The information source for commercial truck fleet operations, equipment and technology. Fleet Owner provides information about operations, vehicle maintenance, industry regulations and information-management technology. Also includes information on latest trucking trends, including hybrid technologies, diesel fuel economy, trucking safety, jobs and employment news.
Bob Costello, chief economist for the American Trucking Associations (ATA) and the trade group’s representative at the NAFTA negotiations, noted recently that his largely positive outlook for the industry is “threatened” if the U.S. withdraws from the agreement, which is something the Trump administration has threatened to do, but which he thinks could be a “negotiating” tactic.
“I’m slightly optimistic that this [a pull out] is being floated as a negotiating tactic,” he explained. “With the Mexican presidential election in July and our mid-term [Congressional] elections in November, the odds of making a deal by this point are long.”
If Trump were to truly initiate a NAFTA pull out, that would occur in late March/early April and would activate a six-month clock for dissolution of the trade deal. But Costello does not see that scenario developing quite yet. “It might be a ploy to get a deal done within that six months, but that would be a really big gamble. And suffice to say this is a really big deal for trucking: cross-border truck-traffic generates $6.5 billion a year for U.S. truckers. [That trade] is critical to the trucking industry.”
Even though more than 60% of business leaders across North America polled as part of this report believe governments are increasingly taking a “protectionist” stance of raising trade barriers to defend domestic businesses, nearly half of them (U.S. 49%; Canada 52%; Mexico 53%) expect the impact of NAFTA to be “positive” over the next two years.
“In spite of the threat of new trade barriers, we expect growth in cross-border business to continue, especially among our North American neighbors. We’re seeing a lot of optimism from U.S. clients right now stemming from factors like deregulation, lower taxes, a somewhat weaker U.S. dollar, climbing energy prices and a rise in global economic development,” noted Wyatt Crowell, head of commercial banking for HSBC USA, in a statement.
HSBC surveyed 6,000 international firms around the world for its report and found that more than three in four (77%) are optimistic about their international prospects, notwithstanding the worldwide concern among almost two-thirds of global businesses (61%) that governments are becoming protective of their domestic economies.
According to the survey, less than one in ten (9%) U.S. businesses expect NAFTA to inhibit growth – a smaller share of firms with negative views of NAFTA than in Mexico (16%) and Canada (13%).
In fact, the survey found that North American firms were more positive about NAFTA than agreements with trading partners farther from home. For example, a smaller share of Mexican firms (43%) expected a positive impact from the Pacific Alliance – a trade block comprising Mexico, Peru, Colombia and Chile – than from NAFTA (53%). Similarly, Canadian firms saw less growth opportunity from CETA (43%) and CPTPP (39%) than from NAFTA (52%).
“NAFTA has significantly benefitted Canada, Mexico and the U.S.,” added Linda Seymour, head of commercial banking for HSBC Bank Canada. “It has facilitated increased trade, improved customer choice, allowed for the provision of more services and has fostered growth and greater co-operation among government policy makers and businesses in all three countries.”
Firms in all three countries remain upbeat about doing more business abroad, with Mexico leading the way with 87% of firms surveyed expecting increased trade volume over the next 12 months, compared to 77% of U.S. firms and 70% of Canadian firms.
“NAFTA has become a $1.2 trillion corridor for continental trade and investment, and represents a good opportunity to business in the three countries to grow and expand, noted Juan Marotta, head of commercial banking for HSBC Latin America and Mexico. “HSBC has a major presence in each NAFTA country, making us ideally placed to connect businesses to opportunities across North America, as well as around the world.”
In all three North American countries, surveyed businesses rank NAFTA partners as their top two most important target markets for expansion.
U.S. firms identify Canada (20%), Mexico (19%) and Japan (11%) as their primary markets for expansion;
Mexican firms are focused on expansion in the U.S. (39%), Canada (27%) and Argentina (10%);
Canadian firms see opportunity in the U.S. (36%), Mexico (18%) and China (14%)
Other key survey findings from businesses in the U.S. include:
In light of an overall “upbeat” trade outlook, just over half (52%) of the U.S. businesses surveyed expect to need more trade finance over the next 12 months. A similar proportion (49%) think their access to trade finance will improve.
As the world’s leader in service exports, the U.S. accounts for an estimated 15% of total international services trade, with business-to-business services dominating the sector.
Over a third (35%) of respondents think technology use stimulates growth in services trade. After entering new markets—the number one strategy for increasing service trade, cited by a third of respondents—e-commerce is the second most popular approach.
More than three-quarters (77%) of U.S. firms said easier access to data creates a more level playing field in international business, while about two-thirds (68%) believe data regulation would impede cross-border service delivery.
Just some information truckers should keep in mind as NAFTA negotiations push forward.
But sleepiness poses a lot of risks, especially to transportation workers.
I’ve slept in a sleeper berth a time or two and it’s something that takes getting used to for most folks; even for long-haul irregular route TL drivers who live in their trucks three weeks or more out of a month.
There are external noises to deal with, the often-constant rattle and hum from diesel-fired auxiliary power units (APUs) or idling engines, and the effort to get physically comfortable on a mattress that’s mayhap not as comfy as the one back home.
Thus getting good, restorative sleep for truck drivers can sometimes be a struggle, and that’s before we inject medical issues such as sleep apnea in to the mix. But truckers should take heart from one aspect of their “sleep struggles,” if you can call them that – they aren’t unique to the freight-hauling business, not be a longshot.
The survey – conducted online in February by Harris Poll on behalf of Philips – reviewed the “sleep habits” of over 15,000 adults across 13 countries – the U.S., the U.K., Germany, Poland, France, India, China, Australia, Colombia, Argentina, Mexico, Brazil and Japan – examining how they prioritize, address, and perceive a range of “sleep issues.”
