industry will increase its reliance on biodiesel, it’s important that the new PC11 category include tests for that.

Scuffing/Adhesive Wear – Currently,

there is also no test for this when qualifying a motor oil. There is concern that the thinner films of lower viscosity oils could pose an issue and so a test on scuffing and adhesive wear needs to be created.

Aeration: Engine OEs also want to be sure the new engine oils do not have air entrained within the lubricant, leading to foaming. So tests for this must also be updated.

In short, the industry is looking for motor oils to contribute to improving fuel economy, but wants to ensure there are testing procedures in place to ensure this does not compromise durability. FE

Join us at the Carbon Economy Summit The Carbon Economy Summit 2012 is an exclusive one-day forum for business, environmental and government leaders focused on environmental, financial and risk management performance in the low-carbon era.

The Summit take place June 6 at the Metro Toronto Convention Centre.

Rich conversations at the inaugural event in 2010 laid the foundation for the event’s return in 2012.

The all-new agenda covers: ➤ Upcoming carbon regulations and standards ➤ Climate change strategies for business ➤ Revenue growth opportunities ➤ Legal and marketing compliance ➤ Sustainable transportation, manufacturing and supply chains Join more than 200 sustainability professionals, business/industrial leaders and policymakers for a dynamic day of learning, networking, and valuable insight to take back to your organization.

To register, go to: www.carboneconomysummit.ca.

The Carbon Economy Summit is organized by the CanadianManufacturing.com division of our parent company Business Information Group.

March/April 2012 ❙ FLEET EXECUTIVE 27

12-03-23 9:00 AM

COVER STORY: BETTER FUEL ECONOMY

FUELLING

UP

GOT YOU DOWN?

See how engine makers plan to make trucks that boost fuel economy and lower emissions

By John G. Smith

F

irst, the target was nitrogen oxides (NOx) that contribute to smog. Then, the particulate matter (PM) that would otherwise burrow deep into lungs. Now, regulators have set their sights on a truck’s carbon emissions.

But unlike past regulations from the US Environmental Protection Agency, a series of coming standards will deliver better fuel economy.

The first round of the standards to apply to medium- and heavy-duty trucks will affect 2014-18 models years. And depending on the vehicle configurations, manufacturers will need to lower greenhouse gas emissions between 10% and 23% when compared to 2010 models that lack any of the related improvements. That translates directly into lower fuel bills.

The enhancements will be linked to factors like aerodynamic shapes and fairings, fuel-efficient tires, lighter weights, speed limiters, and controlled idling – all of which will lead trucks to generate lower levels of carbon dioxide, nitrous oxide, methane and hydrofluorocarbons. By some estimates, that will add about $6,000 to the price of the basic 2010 truck without the changes.

The improvements can largely be met with options that are available today, effectively pulling technology off the shelf and

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putting it onto new trucks. Many were outlined in a final report by the National Academy of Sciences, which was unveiled in March 2010, just a couple of months before US President Barak Obama called on the EPA and the National Highway Transportation Safety Administration to develop the standards.

Equally as important are the things that the regulations have left untouched: transmission gear ratios, drive axle gear ratios, engine power ratings, torque curves, tire sizes and final drive ratios can all be dictated by fleet buyers. “We want fleets to continue to make these decisions based on their actual operations, not national average conditions,” the US Environmental Protection Agency’s Byron Bunker said during the annual meeting of the Technology and Maintenance Council.

Trailers are exempt from the first round of fuel-efficient rules, too. “Until we have a cheap way to test trailers and test the wide variation in trailers, it will be very hard to have a regulation,” Bunker said.

The specific reductions vary from one type of truck to the next. There are nine categories covering low-, mid- and high-roof designs in Class 7 and 8 trucks, and Class 8 tractors with sleepers. The greenhouse gases from a Class 8 tractor with a low- or mid-rise roof will need to drop 10%; a Class 8 trucknews.com

12-03-23 9:04 AM

COVER STORY: BETTER FUEL ECONOMY

tractor with a sleeper and high-rise roof will need to reduce the gases by 23%. These differences simply account for the different operating realities. A Class 7 day cab, for example, would not have the opportunity to eliminate hotel loads that are traditionally linked to the creature comforts in a sleeper, Bunker said. And an on/off road truck that serves a farm would be unlikely to benefit from aerodynamic fairings.

The new rules promise to make some dramatic differences.

In the US alone, the fleet of 2014-18 trucks will during the life of the vehicles reduce greenhouse gases by 270 million metric tonnes, and lead to $50 billion in fuel savings (based on $3.50 per US gallon). The improvements in the trucks will cost about $8 billion, but that will still lead to $42 billion in net fuel savings, and the savings even swell to $49 billion when factors like health and welfare are considered.

Of course, the demand for better fuel economy is not driven by regulators alone. “We’re driven by customer demand,” said Al Pearson, Daimler Trucks North America’s chiefengineer – product validation engineering. The American Trucking Associations has itself been calling for fuel economy standards since 2008.

