Motortruck Fleet Executive September/October 2010 by Annex Business Media

Mo oto torrtruck truck

Fleet Executive

C A N A D A â&#x20AC;&#x2122; S

B U S I N E S S

SEPTEMBER/OCTOBER 2010

M A G A Z I N E

F O R

F L E E T

O W N E R S

Are you meeting

their needs? Find out what attracts, motivates and retains drivers with our fifth annual Driver Satisfaction Survey

Special Inside:

Our Annual GREEN TO GOLD Supplement

Can a low-carb diet fuel your bottom line?

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contents September/October 2010

Vol.79, number 5

COVER STORY

Are TIME you meeting

GROW their needs?

Are you meeting their needs? . . . . . . . .37 Find out what attracts, motivates and retains drivers with our fifth annual

Driver Satisfaction Survey.

FEATURES

MOVIN’ ON UP Find out how driver-friendly techniques are helping Two Amigos Moving and Storage avoid downtime in our new City Smarts section.

TMS TALK Not all Transportation Management Systems are created equal, but a recent survey on the topic helps narrow the field. Find out which TMS solution is best for your operation.

NEGOTIATION TIME A tepid recovery and lingering capacity overhang is sure to make rate and capacity negotiations a difficult exercise in 2011. We asked three of the country’s most respected shippers for their insights on the future direction of freight volumes and pricing.

FUEL FEUD International says ‘Advanced EGR’ wins ‘fluid economy’ war vs. SCR – but Daimler fires back over testing methodology.

Green to Gold Supplement: Our fourth annual Green to Gold supplement comes chalk full of information on environmentally-friendly products and techniques designed to give you a better bottom line. Learn how industry pioneers have fared using electric truck technology to date; why a Quebec carrier is making huge investments in LNG-fuelled trucks; how coconut shells, lithium batteries and accumulators are all playing a role in energy storage; how a revolution in packaging could lead to significant savings in freight costs; and what a trio of respected shippers had to say about fuel efficiency and surcharges at our recent Profitability Workshop.

DEPARTMENTS THE VIEW WITH LOU . . . . . . . . . . . . . . . . . . . . 6 With questions still looming about the possibility of a double-dip recession, editorial director Lou Smyrlis reminds that it takes a long time to instil confidence – but no time to instil panic. COMPETITION WATCH . . . . . . . . . . . . . . . . . . . 8 Contrans acquires Edmonton-based waste collection firm; Challenger Motor Freight donates used trailers to charity; Bison Transport given green light for $2.5 million Windsor truck hub; TST Overland Express expands its transportation network with a new gateway in the Midwest; and more. DASHBOARD . . . . . . . . . . . . . . . . . . . . . . . 10 We bring you the latest numbers from TransCore’s Canadian Freight Index and Nulogx’s Canadian General Freight Index in our new Dashboard section. Plus: a look at rising US truck tonnage. TAKING CARE OF BUSINESS . . . . . . . . . . . . . . . 12 Even smaller carriers can better deal with the volatility of currency. Here’s how to take the ‘foreign’ out of foreign exchange. MY HR SPACE . . . . . . . . . . . . . . . . . . . . . . 14 Accurate data is vital to making successful business decisions – and it’s now available at the click of a mouse. EQUIPMENT WATCH . . . . . . . . . . . . . . . . . . . 18 Shell launches nitrate-free, extended life coolant for new engines; PacLease opens a trio of new Canadian locations; and Freightliner builds hybrid truck for on-site fueling service. INSIDE THE NUMBERS . . . . . . . . . . . . . . . . . . 54 How much did North American heavy-duty truck net orders increase in August? What percentage of Canadian fleets are planning to buy used trucks in 2011? Plus: a look at the importance of performance criteria by mode and shipper satisfaction ratings by mode.

september/october 2010

what’s on trucknews.com? Blogs • Trucker Harry Rudolfs conducted a survey on Ontario’s (very few) 400 series rest stops for his most recent blog. His consensus? They’re still a joke. • IT expert Gagan Goraya gives a rundown of an environmentally-conscious program called Green IT which focuses using computer resources in an efficient way. • ATBS Canada CEO Ray Haight continues his popular “Ray’s Rules” series of blogs with a look at rules for driver recruiters. • Motivational speaker David Benjatschek delivers an “average” rant, voicing his distaste for corporate leaders that only strive for the middle of the pack.

Web TV: Transportation Matters • ASSAULT ON MEDIUM-DUTY: Navistar sets out to capture 50% of the medium-duty truck market. • MARATHON TRUCKERS: A trio of Ontario truckers take to the streets in pursuit of their other roadside passion: marathon running. • CLEANING HOUSE: Find out how Bison Transport set up its new in-house DPF cleaning program and learn about the cleaning process itself. • WOMEN IN TRANSPORTATION: A new program aims to match women with rewarding careers in transportation.

You Said It . . . “I think that it’s interesting that harassment and discriminatory practices are allowed to continue in truck stops, carrier terminals and on the road. In other industries, there would have been a larger outcry and probably a couple of lawsuits already. Does it continue because there are no real consequences for the driver or company that harasses a woman? There doesn’t seem to be much that happens – the woman keeps her head down and everything continues as ‘normal.’ If the industry wants to change, it can... it just doesn’t seem to want to all that much. Women in Trucking has made huge strides, but it’s mostly women working for women. Until the industry stops thinking about it as a ‘woman driver’ issue and starts thinking about it as a business/legal/decency (take your pick) issue, nothing is going to change.” – Jane Jazrawy responding to Adam Ledlow’s blog: Where have all the women truckers gone? 4

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We now TWEET! Follow us on Twitter Twitter.com/AdamLedlow Twitter.com/JamesMenzies Twitter.com/LouSmyrlis

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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

SEPTEMBER/OCTOBER 2010

VOL. 79

It takes a long time to instill confidence and no time to instill panic

or several years now, I’ve been appointed to provide the wrap-up and summary at Richard Lande’s popular Transportation Innovation and Cost Savings Conference. I joke with the wily Richard that by giving me this task, he’s finally found a way to ensure the media shows up on time, pays attention and stays till the end. Truth is, challenging as Lou Smyrlis, it may be to summarize the MCILT thoughts of several industry Editor experts on several different topics lou@transportationmedia.ca into one cohesive 15-minute summary, I actually enjoy the experience. I’ve found over the years that if you pay close enough attention, there is usually a common thread to be found in the words of the industry experts. Yet, I must admit, this year I found that task particularly difficult because I couldn’t take my mind away from the words of the first speaker: Peter Hall, vice-president and chief economist with Export Development Canada. Over and over throughout the day, my mind kept drifting back to Hall’s gloomy message: Our domestic economy, the US economy and the global economy are all moving slow enough right now that the probability of a double-dip recession is high. The likelihood of falling back into the financial abyss is getting close to 50%, according to Hall. Can he be right, I kept thinking throughout the day. Can our industry have survived the deepest recession of the post-War era, with many carriers practically hanging on by their fingernails, only to drop back into the black hole of economic despair after such a short period of economic recovery? I spoke to many of the conference participants during the breaks throughout the day; they all kept saying the same thing: we hope he’s wrong. Problem was, he sounded so convincing. There are several reasons we may be headed for a double-dip recession, according to Hall. He believes the aggressive growth we saw during the end of last year and during the first quarter of this year had much to do with all the stimulus spending from governments around the world, but is now petering out before real economic growth kicks in. He’s also con6

cerned about several signs of weakness in the US, the world’s largest economy. He believes the US housing market still requires another year to recover and US consumers may need as long as that and perhaps a bit longer before they feel secure enough about their savings to get back to normal spending levels. He also sees trouble for the global economy with Japan and China headed for recession. And this time around, debt-loaded governments don’t have the manoeuvering room to help sustain their economies like they did two years ago. Yet as convincing as Hall is (and having heard him speak before and being a fan of his weekly column, I have a great deal of respect for him), we should be cautious in accepting his reading of the situation as gospel. Leading transportation industry forecasters speaking at the recent Commercial Vehicle Outlook Conference seemed just as certain that fears of a double-dip recession are overblown. Despite startling new housing figures that showed sales of previously-owned US homes were down 27% in July and housing starts down 12% compared to June, Eric Starks, president of FTR Associates, said there’s little reason to fear a double-dip recession and pegged the likelihood of such a scenario at just 10%. Starks, who keeps a Trucking Conditions Index, believes what we will get instead is several months of very slow growth that will make motor carriers feel like they’re treading water. The only way the US economy is falling back into recession, Starks believes, is if it gets hit by some external global issue. Those sentiments were echoed by Donald Broughton, managing director and senior analyst with Avondale Partners and a frequent guest on TV news and business programs. Broughton blamed those very programs for creating unnecessary anxiety. “People are way more worried than they should be,” he said. “(Freight) demand is going up. It’s going up across the board, in every single freight mode.” He urged attendees not to be discouraged by mainstream media reports or stock market selloffs. “Markets are a reflection of us; we are full of greed and full of fear. It takes a long time to instill confidence in us and it takes no time at all to instill panic,” he said of the markets. Sounds like sage advice to me….until I see the third quarter numbers anyway. mt @ARTICLECATEGORY:129;

NO. 5

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 Mary Peligra mpeligra@bizinfogroup.ca Advertising Creative Directors Carolyn Brimer Beverley Richards Contributing Editors Ken Mark James Menzies Ian Putzger John G. Smith Carroll McCormick Harry Rudolfs Publisher Rob Wilkins (416) 510-5123 National Sales Manager Don Besler (416) 699-6966 Account Manager Brenda Grant (416) 494-3333 Production Manager Kim Collins (416) 510-6779 Circulation Manager Mary Garufi Video Production Manager Brad Ling Research Manager Laura Moffatt Vice President Publishing Alex Papanou President Bruce Creighton Head Office 12 Concorde Place, Suite 800 Toronto, Ont. M3C 4J2 Motortruck Fleet Executive is published 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. PUBLICATIONS MAIL AGREEMENT 40069240 Return Undeliverable Canadian Addresses to: Circulation Dept. – Motortruck Magazine, Suite 800 – 12 Concorde Place, Toronto, ON M3C 4J2 USPS 016-317. US office of publication, 2424 Niagara Falls Blvd., Niagara Falls, NY. 14304-0357. Periodical Postage Paid at Niagara Falls NY USA. Postmaster send address corrections to: Motortruck, PO Box 1118, Niagara Falls NY 14304. Member Canadian Business Press. Subscription Inquiries – (416) 442–5600. PAP Registration No. 11025 We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund (CPF) for our publishing activities. ISSN Number 0027-2108 (print) ISSN Number 1923-3507 (digital)

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CompetitionWatch

CONTRANS GROUP is getting into the waste collection business with the acquisition of Edmonton-based ProWerx Disposal. ProWerx provides industrial, commercial and residential waste collection services in the Edmonton area. The company says it operates 15 vehicles and uses about 1,500 collection bins of various sizes and configurations. “We have identified waste collection as a business segment with strong margins and sustainable cash flows, two factors which Contrans and its shareholders have always valued,” said Stan Dunford, CEO of Contrans. “We believe the entry into this market will open the door for greater future potential and it is our intention to continue to pursue opportunities in this segment.” CHALLENGER MOTOR FREIGHT is donating 90 used trailers to charities in the communities it serves. The 53-ft. trailers will be delivered over the coming weeks to charities including: the Canadian Diabetes Association, the Waterloo Rotary Club Charitable Foundation, the Ontario Christian Gleaners, the Samaritans Purse, and the YMCA of St. Clements. The retired trailers have been well-maintained, the company says, and will be put to good use by the charities that receive them. The company conducted a special hand-off ceremony Sept. 17. BISON TRANSPORT has been given the green light to build a $2.5 million truck marshalling yard just east of Windsor, according to a report from The Windsor Star. Town council approved official plan changes on Sept. 7 regarding the truck hub, which will allow greater use of long-combination vehicles (LCVs) in Ontario based on the Winnipeg carrier’s plan. Bison wants to use the yard to detach the second trailer from LCVs bound for Michigan, since the state doesn’t allow LCVs on its highways, according to the report. The yard would also allow single-trailer trucks configured for LCV applications to pick up a second trailer before continuing on into the province. Bison is planning to build at the southeast corner of the Highway 401 and Highway 77 interchange just north of Comber. The site could be expanded to as large as 26 acres, according to the project’s planner. TST OVERLAND EXPRESS is expanding its transportation network with a new Winnipeg, Man.-Minneapolis, Minn. gateway. The company says the new hub will improve transit times on many lanes in the Midwest by up to two days. It’s the third time in the last six months that TST Overland Express has made transportation network improvements, the company says. TST chose Minneapolis as a new regional distribution hub in the upper US Midwest because it can help the carrier provide better service between Western Canada and the US, particularly the Midwest, the company says. TST says proprietary new technology and a direct line-haul service have enabled the company to improve its services in Western Canada. Direct line-haul service reduces freight handling and transit times while the proprietary technology has allowed the company to cross the border more efficiently and better manage its routing and documentation. CONFORCE INTERNATIONAL has agreed to sell its 50.1% stake in Conforce 1 Container Terminals (CCT) to Marino Kulas, owner of Conforce International. Kulas has agreed to purchase the company’s interest in CCT for $445,000. The purchase price is subject to review by a qualified independent third party and may be adjusted according to the findings of the review. Officials say the transaction will reduce the amount of the company’s shareholder loans and eliminate all financial obligations related to the container terminal business. According to sources, the rationale behind selling CCT was based on the company’s decision to focus its resources exclusively on the commercialization of EKO-FLOR, a composite flooring solution engineered for the container and trailer industries. As a result of successful product evaluations, the company expects that production will commence in the fourth quarter of 2010. AERO DELIVERY, an affiliate company of the YANKE GROUP OF COMPANIES, has acquired the land, buildings and operations of Saskatoon Fresh Pack and Fresh Pack Ice Makers in Saskatoon. The facility, located at 1701 16th Street West, consists of 10 acres of land, 90,000 sq. ft. of refrigerated storage and the existing business operations of the ice and freezer businesses. Officials say the purchase will give Aero Delivery the ability to offer full HACCP registered facilities and improved technologies to its customers, while offering Fresh Pack a greater transportation network for existing and future customers. mt

For daily COMPETITION WATCH news go to www.trucknews.com or subscribe to our bi-weekly e-newsletter. 8

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ADVERTISING FEATURE

CHARTING THE CHARTING THE COURSE COURSE TO TO PROFIT PROFIT I n today’s tough economy, transport companies are facing more challenges than ever. Factors like higher fuel prices, shrinking margins, and reduced shipping opportunities are forcing organizations to do even more with less. But in doing so, some organizations discover they don’t have the internal resources needed to properly assess, manage and achieve the new expected level of performance. Luckily, they can look to Shaw Tracking to provide these resources. Shaw Tracking’s Professional Services team can assist in the deployment of technology and help manage operations in order to take greater control over profits.