Philips said several studies estimate that more than 100 million people worldwide suffer from sleep apnea, 80 % of whom remain undiagnosed, and that, globally, 30% of people experience difficulty in initiating and maintaining sleep. Sleeping well is essential to good health, and yet only one-third of people who suffer from sleep disorders seek professional help, the company noted.
"Sleep is the cornerstone of a healthy lifestyle. On a day-to-day basis, how well and how long we slept the night before is the single most important variable dictating how we feel," said Dr. David White, chief medical for Philips. "Thus inadequate sleep can have an immediate impact on our wellbeing unlike exercise or diet. This survey shows that despite knowing sleep is important to overall health, people are still struggling to address it in the same way they would exercise or nutrition. The more we understand how sleep impacts everything we do, the better we can adjust our lifestyle and find solutions that help us get better sleep."
The findings from that research should be of interest to truckers:
Though the survey found that the majority of those polled (67%) view sleep’s impact on their overall health and well-being to be “significant,” only 29% felt “guilty” about not getting enough sleep, in comparison to the guilt over not exercising regularly (49%) and eating healthier foods (42%)
About six in 10 global adults (61%) have some kind of medical issue that impacts their sleep, with a quarter of adults reporting insomnia (26%) and one in five experiencing snoring (21%). Worrying has kept over half of global adults up at night in the past 3 months (58%), followed by technology distractions (26%).
After a bad night’s sleep, those polled said they “look tired” (46%), are “moody/irritable” (41%), aren’t as “motivated” (39%), or they have trouble concentrating (39%).
Three-quarters of those polled (77%) have tried to improve their sleep in some way. Collectively, many have turned to soothing music (36%) or instituted a set bedtime/wake-up schedule (32%).
Throughout the global results, one outlier presented itself in adults aged 18 to 24; the so called “Millennial” generation. Despite being less likely to follow a set bedtime compared to other generations (38% vs. 47% of those aged 25 and over), this group reported getting more sleep each night, on average, than other age groups, with those aged 18-24 getting an average of 7.2 hours, compared to 6.9 hours among those aged 25 and over. They are also more likely to feel guilty about not regularly maintaining good sleep habits as compared to those ages 35 and over (35% vs. 26%).
“Nearly 70 million Americans suffer from a sleep problem and nearly 60% of them have a chronic disease that can harm their overall health,” said Janet Croft, the senior chronic disease epidemiologist in CDC’s division of population health. “Lack of sleep and sleep disorders, including stops in breathing during sleep (sleep apnea), excessive daytime sleepiness (narcolepsy), restless legs syndrome, and insomnia, are increasingly recognized as linked to chronic disease, including obesity, high blood pressure, and cancer.”
And such chronic fatigue is costly in other ways. According to the NSC, fatigued workers cost employers about $1,200 to $3,100 per employee in declining job performance each year, while sleepy workers are estimated to cost employers $136 billion a year in health-related lost productivity.
Sleepiness also impacts transportation in major ways. For example, the National Transportation Safety Board (NTSB) estimates that fatigue has been a contributing factor in 20% of its investigations over the last two decades – and it’s why the agency included “reduce fatigue-related accidents” on its 2017–2018 Most Wanted List of transportation safety improvements.
In February, the AAA Foundation for Traffic Safety released a research brief estimating that drowsy driving is involved in up to 9.5% of all motor vehicle crashes. Their projections indicate that drowsy driving causes an average of 328,000 motor vehicle accidents in the U.S. each year, including 6,400 fatal crashes.
On top of all that, the effects of sleepiness are exacerbated and pose a constant struggle for workers who work night shifts or rotating shifts, and for those who work long hours or have an early morning start time.
U.S. Bureau of Labor statistics show about 15% of full-time employees in the U.S. perform shift work, many of whom suffer from chronic sleep loss caused by a disruption in the body’s circadian rhythm.
Chronic sleep deprivation is also associated with an increased risk of depression, obesity, cardiovascular disease and other illnesses that negatively impact a worker’s well-being and long-term health, according to the CDC’s research – and insufficient sleep is a big problem in transportation-related categories, the agency added.
In fact, a recent CDC analysis found that the jobs with the highest rates of short sleep duration were communications equipment operators (58.2%), other transportation workers (54%) and rail transportation workers (52.7%).
Along with that, night shift workers and those driving during nighttime hours are most at risk for chronic sleep loss. The NSC found that 59% of night shift workers reported short sleep duration compared to 45% of day workers, while the risk of safety incidents was 30% higher during night shifts compared to morning shifts.
All of that is good fodder for trucking to keep in mind as the industry attempts to handle a surge in freight demand that’s expected to keep on rolling through this year and next.
A panel discussion hosted by research firm Stifel Capital Markets delves digitization efforts in the transportation space are actually designed to help humans do their jobs better, with more efficiency, accuracy, and ease.
The race to “digitize” our freight networks is not necessarily winning the hearts and minds of truckers everywhere. Indeed, more than a few folks – myself included – worry about how the disruption caused by digitization could lead to job losses and other adverse effects, particularly where autonomous trucks are concerned.
Yet a recent panel discussion hosted by research firm Stifel Capital Markets and moderated by Tommy Barnes, president of project44, provided some new perspective on “digitization” and how, as a strategy, it may actually be aimed at making the working life of those involved in freight transportation a whole lot better.
Barnes pitched questions to Rob Estes, president & CEO of LTL carrier Estes Express, and Jennifer Schopfer, vice president of GE Transportation’s transport logistics division, to illuminate why digitization is a critical step all participants in the supply chain – from truckers and railroads to warehouse operators and shippers/receivers themselves – must take.