Manufacturers have some flexibility. They can use the average improvements generated by all their trucks in a particular category, and trade some of the results between different vehicle categories. (There are some exceptions. For example, they cannot use results from pickup trucks to meet the tougher Class 8 standards.) The required reductions can also be averaged over a three-year window, and some credits can be earned as early as 2013. There are even chances to earn credits for “advanced and innovative” technology.

An individual truck’s actual savings will be generated by a new Greenhouse Gas Emission Model (GEM) tool – found at www.epa.gov/otaq/climate/gem.htm. This is where manufacturers will be able to detail the savings related to drag (aerodynamic fairings), rolling resistance (fuel-efficient tires), speed (speed limiters), lighter weights and anti-idling tools. But factors such as the engine’s fuel map, the trailer, transmission, axles and drive cycles will all be predefined.

Required improvements in aerodynamics will consider the differences between low-, mid- and high-roof tractors and sleepers. Tire changes will consider the differences between single drive tires with steel, aluminum or lightweight wheels, as well as dual or steer wheels with high-strength steel wheels, aluminum wheels or lightweight aluminum wheels. Weight reductions will focus on the door, roof, rear wall and cab floor, and whether these pieces are made of aluminum or highstrength steel. Engines will also need to shut down after five minutes of idling to gain a credit for this anti-idling strategy.

Even though the technology exists today, the savings are no small task.

“The complexity comes when you consider the number of variables,” Pearson said. A highway tractor’s drag coefficient can be affected by the sun visor, mirrors, auxiliary mirrors, trucknews.com

CoverStoryMar2012.indd 29

bumper, chassis fairing, fairing skirts, quarter fenders, side extenders, sleeper length and roof designs. There are more than 14.5 million combinations here alone.

The individual improvements also need to be proven by testing a coasting tractor-trailer or a combination of preapproved tools like wind tunnels, fluid dynamics and scale models. Even issues like cross winds and the vehicle’s yaw can be considered. “It’s probably the biggest impact for my department,” Pearson said.

The industry’s computer experts are also going to be busy finding ways to calculate the changes whenever a truck is ordered. “We are not going to have a person sitting there calculating every single truck order that comes in,” he added.

Engine makers have some challenges of their own.

“Very rarely do two customers have the same demand,” noted Dave McKenna, director of powertrain for Mack Trucks.

Still, there are gains to be found under the hood. Loadbased variable power programs on a typical tractor-trailer with a gross vehicle weight of 80,000 lbs will lower greenhouse gases by one 1%. By increasing the “governor droop” at high and low engine speeds, smart speed controls can gain another percentage point. Smart engine cooling fans gain another 1% because they are only used as needed, and run at a modulated speed. And an ultra low-speed engine with cruise rpms hovering around 1,100 rpm offers another 1.5% gain. “It’s something that can be done,” McKenna says.

“It may take a little bit getting used to, but it does work.”

That’s where the larger gains come to an end. The days of a “big bullet” or a “magic elixir” that can offer improvements of 3-4% are gone, McKenna said.

But there are new areas to explore. Wasted heat, for example, could be converted into electrical energy. “You can’t call it wasted heat anymore. We’re going to try to use it,” he said. Real-time speed controls could be made possible by combining GPS equipment and telematics, effectively building a “geo-fence” around a truck. Even two-stroke engines could have a role to play.

“Puff top” speed limiters such as those mandated in Ontario may have led to long convoys between Toronto and Montreal, but they can help to meet the new goals, he added.

Each truck will need to carry a new label to identify the specific improvements that were made, and come with maintenance information to help care for everything from emission controlling equipment to the side extenders that improve aerodynamics.

Some of the changes may not even last as long as the trucks themselves. Speed limiters, for example, can be programmed to expire after the first 350,000 miles, to limit the affect on resale prices. Future buyers will also be allowed to remove fairings from trucks that are being transformed from a highway use to a drayage operation.

But the demand for better fuel economy is unlikely to go away. FE March/April 2012 ❙ FLEET EXECUTIVE 29

12-03-23 9:04 AM

MAD ABOUT MAINTENANCE 2010 engines reclaim lost fuel economy, but still struggle with maintenance needs

By John G. Smith

IT SEEMS LIKE A CLASSIC CASE OF TAKING THE GOOD WITH THE BAD. Fleets with engines built to meet the US Environmental Protection Agency’s 2010 emission standards are reclaiming some of the fuel economy enjoyed before the addition of components like exhaust gas recirculation (EGR) systems. But they still can’t seem to escape a steep increase in purchase prices and higher maintenance costs, maintenance managers were told during the annual meeting of the Technology and Maintenance Council.

“Back in September and October 2002, we were told a lot of these things were going to cost very little,” said Mike Moynahan, assets and procurement manager for HEB Grocery, which operates 480 tractors in Texas and New Mexico. “They 30 FLEET EXECUTIVE ❙ March/April 2012

CoverStoryMar2012.indd 30

cost a lot, and from my individual standpoint, they have had a massive impact on our fleet.”

His fleet’s engines that meet 2007 standards generate 8% more work orders than earlier generations of equipment thanks largely to problems with EGR coolers and defects in aftertreatment devices like sensors and fuel-dosing components.

