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SOME GOOD NEWS IN A GLUM ECONOMY: With crude oil prices dipping as low as $60 per barrel recently, diesel fuel prices are now less than $3 per gallon in some parts of the country. The last time the diesel price average dropped below $3 was in September 2007; this summer, diesel fuel prices were at a record high of $4.764 per gallon. The drop in price helps lower prices across supply chains, with some trucking companies lowering or even dropping fuel surcharges. Suzanne Garfield, spokesperson for the California Energy Commission, predicts that crude oil prices will continue the downward trend for a while and then hit a plateau before beginning to climb again in the spring. But she does not expect a reappearance of the overinflated prices that consumers saw during the summer. “I think what will happen is that crude oil prices will reflect more reasonably the demand that’s going on in the world,” Garfield said. In recent years, the demand for diesel has been higher than that of gasoline, making diesel fuel costlier than gasoline. In the United States, gasoline is used mainly for passenger vehicles, while diesel is used in trucks, farm equipment, railcars, and generators. In addition, the demand for diesel fuel is soaring in Europe, China, and India, causing the price to remain relatively high. In Europe, diesel-powered automobiles have been outselling gasoline-powered vehicles in recent years. And in India, more than 30 percent of all new vehicles have diesel engines; by 2010, half of all new vehicles are expected to be diesel powered.
WHAT TO EXPECT FROM OBAMA: What will an Obama administration mean for trucking and transportation? Reviewing campaign promises and voter concerns may reveal what’s in store. At the top of the president-elect’s agenda, say his advisors, is stimulating the economy. A full 62 percent of voters said the economy was the most pressing issue, and eight in 10 said they were worried the economic crisis would harm their family’s future. In a number of speeches, Obama said he would boost the economy and create jobs by rebuilding crumbling roads and bridges. Throughout his campaign, the candidate also placed a high priority on energy independence and investing in renewable energy and clean-energy technology. He favors a deep reduction in carbon dioxide emissions, saying he wants an 80 percent drop by 2050. Investing in clean-energy jobs and technologies that help reduce greenhouse gas emissions would cost some $150 billion over 10 years, according to his web site. Some of that money would come from oil companies, since the president-elect said he plans to implement a new tax on oil company profits. Meanwhile, Democrats who initially opposed offshore drilling have recently decided to let a ban on offshore drilling expire at the end of the year. Obama says he now supports limited drilling in an effort to lower energy costs and encourage energy independence.
SPEED LIMITERS BECOME REALITY IN QUEBEC: As of January 1, all heavy trucks passing through the province of Quebec will be required to have speed limiters set at or below 105 km per hour, or 65 mph. Many analysts expect Ontario to announce a similar plan any day, and the two provinces will likely work together to implement the regulation and educate the industry. Opponents of speed limiters argue that enforcement will be difficult, that a jurisdictional mandate will impede cross-border trade, and that safety will be hampered. However, other groups, such as the American Trucking Associations (ATA), argue that speed limiters would reduce highway fatalities and improve safety. The ATA is pushing for electronic speed limiters in the United States. The group wants speeds limited on all large trucks made since 1992 and certain noncommercial vehicles. Also on ATA’s safety agenda are uniform CDL testing standards, red-light cameras, and a national maximum speed limit of 65 mph. ATA President and CEO Bill Graves said, “Large truck fatality and injury rates are already at their lowest point since the federal government began reporting the figures three decades ago. But we must continue to raise the bar for society.”