And Barnes laid the issues out in rather blunt fashion to kick off the discussion.
“This is all about getting true end-to-end visibility in supply chain.” He stressed. “We get the same questions every week, every day, every hour, and even every minute: Where is my product? How will bad weather affect delivery times? Why is my inventory not mapping with my TMS [transportation management system]? It’s all because the points within the supply chain are fragmented – and many dollars are associated with these broken processes; revenue dollars as well as productivity and efficiency dollars.”
It all creates what Barnes dubbed a “disconnected” shipment life cycle, which leads to unhappy customers, customer churn, plus significant added-in cost and limited visibility of cargo in transit.
“All of those things are problematic today. Shippers manage thousands of shipments every day and errors compound dramatically,” he explained. “Over 60% of shippers have exceptions with shipment in some way, shape, or form; that leads to a lot of manual work and leads to customer being unhappy.”
To that end he believes achieve seamless layer of visibility across the “life cycle” of freight shipments is key – and that accurate data and processes are “ultra-critical” in terms of achieving that goal. Accurate data “leads to smart decision-making and when the end-result is a happy customer, that is what matters the most,” Barnes said. “At the end of the day, your goal is to start with right and accurate information and then move up the ‘value curve’ to prescriptive analytics. It’s a ‘buzzwordy’ term but if you acquire the right data and use it the right way, there is a lot of benefit to be had.”
Schopfer used her ongoing work with Port of Los Angeles to create a “one stop shop” for freight container information as an example of how “digitization” helps improve human work processes. “Essentially what we are doing is reaching across data silos within various supply chain systems – marine terminals, shipping lines, and railroads, among others – and then sharing that date across the entire ‘ecosystem’ to chassis providers, trucking companies, and NVOCCs [non-vessel operating common carriers]. Everyone party to handling a shipment 1then can get up to 14 days of advance notice in some cases – enabling better planning and better [freight] throughput.”
She added that as of right now, railroads, truckers, and chassis providers get no information about inbound cargo until two or three days in advance at best.
“If they can all get that 14 day notice in advance with destination, time of arrival, etc., it helps them better plan equipment, especially if they see a spike of 40-foot containers coming in over a six day span,” Schopfer noted.
For truckers, GE is building a “universal appointment schedule system” as a way return empty containers easier and faster. “Right now [at the port] they are working through 13 different terminals and three different websites,” she said. “Simplifying all of that into one place and keeping it up-to-date in real time will help truckers make their turn times faster. Ultimately all of that benefits the shippers and their ultimate customers.”
By the time the system is fully operation, which is expected by July of this year, Schopfer expects to see an “eight-fold impact” on productivity due to the “layering effect” of getting container data earlier in the arrival process and having it centralized in one location.
Estes noted that “robotics” offers exciting opportunities in the LTL space to take over “repetitive function” work that’s been done manually and to do it with a higher degree of accuracy.
“Normally in LTL a shipment is touched by 20 to 25 people – that’s a lot of handoffs,” he explained. “So we are really trying to automate that process when freight is tendered; that is very important, to have that whole process automated, because, when truck leaves our dock it is like perishable fruit – when it leaves, it is gone forever.”
Estes point is that with the current driver shortage and equipment capacity being tight, a carrier needs to ensure they are fully utilizing every component in their network. “We are rolling out this year a pickup and delivery route optimizing system with suggested routes to avoid left hand turns, optimize customer times and receiving times, etc.,” he said. “In the past, we relied on a driver to keep all of that in his mind. By using technology, though, we optimize routes to add up to an extra shipment per day per driver. That is a huge opportunity and we think we will have that with this technology.”
Estes also stressed that “the speed of change is accelerating geometrically” in the freight business, as technology is taking trucking in particular “from the stone age to the modern age” in rapid fashion.
That's why keeping up with that change – and the demands of customers now accustomed to two days or fewer shipment times due to their e-commerce experience – means this digitization trend will only become more critical.
New survey highlights yet again that despite growing demand for connected technologies, motorists still want to retain control of their vehicles.
It doesn’t surprise me that many motorists still aren’t fans of self-driving vehicles (count me in their corner). And it’s also not surprising that truckers don’t like autonomous driving systems, either – even as both they and motorists alike connected vehicle technology in ever-greater numbers, largely for safety benefits.
Solace polled 1,500 U.S. online consumers who identified as connected car drivers across a wide age range and found, as a group, 57% of them would not buy a self-driving car, even if cost weren't an issue.
When it comes to safety, almost two-thirds (62%) of drivers surveyed by Solace believe they drive safer in connected cars, but when asked what type of decisions they would not trust their connected car to make, 40% noted they wouldn't trust their car to brake for them – and only 9% said they “always trust” their connected car to start with.
Now here’s the ironic twist: Examining responses by generation, Solace found that younger drivers, counterintuitively, are more hesitant to hand over the driving controls than older generations. Almost half (46%) of Millennials aged 18 to 25 would not trust their car to automatically react to driving conditions, whereas only a third of drivers 65 or older felt that way.
"The automotive industry is focused on bringing self-driving cars to the mass market, but our survey showed that connected car drivers of all ages just aren't ready to hand over the wheel," noted Shawn McAllister, chief technology officer for Solace, in a statement. "While advancements in autonomous vehicle technologies are incredibly exciting, it's important to keep an understanding of the consumer front and center. We hope our survey will help in this regard."
Dean Newell, vice president of safety and training for flatbed fleet Maverick Transportation and Dave Manning, president of TCW Inc. and the currently chairman of the American Trucking Associations (ATA) both stressed that fully autonomous trucks simply won’t work in the freight business – a least in the over-the-road sector.