Professional Services Support The opportunity for increased control over profits comes from implementing new technology within an organization’s current operations. As with any new technology, it is common to question the most effective method of calculating its Return on Investment (ROI). The solution? Set up benchmarks prior to rolling out the technology against which the ROI can be measured. This is why Shaw Tracking’s Professional Services has made its mandate as follows: To provide organizations with a proven methodology and the tools to effectively measure the greatest potential for ROI. Shaw Tracking understands that the groundwork must be laid before putting all of an organization’s benefits and costs into any given profit-driven formula. After all, every formula is as unique as the business it’s coming from. Shaw Tracking’s Professional Services’ step-by-step method to calculating true, attainable ROI provides: ■ succinct and complete project definitions ■ the scope and boundaries of the project ■ the ‘soft benefits’ made tangible and quantifiable in monetary terms ■ a solid, water-proof line of argument and attainable ROI document ■ a sensitivity analysis of final results probability and the major risk factors that impact it

Automated Hours of Service Shaw Tracking offers fleet managers the tools they need to accurately monitor and assess their performance, efficiency, safety, compliance, driver and truck information, all in near real-time. The Hours of Service application uses the electronic on-board recorder (EOBR) embedded in the MCP100 hardware solution, and complies with Canadian and US regulations. This technology allows for improved dispatch decisions, increased productivit y and maximized miles per truck per day. As such, the Shaw Tracking Hours of Service application was designed as a proactive management tool, enabling fleets to optimize their dispatch assignments by providing accurate, near realtime driver availability information to the load planning process. As a web-based sof tware ser vice, the information is delivered to the dispatch system via a web interface. It can also be viewed online with a web browser. This automated record-keeping system helps reduce costs by eliminating the use of paper logs and

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So if you’re wondering whether Shaw Tracking is right for you, ask yourself this: With greater control over your operations and profits, can you afford to go without it? Call 1.800.478.9511 or visit SHAWTRACKING.CA for more information.

TRACKING

TransCore’s Canadian Freight Index records highest August spot market freight volume

DashBoard TransCore Canadian Spot Market Freight Index 2006-2010 2006

2007

2008

2009

2010

Percent Change Y-O-Y

Jan

204

173

214

140

171

22%

Feb

179

174

217

117

182

56%

Mar

211

228

264

131

249

90%

Apr

200

212

296

142

261

84%

May

275

280

316

164

283

73%

Jun

271

288

307

185

294

59%

Jul

197

219

264

156

238

53%

Aug

210

235

219

160

240

50%

Sep

190

206

203

180

Oct

188

238

186

168

Nov

182

227

143

157

Dec

159

214

139

168

TransCore Canadian Spot Market Freight Index 2006-2010

TransCore’s Canadian Freight Index records highest August spot market freight volume

ransCore’s Canadian Freight Index showed a 50% year-over-year increase in spot market freight volume with a two point increase from July. Freight for the month of August registered the highest volume ever recorded for the same month in the last five years. Combined cross-border loads were 55% higher year-overyear, while equipment availability dropped 16% as compared to August 2009. Increasing level of freight availability along with a decline in trucks searching for loads has been the steady pattern throughout the last eight months. August was also the fifth highest performing month in 2010. TransCore’s 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. Over 12 million full loads, LTL (less-than-truckload) 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 four columns in Table 1 include monthly index values for years 2006 through 2009. The last column indicates the percentage change from January through August 2009 to 2010. For the purpose of establishing a baseline for the index, January 2002 (index value of 100) has been used.

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he cost of ground transportation for Canadian shippers increased slightly during the first six months of 2010, according to results published by the Canadian General Freight Index (CGFI), published by Nulogx. Overall freight costs increased by 1.8% from December 2009 to June 2010. Base rates, which exclude the impact of fuel surcharges assessed by carriers, also increased by 2.2%. Average fuel surcharges decreased marginally from 14.7% of base rates to 13.4%, which buffered the effect of the increasing base rates. In addition, overall freight costs for June trended upward, increasing 1.9% when compared to May and 3.2% compared to April. “While rates continued to trend downward in the first quarter of 2010, we have seen two successive months of increases, which may indicate that we reached bottom in April although it is still too early to know for sure,” said Dr. Alan Saipe, president of Supply Chain Surveys. Dr. Saipe handles the CGFI on behalf of Nulogx. “Most of the increases are in the domestic truckload sector,” said Doug Payne, president of Nulogx. “If fleet operators have eliminated their excess capacity, they may now be looking to secure price increases in this more volatile market segment.”

US truck tonnage turns positive once again in July

TA’s advance seasonally adjusted (SA) ForHire Truck Tonnage Index improved 1.5% in July, although June’s reduction was revised from 1.4% to 1.6%. This latest increase raised the SA index from 108.3 (2000=100) in June to 110 in July. The non-seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equalled 109.9 in July, down 5% from the previous month. Compared with July 2009, SA tonnage climbed 7.4%, which matched June’s increase and was the eighth consecutive year-over-year gain. So far this year, tonnage is up 6.7%. ATA Chief Economist Bob Costello said that July’s data didn’t change his outlook for subdued tonnage growth in the months ahead. “The economy is slowing and truck freight tonnage has essentially gone sideways since April 2010,” he said. Despite the slowdown, Costello believes that tonnage will likely see some moderate gains for the second half of the year.

Taking Care of Business

Taking the foreign out of foreign exchange How even small carriers can better deal with the volatility of currency

hile the economic recovery still looms far away in the transportation industry, currency volatility continues to impact the bottom line of transport-related businesses. I spoke with Rahim Madhavji, president of Knightsbridge Foreign Exchange (www.knightsbridgefx.com). He believes that the time for accepting rampant currency volatility is over. There are tools businesses can use to minimize this risk. Businesses can plan ahead without having to worry about how the US dollar or Euro will impact their profit margins. Banks have been providing these risk management tools, but generally only to larger clients. The remaining Canadian businesses are left to figure it out themselves. While banks continue to proactively service large institutions, corporate foreign exchange companies like Madhavji’s focus specifically on small and mediumsized businesses and private clients (foreign property purchasers), offering better than bank FX rates as well as proactive hedging services allowing one to lock-in a rate today for a certain time in the future. Madhavji explains: “If your business has foreign exchange exposures, currency movements will impact your bottom line. Many businesses are invoiced today in US dollars but are not required to pay for products until they are delivered months later. In that time, the exchange rate could have dramatically taken a turn for the worse, exposing the company to losses. The impact on cash flows affects the ability to repay bank debt as well as pay share-

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holders. Businesses should consider hedging their predictable currency requirements to protect cash flows. Madhavji said FX companies help businesses take the “foreign out of foreign exchange.” So how do you improve your bottom line? The big five banks have a stronghold on the corporate foreign exchange market. Market share is estimated at more than 95%. However, high currency margins of up to 2.5% are hidden within the FX rate. This has created the entry of independent providers which provide more competitive pricing and proactive service. Businesses should consider validating the FX pricing they receive with another provider to determine if there are opportunities for significant savings. Are there risk management options? In addition to better pricing, there are a couple of things a business can do to protect itself from foreign exchange volatility. Business can book a forward contract. A forward contract allows a company to lock in an exchange rate today for use at a predetermined date in the future. An importer can lock in an exchange rate of 1.0300 USD/CAD today for six months and can therefore fix its US inventory cost and know the price it should sell its products in Canada. If the exchange rate moves unfavourably – the business is not impacted. A forward contract removes the element of risk associated with future foreign currency requirements and allows one to plan ahead. However, some businesses may want to

Mark Borkowski is president of Mercantile Mergers & Acquisitions Corporation. Mercantile specializes in the sale of mid-market companies. Mark can be contacted at www.mercantilemergersacquisitions.com.

take on some currency risk. Madhavji suggests a solution called a “bid order.” This allows a business to instruct their FX provider to execute a transaction only if the foreign exchange rate can be executed at the rate specified by the client. “If the current rate is 1.0300 and the client requests 1.0200, the FX firm can watch the markets in real-time, until the rate meets the appropriate threshold. Even if the exchange rates meet the threshold for a few seconds, the transaction can be executed in that time. Madhavji said that this can often save a CFO significant time from having to watch the markets on a constant basis. Each company has unique foreign exchange exposures to consider and varying internal resources to manage them. Using a foreign exchange company is an effective method to outsource the treasury function, save time, and improve one’s bottom line. mt

the human edge

data driven decisions Accurate data is needed to make successful business decisions, and it is now available with the click of a mouse

rucks may be powered by burning diesel, but the successful business plans behind them require fuel of another sort – and it comes in the form of accurate data. Information about factors such as the number of trucks in a specific region or revenue per shipment can all play a role in determining everything from hiring practices to competitive rates. And the Canadian Trucking Human Resources Council’s new basic and advanced Labour Information Highway data tools are pulling together this type of data from a number of sources, making it available to the trucking industry with the simple click of a mouse. A basic version of the tool provides users with historical, current and projected data (between 1987 and 2016) concerning GDP and employment trends for nine key occupations at provincial, regional and national levels. An advanced version provides historical, current and projected data in categories such as unemployment rates, shipments, weight, distance, tonne-km, revenue and more. Bison Transport is already measuring its performance against a number of formal Key Performance Indicators that are based on trusted sources of external data. “We belong to a number of truckload carrier associations and collect a lot of benchmark data,” observes Linda Young, the fleet’s vice-president of people development. But it is more than a matter of simply collecting the information, she stresses. Fleets then need to integrate these details into daily processes and business cycles if they want to leverage the opportunities that information can provide. Recruiting strategies involve “a lot of gut, a lot of market scan,” Young says. “Sometimes it’s got to be a little bit of both.” Now the CTHRC’s basic and advanced data tools help fleets in market scans of their own. Guidance like this may become more important in the near future. Even though the recession offered a reprieve from personnel shortages, fleets are already beginning to see the human resources challenge return, notes Bob Dolyniuk, executive director of the Manitoba Trucking Association. But it is not only a matter of tracking or projecting hiring trends. Insight into vehicle ages in a particular area can help to establish truck trade-in cycles, while those who oversee maintenance needs will be able to identify potential shortages in replacement parts.

To find a HR Essentials workshop in your region contact:

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Senior managers will need to identify an aging workforce when trying to establish a succession plan or recruiting strategies that reach out to a new generation of employees. Accurate data can also play a role in helping a fleet’s sales and marketing teams establish prices for different shipments and services. Companies looking to explore their market share might need to be aware of factors such as tonnage increases in specific lanes, Dolyniuk explains, noting how the Manitoba Trucking Association regularly fields questions from carriers asking about trends in factors such as freight volumes. “Do I look at my existing business market, my geographic market, or do I look at a different geographic area? Are there sufficient opportunities where I am?” Industry associations need reliable sources of data as well, as they make presentations to a wide array of government bodies or other related sources of support. “Any specific data we can get our hands on is useful,” adds Louise Yako of the B.C. Trucking Association, noting how industry groups need the latest data when working with organizations such as the Industry Training Authority, which sets her province’s training standards for apprentices and trades, and the Insurance Corporation of B.C. Dolyniuk suggests that the new tools from CTHRC will be able to offer that kind of help: “It’s something that a [trucking] association may use for providing statistics to government or support a case or compare trends from a global level.” He adds that, “When I was in industry, I wanted to be able to measure myself against similar companies. I would suspect that industry views have not changed.” The right information will always be able to fuel accurate business decisions for years to come. To access the free Labour Information Highway – Basic tool, or to subscribe to the Labour Information Highway – Advanced tool, visit www.cthrc.com. mt Funded by the Government of Canada’s Sector Council Program, the Canadian Trucking HR Council (CTHRC) is an incorporated not-for-profit organizations that helps attract, train and retain workers for Canada’s trucking industry. For more information, visit www.cthrc.com.

AMTA www.amta.ca

PEI Trucking Sector Council www.peitsc.ca

Ontario Trucking Association www.ontruck.org

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

inside the numbers

Average Weekly Earnings in the Trucking Industry, 1999-2005 (CURRENT $)

1999

2000

2001

2002

2003

2004

2005

EASTERN CANADA Nfld & Labrador PEI Nova Scotia New Brunswick Quebec Ontario

$587 $513 $557 $551 $578 $727

$639 $533 $584 $540 $581 $751

$656 $551 $598 $496 $584 $782

$682 $580 $624 $528 $604 $800

$636 $617 $631 $578 $628 $804

$614 $614 $692 $585 $630 $776

$616 $569 $714 $569 $640 $794

WESTERN CANADA Manitoba $655 Saskatchewan $619 Alberta $703 British Columbia $738 Yukon $625

$682 $621 $705 $752 $616

$703 $639 $707 $767 $638

$736 $665 $735 $790 NA

$729 $660 $732 $785 $645

$702 $663 $721 $803 $795

$731 $654 $752 $818 $957

CANADA

$680

$693

$716

$712

$716

$733

$668

Pay Scales for Trucking Maintenance Positions JOB TITLE

PAY RANGE

Maintenance Helper/Service Employee

$15/hr (approx.)

Truck and Transport Mechanic

$19.38 - $25.75/hr

Truck and Trailer Technician

$16.65 - $25.07/hr

Parts Technician

Wheel and Tire Technician

Welder

$23.00/hr (approx.) $21.46/hr $15/hr (approx.)

$16.00 -- $25.84/hr

Auto Body Repairperson

NATIONAL AVERAGE

$21.63 $20.00 (approx.)

$20.00 (approx.)

Shop Supervisor/Foreman

$47,835 - $63,780

$56,323

Maintenance Manager

$55,550 - $118,880

$81,968

In this case, size should matter It may seem sometimes like the trucking industry gets little respect, whether it’s from the general public, the mainstream media or legislators. But by its sheer size alone, the trucking industry commands respect. Statistics Canada is five years behind in its annual tally of the numbers of people employed in Canada’s for-hire trucking industry and stopped surveying the private fleet sector many years ago. Yet its latest tally shows there are more than 350,000 people employed in the Canadian for-hire carrier industry. When the quiet giant that is private trucking is thrown into the mix, it’s likely that trucking accounts for about 700,000 workers in Canada. One of the challenges an industry of this size is certain to face in the future is attracting enough people from what will be a shrinking labour pool to replenish itself. Pay rates, particularly at the front ranks level, have long been a sore point and will likely need to show strong upward momentum to keep pace with other competing industries. However, too much focus may be placed on driver jobs. Trucking also offers many non-driving careers. In this issue, we present information gleaned from the Canadian Trucking Human Resources Council on pay scales for maintenance-related positions and we will look at more job groups in future issues.

