Motortruck Sept/Oct 2012

Motortruck

Fleet Executive

C A N A D A ’ S

B U S I N E S S

HUMAN RESOURCES Pitfalls in addressing drug and alcohol issues

SEPTEMBER/OCTOBER 2012

M A G A Z I N E

ENGINES Inside Navistar’s abrupt change to its engine platform

F O R

F L E E T

O W N E R S

TRUCK TEST What’s super about Mack’s Econodyne powertrain?

BEYOND THE HYPE Sustainable transportation practices are maturing as ROI data becomes available and benchmarks are set.

Are you keeping up? Find out with our sixth annual Green to Gold supplement Mail Agreement No.40069240

MT COVER Sept DI/Oct2012.indd 1

12-10-15 9:51 AM

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September/October 2012

contents

Volume 81, No. 5

COVER STORY 21 Our sixth Green to Gold supplement explores Natural Resources

Canada’s rollout of the Canadian version of the SmartWay Transport Partnership; a driver’s view of Fleetsmart’s SmartDriver E-learning fuelsaving program; the finer points on how roll out an effective incentives program; and a look at the relationship between proper tire pressure and the effectiveness of low rolling resistance tires as fuel-savers. Plus: what drivers, maintainers and fleet managers really think about fuel-efficient technologies.

Features 14 FIT FOR DUTY?

Meeting the need for safety while accommodating for drugs to treat health issues of an aging driver force is a weighty task for safety-sensitive industries.

37 CAUTION: SLOW GROWTH AHEAD

An Eaton rep is predicting a sluggish economy in the coming months.

38 PEET-ERING OUT

Millions of dollars in grant money still up for grabs for carriers looking to invest in energy-efficient technologies before Quebec’s PEET program wraps in March.

page 21

40 SEPARATE FROM THE PACK

It’s time for trucking company leaders to create focused, lean and productive sales organizations, says Dan Goodwill of Dan Goodwill and Associates.

Departments THE VIEW WITH LOU…6 Editorial director Lou Smyrlis has had enough of OOIDA and OBAC’s propensity for protest as legal challenges related to speed limiter legislation continue.

MAILBAG…8 Readers respond to column and blog, “Why OOIDA is actually hurting its members.”

COMPETITION WATCH…10 Bison wins coveted safety award; Wheels Group buys MSM Transport; U.S. Xpress Enterprises, M-O join forces with new cross-border shipping solution; and more.

page 14

THE BOTTOM LINE…12 It’s time to lose the customer survey, says MSM’s Mike McCarron.

TAKING CARE OF BUSINESS…13 A rundown of the 10 most common pricing mistakes.

MAINTENANCE MATTERS…18 With equipment costs on the rise, productivity is now priority when spec’ing.

GEARED UP…42 What’s so super about Mack’s Econodyne? Equipment editor James Menzies takes it for a spin to find out. Plus: a look at Navistar’s abrupt change to its engine platform, the latest from Bridgestone Commercial Solutions and Shaw Tracking, and more.

DASHBOARD…52

page 24

TransCore’s Canadian Freight Index dips in July; cost of ground transportation drops in July; Canadian rail freight traffic up 6.8% in June; and more.

INSIDE THE NUMBERS…54 How much of Canada’s GDP is represented by the transportation services sector? Plus: a look at winners and losers in Canada’s transportation infrastructure. trucknews.com

Contents Sep 2012.indd 3

September/October 2012 ❙ FLEET EXECUTIVE 3

12-10-11 1:32 PM

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

BLOGS Tibor Shanto, principal at Renbor Sales Solutions, throws his support behind profiling – client profiling, that is.

Dan Goodwill of Dan Goodwill and Associates explains the importance of integrating social media into your sales pipeline.

On-road editor Harry Rudolfs laments the decline in popularity of logging culture via events like the Maynooth Loggers Games.

You said it...

“Ray, I agree that the industry needs to step up, and ‘finish’ driv-

ers – so to speak – that come from schools...Why does no one push for skilled trade status? There seem to be some very lame points our good friends in the lobby groups pursue, why not Journeymen status for drivers? Gain some credibility, develop apprenticeship steps and stages to full licensing, establish minimum training criteria and time...it seems to be exactly what people need.

For God’s sake...hairdressers are a skilled trade. I’ve never seen a fatality from a bad haircut. Not that I need one often anymore.”

—Dave’s comments on Ray Haight’s blog, “Same Old Same Old.”

Web TV:

Transportation Matters PREVENTING TRAILER-TOP FALLS: Sousa Truck Trailer Repair has created a prototype designed to prevent technician falls during trailer roof repairs.

NEW PRODUCT FROM SHAW:

Shaw Tracking vice-president Mike Ham dishes on the company’s latest addition to its line-up of fleet management solutions: the MCP50.

FERGUS 2012:

Highlights from this year’s Fergus Truck Show – with zombies!

FEDEX’S NEW SORTING FACILITY:

Take an exclusive tour of FedEx’s new Markham, Ont.-based sorting facility with Fleet Executive’s sister publication, MM&D.

FOLLOW US ON TWITTER @TruckNewsMag @AdamLedlow @JameMenzies @LouSmyrlis @JuliaKuzeljevic @KathyPenner Fleet Executive editors are now on the Find us on Facebook facebook.com/trucknews 4 FLEET EXECUTIVE ❙ September/October 2012

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

trucknews.com

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Motortruck

Fleet Executive

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

THE VIEW WITH LOU

SEPTEMBER/OCTOBER 2012

VOL. 81 NO. 5

Enough Already Continuing legal challenges of speed limiter legislation only prove OOIDA, OBAC happy to fan flames of protest – despite no supporting evidence

S

peed limiters is going to go down as the issue that just won’t go away, despite the fact it has been in the books in Ontario and Quebec for a few years now. The latest development is a series of court challenges, which range from the valid to the downright silly.

Under the “nice try” category, there is the case of owner/operator Lee Ingratta who argued in court that enforcement officials should have to sign a waiver accepting responsibility for any damage caused by the EZ-Tap reading device they plug into his vehicle’s ECM. The case got thrown out.

There is the bizarre case of Don’s Triple F Transport, where a company truck was found to be in violation of the speed limiter law, even though the speed limiter was activated but set at 121 km/h, well above the legal requirement of 105. However, the charge on the ticket read: “Permit operation of commercial motor vehicle not equipped with working speed limiting system.” The charge got dismissed because the truck did have a working speed limiter, even though it was set at an illegal limit. Saved by a technicality.

And there’s the case of one carrier who took six trucks to a mechanic and asked for the speed limiters to be properly set. But the mechanic set them at 107 km/h, instead of 105, resulting in a ticket.

The carrier won that case, as he should have.

Of course, of all the cases, the Gene Michaud case is cited by opponents of the law as the most important. With financial backing from the USbased Owner-Operator Independent Drivers Association (OOIDA), Michaud won a case before an Ontario Justice of the Peace, which found the law to be unconstitutional under Section 7 of the Charter of Rights. David Crocker, the lawyer who represented Michaud, argued that limiting truck speed to 105 km/h jeopardizes driver safety, rather than enhancing it. It’s the same argument OOIDA and their Canadian counterpart, the Owner-Operators Business Association of Canada (OBAC) have been pressing since we first started talking about speed limiters back in 2005.

Justice of the Peace Brett Kelly bought into

Lou Smyrlis, MCILT, Editor lou@transportationmedia.ca

Crocker’s argument, stating that “inability to accelerate, or not accelerate fully places a driver in a less than safe situation because we have taken some of the tools required to drive properly away from the driver. Mr. Michaud needs to be able to take certain precautions in the execution of his job that will take him out of harm’s way and keep him and those around him safe.”

The decision is being appealed, and so far has not resulted (nor is it expected to) in any change to the law.

But let’s consider (yet again) the argument that limiting truck speeds is a safety risk. If it is the safety risk that OOIDA and OBAC claim it to be, after more than two years of having this law in place, we should be seeing a great increase in accidents, shouldn’t we? Yet, there is no proof in the accident numbers. In fact, during the first year the law went into effect, large truck fatalities in Ontario actually dropped by 24%.

Okay, maybe the province got lucky. Let’s take a longer term view. Australia has had speed limiter legislation since 1990. Its trucks are limited to 100 km/h. Surely they should be seeing the carnage on their highways we’ve been led to believe is sure to happen?

Here is what the Australian Transport Safety Board has to say: “There is no good evidence that a 10 km/h differential between light vehicle and truck speed creates a safety problem. If there is any such problem at all, it is small compared to the safety benefits of running trucks at 100 km/h.”

So let’s call a spade a spade. Safety is not an issue with speed limiters no matter how much OOIDA and OBAC want to pretend that it is.

All that the spate of recent legal challenges proves is this: A large majority of owner/operators and drivers remain vehemently opposed to the law; their associations are willing to continue fanning the flames of protest even though their concerns have not been borne out by the evidence; and there are plenty of lawyers willing to spend their money as they bring their fight to court. FE

Editorial Director Lou Smyrlis (416) 510-6881 lou@TransportationMedia.ca Managing Editor Adam Ledlow (416) 510-6890 adam@TransportationMedia.ca Features Editor Julia Kuzeljevich (416) 510-6880 julia@TransportationMedia.ca Creative Director Stephen Ferrie sferrie@bizinfogroup.ca Advertising Creative Directors Carolyn Brimer Beverley Richards Contributing Editors Ken Mark James Menzies Ian Putzger John G. Smith Carroll McCormick Harry Rudolfs Publisher Rob Wilkins (416) 510-5123 National Sales Manager Don Besler (416) 699-6966 Account Manager Brenda Grant (416) 494-3333 Production Manager Kim Collins (416) 510-6779 Circulation Manager Mary Garufi Video Production Manager Brad Ling Research Manager Laura Moffatt Vice President Publishing Alex Papanou President Bruce Creighton

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

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

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.

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Subscription Inquiries – (416) 442–5600.

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)

6 FLEET EXECUTIVE ❙ September/October 2012 Member/Canadian Business Press

Twitter.indd View with Lou Sep 2012 CS6.indd 6

12-10-11 12:43 PM

or owners, nce panies vice trucks, buses.

We’re now on twitter - and we’re pretty cocky about it.

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by BIG Holdings mation company wspapers and

be reproduced r full, including written consent of this of any nature Fleet Executive

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Twitter.indd 1 View with Lou Sep 2012 CS6.indd 7

24/11/09 2:16 PM 12-10-11 12:43 PM

MAIL BAG Is OOIDA actually hurting its members with its opposition to on-board recorders?

My column and blog “Why OOIDA is actually hurting its members” – explaining how I find it hard to understand the Owner-Operator Independent Drivers Association’s (OOIDA) vehement opposition to electronic on-board recorders – received a great deal of response from readers. I argued that, contrary to what OOIDA claims, on-board recorders will neither bankrupt carriers and owner/operators nor are they a big-fleet ploy to squeeze more productivity out of their drivers and drive up costs for their smaller competitors. What they will do is reduce Out-of-Service violations and show the public that our industry is taking the lead on safety. Just like satellite communications, which were initially resisted by many driving professionals, we will look back 10 years from now and wonder how we did without them. Included on this page are a few examples of the many comments received from trucking executives, drivers and owner/operators. To read all the comments, or to comment yourself, see my blog in the Industry Blogs section of www.trucknews.com.

– Lou Smyrlis, editorial director

You hit the nail on the head as usual and your headline “Why OOIDA is actually hurting its members” pretty much sums up OOIDA’s failings in a nutshell.

What they provide their membership today is simply a voice to complain and not leadership. Their easy argument is that they are an association and are charged with complying with their member’s wishes. But, in fact, any responsible association sees their opportunity to manage their member’s best interests, which most progressive association heads are quick to point out, are not always the same. Instead of clearing away the smoke and uncertainty and helping to chart a future, they are busy manufacturing stories of doom and gloom and throwing a wet blanket on the independent operator’s true chance to shine. The trucking industry needs owner/ operators to succeed and it would be nice to see some true leadership to help guide them.

– Robert Penner, executive vice-president and COO, Bison Transport

I recall many opposing satellite communications when that technology emerged 20 years ago; yet they wouldn’t want to be without it today. It’s easy for an association to simply feed the fears of its members. It takes leadership to embrace change and make the effort to guide its members through it. Is satellite not a de facto EOBR in an audit? So we are already there.

– Posted by meslippery 8 FLEET EXECUTIVE ❙ September/October 2012

Mailbag.indd 8

I have been a Canadian trucker for 42 years and I worked for my father’s trucking business after school and weekends doing repairs, loading trucks, helping in the office long before that. That being said, I was directly involved in trucking most likely longer than you were alive. I was trucking back in the ’70s and ’80s when trucking was heavily regulated and made money doing it. Then deregulation reared its ugly head in the United States and dominoed its way into Canada. After that point in time, it has always been a struggle to break even let alone make money. The point I am trying to make is we were less regulated under a regulated environment than we are now under deregulation.

This whole issue with EOBRs is more regulation in a deregulated environment. I applaud OOIDA with their stance on this issue and many others. I even went so far that I dropped my membership in a provincial trucking association after 25 years as a member and forwarded those membership dues to OOIDA. Most truckers who are around for 10 or more years already know how to run their businesses and don’t need any snot-nosed politician or columnist to tell them how to do it! We need to go back to the days when men were men and say NO! to burdening truckers with this type of political bullshit.

– Posted by Fred Webster I am all for being safe and we all know that trucks have gotten many times safer in the last 10 years. Lou, you need to be careful when you slam OOIDA like that, they have done a lot of good in the past and they have a very valid point in their stance against recorders.

Just imagine if you had a recorder strapped on you, and it would require you to deduct or add time to your time card.

Leaving work eight minuets early, getting seven cups of coffee during the day, your computer freezing or having an error happen, fellow employees talking to you about nonwork-related things would all be taken into consideration in your daily time recording. Recording these things would be nuts, and, in essence, that is what we are doing to truck drivers. I think all dispatchers, office staff, safety personnel, owners, everyone related to trucking should spend a week riding along with a driver to see what they put up with. Let’s be safe and fair.

P.S. I know one company that has taken these recorders out of their trucks because there is no way they could keep a schedule without going to team driving.

– Posted by wannabefair To read and comment on our industry blogs, visit blogstn.trucknews.com. trucknews.com

12-10-11 12:47 PM

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COMPETITION WATCH

BISON TRANSPORT has been awarded the American Trucking Associations’ (ATA) President’s Trophy for its outstanding safety record and programs. For the second consecutive year, Bison has attained the lowest US Department of Transportation recordable accident rate in its division and mileage category: 100 million mile line haul. Bison also received the ATA’s Safety Improvement Award for its reduction in workplace accidents and injuries. The awards were presented during the ATA’s Safety and Human Resources National Conference and Exhibition.

BRITTON TRANSPORT, a US subsidiary of Bison Transport, has acquired SCOTT’S EXPRESS and SCOTT’S TRANSPORTATION SERVICES, located in Grand Forks, N.D. Scott’s is a nationwide trucking and truck brokerage company, specializing in agribusiness throughout the US and parts of Canada. Founded in 1952, Scott’s was initially operated as a filling station, but soon after began sourcing trucks on behalf of local potato farmers, becoming the first truck brokerage in the Red River Valley.

Today, Scott’s continues to service the potato and specialty crop sector. Financial details concerning this transaction have not been disclosed.

MSM TRANSPORTATION has been purchased by WHEELS GROUP in a deal expected to wrap up by the end of September.

MSM has been named one of Canada’s 50 Best Managed Companies for 15 straight years and has operations in Bolton, Ont. as well as in California. It boasts same-day service within southern California and has established high-volume consolidation lanes to major Canadian cities and select US destinations. MSM earned revenue of about $44 million in 2011. The purchase price is about $18.6 million, Wheels Group reported.

U.S. XPRESS ENTERPRISES and MARITIME-ONTARIO FREIGHT LINES (M-O) are partnering to launch a cross-border North American shipping solution. Through the partnership, each company will leverage its dominant national network to move freight across the border and throughout each country, creating one seamless North American network, covering the US, Canada and Mexico. This unique partnership comes as a response to customer demand for a one-stop direct carrier option with the geographic footprint, ease of access and capacity they need to take their freight safely across the border and to its final destination without the need for third-party vendors. Under terms of the agreement, M-O will carry the freight across the Canada-US border crossing and U.S. Xpress will be responsible for Mexico-US border crossings. The border crossings served through the partnership are Buffalo/Niagara and Detroit/Windsor. To ensure the security of the freight and facilities, M-O has completed the requirements and testing necessary to earn its C-TPAT certification in Canada and PIPS certification in the US, and U.S. Xpress has been recognized as C-TPAT compliant. The service has been designed to cover the widest possible range of needs and price points and will employ truckload, refrigerated, dedicated and some limited LTL options through team and solo arrangements. To take advantage of each company’s strong rail presence, intermodal services will also be used as appropriate.

While U.S. Xpress and M-O believe that the retail sector will generate the greatest demand for this service, it is suited to everything from pharmaceuticals to grocery to manufacturing.