“I don’t ever think we’ll see them on the highway,” said Newell. “We’ll see them in certain applications, like mining trucks and things like that. But as far as over-the-road operation I don’t think we’ll see it in my lifetime. They will be more autonomous, but not driverless; we will still need people in there.”
Manning added that drivers “just perform too much other vital work aside from driving,” he explained, citing the tarping down of flatbed loads, handling intermodal container exchanges, conducting vehicle safety inspections, and managing hazardous material shipments.
“They do way more than simply refuel and drive trucks,” Manning said. “And when does technology work 100% of the time? All systems have flaws and a driver needs to be there to go ‘old school’ in case a problem with the technology occurs.”
Newel added that the “skills sets” professional truck drivers bring to the table are also critical to operating big rigs safely in bad weather or in emergency situations as when a tractor-trailer blows a tire.
Solace’s survey also provided some other interesting insights from motorists about connected and self-driving vehicle systems, ones that are probably shared to some degree by truckers as well:
When it comes to connected car capabilities, safety and navigation features are the most trusted and valued for U.S. drivers.Half (49%) of U.S. drivers are most likely to rely on safety sensors – such as lane departure alerts – in a connected car; while one in three (35%) are most likely to rely on navigational driving prompts. One in four drivers (26%) also believe navigation is the most valuable connected feature for their driving needs; while 20% selected safety monitors as the most valuable connected feature.
Connected car drivers aren't overly dependent on apps when they drive, but app performance impacts their driving experience.When asked how many applications connected car drivers depend on while driving, over half (53%) of respondents noted they use only one to two applications while driving, while less than three percent noted they use more than five. Examining driver frustrations when it comes to features in their connected car, roughly 15% said that if an app they're using froze or stalled while they were driving it would create a poor driving experience. Additionally, almost one in five (18%) noted they become frustrated while driving if an app provides incorrect information.
Most consumers don't know what happens to their data in a connected car. While data storage has become a growing concern for connected cars, especially those in the rental market, Solace found that almost half of connected car drivers (48%) weren't aware that their vehicle could store their personal data, such as their home address, social security number, birthday, etc.
Those are all issues worth thinking about as cars and trucks continue to become more computerized with every new model introduction.
Yet, if a new global survey of nearly 3,000 employees across eight nations conducted by The Workforce Institute at Kronos Incorporated is correct, it seems that more and more of them believe there is “a significant opportunity” for AI to help improve “the workplace experience” and, yes, believe it or not, the logistics/transportation sector is one of the leading industries in this regard.
The survey – dubbed Engaging Opportunity: Working Smarter with AI and conducted by Coleman Parkes Research – polled hourly and salaried workers across a variety of industries in Australia, Canada, France, Germany, Mexico, New Zealand, the United Kingdom, and the U.S. Not only did the survey discern there may be more “ground level support” regarding the use of AI in the workplace, it also found that company management is being largely close-mouthed regarding AI developments – and that, not AI itself, is what’s sparking the most unease about the technology among workers.
Here are some findings to chew on:
Employees from all eight nations in this poll would welcome AI if it simplified or automated time-consuming internal processes (64%), helped better balance their workload (64%), increased fairness in subjective decisions (62%), or ensured managers made better choices affecting individual employees (57%).
Surprisingly, workers in Mexico are most enthusiastic about AI’s benefits, especially in terms of simplifying time-consuming processes (Mexico: 81%; Canada: 65%; U.S.: 62%) and better balance their workload (Mexico: 84%; U.S. 64%; Canada: 61%).
No surprise here: younger workers are far more supportive of AI usage in the workplace. Globally, 88% of Gen Z workers (aged 18 to 20) believe AI can improve their job in some manner. However, just 70% of Baby Boomers (55 and older) feel the same way.
Younger millennials (aged 21 to 27), older millennials (aged 28 to 37), and Gen X workers (38 to 54) in the U.S. and Canada think the biggest benefit of AI for them is elimination of manual processes and time wasted on basic administrative work, each of which “detracts from more rewarding workplace activities.” But when it comes to U.S. Baby Boomers 38% either don’t think or aren’t sure how AI would improve their job.
The poll also found that three out of every five international organizations (58%) have yet to discuss the potential impact of AI on their workforce with employees. And two-thirds of global employees (61%) said they’d feel far more comfortable if employers were more transparent about what the future may hold.
Interestingly, again, the U.S. is the most secretive when it comes to corporate plans for AI, with 67% of those U.S. employees polled reporting they have no knowledge of their organization’s plans for AI. Employees in Canada (66 %) and the United Kingdom (62%) are similarly in the dark, while the reverse is true in Mexico, where 67% of employees in said their organization has openly discussed AI with employees.
Then again, some U.S. industries are more “transparent” than others regarding discussions over the future of AI. Organizations in financial services/banking (38%), manufacturing (35%), and logistics/transportation (27%) are already discussing AI’s future impact on the workforce with employees.
In Canada, a similar finding: 37% of financial services organizations, 33% of manufacturing industries, 27% of logistics/transportation organizations have discussed the topic openly.
At the end of the day, though, the fear of being replaced by a machine is still quite prevalent. So while four out of five employees (82%) see opportunity for AI to improve their jobs, about a third (34%) expressed concern that AI could someday replace them altogether, including 42% of Gen Z employees; the youngest set in the workforce.
“Organizations are making significant investments in benefits, technology, and innovative workplaces, yet employees are working more than ever and engagement has remained stagnant for decades,” noted Joyce Maroney, executive director of The Workforce Institute at Kronos, in a statement.
“While emerging technologies always generate uncertainty, this survey shows employees worldwide share a cautious optimism that artificial intelligence is a promising tool,” she added. “It could pave the way for a game-changing employee experience if it is used to add fairness and eliminate low-value workplace processes and tasks, allowing employees to focus on the parts of their roles that really matter.”