While the newest trucks seem to be offering “pretty good” fuel economy, some of the gains are not linked to emission standards. In 2007, for example, the fleet dropped engine speeds to 1,000 rpm from 1,200 rpm, and reduced axle ratios to 3.07 from 3.21. The engines built to 2010 emission standards were also accompanied by a shift from 6x4 tractors to 6x2 designs, while axle ratios dropped to 2.93 from 3.07.

“We have not had a driver complaint on gradeability and trucknews.com

12-03-23 9:05 AM

COVER STORY: MODEL YEAR IN REVIEW

power,” he stressed. “The performance from their standpoint is excellent.”

The story about added maintenance needs has not been as positive. The post-2007 engines spend more time in the shop.

“The downtime has a direct effect on our operating costs,” he said. “We incur equipment shortages and delays which affect our on-time delivery percentages.”

Frank Nicholson, vice-president of maintenance at TransAm Trucking in Kansas City, stressed that most breakdowns of his late-model equipment are related to aftertreatment devices and sensors. “The base engine is very reliable,” he said of the designs meeting Environmental Protection Agency (EPA) 2010 standards. “Overall, our experience with the 12.9-litre engine compared to the 15-litre EPA-07 product is excellent.”

But preventive maintenance costs for engines built to 2007 or 2010 standards are up 200% compared to pre-2007 engines.

Luckily, many maintenance issues with 2007 engines have been addressed. “Initially, our downtime for that vintage of EPA engine was off the chart,” Nicholson said. Now a mere 2% of the trucks are down on any given day.

There have certainly been gains in fuel economy. TransAm trucks that meet 2010 standards are 10.5% more fuelefficient than the 2007 models or those that came before them. Granted, some of his fuel economy gains came from other areas as well. The fleet has shifted from long-nose conventional trucks with Texas bumpers to equipment with aerodynamic cabs, sloped hoods, skirted tanks and tighter tractor-trailer gaps. Speeds have been slowed, tires are more fuel efficient, oils are now synthetic, and gear ratios have been reduced. “We got the fuel economy,” Nicholson says, “but the fuel economy comes at a cost.”

FedEx Freight has found that engines built to 2007 standards are 33% less reliable than those built to 2004 standards, said Brian Baker, fleet maintenance specialist. In contrast, the 2010 engines are 7.2% better than 2004 designs, and 60% more reliable than 2007.

There are fewer miles between breakdowns, he added.

There was a 38% drop in these distances when comparing 2004 and 2007 technology, and there was another 7% drop from 2007 to 2010. But the purchase prices are undeniably higher. The overall tractor purchase costs were up 10% between 2004 and 2007, and 15.9% from 2007 to 2010.

The fuel economy has been on a steady rise at this fleet as well. There was a 1.95% improvement in fuel economy between 2004 and 2007 models, and a 5.37% increase from 2007 to 2010. The latest models are faring 7.43% better than 2004 designs.

Like other fleets involved in the presentation, however, FedEx gains have not been limited to engines alone. Baker credits some of its improvements to fully automatic transmissions.

Schneider National has found that service costs for 2010 engine designs are 52% higher than 2004 designs, and 15% higher than 2007. There has been a 50% drop in the trucknews.com

CoverStoryMar2012.indd 31

life of five micron fuel filters, diesel exhaust fluid lines and valves can face problems, and new crankcase breather filters require extra maintenance. But service intervals on the diesel particulate filters (DPFs) have been pushed to 550,000 miles from 300,000 miles.

Work orders, however, are up 4%, partly because of an “excessive” number of engine fault codes, and there are problems with some engine parameters.

When all the new emissions technology is combined, there has also been a need for extra training. Schneider’s drivers get an extra hour of training on the new technology, lead mechanics need 35 to 40 hours, general mechanics get five hours, and the call centre requires two hours of its own training. “The training of technicians lags the availability of the product,” Duley added. “That’s part of the challenge.”

Another part of the challenge has come in the form of higher operating costs. Maintenance relating to emission changes has added eight to 10 cents to the cost per mile.

“That was more than what we spend on all of maintenance in 2002,” he said. Compared to the pre-EGR engines, the 2007 engines saw maintenance costs rise 35.7% including warranty credits but excluding accidents and tires. Earlier engines fared poorer than that, with maintenance costs that were about 123% higher from 2004 to 2006 model years.

UPS has faced maintenance struggles of its own.

Engines built prior to the 2002 standards represent 39% of the fleet and 31% of breakdowns, but 2004 designs account for 40% of the fleet and 44% of breakdowns, even though they’re newer. Move forward to 2007 models, representing 14% of the fleet, and the trucks account for 21% of breakdowns.

“I would always expect my older tractors to cost me the most,” said Duane Lippincott, engineering and maintenance manager. The maintenance costs were up 19% with 2007 models when compared to their older counterparts. But the 2010 maintenance costs are actually 64% less, thanks in part to an extended warranty program.

Fuel economy is improving here as well. Compared to pre-EGR engines, the 2004 designs use 3.2% more fuel, and 2007 models used 4.4% more fuel. In contrast, the 2010 models are 4.2% better. “We finally got the trend in the right direction,” said Lippincott.