Saskatchewan Trucking Association www.sasktrucking.com

British Columbia Trucking Association www.bctrucking.com

Manitoba Trucking Association www.trucking.mb.ca

Camo-route www.camo-route.com

Or Contact the Canadian Trucking Human Resources Council, info@cthrc.com or 613 244 4800 september/october 2010

CitySmarts

Welcome to City Smarts, our new section examining private, regional and city trucking. These sectors are a vibrant part of our industry yet face unique issues we feel deserve individual attention. We hope you will find this section a rich source of information.

movin’ on up How driver-friendly technologies are helping Two Amigos Moving and Storage avoid downtime By James Menzies

hen you think of industry trendsetters, it’s usually the megafleets that come to mind. But in Winnipeg, a small furniture delivery company is among the first trucking companies to deploy straight trucks with technologies such as EPA2010-compliant engine technology and UltraShift HV automated transmissions. Two Amigos Moving and Storage operates about 17 straight trucks and six tractortrailers units out of its Winnipeg location. The tractor-trailers perform long-distance household moves under the banner of Alero Moving and Storage while the straight trucks deliver furniture throughout the city of Winnipeg on behalf of furniture retailer The Brick. Fleet manager Brad Prociuk recently allowed me to spend some time with the company and take one of its new Kenworth T370s with EPA2010-compliant Paccar PX-6 engine and Eaton UltraShift HV transmission for a spin. Prociuk is proud to be an early adopter of the new engine technology, but he’s equally impressed with the UltraShift HV, given the rigorous urban duty-cycles the trucks perform under. “We were running standard transmissions for a long time, but no one wants to drive them the way you’re supposed to,” he said. “We’d go through so many clutches, it was unbelievable. I had a driver burn a clutch out in six months; (drivers) always wanted to start in third gear.” Prociuk added the company has also run Allison automatics in its fleet, which is comprised mostly of Kenworths with a sprin16

motortruck

MONEY IN THE BANK: Two Amigos driver Cameron Quinn (left) and fleet manager Brad Prociuk agree the UltraShift HV should reduce downtime and repair costs.

kling of Internationals. Two Amigos’ local delivery trucks are driven pretty hard. It’s just the nature of the business – they’re operated by employees who are movers first, drivers second. The truck is little more than a tool they use to perform their primary duty and that’s to deliver furniture on time. Two Amigos employees spend their mornings loading the trucks with as many as 16 deliveries before setting out to make drops over a six- to 12hour shift. They’ll sometimes return to make a second trip with same-day delivery purchases. When they’re on the road, the trucks get

pushed hard. Two Amigos employee Cameron Quinn yielded the driver’s seat to me for a delivery during a recent visit to Winnipeg. The EPA2010 engine operated just like any other engine. Prociuk buys the diesel exhaust fluid (DEF) from Custom Truck Sales, the PacLease agent that leased him the trucks, where it currently cost about $15 for 10 litres. The PX-6 offers all the torque and horsepower (260 hp) needed to bomb around the city all day. The UltraShift HV was a nice transmission to operate. It doesn’t creep when you’re stopped at a red light like some automatics are wont to do. The transmission also helps

CitySmarts

slow the truck down when you let off the gas, so with some anticipatory driving techniques, you only need to touch the brake pedal to bring the truck to a complete stop. That’ll go a long way towards saving on brake maintenance, a benefit that will be enjoyed by Custom Truck Sales as much as the customer itself. Because Two Amigos’ Kenworths are on full-service leases, Custom Truck Sales has good reason to encourage the use of driver-friendly options like the UltraShift HV. “They’ve got young drivers and probably some turnover as well, so they’re always bringing new guys in and controlling that is pretty hard on a day-to-day basis,” Kelly Whyte, PacLease service manager with Custom Truck Sales Lease and Rental says of Two Amigos. “If we can add components into the powertrain that take away the ability for a driver to cause abuse or to misuse the equipment, that’s a win-win for everybody.” Two Amigos’ Kenworth T370s are the first that Custom Truck Sales has leased with the UltraShift HV. They’ve only been in service since June, but Whyte is confident maintenance savings will be realized. “The exposure we’ve had so far is very positive,” he said. “I want to track some of the maintenance numbers down the road, but I know for sure we’re going to step up on our tire life and brakes and to me, the product has proven itself already.” For leasing companies such as PacLease, charging customers for damage incurred by their drivers is always a thorny issue. One of the primary benefits of a full-service lease to the customer is avoiding unexpected costs.

GREEN TO GOLD: Fleet manager Brad Prociuk shows off one of the company’s new Kenworth T370s with EPA2010-compliant Paccar PX-6 engine.

So obviously they’re not always happy when they receive a bill for damage. “We don’t like billing anything back to our customers,” Whyte said. “But if it’s abuse, we have to.” Two Amigos drivers have been receptive to the new technology, although they say it took a couple days to get used to the backing characteristics of the UltraShift HV. Because of the centrifugal clutch, backing can be finicky at first, but Quinn says the technique can be mastered over the course of a couple days’ work. On the engine side, Prociuk said the EPA2010-compliant PX-6 is operating as expected and finding and replenishing diesel exhaust fluid (DEF) hasn’t been a problem. It’s always been available when he’s needed it, he says, and “it lasts quite a while.” After watching as the Two Amigos pros loaded the truck to the roof in what could be described as a real-life version of Tetris, I climbed behind the wheel to make the first delivery run of the day. Our route took us through downtown Winnipeg where con-

struction necessitated lots of starts and stops (a perfect environment to put the UltraShift HV through its paces) and then into a residential neighbourhood. I pulled the truck up to our destination on a quiet, narrow side street and jumped outside. Quinn, having just lugged a sofa and loveseat into the home (as I supervised – no heavy lifting for this guy), took a moment to assess my potential as a furniture delivery guy. “You’d need to go a little faster,” he said, “but not too bad.” And with that, I was relieved of my duties. Turns out my cautious driving style may not be conducive to success in the furniture delivery business. Glad I didn’t quit my day job. mt James Menzies is the executive editor of sister publications Truck News and Truck West. He holds a commercial drivers’ licence and has test driven trucks all over Canada, the US, Asia and Europe. An award-winning writer, he has also co-authored a book about trucks from around the world. september/october 2010

EquipmentWatch Shell launches nitrite-free extended life coolant for new engines By James Menzies Shell Lubricants has launched a complete

line of Rotella-branded heavy-duty coolants, which is headlined by a new Shell Rotella Ultra ELC, a nitrite-free coolant the company says can last up to 600,000 miles with

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no extender required. The latest addition is well suited for EPA2010-compliant engines, Stede Granger, OEM technical services manager told Motortruck Fleet Executive at the Great American Trucking Show, where the product was launched. “With the new 2010 engines, we’re seeing a lot more use of aluminum and in certain situations, nitrite has a reaction with aluminum. It can form ammonia gas and cause corrosion, so we’re now working with the OEMs to put into the marketplace a nitrite-free coolant,” Granger said. The Rotella Ultra ELC is also designed to handle the requirements of hotter-running engines and an overall harsher engine environment. Other benefits of the Rotella Ultra ELC product include: enhanced oxidation control and corrosion protection of aluminum alloys and lead solder as well as better elastomer compatibility with silicone seals, the company claims. It can also be used in light-duty engines, making it ideal for fleets with a mix of lightand heavy-duty vehicles, Shell points out. The top of the line product from the new Rotella coolant family is available immediately in bulk and drum quantities and will be available in a 50/50 pre-diluted concentration in December, Shell officials told Motortruck. Rounding out the product line is Shell Rotella ELC, which uses organic additives to inhibit corrosion and protect cylinder liners from pitting. The Rotella ELC coolant can provide protection for up to 600,000 miles as well, but it requires an extender at the 300,000-mile mark. Also available is Shell Rotella Fully Formulated coolant with supplemental coolant additives (SCAs), offering protection for up to 250,000 miles. However, it requires the user to monitor and maintain SCA additive levels. PacLease opens three new Canadian locations PacLease has added 23 new locations in North America, including three in Canada.

Weâ&#x20AC;&#x2122;re now on twitter - and weâ&#x20AC;&#x2122;re pretty cocky about it. twitter.com/adamledlow twitter.com/jamesmenzies twitter.com/lousmyrlis

EquipmentWatch The new Canadian locations are: • Peterbilt Atlantic PacLease, 136 Rue de la VTL, C.P. 39, Saint Louis du Ha! Ha!, Que., G0L 3S0, 418-854-7383;

• Peterbilt Atlantic PacLease, 196 Church Road, Little Bras D’or, N.S., B1Y 2Y2, 902-736-7383; and • Peterbilt Pacific Leasing, 3104 Hampton

Street, Terrace, B.C., V8G 5R5, 250638-1433. “Our location growth has been exceptional,” said PacLease president Bob Southern. “Paccar dealers are looking for additional ways to serve their customers and markets; full-service leasing offers that opportunity. We also help our customers become more successful by offering programs that can preserve their company’s capital in addition to providing fleet management tools, local service and a quality advantage that makes sense for their business.” Freightliner builds hybrid truck for on-site fueling service Freightliner has sold what it claims to be the first ever diesel-electric hybrid fuel delivery truck with on-site refueling service provider Diesel Direct. The truck is a Freightliner Business Class M2 106 Hybrid, which will be put to work fueling commercial vehicles on job sites in Massachusetts. Diesel Direct is one of the largest mobile refuelers in the US, delivering fuel to national, regional and local fleets throughout the US. “Because our goal is to provide our customers with a reliable and efficient solution that reduces driver downtime, it’s imperative that our equipment is of the highest quality,” said Dan Abrams, founder and president of Diesel Direct. “That’s why, when we decided to develop our new diesel electric hybrid fuel truck, we turned to Freightliner Trucks.” The truck uses Eaton’s hybrid-electric drivetrain system. “One of our biggest expenses is just to fuel our own trucks,” said Abrams. “With the new Freightliner truck, we expect to save at least 25-30% in fuel consumption.” The hybrid system also allows the company to run its pump while the engine is shut off, which not only saves fuel, but also runs quieter than idling the engine. “We often pump fuel at night and in residential neighbourhoods, so it’s a real benefit,” Abrams said.

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Mo oto torrtruck truck

Fleet Executive

C A N A D A â&#x20AC;&#x2122; S

B U S I N E S S

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How a low-carb diet can fuel your bottom line growth

he transportation sector is what makes Canada a country, bridging together the vast distances among our geographically dispersed cities and resources. Yet our heavy reliance on transportation as a bulwark of our economy also creates distinct challenges when it comes to reducing greenhouse gases. Mountainous terrain, cold and snowy winters and gridlock in some of our major centres exacerbate the issue. The transportation sector is the second largest source of greenhouse gas (GHG) emissions in Canada, trailing only stationary sources, with a share of 27% of total emissions in 2007. Between 2000 and 2007, transportation emissions grew at an average of 1.6% per year (from 178 megatonnes (Mt) to 200 Mt), while total GHG emissions grew at a rate of 0.6% per year, from 717 Mt to 747 Mt. Freight activity (as measured by tonne kilometres) increased on average by 2.7% per year from 2000 to 2007. But we are starting to turn the corner. Improvements in efficiency are helping mitigate the impact of the growth on GHG emissions – freight-related emissions grew by only 2.4% on average during the same period. And the transport industry has made significant breakthroughs in reducing air pollution emissions, such as fine particulate matter, sulphur oxides, nitrogen oxides and volatile organic compounds. Despite these improvements, however, the industry’s high contribution to GHG emissions means transportation can’t escape

the attention of legislators looking to create a greener future. But, as we have maintained since we started publishing our Green to Gold series, a greener future doesn’t have to mean a less profitable one. In many instances, the investments made in greener technologies and transportation practices are paying off in reduced costs. And high standards in fuel efficiency are increasingly becoming central to the carrier selection process of large shippers. It’s with this reality in mind that we produce our fourth annual Green to Gold supplement on sustainable transportation practices. In addition, we have more information available online at trucknews.com and look for our upcoming webinars on green transportation practices. Our goal is to inform fleet managers about the latest technologies and strategies being used to reduce not only the carbon footprint of the nation’s fleets, but their operating costs as well. After all, for green projects to succeed, they must be based on sound business strategies. And, once again, we profile the efforts of executives and managers who are pioneering sustainable transportation practices. As their experiences clearly indicate, if you take the time to do it right, you can turn green into gold. MT

Lou Smyrlis Editorial Director

ecoENERGY for Fleets (FleetSmart) introduces fleets to energy-efficient practices that can reduce fuel consumption. This program offers free practical advice on how energy-efficient vehicles and business practices can reduce fleet operating costs, improve productivity and increase your competitiveness. Visit: www.fleetsmart.gc.ca

SEPTEMBER/OCTOBER 2010

here come the electrics Is it time to get in the loop? Industry pioneers share their results to date By Harry Rudolfs

ottlieb Daimler and Karl Benz are credited with introducing the first internal combustion vehicle in 1886. But Canadians were initially more interested in battery-powered trucks. In 1898, mercantile visionary Robert Simpson of Toronto, bought an electric delivery wagon manufactured by Fischer Equipment of Chicago. The second truck in Canada was also an electric purchased by the Parker Dye Works of Toronto. It was even made here by the Still Motor Company on nearby Yonge Street. For decades, auto and truck manufacturers were undecided about which energy source to use. They experimented with electric, steam and gas powered engines, and we all know who won the race. Until now. ON THE FAST TRACK: Loblaws’ Peterbilt hybrid comes with a complete aero package What goes around comes and our test driver found it to be quick and responsive with its power channeled through around and electric technology is an Eaton Ultra-Shift automatic. back with a vengeance. Although North America lags behind Europe in this field, two all-electric trucks are current- to provide LNG and CNG options for custo- Purolator’s Hybridization Experience ly in limited production on this continent: the mers, while work goes on with the more Purolator Courier jumped into HEVs in 2005 eStar made by Navistar in Wakarusa, Ind., and experimental hydrogen fuel cell and hydrau- when it placed an order for 115 series dieselelectric curbside vans. Today, they have 204 the Smith Electric’s Newton assembled in lic hybrid technologies. These units are expensive but expected to curbside Class 4 P&D trucks in operation Kansas City, Mo. Diesel-electric medium- and heavy-duty come down in price, and some offsetting across Canada. They’ve also field-tested a hybrids are becoming increasingly popular government grants are available for “gree- 4300 series International diesel-electric with Class 6 and 7 customers. Navistar has ning” fleets. But urban and regional truck fle- DuraStar five-tonne and experimented with a the longest track record with its DuraStar ets, both P&D or vocational, are considered to hydrogen fuel cell vehicle. Utilizing a Ford chassis and hybrid technomodel, while other OEMs are active with their be an exponential growth area for electric and logy supplied by Azure Dynamics, the curbside own platforms. OEMs are also looking hybrid technologies.

