Tuesday, November 11, 2008

Riding the Circuit - the Road to Everywhere

The Transportation Club continues to attract quality speakers with gravitas, featuring Ray Kuntz, Immediate Past President of the American Trucking Association yesterday.

But after his year on the rubber-chicken circuit, our audience was treated to a well polished presentation of the challenges confronting the trucking industry from a front-line fighter, plus a few glimpses into his vision for the future.

As Chairman of the Board and CEO for Watkins Shepard Trucking of Helena, MT, we can be gratified to have a Westerner at the forefront of trucking's issues. There wasn't much doubt that he considers the U.S. infrastructure system to be failing - the foundation of our status as a global power. Kuntz gave a review of several national (and state) systems that have gone to hi-way privatization for infrastructure. Uniformly, he forecasts private tolling fees of $1/mile, forcing trucks to use adjacent arterials systems.

And, he had a special forecast for Mexican trucking issues. There is no low-sulfur diesel refined or planned for in Mexico, although one firm plans to supply truckstops with tanker-trucked diesel. Mexican trucks will use non-low sulfur diesel, making them "dirty" trucks when traveling in the U.S. (via the FTA provisions). U.S. trucks, built after 2007 will have to pay the higher diesel costs of limited supplies when in Mexico. Kuntz laments that the real issues of NAFTA are never part of the public discourse.

Kuntz also is troubled by the cost of the next highway bill, which he puts at $400+ billion. He asks: "How do we fund this?" Plus, he asks how the trucking industry will respond to sustainability and climate change legislation, probably mandating carbon credits. He said the National Association of Manufacturers puts this toll at $1 billion.

Kuntz offers these solutions:
  1. FIX CONGESTION. Focusing on congestion problems will cost $80 billion, with 3/4ths of that in the top 20 metro areas;
  2. NATIONAL 60 MPH SPEED LIMIT. This will give greater fuel efficiency and reduce our consumption;
  3. DO ALL OPTIONS FOR FUEL SOURCES. Do conservation. Do alternative fuels. Do drill more.

His observation - National legislation has proposed to eliminate larger companies (more than 50 trucks) from incentives, yet those larger companies are the ones doing fuel conservation:

  • Adding APUs
  • Buying fuel efficient tires
  • Giving drivers fuel bonuses

These activities are saving his 700-truck firm $500,000/month. And, from us he got more than rubber chicken - he got salmon!

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