Still, equipment prices have been increasing rapidly, even when accepting that material costs should increase about 3% a year, he said. Based on that assumption, tractor costs should have increased 12% between 2000 and 2004. They were up 40%. The truck costs should have been 24% higher in 2007, but they were up 64%. And while an EPA 2010 engine should be 33% more expensive, it cost 115% more than those bought in 2000.

“As a company and industry, we can’t keep absorbing these kinds of increases. We need help to drive the costs down wherever we can,” he added. “It’s not picking on any one OE ... It’s what’s been given to us to have cleaner air.” FE March/April 2012 ❙ FLEET EXECUTIVE 31

12-03-23 9:05 AM

COVER STORY: FUEL EFFICIENCY STUDY

NACFE conducts extensive benchmarking study on fleet fuel efficiency

A

new fleet fuel efficiency study conducted by the North American Council for Freight Efficiency (NACFE) has revealed some of the most widely used and successful fuel-savings tactics employed by fleets. The non-profit organization studied eight North American fleets, collectively representing 75,000 tractors and 130,000 trailers, making it “arguably the largest ever fleet fuel efficiency benchmarking study ever completed,” the NACFE announced at the Technology and Maintenance Council meetings.

The study highlights successful applications of new products and practices that have provided fuel savings in real-world usage. It also analyzed the adoption of 60 known technologies and practices available to fleets over the past eight years. Technology implementation experiences and best practices were identified through the study.

The study found that the participating fleets were saving about US$4,400 per year in fuel as a result of their fuel-saving initiatives.

“The economic value that this NACFE Fuel Efficiency study represents to us is significant as it provides specific ideas for execution as we continue to lower our fuel costs,” said Mike O’Connell, national senior director, fleet capability with Frito Canadian Transportation & Logistics_LAD.pdf 1 8/29/11 Lay. “Environmental opportunities are equally exciting.”

Added Steve Phillips, senior vice-president of operations with Werner Enterprises: “This is a groundbreaking, first-ever report that is beneficial to all fleets, large and small, plus owner/operators interested in reducing their operating costs and lowering their risk of adopting new technologies. It also provides suppliers and support organizations with real world information garnered directly from those of us who purchase, operate and maintain all these products they produce.”

Both Werner and Frito Lay were among the eight participating fleets. NACFE executive director Mike Roeth said, “Being a newly-created non-profit, formed within the past two years, we are thrilled that our first major product is generating so much interest among the trucking industry. Through our unbiased approach to aggregating information on fuel-efficient technologies, we are adding direct value to the fleets’ bottom line and offering significant insights for suppliers and other organizations as they work in this field. We are receiving a number of accolades from the participating and other fleets wanting to join future studies to build on these findings.”

To find out what’s inside the report, non-member fleets will have to purchase it from NACFE at a cost of US$795. An executive summary is available for $195. More information is 2:19 PM available at nacfe.org. FE

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trucknews.com

12-03-23 9:05 AM

EQUIPMENT WATCH

Great Dane’s new Champion dry van is part of the ‘Evolution’ of the company’s trailer line.

Great Dane revamps entire trailer line Great Dane has revamped its complete product line, introducing the Champion dry van, Everest refrigerated trailers and Freedom flatbed.

The trailer manufacturer has dubbed its transformation Evolution, and said the changes were necessary to keep pace with the rapidly changing industry.

“The last two years have been filled with tremendous change for us as a nation and as a company,” said Bill Crown, president and CEO of Great Dane. “In addition to a turbulent global economy, our own corporate leadership team weathered an unexpected transition. Instead of allowing circumstances to determine our future, the team at Great Dane accepted these challenges as the perfect opportunity to revolutionize the trucking industry by setting a new benchmark for quality. This is just one part of our long-term commitment to continually raise the industry’s standards for products, sales and service.”

Great Dane says the new line of trailers represents its bestever product mix. Each of the three trailer lines will include three models.

The Everest TL and Everest SS are designed for the longhaul truckload reefer market while the Everest CL is a highspec offering for grocery and multi-temp applications, the company announced.

The Champion SE is spec’d for heavy-duty productivity for fleets, while the Champion CL is a versatile freight van that can be spec’d for various needs and the Champion CP boasts Great Dane’s composite panel technology.

On the flatbed side, the Freedom SE is a heavy-duty all-steel flatbed trailer with available straight, drop or extendable bodies. The Freedom LT combines steel and aluminum for lighter weight and the Freedom XP is an even lighter-weight option, coming in at 1,000 lbs less than the LT, the company says. trucknews.com

EquipmentWatchMar12.indd 33

The van trailers will debut Great Dane’s new EnduroGuard, a reinforced, corrosion-resistant rear frame for improved strength. The trailers will also feature LED lamps with dual-intensity lights. PunctureGuard will be the standard lining on refrigerated trailers, the company announced.

Meanwhile, the company has redesigned its logo, adding a reflective background and polished chrome rim.

“Changes to our corporate logo are subtle enough to rejuvenate its image but maintain brand recognition,” said Brandie Fuller, vice-president, marketing at Great Dane.

