Waynes World - February 2007

NEW FUEL-SAVING LOAN PROGRAM, NEW
RULES PROPOSED BY FMCSA, AND...

THE IMPORTANCE OF
HAVING A PLAN
By Wayne Schooling

PROPER PLANNING CAN SET YOU APART
With taxes and fuel costs on the rise, stricter rules and cut-throat competition, it is now more important than ever to think about how you are going to improve your revenue in 2007 and cut your costs.

We know that in the early months of the year, the available freight is down. What do you do? Check with your shippers, brokers or the trucking company you are currently leased to and find out what their projections are for the year, and what their solutions might be in regards to keeping you on if the freight remains low. Look into other traffic lanes. For instance, you may like the L.A. to Oakland traffic lane, but you may want to check into running from L.A. to Seattle, or in the other direction to Las Vegas or Phoenix. Be sure to consider the weather (and the season) before making your final decision.

What about trucking rates? Can you still depend on fuel surcharges? From reports within the shipping and logistics community, shippers are expecting higher costs. They know that shipping rates have remained low compared to their other costs and they are moving away from truckload shipping. In fact, truckload percentages have dropped almost 5% in the last three years. Shippers and logistics companies are doing everything in their power to roll the fuel surcharge into the base hauling rate, so knowing your total costs and your break-even point, once again, becomes even more crucial.

Finally, what can you do to stand out in the crowd of competitors? After all, why should anyone pick you to haul their freight? What makes you better than the rest? One suggestion is to have your management team take an applicable official US DOT training course (available at the NTA On-Line Institute at www.ntassoc.com). The courses can be done 24/7, 365 days a year and, once completed, you can boast that all of your team has been trained and holds certificates from the US DOT’s Transportation Safety Institute. This fact holds true for the owner operator as well. If I was a safety manager for a company that needed to sign-on owner operators, there is no doubt in my mind that I would pick ones with documented training over any other owner operators.

Simply put, hauling freight the same way you always have and expecting better results than last year will put you in the poor house. Start looking at what your customers want, not just what you think they need. Look at what your shippers’ needs are, and what they want. Shippers need trucking companies to be in compliance with a satisfactory rating and they need on-time pickup and delivery. They may even want greater control over increasing costs. In short, always think of working with, and not against, your shippers, receivers and other trucking companies.

In 2007, you will have to become more flexible and have a quicker response. Your goals should include working directly with the shipper to develop a better load planning strategy so that you don’t run out of hours. You should always have a preplanned load already set up for the backhaul. Standing above the rest is not difficult, but it does require planning and hard work.

NEW FUEL-SAVING LOAN PROGRAM
Small trucking companies can now make sure the rubber meets the road while saving money and reducing pollution with a new loan program that will help pay for some fuel-saving technologies. The Environmental Protection Agency (EPA) is partnering with the Small Business Administration (SBA) to make loans available to purchase Smartway Upgrade Kits. This program helps small truckers finance these kits, which include idle-reduction devices, low rolling resistance tires, aerodynamic equipment, and exhaust after-treatment devices. These items can improve truck fuel efficiency by 15% and save more than $8,000 in fuel costs per year, while significantly reducing emissions of soot and nitrogen oxides. Small trucking companies can now borrow from $5,000 to $25,000 with no collateral, an easy on-line or phone application, and flexible loan terms. Information about this program is available now on the NTA website (www.ntassoc.com). Simply click on “Industry Links” and scroll down to the “Fuel Saving Technology” link. While there, be sure to check out the Fuel Saving Calculator as well.

NEW STANDARDS AND RULES PROPOSED
The FMCSA has proposed new rules to toughen the entry into the trucking business. Under the proposed new rules, would-be carriers would have to comply with eleven rules that the agency believes are essential elements of safety management. If an applicant did not comply with the eleven rules, he would fail his audit. The FMCSA has also proposed new rules on medical cards, issuing a long-awaited proposal to merge information currently on the medical certificate with the commercial driver’s license (CDL). When the proposal is finalized, and after a prescribed phase-in period, CDL drivers would no longer be required to carry the medical examiner’s certificate. Their certification status would be verified electronically. Motor carriers would no longer be required to maintain the original (or a copy) of the medical certificate in each of their driver qualification files. For non-CDL drivers, the requirements would not change, and drivers would continue to provide the carrier with a copy for their driver files.

I will try to keep my readers updated on all of these proposed rules (and others) in the future. If you have any questions, call me at (562) 279-0557 or send me an e-mail to wayne@ntassoc.com. Until next month, “Drive Safe – Drive Smart!”