Hopes and Fears
by Marco Beghetto
After a year of speculation that North American heavy-duty truck sales would completely dive after Jan. 1, 2007, the so-called downturn might not slump too far after all. At least that's what truckmakers and dealers are whispering these days.
Class 8 sales this year – fueled in part by a pre-buy surge – will reportedly top a record 300,000 units. That same pre-buy, however, could to cause retail sales to slide about 30 percent in 2007.
While that's a significant drop, it's still a good year compared to any other average sales period, says Jim Beiderwieden, president of the Inland Kenworth franchise in Burnaby, B.C. "Even with 200,000 trucks, that's still the sixth or seventh best year (the industry's) ever had.”
Some dealers will have ‘06 engines in ‘07 truck models for the first couple months of 2007, Beiderwieden confirmed for highwaySTAR. "Some buyers might prefer the known engine to the unknown.” he says. Availability and demand, however, will vary wildly among dealers and customers in each region.
While the largest trucklines in the U.S. were the main players in the pre-buy, most average Canadian fleets are either confident in ‘07 engines, or not worried enough to be swayed from scheduled buy-trade cycles, says Cummins Canada General Manager Alasdair McNellan in Toronto. Still, he says owner-operators – especially those in central and Atlantic Canada – will be more driven to hunt down ‘06 engines in the early part of next year or play the wait-and-see card.
"The owner-op is the one that's going to be somewhat affected as far as not having the will to pay out a $10,000 premium for a truck they could have bought this year. But fleets don't seem to be as concerned because they feel they can pass it on,” McNellan says.
In fact almost all of the eastern owner-ops contacted by highwaySTAR indicated they'll be staying away from ‘07 equipment for the next year or so.
While they're cautious as well, small truckers and owner-ops from booming, energy-rich Western Canada seem to have a slightly more confident tone than their manufacturing-dependant counterparts way east on the Trans Canada.
K&M Transport's Grant Barry, who hauls petroleum with four trucks out of Saskatoon, says because business is booming he'll buy new iron next year – likely a Pete 379. It's not that the $10,000-$12,000 extra sticker price; the ultra low sulfur diesel required for the engines; as well as the functionality of the new technology aren't worth considering, but they're issues he won't let impede his growth in the market. "To be honest,” he says, "I can't worry about anything regarding the new engines. That's what warranties are for.”
He'll try to pass along the added costs of the engine to the company he's working for, and for the most part, he thinks he can recoup some of it. "They're not going to eat the extra $10,000 (premium on a new truck) just extra increases across the board.”
Around the water cooler at Shadow Lines Transportation – a 100 percent owner-op carrier based in Langley, B.C. – logistics and special projects manager Tom Mierzejewski says he's heard more than a few of his owner-ops say they're committed to new equipment next year. "I know of at least a dozen guys here that have no reservation to replace their trucks in ‘07,” he says. "Overall, with the strength of the tar sands sector in Alberta and construction in B.C., if our guys have to buy a truck they'll buy it. I got a few operators that just purchased their own step-deck trailers and didn't blink on spending the money because of how things are going.”
The sun isn't shining that bright on every other North American market, however, and with the pre-buy boom now deflated, conventional wisdom suggests that OEMs eager to keep production lines moving will pull out plenty of carrots to wave in front of customers willing to jump behind the wheel of an ‘07.
McNellan thinks that during a downturn – even a modest one – OEMs will easily choose to fill as much production capacity as they can.
"A lot of customers we talked to are sure the OEMs are as hungry to keep the lines open as we are. And they're waiting. Will there be incentives, like better residual value, finance packages, maybe a lesser price on a truck? I think absolutely,” he says. "Some OEMs are even thinking of bringing in ‘07 engines at ‘06 prices just to get customers in. I really think you can't shut down a plant, so you do what you have to do.”
So what does the dealer have to say about his marketing strategy in ‘07? Beiderwieden pauses before answering. "I'll just say, that if you're looking for an ‘07 engine, the best time to buy would be first quarter 2007. That's when it'll be price advantageous.” Happy shopping.
Quebec's new TDG tanker rules require black boxes or
As of late summer, all new Quebec tank trucks hauling dangerous goods must be equipped with either electronic stability control or an onboard recorder system. Older tank trucks must have their speed limited to 100 km/h.
New tank trucks made after August 15, 2006 will have to be equipped with either a real-time driver monitoring system that records significant speed variations, or an electronic system for dynamic stabilization to assist the driver during a critical maneuver. For tank trucks assembled before that date, a speed limiter that caps speed to 100 km/h will also be accepted.
This new requirement applies to all dangerous goods carriers – including out-of-province haulers - using the Quebec road network.
According to the regulation, systems that determine vehicle speed using only GPS technology cannot satisfy the regulatory provision unless the system captures and records the positioning signals at a sufficient frequency. Because the rule demands the recording of significant speed variations - like sudden braking - it is essential that the speed data is captured at a sufficiently high frequency like from the electronic information stored inside the vehicle engine's Engine Control Module (ECM).