“We’ve updated the oval with modern touches, but are moving back to all red markings on our products to honour the history of the brand, which has been red since 1951.”

The new trailer line will be showcased at the Mid-America Trucking Show in Louisville, Ky. March 22-24.

ATDynamics introduces RollTail trailer tail for roll door trailers ATDynamics has introduced a trailer tail for roll door trailers, which the company says will save 4-5% in fuel at 60-65 mph.

The new RollTail’s fuel savings were validated through SAE Type II testing, Andrew Smith, CEO and founder of ATDynamics said.

“A lot of fleets have been asking for a roll door solution,” he told Fleet Executive during a demonstration at the Technology and Maintenance Council meetings. “This involves zero driver interaction. You back right into the loading bay, it moves out of the way, you unload your cargo and when you pull away from the loading bay it goes back into shape. We have looked at different ways of doing this and it turns out we have an incredibly simple design.”

Smith estimates there are about 100,000 trailers with rollup doors in Canada and another 500,000 or so in the US. If the entire population of trailers with roll-up doors were to be fitted with RollTail’s, Smith estimated the trucking industry would save US$3 billion in fuel over the next decade.

Smith told Fleet Executive that work continues in Canada to have full-sized trailer tails approved for use. ATDynamics has a shorter system that complies with Canadian regulations, however, the fuel savings aren’t as significant as with its standard size TrailerTail. As a result, Smith said most Canadian companies interested in running the system are opting for the fullsized version – which can deliver 5-6% fuel savings – while in the US and then folding in the system while in Canada.

The RollTail is available as a retrofit device or for factory installation. Smith said two people can install the system in 45 minutes. He noted the device does not affect trailer loading or cube capacity and will be certified by the EPA SmartWay program as well as CARB. March/April 2012 ❙ FLEET EXECUTIVE 33

12-03-23 9:06 AM

EQUIPMENT WATCH

Volvo wins 2011 TWNA Technical Achievement Award The Truck Writers of North America (TWNA) have awarded Volvo the 2011 Technical Achievement Award for its XE13 powertrain package.

The award was presented to Volvo Trucks powertrain product manager Ed Saxman by TWNA Technical Achievement Award Committee chair and Fleet Executive contributing editor James Menzies at the Technology and Maintenance Council meetings Feb. 22.

The annual award, now in its 21st year, recognizes a product or service that clearly exhibits technical innovation, has a wide applicability in the trucking industry, offers significant benefits and is widely available. Complete vehicles do not qualify, but components and systems do.

The Volvo XE13 powertrain package introduces the concept of ‘downspeeding,’ by combining a set of specifications – including Volvo’s I-Shift automated manual transmission – that collectively allow the engine to run about 200 rpm slower than the average truck sold today. That translates to a fuel savings of about 3% compared to a similarly specified truck with an overdrive transmission.

“Volvo’s XE13 powertrain package brings the concept of running slow to a new level,” said Menzies. “Several members of the committee have had the chance to drive a Volvo VN equipped with the new powertrain package and we were all very impressed with how it performed on the road.”

“It’s an incredible honour to be recognized by the Truck Writers of North America,” said Ron Huibers, president, Volvo Trucks North American sales and marketing. “We truly appreciate their thorough evaluations of our XE13 package, a proprietary solution that provides just a glimpse at the future potential of Volvo Trucks’ integrated powertrain.”

Ed Saxman, powertrain product manager with Volvo, pictured with the TWNA Technical Achievement Award at TMC.

Saxman, who received the award on behalf of Volvo, added: “The benefits of ‘downspeeding’ an engine are intuitive – lower engine rpm results in less fuel consumed – but virtually impossible to achieve without a perfectly harmonized powertrain. The intelligence of the Volvo I-Shift and proprietary software used in the XE13 package has created an incredible paradigm shift, so we now see the transmission controlling the engine.”

The six finalists for the award were: The Bendix EverSure spring brake; the Fontaine/Volvo integrated fifth wheel; Goodyear’s G392 SSD/SST DuraSeal wide-base tires; RigDig’s Truck History Reports; Spectra’s Hub Alert; and the winning Volvo XE13 powertrain package.

The Technical Achievement Award winner was selected by committee members Paul Abelson (Road King and Land Line magazines), John Baxter (Randall-Reilly Publishing), Tom Berg (Heavy Duty Trucking and Construction Equipment magazines), Peter Carter (Today’s Trucking), Paul Hartley (AddMedia), James Menzies (Fleet Executive, Truck News and Truck West), and Jim Park (Heavy Duty Trucking).

Dana expands Spicer Diamond Series driveshaft line Dana has announced it is expanding its lightweight Spicer Diamond Series driveshaft, making it applicable to about 60% of North American trucking applications.

The Diamond Series driveshaft is a one-piece aluminum driveshaft that is constructed utilizing two patented manufacturing processes that allow Dana to reduce weight significantly without compromising strength, the company says.

The technology earned Dana a Frost and Sullivan Technological Innovation award.

The newest offerings now cover applications requiring driveshafts as long as 130 inches.