KEEPING ONE STEP AHEAD: With a weak economy, cargo theft appears to be on the rise, and truckers need to be even more vigilant. Experts say truckers hauling consumer electronics on the weekend are at greatest risk. About 52 percent of all cargo theft occurs on Friday, Saturday, or Sunday, according to a survey by the Chubb Group of Insurance Companies, and thieves’ preferred cargo is consumer electronics, followed by food, and clothing. “Cargo thieves are opportunists, and these statistics indicate where, when and how they are likely to strike and the type of goods they are likely to target,” said a loss specialist for Chubb. To prevent theft, experts recommend establishing internal security procedures. For tractor-trailers, consider implementing surveillance monitors and GPS systems. For individual packages and pallet shipments, custom printed theft-deterrent labels, self-voiding seals, and tamper-evident tapes are effective. Custom imprinted tapes and labels are difficult for thieves to replicate, and frequently changing the imprint or tape color can throw thieves off balance. Experts also say it’s important that customers understand security procedures, knowing, for example, how pallets are prepared at point of origin. This allows customers to identify tampering once they receive a shipment. The faster they can detect tampering, the sooner the authorities can be notified.
VEHICLE-ANIMAL CRASHES UP: Fatalities from vehicle crashes with animals, mainly deer, have more than doubled in the last 15 years, according to a new study. The Highway Loss Data Institute found that 223 people died in animal-vehicle accidents in 2007, compared to 150 in 2000 and 101 in 1993. Urban sprawl is behind the increasing numbers. “Urban sprawl means suburbia and deer habitat intersect in many parts of the country,” said the senior vice president of the Highway Loss Data Institute. “If you’re driving in areas where deer are prevalent, the caution flag is out, especially in November.” November, according to the study, has three times the number of animal-vehicle crashes than the months January to September. Animal crashes contribute to a small fraction of the vehicle fatalities—consider that drunk driving causes about 12,000 deaths each year—but the problem is growing. One insurance company estimates there are 1.2 million claims annually for crashes with animals, and that those types of claims have increased nearly 15 percent over the last five years. According to Governors Highway Safety Association, there are no proven countermeasures to keeping animals off roads, except for fencing, which is extremely expensive and impractical. The group cautions motorists to slow down during the fall and early winter seasons, particularly at dusk.
PLANNING AHEAD: With the stock market’s turbulent and unpredictable performance in recent months, some workers planning for retirement are understandably nervous. Nearly all 401(k) and 403(b) type retirement plans have suffered from recent market declines. Ignoring the current economy is the worst form of planning, but a new survey finds that half of workers over 42 do not have specific goals for retirement. The average U.S. life expectancy for a male is 79 and for a female, 82, but many Americans live even longer, as medical care improves and people lead healthier lives. If a male retires at 65, he’ll need to have resources at his disposal for at least another 14 years of living. If you are concerned about retirement planning or are considering making changes to your existing plan, talk to a consultant. At first glance, these market swings may appear to have wiped out months of savings. But, says Ted Weston, Jr., professor emeritus at Colorado State University, “Be careful—these losses are only losses if one sells…. My advice is to keep saving.” Weston says it may take one or two years for a person’s savings to recover, but it will happen and the funds in retirement accounts will recover.
ORGANIZATIONAL LEARNING: Organizations undergo major change about once every three years and smaller changes occur constantly. But new findings suggest that only 40 percent of major change initiatives succeed; the problem, claim researchers, is that organizations do not always learn from their mistakes. More than 85 percent of employees said they treat “everything that happens as a learning opportunity,” but only 58 percent said they could describe what they learned, according to researchers Peter Honey and Mark Mercer. Organizations assume that employees will learn from their mistakes, but the majority of companies do not have an organized method of encouraging learning from mistakes. Without an action plan, lessons are forgotten. The other problem is that people sometimes try to cover up their mistakes or spread the blame. But when mistakes result from intelligent experimentation and calculated risk-taking, the mistake is valuable and merits examination. Bill Gates is often quoted as saying he likes to hire people who have made mistakes because it shows they take risks. Honey and Mercer urge leaders to remain calm when dealing with mistakes and explore the situation and ask questions instead of finding fault or jumping to conclusions. Focus more on the processes that allowed the mistakes to occur rather than on the mistake maker. Be sure a feasible action plan is in place for preventing similar mistakes; otherwise, the learning opportunity is lost.
Wishing you a safe and joyful holiday season and a prosperous New Year
—From all of us at Roemer Insurance