TRIMAC TRANSPORTATION has completed its acquisition of all of the issued and outstanding shares in the capital of LIQUID CARGO LINES (LCL). Trimac acquired the shares of LCL from McCaig Real Estate, an affiliate of Trimac, for a purchase price of $1,986,000. LCL, based out of Mississauga, Ont. since 1953, provides specialized bulk transportation deliveries throughout Ontario, Quebec and the US with a focus in chemicals and asphalt. The assets of LCL include 42 trailers, 22 company-owned power units, in addition to eight owner/operator units, and a lease of a 13-acre property in Mississauga. According to company officials, immediately prior to the closing of the acquisition, through a series of transactions, McCaig Real Estate acquired the shares of LCL from an arm’s length third party and purchased from, and leased back to, LCL the 13-acre property where LCL’s branch is located and where National Tank Services currently operates a tank wash facility. McCaig Real Estate is controlled

by Jeffrey J. McCaig, the chairman and CEO of Trimac. The transaction was reviewed and unanimously approved by the independent directors of Trimac and supported by independent appraisals of both the rolling stock and the real property.

ARMOUR TRANSPORTATION SYSTEMS’ (ATS) president and CEO Wes Armour has won the “Builder of Youth Lifetime Achievement Award” from the Boys and Girls Club of Moncton. The award, presented to Armour on May 16, is the highest honour the Boys and Girls Club can bestow on anyone in the Greater Moncton community. Over the past decade, ATS has contributed hundreds of thousands of dollars to youth-related activities and charities, including the Juvenile Diabetes Research Foundation, community hospitals and universities, and Boys and Girls Clubs. Armour has also contributed his time through mentorship and financial support on behalf of young entrepreneurs across New Brunswick. The company offers an annual scholarship program to the children of ATS employees who have started their first year of post-secondary studies. FE 10 FLEET EXECUTIVE ❙ September/October 2012

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BOTTOM LINE

THE ONE SURVEY THAT MATTERS Lose the customer survey. An internal survey is simpler and far more accurate

By Mike McCarron

I

cringe when I look at some of my older columns. Time has made some of my thoughts so contradicting, I wonder what song sheet I was singing from back then.

One area where I’ve changed my tune is the value of customer surveys. In the past, I have penned how essential they are, insisted they be done annually, and made a lot of important business decisions based on their results. Fast-forward a decade and I think customer surveys of any kind are totally and utterly useless. The reality is, they are rarely accurate (just like any other single method of collecting customer feedback).

It still surprises me that almost every ISO Quality System makes annual surveys mandatory for registration.

I understand the allure of a customer survey. It’s almost like comfort food. Need to know whether your customers like you?

No problemo! Just have sales whip up a survey. They’re fun to put together, easy to implement, and quickly provide loads of “important” information about how you’re doing.

They’re also a waste of time.

Imagine going door-to-door and asking your neighbours to rate key areas of your character on a scale of 1 to 10 (1 you’re a buffoon, 10 you’re Godlike). Surveying your own customers isn’t much different.

Even if your survey is blind and anonymous, filling it out takes time and effort your customer just doesn’t have. Honestly, how much do you enjoy filling out surveys? How many do you actually complete? If you’re like me, it’s zippo. I won’t even do the ones that try to con you by offering the lucky draw for a free trip to Vegas. Let me get this straight: I’m going to tell you how bad your service is and you’re going to thank me by sending me to Sin City for a free weekend of fun and sun?

My favourite tactic is when the surveyor phones and has you paged out of an important meeting. I get so bent out of shape that even if I were a fan of Company A, I’d quickly convert to the dark side.

Survey Yourself People are way too busy these days to tell you what they think you should already know. I don’t know many customers who get excited over the call from a carrier’s quality manager looking to set up a meeting to discuss their disturbing survey results. By nature, we’d rather keep our mouths shut than open up about something that’s really not very important or pleasant to do. There are so many competitors banging on 12 FLEET EXECUTIVE ❙ September/October 2012

Bottom Line Sep 2012.indd 12

our customers’ doors that it’s easier for a customer to switch than to lay their cards on the table.

My suggestion is to lose the customer survey and do an internal survey by asking yourself the following 10 questions.

It’s easy, simpler, and far more accurate.

1. If you were a transportation decision-maker, would you use the services of your trucking company? (If you wouldn’t, don’t worry about the next nine questions.)

2. Is your top- and bottom-line business growing with your existing, long-term customers? (It’s the fastest, cheapest, and most profitable way to grow. The 80/20 rule is A-OK.) 3. Are customers presenting you with new and exciting business opportunities that take you out of your comfort zone? (Shows a high level of trust and compatibility.)

4. Does your company get unsolicited calls from positive word of mouth? (Word of mouth is better than advertising and absolutely necessary to grow your business today.)

5. Would your company have the courage to implement an unconditional 100%-money-back guarantee? (Takes big nuts, but makes a huge statement about your company.)

6. What do your competitors think of you? (It’s easier to find out than you think.)

7. What’s being said about you on social media sites? (No news is not necessarily good news.)

8. Do you get a lot of one-shot wonders, people who give you a trial shipment only to turn into Casper the Ghost, never to be heard from again? (A real litmus test. These customers were underwhelmed by their first experience with you.)

9. Does your product solve problems? (On-time service does not build loyalty. It builds vanilla, neutral, bland relationships.)

10. What’s your gut tell you? (Almost never wrong.)

Surveys are inaccurate, they irritate people, and most people don’t complete them when asked. If you need your customers’ input to tell you how your company is performing, it’s way too late. You probably already have a lot fewer customers to ask than you used to. FE Mike McCarron is one of the founding “M’s” at MSM Transportation (www.shipmsm.com) in Bolton, Ont. He can be reached at mmccarron@shipmsm.com or @AceMcC on Twitter. trucknews.com

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0 1 e Th

TAKING CARE OF BUSINESS

es k a t s i m g ricin p n o m m most co

I

recently spoke with Dennis Brown, partner at Californiabased Atenga – the nation’s leading pricing authority to commercial and industrial companies worldwide. The company has resources and processes designed to improve clients’ profits by optimizing prices and improving price performance. Their most surprising finding, according to Brown, has been how often price optimization can raise prices and improves sales volumes at the same time.

Brown said price strategy is “emerging as the most important resource for companies to increase their competitive advantage.” The vast majority of companies have spent years achieving gains through cost cutting, outsourcing, process reengineering and the adoption of innovative technologies.

However, the incremental benefits from these important activities are diminishing and companies are looking at other areas to improve their business results.

Brown believes that companies are looking to serve welldefined market segments with specialized products, messages, product variants and services – and earn superior profit margins while doing so. Savvy companies are implementing price optimization schemes and focusing on building their organizations to serve their most profitable customers. Many are seeing improvements by even “firing” customers who are unprofitable.

All too many companies, however, use simplistic pricing processes and some cannot even identify their most profitable services, customers or customer segments. This lack of information means too many management teams have their sales staff focusing the bulk of their time servicing the least profitable of their customers. Some companies even embrace policies and pricing strategies that drive away their best customers and then wonder why their profits are not growing.

Over the years, Brown has seen examples of good and bad pricing policies. The following is a list of 10 of the most common mistakes companies make when pricing their products and services.

1.

Basing prices on costs, not customers’ perceptions of value – Pricing based on costs invariably leads to prices that are too high or – more often – too low.

2.

Holding prices at the same level for too long; ignoring changes in costs, competitive environment and customers’ preferences – Most companies fear the uproar of a price change and put it off too long. Savvy companies acclimate their customers and their sales forces to frequent price changes. trucknews.com

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Is it time to revaluate your pricing policies during tough times?

By Mark Borkowski

3.

Basing prices on “the marketplace” – Management teams must find ways to differentiate their products or services to create additional value for specific market segments.

4.

Attempting to achieve the same profit margin across different product lines – For any single product, profit is optimized when the price reflects the customer’s willingness to pay.

5.

Failing to segment customers – The value proposition for any product or service varies in different market segments and price strategy should reflect that difference.

6.

Incentivizing salespeople on revenue generated, rather than on profits – Volume-based sales incentives create a drain on profits when salespeople are compensated to push volume at the lowest possible price.

7.

Changing prices without forecasting competitors’ reactions – Smart companies know enough about their competitors to predict their reactions and prepare for them.

8.

Using insufficient resources to manage pricing practices – Cost, sales volume and price are the three basic variables that drive profit.

9.

Failing to establish internal procedures to optimize prices – The hastily called “price meeting” has become a regular occurrence, a last-minute meeting to set the final price for a new service.

10.

Spending a disproportionate amount of time serving your least profitable customers – Most companies do not know who their most profitable customers are. Know your customers: 80% of a company’s profits generally come from 20% of its customers. Failure to identify and focus on the 20% leaves companies undefended against wily competitors. FE Mark Borkowski is president of Mercantile Mergers & Acquisitions Corporation.

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

September/October 2012 ❙ FLEET EXECUTIVE 13

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FIT FOR DUTY?

By Julia Kuzeljevich

Meeting the need for safety while accommodating for drugs to treat health issues of an aging driver force is a weighty task for safetysensitive industries. And it’s only going to get even more complicated.

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I ?

n safety-sensitive industries such as transportation, drug and alcohol use can become a defined safety issue that requires employers to determine “fitness for duty.”

A good employee assistance plan is key to properly addressing drug and alcohol problems, and to referring the employee for proper treatment.

But does it do enough?

“Alcohol and drug prevalence rates are higher in society than we actually know about,” says Karen Seward, executive vice-president with Morneau Shepell, which offers comprehensive employee assistance programs. And the trucking lifestyle can make some people more predisposed to mental health and drug addiction issues, she said.

“There’s a higher percentage of people who smoke, or use alcohol for relieving the stress. They are kept to a schedule that sometimes they have no control over. The big risk management issue for the transportation industry is the safety of others. That’s the bigger difference in duty to accommodate,” said Seward.

While there are different levels of drug and alcohol use, actual addiction is defined when three of seven criteria, listed in the Diagnostic and Statistical Manual of mental disorders, have been present for over a year.

Most important are the criteria of “tolerance” (having to use more and more to get the same effect) and “withdrawals” (a compilation of symptoms specific to each class of drugs, that a patient would experience if their drug of choice is stopped), noted Dr. Michael Varenbut, an Ontario specialist in addiction and sleep apnea.

“Additional criteria are things such as using a drug more than it’s intended, having others telling you to quit, spending more time or money obtaining the drug or using the drug,” he says.

“Absolutely any big company in a safety-related profession is going to have a policy vetted by their lawyers. Where the problems are coming up are for the smaller organizations.

Sometimes they will just download something off the Internet and that is going to get them in trouble with drugs because drug addiction is recognized as a disability in Canada,” warns Aaron Rousseau, a lawyer with Rubin Thomlinson.

“The law is clear that there is no problem with requiring drug or alcohol testing in a post-accident or near-miss situation. The controversy arises more often around what happens in a situation of random testing – not right after an accident, but what happens down the road. The danger for employers is not making an individualized assessment and going too far too fast,” adds Rousseau.

But even in companies with entrenched policies, issues can and do arise. trucknews.com

Human Edge Sep 2012.indd 15

THE HUMAN EDGE

For example, in the summer of 2011 a major US truck line was sued by the US Equal Employment Opportunity Commission (EEOC) for violating the Americans with Disabilities Act when a company driver who self-reported an alcohol problem was suspended from his position, and allegedly told he would not be able to return to driving, even upon successful completion of a counselling program.

In the fall of 2011, The Toronto Transit Commission (TTC) approved a proposal to start conducting random drug and alcohol testing of its employees. Its prior “fitness for duty” policy had been to test employees in “safety-sensitive” positions, before hiring, and when there was a reasonable reason to suspect impairment, such as after an incident or after substance abuse treatment. The decision came after a TTC bus driver was charged with criminal negligence causing death and possession of marijuana in an August 2011 accident that killed a 43-year-old woman and injured 13 other passengers.

It’s a tougher approach that is widely in evidence in US jurisdictions.

In May 2011, a bipartisan bill was introduced called “The Safe Roads Act” that would create a national drug clearinghouse database to store all commercial motor vehicle operators’ positive drug and alcohol tests results and records of refusals to take the tests.

The American Trucking Association supports the bill, which it said “will address a well-known loophole in the federal drug and alcohol testing requirements for commercial drivers.”

Ted Shults, chairman of the American Association of Medical Review Officers (AAMRO), and the American Board of Forensic Toxicology, told Fleet Executive that “a closer collaboration between the MRO and medical examination function will be helpful. What is also critically important is that all medical examinations include a search of state prescription drug databases by DOT medical examiners and MROs to see how many prescriptions a driver is getting. It is often the most important and sometimes shocking piece of information that is nearly impossible for MROs and Medical Examiners to obtain the way the various laws were set up. If an MRO or examining physician sees that a driver has 10 doctors prescribing opiates, stimulants or sedatives, that is all you need to know in that case.”

Data from the Federal Motor Carrier Safety Association revealed that more than 70% of compliance reviews conducted since 2001 and more than 40% of safety audits conducted since 2003 found violations of drug testing regulations, including finding that carriers had no drug testing program at all.

In July 2011, Washington-based Gordon Trucking began drug screening all job applicants via hair samples “with the goal of reducing new driver accidents within the first crucial months of employment.”

According to Scott Manthey, vice-president of safety and compliance for Gordon Trucking, “We feel that a urine test combined with the longer timeframe of a hair test offers one September/October 2012 ❙ FLEET EXECUTIVE 15

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THE HUMAN EDGE

‘‘

employer. The key MRO role is to determine if a ‘positive,’ “Research has shown confirmed laboratory result can be attributed to the legitiuse of a prescription drug – or not. Even if the drug use most accidents occur mate is legal there is the secondary question if the medical inforprovided to the MRO raises a fitness or safety conwithin the first 90-120 days mation cern. That is one of the areas that is getting more complex.

The other area of increasing complexity is the management of employment. of the integrity of the specimens. Over the past two decades, a cottage industry of manufactures of artificial urine Once a driver makes and chemical concoctions to adulterate the specimen has grown up around drug it through that initial period testing and has continually threatened integrity and efficacy of the whole the risk of an accident the program – not to mention public safety,” drops dramatically.” says“AllShults. employers who have safety-sen-

of the best possible screening tools. We have concluded that this aids in selecting some of the safest and most professional drivers on the road,” he says.

The tests aim to address the problem of urine test fraud and job-hopping, where a candidate who tests positive for one carrier is fired, quits, or is not hired, but then subsequently tests negative on a pre-employment test for another carrier, without disclosing the previous failed drug test.

“Beyond the candidates who have tested positive, we also routinely have candidates dismiss themselves from orientation classes once they confirm a hair test will be conducted,” said Manthey, who also stated his support for a drug test clearinghouse proposal, to be expanded to include any drug or alcohol screen that has been medically reviewed.

“There is a very significant increase (in hair testing) under their own company authority because of the use of the amount of adulterants available for urine testing so that employers are not believing the results of urine test,” said Bill Corl, CEO of Omega Laboratories. Hair testing can prove more accurate for some drugs that cannot be detected in urine for more than a few days.

“That kind of gets a little tricky with safety-sensitive positions: once hired, employers have the right to find out if they are abusing a prescription. Many of the employers use a medical review officer, and if there is a positive result, the officer contacts the donor to find out if they have had treatment for the drug or alcohol,” said Corl.

Substance abuse professionals are increasingly tasked with making determinations that go beyond the scope of their defined duties. This is becoming more of an issue as the workforce ages and as more medications, such as sleep medications and anti-depressants, are introduced which may interfere with the results of testing.

“In regulated drug testing, the role of the Medical Review Officer’s function is defined by regulation. The MRO acts as an interface between the donor of a specimen and the 16 FLEET EXECUTIVE ❙ September/October 2012

Human Edge Sep 2012.indd 16

sitive operations are struggling with this issue. It is much more difficult to determine whether a drug like an opiate or multiple drugs like opiates, stimulant and sedative use presents legitimate use, abuse, addiction, dependency and the magnitude of the safety risks involved.

These are diagnostic decisions that require professional judgment. Unlike looking at alcohol use, the relationship between drug levels and impairment is complex and often not conclusive. Unfortunately, the unsettling truth is that many workers in the transportation field are getting older, suffer from chronic medical conditions, and are taking a multitude of legal prescription drugs that may affect performance. It is true that doctors can clearly sort out the very healthy from the very unhealthy, but there is a lot of gray area in the science and data.

“I would like to suggest that physicians and employers be given insulation from threats of disability lawsuits as a result of providing a medical diagnosis that disqualifies a driver because of potential safety risks presented. I would like to see employers implement policies that allow for prescription drug use, but that prescription drug and underlying medical condition be reviewed at least on an annual basis,” he explains.

Ultimately, says Shults, drivers have responsibility for their safety in terms of drug use.

“What drivers should know, or be reminded of, is that when they are prescribed a controlled drug like an amphetamine, opiate or sedative, they must tell their treating physician that they are truck drivers and that the treating physician has to approve or clear them to work on these medications.”

While minimum medical qualifications for drivers are constantly being updated, “There are no definitive criteria for predicting future performance in many cases, and we accept risk,” said Shults.

“We are still going to have the gray areas and the balance between safety and allegations of disability or age discrimination is not easy to find,” he said. FE trucknews.com

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Human Edge Sep 2012.indd 17

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MAINTENANCE MATTERS

PRODUCTIVITY IS PRIORITY Rising equipment costs are influencing spec’ing decisions and strategies

By James Menzies

A

s shippers continue to commoditize trucking, it behooves carriers to do everything they can to squeeze more productivity out of their equipment.

That was the message from Tom Kretsinger Jr., president and COO of American Central Transport (ACT), when speaking at the Commercial Vehicle Outlook Conference Aug. 23.

“This year, we’ve had very little ability to increase our prices,” Kretsinger said. “If costs are going up but the prices that you can charge are not going up, then what is your solution?