For trucks built before the mid-nineties not equipped with an ECM, it is possible to use the data coming from speed sensors, but carriers must ensure that the frequency of the GPS positions are adequate to detect rapid deceleration.
The amendment to the Article 40 was announced in late 2004, but postponed because the industry wanted a more complete recording system.
"The new regulation was not well received by the industry at first because some information was missing," says Rene Rouillard, president of Transport Bessette, and chair of the dangerous goods transport committee at the Quebec Trucking Association.
"The initial project mentioned speed reading at regular intervals only. Some adjustments had been made so the on-board recorder could read quick acceleration or decelerations, which are important elements for analyzing roll-over risks and educating the drivers."
Transport Jacques Auger of Levis, Que. specializes in hauling petroleum products. Valerie Fournier, assistant director of prevention, training, and safety, says the regulation has no impact on her company.
"Our fleet met the requirements before the announcement of the new regulation," she said, adding that it'll improve road safety now that all other tank truckers must do the same.
FAST "endorsement" not required for cross-border hazmat loads
Terminology may be at the root of recent confusion surrounding the use of a FAST card to qualify a driver to transport placardable quantities of hazmat loads in the U.S.
Some drivers report having been asked to report to a FAST operations center to get a HAZMAT "endorsement" on their FAST cards.
According to Ron Lennox, vice-president of trade and security at the Canadian Trucking Alliance, the U.S. rule says nothing about a FAST "endorsement." It just requires that Canadian drivers obtain the card in order to continue to haul placarded quantities of hazmat while in the US.
"My understanding is that there was a bit of a glitch in ACE whereby the system – if it spotted hazmat on the manifest and a driver with a FAST card – would then search to see if there was information about the driver indicating he or she had received training. I've been told by CBP that this has been fixed.
"My contacts at CBP tell me the only thing [they're] looking for is to see if there is qualified hazmat on the manifest. If so, they want to see a FAST card, too," Lennox says. "If the driver has one, he's on his way."
All the other requirements remain the same. Canadian drivers are required to carry proof of Transportation of Dangerous Goods (TDG) training while hauling such loads.
The CTA recently convinced CBP to accept FAST cards in lieu of a specialized hazmat endorsement that would have imposed nearly identical background checks as the FAST cards.
Meal Claim Issue Heads to Supreme Court
After failing to convince a B.C. appeals court that the federal government's $73 daily tax free meal allowance for civil servants violates the Charter of Rights and Freedoms, Summerland, B.C. lawyer, Tom Johnston and his 2,200-strong band of meal-tax-crusading truckers, are taking the case to the big show - the Supreme Court of Canada.
Johnston launched a class action suit against the Canada Revenue Service at the B.C. Supreme Court in 2004, arguing that the shortfall between a federal bureaucrat's $73 meal allowance and the maximum daily $22.50 meal tax deduction allowed a Canadian trucker under the Income Tax Act violated the equality sections of the charter.
"Our argument was that under the Charter, Sec 15 Equality section, one group of Canadian (federal government employees) are getting an entitlement not received by other Canadians and therefore in violation of the equality provisions of the charter," says Johnston.
In 2005, Supreme Court Justice Alison Beames struck down the claim, deciding that the federal government was acting in its role as "employer" in giving its employees the $73 per day meal allowance and therefore entitled to bestow that benefit to its employees. A B.C. appeals court recently backed up the decision, prompting Johnston to try his luck at the Supreme Court.
Johnston says he's enlisted the help of Supreme Court-experienced agents from the law firm Lang Michener in bringing the leave appeal to the top court.
He says all 2,200+ members of the class action are welcome to join the Supreme Court leave to appeal for an extra $100. "Plus we've had some new people jump on at this point because they believe so strongly in the cause."
Lobby group formed
Besides applying for the leave application, Johnston and a few class members from across the country are forming a lobby group - Keep Canada Moving - in a bid to keep the concerns of Canada's truck drivers front and center in the minds of Canadian lawmakers.
Johnston says the group will use the industry's ailing employment rolls and lack of new drivers to draw attention to the big issues facing drivers. "Part of the problem is the meal allowance but there are other issues as well - primarily safety and cross border traffic issues," says Johnston. The group will be active in lobbying both Ottawa as well as provincial and municipal governments on behalf of Canadian truckers.
Security Problems Could Sidetrack TWIC Program
The requirement to have all transportation workers that access U.S. ports and other "safety sensitive" areas to undergo new security clearance could be delayed indefinitely, says the U.S. Department of Homeland Security. During a recent review of TWIC prototype systems, DHS officials identified "significant vulnerabilities" with the proposed Transportation Worker Identification Credential (TWIC) program, which could pose "high-risk" security problems.