While such “game-changing” instills a lot of worry in folks like myself, Jack Uldrich, a self-titled “global futurist,” explained last week during NATSO Connect 2018 – the annual convention of the trade group formerly known as the National Association of Truck Stop Operators – that though AI and other technological develops “makes this a confusing time for all of us,” the current workforce has already experienced this level of “transformative” change.
“Remember dial-up 56K modems? That was just 8,000 days ago,” he told the gathered audience. “We’re now at 4G bandwidth speeds; that’s a fourteen hundred-fold level of change and you’ve already lived through it.”
By 2020, he expects 5G bandwidth will be in place – which is a hundred-fold faster than 4G. And 5G will be one of the technological “backbones” required to support AI, autonomous vehicles (AVs) and much, much more.
“We’ve got 3D printing now, so instead of producing goods like running shoes in Asia, and then shipping them here to the U.S., we can custom make shoes that fit your foot right here in your community,” Uldrich said. “And now they are using 3D printing to make houses. And it is things like that which will change global supply chains faster than we’re ready for.”
Not only, then, must we be prepared for the world to change due to a wide range of technological advancements (including AI and “smart machines”) but it will change far faster than we are prepared for, he warned.
Another example Uldrich pointed to: Uber and Lyft drivers. “Ten years ago, neither of them could exist; we didn’t have the technology,” he noted. “Now they are $100 billion a year businesses. So now, instead of owning cars, the younger generation may trade away ownership for real-time access to mobility.”
[Another NATSO speaker added that it only took Uber and Lyft nine years to establish a pool of over 1 million ride-hailing drivers; by comparison it took trucking 100 years to create a pool of 3.5 million truck drivers.]
And while many might worry about a generation forgoing a $30,000-plus investment (at the low end) in a new set of wheels every few years, Uldrich emphasized that $30,000 will now get spent elsewhere – with the “where” an open question yet to be answered.
“The point is that, in a world of exponential change, what worked before will not work down the road,” he stressed. “It means all us need to keep an open mind about the future, because it is simply not going to unfold like we expect. Also, remember this: technology is great, but can it do everything? No. Not for a moment do I think that. But we tend to get so ‘locked up’ in our industries from a day-to-day perspective that we forget to look for the future opportunities inherent in all of this change. You need to be prepared and you need to think differently because you will only continue to experience rapid change.”
Something to keep in mind as trucking continues to barrel towards the future.
And wouldn’t you know it; the need for more operational data is at the heart of it.
It’s been an ongoing contention for years that trucking is undervalued for the supply chain services it provides – especially when it comes to truck driver wages. And while freight rates are on the rise, which provides motor carriers with fund necessary to boost driver pay, there’s still a widespread feeling within the industry that shippers consider trucking nothing more than a commodity, with drivers, fleets, trucks and trailers all the same; all interchangeable from one to the next.
“A couple of people sent me letters from shippers during that [pre-ELD] time which said, ’We’re so grateful for all the great service you’ve provided to us over the years; however, we’re notifying you that we’re going to take our [freight] prices down 10% effective the Monday after next. If you’re willing to absorb that price discount that’s great, we’d be happy to have you in our carrier mix; if not we’ll put your business out to bid and you may win some of that, you may lose all of it. The likelihood of you winning it all back is zero,’” he noted in his remarks.
“That’s pretty harsh,” Larkin stressed. “That’s treatment of somebody who’s supposed to be your partner and I think some of those folks are going to see the other end of that here very shortly. It’s hard to feel too sorry for them.”
With all that in mind, then, a call for new supply chain costing methods being made by APICS, an association representing supply chain management professionals, and IMA, the Institute of Management Accountants, could be both welcome and worrisome.
On the one hand, getting a better accounting of supply chain costs is a good thing, as more accuracy in monetary matters usually leads to better outcomes, noted Raef Lawson, IMA’s vice president of research and policy.
"From the supply chain perspective, an effective managerial costing system has clear value. It enables better make-or-buy decisions, defines landed versus delivery costs and determines the realistic cost of holding inventory," he explained.
However, if such “costing” improvements leaves trucking yet again with the short end of the monetary stick, that won’t be a such a great development – especially if it continues to foster a “cheap freight” mentality.
The APICS/IMA report found that when asked what prevents supply chain managers from maximizing the use of current costing information, 44% of those polled cited a lack of operational data. Instead, costing information is often reported in exclusively financial terms, making it more difficult to leverage. Respondents added that the secondary and “tertiary barriers” to useful costing information are inadequate technology and software (39%) and a resistance to change by accounting and finance personnel (30%).
According to the report, there are three root causes why supply chain professionals are not receiving adequate costing information:
An overreliance on external financial reporting systems:Many organizations rely on externally-oriented financial accounting systems that employ oversimplified methods of costing products and services to produce information supporting internal business decision making.
Using outdated costing models:Traditional cost accounting practices can no longer meet the challenges of today's business environment, but are still used by many accountants.
Accounting and finance's resistance to change:With little pressure from managers who use accounting information to improve data accuracy and relevance, accountants are reluctant to promote new, more appropriate practices within their organizations.
Again, though, if revamping cost calculation strategies within the supply chain results in a better appreciation of trucking’s role – especially from a freight rate and driver pay perspective – then it’ll be a worthwhile effort to pursue. We’ll wait and see how it turns out.
A new survey finds 85% of consumers won’t do business with a company if they’re concerned about their data practices. Freight customers probably feel the same way.
The news that FedEx stored the identifications of thousands of customers on an unsecured “legacy server” is yet another reminder of how data security isn’t as tight as it needs to be in a world full of cyber criminals and hackers – folks all too ready to take malicious advantage of such information.