The only solution is to find ways to increase productivity. To increase your costs without increasing productivity an equal amount or more isn’t rational.”

For ACT, that has meant taking a sophisticated approach to spec’ing new equipment and adopting traditionally unortho-

dox spec’s such as 6x2 drive configurations. ACT bought 50 trucks with so-called ‘dead axles’ last year and gained fourtenths of a mile per gallon while also adding payload.

“The residuals on it are unknown, but the thing that’s surprising is, we’ve had some of these available through our lease-purchase program and we’ve had some operators specifically ask for them,” Kretsinger said. “They understand how much money they can save on fuel.”

He noted some driver training is required to prevent excessive tire wear when slippage occurs.

When spec’ing new equipment, ACT forms a committee with representation from the finance and maintenance departments. They look at: reliability; dealer support and footprint; reputation; driver acceptance; and resale values, among other variables. Top of mind, however, is total cost of ownership.

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18 FLEET EXECUTIVE ❙ September/October 2012

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Wi

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Publ i shin ine

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TransporTaTion MaTTers

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MAINTENANCE MATTERS

“We don’t look so much at the price of a new truck itself,” Kretsinger explained. “We would like the lowest price we can get, but really the price is what it’s going to cost to operate that piece of equipment over its life, which for us is normally about five years.”

Moving to tag axles and wide-base tires has seen some ACT drivers improve their fuel mileage by as much as 1 mpg.

Kretsinger said the company recently hosted a Kansas City barbecue for drivers who could reach 8 mpg and 14 drivers were invited. Twelve of the 14 were

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owner/operators, he hastened to add.

When shopping for new equipment, ACT develops a master spec’ with comparable components across the various truck brands. It also relies on past experience, surveys such as JD Power & Associates and networking to determine which vehicles are the most reliable and well-liked by drivers. Residual value often gets overlooked, but Kretsinger said it’s an important consideration.

“It’s a very important part of the lifecycle cost,” he explained. “We do spec’ our trucks for the residual market unless it’s something like a dead axle where we think we can make it up ahead of time.”

The company mostly orders mid-level interiors, which are appreciated by drivers, potentially lowering driver turnover and are also easier to sell later. Kretsinger said it’s important to work closely with the OEM when spec’ing new equipment.

“The OEM people we deal with are good folks,” he said. “They’re pretty straight shooters and we don’t see much in the way of fluff. There are times when they want to sell trucks more than others, and you’ll see that in the price. Then, the other thing we do is we try to do multiyear purchases at once, but that also becomes difficult. Everyone in the industry is trying to figure out what’s going to happen in two years – how do you do a three-year deal?”

With the cost of fuel and equipment rising, Kretsinger said the obvious place to look for improved efficiencies is fuel consumption.

“There’s no expense to running a truck that’s bigger than fuel,” he said, noting that going from 6 mpg to 7 mpg yields annual fuel savings of about US$3,000 per truck. With shippers looking to drive down transportation costs and in many cases staffing traffic departments with purchasing managers instead of transportation experts, Kretsinger said improving productivity is the only answer.

“Our customers, at least now, will not pay for (the extra costs of trucking),” he said. “If we don’t get it back somewhere, we’re just shrinking our margins and that’s not sustainable over time.” FE trucknews.com

12-10-11 1:18 PM

Motortruck

Fleet Executive

C A N A D A ’ S

B U S I N E S S

SEPTEMBER/OCTOBER 2012

M A G A Z I N E

GREEN TO GOLD

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F O R

F L E E T

O W N E R S

AN IN-DEPTH LOOK AT THE GREEN TECHNOLOGIES, PRACTICES AND PROGRAMS PROVEN TO DELIVER RESULTS FOR YOUR BOTTOM LINE

12-10-11 1:19 PM

3G

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Monday, July 2, 2012

Ontario trucking companiea optimistic about next quarter BCTA wary AirCare program phase-out will shift

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GREEN to GOLD

STEP NEXT >> THE

M

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Sustainable transportation practices are maturing as ROI numbers become available and benchmarks are set

ith this, our sixth annual supplement on sustainable transportation practices, we come to an important milestone. Since our first groundbreaking supplement, the discussion about sustainable practices has evolved from simply making the case on why the fuel-wasting ways of the past had to go, to beginning to explain how to do so, and finally to discussing how to measure and benchmark performance in this regard.

This supplement includes a story from features editor Julia Kuzeljevich about Natural Resources Canada’s rollout of the Canadian version of the SmartWay Transport Partnership. This is a pivotal development. SmartWay offers Canadian truck carriers, shippers, and logistics companies the opportunity to collect data on their carbon emissions and measure against consistent standards developed on both sides of the Canada-US border.

More than 3,000 industry partners have signed on to SmartWay since it was launched by the US Environmental Protection Agency back in 2004. Previously, Canadian freight carriers and shippers with cross-border business wishing to participate in the SmartWay program could only register in the US. Now they can do so in Canada and know they will be measured by the same yardstick on both sides of the border.

Providing a definitive answer on whether the cost-saving potential of fuel-efficient technologies is worth the upfront investment is critical, particularly for small and medium-size fleets who may not have the resources to take a chance on new technologies. Earlier this year, Natural Resources Canada stepped up to the plate with the publication of a study that gets to the heart of that question. We reported the study’s find-

trucknews.com

ings (mainly a 5% average reduction in fuel consumption, and an eight-month/110,000-km payback period) in our May/June issue. Now we follow up with comments from the drivers, maintainers and fleet managers of the carriers involved in the research. Their comments take you beyond the numbers and make for an interesting read.

Tires make a significant contribution to fuel savings. And it can be argued that while aerodynamic enhancements to tractors and trailers require a discretionary initial investment, since rigs do not roll without tires, fleets cannot lose by buying tires proven to reduce fuel consumption. Veteran correspondent Carroll McCormick outlines how low rolling resistance tires plus proper inflation can equal lower fuel bills.

Of course, the driver remains at the centre of fuel-saving strategies and education is paramount. Over the last decade, thousands of Canadian truck drivers have taken a Fleetsmart SmartDriver classroom session in one form or another, resulting in great savings in fuel economy and significant reductions in greenhouse gas emissions.

Our correspondent Harry Rudolfs, a professional driver himself, takes us through the new E-learning edition of SmartDriver for Highway Trucking and explains what the program has to offer and why E-learning makes so much sense for an industry whose frontline employees are constantly on the move.

We hope you enjoy our supplement. Also be sure to look for more information on sustainable transportation online with our Green to Gold section under Knowledge Centres on trucknews.com.

Lou Smyrlis Editorial Director

September/October 2012 ❙ FLEET EXECUTIVE 23

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COVER STORY

GREEN to GOLD

DOING THINGS THE SMARTWAY Natural Resources Canada releasing Canada’s version of SmartWay program

N

By Julia Kuzeljevich

atural Resources Canada (NRCan) has begun rolling out a Canadian version of the SmartWay Transport Partnership program, offering Canadian truck carriers, shippers, and logistics companies the opportunity to become partners right away and to use the SmartWay FLEET Tool carbon data collection system, which measures against consistent standards developed on both sides of the Canada-US border.

The SmartWay program is an international network that was launched by the US Environmental Protection Agency (EPA) in 2004. Since then, more than 3,000 industry partners have signed on.

Previously, Canadian freight carriers and shippers with cross-border business and wishing to participate in the SmartWay program could only register in the US. Now, NRCan will administer the SmartWay Transport Partnership, and Canadian companies who move freight north, south and east or west can join in Canada and register through the NRCan Web site.

Cara Scales, chief of the SmartWay program at Natural Resources Canada, noted that it’s too early to say what kind of uptake the Canadian version of the program will have in Canada.

24 FLEET EXECUTIVE ❙ September/October 2012

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“But I will say that the US program, up and running since 2004, has 250 Canadian companies registered through the US portal, so that indicates there is interest among Canadian companies to participate. That number has actually increased in the last year alone by 50 more companies,” she said.

Prior to the rollout, Natural Resources Canada put on some workshops to get an idea of what industry was thinking.

“We talked to non-SmartWay partners and were pleased to see early buy-in to the program. Several shippers felt that by joining there is opportunity to help lead the way toward a sustainable transportation future. They also recognized that by encouraging their carriers to join they could help influence the freight sector to adopt more energy-efficient practices,” she said.

“For the first time, Canadian companies that conduct business within Canada will have the same opportunity to benefit from the SmartWay network. Here, they can join a business-to-business network committed to saving fuel and money, and reducing emissions across the country,” said Scales.

Before the SmartWay FLEET tools were introduced, many different carbon data collection systems were being used across North America.

Natural Resources Canada and the EPA will rank and publicize partner performance on the SmartWay Web sites, rewarding organizations that significantly reduce the environmental impacts of the freight sector through recognition, and trucknews.com

12-10-11 1:19 PM

providing information products, tools, technical training, and networking opportunities.

“The EPA has already released tools for the following SmartWay partner categories: truck, multimodal, logistics, shipper and rail and is working with a number of stakeholders to evaluate approaches for including marine and air freight into SmartWay. We intend to align these efforts with Canada going forward,” the EPA told Fleet Executive.

“Our goal is to make it as seamless as possible for participants. The 2011 calendar year registration tools will be released in a staggered timeline compared to the US. The release of the 2012 calendar year registration tool for trucks is planned for around late November in the US, and about three weeks later in Canada. The delay allows us to release the registration tools in English and French and adapt them to the metric system.

Following that, we will be on a similar timeline as the US. Right now, the US EPA and Natural Resources Canada are both still collecting 2011 calendar year material,” said Scales.

The goal is that shippers who join the SmartWay Transport Partnership will better understand and evaluate their environmental performance and energy use, and be able to reduce the impact of transportation on the environment and their businesses.

Similarly, SmartWay carriers commit to reducing fuel costs and greenhouse gas emissions by adopting fuel-efficient technologies and operational policies. trucknews.com

GreentoGoldSep12 CS6.indd 25

Government and non-government organizations, such as trade and professional associations, academic institutions, dealerships and truck stops, can also become affiliates in the program and can promote SmartWay on their Web sites.

Shippers who want to become partners must gather and submit information about their operations and their contracted fleets.

Data, which includes address and contact information about the partner company, as well as its North American Industry Classification System (NAICS) Codes, is entered into the Freight Shipper Tool and submitted for approval.

Shippers must also submit information regarding the carrier, such as activity details around kilometres and tonne-kilometres contracted, freight characterization and preferred emissions inventory calculation metrics.

Shippers can view and track carrier performance rankings by updating their tool submission each year. The tool enables companies to calculate how much freight they ship with SmartWay Carrier Partners and estimate the energy use and emissions impact of the goods movement.

Because the program analyzes operations based on the performance of carriers contracted with in the previous year, the results are more accurate if carriers are enrolled before the Shipper FLEET Tool is submitted.

If some carriers choose not to participate, shippers can still do so, but their results will be less accurate, as they will be based in part on industry averages rather than on specific companies contracted with.

NRCan said that with shipper approval it can also contact carriers directly, if provided with the contact names of shippers’ outsourced carrier companies for 2011.

“Because SmartWay analyzes a shipper’s operations based on the performance of their carriers, the carriers would need to enrol before the shipper submits the FLEET Tool,” said Scales.

“Our team is ready to help out – if the shipper provides us with the names of their outsourced carrier companies, we would be pleased to contact them and guide them through the steps.

“It’s important for the shippers to know that even if their carriers are unable to sign up right away, shippers can still participate – their results will be based on industry averages meaning that they will slightly less accurate.”

Carriers may also contact a Partner Account Manager (PAM) who can guide them through the registration process.

“As soon as a company makes a first point of contact with a Partner Account Manager, that person becomes the go-to or their personal helpdesk and walks them through the registration process,” said Scales.

“While the upfront investment of information is extensive, the value of benchmarking their operations using the FLEET Tool helps carriers analyze their fuel consumption and carbon footprint and compares their operations to their competitors,” said Scales. “When they see how their company’s performance compares to industry averages, they can ask themselves: why aren’t we performing as well as others and where can we make improvements.

Continued on page 34 September/October 2012 ❙ FLEET EXECUTIVE 25

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COVER STORY

GREEN to GOLD

Fleetsmart’s Smart Driver E-learning fuel-saving program adds a new express lane on the Information Highway

By Harry Rudolfs

O

ver the last decade, thousands of Canadian truck drivers have taken a Fleetsmart SmartDriver classroom session in one form or another, resulting in great savings in fuel economy and significant reductions in greenhouse gas emissions.

Now with the launch of its new E-learning edition of SmartDriver for Highway Trucking, Natural Resources Canada hopes to reach many more drivers via the Information Highway. The course is now available free of charge and is delivered in an 80-minute program through a series of interactive modules. Primarily designed for experienced drivers who may

LIGENT APPROACH NG FUEL COSTS not be getting optimum fuel mileage, the online course can also be dovetailed with existing training programs for drivers at any skill level.

By some estimates, at least half of long distance truckers carry a laptop or some other form of Internet-enabled device. It follows that the E-learning modules will have wider access to a much larger group of drivers, particularly longhaul company drivers and owner/operators who may only get into the company’s terminal on an infrequent basis. “We wanted to move into Web-based learning that a driver could access from anywhere in North America,” says Fleetsmart’s senior manager Lynda Harvey.

Participants merely go to the Fleetsmart Web site (www. fleetsmart.gc.ca) and click on the top right corner as a new member. After registering, drivers are guided through the sessions which can be completed at their leisure. A unique bookmarking system allows drivers to start and stop the modules at any time, and brings them back to the last completed section upon subsequent logins.

The E-learning course is packed with a set of visual presentations, videos and short quizzes, and covers the fundamentals of fuel-efficient driving. The comprehensive course looks at all aspects of the craft, from mechanical fitness of the vehicle, to aerodynamic and developing technologies, to fuel-saving driving techniques, including progressive shifting and defensive driving. Following a knowledge-testing quiz at the end of the session, participants can print up a certificate that they can add to their resume. trucknews.com

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As a working Class A driver with more than 30 years experience, I’ve taken several courses over the years, including SmartDriver for Highway and City Trucking, so I’m familiar with most of these driving techniques. Regardless, I found the online course to be fresh and interesting. The video segments are well-produced and engaging. Moreover, the sessions are relayed in “trucker speak,” and don’t talk down to participants by using technical jargon.

I completed the course during three easy sittings. While at home, I started the modules while doing housework, and after getting distracted by the laundry or a telephone call, I just scrolled back to where I had left off and started that page again. While on the road, I found the program to be a welcome diversion during my hours of involuntary downtime.

Prior to its launch, the program was “tested” by more than 1,000 drivers from both the US and Canada. NRCan’s Fleetsmart developed the E-learning course in tandem with the US EPA’s SmartWay initiative. After a rollout on Sept. 12, the material available on both sides of the border from both agencies will be consistent.

Chrysler Group’s transportation division originally supplied six drivers last fall as test pilots for the E-learning sessions.

They liked the program so much that they increased that number to 600 drivers by Christmas. Significant fuel savings were achieved by participating drivers, from 5.95 to 6.42 mpg (US gallons), as well as tangible reductions in greenhouse gas emissions. Chrysler now sees the SmartDriver for Highway Trucking Web-based workshop as a key component to its driver training curriculum and currently has put 800 drivers through the program.

Another carrier that posted good results, both from the classroom and online programs, was Kriska Transportation of Prescott, Ont. They enrolled a test group of 40 drivers in a study, separating them up into four groups of 10. Ten drivers received the E-learning program only, while the next 10 had the E-learning session along with a road trial. Another 10 received the SmartDriver classroom training along with a test drive, while 10 drivers received no instruction at all.

To demonstrate the versatility of the E-learning program, five out of 10 of the first group, those getting the E-learning alone, had no experience with the Internet or computers. “We had to nudge them a bit,” says Robert Duncan, driver training coordinator for Kriska. “The guys that didn’t know computers at all went right through and seemed to enjoy it. They liked the fact they could do it at their own pace and no one was looking over their shoulder.”

Although the test sample of drivers monitored was small, some good results were obtained by all the groups including the 10 drivers who received no training at all. Duncan attributes this to “word of mouth among the drivers.” Kriska supplies all of their 400 drivers with a monthly print-out that charts their fuel mileage, idling time, hard braking, high rpm, low rpm, and overspeed events, so the employees are already aware of the Continued on page 34 September/October 2012 ❙ FLEET EXECUTIVE 27

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COVER STORY

GREEN to GOLD

SOLID FOUNDATION What you must do to ensure your fuel efficiency incentive program is based on one

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fuel-efficiency incentive program, by itself or as part of a more comprehensive incentive program, can be an important part of your company’s efforts to “go green.” Incentive programs motiv-

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ate employees to improve their performance by rewarding specific positive behaviours.

For an incentive program to be successful, it must be properly designed, implemented and administered. Yet,

until recently, there was little published information on how to implement and sustain a successful incentive program.

Natural Resources Canada has aimed to meet this need with a guide entitled Driving for Fuel Efficiency: An Incentive Program Handbook. The guide provides practical advice on how to design, implement and sustain a fuel-efficiency incentive program.

Over the next few issues, we will be publishing excerpts from the guide to help carriers interested in setting up their own fuel efficiency incentives programs.

A successful incentives program must be built upon a solid foundation. We start with the key steps in developing a successful incentive program.

Choose a coordinator carefully After the company has made a firm commitment, the chosen “champion” must put someone in charge of coordinating all aspects of the incentive program. The coordinator should be a knowledgeable,

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GREEN to GOLD dependable member of the management team – someone willing and able to promote the program as part of his or her duties.