The Canadian Trucking Alliance is trying to convince DHS officials to accept FAST cards in lieu of overlapping security background checks required for the TWIC card as that card meets or exceeds that of the TWIC card.
Although the number of Canadian truckers that would be affected by the first phase of the TWIC roll out is relatively small, CTA has filed comments with the U.S. Transportation Security Administration (TSA), asking that mutual recognition agreements be explored to avoid potential duplication of security checks.
Ret Tinning of B.C. intermodal carrier, Berry & Smith Trucking, which takes container freight to and from the port in Seattle, welcomes the idea. "I think that's brilliant. The FAST card is an excellent ID credential – they've got the guys' picture, fingerprints, background check. To do a TWIC card it's just a repeat of all that. If Homeland Security was really on the ball they'd ask to hook up with the FAST card and it'll save them a pile of grief."
CTA is asking that TSA abandon plans to charge drivers a $50 fee for security checks if they have already undergone a similar security check under a program such as FAST. CTA also requests that TSA not penalize Canadian drivers with processing delays for failing to "voluntarily” provide their U.S. social security number – a document they cannot legally possess.
Flying J Teams With Shell Canada
A joint venture between American travel center giant, Flying J, and Shell Canada will combine Shell Canada's national cardlock network with Flying J's Canadian travel plazas to create a comprehensive network of fuel outlets for Canadian road transport customers.
The two also plan to invest $200 million to build more than 15 new travel plazas and to remodel existing centers – which will all feature Shell fuels.
Customers can expect an enhanced level of service, which includes showers, restrooms, food, and seating areas, as well as access to a suite of ancillary services such as banking, truck and trailer leasing and sales, insurance, payroll services, freight matching, document management and more. Shell Canada and Flying J will also continue to offer their respective loyalty programs to customers.
"Flying J is the undisputed leader in the North American highway hospitality and service business,” said Les Markiewicz, GM of commercial sales and marketing for Shell Canada. "Combining Flying J's high quality services and facility standards with Shell's nation-wide cardlock network and world-class fuel and lubricants, highlights the best of both companies.”
Today's announcement builds on an existing relationship between Shell Canada and Flying J, which have worked together in the fuel supply, commercial card, and road transport business. Most recently, Shell Canada and Flying J opened state-of-the-art travel plazas in Edmonton, Alta. and Winnipeg, Man. Plans are underway now to open additional travel plazas in Western Canada later this year.
OTA Recruiting New
Team of Road Knights
The Ontario Trucking Association is looking for a few well-rounded truck drivers with good communications skills and exemplary driving records to serve as industry ambassadors on the 2007/2008 Road Knights team. Each team serves a two-year term participating in media interviews and speaking engagements aimed at improving road safety and increasing awareness of the economic and social importance of the trucking industry.
Each member of the team can expect to spend a few days each month meeting with the media and community groups such as business clubs, driving schools, and community associations. They also visit community schools with their trucks to introduce young people to the trucking industry, and meet with truck driving students to emphasize the importance of safety, professionalism, and courtesy.
OTA provides media/presentation training to drivers selected for the team, so if you're not yet a world-class speaker, don't worry; you will be by the time you've served your term. A panel of industry, government, law enforcement, and media representatives will select team finalists from a short list of all the nominations received by the OTA.
The Road Knights program started in 1995, and to date, 56 truck drivers have participated in the program – including highwaySTAR editor, Jim Park.
To participate in the program, drivers must be nominated by member companies in good standing of the OTA. Owner-operators are welcome too, and owner-operator members of OTA may act as both nominating company and candidate. As always, both men and women are welcome. Nominations must be received by December 8, 2006, and all participants are subject to a criminal record check. For more information, please see www.ontruck.org /info/knights/, or call 416-249-7401.
Quebec Anti-Emissions Rule Now In Effect
Enforcement officials in Quebec are now targeting vehicles producing visible plumes of exhaust smoke for roadside emissions testing. Vehicles in excess of 3,000 kg, including trucks, buses, emergency vehicles, and municipal vehicles, could receive tickets under the provinces new anti-pollution program, Programme d'inspection et d'entretien des véhicules automobiles lourds (PIEVAL).
Farm and off-road vehicles are exempt. Enforcement began on Sept. 1st. Inspectors will measure the opacity of exhaust smoke using a "snap acceleration method.”
For the first two years of the program, acceptable opacity rates will be 45 percent for 1991-and-newer trucks and 60 percent for 1990 models-and-older. After two years, 1991 and newer trucks have to meet a 40 percent opacity benchmark, while 1990 and older must pass a 55 percent standard.
Owners of vehicles over the acceptable rates will receive a fine between $100 and $400, depending if the vehicle is registered to an individual or a company. Failure to pay the fine within 30 days and providing proof that the vehicle has been repaired at a provincially accredited re-test/repair facility, could result in fines of between $300 and $3,000.