And consumers are definitely worried about such exposure (although few are taking steps to protect themselves) and that’s beginning to affect who they do business with.
Yet only 45% of organizations report to owning a structured plan to ensure data compliance, the firm found. This, coupled with current industry trends, means it could be a tumultuous year ahead for businesses that do not invest, or begin to invest, in a data privacy and security framework. It could expose organizations to risks such as staggering financial fines, regulatory penalties and loss of customers, according to Ale Brown, Kirke’s founder and principal consultant.
“We expect privacy concerns will soar to new heights this year with the renewed focus on data protection,” he explained. “It’s an opportune time for businesses to differentiate by prioritizing the safeguarding of personal information. Businesses have the power to distinguish themselves by leveraging privacy management practices as a foundation for trust to deepen employee engagement and customer loyalty.”
But although most organizations maintain information technology or “IT” governance when it comes to data security, the “privacy gap” has yet to close, Brown stressed. Continued growth in digital devices is driving risk management and with 2017 seeing a 2,502% increase in the sale of ransomware on the “dark web” it is clear privacy will remain a vital business issue.
In a global economy, new regulations such as the General Data Protection Regulation (GDPR) from the European Union will impact companies worldwide starting May 25 if they handle any data from EU citizens. In the event of non-compliance or data breaches, Brown said businesses face monetary fines up to 4% annual global turnover, increasing solvency risks for many organizations.
The data privacy news is just as gloomy in The Global State of Information Security Survey 2018 compiled by global consulting firm PricewaterhouseCoopers (PwC). That poll, which draws on the responses of 9,500 executives in 122 countries and more than 75 industries, finds that though “massive cybersecurity breaches” have become almost commonplace, many organizations worldwide still struggle to comprehend and manage emerging cyber risks in an increasingly complex digital society.
Indeed, PwC’s poll found that relatively few respondents (34%) say their organizations plan to assess Internet of things (IoT) security risks across the business ecosystem, while only 34% are developing new data collection, retention, and destruction policies. Only 34% assess device and system interconnectivity and vulnerability across the business ecosystem.
Still, Kirke’s Brown noted that 72% of consumers polled in his firms survey believe businesses, not government, are best equipped to protect their data. That means, at least from my perspective, that if a company can demonstrate solid data privacy and security protocols, it can win more business – especially in the freight world, where data is becoming more and more critical all the time.
But beware if the reverse is true. “Without the correct privacy frameworks, businesses are operating on the sands of time and leaving themselves exposed and vulnerable to breaches,” Brown said. “Despite an awareness of disruptive cyber risks, companies often remain unprepared to deal with them. Achieving greater cyber resilience as a society and within organizations will require a more concerted effort to uncover and manage new risks inherent in emerging technologies. Organizations must have the right leadership and processes in place to drive the security measures required by digital advancements.”
That includes truckers and any business connected to the freight shipping process these days.
Analyst explains that the pace of change is only going to accelerate in the freight transportation sector.
What happens when previously segmented goods, like clothing and groceries, are sold together and online in increasing amounts? What happens when technology companies start building their own transportation companies? What happens when technology changes so fast the life-cycle of a typical business is slashed by two-thirds?
And where does trucking and the businesses that support them, like truckstops, fit into all of this?
Those were just some of the trends discussed by Ken Cassar, principal analyst and vice president of Slice Intelligence at the recent NATSO Connect 2018 meeting in Nashville, TN, this week.
Cassar, who’s been covering the e-commerce space for some 20 years now, noted that one of the biggest side-effects on the online shopping, buying, and shipping revolution is that the life-span of companies is being shortened considerably – even as they combine and re-combine to offer goods and services in non- typical ways.
“Consumers are more willing to adopt new technologies than ever before and that is shrinking the average lifespan of companies, from 61 years in 1955 to 17 years by 2015 – and it’s only going to shrink more,” he warned. “Technology is the main driver now. Uber, Google and Amazon are wired to disrupt and you are not immune; regulations, cost and experience no longer seem to matter.”
For example, he pointed to the list of the top five publicly traded companies by market capitalization and how it has changed in a decade. In 2006, Exxon was at the top at $446 billion, followed by GE, Total (another energy company), then Microsoft – the only technology company – at $292 billion and then Citi Bank. Fast forward to 2016 and only Microsoft remains, at the number three position, with $452 billion. Apple is at the top with $582 billion, followed by Alphabet (the holding company for Google) then Microsoft, Amazon and Facebook. No big industrial firm or energy company, such as Exxon, is in the top five anymore, Cassar said.
“This is a relatively scary time for many folks,” he stressed, especially in terms of just how fast technological change is occurring now.
“It took the telephone 75 years to reach 80% penetration among consumers; the clothes washer took 80 years and the automobile 55 years,” Cassar explained. “But the cell phone took just 15 years to reach mass penetration.”
A related trend is that the dominant companies are younger than ever before and technologically-focused. On top of that, consumers are discarding companies and brands like never before and at a faster pace. That’s causing more “established” firms to do different things. The Kohl’s department store, for example, is forging partnerships to add groceries to some of its stores, while Berkshire Hathaway forged a three-way partnership to address health care costs – with Amazon, one of the freight industry’s biggest disruptors, as one of the three partners.
“This is all causing CEOs to become paranoid; the world has turned upside down in 10 short years,” Cassar said. “Amazon the most extreme example of what we are seeing. They have six different store formats, they are leasing airplanes and leasing/buying trucks, they are getting into freight brokering and automated warehouses, plus they plan to compete head on with FedEx and UPS. They are defying the laws of traditional business function.”
And at the back of everyone’s mind is what he calls the “Netflix dilemma,” relating back to the “conventional wisdom” in the early 200os that there was no way a mail-order DVD business like Netflix could beat huge retail like Blockbuster Video; which it, of course, eventually did in dramatic fashion. “This shows anyone vulnerable,” Cassar pointed out.