In smaller companies, the president often coordinates the incentive program and acts as the program champion. Sales and marketing people, as well as health and safety managers, can be good coordinators, too. The role of coordinator depends on your company’s size and the coordinator’s capability and interest.

The coordinator should have these characteristics: • Expertise in the areas targeted by the incentive program • A commitment to three basic principles:

Work closely with the target groups Management develops the program in cooperation and consultation with those for whom it is intended – the target groups.

Employees are more likely to work toward goals they have helped define.

Management usually sets the overall budget for the program. However, employees need to be involved in deciding the details. This will lead them to buying into the incentive program – a feature critical to its success.

Ask employees to establish which incentives are the most motivating and under what conditions. Involve them in all aspects of the program.

> F uel consumption can be improved. > This improvement can be measured. > Positive feedback is more effective

Form a team to drive the program Teamwork is essential to success. Involving the right people in planning and implementation will strengthen companywide support for your program and enable it to achieve its ob-

with employees than criticism.

Clearly define the coordinator’s role and responsibilities, preferably in writing.

jectives. The incentive team should represent all areas of your company: drivers, the dispatch office, maintenance staff and management.

Call for volunteers to identify team members. This could result in a high level of commitment for making the program a success and motivating other employees.

The team should meet regularly to identify problems, suggest solutions and develop action plans.

The team should meet with senior management regularly (at least annually) to report on achievements and present goals and objectives for six or 12 months.

This way, management has an opportunity to recognize accomplishments by the incentive team and show appreciation for employees’ efforts.

Your company may already have a committee whose structure and tasks are compatible with the desired objectives; it could address the fuel-efficiency incentive program as part of its mandate. If Continued on page 35

Miles go up. Costs go down. Tank empties. Bank fills. Impossible? Not with PeopleNet. We can see opportunities for MPG gains where others can’t. Guaranteed. Find out more and get the power too:

peoplenetonline.com/ThePowerTo A FLEET MANAGEMENT, MOBILE COMMUNICATIONS AND ONBOARD COMPUTING COMPANY ©2012 PeopleNet.

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THE TIRE FUEL EQUATION + air

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Low rolling resistance tires plus proper inflation equals lower fuel bill

A

erodynamic enhancements By Carroll McCormick and tread depth. The lower a tire’s rolling resistance, the easier it rolls under a load and the to tractors and trailers may not be in every fleet’s budget, but since less fuel it takes to keep the truck moving.

SmartWay only lists tires that shave a minimum of 3% off rigs do not roll without tires, fleets cannot lose by buying tires proven to reduce fuel the fuel bill, but that can hit 5% for duals. Fuel savings for consumption. Such tires are known as wide-base tires, also known as super singles, one of which low rolling resistance tires. Finding out which brands and replaces a dual tire set, can hover close to 9%. SmartWay calmodels qualify is as simple as logging onto the SmartWay culates that a truck outfitted with low rolling resistance duals Technology Program Web site for some quick information. or wide-base tires would save more than 500 gallons of fuel a Fuel savings begin the minute rigs roll out of the garage with year and cut GHG emissions by more than five tonnes.

The majority of trucks are still outfitted with traditional dual their newly mounted skins.

Run by the US Environmental Protection Agency, Smart- tires, but wide-base tires have been gaining wider acceptance Way has a page dedicated to verified low rolling resistance in the past few years. SmartWay places particular emphasis on tires. All of the tires on their list have been tested and will them. Modern wide-base tires are nothing like the 65-series decrease fuel use by at least 3% when used on all five axles tires typically seen on cement trucks, although some of the on long-haul Class 8 trucks. It currently lists 33 brands stigma of the additional road damage linked to the 65 series and a long list of steer, drive and trailer dual and wide-base still lingers in the minds of those who set axle weight limits.

Wide-base tires include the Michelin X One series, Goodtire models.

Simply put, rolling resistance is the amount of energy it year’s Fuel Max Technology tires and the Bridgestone Firetakes to make a truck go forward while carrying a given stone North America Greatec brand. The fuel savings, not weight. Tire rolling resistance accounts for nearly 13% of a to mention lower weight, are impressive. Goodyear, for excombination truck’s fuel consumption. Tire manufacturers ample, reports that SAE fuel consumption tests on its Smartmake low rolling resistance tires by playing with four vari- Way-approved G305 LHD and G316 show they can help deables: tire compounds, tire architecture, better tread design crease fuel consumption by 8% in comparison with a combin30 FLEET EXECUTIVE ❙ September/October 2012

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trucknews.com

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COVER STORY

+

air

ation of Goodyear standard production tires. In everyday operations, this might hit 4%, Goodyear reports.

Michelin, which has a handful of X One drive and trailer tires on the SmartWay list, did some tests in 2010 and 2011 comparing Michelin dual and X One tires with the exact same tread design for the drive axles and trailer positions.

“Michelin saw a 4.6-8.6% fuel saving with the X One technology,” says Francois Beauchamp, field engineering support manager for Michelin. Other tests over the past decade have produced similar results.

Wide-base tires also shave 200-250 lbs off each axle, which can count either towards increased fuel savings or more cargo.

Boucherville, Que.-based Robert Transport specifies Michelin X One 455/55R22.5 tires on the drive axles of its growing fleet of Peterbilt trucks equipped with Westport liquid natural gas (LNG) engines. These are very expensive rigs, and Robert is using wide-base tires to further reduce fuel costs in the corridor these rigs are plying between Quebec City and Toronto. Robert is mum about the exact fuel savings it is wringing out of the X One tires. “We expect to get at least 3%,” is all that Yves Maurais, the engineer in charge of Robert’s LNG project, will say.

Deciding whether to use wide-base tires requires some con-

SmartWay notes that tires underinflated by just 10% can reduce fuel economy by between 0.5% and 1%. sideration. Getting parity with duals on axle weight limits has been an agonizing exercise in the story of modern wide-base tires. According to Beauchamp, only Quebec and Ontario allow axles fitted with wide-base tires to carry the same weight as duals – 9,000 kilograms/axle. The other eight provinces limit trucks running wide base tires to 7,727 kg/axle.

Beauchamp explains the logistics problem: “A Quebec or Ontario carrier can drive a truck with X One tires to the United States and be at no weight disadvantage. But coming back into any other Canadian province, the carrier will be limited to 7,727kg/axle for the X One compared to 9,000 kg/ axle for duals.”

Depending on where a carrier goes, fuel savings with widebase tires might not compensate for the loss of payload. “The different weight limits is a key element for the deployment of wide-base tires in Canada. Until these barriers fall, this product will not take full flight,” Beauchamp says.

Joliette, Que.-based Dan Freight Systems started running wide-base tires in 2001 and converted its entire fleet of tractors and trailers to them between 2003 and 2004. “We got 9-10% fuel savings without doing anything else,” says Claude Laporte, executive director of Dan Freight Systems. Its fleet of 100 tractors and 120 two-axle trailers run only in the US. “The maximum weight limit does not affect us at all because we always travel in trucknews.com

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=

GREEN to GOLD

the US, and we carry 80,000 lbs GVW or less,” Laporte explains.

Wringing the full benefit out of low rolling resistance tires also requires maintaining proper tire pressure. As tire pressure falls, the contact area with the road increases. SmartWay notes that tires under-inflated by just 10% can reduce fuel economy by between 0.5% and 1%. A tire under load at 50 lbs per square inch inflation can have 50% more road contact area than a tire at 100 psi.

“Dropping 5-10 lbs is not that bad, but how many times have you tested the tires in your fleet and found pressures of 50-60 lbs?” Laporte points out. SmartWay cites a survey in which less than half the tires surveyed were within 5% of the recommended inflation pressure.

Tires can lose 2% pressure a month. The options for maintaining good pressure include a tire inflation management program, automatic tire inflation systems and nitrogen inflation. SmartWay endorses these as ways to maintain the fuel-saving benefits of low rolling resistance tires.

Nitrogen inflation is an interesting option. Tires are purged of ordinary air and inflated with pure nitrogen. The idea is that nitrogen molecules are larger than oxygen molecules and therefore escape through the tires far more slowly than ordinary air. Air is already 78% nitrogen, but raising the percentage of nitrogen to nearly 100% makes a difference.

Dan Freight Systems has been using nitrogen inflation since 2004 and reports good results, despite early skepticism from its maintenance department. “When you roll with nitrogen, it is easy to maintain the proper pressure,” Laporte reports.

The challenge with reaping the benefits of nitrogen inflation, though, is in making sure that tires re-inflated with air are promptly re-inflated with nitrogen. “When a truck has a flat en route, the tire is flushed and recharged with nitrogen when it comes back here,” Laporte says.

Dan Freight trucks return to the shop every week, so this has not been a problem. Winnipeg Motor Express, on the other hand, discontinued its nitrogen inflation program after a year and a half. “You can’t dispute that nitrogen extends tire life and you don’t lose pressure in the tires as often as with air.

But our problem was that there was not enough nitrogen filling stations. The proliferation of nitrogen inflation stations is not what I had anticipated it would be,” explains Brian Page, president of Winnipeg Motor Express.

“This is a problem a lot of carriers have,” Page continues.

“It became evident that there were not savings. When we dug deeper we found that tires were being topped up with oxygen.

Any time you contaminate a nitrogen-filled tire with air you lose the benefit. In a pure nitrogen-controlled environment, it worked fine, but for over the road it did not.”

In sum, switching to low rolling resistance tires is easy and can reduce fuel consumption by at least 3%. If a carrier’s routes and cargo weight are suitable, installing super singles can save even more fuel and reduce weight. Choosing a tire inflation management regime that works for your fleet is the secret to ensuring that you get the full benefits out of these tires. FE September/October 2012 ❙ FLEET EXECUTIVE 31

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COVER STORY

GREEN to GOLD

TECHNOLOGY TESTIMONIALS What drivers, maintainers and fleet managers really think about fuel-efficient technologies

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roviding a definitive answer whether the cost saving potential of fuel-efficient technologies is worth the upfront investment was the goal of a new study released earlier this year by Natural Resources Canada, entitled Results from the Road. Back in September 2009, Natural Resources Canada launched the SmartWay Certified Technology Fund to prove out the cost-saving potential of fuel-efficient technologies by helping freight companies purchase, install and test fuel-efficient tires and aerodynamic skirts in a variety of real-world driving conditions. The goal was to learn about the performance of energy-efficient devices and equipment in a variety of real-world operating conditions on as many vehicles as possible. Twelve companies qualified for up to $100,000 in funding and entered into contribution agreements which required them to collect and report fuel-usage data when using their new fuel-efficient technologies.

Following a full year of pre-trial baseline fuel usage gathering followed by six months of trials, including both summer and winter driving conditions, Natural Resources released the findings through the Results from the Road report. In our May/June issue we reported on the key findings: mainly a 5% average reduction in fuel consumption, and an eight-month/110,000km payback period.

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In this issue, we profile the comments from the drivers, maintainers and fleet managers of the carriers involved in the project.

DRIVERS Of the 100-plus drivers surveyed, the majority were quite satisfied with the improved fuel economy resulting from the aerodynamic skirts and energy-efficient tires, and reported no significant differences in performance or handling with the tires. The most prevalent concern related to the use of fuel-efficient tires was that unlike dual tires, wide-base tires have no “back-up” in the event of a blowout to allow drivers to immediately continue with their load. Because wide-base tires are not available everywhere, a blowout could cause further delays until a replacement is located. Some drivers indicated this issue could be minimized – although not completely eliminated – with ongoing monitoring and maintenance.

Most of the other comments dealt with vehicle handling in a variety of weather conditions, road noise, and tire reliability.

In each case, drivers were divided on the question of whether energy-efficient tires are more or less advantageous than regutrucknews.com

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lar tires. A few comments suggested wide-base tires handle less well on roads grooved by dual tires, but this did not seem to be a widespread concern.

The following remarks from two surveyed drivers capture the general sentiments on energy-efficient tires: “Remember they are on your unit and drive accordingly.”

“Take your time and learn what they can and can’t do.”

Regarding the aerodynamic skirts, the impact of crosswinds came up most often among respondents. Again, feedback was mixed: some said they experienced greater challenges with skirts; others said handling was more stable with skirts installed.

Of those who commented on specific issues, the consensus was that skirts were an impediment on loading docks with steeper inclines and presented challenges with respect to snowbanks, potholes and road debris. A few respondents who transport refrigerated units commented that the skirts, as currently designed, impede the fuel tank from opening, which can affect vehicle refuelling. These concerns were not considered to be reasons to avoid using skirts, but should be considered for refinements to achieve maximum effectiveness.

MAINTAINERS Maintainers surveyed after both phases of the project were generally satisfied with the degree of maintenance required for the aerodynamic skirts and fuel-efficient tires. No major issues were presented and, in certain situations, the technologies may have provided benefits beyond fuel economy. With respect to seasonal differences, maintainers noted the skirts had definitive issues associated with winter use, but nothing requiring more than minor adjustments.

Although aerodynamic skirts may appear to be rigid and easily breakable, maintainers observed no significant increases in maintenance and found them easy to install. In general, less dirt and mud accumulation was seen on the undercarriage, which could also help reduce corrosion over time. This observation was also made with respect to snow; however, there were differences in maintainers’ experiences of snow accumulation related to skirt use. Maintainers noted a few extra repair situations during the early stages following installation, attributed more to driver learning curve than flaws with the technology.

Accessibility to the undercarriage was stated as the most significant concern about the skirts, as it could be an impediment to general maintenance. Also, like the drivers, maintainers noted that certain sloped loading docks could provide an obstruction to the skirts and cause minor damage. In addition, strong wind conditions – particularly crosswinds – tend to loosen brackets over time. This, however, can be managed through ongoing preventative observation and maintenance.

Finally, individual comments highlighted potential installation issues with respect to the location of marker lights on trailers or the fuel tank on refrigerated units.

On the topic of fuel-efficient tires, opinions were somewhat more diverse. Some maintainers remarked that the tires (especially wide-base tires) are not as durable as regular tires; trucknews.com

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one observed to the contrary that they actually became flat less often than regular tires. In another instance, there were opposite opinions as to whether traction had increased or decreased when using the tires, although most found no difference. Maintainers acknowledged the increased weight of wide-base tires, but did not seem concerned that it presented a significant increase to their workload.

While one or two of the maintainers surveyed were generally less enthusiastic about the skirts and/or energy-efficient tires, in general the group was satisfied with the maintenance requirements for both technologies. A few questioned the overall cost-benefit of the tires when comparing maintenance and tire-changing costs with fuel-efficiency gains; however, this was not shared among the majority of maintainers.

FLEET MANAGERS Fleet managers involved with the project were required to comment on the fuel efficiency and general performance of the tires and skirts. In addition, they were asked to identify factors other than these technologies that might explain any changes in fuel consumption. A few acknowledged that driver habits and driver training could easily alter the results from one truck to another. Other possible factors mentioned included: different drivers for the same vehicle over the course of the trial period; different tractors pulling the same trailer; route changes; fuel-incentive initiatives; the use of long-combination vehicles; and the weight of loads. Ambient temperatures and driving conditions due to weather changes were also identified as key factors in fuel consumption.

Despite the possibility of these mitigating factors, fleet managers were generally quite satisfied with both the tires and skirts. They were convinced their use provided a clear fuel-efficiency advantage – and, in turn, a significant financial benefit if installed throughout an entire fleet. As one manager stated: “When owners/operators read or hear testimonials about the cost savings and smooth operation of vehicles equipped with aerodynamic skirts and energy-efficient tires, they will realize they are losing their competitiveness by not having them. The competitive nature of the trucking industry will dictate the popularity of energy-efficient tires and aerodynamic skirts.”

Fleet managers reiterated many of the comments from maintainers, particularly with respect to the performance, handling and maintenance of the technologies. While most concerns would not influence their decision to use this equipment in their fleets, managers did have some reservations about the possibility that fuel-efficient tires would not last as long as regular tires – meaning that any gains in fuel efficiency would be lost to additional repair and replacement costs. Second, with weight restrictions on wide-base tires in the western provinces, it was felt it would ultimately take more loads to haul the same level of cargo. Finally, because the availability of wide-base tires is presently limited in certain regions, having to replace one while on the road can result in money-losing downtime until a tire is available. FE September/October 2012 ❙ FLEET EXECUTIVE 33

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COVER STORY

GREEN to GOLD DOING THINGS THE SMARTWAY continued from page 25 “The FLEET Tool helps carriers identify areas where improvements can be made and develop action plans that could reduce their operating costs. To help out, the SmartWay Web site can link them to other programs such as Natural Resources Canada’s FleetSmart and Transport Canada where they will find additional educational materials and training resources and ROI tools,” said Scales.

Shippers who have their own private truck carrier operations can also register those operations using the Truck Carrier Tool. They will be able to select their own fleet when they complete the Shipper Tool in the fall.

Depending on a company’s operations, they may need to complete more than one tool. For example, a shipper that owns a private fleet in addition to contracting out for transportation services would complete the Truck Carrier Tool for its private fleet, and then complete the Shipper Tool.

Upon approval of a Shipper FLEET Tool submission, shipper companies will be identified as SmartWay Shipper Partners on both SmartWay Web sites (in the US and in Canada) on the “SmartWay Partner List” and in a database used to identify companies that meet SmartWay’s annual requirements.

Only the company name and location is made public on the SmartWay Web sites. Carrier companies also have information about their emissions performance made public on the SmartWay Web sites. Shippers will be able to see the publicly available emissions rates for all SmartWay carriers.