MOTORTRUCK

hybrids have paid off big time, according to national fleet manager Serge Viola. “We’re realizing about 25-30% fuel savings on the trucks. As far as maintenance goes, it’s about the same. We service the trucks right at the depots. This has involved some training for the mechanics, and we’ve had to get them laptops and the tools they need to do the servicing.” Viola can show that brake replacement and servicing has been reduced because of the regenerative braking system that recharges the Nickel Cadmium batteries. The NiCad batteries will eventually be replaced with Lithium Ion cells according to Viola. “Better battery, longer range,” he says. It’s interesting to note the evolution of Purolator’s curbside hybrids from series powered diesel-electrics to parallel gas-electrics. “Initially, Azure had based their product on the Series HEV vehicle, thinking this was the way to go for full fuel efficiency,” says Viola. “Later, as the Parallel system evolved and a need for longer on highway range was required, the Parallel system was the better alternative for our needs. It also provided a backup in case the hybrid system failed during the day.” Viola also makes the point that gas-powered hybrids are the way to go at present because the stripped Ford chassis only comes with a petrol engine. “We really had no choice unless we moved to a more expensive chassis (which) would’ve made the business case worse. Plus, we really don’t require a heavier chassis for what we carry. The first series from Azure actually took a Ford European 2.4 L diesel from Europe and switched the engines in the truck. That engine does not meet North American Emission standards so we couldn’t do that anymore. “With 2010 emissions (SCR or Enhanced EGR), diesel engines packages are getting very expensive as compared to gas engines,” says Viola. “Also fuel economy on gas engines

and engine longevity is improving in this class of vehicle (Class 4). You see more fleets dropping the diesel in that class of truck.” Smith Electric Trucks now in Canada Smith Electric Vehicles has a long history of truck manufacture in Europe, but is new to North America. A $32 million grant from the Obama administration certainly kick-started their Kansas City plant to start churning out the first 200 Newton models. Two Canadian companies are the recipients of the first SEVs in Canada: Frito Lay has bought six of these trucks and Novex Courier of Vancouver has two units running around BC’s lower mainland. Frito Lay route driver Jay McAughey was ecstatic about the truck after three days on the road. His route takes him 72 km from the depot and he arrives back in the yard with 20% charge to spare. None of his route is freeway driving, but he admits to a top speed of 95 kph on Derry Road. “You can feel the battery regenerating when you let up on the throttle.” After a day’s work, it takes from six to eight hours to recharge the lithium ion iron phosphate battery packs. A 220V plug is located just under the driver’s door. I drove the Smith around the block on a very hot day in Brampton, Ont. The Czechbuilt body provides extremely good sight lines and an amazing turning radius. Its bubble-like canopy reminds me of a White 3000 from the 1950s. This is a Class 5 or 6 vehicle with a 7,000 kg GVW and a 17-ft box. No transmission, just a joy stick that has three positions: forward, reverse or neutral. The 120 kW induction motor sends power directly to the drive wheels. There’s room for three people in the cab with a bench passenger seat, but it seats only two comfortably. The truck is peppy on acceleration and has lots of torque at low speeds,

but a lot less at the top end. The Smith ran almost noiseless, a subtle whirring on acceleration, except for cooling fans that stayed on constantly. It will be interesting to see how these units respond to extreme cold weather. Smaller motors located at the front of the chassis drive the power steering and air compressor (the current package only comes with air brakes so drivers will need to get an air brake endorsement). The Newton also comes with air conditioning as an option, but this seems like an unnecessary drag on the power supply. Make no mistake, these trucks are expensive, $170,000-200,000-plus, depending on the number of battery packs you buy. But Helmi Ansari, Frito Lay’s operations analyst and sustainability leader, expects to keep the trucks for 10 years and maybe 15, during which time he anticipates saving $8,000-9,000 per unit on fuel per year (at $1/litre). Correspondingly, he estimates hydro costs to be somewhere around $400-600 per year. “The power train should long outlast the body,” he says. Bryan Hansel, CEO of Smith Electric Vehicles US, thinks that the price of the vehicles will come down as production ramps up (they’ve currently delivered 55 of the first 200 trucks in the initial run). He also expects the price of batteries to halve every 18 months. “Almost no maintenance, no oil changes, we feel we can justify the 10-year plan,” he says. PHETT: the world’s greenest shunt truck Shunting might be the best application for regenerative braking: lots of stops in an intense duty cycle. Capacity of Longview, Texas has seized on the idea and produced an electric shunt truck that meets all the criteria of its diesel counterparts, and even outperforms them in certain ways. These trucks are more expensive than the standard shunt truck, but corporations with busy docking operations SEPTEMBER/OCTOBER 2010

ith s from Sm ese truck e th f th o t a ix s d d te rs loca urchase to p o s m a r h y lle a a . Sm : Frito L noiseless pressor. LECTRIC n almost d air com n ru FULLY E a y e g h n T ri . e r ste ehicles the powe Electric V ssis drive a h c e th f front o

are looking for ways to mitigate their carbon footprint and reduce fuel costs. According to George Cobham Jr., vice-president of sales for Capacity/Great Dane in Mississauga, Ont., some companies are asking for bids on electric shunts in their equipment tenders. From a driver’s perspective, there appears to be even more room in the cab. What I like about it is that the instrumentation is almost indistinguishable from a run-of-the-mill Capacity or Ottawa truck – controls, switches and buttons in about the same place. An experienced hydraulic driver can get in one and start shunting with only a little training. This is a true electric; the bad boy Baldor 225 hp motor can put out 12,000 ft-lb of torque, which means it’s very quick in the yard. Power is transmitted directly to the massive rear axle, which is a Sisu planetary axle rated for 70,000 lbs. I particularly liked the high speed button on the boom lever. The shift lever is again a simple three-position joystick. Other than a gauge showing the state of charge, the instrument layout is pretty well identical to Capacity’s Trailer Jockey models. The industrial Onan diesel generator never kicked in during my test run as there was lots of electricity to spare for a couple of hours of operation. The diesel generator only puts out 40 hp and charges up the battery when it drops below half-charge, burning half the fuel that a diesel shunt would use. “Shunting comes in bursts of activity,” says Cobham. “And some of our customers will never hear the diesel start up. After completing his shunts, the driver plugs the truck into the outlet and the batteries recharge that way.” The 40 hp diesel generator is rated industrial, so there’s no need for an expensive steelplated stack with sensors. The muffler hangs below the chassis and has no pollution controls or fetters. The ride is solid, though a little “tankish,” as the PHETT sits on a rigid frame weighing an

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extra 4,000 lbs. It’s unlikely this thing will get stuck much in the winter. The extra weight is distributed equally among 50 batteries located in two packs on both sides of the frame. The wheelbase is slightly longer to accommodate the packs (130”), but Capacity has compensated by making the front axle spread a little wider and the wheel cut a little steeper. There was no compromise to manoeuvrability that I could tell. Rolling, the PHETT sounds a little like a subway or trolley bus. As mentioned, there was lots of power at the lower end and terrific acceleration. But it tops out at 45 kph and I found that a little slow for a plated on-road truck. I’d like to see 60 kph at least if you’re going to operate in traffic. Maybe an overdrive gear could be inserted somewhere in the drive train for plated units. Capacity’s PHETT comes with air conditioning as an option, something most shunt drivers want and need. A supplemental Webasto heater is mounted behind the driver’s seat with lots of extra BTUs for those challenging Canadian winters. Loblaws testing Peterbilt-Eaton hybrid I wanted to drive the Loblaws “green” tractor ever since it passed me on the 401. The driver told me on the CB radio that he was fourth on the seniority list in Whitby and his name came up to drive it that night. He loved it, of

course: “Lots of acceleration up hills.” A few calls to the Loblaws publicist got me invited to a photo shoot at their Cambridge, Ont. facility where I did get a chance to slip behind the wheel. Wal-Mart has been experimenting with 386 Peterbilt Class 8 hybrids since 2007, but Loblaws is the first Canadian fleet to get one for a field test. The tractor and trailer unit comes with the whole aero package – single tires, roof tabs, trailer skirts – but it’s what’s in the power train that’s really interesting. A 60 hp motor-generator assists the 400 hp Cummins ISX engine on starts and low speed acceleration. During deceleration and braking the motor generator’s two batteries get charged and that power is then used to assist the Cummins on takeoff. The truck was quick and responsive on takeoff – everything you’d expect from a new Pete. Personally, I couldn’t tell when the generator-motor kicked in, but I’m told if you feather the throttle just right, you can back into a dock without even using the diesel. The dash is all standard Peterbilt, with the exception of a digitalized schematic of the wheels and power train showing what the generator and motor are doing. Power is channelled through an Eaton Ultra-Shift automatic; a simple punch pad gets you in gear. “Not much training required,” says Matt Preston, Canadian fleet sales manager for

READY TO CO MPETE: Shuntin g might be the application for re best generative brakin g as they include of stops in an inte lots nse duty cycle. Ca pacity of Longvie Texas has seized w, on the idea and produc ed an electric shunt tru ck that meets all the cr iteria of its diesel counte rparts, and even outp erforms them in certain wa ys.

Peterbilt. “More on safety training as the system is 340 volts.” Wal-Mart has been testing these units in their line-haul operation, which would account for limited fuel savings when running the highway. But Loblaws’ focus will be on using this truck in its urban and regional delivery system. Delivery to food stores is often done in congested urban and suburban areas with lots of frequent stops. The hybrid components weigh an extra 400 lbs, but fuel savings of 8-10% might be expected in a typical line-haul operation, perhaps more in a multi-drop operation. Wayne Scott, senior director truck maintenance for Loblaws Companies Ltd., thinks it’s too early to make cost comparisons on the feasibility of incorporating hybrids into their fleet, but he’s happy with the trials so far: He writes via e-mail: “The pilot of the hybrid project is going very well. We are getting positive feedback from our drivers...It has been operating to the same standard as our traditional Class 8 trucks.” Loblaws has set a target of 2% fuel reduction over 2009 levels and Scott has adopted a variety of tactics to get there: “This includes the use of biodiesel, reduced idling, replacing older transport trucks with new trucks that adhere to the latest emissions standards and potentially integrating trucks that run on hybrid technology into our corporate fleet.” Meanwhile, work goes on at Peterbilt in refining the concept even further. According to Preston, “Peterbilt along with Eaton are working on a generation 2 hybrid for a Class 8 hybrid that will be equipped with a larger motor generator to try to prolong the electric assistance.” Making the case for the environment Presenting the business case for adopting alternative technologies to a fleet can be a

daunting task. The high price of these units means that the payoff is years down the road. But environmental concerns have become the third most important variable in any fleet operation after price and service. Companies across the spectrum have made it part of their mission statement to operate sustainably and responsibly, and this carries over into trucking operations. Furthermore, as has been shown, substantial fuel savings can be had by going this route. Ken Johnston, president of Novex Couriers of Surrey, B.C., owner of two Smith electrics as mentioned above, has made it part of his company’s mandate to move all freight by hybrid or better by 2015. He laughs and tells me on the phone he’s 20% of the way there. Fleets that are going “green” are quite happy to boast about their equipment. They can use their state-of-the-art technology to advertise and develop new markets. “We’ve walked the walk over the years and a lot of our partners like what we’re doing,” says Johnston. “They want to do something sustainable, and they want to know what we’re doing and how we’re doing it.” MT

Harry Rudolfs is the rare combination of a journalist and trucker. He has logged more than a million miles, and this insight allows him to tackle the issues truckers love to talk about – and, occasionally, a few they don’t. SEPTEMBER/OCTOBER 2010

the long term view Why Quebec carrier Groupe Robert is making a major investment in LNG-fuelled trucks By Carroll McCormick

eeking to take advantage of a reduction in greenhouse gas emissions (GHG) of between 25 and 30% compared to diesel, Groupe Robert is completing negotiations for an order of more than 50 liquid natural gas-fueled (LNG) tractors manufactured by Vancouver-based Westport Innovations. Equipped with GX 2010 15l engines, the tractors will include two engine displacements: 400 hp/1,450 ft-lbs and 450 hp/1,650 ft-lbs. Groupe Robert has not yet chosen the tractor manufacturer. “It is important to have technologies that

have a good marriage between economical operations and good environment,” says Daniel St-Germain, vice-president of asset management for Groupe Robert. The fuel savings are said to be around 25-30% compared to diesel. (S&T)2 Consultants used GHGenius 3.15 – Natural Resources Canada’s lifecycle emission model for transportation – to compare GHG emissions for LNG and diesel at five stages of handling: extraction, processing, fueling, transportation and storage, and emissions at end use. A 25%-plus difference was calculated specifically for Quebec.

The Quebec government provided important impetus in its 2010-2011 budget for the carrier’s move to adopt LNG technology. First, the capital cost allowance (CCA) for new trucks or tractors designed for hauling freight has been raised from 40% to 60%. As well, Revenue Quebec will allow taxpayers to deduct an additional 85% of the 60% CCA if the vehicles are fuelled by LNG. “Without the added depreciation, I don’t think the project could work,” says St-Germain. “As it is, it will take about six years to break even on the project.” Maintenance costs

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will also be higher than with diesel engines. “In our opinion, it will cost 20% more to operate these trucks for eight to 10 years,” St-Germain explains. The carrier is taking the long view with the adoption of LNG. “There is a big possibility that LNG prices will be more stable than diesel in North America. It also means less dependence on Organization of the Petroleum Exporting Countries and Middle East fuel sources,” St-Germain says. Groupe Robert, a vigorous supporter and adopter of energy savings technologies such as aerodynamic equipment, has its eye firmly on what is the new Holy Grail of trucking: the interprovincial operation of long combination vehicles (LCV). This combination of two 53-ft trailers is a well-established configuration in Quebec, but is new in Ontario, New Brunswick and Nova Scotia.

“Think of the greenhouse gasses we could save with an LNG/LCV combination. Normally, we run two tractors and trailers between Montreal and Toronto. We will do the trip with LCVs, hauled by trucks powered by LNG. This will allow us to reap important fuel savings and make a big reduction in greenhouse gasses. I dream of running 25 LCVs with LNG tractors,” St-Germain reveals. Groupe Robert has entered into a partnership with Gaz Metro. Details of the partnership have not been made public yet, but Gaz Metro, which distributes 97% of all natural gas products in Quebec, makes and stores two billion cubic feet of LNG a year at its liquification plant in east Montreal. It converts the LNG gas as needed to compressed natural gas and shoots it into its distribution system to 180,000 customers. Westport is the other partner in Groupe

Robert’s venture. “We are very actively engaged with [Groupe Robert president] Claude Robert to help build out the corridor that will help this program,” says Nicholas Sonntag, executive vice-president of new markets development, and president of Westport Asia for Westport Innovations. On July 6, Westport announced that the US Environmental Protection Agency (EPA) had certified the GX to 2010 emissions compliance. Sonntag explains the basics of its engine and how it works: “The engine is branded as a Westport engine. It is manufactured by Cummins without the diesel component. Westport carries the warrantee and we are the manufacturer of record. The engine provides the same performance as the diesel engine. “The LNG is pumped out of the cryogenic tanks and vaporized and warmed to about 100° F and 4,500 psi (40º C and 30 MPa). Since the Continued on page 34

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Enhancing Energy Coconut shells, lithium batteries and accumulators all playing a role in energy storage By John G. Smith

ho would have ever believed that Gilligan’s Island could teach us lessons in engineering? The “professor” on the 1960s sitcom seemed to use coconuts to build everything shy of a boat for his fellow castaways. Now modern engineers are using coconut shells to create ultracapacitors, which are expected to play a key role in the development of energy storage systems for hybrid vehicles. It is no garden-variety coconut shell, says

MOTORTRUCK

Brendan Andrews of Maxwell Technologies, which makes energy storage and power delivery systems. Most of those with the required characteristics are harvested in an area close to the equator, generating activated carbon that is eventually rolled and formed into sheets. “We put it into modules, and these modules have the higher energy density and the higher voltages,” he says, referring to the canshaped ultracapacitors that are anywhere

from two inches in diameter to the size of a Coke can. While a battery is used to store energy and can offer long-term voltage stability, an ultracapacitor can support short-term bursts of high power that are needed for tasks such as starting a vehicle or operating the tools on a utility truck. Think of the flow of energy like water escaping from a bucket. If you had a traditional battery, the water would escape from a hole as big as a nail. In a system that

incorporates an ultracapacitor, the water could escape through a hole as wide as a basketball. They are components that will be particularly important in the evolution of heavy-duty hybrid vehicles. An electric car may deal with 30 starts and stops per charge, but its heavyduty counterpart will need to do that 750 times. And while a car may need 30 kW of peak power, a transit bus might need 200kW. Refuse vehicles present a perfect application for ultracapacitors, says Rob Delcore, ISE Corporation’s director of business development, energy storage systems. The components’ high discharge rate makes it possible to launch away from a curb more quickly, without generating as much heat as a device that offers more resistance. “If your application requires a huge amount of power, ultracapacitors are it,” he says. “You can almost think of an ultracapacitor as something that can accept a lightning bolt,” Delcore adds, referring to the high charging rate. And while a lead battery can typically offer 3,000 load cycles, an ultracapacitor can be discharged millions of times. Systems that blend batteries and ultracapacitors will extend the life of the batteries that like to be discharged gradually, and allow for energy storage systems to be downsized. “It’s a really exciting concept,” he says. These components are hardly the tools of Star Trek. “This is proven technology,” Andrews says. The ultracapacitors are already being used to increase the cranking power of more than 1,000 buses in service in Asia, the US and Europe. He also referred to the prototype of a 16.2-volt truck starter system has been able to start a 12-litre diesel engine six times on a single charge.