“Our customers are looking for ways to be more productive,” Steve Slesinski, director of global product planning at Dana announced during the Technology and Maintenance Council meetings. “The Diamond Series can now address approximately 60% of North American truck ap-

34 FLEET EXECUTIVE ❙ March/April 2012

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EQUIPMENT WATCH

plications with the durable and lightweight characteristics they demand.”

Volvo takes new approach to aftermarket support

By James Menzies Volvo Trucks has announced a new approach to aftermarket support for its products, including two years of free access to its MVASIST platform.

As part of the overhaul, MVASIST will henceforth be known simply as ASIST. “We are announcing a new aftermarket support suite of services under the Volvo Trucks Support Services umbrella,” David Pardue, Volvo Trucks vice-president of aftermarket solutions told Fleet Executive at the Technology and Maintenance Council (TMC) meetings. “This allows us to take previously separate, individual activities we’ve done in the past for parts and service and extended agreements and bring them together under one common umbrella.”

Key to the organizational changes, ASIST will now be offered free of charge for two years on new Volvo trucks. The ASIST communications platform allows fleets to better communicate their service requirements with dealers, in many instances eliminating phone calls and creating an online filing cabinet for service records.

Pardue said fleets that have been using ASIST rave about it, but the uptake has been slower than Volvo would like because it’s a difficult concept for dealers to communicate to truck buyers.

“We’ve had very favourable response from customers who use our ASIST software,” he said. “It’s largely been liked, but not understood. It’s a difficult sales message at the dealership so now we’re putting it out there (for free).”

ASIST also is available as an aftermarket product for existing vehicles, Pardue added, and is sold on a subscription basis once the initial two-year trial expires.

Steve Hayes, a software platform expert with Volvo, demonstrated ASIST to Fleet Executive at TMC. He said in the event of a breakdown, fleet maintenance managers typically waste a lot of time playing phone tag, waiting on hold, leaving or listening to voicemail and looking up service records written on notepads and stored in filing cabinets or boxes.

“I don’t care how sophisticated they are, it’s the same process,” he said of small and large fleets alike. Hayes cited one study that indicated a common maintenance-related event requires five phone calls and 32.5 minutes on the phone, 20 minutes of which is spent on hold or listening to or leaving voicemail.

Hayes pointed out Mail Contractors of America conducted in internal audit that found an average of US$300 is spent just managing documents when an event occurs. trucknews.com

EquipmentWatchMar12.indd 35

With ASIST, customers are able to customize the program to their own needs, so Volvo dealers can adhere to the customers’ preferences. It also provides records of all communications, which are conducted online, and displays the initial estimate and final invoice so fleets can be assured they are not overpaying for services.

Hayes also said ASIST eliminates “he said-she said” disputes, which “are very common in the industry. They’re the roots of most complaints.”

Pardue said Volvo is hoping that as more fleets have the chance to experience ASIST, they’ll see the benefits. He also said the changes now make big fleet-type access to resources available even to one-truck operators.

Great Dane providing free 24-hour roadside assistance Great Dane has rolled out a new emergency roadside service program as part of its AdvantEDGE platform, which is free of charge to members, whether or not they are Great Dane customers.

The program provides full coverage in the US, Canada and even Mexico, drawing from a network of 20,000 service providers. It covers towing, tractor and trailer repair, tire failures, reefer unit repairs and other roadside failures 24 hours a day, seven days a week, the company announced at the Technology and Maintenance Council meetings.

“We had a tremendous reaction to the launch of our AdvantEDGE program, which provides customers with cost-effective, streamlined access to parts and service at more than 100 participating Great Dane distributors throughout North America,” said Dave Durand, vice-president aftermarket parts. “The availability of emergency road service is a crucial part of the safety and security of both personnel and freight for our customers.

Now AdvantEDGE members can rest assured knowing we are prepared to deploy assistance around the clock.”

Brandie Fuller, vice-president of marketing with Great Dane Trailers, told Fleet Executive the program has been made available to everyone, in hopes they will appreciate the service and turn to Great Dane for trailers, parts and service if they aren’t already Great Dane customers.

“There’s no charge for the subscription,” she pointed out.

Customers will pay only for the roadside service they receive.

The program applies to all Classes 7 and 8 vehicles and trailers. The invoicing is handled through Great Dane’s AdvantEDGE program and estimates are provided up-front, Fuller noted. Customers can access billing records online and enjoy the consistent pricing available through Great Dane’s signature parts price protection program.