SmartWay carrier emissions rates are published at a fleet-by-fleet level. For example, truck carriers are broken down into the following fleet categories: flatbed, less-than-truckload dry van, mixed, package delivery, refrigerated, specialized, tanker, truckload dry van.

Class 2 B is the smallest truck category that can register for the program.

All available company-specific, fleetlevel emissions rates are then used to place carrier fleets into performance 34 FLEET EXECUTIVE ❙ September/October 2012

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ranges: (Top 20%; Second 20%; Middle 20%; Fourth 20% and the Bottom 20% – ranking them from best to worst.)

Performance ranges are specific to each fleet category, since each fleet category has distinct equipment and operational characteristics that can affect both fuel consumption and emissions.

There are separate ranges for each of the eight emissions categories, which are: • Grams/kilometre of carbon dioxide • Grams/kilometre of nitrous oxide • Grams/kilometre of particulate matter 2.5 microns in diameter • Grams/kilometre of particulate matter 10 microns in diameter • Grams/tonne-kilometre of carbon dioxide • Grams/tonne-kilometre of nitrous oxide • Grams/tonne-kilometre of particulate matter 2.5 microns in diameter • Grams/tonne-kilometre of particulate matter 10 microns in diameter SmartWay then sets the midpoint of each performance range as the publicly available performance level for all of the fleets that fall within that performance range, within that fleet category.

You can look at the output screens and calculate the carbon inventory for your entire company, break it down by division, break it down by product lines, compare efficiencies between modes or, if you are within a certain mode, you can determine which carrier is the most efficient mode.

“It’s important for companies to be compared on apples-to-apples basis.

The categories are meant to be recognizable by industry as the business units they would be hiring from. Carrier information has to be as accurate as possible for shipper use,” said Scales.

To ensure other companies are submitting accurate data, SmartWay conducts several levels of data verification, and a validation process is imbedded in the FLEET Tool.

“SmartWay works to ensure that the data carriers submit is accurate. For example, the FLEET Tool has an embedded validation process that flags data entries outside the expected range for the in-

dustry. When a flag is raised, the carrier must provide clarification and back-up documents to support the claim may be requested,” said Scales.

Company submissions are also compared with publicly reported company information, as well as previous year submissions for that company, if data is available. Prior to information being published on the SmartWay Web sites, a technical analyst reviews all company submissions to identify anomalies within fleet and performance categories.

All SmartWay Partners agree to submit to an audit of their SmartWay data at the request of Natural Resources Canada.

Companies are assigned the midrange performance level of their performance bin, which covers a 20% range of performance. The performance bins are set after annual submissions are received by SmartWay each year. FE

THE INTELLIGENT APPROACH TO CUTTING FUEL COSTS continued from page 27 emphasis the company puts on these variables. Duncan suspects that the workplace “buzz” that some drivers were taking a special course may have had a positive effect on the rest of the workforce.

According to the Kriska’s statistics compiled by Fleetsmart, the average idling time for untrained drivers was 13.12% and the average idling time for trained drivers was 5.88%. Furthermore, the average fuel consumption of untrained drivers was 37.89 L/100 km and the average fuel consumption of trained drivers was 35.75 L/100 km, about a 6% improvement.

Kriska also wanted to know if there was a difference between classroom-trained drivers and those who received the E-learning. In this sample, classroom trained drivers performed slightly better, but not enough to be statistically significant.

Kriska offers its employees a yearly refresher course and now includes the SmartDriver program as part of its oneday curriculum. New hires are also given SmartDriver training as part of their orientation. “We have seen a difference and our fleet mileage has imtrucknews.com

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proved,” says Duncan. “We didn’t think we’d get such good feedback, but it seems the guys are watching their equipment and mileage. If their mileage starts slipping, they’re down at the shop trying to figure out what’s wrong.”

Duncan thinks that including the road training session after the classroom or E-learning training is advantageous.

“There are things they don’t seem to teach in truck driving school,” says Duncan, “like getting off the throttle before you come to an off-ramp, or using 70% of your pedal rather than 100% all the time.”

NRCan’s Fleetsmart division also saw a need for an on-road supplement to accompany its SmartDriver classroom and E-learning products. A similar program had been developed for transit operators and achieved terrific results. “The difference was really amazing, from 5-8% improvement,” says Fleetsmart’s Harvey.

“I wanted a trucking version of this, and one that would include a virtual version as well, using a simulator.”

Harvey enlisted Andy Roberts, president of the Mountain Transport Institute to develop the on-road practicum, which should be available on the Fleetsmart Web site this fall. The practicum is a downloadable reference guide for driver trainers which includes a workbook that can be used to calculate driver performance. Tips are also provided on how to choose a driving course that is characteristic of the kind of work that the company drivers are doing.

The on-road practicum developed by Roberts suggests two road tests be taken on the same day with the SmartDriver training sandwiched between them. The morning road test is a “cold” trial without instruction to set the driver’s baseline performance. After the SmartDriver training – delivered either in-classroom or online – drivers follow exactly the same course, but this time are coached by an instructor to utilize some of those newly-learned techniques, including momentum management, idling elimination, progressive shifting, and speed reduction.

According to Roberts, fuel efficiency can vary greatly among any group of drivers. “Six drivers using identical equipment over an identical course can show a 14-20% difference in fuel mileage betrucknews.com

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tween the best one and the worst,” says Roberts. “We present the preliminary results to them without naming the drivers and this gets their attention.” Typically, he says, drivers completing the course and the two ride-along sessions will show a 5% improvement or better.

Roberts also thinks that using a simulator rather than live on-road sessions has advantages. “The good thing about the simulator is that you can do it at any time and it doesn’t take as long because you don’t have to drive to the course,” he says. “And you can exactly mimic the same conditions for all drivers.”

Lastly, Roberts suggests that training drivers in fuel-saving techniques is not enough without instituting some kind of on-going monitoring program. “You’ve got to keep it up after the training,” he says. “Without some kind of feedback drivers don’t know how they’re doing.

Even better is some kind of rewards program where drivers receive of a bonus for reaching certain benchmarks.” FE

SOLID FOUNDATION continued from page 29 not, set up a separate group to focus on the incentive program.

At its first meetings, the new team may need to spend considerable time discussing its concerns about the incentive program. The team will need to deal with these issues to build trust and confidence in one another and to “buy into” the program.

Senior management must identify and document the decision-making parameters of the coordinator and incentive team. The team needs the decision-making capabilities to administer the program after senior management has established the program and its incentives.

Expect the program to evolve Creating a successful program involves a willingness to experiment and to learn by trial and error. Also, few programs are implemented without significant changes and adjustments.

Expect your program to evolve. You will likely not get it right the first time; be flexible so you can revise and finetune the program.

Consistency and follow-through is the key. Programs work when employee suggestions are implemented and problems are corrected as they occur. Adjustments will be necessary on an ongoing basis, as the team provides feedback.

Two or three years into an incentive program, you may want to make some changes. Programs need to be revitalized or they lose their effectiveness.

Never use incentives in a crisis Incentive programs should never be considered as a “quick fix” for a crisis situation. Incentive programs take time to be developed and implemented properly. They need to be clear and communicated well.

They need time to become effective after implementation. Sometimes it takes several cycles of bonus payments before a company realizes the full benefits of the program.

Develop a communication plan Communication is essential to any successful incentive program. You will need a plan that includes internal and external communications, focusing on employees, shippers and other target groups.

Prepare for negative feedback Some employees may respond negatively to the incentive program at first.

Typical feedback includes “They tried it before where I was, and we never saw any of the benefits” and “This is just another way to exploit us.” Time and effort may be required to counteract such negativity. Schedule frequent meetings with the target groups at the beginning of the program to discuss and clarify problems. Issue other communications if necessary. Also, hold individual meetings with participants, both those motivated by the program and those who are not, to discuss concerns they or others may have.

Have a training program Training is an essential element of any incentive program. Training in fuel-efficient driving techniques will give drivers the skills and knowledge they need to participate fully in the incentive program and hence maximize fuel savings. FE September/October 2012 ❙ FLEET EXECUTIVE 35

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PROFITABILITY

CAUTION: SLOW GROWTH AHEAD Eaton rep predicts sluggish economy in coming months

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By James Menzies

f the years 1985 to 2000 were the “Golden Age” for trucking and 2000-2010 was the “Turbulent Decade,” then consider the current era the “Decade of High Costs.”

That was how Jim Meil, vice-president and chief economist with Eaton Corp. characterized the current operating environment for trucking companies, during a presentation at the Commercial Vehicle Outlook in Dallas Aug. 23.

While trying to provide an economic forecast that fleet executives could buy into, Meil cautioned there’s “some real fuzz and opaqueness out there.”

On the global stage, Meil surmised Europe is in the second half of a double-dip recession and China, Brazil and India are “turning in disappointing report cards.” China’s woes are even greater than they are admitting to, Meil said, noting independent data suggests its manufacturing sector growth has actually slowed to 3.5-4%, and not the 9% the country is reporting.

“One lesson we take away is China’s manufacturing growth numbers may be overstated,” Meil said.

In the US, slow growth seems to be in the cards. Meil pointed out 2012 marks the third straight year in which economic indicators started off strongly and then trailed off.

There are, however, bright spots in the US economic picture, he added.

Housing starts are up modestly, from recession lows of 550,000-600,000 units to about 700,000. Meil said incremental gains of 100,000 units or so can be expected, but it could be 10-15 years before this segment returns to the boom years of 2004-2005. Non-residential construction – both retail and industrial – is also “clearly on the mend,” Meil noted.

And the automotive market is also recovering, up from a

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low of nine million light-duty automobiles during the recession to about 14 million today, still well off the yearly average of 17 million vehicles in the industry’s heydays.

Consumer confidence in the US remains depressed and small businesses are taking a “glass half-empty” view of the economy, Meil pointed out. This will likely remain the case until after the presidential election. “There’s a lot of uncertainty out there,” Meil said. “Uncertainty breeds inaction and uncertainty breeds inertia. There are a lot of decision-makers standing on the sidelines until they get more clarity after the election.”

Meil characterized the US economy as “the fastest Clydesdale in the horse race” when compared to other economies around the world (he made no mention of Canada’s).

As far as trucking is concerned, indicators such as the Cass Freight Index and the American Trucking Associations’ For-Hire Truck Tonnage Index show a continued recovery in freight volumes. Truckload pricing is firm, and capacity is still tight, Meil noted. He said the Class 8 truck fleet contracted by about 19% through the recession. At the worst of the recession, Meil said there were about 175,000 too many Class 8 trucks for the available freight. Now, he says the industry’s capacity is about 65,000 short of what can be supported.

“That’s good news as far as keeping capacity utilization rates and pricing relatively high,” Meil said.

Meil said the US manufacturing sector is growing and so is truck freight, at a rate of about 3% per year.

“The real takeaway here is that this is a slow-growing economy,” Meil concluded, anticipating GDP growth of about 2% in 2012 and 2013. “This will really be the fourth year of lackluster growth after the worst post-war recession.

Normally after a recession, you have an economy that shows a lot more strength.” FE September/October 2012 ❙ FLEET EXECUTIVE 37

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PROFITABILITY

FUNDING FUEL REDUCTION TECHNOLOGIES

Millions remain to be spent in Quebec energy efficiency program

By Carroll McCormick

T

hree years into a Transport Quebec energy efficiency program that includes $27 million for the highway transport industry, 1,280 trucking companies had applied for 1,848 subsidies, 1,805 applications had been assessed and 1,699 projects approved. By early July, $7.3 million in grants had been awarded.

Quebec launched the program, known as PEET (Programme d’aide gouvernementale à l’amélioration de l’efficacité énergétique dans le transport routier, ferroviaire et maritime, or the Government Assistance Program for Improving Energy Efficiency in Road, Rail and Marine Transportation) in 2009. It’s part of the province’s 2006-2012 climate change action plan titled Quebec and Climate Change – A Challenge for the Future. It includes a plan to reduce greenhouse gases (GHG) to 6% below the 1990 level, or by 14.6 megatonnes by 2012.

PEET has a budget of $45 million, $18 million of which is earmarked for the rail and marine modes and $27 million for highway transporters. Transport Quebec describes PEET as being “open to companies, municipal organizations and other legally constituted organizations with a place of business in Quebec.” The PEET program officially ends on March 31, but Transports Quebec is committed to spending the whole pot, according to Benoit Cayouette, director of the freight motor carrier division.

Trucking companies can receive grants equivalent to 30% of eligible expenses in seven categories of technologies proven to reduce fuel consumption and greenhouse gases by at least 3%. They include onboard computers, backup heating or air conditioning systems, trailer skirts and alternative fuel using equipment such as diesel-electric hybrids and liquid natural gas (LNG) trucks.

PEET is designed so that it is easy for companies to qualify, says Cayouette. Restrictions are few: companies have to be registered in Quebec and they must have a satisfactory rating with the Societe de l’assurance automobile du Quebec. They must also choose from an approved list of technologies, by manufacturer and model, that qualify for financial assistance.

In return for the grants, carriers have to help Transport Quebec learn whether the equipment is working for them. “Transport Quebec will take samples from some carriers,” Cayouette explains. “We have some numbers, such as hours per week of reduced idling due to the installation of a heater. If a carrier refuses to give us the numbers, we can take back the subsidy.

“Carriers have to keep data; for example trailer mileage.

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They just have to tell us how many kilometres the trailer did last year. We will use Energotest data [from the FPInnovations PIT program] to get an estimate of fuel savings.”

There are 38 approved models of onboard computers by 22 manufacturers, for which grants of 30%, up to a maximum of $600, may be had.

Cascades Transport purchased 95 onboard computers by Shaw Tracking with the help of PEET grants.

Transport Gilmyr, located 80 kilometres east of Quebec City, received a grant to help purchase 95 onboard computers.

The computers collect data on variables such as idling time and fuel consumption, idling time in traffic, miles per gallon, acceleration and braking, progressive shifting, consumption of fuel beyond what is required to accelerate; i.e., consumed, but unburned fuel, overspeed and excessive speed. “With the information from the computers we have pushed our drivers more and more to lower consumption,” explains Claude Boucher, Gilmyr’s director general. Gilmyr is also using the computers to determine whether drivers are taking the shortest routes.

PEET grants covering 30% of eligible expenses up to a maximum of $900 can be used to purchase any one of 53 models of backup heating or air conditioning systems by 15 manufacturers. The equipment is designed as a significant or total substitute for a truck’s engine to operate the truck’s heating or air conditioning system. The other group of equipment designed to reduce engine idle time are 29 models of onboard or backup generators and auxiliary power units (APUs) by 19 manufacturers.

Cascades’ PEET-subsidized purchases include 30 Espar cabin heaters. Boucherville-based Robert Transport has purchased 400 Tripac APUs, which will cut idling time by 75%, as part of a much larger purchase of PEET-approved technologies since January 2009.

The third category includes twelve models of side skirts by nine manufacturers and three models of weatherproof tarps by three manufacturers. This equipment improves aerodynamics and is known to reduce fuel consumption by at least 3%. PEET grants will cover 30% of eligible expenses up to $1,500.

Robert and Cascades each bought 250 Transtex side skirts, which will reduce fuel consumption by 5%. Cascades estimates that the side skirts it purchased will reduce greenhouse gases by some 236 tonnes a year.

The fourth category is for “other technology” that reduces trucknews.com

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that can lead to problems and sometimes terminations.

“People who are engaged sell more and have fewer accidents,” said Lobraico.

So how can a company best leverage behavioural assessments?

“In a role where the skills and knowledge sets are the same, such as in nursing, is it fair to say a nurse is a nurse is a nurse? No, behaviour affects the role from ward to ward.

Assessment allows you to understand who is the leader, and there are different leader styles (i.e. collaborative, or more aggressive),” he said.

Working conditions also impact on performance. Optimizing fuel burn by at least 3%.isItabout includes an engine torque-manageemployee engagement understanding if the employee ment system by RM2J. Subsidies top at $3,000.who Category fits the culture of your workplace. Butout an employee is the five is for the alteration or replacement of equipment wrong fit for your organization is not always at fault. to convert“We to hybrid technology. two with diesel-electric and often have a ‘sink orPEET swim’lists attitude our managers, diesel-hydraulic hybrid technologies.

Subsidies will cover as with our drivers. One of the things you’ll find in organizations $15,000 of eligible expenses. with multiple locations is that what drives the culture is the Transport Quebec only included the diesel-electric in behaviour of the leadership at that particular location. trucks If you’re the PEET list after FPInnovations completed two long-term sitting in an office talking with somebody about why they don’t studies designed to determine whether they would meet like the fit the organization, whose responsibility is that?

So tools PEET energy efficiency requirements.

The two reports that assessment put the spotlight on your managers. Ultimately, if FPInnovations prepared for we release this year provide a we have people problems, haveearlier a management problem. wealth of detail on these trucks, including detailed cost-benefit Either A, they don’t know how to hire, or B, they don’t know analyses based onthe extensive real-world use.be all things to all how to develop employee.

You can’t Category six is for the alteration or replacement equippeople; your organization has a personality, and of there are ment to use alternative fuels.

They must reduce greenhouse going to be people that don’t fit,” said Lobraico. gases at least 3%. will cover eligible expenses It’sby important to Grants understand that 3% “Weof lead people, we up to $15,000.

