December 25, 2012 at 7:24 AM
The trucking industry has always been a very competitive arena, owner-operator versus large national carriers; trucking has for the most part been a tough way for one to make a living. In today’s volatile market, trucking has had many competitive factors that affect whether transporting a load is profitable. Rising cost of fuel and tolls, highway taxes and costly repairs, price wars set by the dispatching brokers, rising insurance cost, and the initial layout of replacement or upgrading equipment (truck and trailer) are just some of the ongoing concerns one must face when behind the wheel of a rig. Today new threats are emerging and are instruments of war against the trucking industry, causing many fleet owners to go for broke and consumers to face rising cost of consumer goods.
Regardless which side of the trucking bed one wakes up on there are no denying two key regulatory and legislative laws that have been the modern weapon of choice against one of the most important industries that move our country. One of the largest concerns that have truckers up in rage has been emissions standards tagged in the name of environmental justice.
The cost of compliance has been forcing many owner-operators to park their trucks, larger firms to upgrade to expensive equipment, and for the end consumer to pay the price of these very costly modifications. One piece of regulation has been the National Diesel Campaign and Stop the Soot Campaign, under the supervision of the EPA. The program has dictated to the market which product or innovation will be the winner or loser in mitigating emissions, and truckers must use what EPA has stated must be used, or park their equipment, purchase a new truck, or go to work for a national carrier who can afford to keep up with compliance. The law and program does not give truckers the option to purchase equipment that best suits their fleet needs, or suit their budget. Equipment under this program, has to be used by public transportation providers (such as transit systems, government contractors, and DPW fleets), carries a very high price tag. The equipment also has been known to rob vehicles of their standard fuel economy. This program alone has cost New Jersey Tax payers $176 million dollars, to pay for equipment from a few selected emissions equipment manufacturers who are “on the list”. And now the trucking industry is forced to participate in the same program.
Another part of the program gave grant money to owner-operators who hauled out of the ports in New Jersey to purchase a new truck. The grant would give an owner-operator (who qualified) 25% down on a new truck, if they traded in their older truck to the salvage yard. The program would only be open to around 110 trucker owners who operated a truck that was older than a 1994. Great concept, but if the owner-operator could not afford the payments along the way to pay off the new rig, the rig would be repossessed and the driver out of business. Today only 11 of the 110 owner-operators still have their trucks. The rest had their trucks repossessed and went to work for a national carrier. Of the 11 owner-operators, their average payment is $2000 per month, leaving very little money in their pocket to put food on the table. What is very interesting about this program is that the majority of the owner-operators had trucks where the engine was repowered (or rebuilt). Repowered trucks have engines or rebuilt engines from newer year make models with low miles. These engines do meet emissions requirements. With the way the law has been written, production dates decides which vehicle is allowed in the port, not the performance or production date of the actual engine. This forces good affordable trucks off the road.
These programs and laws have been adopted in New Jersey and California with good reason. Both states are high impact transit states that include low income housing areas in between industrial complexes. Both states are in high profile port areas that manage the majority of the foreign made goods that make it to the shelves of US retailers. Both states have massive environmental issues including numerous browns-fields and poor air quality; however they have failed to usher in the economic benefit of these policies as promised. And, oh by the way, neither state has a sound economic engine as a result of over regulated industry. Critics have contended that such environmental policies in the transportation sector would have a huge effect on the cost of goods and services, create tax increases, and force vehicles to have higher prices tags on their windows at the dealership. Sorry to say, the critics got it right.
I find very interesting that the law was built around production date. What about the truck driver who has a totally rebuilt 1986 Classic Mack or Peterbuilt, with a new engine, is affordable to maintain, and is bought and paid for? That driver is not allowed into our nation’s ports to carry freight. So if you are wondering why the cost of imported goods has begun to catch up with the price of American manufactured or grown goods, then you need to take a look at how many $50,000 trucks have been forced off the roads and replaced by vehicles that now exceed the cost of $150,000 to purchase. When one does make the choice to purchase a new truck, it cost $30-50k more than models of just six years ago. Truck engine manufactures have been forced to utilize the same equipment the EPA has forced down the throat of the aftermarket, causing truck prices to skyrocket. The average return on investment for a big rig was five years, when an owner-operator could pay off their note. Today it is almost double that.
“The work has not gone away, just the cost of doing business has gone up with all these new equipment laws,” quoted Brion Lamwers, a trucker from Sussex County, “How much more is the government going to squeeze out of the truckers pocket? And what about the poor guy who put his money into the older truck because that is what he could afford? You’re gonna have tell him he now has a parade piece only and he can’t provide for his family? What the hell’s going on in this country when the people who work to make this country move are told what equipment they can or cannot have; it insane to think that policies like these are looked at as the one size fits all that some bureaucrat or legislator makes so they can keep their job or get re-elected. And yet these things go unchecked when new technology is made available to the trucker that is more affordable or helps them with fuel economy. It’s like they don’t even care about the poor guy behind the wheel as long as he has a way to pay government more money to stay behind the wheel.”