Customers can enrol in the program or find out more by visiting www.greatdanetrailers.com/advantedge or report a breakdown at www.greatdanetrailers.com/ERS or by calling 877-506-9582. FE March/April 2012 ❙ FLEET EXECUTIVE 35

12-03-23 9:06 AM

DASHBOARD TransCore Canadian Spot Market Freight Index 2007-2012

2007 2008 2009 2010 2011 2012

%

JAN

173

214

140

171

222

FEB

174

217

117

182

248

MAR

228

264

131

249

337

APR

212

296

142

261

300

MAY

280

316

164

283

307

JUN

288

307

185

294

315

JUL

219

264

156

238

245

AUG

235

219

160

240

270

SEP

206

203

180

234

263

OCT

238

186

168

211

251

NOV

227

143

157

215

252

DEC

214

139

168

225

217

220

%

Change Change Y-O-Y M-O-M

-1%

1%

TransCore Canadian Spot Market Freight Index 2007-2012

TransCore’s Canadian Freight Index starts 2012 with slight uptick in January results TransCore’s Canadian spot market freight index saw a steady start to the new year with volumes increasing 1% from December, while year-over-year it was off slightly by 1% from January 2011. Intra-Canadian loads accounted for 28% of the volume. Top regions for loads within Canada were: Western (53%), Ontario (23%), Quebec (18%), and Atlantic (6%).

Equipment postings in January increased 11% from the previous month, while year-over-year capacity was unchanged from January 2011.

The equipment-to-loads ratio increased from December, matching the volumes recorded in January 2011.

TransCore’s Canadian-based Loadlink freight matching database constitutes the largest Canadian network of carriers, owner/operators, freight brokers and intermediaries and has been available to Canadian subscribers since its inception in 1990. More than 13 million full loads, less-than-truckload (LTL) shipments and trucks are posted to the Loadlink network annually. As a result of this high volume, TransCore believes its Canadian Freight Index is representative of the ups and downs in spot market freight movement and provides a historical account of the domestic and cross-border spot market freight movement.

The first six columns include monthly index values for years 2007 through 2012. The seventh column indicates the percentage change from 2011 to 2012. The last column indicates the percentage change from the previous month to the current month. For the purpose of establishing a baseline for the index, January 2002 (index value of 100) has been used.

36 FLEET EXECUTIVE ❙ March/April 2012

DashboardMar12.indd 36

Freight costs continue to rise for tenth consecutive month Results published by the Canadian General Freight Index (CGFI) indicate that the cost of ground transportation for Canadian shippers increased 1.1% in December when compared with November results. After the tenth consecutive monthly increase, the CGFI is now 8.1% above the December 2010 result.

The Base Rate Index, which excludes the impact of accessorial charges assessed by carriers remained essentially the same in December versus November. Since December 2010, base rates reported by the CGFI have risen only 0.8%.

Increasing accessorial charges (including fuel surcharges) are the primary driver of increasing freight costs for Canadian shippers. In December, the average accessorial charges assessed by carriers increased to 27.8% of base rates, up from 26.7% in November, and 24.3% in October.

“During the winter months, it is not uncommon to see increases in non-fuel accessory charges as a result of seasonal shipping and winter conditions,” said Doug Payne, president and COO of Nulogx, which facilitates the CGFI. “While we expect these to decline in the spring, we are continuing to monitor the impact rising fuel prices has on shipping costs.”

Canadian rail carloadings in December up more than 11% over previous year Canadian railways carried 25.8 million tonnes of freight in December, up 11.5% from December 2010, Statistics Canada reports. The gain was the result of increases in both domestic and international cargo loadings.

Over the same 12-month period, the railway industry’s core domestic transportation systems, non-intermodal and intermodal, saw their combined freight loadings rise 11.3% to 23.1 million tonnes.

Non-intermodal cargo loadings typically carried in bulk or loaded in box cars, advanced 12.2% to 20.9 million tonnes.

The gain was the result of increased traffic in more than half of the commodity classifications carried by the railways. The commodity groups with the largest increases in tonnage were coal, wheat and colza seeds (canola).

Intermodal freight loadings of containers and trailers loaded onto flat cars grew 3.3% to 2.2 million tonnes.

The increase was attributed solely to containerized cargo shipments as trailers loaded onto flat cars fell in December.

From an international perspective, freight traffic received from the US experienced a 13.5% gain to 2.7 million tonnes. The increase was driven by both non-intermodal and intermodal traffic.

US truck tonnage settles in January after December surge US for-hire truck tonnage plummeted 4% in January, but American Trucking Associations chief economist Bob Costello warned there’s no reason to panic.

The ATA’s truck tonnage index was coming off a strong December in which tonnage surged 6.4%. The contraction trucknews.com

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DASHBOARD in January still puts tonnage 3.6% ahead of January 2011 numbers, the association reported.

For all of 2011, tonnage rose 5.8%.

“Last month, I said I was surprised by the size of the gain in December. Today, I’m not surprised that tonnage fell on a seasonally adjusted basis in January simply due to the fact that December was so strong,” Costello said. He added December’s increase was the largest month-to-month gain since January 2005.

Purchasing Managers’ Index finds output, new order growth remain modest in February The RBC Canadian Manufacturing Purchasing Managers’ Index – a composite indicator designed to provide a singlefigure snapshot of the health of the manufacturing sector – posted 51.8 in February, up from 50.6 in January, and signalled a modest improvement in Canadian manufacturing business conditions. Index readings above 50.0 signal expansion from the previous month; readings below 50.0 indicate contraction.

The RBC PMI found that both new orders and output increased in February. The rates of growth were modest, however, and the second-weakest in 17 months of data collection. Meanwhile, Canadian manufacturers hired additional staff in February,

trucknews.com

DashboardMar12.indd 37

in contrast to job losses in January, and the rate of input price inflation strengthened to a six-month high.