The most high-profile recipient of grants in this manage process. Assessment allows us to identify the category The carrier hasable already purchased 65 PeterstrengthsisofRobert. those who are better to manage process and bilt LNG tractors with Westport GX engines, and intends to buy lead people,” said Lobraico. as many as 170ofLNG trucks. in Robert expectsindustry, that theyLobraico will reIn his years experience the trucking duce greenhouse gases by about 25%. also observed that automatically promoting people to a St-Romuald-based YN-Gonthier received two higher role sometimesTransport didn’t have the best results. $15,000 grants to help purchase two Peterbilt 386 with “We had a history of taking our best people,tractors promoting Westport 15-litre engines that burn LNG. them to failure, and then they would go to the competitor and Canadian Transportation & Logistics_LAD.pdf 1 8/29/11 trucknews.com

TheHumanEdgeJuly12.indd 15

organization, when there are shortcuts, there are many reasons why the perfect fits leave.”

The Predictive Index allows companies to manage the gaps that exist between the job model or the behavioural demands of the job, and the individual model, or the natural behavioural strengths of a person.

“We have had people tell us the tool is great but it takes us longer to make a hire. But the retentionPROFITABILITY is great. If you want to make a significant impact in your business, you want to hire slow,” said Lobraico.

As the trucking industry faces more competition from other sectors for fewer and fewer available and qualified The seventh category is for other technology that improves potential employees, a tool that enables companies to better energy efficiency.

It includes the FRIO truck body

by Transit fit the person to the mould becomes all the more essential.

Truck Bodies, andfind a cold storage system

by Fygy Cube Interna“What you’ll is, in the new environment we’re going tional.

For more information on PEET, visit the Transport Queto come into, it is our good people that are going to leave.

FE bec Web site at www.mtq.gouv.qc.ca.

It’s not going to be your poor performers,” said Lobraico. FE

2:19 PM

July/August 2012 ❙ FLEET EXECUTIVE 15

12-07-20 7:35 AM

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PROFITABILITY

SEPARATE FROM THE PACK It’s time for trucking company leaders to create focused, lean, and productive sales organizations By Dan Goodwill

T

he economic forecasts for the second half of this year do not look too promising. While there are a few positive signs in the US (e.g. auto sales, new home construction), the overall trend line still remains slow or stagnating growth.

The Great Recession of a few years ago taught transportation company leaders the value in running a lean operation, to focus on the most profitable markets, to improve yield management and to hold back on making asset purchases. A recent Harvard Business Review article (“CEOs Need to Get Serious About Sales” by Ram Trichur, Maria Valdivieso de Uster, and Jon Vander Ark, July 10, 2012), argues that effective sales management is still 40 FLEET EXECUTIVE ❙ September/October 2012

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overlooked by many CEOs – including trucking company CEOs. Here are a few thoughts on how to increase the productivity of a freight sales team.

Direct the team to the most profitable lanes and markets What can trucking company leaders do to energize their sales efforts in a stagnating economy? First, they need to make sure their sales efforts are very focused and productive. This starts with sharing the company’s vision and profitable routes with their sales team and ensuring that the team is directed to generating the type of business the company needs most. An unfocused sales team is an unproductive sales team.

Think ‘network’ rather than ‘lanes’ A 2009 MergeGlobal Creation Initiative study (Time to Buy, Strategic growth in Truckload) indicated that “the most successful truckload companies have executed growth initiatives in extremely disciplined, deliberate manners, targeting incremental pieces of business which complement their existing operations. Because profitable growth requires careful attention to how each new piece of business fits with the existing portfolio, it is typically accomplished organically, through sales and marketing efforts.”

The study highlighted that “organic growth typically doesn’t happen in load-by-load or route-by-route incretrucknews.com

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PROFITABILITY

ments. Instead, the increment in which a new ‘piece of business’ is typically added is a number of lanes emanating from a single location (often a distribution centre or manufacturing facility).

Furthermore, these lanes are generally one-way, leaving the task of constructing the remaining portion of the itinerary (closing the loop) to the trucker. It helps, therefore, to think of growing a TL carrier in partially constructed ‘itinerary cluster’ increments. Each potential new piece of business will have a number of outbound lanes associated with it and must be evaluated in terms of how those lanes will become a cluster of closed-loop itineraries. Ideally, this will be accomplished by meshing it with the company’s existing portfolio of itinerary clusters.”

A 2008 study (Lifting the Veil of Value in Truckload) from the same company, which looked at some of the most successful truckload carriers in the US, highlighted that part of the success can be attributed to selling into inbound unbalanced lanes where additional traffic can have a big impact on profitability. “Aggressively marketing the business in markets that are heavily inbound imbalanced in terms of loads coming in serving the 300 to 600 mile market has a marginimproving effect on both rates and cost per mile.”

Build a sales plan around ‘hard data’ The HBR study indicated that “winning CEOs demand analytics from their sales organization (much as they do from operations or strategy) to help understand everything from the effectiveness of sales campaigns to opportunity analysis to performance reviews.

CEOs need to champion this ‘sales as a science’ approach by demanding KPIs and then holding their leaders accountable for delivering on them.

When tracking trends for future growth opportunities, for example, invest real money (2 to 4% of the sales budget is good) to develop analytical tools and teams that monitor trends trucknews.com

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such as demographic shifts, regulations, and new technologies. Actively track performance and shift budgets to monitor promising trends while killing off tracking projects that aren’t going anywhere.”

Invest in training Training is a key success factor in every facet of a business. Well trained employees work faster and smarter. Well trained sales personnel know how to secure appointments, how to handle objections and how to close sales.

Don’t overlook the benefits of training your front line sales people and don’t assume that the training they received in other transportation organizations was effective.

Automate your sales processes In my experience, many companies invest first in their accounting and financial systems. Sales automation always seems to be near the bottom of the priority list. An automated tool allows the sales team and the management team to have visibility into what the sales team is doing. It displays the sales pipeline of every rep. This indispensable tool highlights the reps’ prospects, the number of proposals prepared, submitted and approved. The tool tells you if the rep has confirmed appointments with his prospects or is operating on “hope and prayer.” They provide data on the profitability of accounts, the productivity of the sales team in terms of sales results, closing ratios and other key metrics.

Limit non-productive sales time Are the weekly sales meetings necessary? What do your reps take away from the meetings? Are they used for training and role playing? Would conference calls be just as effective in many instances? Would much of this time be better used if the rep focused more on planning their itineraries, learning more about their prospects, studying the shipment activity of their

clients and prospects and in making more, productive sales calls.

GreentoGol

Actively participate in social media

tonnes offsets he’d Thereiniscarbon so much youand cancurrently learn about get about $240.” prospects and clients from their Web That Facebook might not seem a lot tweets, of cash sites, page,liketheir back work and investment theirconsidering LinkedIn the participation and other involved, if nothing else, itthey couldare givein, a sources.but, Join the groups company bragging rights maybefriends a marobtain referrals fromand mutual keting tool. On the other hand, the financial and turn suspects into prospects and orprospects marketinginto bottom line may not be the customers. most important aspect of the program, to some.

The value of fuel saved outweighs Makes sales a team effort the value the credits always will, Salesof can be a and veryit lonely job.Arcand There told Sun,hours but theonsocial contribarethe long the value roadofand lots uting to a cleanerAenvironment priceless. of rejection. sales team iscan be so As formore whateffective a trucking company has to much when the drivers do tofeeding comply,the Stedeford says COAC proare reps leads, the managvides the alerting expertisethem and does all the work. ers are to trial shipments, “Wewhen basically come in and do all theand inand other key operations stallation,” he says. “We do the an awareness pricing managers are “in loop.” session, we put modemsmay in (the While theour economy betrucks), slowwe all the data and ingcapture in the second halfweofsend thereports year, toseparate the company let themfrom knowthe where your to company rest they need to focus, which operators needfoa of the pack by establishing a lean, little bit of help in a certain cused, productive sales area.” team. FE Equipment is installed by COAC to ac-

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curately measure f Stedeford says hardware, though. gram,” he says. “S with all of the oper es they can make th the amount of fuel COAC’s Web tion of their equ non-hydraulic lifti excavator, is $4,0 the setup itself. T change for a veh COAC can help t “We actually says. “We come in gether, we sugge should put into th when to do it, we very much a win-w Truckers who f bon offsets attracti to surrender their themselves out of “If someone do carbon offsets wo you have to be in says. “So while t emissions) they ca it’s gone through agreed-upon me haven’t, they shou their customers t duced (their emiss It may end up b too long, anyway, Trade concept be something Steded pen (short of a cha ment, perhaps).

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22 motortruck September/October 2012 ❙ FLEET EXECUTIVE 41

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WHAT’S SUPER ABOUT

Mack’s Econodyne powertrain?

Mack didn’t invent ‘gear fast, run slow.’ But it may have perfected it

By James Menzies

W

hen Mack introduced the original Econodyne engine in 1980, it brought to market an efficient engine that promised to deliver substantial fuel savings. Mack purists hated it.

“It was initially not well received by the fleets, because they were used to the typical Mack engine which was all power, all the time,” admits David McKenna, director of powertrain sales with Mack. “They didn’t appreciate the lower torque curves of the original Econodyne.”

It has taken some time, but Mack has now come out with a fully integrated Super Econodyne powertrain package, which delivers on that demand for “all power, all the time” while providing even greater fuel savings than before.

Mack’s new Super Econodyne package consists of the MP8-455SE engine, mDrive automated manual transmission, Mack’s C125 drive axles and the software that connects all the dots and makes the fuel savings possible. It allows the engine to run as low as 1,160 rpm while cruising at 62 mph, a full 200-250 rpm lower than your typical MP8-455 Econo-

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dyne. This translates to a fuel savings of about 2%, Mack claims, or 3.5% when factoring in the efficient C125 axles.

The results have impressed the US Environmental Protection Agency (EPA) so much that it has designated the Super Econodyne package an “innovative technology,” meaning Mack will earn credits towards compliance with the impending greenhouse gas emissions regulations for every truck it deploys with the SE powertrain pack.

Lowering the cruise speed of the engine from 1,380 rpm to 1,160 is made possible through the complete integration of the engine, transmission, axles and vehicle, McKenna claims.

“The only way you can do this is to be completely integrated,” he explains. “You need communication between the engine and transmission and the vehicle’s ECU. No manufacturer shares all its data with another manufacturer; it’s just not done. We share 100% of the information between the transmission, the engine and the ECU so we have 100% data exchange all of the time.”

Add to this the efficiency of Mack’s C125 drive axles, with a ratio of 2.66:1, and the fuel savings are significant. In fact, Mack claims independent testing has shown its C125 trucknews.com

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axle carriers to be 1.5% more fuel efficient than the next best in the industry, thanks to their spiral bevel gears, topmounted design and a centrifugal power divider that works only when required.

Mack’s MP8 engine, its mDrive automated transmission and its C125 axle carriers are each impressive in their own right, but they are most impressive when viewed holistically as a complete package. That is the thinking behind the Super Econodyne powertrain, which provides the operator with a broader torque curve – a torque plateau, if you will – and gives Mack engineers more latitude in developing their shift strategies.

“There are two things you need to do,” McKenna says when describing the fuel-saving potential of the Super Econodyne package. “You have to make sure you have enough horsepower and torque to move the load and perform the work you’re asking the vehicle to do and the other trick is to do it at as low an rpm as possible without impacting gradeability or the ability to hold a cruise speed. We can all run engines at 1,100 rpm, but if it won’t get out of its own way, what good is it?”

The thinking behind the Super Econodyne all sounds very good in theory, but I wanted to take the Bulldog out on the highway for a good run to see how it performed over the undulating Pennsylvania hills near Allentown, home to Mack’s Customer Center. Mack hooked me up with a Pinnacle outfitted with the Super Econodyne package, pulling a flatdeck grossing about 77,000 lbs – an ideal weight and application for the SE pack.

Mack is very particular about the applications into which the new offering will initially be approved, but it’s best suited for mainstream, on-highway applications of up to 88,000 lbs. In time, the applicability of the technology may be expanded, but for now, Mack wants to get it into the hands of mainstream linehaul operators where the fuelsaving benefits will be most pronounced. In fact, Mack’s so eager to get the package into the hands of fleets that it is offering it at no up-charge for the time being.

On the road I drove the Mack Pinnacle with Super Econodyne package east along I-78 towards Newark, N.J. for a little over an hour and then back again, enjoying the rolling hills that tested the mDrive’s ability to hold top gear. Most of the time it did just that.

I was never handicapped by the lower rpm and in fact, I passed my share of trucks on the uphill sections of the highway.

When the mDrive did drop a gear, it was non-disruptive.

The mDrive’s console is mounted on the dash, which makes it easy to resist the temptation of trying to outthink the electronics. Incorporating a keypad console design rather than a traditional shifter is intended to minimize driver interference with gear selection. trucknews.com

Geared Up Sep 2012.indd 43

“With the keypad, after a couple of days the driver forgets about it and that’s really what we want,” McKenna says. “We want to reduce the amount of manual inputs a driver makes with the transmission.”

Drivers who are familiar with Allison automatic transmissions will immediately be comfortable with the placement of the controls and the location makes it a little easier to slip out of the driver’s seat and into the sleeper cab.

The mDrive has been hugely popular since its 2010 introduction. Mack’s McKenna jokes he’s the only employee who can lie to the boss and keep his job, after predicting the transmission’s penetration might reach 12-15% the first year and maybe as much as 28% in a mature market.

“The second year, we were at 33% and this year we’re trending at 36% (of all Pinnacles sold),” McKenna said.

Based on the slick I-Shift transmission from Volvo, the mDrive isn’t a complete clone. McKenna says Mack chose not to incorporate some the functions of the I-Shift in hopes of providing a more robust transmission.

“We don’t want people confusing the two,” McKenna says, comparing the mDrive to a “roll up the sleeves and get the job done,” alternative. “A significant amount of the hardware is the same, but the software is definitely different.”

One of the most impressive features of the mDrive is Grade Gripper, which will hold the truck in position on a steep incline without rolling back. This function can be disabled via a toggle switch on the dash, but I’ve yet to come up with a good excuse for disabling it.

The mDrive is available in Fleet and Premium versions.

The Fleet model limits a driver’s opportunities to intervene, allowing them only to hold the gear they’re already in. The Premium version allows drivers to override the transmission in certain situations. I was driving the Premium version and while it probably wasn’t necessary, I did enjoy having the option of dropping a gear while going downhill to coax a little more retardation out of the engine brake.

Speaking of the engine brake, Mack has incorporated some clever innovations into its PowerLeash Plus brake that’s exclusive to the mDrive. One such function is dubbed ‘Cruise ‘n Brake,’ which is designed to anticipate driver needs and engage accordingly while in cruise control. It will allow the truck to exceed its set cruise speed by 3 mph to better utilize gravity and prevent the brake from engaging too frequently.

There’s also a setting for the engine brake, which allows the driver to select a cruise speed and then hold that speed all the way down a hill. Once the throttle is applied, the engine brake ‘forgets’ the chosen cruise speed, which can once again be set for the next hill. You can reduce the desired speed by tapping the toggle switch down or increase it by September/October 2012 ❙ FLEET EXECUTIVE 43

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adding some throttle and then tapping the Set- button once again. It’s a smart engine brake with a lot of functionality and it’s also fun and easy to use once you get the hang of it and understand its capabilities.

The Super Econodyne package is also available with Smooth Cruise, a no-charge option that “desensitizes cruise control” and gradually ramps the truck’s speed back up to its set cruise speed.

“On the trucks we have today, when we go downhill it gives zero throttle and when you start going up the hill, it gives 100% power to the engine right away,” McKenna explains. “Smooth Cruise is more intuitive, it will actually roll on the throttle.”

The gradual re-engagement of the throttle while in cruise control was noticeable from behind the wheel and it addresses a long-running source of personal irritation. Most vehicles tend to race back up to the set cruise speed too aggressively for my liking, blowing away any fuel savings I’ve worked hard to achieve. Smooth Cruise will surely provide an impetus for drivers to run in cruise control more frequently, which in many cases is more efficient than working the foot feed.

Out on the highway, the Super Econodyne package did everything Mack said it would. It pulled strong at low rpms, 44 FLEET EXECUTIVE ❙ September/October 2012

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provided ample power and ran particularly quiet, a welcomed by-product of the lower revving engine.

I was almost always in the Sweet Spot, as indicated by the double dollar signs on the in-cab display. I was flattered by the acknowledgement until I realized those dollar signs hardly ever disappeared, thanks to the extra wide speed spot afforded by the Super Econodyne. How wide?

Mack says the sweet spot on the Super Econodyne stretches from 1,050 to 1,500 rpm, compared to 1,200-1,500 rpm on the standard Econodyne.

This broader sweet spot covers road speeds of 58-80 mph in 12th gear. I remained in the sweet spot even when alternating between 10th and 12th gears and on the largest hills along my route I was never a moving chicane that other trucks or even cars were forced to avoid.

Peak torque of 1,760 lb.-ft. is available nearly all the time and a whopping 1,400 lb.-ft. is available right down to 900 rpm. This abundance of torque at low rpms is a key differentiator between Mack’s former Econodyne engine and the Super Econodyne package available today.

The Super Econodyne provides a relaxed driving experience, which Mack thinks will translate to improved safety. It’s not a nonsensical suggestion.

And how about the Pinnacle itself? With the downturn in the construction sector, Mack has had plenty of time to turn its attention to its highway products. It has done just that and officials say they feel the company has discovered a healthier balance between highway and vocational product lines.

Today’s Pinnacle isn’t your old man’s Mack truck. It’s a really, really nicely appointed vehicle with plenty of storage and an intuitive layout.