If anything, the ultracapacitors will be crucial to increasing the life of lithium ion batteries that the US Secretary of Energy has suggested will be vital to the future of hybrid vehicles. The use of lithium batteries will be growing substantially with the introduction of vehicles like the Chevy Volt, says Kevin Snow, chief engineer for hydraulic application development at Eaton. But significant improvements in power density are probably at least eight years away. Unlike lead acid batteries, the resulting hybrid technologies will need to be part of a larger system that is fully integrated into the chassis, Snow adds. While lithium ion batteries can be safe, their temperatures need to be controlled to protect performance and the life of the battery itself. As energy storage needs increase, ultracapacitor modules might best be ganged together in a junction box that contains everything from relays to fuses and sensors. Still, batteries are not the only tools being used to store energy in hybrid vehicles. Another form of hybrid technology has come in the form of accumulators that have been incorporated into refuse trucks and delivery vehicles used by UPS and FedEx. Accumulators come in a variety of forms. Some store the energy from a battery, hydraulic accumulators store the potential energy in a fluid, and hydropneumatic designs store energy in the form of compressed gas within a fluid container such as a piston or bladder. Pressurized accumulators made of composite materials were first used in NASA’s rocket casings, and moved into commercial applications as an option when making storage tanks for compressed natural gas,

says Rafeal Toledo, an applications engineer with Parker Hannifin’s hydraulic accumulator division. It is the type of advancement that supports the use of accumulators in the weight-conscious environment of a vehicle. Parker Hannifin’s Runwise system weighs 20% as much as a steel counterpart, can be stored in tighter spaces, and resists corrosion. A 20 US gallon composite model – seen as a typical size for a one-way system – weighs 250 lbs, compared to a 25 US gallon steel version that weighs 1,250 lbs. It can also be charged and dissipated very quickly. An added advantage is that hydropneumatic accumulator bladders can be easily repaired. But they do require care. The high pressures in most applications will require some attention to sizing and handling. For example, those working with bladder-style versions need to add the first 50 psi slowly until the bladder expands within the shell. “These systems are out there today,” adds Guy Rini, chairman of the Technology and Maintenance Council task force looking at hybrid technologies. Three Tier 1 suppliers are working with hybrid hydraulic systems while there are more than a dozen working with hybrid electric systems. “On the capacitor, side I know of three systems that are on the road,” he adds. With all the energy being directed into hybrid vehicle development, there are likely more to come. MT John G. Smith is Motortruck’s technical correspondent, providing coverage of equipment-related issues. He is the former editor of sister publications Truck News and Truck West and is the author of Big Rigs: In for the Long Haul. SEPTEMBER/OCTOBER 2010

all wrapped up How a revolution in packaging could lead to significant savings – especially in freight costs By Julia Kuzeljevich

ackaging optimization is an area of the supply chain that has long received too little attention. But its benefits are becoming more and more known, not only to consumers fed up with extra garbage, but to the transportation industry too. Jack Ampuja, president of Supply Chain Optimizers and a lecturer at Niagara University, said the process of packaging optimization actually started in Toronto back in 1985, originally focusing in on consumer product goods firms. “Initial attempts to take out packaging costs drove freight savings of several millions of dollars a year, and that’s the connection to trucking,” said Ampuja at the recent Profitability Workshop, hosted jointly by Motortruck Fleet Executive and Dan Goodwill and Associates. Packaging optimization has experienced a recent migration to inbound private label and retail ready packaging, he noted. “The basic premise is that the shipping case or bag is the lowest echelon building block in the supply chain, with impacts on handling, storage, freight, and damage, all of which have financial and environmental components,” said Ampuja. There’s long been a misdirected focus on packaging in many firms, as it’s a task usually seen as a marketing or engineering process, and therefore assigned to the marketing department by consumer goods products companies, or to the engineering department by industrial firms. Optimization, he said, considers a more holistic supply chain, and is an opportunity that comes from understanding the total packaging, warehousing, and transportation effect on cost and sustainability. “The major dollars are in the logistics budget. Yet the typical firm is focused on packaging without considering the total system

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impact,” noted Ampuja. But optimization of packaging can impact the overall supply chain more than 10%, warehousing 20%, and freight about 60%. “Yet most clients are focused on driving down packaging without knowing the full impact…saving nickels by spending quarters and hurting sustainability,” said Ampuja. Density is the number one cost factor in LTL and small package transport. Essentially, it’s more costly to ship 100 lbs of feathers versus 100 lbs of steel, noted Ampuja. So small package carriers now use dimensional weight on domestic ground shipments, and he said the US LTL industry is moving in that direction too. “All LTL shipments to and from the US have to comply with NMFC (National Motor Freight Traffic Association) regulations which have 150 pages of packaging rules that impact freight cost,” said Ampuja. Today, with many clients wanting to document the impact on sustainability, and having to report to shareholders and consumers, efforts towards optimizing packaging as a supply chain management tool fall in line with the goal of increasing performance while reducing costs. “But do not invite your carriers in and pound them for 20%...you’ve got to look at other ways to optimize,” he said. In 2006, Wal-Mart announced an initiative, under CEO and logistician Lee Scott, which aimed at increasing efficiency with an added environmental benefit. The company’s top suppliers were asked to reduce packaging by 5%. Some 60,000 other suppliers started on the initiative in February 2007, at a projected savings in of $10 billion in 2008: $3.5 billion to Wal-Mart and $6.5 billion to suppliers, noted Ampuja, who said the “real opportunity” is closer to $20 billion. Even something seemingly as innocuous

as packaging that sits in storage can be a sustainability and cost issue. At zero days in storage, Ampuja pointed out, in normal ambient temperature space, corrugated packaging retains its full strength. At one to four days’ storage, it’s already down to about 70% strength, and loses half its strength at 1,000 days. “If a product sits for a year, shouldn’t it have a different box from one that sits for a week?” he said. The impact of humidity is perhaps more obvious, but no less serious. At 45% relative humidity, a box’s strength is about 110%, and at 100% humidity it is down to 50%, Ampuja pointed out. “The frozen potato industry beefs up its boxes to meet higher humidity and switches over throughout the year,” he said. Building an economical and efficient box, he said, is best determined by a ratio of Length 2 – Width 1 – Depth 2. “There are more than 10 different ways to construct a box….each impacts the cost differently,” he said. Ampuja said that packaging optimization continues to be an excellent opportunity for supply chain efficiency and sustainability improvement. “The real financial and environmental benefit is in freight, with a typical cost reduction opportunity of 10% for manufacturers and inbound, and 15% for pick-pack companies. Adapting to change is the biggest obstacle,” he said. MT

Features editor Julia Kuzeljevich has been writing about transportation issues for more than a decade. Her meticulously researched articles have garnered transportation writing and Canadian Business Press Awards.

tough talk on fuel efficiency Fuel surcharges have become almost universal in trucking. But shippers appear ready to get much more demanding on fuel efficiency. Read what three respected shippers had to say at our recent Profitability Workshop, conducted in partnership with Dan Goodwill & Associates.

Allan Kelly, director, distribution and supply chain analysis, Casco Inc.

Laurie Stapley, transportation analyst, Fisher Scientific

Robert Wiebe, senior vice-president, transportation and logistics, Loblaw Companies

MT: I think the only thing that we can accurately predict about fuel pricing is that it is going to be volatile. When you look ahead with your own supply chain budgets, how do you factor that in? Where do you expect fuel pricing to go, and how are you preparing yourself for it? Stapley: I feel it is important to work into your motor carrier agreement a discount. Fuel fluctuates and it can really throw your budget out of whack, so work in a discount of the fuel surcharge. When carriers come asking for a fuel surcharge increase or tell you that it is going to increase, I will go back and challenge the carrier to update me on what the company is doing to minimize fuel consumption. As a shipper, in the past few years I just felt like the carriers were just passing on the fuel to the shipper. Come to me with some sustainable solutions that your company is doing to minimize fuel consumption.

asking for those kind of things? Kelly: We are definitely asking for it because our customers are asking for it. They are asking what we as a supplier are doing to decrease the footprint, and what we are doing with our vendors. I have received letters from our major carriers that this is the shopping list of things that they are doing to reduce energy and improve the environment. That is becoming a very common practice right now. We have already moved in that direction going from a percentage to a mileage rate basis. The sophistication in trucks now is you know at the end of your trip how much fuel you have used, and it is actually going to drill down to, “Okay, if you used $139 worth of fuel, then that is fuel on which I will pay the surcharge, and you show me the documentation to do that.” We are not there yet, but in the United States that is the way we are going.

MT: As Laurie mentioned, there was concern in the past that what was happening with fuel pricing was that it was just getting passed on to the shippers, although I believe it had to be because the costs were enormous for a trucking company or any carrier to sustain. However, do you see shippers being more sensitive to that issue this time around in terms of demanding that carriers invest in more aerodynamic trucks in their fleet or training drivers better to maximize fuel economy, as Laurie suggests? Are you seeing yourselves getting more sophisticated in

MT: How critical do you see fuel efficiency being in your overall criteria when selecting a carrier? One of the complaints that we have heard from carriers is that they have invested all of this money in better training their staff and in more aerodynamic designs, and yet at the end of the day shippers do not seem to make that an issue. Do you see that changing? Do you see yourself making a decision whereby you say this particular trucking or courier company is not fuel-efficient enough, so you are willing to part ways with them and choose someone else who is?

Wiebe: Certainly from Loblaws’ perspective, when we ran the national tender last year, we asked each carrier to fill out a green survey, and we have now established a carrier advisory committee to come and meet quarterly with us to decide what our next steps are in terms of implementing solid benchmarks for carriers to meet. If they do not, there are penalties that at some point would see potentially a carrier losing that business. It certainly is a big issue on the cost side, but more on the green side. That becomes, obviously, a larger and larger conversation, especially for large retailers. We have got a corporate compliance committee that we have never had before in Loblaws, and obviously you have seen a lot of our president’s commercials; he is very much in favour of the green program. So that becomes a very large conversation issue, and it becomes a big issue with us in terms of our RFPs, and we will certainly begin implementing standards that carriers are going to have to meet if they want to haul for us. We will have to put it back in terms of what that is going to mean from a cost perspective. I always want to understand where a carrier is at, and what we are doing to be greener and reduce our carbon footprint, but I also have to have a mechanism when people pay bills that is going to work for us, and that people are going to be able to pay them on a consistent basis, and that the carriers understand that they are going to get paid on a consistent basis. MT SEPTEMBER/OCTOBER 2010

Groupe Robert – continued from page 29 natural gas will not ignite with compression, we add diesel [averaging about 3%, according to Groupe Robert] to the natural gas as an injection fuel. We call it a liquid spark plug. Ours is the only engine with compression ignition with direct injection.” On a purely product support basis, Westport will provide driver and technician training. Driver training takes about a half hour, and no special licence is required to fuel trucks. They learn to look for gas leaks and to check valves on the inside of the LNG tanks. They learn to fuel the tractors, which is as quick or even quicker than fueling up with diesel. Inside the cab, they learn to read a display monitor that shows the LNG tank level and which shows any messages the system might have for the driver, such as lot fuel level. For technicians, Konrad Komeniecki, customer care manager for Westport says, “We have designed a three-and-a-half to four-day course where technicians learn proper work procedure and everything about our system and subsystems. A second part of our course focuses on electronic tools.” St-Germain comments: “Westport will come to Groupe Robert to train our technicians. We have to modify a special bay to work on LNG. We cannot work on these trucks in a regular bay. We need spark-proof electrical outlets and other things.” As a training run for the delivery of the fleet of LNG tractors, this year Groupe Robert purchased a Kenworth with a Cummins GX engine; a modified ISX diesel engine. It is the first LNG truck ever in Quebec. “We

want to use it to validate its performance and [have a chance to] deal with any emerging technical issues. We also want to use it to train the technicians. They need to become familiar and comfortable with it,” St-Germain explains. “We also plan on taking delivery of a pilot prototype – a day cab and sleeper – to make sure everything is perfect before we place the final order.” With a second LNG fueling station to be built in Mississauga (the first one will be built at Groupe Robert in Quebec), the first goal is to cover the Quebec-Toronto corridor, but also to do regional work in the Montreal area. “The truck will not be used for city work. In our opinion, we would lose money running LNG in the city. Five to six miles per gallon and a lot of mileage is economical at the current state of the LNG option,” St-Germain says. Some of the trucks will be used to haul B-trains. The round trips that are planned can be done on one fill-up, as each truck carries two 120-gallon cryogenic tanks, which give a range of about 1,000 kilometres. Having a fueling station will give Groupe Robert the option to consider compressed natural gas-fuelled vehicles for local deliveries. For now, however, the focus is on developing the routes for the new fleet of LNG trucks. “We would like to be clear to drive the Quebec-Toronto corridor. This is our first goal,” St-Germain says. Within five years, St-Germain predicts that there will be more LNG fueling stations at truck stops between Quebec and Toronto. “We want other carriers to do this too. Claude Robert is an industry thinker. He is convinced that LNG is good for other people, industry and citizens.” MT

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Smarttalk for Urban fleetS with fleetSmart’S SmartDriver in the City For long-haul highway trucks, forestry trucks, transit buses, motor coaches or school buses, SmartDriver workshops have been available to deliver sound advice to drivers about saving fuel, while reducing their environmental footprint. As FleetSmart expands the scope of its activities, urban fleet drivers of both light-duty (eg. cars, pick-up trucks, small vans) and medium-duty (eg. cube vans, day cabs) vehicles have been identified as another group that can benefit from SmartDriver training. The result is SmartDriver in the City, which has adapted the existing workshop formats to meet the particular needs of this audience. With the dedicated assistance of a diverse volunteercommittee from the urban transportation community, SmartDriver in the City shares the key points of information from other SmartDriver workshops with additions that are solely applicable to the urban fleet fleet vehicle mix. The significant change is the adaptability of the workshop to meet the specific needs of the drivers, as the information has been packaged into 10-minute segments (tail-gate talks) on a given topic. These “SmartTalks” allow the workshop to be delivered over many shorter segments within regular driver meetings, incorporated into existing training programs or assembled together for longer stand-alone sessions. In fact, certain SmartTalks are specifically designated for light-duty drivers and others for medium-duty drivers. As with all of the SmartDriver workshops, the intent of SmartDriver in the City is to help companies lower their fuel bills, reduce wear and tear on vehicle components, augment the skills of the drivers which can lower the accident risk, and finally, improve their company image by helping to ensure a cleaner, healthier environment. In order to do this the various SmartTalk modules cover a wide range of topics including:

• • • • • • •

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

All SmartDriver in the City training material is easy to reproduce using the the CD-ROM included in the instructor’s manual. In addition, posters are also made available which can be used to reinforce ideas delivered in each SmartTalk. Finally, certificates of participation are available for individual modules, with full-page certificates and wallet cards for those complete all SmartTalks relevant to their fleet. Although fleet managers can spec their equipment for fuel efficiency, without proper driver training, their time, effort and money are not optimized. SmartDriver in the City provides this necessary training, so that we can all win by saving money and helping the environment. For more information on energy-saving opportunities for urban fleets, contact:

ecoEnergy for Fleets (FleetSmart) Office of Energy Efficiency Natural Resources Canada 885 Meadowlands Drive Ottawa, ON K1A 0E4 Fax: 613-960-7340 E-mail: fleetsmart@nrcan.gc.ca

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Michelin North America (Canada) Inc. is Canada’s largest manufacturing employer in the tire industry. In all, over 3,700 people work in its three Nova Scotia manufacturing plants and at its head office in Laval, Quebec. Michelin was founded in Canada in 1941, and in 2011 the company will celebrate 40 years of manufacturing operations in eastern Canada. Michelin produces tires for both individual and commercial customers nationwide. As a testament to Michelin reliability, the public transit vehicles in several major Canadian cities, including Montreal, Quebec City, Regina, Winnipeg and Vancouver, are equipped with Michelin tires. From coast to coast, on two wheels or four, Michelin is without a doubt a better way forward. Michelin is pleased to have the opportunity and proud to be the Founding Sponsor of Transportation Media’s 2010 Driver Satisfaction Survey. The North American economy runs on trucks and understanding the driver’s view is a key to making sure trucking is safe, effective and efficient for everyone. Driven by a constant will to innovate, we are proud to help provide a long-term response to issues pertaining to mobility.