So is there a war on trucking? The industry seems to think so. Mike Regan, president of TranzAct Technologies, active member of NASSTRAC, and notable commentator on the freight transportation sector generally, drew some notice in late 2010 by warning that there was an emerging ‘war on trucking’ that should have not only carriers but shippers concerned, from an article recently published by the Supply Chain Digest. “The war is still going on; however I would suggest that instead of being phases of an active campaign, we are actually seeing a lull as things sort out. There are a lot of things happening in Washington DC that are taking precedence right now over things related to the transportation industry. But I want to emphasize that these issues, it's not that they've gone away, it's just that they’re not getting the attention right now given the election campaigns, the fiscal cliff, etc.”
Truckers are not against the environment. Many of them do want to play their part in preserving the planet for tomorrow’s generation. Many owner-operators have looked for ways to incorporate technology into their fleet, while not costing them out of pocket as much money as the equipment promoted through government. “I looked for ways to hold onto my older International which was my bread and butter until I could afford another newer rig. The one thing government does not understand about owner-operators is that we are resourceful and do care about our equipment. It’s what allows for us to provide for our families,” stated Eddie Wiese, an owner-operator of Yz Enterprises LLC, who works the I-95 corridor, “I retrofitted my trucks with technology that was not on the EPA list, and that technology made it affordable for me to be in business. My rig is cleaner than most new trucks, and it gets better mileage. My unit needs very little maintenance versus the equipment on the EPA list, cost less, and I can take care of the equipment myself, without any additional special training. EPA and state agencies need to promote technologies that provide a return on investment for people if they want people and the industry to adopt it as standard.”
“EPA and government need to get out of the business of picking what they feel are a good products, and let the end users decide. My friends who have the EPA list equipment have more breakdowns with their trucks, higher maintenance cost, and more down time due to those problems. The device I have has paid for itself several times over, provides for better fuel economy, and helps me be a green trucker. I don’t mind helping the environment, but I don’t want to go broke in the process,” he continued.
So what is the happy medium between satisfying regulators and lawmakers and the people who have to pay the price for the decisions make? How can owner-operators to get the most out of their investment into compliance while trying to get a return on the cost? To find out, I turned to recognized Fuel Economy Expert and author of the Ultimate Fuel Economy Book, Michael Holler for the answers.
“No single source has all of the answers. The role of government regulation should be limited to quantifiable results, regardless of the mechanism. If the rules limit particulate emissions, a truck owner should be allowed to put jelly doughnuts on the air hoses, so long as that truck meets or exceeds performance mandates. Regulation (if even needed) should be based on performance, not a list of compiled or campaigned contributors. Realistic performance requirements open the doors for good old fashioned marketplace competition. With a fair and competitive market, quality and performance improves, while prices decline. A model of this has been the cell phone and computer industry,” shared Holler.
In a time which America needs to do everything it can to preserve the little industry it has left, regulation and legislators again is sending another important economic driver over the cliff to join our fiscal policy. The next time you purchase a good from a retailer, think about the truck driver who got it there, and what their cost were just was for you to purchase that new designer shirt or have that out of season fruit or vegetable at the grocery store, imported from another country. Truckers are your friends and neighbors, the unsung heroes of the highway that move our country. They want to do what’s right, and they want to provide the best they can. They just don’t want to do in the name of any war.
Large national carriers have been instituting policies and procedures around economic and environmental sustainability, recognizing that both concepts go hand in hand. And with more than just environmental regulation, the industry is bracing itself for another round of profit eating laws that will limit job growth, make the US trucking industry less profitable and more competitive, and will usher in more government into the lives of private business. More on that in The Green Lane, “The War on Trucking; Part II-Drivers Unwanted”
Samuel K. Burlum. Mr. Burlum is the CEO/President, and Chairman of Extreme Energy Solutions Inc; a company that develops, sells, and services environmental mitigation products and practices. Under his leadership, Extreme Energy Solutions Inc. “Made in the USA Manufacturing Plan” was adopted; thus creating many new jobs in the Northeast. Mr. Burlum has testified on behalf of innovative technology at many US EPA/NJ DEP stakeholders hearings, including hearings on dirty coal fired electric generation facilities, and national diesel pollution reduction campaigns. Mr. Burlum also serves as Vice President of SMART Air Fuel Saver LLC; a Board Director for ESLC Inc; while also serving as Board Secretary for the Spirit of the Arts Foundation (501c3 Non-Profit). Mr. Burlum is involved in Motorsports (Stock Car Racing) industry, as a car/team owner, and driver. Mr. Burlum has been an Entrepreneur for over 20 years, founding his first business in 1992. He graduated from Berkeley College with an Associates Degree in Business Management & Entrepreneurship in 1998. He is an active participant and Member of both Sussex County and NJ State Chamber of Commerce; NJ State Chamber of Commerce Cornerstone Member, NJ Clean Cities Coalition, California Trucking Association, Global Information Network, and UMP Dirt Car. Mr. Burlum has been interviewed on radio and television including on People of Distinction, with CBS Radio's Al Cole, Today in America with Terry Bradshaw, WIBG 1020 am News Hurley in the Morning, NTR Radio's Voice of Success Program, and Cablevision's The Neighborhood Journal, and featured in many articles including in the publication The Taxi Insider, The Alternative Press, and MPG Today Magazine. He has been a featured speaker at the World Green Energy Symposium, and the Sustainability Summit, powered by The Council (NYC) on panels discussing matters on green transportation solutions and innovative green supply chain development.
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