The truck I drove featured a stylish Trim Level 3 interior with button-tuck ceiling. The leather seats and steering wheel are stylish in an old-school way, comfortable to use and easy to position. Visibility over the hood is fantastic.

The truck I drove came with a full complement of safetyrelated driver aids including Bendix Blindspotter and its Wingman Active Cruise with Braking (did my reputation precede me?)

The Pinnacle I drove was adorned with a gold Bulldog on the hood, meaning it was equipped with a fully integrated Mack powertrain. With the Super Econodye package now available – essentially for free – you could be seeing more of those gold Bulldogs in the not-too-distant future. FE

James Menzies is equipment editor for Fleet Executive. He possesses a CDL and has covered the Canadian trucking industry for 11 years with an emphasis on equipment-related issues. trucknews.com

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FIGHt Increased Fuel costs, ENGINE wear and SLUGGISH Performance.

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DURON -E – the leading soot-fighting formula in the industry. It seeks out soot particles and isolates them before they can join forces. And if they can’t cluster, your engine is defended from damage.

TM

Today’s operating conditions can produce and retain more soot than ever before. But DURON-E, formulated with 99.9% pure base oils, is engineered to go above and beyond the call of duty.

It’s proven to handle up to 2x more soot* while maintaining its viscosity; protecting engines from wear, extending drain intervals, maintaining peak fuel economy, and reducing maintenance costs for fleets – even in the heaviest soot conditions.

That keeps costs down over the long haul and extends the life of your engines.

Get the most from your fleet. Learn more at fightsoot.com

DURON. Fight Soot. Save Money. *Based on MACK T-11 Enhanced Soot Control Test results. DURON-E Synthetic 10W-40 performed 2.2x better than CJ-4 requirement, while maintaining viscosity level.

Petro-Canada is a Suncor Energy business Trademark of Suncor Energy Inc. Used under licence.

TM

Geared Up Sep 2012.indd 45

Production Artist:

JC

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Dec 1, 2011

Revision #:

0

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12-10-11 1:24 PM

Shaw Tracking’s next generation of mobile computing focused on cost-effective solutions

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haw Tracking is expanding its line of mobile fleet terface is designed to reduce distracted driving by restricting management solutions with the launch of the Mo- the visual displays drivers can see while the vehicle is in mobile Computing Platform 50 (MCP50) and Trailer tion. Also incorporated is a text-to-speech feature so drivers can receive and hear messages safely. And In-Cab Navigation Tracks 210 (TT210).

The MCP50 solution is aimed at helping fleets cost-effec- provides drivers with more efficient routes, turn-by-turn directively monitor and manage safety and regulatory compliance, tions, and up-to-date, interactive truck maps.

Quick installation: Targeted installation time is one hour as well as benefit from improved asset visibility and producand Ham says the system is intuitive for drivers to use and tivity, says Shaw Tracking vice-president Mike Ham. includes built-in, step-by-step help. There is also after sales With the MCP50, fleets will have access to a set of 24/7 support. standard applications such as two-way MessagShaw Tracking’s latest trailer tracking solution, the Trailer ing, Performance Monitoring, and Fleet Tracks 210 (TT210), delivers information about the load Visibility. There will also be optional status and location of trailers. It monitors the status applications available, On-board and location of trailers and containers in near Navigation (ALK), Critical real-time. Users receive notification when a Event Reporting, Hours-oftrailer is dropped or connected to a tractor.

Service, Work Flow and Equipped with several new feaSpeedGauge, for fleets with tures, including enhanced responmore advanced monitoring and siveness to incoming messages, managing needs. simplified installation and a “We’ve listened to our customers, compact one-piece terminal and we’ve learned. It’s all about providconfiguration, the TT210 is ing customers with the tools and informaTrailer Tracks 210 aimed to promote increased opertion to enhance their relationship and the valational efficiency and fleet profitability. ue they bring to their own customers,” Ham told The TT210 also has a rechargeable battery Fleet Executive. “The MCP50 is designed to enable and an embedded solar panel standard, which every fleet, of any size, to adopt in-cab technology to will not only extend the life of the battery, but is also help improve their business.” much more reliable in the winter months, Ham says. Shaw Shaw is marketing the MCP50 as a “low cost” fleet management solution and is targeting private and for-hire carriers Tracking figures the extended battery life and better winter perwith fleets of Class 6 and 7 vehicles looking to benefit from formance can save $300-$500 per trailer.

“It’s unacceptable for our customers to have technology in fleet management technology solutions at a more cost-effective price. It is also aimed at fleets which do not require sat- the field that doesn’t work because the battery ran out. The ellite communications and are shopping for more affordable solar panel design provides consistency of communication. options and owners of mobile communications solutions who The simplicity of the solar panel also provides quicker and want to upgrade their existing technology, but only require a easier installation. No longer do we have to tie up trailers for any period of time,” Ham added. core set of services.

The TT210 is designed to last the life of the trailer and has a Here is some more detail on the MCP50 features: Compliance: Enables fleets to be compliant with the lat- 45-75 minute install time with a compact one-piece terminal est rules and regulations of Transport Canada and the Federal configuration. For more information, visit Shaw Tracking at Motor Carrier Safety Administration (FMCSA) on driver hours. www.shawtracking.ca. FE Improved efficiency and cost reduction: With the QTRACS Fleet Visibility application, carriers can monitor their vehicles’ To learn more about the locations and send two-way messages and real-time informaMCP50 and the TT210, watch tion to drivers while they are on the road. The system also brings the “New Product From efficiency to the back office by using a simple Web interface or Shaw” and “Shaw’s New integrating the data with your fleet management software.

Trailer Tracker” videos at Improved fleet safety: The Critical Event Reporting (CER) trucknews.com/videos. application allows carriers to monitor driver behaviour and intervene before an accident occurs. The In-Motion User In46 FLEET EXECUTIVE ❙ September/October 2012

Geared Up Sep 2012.indd 46

trucknews.com

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Connecting the little guys BigRoad shares its big vision for bringing telematics to smaller carriers

T

oday’s telematics solutions – like GPS tracking, voice/ data communications, and fleet management systems – can help fleet managers squeeze every efficiency out of operations. But there’s a huge gap between what’s available for use and what’s actually in use, according to Kelly Frey, who heads BigRoad, a new entrant in the mobile communications market bent on significantly reducing that gap.

For smaller fleets operating on slim margins, investment in telematics is a luxury, argues Frey. Generally, only the industry’s better-capitalized large commercial fleets have tested and adopted advanced solutions. He points to Frost and Sullivan’s 2011 report Strategic Analysis of North American Medium and Heavy-duty Commercial Vehicle Telematics Market, which presents the startling conclusion that 85% of trucks on the road today still operate without the support of systems that optimize operations and increase safety.

But for small and medium-size fleets to adopt telematics, a solution that better fits their needs is required, according to Frey, who has a transportation industry background with CN Intermodal and Descartes. That is now made possible by the preponderance of inexpensive and feature-rich mobile technologies. Hardware in the form of a smartphone or tablet, userfriendly apps, and the simplicity of cloud-enabled solutions all combine to significantly lower the barrier to technology entry for even the most basic trucking operation, he points out. The mobile app phenomenon is also a viable way to get drivers, who may otherwise be averse to learning to use new tools, using the technology that helps operations gain more efficiency.

While client/server solutions dominate the fleet management system landscape, BigRoad’s solution for fleets and drivers leverages many of the flexible features of Web and mobile applications.

BigRoad offers two separate applications that can be used independently, but realize the greatest benefit as a tandem.

Each app serves the other with status updates, automated documentation sharing, and analytics that help fleet managers and drivers identify and realize productivity gains.

BigRoad Driver is a free mobile app for Android smartphones and tablets designed to make life simpler for drivers.

trucknews.com

Geared Up Sep 2012.indd 47

Features include in-app messaging for easy smartphone use, HoS documentation, and real-time navigation with traffic.

“The driver app is free and will always be free,” Frey says.

“I wanted to focus on the driver’s needs. I wanted to give something to the driver that they will want to use to make their day easier, to help with compliance work, staying in touch with family, staying in contact with dispatch.” He adds that if the driver likes it, the solution will be “backwards infectious” to the fleet.

BigRoad Fleet is a Web-based desktop application for use by fleet managers and dispatchers to more effectively assign work, monitor operations, and adjust on the fly to changing conditions. As Tandem Apps, the mobile app and desktop app inform each other both passively and proactively. For example, a driver’s HoS status is fully transparent to dispatch, informing which drivers are best positioned to accept and execute a load.

One of the first trucking firms that worked with BigRoad in developing the product is Trafalgar Supply, based in Woodstock, Ont. Owner James Neely sees the potential to improve his operation by equipping his drivers with the BigRoad mobile app and having dispatchers use the Web app to manage load assignments.

Neely says customers often call at 8 a.m. and want to know the status of their loads right away. What Trafalgar Supply used to do is put the customer on hold and call the driver.

Neely estimates that six out of 10 times the dispatcher gets the driver right away and he tells you where he is and when he will make the delivery. “That’s six out of 10 and the customer’s happy. The other four times you get voicemail and you have to go back to the customer and say I don’t know where your load is.” Neely says that can paint an unfavourable picture in the customer’s eyes.

“Now I can open up the BigRoad Web app and find out the latest status. I can tell the customer exactly where the truck is that minute. That’s a top benefit for us.”

Another key feature for Trafalgar Supply in BigRoad is dispatching. Prior to BigRoad, they handled dispatch over the phone. The driver would call in, the dispatcher would read out the details, and the driver read it back to confirm. That process takes up to seven minutes and can leave as many as eight other calls on hold, according to Neely.

“Now with BigRoad we e-mail the information through the app and the driver has the information right there on their phone. It’s also great for multitasking. You can be on the phone with the customer and be typing a message to the driver at the same time.”

“BigRoad definitely has the ability to change the way we do business,” Neely concludes. FE September/October 2012 ❙ FLEET EXECUTIVE 47

12-10-11 1:24 PM

The inside scoop on Bridgestone’s tire technologies Business press editors were given a taste of ‘boot camp’ this summer care of Bridgestone Commercial Solutions (BCS), as the company took time to focus on new tire technologies and training aimed at making a real difference for its dealers and customers

By Lou Smyrlis

Buying a ‘good tire’ is no longer good enough Bridgestone Commercial Solutions (BCS) is shooting for some aggressive goals over the next few years, including improving the rolling efficiency of its tires by 25% and reducing the CO2 content per sale by 35% by the year 2025. President Kurt Danielson and vice-president of marketing Scott Damon emphasize that the company is relying on providing total tire solutions and paying close attention to the unique needs of customers rather than producing products and expecting the market to adopt them.

“During the recession, everybody took a closer look at their business and started running it tighter. We have seen a shift in 48 FLEET EXECUTIVE ❙ September/October 2012

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our customer base where they are saying, ‘Help us manage our tire programs better, help us find solutions to reduce downtime,’” Danielson said during the company’s Media Boot Camp. “Buying a ‘good tire’ is no longer good enough.”

The Media Boot Camp included a deep dive into the company’s new Bridgestone Ecopia truck tire lineup and Bandag FuelTech retread solution. The two product lines, which include five new tires and four retreads, are designed to work together. Using specially engineered compounds which have been paired with matching retread patterns, BCS believes it has created a solution that provides low rolling resistance from the new Ecopia tire straight through to the FuelTech retread

while extending casing life.

The Media Boot Camp also included an extensive tour of the company’s Warren flagship tire plant and its education centre. The plant produces around 8,500 truck tires a day, employing four shifts.

Plans to increase production by another 1,000 tires a day go into effect next year.

After a drive down the highway, journalists were also treated to a tour of the company’s North American Manufacturing Education Centre where Randy Hanson, technical training solutions manager, showed and explained the different machinery used in a Bandag retreading plant.

The centre is used to provide educational support to BCS dealers and customers who come to learn such things as basic tire construction, conditions for tire failure, and equipment maintenance and troubleshooting.

Raw materials pricing volatility a tough challenge for OEMs Business volumes continue to look positive for North America’s tire manufacturers, but the outlook on their costs remain uncertain due to volatile raw materials pricing.

“Predictability has been almost impossible with raw materials. There are trucknews.com

12-10-11 1:24 PM

Bridgestone Commercial Solutions’ recent Media Boot Camp included a deep dive into the company’s new Bridgestone Ecopia truck tire lineup and Bandag FuelTech retread solution.

too many things going on. It’s like trying to predict the stock market,” attested Kurt Danielson, president of Bridgestone Commercial Solutions, during the company’s Media Boot Camp held earlier this summer.

A basic truck tire with four belt construction can contain 14-15 different rubber compounds. The price of rubber has come down of late, but is still up substantially when looking at it over a 10-year window. There is concern that once the North American and world economies kick back into full gear the resulting increase in production will place pressure on raw material inventories and, thus, pricing. Higher raw materials costs pose a particular challenge to tire manufacturers selling into the for-hire and owner/ operator truck market segments. Profit margins remain thin in these sectors and, as a result, most customers are very averse to any price increases.

Would this then be the right time to buy more rubber and other raw materials at the current lower pricing in anticipation of higher pricing to come?

Not necessarily, according to Danielson and other Bridgestone officials.

“We are trying to take as much volatility out of the equation as we can because it’s not good for us and it’s not good for the trucker. We have plans to hedge as much as we can. But there is a risk in buying too far out,” Danielson said.

The many offshore manufacturers based in India and China which have been pumping low-cost tires into the North American market are another threat the established brands have to contend with when considering their pricing.

For their part, Bridgestone officials say they differentiate themselves by focusing on and educating buyers on total cost when it comes to tire purchasing.

“It’s not about the acquisition price. trucknews.com

Geared Up Sep 2012.indd 49

It’s about the total cost over the life of the tire,” said John Boynton, vice-president of sales for Bridgestone Commercial Solutions. “Customers are saying, ‘Help us with the predictability of our tire costs,’ rather than, ‘What is the cheapest price you’ve got?’”

Danielson also pointed to the increasing amount of government regulation, particularly on the environment side, which he believes will make it continually more difficult for offshore low-cost tire providers to stay in the game. And with the SmartWay program now extended to retreads, shippers themselves may start to play a larger role by demanding that their carriers only use SmartWay-approved products.

“The offshore products are a threat, but we don’t fear them long-term because we believe we have something that differentiates us,” said Scott Damon, vice-president of marketing.

Bridgestone shows science behind latest tire designs Tires could very well be the Rodney Dangerfields of the trucking world: they simply don’t get the respect they deserve.

They may seem simple and utilitarian, but the science that goes into their construction is considerably sophisticated.

That much is quickly made evident as one listens to Guy Walenga, director of engineering for commercial products and technologies for Bridgestone Americas. Walenga has a wealth of knowledge about tire design and during the company’s Media Boot Camp held in Tennessee, earlier this summer, he shared it with transportation industry journalists.

That “simple” truck tire with a basic four-belt construction actually includes 14-15 different rubber compounds, each chosen for a specific set of properties, not to mention a series of agents to help the rubber cure faster, resist oxidation, etc. Each of these compounds cures under a certain temperature, time and pressure, yet they must all cure at the same time to produce a tire.

That’s just the basics, of course. As Walenga showed, tire design has taken

on a great deal of sophistication over the years. For example, Bridgestone’s focus is on a total tire solution. Its new Ecopia lineup, first introduced to the market at the Mid-America Trucking Show in the spring, includes five new tires (steer, drive and trailer positions) and is married to four new tread designs in the Bandag FuelTech line (drive and trailer positions). The idea is to provide a fuelefficient solution from the original tire through to the retread.

Bridgestone believes the tires can save up to 29% in total tire wear cost when retreading an Ecopia casing with Bandag FuelTech.

Walenga walked through several of the enhancements built into the new tires.

Within the tire tread, Bridgestone is using a patented polymer technology called NanoPro-Tech. Using this technological advancement, quality carbon black is dispersed more uniformly within the rubber, better controlling particle movement and, thus, reducing energy loss. Why this matters is because the end result, according to Walenga, is improved fuel economy through lower rolling resistance.

The company has also turned to a proprietary sidewall compound to reduce heat generation, which reduces rolling resistance and improves fuel economy without compromising protection for the tire. The sidewall of the M710 drive radial and the R197 trailer Ecopia tires also contain less bead filler volume as a way to lower tire weight and improve fuel economy. Walenga said about 2 lbs have been removed from the tires through this design enhancement, which had been used in the Japanese market for about six years before being tried in North America.

“You can barely see the difference but if you touch the tire you can feel it,” Walenga said.

The company’s line of wide-base singles, called Greatec Ecopia, include a patented Waved Belt design to improve durability and create a more retreadable casing, particularly when paired with a Bandag FuelTech product. FE September/October 2012 ❙ FLEET EXECUTIVE 49

12-10-11 1:24 PM

NAVISTAR CHARTS

NEW PATH

Company executives speak out about their new engine platform, why their in-cylinder emissions strategy didn’t pan out and the key advantage they have going forward. By James Menzies

I

ts bid to establish a “sustained, product-based differentiation” within the marketplace fell short as Navistar International announced recently it would add selective catalytic reduction (SCR) exhaust aftertreatment to its engine line.

Navistar had originally committed itself to achieving EPA2010 emissions standards using only advanced exhaust gas recirculation (A-EGR), while all its competitors chose to pursue SCR, which requires the use of urea-based diesel exhaust fluid.