FROM THE SUPPORTING PARTNER

Our Industry, Your Council! The Canadian Trucking Human Resources Council (CTHRC) works with employers, educators, labour and organizations who are committed to improving the professionalism and sustainability of Canada's trucking industry. Together, we are developing and delivering the products and programs that are dedicated to meeting these important needs. This support is available at a critical time. Although the recent recession offered a temporary reprieve from human resource challenges such as driver shortages, these issues are expected to return as the economy recovers. Between now and 2015, Canada’ trucking industry will need to hire another 27,100 drivers, 2,647 truck/transport mechanics, 3,633 cargo workers and 1,993 dispatchers. The council is dedicated to addressing Human Resource issues like these and helping to alleviate the pressures of labour shortages to come. We are very pleased to have the opportunity once again to be the Supporting Partner for the Motortruck Fleet Executive 2010 Driver Satisfaction Survey. We strongly believe that you cannot get to where you are going without understanding where you are and that includes knowledge of professional drivers.

Sometimes the most pleasant of surprises come during the most dire of circumstances. When we wrote last year that human resource management in 2010 would not be for the faint of heart, we were in the midst of the worst recession of the post-War era. We knew that all the nasty things that come with recessions – slumping revenues that necessitate cutbacks and make decent wage increases impossible, layoffs, relying on older equipment, changes in management, etc. – make for uncertainty and job stress that wreak havoc on employee morale. Heading into this year’s Driver Satisfaction Survey, our fifth annual attempt to get inside the heads of the men and women behind the wheel of our nation’s fleets, we were, frankly, bracing for the worst, but hoping for the best. Trucking was bruised and battered by this recession like never before and many tough choices had to be made.And these choices were often made against a background of already slumping job satisfaction. Yet, as you will read over the next few pages of highlights from our fifth annual Driver Satisfaction Survey, conducted in partnership with Canadian Trucking Human Resources Council, we were pleasantly surprised. How did our driver relations endure the hardships of cutbacks, wage freezes and layoffs? Are our drivers still feeling engaged and enthused to tackle the distinct challenges of a career behind the wheel? As managers, do we know how to attract them, motivate them and retain them? We want to play an important role in helping you find answers to those questions. For the fifth straight year, our research arm, Transportation Media Research, spent several months surveying company drivers and owner/operators across the country – through e-mail and at industry shows. We wanted to know how satisfied they are in their jobs, which parts of their job provide them with the most satisfaction and which the least? We wanted to get to the heart of critical questions such as which parts of their job drivers most strongly feel should be recognized and rewarded, which areas they want to receive more training, and the relative importance they attach to having a say in a range of management decisions. Our research also looked at what would make them choose one employer over another when looking for a new job. Research of this scope and breadth is a considerable annual undertaking and would not have been possible without the help and support of our founding sponsor, Michelin North America (Canada) Inc. and our supporting partner, the Canadian Trucking Human Resources Council (CTHRC). It speaks to their commitment to this industry that they have chosen to support such research year after year. Our greatest thanks go out to the company drivers and owner/operators across the country who took time out of their very busy schedules to respond to our questionnaire.Thank you for making our research project a success yet again. We hope the results of our survey are considered by both fleet managers and the drivers they employ in the spirit in which our research was intended and conducted: as a good starting point towards better understanding the driver-fleet manager relationship and what is required to make it most effective. We also believe that good research is meant to evolve over time and so we ask for your feedback on our effort and any changes or additions you would like to see made in future years. Lou Smyrlis Editorial Director

Motortruck

SEPTEMBER/OCTOBER 2010

Fleet Executive

DRIVER SATISFACTION SURVEY Page 39

C A N A D A ’ S

For hire fleet: 52%

O/O: 23% Private fleet: 23%

Government fleet: 1%

Geographic Distribution

Western Canada 20%

Eastern Canada 11%

Central Canada 69%

F O R

Are you meeting

their needs?

F L E E T

O W N E R S

sidering themselves neutral on the issue and 23% being unsatisfied. Understanding what drives driver job satisfaction is a key objective of our survey, conducted in partnership once again with CTHRC. Our survey examines how satisfied drivers are regarding 12 different aspects of their job, ranging from pay and recognition to stress and growth opportunities within the company. Recruitment, of course, is the other half of the human resource equation. When drivers are looking for work, what makes one employer stand out over the rest? Our research, once again, looks into that important question examining the factors you need to focus on to attract company drivers and owner/operators. But first, let’s get deeper into the issue of job satisfaction. As noted above, our survey asked participants to assess not only their overall job satisfaction, but also their satisfaction with specific characteristics of their job. With the previous survey, we had noted that the depth to which satisfaction levels had fallen in several areas should be of great concern. For example, of the 12 different job factors we track, only one had a

HUMAN RESOURCES Help struggling sales people recapture their confidence GREEN TRUCKING Can lighter-weight oils offer heavyweight protection?

also lower satisfaction levels as they tend to dominate the extreme ends of the satisfaction spectrum). But even when we isolate company driver responses, job satisfaction this year managed to rise, albeit to a more modest 3.37. Almost half (48%) of company drivers considered themselves satisfied with 29% con-

Distribution by Employer Type Driver Service: 1%

M A G A Z I N E

TECHNOLOGY Why fleets are embracing electronic logbooks

ast year, we were alarmed to find that job satisfaction had dropped to its lowest level since the start of the survey, with the national job satisfaction level calculated at a mere 3.13 out of 5. That’s barely a C grade. Even more alarming was the fact that a full fifth of the drivers and owner/operators in our previous survey considered themselves either “unsatisfied” or “very unsatisfied” in their jobs. It seemed logical to expect things to get worse this year. And yet, they did not. Despite all the adversity the Canadian driver force faced this year, our survey found that not only did their job satisfaction not deteriorate, it actually improved. In fact, it rose to 3.67 out of 5, which is just a touch better than the 3.66 level posted during the first two years of the survey. And this year, 60% marked themselves down as either satisfied or very satisfied and the number of unsatisfied respondents was down to 16%. Part of the reason for the higher score is the fact that a greater proportion of our sample this year included owner/operators (59% compared to 45% the previous year) and they tend to report higher job satisfaction levels (and

B U S I N E S S

Respondent Profile and Survey Methodology Over the course of the past year, company drivers and owner/operators were invited to participate in our fifth annual national Driver Satisfaction Survey in a variety of ways. E-mail invites were sent to a subset of the circulation of Truck News and Truck West. Invitations to participate were also provided at leading industry shows. In total, the responses of more than 200 professional drivers are included in this survey. Forty one percent of our driver sample consisted of company drivers and 59% of owner/operators, which represents a 14% increase in owner/operators from the previous survey. Fifty two percent worked in the for-hire fleet sector; 23% in the private fleet sector; 2% worked in a government fleet or a driver service, and 23% worked for an owner/operator. While 69% were based in Central Canada, the survey included representation across the country. Eleven percent were from Eastern Canada and 20% from Western Canada. The average age for survey respondents was 49, with 23 years of driving experience. During that time our average respondent worked for 5 different companies and has spent the last 9 years with their latest employer. The vast majority of company drivers (92%) drove solo. Pay by the mile/km was the most common form of payment for our survey sample with 40% of drivers reporting that’s how they were paid. Pay by hour (20%) and by trip (16%) were the second most common forms of payment for our survey sample. Other forms of payment included by the hour, by the tonne, and by salary.

Page 40 DRIVER SATISFACTION SURVEY

satisfaction level above 3.50 or, put more simply, was given a B grade. This is what we found this year: • Survey participants gave a B grade or better to four of the 12 characteristics of their job. And whereas last year several areas came awfully close to receiving a failing grade, this year only one job characteristic was graded less than 3 out of 5. That was for training and development, perhaps no surprise considering training budgets are among the first cut when companies are trying to reduce their expenditures.

• Drivers gave their highest satisfaction rating, a 3.78 out of 5 to the people they get to work with on the job. Their next highest score, and particularly heartening, was the 3.68 they gave for being in a job that provides them with a sense of accomplishment. In the previous survey, that had declined to 3.09. It was mentioned earlier that company drivers are not quite as satisfied as are owner/operators, yet company drivers scored these two characteristics of the job higher than the overall survey average. Rounding out the four characteristics given better than a B grade were “respect and fair treat-

Figure 1

Importance of having a say in management decisions (on scale of 1 to 5) Dispatch - 4.02 Maintenance - 4.35 Benefit package - 4.09 Equipment spec’ing - 4.14 Customer service - 4.07 Cost cutting - 4.04 Safety improvements - 4.21 Fuel management - 4.11

ment received from customers,” which was given a 3.59 out of 5 grade and the job’s allowance for “individual thought and action,” which was scored at 3.51. The latter showed a considerable improvement from the 2.97 grade it received last year. • Last survey, several important areas slipped into dangerous territory, slipping uncomfortably close to receiving a failing grade. These included the “amount of pay and benefits,” graded at 2.93 out of 5; the “amount of job security” and the “amount of job training,” both graded even lower at 2.71; the “quality of supervision received on the job,” ranked at 2.86. This year, satisfaction with pay and benefits was graded at 3.33 out of 5. Since it’s highly unlikely that drivers received much of a wage increase, if any, in 2010, the improved satisfaction in this area may be explained by participants being more appreciative of their pay package when seeing their friends forced into pay cuts or be part of layoffs. Company drivers did score this area a bit lower than the survey average, but not by much. Their satisfaction with the quality of supervision they received on the job also improved to 3.44 out of 5 while their satisfaction with the amount of job security they felt improved to 3.27.

Security - 3.83 0

1.0

2.0

3.0

4.0

5.0

Degree of importance deemed by respondents

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

Figure 2

Fuel efficient driving - 4.34 Accident-free mileage - 4.56 On-time delivery - 4.53 Customer service - 4.40 Learning new skills - 4.14 Business suggestions - 3.96 Minimizing cargo damage - 4.38 Aiding driver recruitment - 3.44 0

1.0

2.0

3.0

4.0

Degree of importance deemed by respondents

5.0

• In the previous survey, there were a couple of areas graded at 2.5 or less out of 5 this year, which translates into a D grade. These included driver satisfaction with the “amount of recognition received for strong performance” graded at 2.50 and the “opportunity to grow with the company,” receiving the lowest grade at 2.38. This year, no job characteristic received anything close to a failing grade. • Stress during recessionary times is always a concern and it certainly was with the previous survey. Drivers had rated their satisfaction with “the amount of stress” in their jobs at 2.73 out of 5, which reflected a drop from the previous years. This year, they scored it at 3.14 – not great, but certainly an improvement. • Looking at the latest results, the areas for greatest concern should be driver satisfaction with the “opportunity to

DRIVER SATISFACTION SURVEY Page 41

grow” with their companies (3.02), “recognition for strong performance” (3.15) and, as mentioned earlier, the level of “training and development” they receive, graded at 2.99. Speaking of the low mark drivers gave their employers for recognizing strong performance, our survey also questions drivers about which areas they deem most important to receive rewards and recognition. As shown in Figure 2, carriers who reward their drivers for accident-free mileage, on-time delivery, minimizing cargo damage and customer service are most in tune with what is important to their driver force. Every year, we also ask drivers to rate how concerned they perceive their employer to be in meeting their needs (see Figure 4). Here, too, we ask them to rate 12 different areas of importance, ranging from getting them home on time to rewarding strong performance. What was remarkable about the previous year’s survey results was that we found deterioration in 11 of the 12 areas and the one area that did not confirm to this pattern (paying you on time) simply held steady. It was heartening this year to find across the board improvement in this area, with every one of the 12 different areas we probed, being rated higher than the past year and no area receiving a failing grade. For example, last year, survey respondents marked their employer’s concern with getting them home when promised at 3.30 out of 5; this year they marked it at 3.76. Similarly, last year, employer concern for providing enough time to complete trips was graded at 3.41 and this year, it was improved to 3.72. Paying on time has traditionally received the highest mark and it did so again this year with a score of 4.34. Of note during this time when motor carriers have been forced into running the oldest fleet in recent memory is drivers’ grade for employer concern in “making sure your equipment is safe.” It was graded at 4.15 this year, compared to 3.85 last year. While the recession did away with any concerns for a driver shortage, this is an issue guaranteed to become prominent again in the near future and be certain to impact motor carrier growth plans. Back in 2006, at the tail end of the

continent’s economic expansion, extensive CTHRC research found that almost 60% of industry employers considered the driver shortage as one of their top two concerns. Job vacancy rates increased to 12.3% and such a high job vacancy rate translated into an immediate need for 12,000 new drivers of tractor-trailers.

All the motor carrier executives who participated in our series of Profitability seminars put on this summer in partnership with Dan Goodwill and Associates shared the same concern for a looming driver shortage. “What caused the shortage in transportation several years ago? I do not

Areas receiving training

Figure 3 Driving skills - 47% of respondents Defensive driving - 47% Business skills - 29% Fuel efficiency - 40% Completing paperwork - 58% Maintenance - 41% Safety regulations - 62% Injury prevention - 52% Customer service - 44% Company policies - 63% Managing family issues - 30%

Career path - 25%

% of respondents

Figure 4

Rating of employer concern in meeting driver needs (on scale of 1 to 5) Getting you home when promised - 3.76 Giving you enough time to complete your trips - 3.72 Making sure your equipment is safe - 4.15 Making sure your equipment is modern - 3.81 Providing adequate safety training - 3.79 Providing adequate training in new technologies - 3.42 Seeking your advice on equipment purchases - 2.91 Providing a competitive income - 3.55 Paying you on time - 4.34 Offering job security - 3.60 Rewarding strong performance - 3.49 Meeting with you regularly - 3.40

1.0 2.0 3.0 4.0 Degree of importance deemed by respondents

5.0

Page 42 DRIVER SATISFACTION SURVEY

Items included in total compensation

Figure 5

Individual bonus - 52% of respondents Profit sharing - 12% Stock options - 4% Personal career development - 9% Scheduled days off - 44%

% of respondents

Rating of supervisor (on scale of 1 to 5)

Figure 6

Asking your opinion - 3.29 Treating you with respect - 3.78 Following up on your concerns - 3.47 Being fair to all drivers - 3.42 Giving you credit for a job well done - 3.49

1.0

2.0

3.0

4.0

5.0

Degree of importance deemed by respondents

Job satisfaction (on scale of 1 to 5)

Figure 7 3.67

1.0

2.0

3.0

4.0

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Degree of satisfaction deemed by respondents

Top 7 reasons drivers would consider working for another carrier

Figure 8

Better money - 83% of respondents Better benefits - 59% Better rewards program - 27% Reputation of firm - 26% Better scheduling - 25% Company career path for drivers - 23% Better equipment - 29%

% of respondents

think it was lack of financing or lack of capital; it was finding the drivers. I think the issue is going to be an even bigger one this time because we have lost so many drivers out of the industry as they have changed occupations. I think our growth eventually will be controlled by the amount of help that we can find, and the amount of people that we can get into our industry,” said Wes Armour, the well-known leader of Atlantic Canada’s powerhouse Armour Transport. “If you are a young person and you can go to a job where you go to work at nine o’clock in the morning and get home at five o’clock at night, five days per week, why are you going to go and work for an industry that works weekends and nights under a lot of pressure? There is no such thing as an eight-hour day in trucking. I will make a prediction that we are going to be out of these people quicker than we think.” Previous CTHRC research found the hiring of new employees in trucking prior to the recession lagged behind the rate at which drivers were being lost. New hires were accounting for 17.6% of the workforce, compared to the share of drivers who quit (13.3%), were terminated (8%), or retired (3.2%). Retirement rates, according to the CTHRC research have increased threefold since 2002. When the economy resumes its stride and trucking companies start growing again, driver retention and recruitment are certain to be important barriers to growth. Our survey also asks drivers to list the main reasons they would consider working for another carrier. In each year of our survey, not surprisingly, better money is the most often cited reason with 83% of respondents admitting that thoughts of a fatter paycheque do make them consider alternative employment. Better benefits (59%) and better rewards program (27%) are traditionally top of the list as is better scheduling (25%). What’s interesting this year, however, is that reputation of firm has snuck into the top seven, cited by 26% of our sample. Perhaps that’s a fitting indication that a thorough understanding of what attracts and motivates drivers and the ability to deliver on those factors will be central to future growth strategy for Canada’s motor carriers.