Today, he said business-to-consumer e-commerce activity remains relatively small, totaling some $350 billion a year in U.S., which is 9% of total U.S. consumer spending. though that e-commerce spending has grown more than 20% year-over-year in each of the last three to four years
About 17% of all sales are online now, with 4% of food bought online. Amazon currently has 41% of total e-commerce sales and in 2017 was responsible for 54% of all growth in e-commerce. “They are killing it in every category,” Cassar noted.
On top of that, consumers now rank convenience (38%) above price (31%) and selection (29%) as the principal reason for buying online. And truck drivers are part of that wave, Cassar emphasized, as a National Institute for Occupational Health & Safety study conducted back in October of 2016 found that internet device usage” amongst truckers is climbing rapidly. At that time, 71% of truck drivers said they owned a laptop and/or smart phone, with 17% owning a tablet computer.
“Truckers are absolutely digitally engaged,” he said.
What this all means is that the “omni-channel” format is going to start dominating the supply chain: “It is great to have store, it is great buy online, but now we’re looking to find ways to match those together,” Cassar said. In the case of mega-retailer Wal Mart, that means ordering groceries online, then coming to a store to pick them up and buy coffee and gasoline while the groceries are loaded up.
Amazon is going a step further with a “fresh pickup” initiative whereby groceries ordered online are ready in 15 minutes and brought out to you when you arrive at a store location.
The whole point of discussing all those new efforts, stressed Cassar, is that past successes are now a “far less reliable predictor of future successes” than ever before. “And now big e-commerce players like Amazon, Uber, Walmart and Google will warrant much closer attention as they are beginning to play in the trucking and freight transportation space. This is where the challenges will come from.”
The ride sharing firm adopts a 12-hours on, six-hours off drive time policy. Will it stick? More importantly, are more “driver-focused” rules on the way?
By now I am sure you’ve heard about the ambitious move by Uber to pre-empt a drive-time regulatory effort by voluntarily adopting a 12-hours on/six-hours off policy.
Sachin Kansal, director of product management at Uber, announced the move in a blog post, noting that a new feature on its driver’s app will provide “periodic notifications” when a driver approaches the new 12-hour driving time limit. It’ll then automatically take the driver offline for six straight hours when that 12-hour maximum has been reached.
[Those driving limits differ depending on the location, though. For example, New York City mandates a 10-hour “passenger time” limit for taxi and limousine drivers.]
“While nearly 60% of U.S. drivers use Uber less than 10 hours a week, we want to do our part to help prevent drowsy driving,” Kansal said in his blog post. “That’s why we’re taking a step forward by launching a feature across the country that prompts drivers to go offline for six straight hours after a total of 12 hours of driving time. This move will strengthen our approach to help keep riders and drivers safe on the road while preserving the flexibility drivers tell us they love.”
He added that “everyone knows that drinking and driving is dangerous, but many don’t know the risks or warning signs of drowsy driving.” As such, Uber’s “community guidelines” make clear that it’s important to “take a break” when feeling tired on the road, he added.
“We’ve also piloted features like an in-app notification that reminds drivers of this,” Kansal said. “According to the experts, raising awareness is key.”
And the “experts” are liking this move – a lot. “Driver fatigue is a serious and underappreciated traffic safety issue, and states need all the help they can get to address it. GHSA is thrilled that Uber is taking steps to prevent drowsy driving by limiting the hours a driver can be behind the wheel,” noted Jonathan Adkins, executive director of the Governors Highway Safety Association. “This new feature has tremendous potential to protect not only Uber driver-partners, but also their passengers and, ultimately, all road users.”
“The National Sleep Foundation’s validated Sleep Health Index consistently finds that American adults only feel well-rested four days out of the week. Furthermore, the public is not fully aware of how this lack of good, restorative sleep can affect their overall well-being,” added David Cloud, CEO of the National Sleep Foundation. “This not only highlights the importance of outreach and education to help raise public awareness, but also the need for strategies that promote sleep health and safety. We’re pleased to see Uber taking this step and using technology to elevate the importance of this issue.”
Yet, you know what? Uber’s in-app notification protocol suspiciously seems to mimic what an electronic logging device (ELD) is supposed to do in trucking – something that caught the attention of Pete Allen, chief client officer at MiX Telematics.
“When I heard about this on the news, I was taken aback,” he told me by phone. “Fatigue has been proven to lead to crashes and other unsafe driving events. So I thought it very interesting and forward-thinking for them to do this for their entire driver work force.”
While the 12/6 rule is not the same as the 14/10 rule for truckers, Allen believes “the same intent” is there, though he remains curious as to why Uber didn’t synch its drive-time rules with a 24-hour clock.
“I don’t know why it’s different, but it is a good step towards addressing fatigue,” he explained. “What also struck me originally is that they are not being mandated to do this – they are being the ‘early adopter’ here, taking the lead. I’m personally not a big fan of regulation so I’d love to see similar companies adopt this approach. Making the rules yourself leaves you much better off.”
Allen also thinks this new drive-time feature programmed into Uber’s app “opens the door” to other telematics-driven monitoring options, such as collecting data on hard braking incidents to allow for driver coaching as well as for restricting cell phone usage to avoid distracted driving.
“As a passenger, it would be nice if you had data to monitor this, especially so you could create a better and more uniform ride ‘experience’ from a safety perspective,” he added.
I got even more nervous when I “stalled” the ZECT out twice during my trip around the test track at the PACCAR Technical Center in Mt. Vernon, WA; a “stall” due to an overspeed miscommunication between the truck’s four-speed automated transmission and its dual-rotor electric motor.