During a candid discussion with trade press journalists at Navistar’s Lisle, Ill. headquarters, Jack Allen, president of the North American Truck Group, said the company was forced to change its emissions strategy when it became clear it would be unable to certify its 13-litre Advanced-EGR MaxxForce engine before cashing in the last of its emissions credits. Credits were earned for producing engines that were cleaner than required under previous emissions standards, but those credits ran perilously low before the company was able to certify its A-EGR engines at 0.2 grams NOx. “That’s really where the wheels came off the cart,” Allen said. “It’s not in the technology; it’s really in the timing of that technology being ready versus when the credits were going to run out. We got to the point in the intersection where those two factors were coming together like a freight train.”

Allen lamented, “It looks like we’ll never know if the technology and the credits would have lined up.”

Navistar’s initial decision to take a different approach to EPA2010 emissions standards than all its competitors was borne from a desire to achieve a long-term differentiation in the marketplace, Allen explained.

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customer or the formula doesn’t work. When we looked at 2010 emissions, we thought there was a way to have a sustained competitive advantage with a non-urea engine,” Allen recalled. “We really believed we had the opportunity to get there from a differentiation standpoint, and we think it would’ve been good for our customers to have a system that didn’t require SCR and that provided a lower operating cost.”

Moving forward, Navistar International says it will pay nonconformance penalties (of US$3,775 per engine) while also redeeming its remaining emissions credits until it’s ready to roll out its new ICT+ (In-Cylinder Technology Plus) solution next May. ICT+ combines Navistar’s in-cylinder emissions technologies with proven selective catalytic reduction (SCR), which will be supplied by Cummins. It will also offer International trucks with the Cummins ISX15 engine as early as January.

Allen said Navistar has secured a $1-billion loan and is confident the production and sales of its engines into the North American market will go uninterrupted as it transitions to the new technology.

“We continue to expect there’s not going to be any interruption in our production,” Allen said. “We’ll go from building trucks with the interim NCPs to building trucks with the final NCPs until we get to the point where our SCR system is integrated into all of our products. By our projection, we have enough credits to get us into next year, certainly until the other side of when the Cummins engine will be available (in January).”

As for its relationship with Cummins, Allen said a Memorandum of Understanding is in place, which will soon be proclaimed an official supply agreement.

“It’s quickly moving to a supply agreement to re-establish a strategic relationship with them across a number of fronts, the trucknews.com

12-10-11 1:24 PM

first one being their aftertreatment system,” Allen explained.

He said Navistar maintained ties with Cummins through the past two years and in fact sold more than 11,000 trucks with Cummins power into its export markets in 2011.

“It wasn’t a big stretch to get back together with Cummins,” Allen said.

Navistar officials said in some ways, the company will benefit from adding Cummins’ SCR technology to its trucks after the system has proven itself over a couple years in the field.

“Everybody had issues delivering their (EPA2010) products,” said David Majors, vice-president, product development, North American platform with Navistar. “That’s the benefit of us coming in later with SCR, those lessons have been learned.”

Navistar will also benefit from the extensive knowledge it gained on controlling NOx in-cylinder, officials said.

“The advantage we have is we’ve gone way deeper into EGR than our competitors have had a need to,” said Tim Shick, vice-president, North American engine sales. “That’s what we feel is going to give us an advantage going forward.”

While Navistar will dial back EGR flow rates, Allen said “because of all the work we’ve done on our in-cylinder product, we’re in the best market position to be able to optimize the engine and aftertreatment and to drive the best performance and best fuel economy in the marketplace.”

Navistar hasn’t yet decided whether it will continue to develop its own 15-litre MaxxForce engine, or rely solely on the Cummins ISX15 to appease customers with big power requirements.

“We’re going to have to make some decisions on whether we continue with that engine or go with the ISX,” Allen said.

“The decision hasn’t been made.”

Allen confirmed to Fleet Executive that the International LoneStar would remain an offering.

“We will add SCR to the LoneStar product and then we’ve got to evaluate the 15-litre, the cooling and all that kind of stuff to determine if we can go forward with the 15-litre (on the LoneStar),” he said. “We’d sure like to. The LoneStar is a product in our future, for sure.”

For now, Navistar is focusing most of its attention on its highest volume products, bringing out its ICT+ engine and packaging the SCR system on the ProStar+ chassis. The installation of the SCR system has been fairly straightforward, officials said.

They showed visiting journalists an International ProStar+ with a Cummins ISX engine with SCR under the hood.

The Cummins engine was pulled from a competitive truck and installed in the ProStar+ and driven from Colorado to Illinois without any issues, Majors explained.

Most trucks will use a switchback installation configuration, with the majority of the SCR components packaged underneath the passenger side steps. The company already has developed several SCR configurations on its various chassis to fit the needs of the vast majority of its customers. trucknews.com

Geared Up Sep 2012.indd 51

“It’s a pretty clean installation for us,” said Majors. Officials said new trucks with either ICT+ or the Cummins engine with SCR will be priced competitively.

“We compete in a very competitive market today and it’s our intention to compete in that market going forward from a price/value equation,” Allen said.

There are about 40,000 MaxxForce 13 advanced EGR engines currently in the market, and Allen said Navistar expects them to retain their value.

“What happened when the industry went from 2009 to EPA2010 and what happened to the value of a non-SCR used truck? It went up, there was a marked pickup in the value of used trucks during that period in time,” Allen reasoned.

Shick noted the base engine will remain the same when SCR is added next year.

When a decision was made to add SCR, Navistar moved very quickly to communicate the new strategy to employees, dealers and customers. Dealers, Allen said, appreciate the certainty of the new approach and the expanded product line but engineers who’ve committed the last few years of their lives to achieving the EPA2010 standard without SCR had mixed feelings.

“Are people disappointed the original strategy didn’t work? Of course. But clarity of a direction Navistar’s Jack Allen says the is a really powerful motivating company’s decision to change factor; probably more powerful directions has been a ‘relief.’ than any of us realized until we did it,” Allen explained. “The time this was taking, the anxiety it was driving, the uncertainty…I think there’s a lot of relief.”

While a seemingly humbler Navistar is looking ahead and eager to roll out its new engine line, Allen made no apologies for the company’s motivations to pursue a non-SCR engine.

“Great American companies innovate,” he said. “Great American companies differentiate themselves in the marketplace. It doesn’t always work out as well as intended.”

Whether or not Navistar could eventually have gotten its MaxxForce 13 certified if it had more time, and whether doing so would have provided the truck and engine maker with a significant advantage in the market, are questions that will go unanswered.

“I would just say, we came to the conclusion that the time required to continue on the process we were on, relative to the anxiety this was causing internally, with the dealers, the analysts and investors, that it was time to take a different direction and move ahead,” Allen said. “There was no real one event that drove that. We made a decision to go in a different direction and that’s where we’re going.” FE September/October 2012 ❙ FLEET EXECUTIVE 51

12-10-11 1:24 PM

DASHBOARD

TransCore Canadian Spot Market Freight Index 2007-2012

2007 2008 2009 2010 2011 2012 %

%

Change Change

Y-O-Y M-O-M

The top states of origin for loads destined to Canada in order of most loads were Pennsylvania, Ohio, California, Illinois and Texas. The top US destinations for freight originating in Canada were New York, Texas, Pennsylvania, California and Michigan.

TransCore’s Canadian-based Loadlink freight matching database constitutes the largest Canadian network of carriers, owner/operators, freight brokers and intermediaries. More than 13 million full loads, less-thantruckload (LTL) shipments and trucks are posted to the Loadlink network annually.

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

JAN

173 214 140 171 222 220 -1% 1%

FEB

174 217 117 182 248 222 -10% 1%

MAR

228 264 131 249 337 276 -18% 24%

APR

212 296 142 261 300 266 -11% -3%

MAY

280 316 164 283 307 301 -2% 13%

JUN

288 307 185 294 315 295 -6% -2%

JUL

219 264 156 238 245 233 -5% -21%

AUG

235 219 160 240 270

SEP

206 203 180 234 263

OCT

238 186 168 211 251

NOV

227 143 157 215 252

Cost of ground transportation drops in July

DEC

214 139 168 225 217

The cost of ground transportation for Canadian shippers decreased by 0.5 % in July when compared with June results, according to the latest results published by the Canadian General Freight Index (CGFI).

The Base Rate Index, which excludes the impact of accessorial charges assessed by carriers, increased by 0.9% when compared to June.

Average fuel surcharges assessed by carriers have seen a decrease from 20.18% of base rates in June to 18.8% in July.

“The total cost decrease was driven by lower fuel costs while base rates actually increased,” said Doug Payne, president and COO of Nulogx, which facilitates the CGFI. “However, base freight costs are down 3% from a year ago.”

The CGFI is sponsored by Nulogx a leading Transportation Management Solutions provider, and is used by shippers and carriers to benchmark performance, develop business plans, and secure competitive agreements. It was developed with the assistance of Dr. Alan Saipe. The most recent results are available at the CGFI Web site: www.cgfi.ca.

TransCore Canadian Spot Market Freight Index 2007-2012

TransCore’s Canadian Freight Index dips in July as summer slow period begins TransCore’s Canadian Freight Index for the spot market dropped 21% in July as the traditional summer slowdown began. With the annual onset of summer construction, vacations and company shutdown periods, July experienced the third-lowest volumes of any month this year; however, it was the fourth most active July on record, finishing 5% behind July 2011.

Cross-border postings decreased two points, accounting for 73% of overall load postings. Intra-Canada postings contributed 23% of the total load volumes, increasing 1% from June.

Equipment postings jumped 9% month-over-month and were up significantly year-over-year, increasing 21%. The equipment-to-loads ratio increased in July, reaching the highest levels for 2012.

Top destinations for loads imported into Canada were: Ontario (54%), Western (23%), Quebec (20%), and Atlantic (3%). Western Canada increased 3%, as did Quebec. The remaining regions remained unchanged.

Top regions for import equipment into Canada were: Ontario (53%), Western (23%), Quebec (21%), and Atlantic (3%).

Western Canada decreased 1%, while Quebec increased 1%. The remaining regions remained unchanged.

Regions of origins for loads within Canada were: Western (44%), Ontario (26%), Quebec (22%), and Atlantic (8%). The regions remained unchanged from last month.

52 FLEET EXECUTIVE ❙ September/October 2012

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Canadian rail freight traffic up 6.8% in June

Canadian rail freight traffic rose 6.8% in June from June 2011 to 27.2 million tonnes, according to a report from Statistics Canada. The gain was the result of increases in both domestic and international cargo loadings.

Over the same period, the industry’s core domestic transportation systems, composed of non-intermodal traffic and intermodal traffic, increased 4.9% to 23.8 million tonnes.

Non-intermodal cargo loadings rose 4.2% to 21.2 million tonnes. The gain was the result of increased traffic in approximately half of the commodity classifications carried by the railways. The commodity groups with the largest increases trucknews.com

12-10-11 1:27 PM

DASHBOARD

in tonnage were coal, fuel oils and crude petroleum, and iron ores and concentrates.

In contrast, several commodity groups registered decreases.

Loadings of wheat decreased the most, followed by sand, gravel and crushed stone, and colza seeds (canola).

Intermodal freight loadings rose 10.5% to 2.6 million tonnes. The increase occurred solely on the strength of containerized cargo shipments, as trailers loaded onto flat cars declined, StatsCan reports.

At an international level, total rail traffic received from the US advanced 22.2% to 3.4 million tonnes. The increase was driven by both non-intermodal and intermodal traffic.

US truck tonnage flat in July US for-hire truck tonnage was flat in July, but up 4.1% compared to last July, marking the best year-over-year gain since February 2012.

Year-to-date, tonnage is up 3.7% compared to 2011, according to the American Trucking Associations.

“July’s reading reflects an economy that has lost some steam, but hasn’t stalled,” ATA chief economist Bob Costello said. “Certainly there has been some better economic news recently, but I continue to believe we will see some deceleration in tonnage during the second half of the year, if for nothing else but very tough comparisons on a robust August through December period in 2011.”

Costello added he expects the slowdown in new factory orders will constrain manufacturing output, which will impact truck freight volumes. He’s also concerned about the recent jump in the total business (manufacturing, wholesale, and retail) inventory-to-sales ratio. “Unintended gains in inventories will hit trucking negatively as the supply chain works off stocks,” Costello said.

He kept his tonnage outlook for 2012 to the 3-3.5% range as reported last month.

RBC PMI suggests slightly weaker expansion of Canada’s manufacturing sector in August Canada’s manufacturing sector grew in August, although at its weakest pace in five months, according to the RBC Canadian Manufacturing Purchasing Managers’ Index.

The headline RBC PMI – a composite indicator designed to provide a single-figure snapshot of the health of the manufacturing sector – indicated a solid improvement in Canadian manufacturing business conditions in August.

However, having fallen slightly from 53.1 in July to 53.0, the PMI remained below the series average of 54.2 and signalled the weakest manufacturing expansion in five months.

The RBC PMI indicated further increases in both output and new orders in August. However, the rate of output growth was unchanged from July’s four-month low, while the expansion for new orders remained below the series average. trucknews.com

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Employment also increased over the month, but the rate of job creation slowed slightly to its weakest since April. Input prices meanwhile increased in August, reversing the marginal decline in July.

“In contrast to declining manufacturing conditions around the world, particularly in the US, Euro area and China, the Canadian manufacturing sector is continuing to grow, albeit at a moderately slower pace,” said Craig Wright, senior vicepresident and chief economist at RBC. The monthly survey is conducted in association with Markit, a global financial information services company, and the Purchasing Management Association of Canada (PMAC).

In addition to the headline RBC PMI, the survey also tracks changes in output, new orders, employment, inventories, prices and supplier delivery times.

Key findings from the August survey include: growth of output unchanged from July’s four-month low; new orders increasing solidly, partly reflecting an uptick in new export work; and input prices rising solidly, reversing marginal decline recorded one month previously.

The volume of new orders received by Canadian manufacturers increased in August, with firms generally linking this to greater client demand. New export orders also rose over the month, with an increase in new work from the US particularly mentioned by panellists. Overall, total new orders rose solidly from July, although the rate of growth remained slower than the series average.

Reflective of the rise in new work intakes, manufacturers across Canada raised their production levels in August.

Output has risen in each month since data collection began in October 2010, but the rate of increase was unchanged from the four-month low recorded in July. Firms also depleted stocks of finished goods, albeit to a lesser extent than one month previously, and reduced the level of outstanding business for the third month running.

The amount of inputs bought by surveyed companies increased in August, with firms largely linking the rise in purchases to greater output requirements. Input inventories also rose over the month; however, the rate of stock accumulation was only slight overall. Concurrently, suppliers’ delivery times lengthened further during the latest survey period. However, the increase in input lead times was only marginal and the weakest in the 23-month series history.

“Although the Canadian manufacturing sector grew at its weakest pace since March, the slowdown was less severe than in July and the pace of expansion remained solid overall,” said Cheryl Paradowski, president and CEO of PMAC. “An uptick in new export orders, reflecting greater demand from the US, contributed to a faster expansion in total new orders in August.

However, the increase in new work did not translate into a stronger rise in production, with output growing at the same rate as in July.” FE September/October 2012 ❙ FLEET EXECUTIVE 53

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INSIDE THE

NUMBERS

4.2%

4.2% That’s the

TOP 10 INTERPROVINCIAL TRADE ROUTES Provincial Trade Route

$ (millions)

1. Quebec-Ontario

$38,317

2. Ontario-Alberta

$23,668

3. Alberta-British Columbia

$15,401

4. Ontario-British Columbia

$9,902

5. Saskatchewan-Alberta

$9,819

6. Quebec-Alberta

$7,824

7. Ontario-Saskatchewan

$7,627

8. Ontario-Manitoba

$5,541

9. Manitoba-Alberta

$5,044

10. Quebec-British Columbia

$5,004

percentage of

10 BUSIEST CANADA-US BORDER CROSSINGS

Canadian GDP

Border Crossing

$ (millions)

1. Windsor-Ambassador, Ontario

$86,001

represented by

2. Fort Erie/Niagara Falls, Ontario

$49,870

the transportation

3. Sarnia, Ontario

$42,416

4. Lacolle, Quebec

$20,284

services sector,

5. Emerson, Manitoba

$15,355

totalling

6. Pacific Highway, British Columbia

$13,320

7. Lansdowne, Ontario

$12,540

$53 billion

8. Coutts, Alberta

$11,914

9. North Portal, Saskatchewan

$8,674

10. Philipsburg, Quebec

$4,654

TOTAL CANADA-US TRADE SHARE BY MODE 2001 VS. 2011 MODE

2001

2011

Road 63.7%

56.5%

Rail 16.6%

16.9%

Marine 2.3

5.8%

Air 7.5%

5.0%

Other 9.8%

15.8%

WINNERS AND LOSERS IN CANADA’S TRANSPORTATION INFRASTRUCTURE

Our country, and our $1.8 trillion economy, is shaped to a great degree by our challenging geography and demographics. And that, in turn, shapes our transportation infrastructure and practices. The 10-million-square-kilometre land mass we call Canada is home to just 34 million inhabitants. We have the longest land border in the world, shared with the world’s most wealthy country. The challenge for Canadian transportation is to be efficient and cost-effective enough to move products large distances across provincial and international borders. Canada’s export-oriented international trade activity remains largely dependent on the health of the US economy. In 2011, Canada’s total merchandise trade with the US was $551 billion and represented 62% of Canada’s total trade activities, according to the annual Transportation in Canada report published late this summer. The charts above show which regions are capturing the largest percentage of trade-related traffic and revenues.

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