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Which TMS is best for you? The offerings are many, but they’re not all created equal. A new TMS Vendor Survey helps you make the right selection By Jim Papineau, Dan Goodwill & Associates

s economic indicators improve, there is growing interest among carriers to restart some of their infrastructural systems improvement projects that had been postponed due to cost cutting. A typical question is simply, “What TMS (Transportation Management System) should I buy?” In general, carriers and other transportation service providers are having a difficult time finding reliable, objective information about TMS vendors and the nature of their products. Web searches and Web site visits do uncover a wealth of alternatives, but since they are heavily marketing- and salesoriented, carriers are often not sure they are looking at information relevant to themselves. Each carrier has unique needs and business plans and until those are fully understood, no informed TMS selection decision is possible. A great TMS solution for one carrier may completely miss the mark for another when it comes to capabilities and cost/ benefit. Recently, Dan Goodwill & Associates conducted a survey as a response to the growing interest among carriers to start the TMS investigation process. The objective was to catalogue a number of carrier-oriented TMS vendors plus an outline of their product offering in an impartial, non-ranking manner. The result is a baseline of vendor and TMS facts which, coupled with a carrier’s business needs, will permit a more timely and confident move from the “Where should I

start?” phase to the “Let’s call the appropriate vendors” step. The survey focused on: • Current TMS vendor contact information • Size, location, any particular industry focus or specialty, etc. • Transportation modes supported, core operations and administrative functionality • Deployment architecture (Web, SaaS, stand-alone, etc.) • Hosting options • Specific hardware or software requirements • Pricing ranges and structures • Version releases and user groups The survey methodology started with a search of Web sites, publications and industry contacts to develop a list of TMS vendors to contact. Examining Web sites revealed

that simply pulling information from these sources would not provide a complete and objective picture since all of them contained strong marketing messages designed to promote buying interest. Several vendors acknowledged that their Web sites do not contain comprehensive, objective information about their TMS products. To address the shortcomings of Web sites as “fact” sources, the survey involved personal or phone interviews with each vendor employing a structured questionnaire of 131 questions spanning 19 categories. Fifteen vendors representing 18 different TMS products were targeted, however not all were successfully interviewed. Although six did not respond (none actually refused), they will be included in subsequent annual survey updates. In the meantime, where public data was available, reliable and comprehensive, it was included in the survey. The following vendors were all included in the survey – although those not directly interviewed were not included in some of the more detailed conclusions: Accord Software Carrier Logistics CSI Road CXT Software Degama Systems Enaptive Express Technologies Accellos McLeod Software september/october 2010

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TechnologySolutions Melton Technologies ODATA Computac Tailwind Management Systems TMW Systems Trinium Technologies Overall, the interviewed vendors (representing 12 TMS products) averaged 20 years of experience in the industry with the longest being 38 years and the shortest five years. The number of client installations ranged from just a few to one vendor with 3,000. The median number of client installations was 78. In terms of geographic scope, 10 out of 18 TMS products were suitable for North American carrier operations – only one was strictly Canadian. Others were just US (four) and three could support global carrier transportation operations. An interesting finding was that 50% of vendors have been involved in merger and acquisition activities and acknowledged a trend towards consolidation and concentration of skills and expertise. Vendors generally attempt to develop TMS products that are suitable for carriers involved in a wide range of client industries, products and services. However, they do not all have the same level of experience across the spectrum. Survey responses showed that most have experience in the common industries and services such as CPG (Consumer Packaged Goods), refrigerated products, packaged food, auto parts, etc. Bulk goods and flat-bed transportation, worksite delivery and finished vehicles transport services were less known among the TMS vendors, while small parcel and home delivery were the areas of least experience. Specifically, industry experience among the TMS products showed the following distribution: Auto parts – assembly 83% Auto – finished vehicles 42% CPG 100% Refrigerated goods 92% Pharmaceuticals 50%

Fresh food Dry, packaged food Livestock Liquid bulk Dry bulk Oil field Flatbed – worksite, etc. Drayage Small parcel Retail/home delivery

75% 92% 17% 33% 50% 42% 50% 67% 8% 25%

Of the 131 questions asked in each interview, 37 focused specifically on TMS application functionality. The objective was to obtain profiles with respect to detailed operational support such as order taking, local and line-haul dispatch, equipment management, fuel tax, driver settlement, etc. as well as the administration tasks such as rating, billing, shipment status visibility, sales tracking, EDI, management reports and financials. These basics, and many others, are covered in different ways by 90-100% of the TMS products. However, functionality such as pallet control, route optimization, fleet maintenance, customer service issue tracking, and cross-border interfaces were less common – some were supported by as few as 50% of the surveyed TMS products. With this in mind, it is most important for a carrier to have an objective understanding of its needs and business plans in order to determine which available functionality is critical, good-to-have or not important before selecting a TMS solution. Forty-two percent of the TMS products include an integrated financial suite spanning accounts receivable, accounts payable, general ledger, etc., however, 100% (including those with these capabilities) do support integration with external financial applications. This is important since many carriers will have a financial management and reporting solution already in place and do not need or want another one. Carriers tend to specialize in certain modes of transportation even though some may offer their clients services covering LTL,

TL, intermodal, and small parcel. TMS products are the same: some are oriented towards certain modes more so than others either by design or as a result of their “starting point” when the product was first being developed. LTL and TL are the most widely supported modes across all TMS products – close to 90%. The rest of the modes and services such as intermodal, rail, courier, ocean, air, and drayage are significantly more specialized among the TMS products. While intermodal and reefer services are accommodated by 67% of respondents, all other mode and service categories (besides LTL and TL) were familiar to less than 40% of the vendors – some, such as air and ocean, were at 17% and 11% respectively. Carrier complexity is an area most TMS products support well. Multi-site, multiple divisions and companies as well as multiple weight metrics (pounds and kilos) were supported by 100% of the products. Multiple currencies are slightly less at 83% while 50% of the products only support English. Deployment models were interesting – all vendors offered products that could be licensed, installed and operated by the carriers. Sixty-seven percent of the vendors offer hosting on behalf of the carrier, or a carrier could achieve the same result using a different party to host the TMS application – this is commonly known as an ASP service (Application Service Provider). The current industry buzzword in hosting is “SaaS” (Software-as-a-Service) and 42% of the TMS products surveyed are available in this fashion over the Web. Every one of these vendors confirmed that their use of the term “SaaS” means that the TMS application is the same version for each client. This is an important distinction between licensed or traditionally hosted applications (ASP) which allow for varying degrees of customization for an individual carrier. Therefore, carriers attracted to the SaaS alternative by the prospect of quick implementation and low cost per transaction, should be certain that they do not need unique functional flexibility and september/october 2010

TechnologySolutions feature control. The SaaS model is evolving to include powerful set-up tools and carrierspecific workflow configuration, but they are not all there yet. Once again, a carrier’s needs must be clear before choosing a deployment model that is right for the business. TMS pricing models all allow the purchase of application modules rather than the entire TMS package. The actual price structures vary widely, but often include a base component plus a declining “per-user” fee based on the number or type of users on the system. Often the user fee reduces at thresholds such as five, 10, or 20 users. It is difficult to generalize across implementation scenarios, but a ballpark cost per user is about $2,500. Other factors such as modifications, training, implementation services, and integ-

ration programming will give each TMS deployment a different Total Cost of Ownership. The average annual maintenance fee for licensed software (carrier, vendor or ASP hosted) is 20% of the license price. SaaS pricing has no extra maintenance fee and is typically based on a per-user rate, but 33% of the vendors also use another pricing metric such as shipments, transactions, and vehicles to align their hosting and communications costs with the value of the SaaS service they provide. In these cases, the SaaS pricing may be very different from one carrier to another. In summary, the survey confirmed that numerous TMS vendors collectively exhibit solid industry experience spanning diverse modes and functionality capabilities. It also confirmed that there is diversity among the

TMS products in terms of deployment, operations or administration orientation and specialized capabilities such as route optimization, advanced management reporting and dashboards. The most important differentiator between the available TMS products is the carrier itself, in terms of its specific needs. The TMS choices are certainly not all equally suitable, but starting from a careful inventory of carrier requirements, a suitable TMS selection is possible and likely. The survey confirms that excellent candidates do exist for most carrier requirements. MT Jim Papineau is director of supply chain systems and automation with Dan Goodwill & Associates.

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motortruck

Profitability

negotiation time A tepid recovery and lingering capacity overhang is certain to make rate and capacity negotiations for 2011 a difficult exercise. In our recent Shipper Workshop, conducted in partnership with Dan Goodwill & Associates, we asked three of the country’s most respected shippers for their insights on the future direction of freight volumes and pricing.

Allan Kelly, director, distribution and supply chain analysis, Casco Inc.

MT: The economic recovery to this point has been weaker than hoped. When you are looking at the rest of 2010 and into next year, how do things look within your company as far as freight volumes are concerned? Weibe: We certainly saw an uptick in the loads we shipped late last year. Because we did not see a drop-off, we do not see a significant surge this year. We are going to grow our regular freight 3-4%. From a dollar-spent perspective, we are slightly down, but that is primarily because the Canadian dollar is trading higher relative to the US, and we bring about 1,000 loads per week out of the US into Canada. That has a significant impact on our spend, but not on our load count or our shipping counts. Kelly: For us, it looks like it is going to remain flat with maybe a slight increase. The food industry is a little bit shielded from downturns. Stapley: Our volume is going to be remaining flat for the next 12 months, as many of our customers – the big one being the govern-

Laurie Stapley, transportation analyst, Fisher Scientific

Robert Wiebe, senior vice-president, transportation and logistics, Loblaw Companies

ment – are dealing with budget cutbacks, so they do not have to the money to spend. What is going to change is how we ship. For example, although our volume is going to remain flat, we may be moving more into a courier environment to go direct to the customer, as opposed to LTL or truckload into Canada, and then courier out. MT: Our research shows that motor carrier executives are very reticent to jump in and believe some of the freight volume projections that we have been hearing. Are carriers justified in taking a more cautious approach? Were shipper projections for 2009 out of whack? When looking back at the projections that you had within your company for 2009, were they close to the mark or far off the mark? Weibe: I would say that carriers are going to be a pessimistic bunch right now as they have just gone through probably the worst year or two of their careers or their companies’ lifespan. It is human nature to be a little more pessimistic about it. From our perspective,

what we had projected to do in 2009 was roughly what we did, if I take out the effect of the US and Canadian dollar exchange. Again, and Allen has said it as well, food was not immune, but was not as impacted by the recession. We saw a bit of an uptick in a lot of our grocery stores, primarily because people were not going to restaurants. Stapley: I think carriers are being very pessimistic. A lot of the carriers came in to meet with us and expressed some frustration and disappointment about volume declines, but we were just telling them to be patient because it will improve. If you hang in there, it will improve. MT: Is the volume growth basically replenishment, or are you seeing some growth in inventories towards 2011? Weibe: We have a fairly large general merchandise business, and we are seeing some of our inventory grow mildly. Although we are not seeing a tremendous boom in terms of the number of cases or the dollar that we are inseptember/october 2010

Profitability ventorying, I think what we are doing is being judicious in terms of what we will order relative to what our sales forecasts are, and I think most Canadian retailers have done the same. MT: The expectation is that the direction of the Canadian dollar is going to be upwards. What is the impact of the Canadian dollar going to be on your supply chain practises? Weibe: I know it is going to hammer us on produce. As the dollar rises, we certainly get a deflationary environment in the produce that we purchase down from the US, and the transport that we purchase just on the exchange arbitrage. Where we are certainly seeing it is there are a lot of deadhead miles. Carriers that were traditionally getting a lot of loads out of Toronto, the Atlantic, British Columbia and down into California, to reposition their reefers and pick up our produce, that is not available to them any longer, and we are paying more in terms of the northbound freight to get the same number of pounds and that same freight level back into Canada. It has had an adverse effect on our

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transport side. I think, from a supply chain perspective, what it does make us do is look again more towards some of those offshore options. Asia may grow at an exponential rate, potentially because we do not have that gap, and typically they price in US dollars. MT: Let us move on to everyone’s favourite subject: rates. What are your projections? Kelly: In our food industry, I am saying they are going to stay flat. Unless there are some carriers out there that are going to have some surprises for me, but that is what we are predicting and budgeting for. MT: What about for 2011? When you look that far ahead, what do you see? Kelly: I think that the strategy for shippers is to really look two years out and lock in for two years with quality carriers. I think if you do not, you will probably have to restock the panic room because there are going to be some carriers that are not out there, or they are going to have very substantial increases. Our strategy is to get out there with two- and three-year contracts. Stapley: We are putting more and more pressure on these carriers to come forward with solutions and set some strategies that can improve our business. With that comes a cost; the carrier has to invest money in order to make money, and I think that is going to be reflective in the rates. Certainly, I expect an increase in assessorials appearing on freight invoices. I agree with locking in a multi-year agreement with the carriers to lock in the rates, but also to give the carrier the opportunity to demonstrate themselves. I know most companies are doing one-year contracts, but I find that when we switch carriers and implement, it takes a few months. If it takes three to four months to make that transition, then there are only about six to eight months left of the agreement. MT: Rates in trucking have dropped as much as 18-25%. In ocean and air, we’ve seen drops in business of about 30%. We know that for

these companies to be able to survive, they are going to have to come back and be aggressive with their rates. Robert, I want to ask you, when you have carriers coming in and asking for a rate increase this year and going into next year, what kind of things as a shipper do you want them to communicate to you in order to justify that increase? Weibe: There is usually the opening sell: “We had a really tough year.” In a lot of cases, folks will come in and say, “We rode the downward spiral with you. It is starting to come back up, and we are going to need to see a market rate that is going to make sense for us.” We generally get into some pretty detailed conversations with our carriers, especially our large partners, in terms of where their wages are going. It is certainly not in our best interest to put them at a disadvantage relative to hiring drivers and getting good gear on the road and we will not accept that. I think that it really just gets into those detailed conversations and just understanding what is going to drive that price increase. What is the bottom line? Is it the driver’s wage? It is probably not going to be that. Is it that the market has changed? Has a head haul lane now changed into a back haul lane? We have certainly seen some of that in some of the places in Canada. The more detail you bring to the conversation, the more credible that conversation is, and it gets a little bit easier to have. If it is really just, “Gee, things were crappy last year and we would like a little more this year,” that is not going to get the carriers very far. Kelly: Carriers have got to cause justify the increase. Right now, we see a big trend on the cost of compliance, and that needs to be broken out. If that is the reason for the increase, let’s put it on the table and talk about it. Do not think that we want any carrier to be out of compliance, and if they need something in that area we will look at it and consider it. Crossing the border is such a big issue; C-TPAT, PIP, all these security programs that are out there do add costs to transportation. Just bring it to the table.