Yet the experience proved instructive as this truck is only just now becoming reality after two years of development work, with more than a few “tweaks” still left to be worked out before real-word testing at the ports of Long Beach and Los Angeles begins in the next few months.
“We are still real early in the development process,” Brian Lindgren, Kenworth’s research and development manager, explained to me during one of several test drives in the T680 ZECT, which really only got “up and running” in his words back in December.
“There is still a lot of tweaking to do; we are still working through the [transmission] shifting algorithms,” he explained.
Of course that’s to be expected with a truck that’s very different in design than the nominal diesel-powered tractors now operating on our roads today:
A comparable diesel-powered T680 daycab tractor weighs in at 16,000 lbs.; the ZECT weighs 22,000 lbs. due to the batteries, heating/cooling system for battery protection, hydrogen storage tanks, etc. “We have added about 6,000 lbs. to this truck compared to a diesel model, but that will be coming down,” said Lindgren. “It could drop by as much as half in the next five years.” It’s also slightly heavier than a comparable natural gas-only powered tractor as well, he said.
The ZECT is powered by a dual-rotor electric motor that generates 420 kilowatts (kW) of power, which is equivalent to a 560 hp engine. Thus it can pull “nominal” Class 8 freight loads fairly easily; the ZECT test tractor-trailer sported a 78,980 lbs. gross combination vehicle weight (GCVW).
“We have decided to leave the electric motor within the frame of this truck, with a standard prop shaft connected back to a standard rear axle,” Lindgren said. “Putting the electric motors within the axle or wheels would lose power and torque.”
The fuel cell cranks out 85 kW and serves to recharge the truck’s 2,000 lb. lithium-ion battery pack, which in turn feeds the electric motor. That 2,000 lbs. worth of batteries also requires 1,500 lbs. of “support equipment,” he noted, from brackets to cooling/heating systems required to ward off the impact of extreme external temperatures. “Like us humans, fuel cells like ‘room temperature’ he best – not too, hot not too cold.”
“I think once we get the fuel cell up to 200 kW or 250 kW output [power] range we will see some changes; the ability to pull hill grades that are steeper and longer, for example,” Lindgren told me. “Right now 85 kW does not match the 400 kW output of the motor; so the fuel cell consumes more hydrogen to keep up with [motor] power demand. Once you attain that greater output then you can reduce the size of the battery pack and extend range; that is when you will also see reductions in weight and cost.”
Right now, the ZECT can maintain 30 mph on a 6% grade, has enough “low” torque to start pulling a fully loaded trailer on a 20% grade, and sports a top speed of 65 mph. The battery pack is expected to last six to 10 years as well, according to Kenworth.
Maintenance will one day be the ultimate advantage of a ZECT-style of truck. “There is no [diesel] engine oil, no oil filters, no valves to adjust, no DPF [diesel particulate filter], and no SCR [selective catalytic reduction] system,” Lindgren said. “There are no moving parts like pistons and crankshafts. Pistons need to accelerate/decelerate/then accelerate; that’s a lot of movement, which creates a lot of wear and tear on the components.”
The big benefit to the ZECT is that its all-electric propulsion system makes it ideal for stop-and-go operations, like the drayage fleet it’ll be deployed to on a lease basis by spring.
“This particular truck likes stop-and-go; this is an application where electric trucks shine. Idling is hard on diesel engines. A diesel prefers to run at two-thirds power at a steady state on the open road,” Lindgren explained to me.
“The drive cycles we’ve been doing [during the test runs at the technical center] are actually tougher on this fuel cell/electric hybrid system than the actual drayage work it is designed for,” he stressed. “In drayage the truck will sit for an hour, waiting in line; this is why it’s a much better option than diesel; so much idle time. No emissions at all. The [truck] wait lines will be far ‘cleaner’ than they’ve been in the past.”
Obviously, though, Lindgren readily admits that there are still many unknowns where the ZECT and its combination fuel cell-electric motor-battery powertrain in concerned.
“How rugged is fuel cell compared to a diesel? We don’t know,” he noted. “That’s what we are going to find out. Ballard [Power Systems] runs its fuel cells in city buses, so they get knocked around. But we don’t know about truck operations yet.”
There is also no hydrogen refueling infrastructure available for the ZECT to use yet, either.
“There are some [hydrogen filling stations] for cars but none you can fit a tractor-trailer into,” he said. “But since our first use of the [ZECT] is to haul cargo in and out of ports, we plan put a refueling station near the port entrance – that way it doesn’t go out of its way to refuel. And refueling is quick, as fast as diesel.”
The main reason Kenworth is involved in this kind of “alternative propulsion” research, explained Lindgren, is that “we just don’t know what we’re going to be using in the future: hydrogen, compressed natural gas, batteries, or micro turbines fueled with mango juice. We just know that we need more powertrain options than just diesel, so we really need to look at all the options.”
Stephan Olsen, Kenworth’s director of product planning, added during the event that the OEM believes that by 2035 or so, some 100,000 “near zero” freight trucks are expected to be in operation.
The point of all of this research we’re doing is that Kenworth needs to be prepared; there is no one single ‘silver bullet’ as a replacement for diesel,” he explained. “There are multiple ones, so we are researching all of the options so we have solutions in place. We think we’re going to need a variety of technologies in the future.”
By extension, Lindgren said the upshot of all that work makes it “an awesome time to be an engineer in trucking.”
He explained that his team is working on not just alternative propulsion systems using different fuels but also LiDAR (Light Detection and Ranging) for collision-avoidance systems and truck automation, just to name a few.
“It is all cool stuff we are getting to work on,” he stressed. “We are getting to design and build the futuristic vehicles we used to watch on TV shows and in the movies.”