“While we observed a modest improvement from January’s sharp slowing, the Canadian manufacturing sector’s growth rate remained tepid in February,” said Craig Wright, senior vice-president and chief economist at RBC. “On a more promising note, the slight uptick in manufacturing employment is in line with our view that Canada’s broader labour market will shake off its recent slump and start to ramp up again in the months ahead.”

Firms largely linked the improvement in Canadian manufacturing business conditions to greater client demand.

Approximately 22% of panellists received a larger volume of new orders during the latest survey period, with growth modest overall. In contrast, new export orders fell for the second month running, with the rate of decline the sharpest since the survey began in October 2010.

Reflective of larger new order requirements, Canadian manufacturers raised production and depleted stocks of finished goods in February.

The monthly survey is conducted in association with Markit, a global financial information services company and the Purchasing Management Association of Canada (PMAC).

The report is available at www.rbc.com/newsroom/pmi. FE

March/April 2012 ❙ FLEET EXECUTIVE 37

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INSIDE THE NUMBERS

45%

Year-over-year average in fuel surcharges

2010/2009

2011*/2010

Domestic LTL

8.9%

38.5%

Domestic TL

22.0%

35.1%

Cross Border LTL

5.7%

47.8%

of their freight out for

Cross Border TL

9.3%

39.2%

bid in 2012, according

Overall

9.8%

39.7%

45% That’s the percentage of shippers who expect to put at least a portion

to the latest Shippers’

Canadian General Freight Index

Pulse Survey.

Own fuel surcharge index

Yes

*To November

Shipper opinions about fuel surcharges Fuel surcharges are necessary as long as fuel costs continue to be highly volatile – 68.5% agree Carriers generally apply fuel surcharges correctly – 45.6% agree

25.8%

No

Fuel surcharges are a way for carriers to squeeze additional revenues from their customers and improve their profits – 61.1% agree

74.2% Carriers should adjust their freight charges to market rates that include fuel surcharges and as a result simplify their billings – 55.6% agree

AS FUEL SURCHARGES RISE, IS A BACKLASH AMONG CANADIAN SHIPPERS LOOMING? Surcharges have been in place for more than a decade to help the transportation industry deal with the persistent variability in the price of fuel. Carriers need a way to pass sudden and unpredictable extra costs along to their customers. Failure to have surcharges in place at the start of the previous decade was a major factor in causing the demise of one quarter of the small carrier base in Canada.

Using surcharges is a practical solution that gets the job done, however, the latest Shippers’ Pulse Survey shows that shippers are growing uncomfortable with the process. The Shippers’ Pulse Survey is conducted by the Canadian Industrial Transportation Association, this year in partnership with our sister publication Canadian Transportation and Logistics.

Average fuel surcharges increased in 2011 by just shy of 40%, with the highest increases being felt in the cross-border segments.

This is the second year in a row that surcharges increased after having fallen sharply in 2009. The survey asks shippers for their opinions about fuel surcharges and we were surprised by the large number of shippers who were unhappy with how things work. In the first question, while two-thirds of the group agree that fuel surcharges are necessary, just under 30% disagree. In the second question, just over

half of the replies with an opinion disagreed that carriers generally apply fuel surcharges correctly. In the third question, more than 60% of the group see fuel surcharges as a source of profits for their carriers, rather than as a neutral cost pass through. Finally, more than half of the group thinks carriers should move to market rates that include fuel surcharges.

Clearly, many shippers would like things to work differently and some have found a change that appears to be better for them. About a quarter of the surveyed companies have developed their own fuel surcharge index that they require their carriers to use. Most base their index on the cost of diesel fuel, though some use the cost of crude oil; most update it monthly, although there is a range of practice here from weekly to quarterly, and, in fact, a small number of companies report that they do it annually. Eight in 10 shippers who have their own fuel surcharge index felt that their fuel surcharge costs are now in better control.

Shipper concerns over fuel surcharges are one of many topics covered by the Shippers’ Pulse Survey. The research also examines on-time delivery and billing error standards, importance of valueadded services and green transportation practices and the use of the spot market. The Shippers’ Pulse Survey is available for purchase on www.ctl.ca.

Sponsored by Castrol – Supplier of Premium-Quality Truck Lubricants

InsidetheNumbersMar12.indd 38

12-03-23 9:07 AM

Another notch in our growing Award Belt Trucknews.com’s WebTV show Transportation Matters has won a silver award in the Best Video or Multimedia Feature category at the third annual Canadian Online Publishing Awards. The awards recognize excellence in online editorial and innovation by Canadian magazine, newspaper, broadcast and Web site publishers.

The silver-winning episode was “Big Beer Run,” which originally aired last winter and chronicled Challenger Motor Freight’s 10-day trek across the GTA hauling six massive beer tanks for Molson-Coors.

www.trucknews.com/videos/

Copa Video Award.indd 1 Copa.indd 39

11-12-01 10:58 AM 12-03-23 9:49 AM

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