Profitability Weibe: As a fairly large shipper and user of transport services, I think we also have to be very aware of the fact that when the rates came down last year, we really were not asking guys to sit in front of us and tell us how their costs came down. We know tractor prices did not come down and we knew

wages did not come down, but we still asked for a rate reduction to get us in line with the market. We have to be aware of the fact that when the market changes, we typically do what these folks do and enter into two-year arrangements in our inbound contracts and then we will go about five years on our out-

bound contracts. So they are pretty detailed discussions, but when those rates came down, we were certainly a shipper that asked for those rate reductions, and I think we work with our partners well, but we also felt we could not be out in terms of our competition. MT

Freight costing with accuracy Taking a closer look at your company activities can lead to a better bottom line By Julia Kuzeljevich

roducing products or services is all about the activities, not just the resources. That’s why looking at the activities your business runs, and not just your revenues, is key to building an accurate freight costing model, according to Kenneth M. Manning, president of Transportation Costing Group. Manning was a speaker at this summer’s Profitability Conference hosted by Motortruck Fleet Executive and Dan Goodwill & Associates. Activity-based costing, or ABC, is a tool that addresses a lot of things in your business, said Manning. For example, shipment crosssubsidies can be very large. Activity-based costing is needed to avoid cross-subsidization. It is a method of costing products or services based upon the activities required to produce the product or service. It’s also a flexible pricing tool, and an excellent way to create a simulation or a “what-if” analysis. It’s also an invaluable repository of marketing, operating, and productivity data waiting to be mined with the right tools. “You can’t just increase revenue and expect to increase your profit. Does your current system highlight opportunities for cost improvement?” asked Manning. For example, do you understand the various activities performed in your company?

Do you have the tools needed to estimate the profitability of prospective customers? Can you simulate the profitability of freight under forecast operating conditions? The basic premise of ABC says that providing a service (freight transportation) consumes activities, which consume resources. The consumption of resources drives costs, and each activity has independently associated overhead costs. “How is this useful? Trucking does not transport hundredweight. Trucking does not transport average shipments. Trucking does transport specific shipments with specific characteristics,” noted Manning. Activity-based costing will look at various activities, adding labour and non-labour costs to each, then adding the cost of providing the service, plus an overhead to that cost, coming up with a more accurate model than traditional costing that just gives you a top line reading of profitability. The cost of activities specific to a customer are to be borne by that customer. Activities specific to a trip to be borne by all customers served on that trip, said Manning. Why does this make a difference? “You can accumulate the activities and costs accumulated per shipment this way. This makes a difference in terms of discover-

ing opportunities for cost improvement, improving strategic decision-making, identifying money-makers and losers, and comparing different options (pricing adjustments, operating adjustments),” noted Manning. The ABC system must be able to associate different handling characteristics in the cost of providing a service. “It may not be practical to allocate all costs to activities. The allocation must be based upon the use of resources, not arbitrary assumptions,” said Manning. Setting up activity-based costing means analyzing activities, gathering the costs of each, establishing output measures (cost per mile, minute, day, etc.) and linking the activities through their system. “It’s not an accounting project – it has to be a top management project,” said Manning. “If you’re not making money on the round trips run to serve a customer, you’re not making money on that customer.” Three essential ingredients – data, data, and data – are necessary for a good activitybased costing system, as well as completeness, consistency, and integrity. “We’re providing a decision-making tool, not the actual decisions. Costing is science, pricing is art, and part of the art of pricing is, what do you want to do with that customer long-term?” said Manning. MT september/october 2010

International says Advanced EGR wins ‘fluid economy’ war vs. SCR Daimler fires back over testing methodology By James Menzies

ou may want to add the term “fluid economy” to your truck vocabulary. It’s a term you’ll likely hear frequently from Navistar International as the company continues to forge its own path towards EPA2010 emissions compliance while avoiding selective catalytic reduction (SCR) exhaust aftertreatment. When measuring the costs of operating EPA2010-compliant trucks and engines, Navistar officials are urging customers to consider the overall consumption of both diesel and diesel exhaust fluid (DEF), a key ingredient required by engines using SCR. Doing so makes its Advanced EGR solution look much more attractive, according to independent third-party test results released by Navistar last month. The results show that when taking the consumption of DEF into account, the truck maker’s rivals using SCR actually consume more total fluid than the International ProStar+ with MaxxForce 13 engine. The tests, conducted on public highways by the respected Transportation Research Center following the TMC Type IV protocol, found the International ProStar+ with MaxxForce 13 consumed nearly 1% less fluid (diesel and DEF) than the Freightliner Cascadia with Detroit Diesel DD15 and nearly 2.5% less fluid than the Kenworth T660 with 15-litre Cummins ISX. When asked why the company compared its own 13-litre engine to its competitors’ 15-litre offerings, Navistar’s senior vice-president of North American sales operations Jim Hebe said they chose the most fuel-efficient spec’ offered by their rivals. “They are the engines they told us were the most fuel efficient they had in their lineup,” Hebe said. “That’s what they’re telling their customers as well.” Navistar officials also said 13-litre offerings weren’t yet available from Cummins or Detroit Diesel for testing. When looking at diesel consumption alone, Navistar says its truck and engine combo was within about 1% of its competitors. The results, Hebe said, exceeded the company’s own expectations. Hebe said the company internally had decided it could make a strong case for its Advanced

motortruck

EGR solution if it could get to within 2% of the fuel economy achieved by its SCR rivals. “The closer we got, the closer we came to realizing not only could we provide parity, we could beat their claims as well,” Hebe said. Navistar, of course, is the only Class 8 truck manufacturer in North America to tackle EPA2010 emissions standards without exhaust aftertreatment. Instead, International trucks will use increased levels of exhaust gas recirculation (EGR) combined with an enhanced fuel system and electronics to meet EPA2010 requirements. All other manufacturers, meanwhile, will use SCR, which requires the addition of diesel exhaust fluid, yet allows the engine to operate more efficiently because NOx is not limited in-cylinder. At times, the debate over which solution works best has turned hostile. “We’ve sat back the last couple of years and we’ve been shot at from about every direction you could be shot at with regards to our strategy for meeting 2010 emissions,” Hebe said. “We’ve seen competitors walk in and show presentations to our customers that say they’re 9% better (in terms of fuel economy) than we are. That clearly wasn’t based on fact. One of the biggest disservices we’ve seen some competitors do to the industry, is they only talk about the one fluid, they only talk about fuel and forget there’s this thing required in their system called diesel exhaust fluid or urea.” Indeed, fuel economy has become one of the strongest selling points for engine manufacturers using SCR. Generally, they claim a 3-5% improvement over EPA07 equivalent offerings. Navistar, it should be noted, has been redeeming emissions credits as it continues to wind its way down to the EPA2010 limit of 0.2

grams/brake hp-hr of NOx. Yet the company says it will not require liquid urea-based SCR at any time and reiterated it has a 15-litre MaxxForce on schedule to be launched in early 2011. The TMC Type IV testing protocol requires similarly-spec’d trucks to be operated over the same route. In this case, a 444-mile route in Indiana was chosen. Drivers and trailers were swapped at the midway point and the consumption of both fuel and DEF was measured carefully using the meter reading of a commercial diesel pump. Navistar officials also said their ProStar+ with MaxxForce 13 is as much as 1,300 lbs lighter than competitive offerings with 15litre engines using SCR. Hebe said the test results were made sweeter by the fact the tests were conducted over long-haul, on-highway duty cycles, where SCR is said to be at its greatest advantage. “The sweet spot for SCR was long-haul, on-highway and we beat them there,” he said. Navistar officials said further tests will be conducted, including direct comparisons to competitive 13-litre engines which it has now obtained. Not surprisingly, Daimler Trucks North America (DTNA), parent company to Freightliner and Detroit Diesel, was quick to dispute the findings. The company has never backed down from a PR battle with its biggest rival. Specifically, DTNA had a problem with how Navistar pitted its own 13-litre engine against a 15-litre Detroit Diesel. “We run stringent fuel economy tests at DTNA which are both accurate and substantiated,” the company said in a statement. “We test back-to-back componentry which is comparable from both a truck and an engine perspective. Ratings, displacements, truck configuration and more are matched to achieve valid results. The combination chosen by our competitor does not comply with these basic premises for proper engineering work and thus doesn’t provide a trustworthy result.” Daimler also contended the 440-mile test run was not long enough to adequately reflect diesel particulate filter (DPF) regeneration cycles. The company said it looks forward to conducting its own test once the International MaxxForce fully complies with the EPA2010 NOx limits. “We’re eagerly anticipating acquiring an EPA2010-certified series production 12.4L MaxxForce engine in order to run our own comparison study,” the company said. “It is neither appropriate nor credible to compare the 12.4L MaxxForce ‘mystery’ engine with proven technology available in the market.” As a parting shot, Daimler noted it had received more than 25,000 orders for EPA2010-compliant trucks and added, “We are unaware of any announcements made by Navistar on their sales track record in this category to date.” Such announcements from Navistar may not be forthcoming either. During the media conference call, Hebe said after securing supply deals with mega-fleets J.B. Hunt, Heartland Express and Boyd Bros., that it would no longer be publicly announcing every

deal it lands. “We have captured several other medium, small and very large fleets, many of whom are using our product and our engine for the first time,” Hebe said. “Suffice to say, interest around our product and where we’re going with the ProStar+ and MaxxForce 13 is really gaining ground. Most of these fleet operators want us to be a success, they want a no-hassle solution to 2010 and they’re not really sold on some of the things they’re seeing out there with regards to SCR and DEF. They want us to be able to deliver on our promises.” With contradicting messages about fuel efficiency superiority, Motortruck Fleet Executive turned to the entirely uninvolved and unbiased FPInnovations for reaction. FPInnovations is a team or researchers that conducts the twice-annual Energotest to test the fuel-saving claims of equipment on behalf of its member fleets. Researcher Marius-Dorin Surcel pointed out that fuel economy testing is tricky business. “My opinion is that there are some aspects that should be considered when interpreting the results,” Surcel said. “Indeed, engines sizes were different: 13 L (Navistar) with 15 L engines (competitors); the results were ±1% in fuel economy and 1-2.5% in ‘overall fluid economy.’ However, both are in or very close to the margin of error for a Type IV TMC RP 1109 Test, which is an in-service test, which means on the road, in this case 700-km length route and the consumed fuel is measured using the fill-up method” (rather than weighing the fuel, as FPInnovations does). Surcel speculated that the 1,300-lb weight savings offered by the International package might have helped its cause. “Vehicle dynamic equations would (allow) for this type of vehicle near to a 1% fuel savings only from the weight difference,” noted Surcel. For its part, Kenworth declined to comment on the test results. To view the test results, visit www.internationaltrucks.com/ results. MT

september/october 2010

15%

InsidetheNumbers

Percentage of Cdn fleets planning on purchasing used trucks

That’s how much North American heavy-duty truck net

NO 17%

orders increased in August compared to a year ago, according to ACT

NO 16%

Research. Medium-duty Classes 5-7 net orders increased by 27% in

YES 84%

August compared to the prior year.

2010

2011

IMPORTANCE OF PERFORMANCE CRITERIA Mode

YES 83%

On-time performance

Equipment and operations

Information technology

Competitive pricing

Customer service

Problem solving

Value-added services

Sustainable practices

4.717 4.846 4.519 4.846 4.856 4.514

4.211 4.459 4.330 4.309 4.405 4.264

3.957 4.057 4.262 4.534 4.463 4.156

4.643 4.709 4.732 4.688 4.569 4.644

4.646 4.585 4.572 4.627 4.611 4.503

4.291 4.278 4.349 4.318 4.367 4.211

3.415 3.701 3.804 3.684 3.804 3.583

4.064 4.192 4.155 4.127 4.194 4.094

Value-added services 13.124 14.282 13.869 13.159 13.767 11.326

Sustainable practices 16.126 17.087 15.855 15.926 16.583 14.996

Total satisfaction score 137.099 144.411 137.611 137.831 141.880 117.145

LTL Trucking TL Trucking Ocean Carriers Couriers Air Carriers Rail Carriers

SHIPPER SATISFACTION RATINGS BY MODE Mode LTL Trucking TL Trucking Ocean Carriers Couriers Air Carriers Rail

On-time performance 20.010 21.288 18.695 20.411 20.735 15.614

Equipment and operations 17.366 19.111 17.770 17.848 18.809 15.849

Information technology 15.274 15.713 16.924 18.530 17.834 15.336

Competitive pricing 19.180 19.881 19.155 18.635 18.546 16.760

WHAT DO YOUR CUSTOMERS WANT MOST FROM YOU?

Customer service 19.378 19.688 18.658 17.763 18.767 14.513

Problem solving 16.640 17.360 16.683 15.558 16.839 12.751

A slumping economy combined with overzealous equipment purchasing on behalf of carriers can have a measurable impact on capacity. Price has been a significant issue in the trucking industry during the last two years as the capacity overhang has led shippers to seek rate cuts from carriers in all modes, and trucking in particular. Just how important competitive pricing has become for trucking is evident in our annual research, which asks close to 2,000 shippers across Canada to rate the importance of eight key performance indicators when it comes to selecting one carrier over another. The “Importance of Performance Criteria” chart above shows the value shippers place on each of the eight KPIs on a scale of 1 to 5 and provides a comparison for all modes. On-time performance remains the top priority when it comes to selecting both LTL and TL carriers. However, competitive pricing is the second highest consideration when shippers select a TL carrier, ahead of both customer service and quality of equipment and operations. When it comes to selecting an LTL carrier, shippers right now value competitive pricing almost as much as customer service. And it’s a certain sign of the times that even when it comes to selecting a courier, competitive pricing is the second highest consideration, again ahead of customer service. This year, our survey also looked into the value shippers place on sustainable practices when it comes to selecting their carriers. It’s interesting to note that sustainable practices were ranked ahead of the ability to provide value-added services and information technology when it came to selecting both LTL and TL carriers. The “Shipper Satisfaction Ratings by Mode” chart shows how shippers scored the performance of their core LTL and TL carriers, as well as carriers in other modes, in those eight key performance indicators. Note that TL carriers were given the highest shipper satisfaction scores. That’s a double-edged sword, of course, since that also indicates that service expectations are highest in the TL sector. In fact, TL carriers scored ahead of all modes in on-time performance, quality of equipment and operations, customer service, problem solving, valuedadded services and employing sustainable practices. Just as impressive is the fact that they accomplished all that while being graded highest for providing competitive pricing. 54

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