Vital and Dynamic Trucking Industry Plots Road to Sustainable Future
By John D. Schulz
Trucking is an overlooked national resource, even in the transportation world. Americans can expect to see 50 varieties of detergent and 100 kinds of soft-drink products when they visit the neighborhood grocery store or retailer. But they don’t often give much thought to how those goods got on the shelf. They got there because a truck delivered them.
With more than 500,000 interstate trucking companies in the United States, the trucking industry is the engine behind the U.S. economy.
“We’re an important part of the quality of life in this country,” says Bill Graves, president and chief executive officer of the American Trucking Associations (ATA). “Trucking delivers America. Unfortunately, we are one of those essentials that is taken for granted precisely because we are so consistent and so reliable.”
Trucking is the driving force behind all companies’ worldwide supply chains, moving nearly everything consumed in this country. Nearly 80% of U.S. communities receive their goods exclusively by truck. Virtually all U.S. goods touch a truck during at least one leg of the supply chain.
Trucking moves nearly 70% of all freight tonnage in this country. Even goods that have traveled by railroads eventually wind up on a truck for the “last mile” of the delivery.
Today, total U.S. freight transportation outlays reach $771 billion, and trucking revenue is over $650 billion. To put that in national perspective, trucking equates to about 5% of the GDP.
“It’s all about execution — the blocking and tackling of the business,” says John Labrie, president of Con-way Freight, a major trucking company. “It’s about reliability. It’s about performing with the industry’s fastest transit times, to more cities, across more lanes — regional, interregional and long-haul — than anybody else. And last, but certainly not least, it’s about exception-free delivery.”
“Trucking delivers America. Unfortunately, we are one of those essentials that is
taken for granted precisely because we are so consistent and so reliable.”
Bill Graves, President and Chief Executive Officer, American Trucking Associations (ATA)
The landmark Motor Carrier Act of 1980 changed the face of the trucking industry forever. The act largely deregulated interstate trucking by reducing barriers to entry and freeing the industry to offer new, dynamic services without prior approval by the federal government. The industry, however, remains heavily regulated in areas of safety and the environment, which has helped make the industry as safe and environmentally sustainable as it ever has been in its history.
Economic deregulation has worked as well in trucking as any industry in America. It has resulted in lower costs and higher service levels, with innovative services that feed today’s “just-in-time” lower-inventory supply chains, which are prevalent in most U.S. industries.
“Without a financially strong and vibrant trucking industry, the nation’s economy is jeopardized and commerce is put at risk,” Con-way’s Labrie says.
Motor carriers dominate today’s freight transportation economy. They represent the overwhelming majority of the domestic transportation market, in terms of both volume and revenue. Above-average growth in key truck freight, the industry’s inherent flexibility (what other mode can deliver to every neighborhood, on every street, 24/7?) and on-time delivery have helped the industry steadily increase its market share over the past decade.
“You are going to be graded every day on the reliability of your service, delivering on your promise to provide on-time, damage-free transportation,” says Jack Holmes, president of UPS Freight, a major less-than-truckload (LTL) carrier. “This is what your customer wants. And without a satisfied returning customer, there is no business.”
As the U.S. has developed an on-demand inventory economy, trucks have replaced warehouses in many cases. Today’s manufacturers, wholesalers and retailers have found that trucks are best suited to their transportation and distribution needs.
But trucking is more than just vehicles, terminals and equipment. Trucking is a major employer, with about 9 million people working in or supporting the industry. About 30% of these individuals are employed in the wholesale and retail industries, with another 30% in the transportation and public utilities industries.
A Proven Record on Safety
The number of highway fatalities in crashes involving large trucks dropped again last year to the lowest level for overall truck fatalities since 1992, according to a study from the National Highway Traffic Safety Administration. The total number of traffic fatalities in large-truck crashes decreased 4.4% in 2007.
Other Federal Highway Administration vehicle-mileage figures show that the fatal crash rate for large trucks has declined to its lowest level since the Department of Transportation began tracking large-truck safety records in 1975.
ATA’s America’s Road Team and Share the Road safety education programs, which are designed to educate the public about highway safety, are examples of the trucking industry’s commitment to keeping our highways safe.
ATA has also called for a national speed limit of 65 mph and has asked the U.S. Department of Transportation to require electronic speed governors to be set at no more than 68 mph on trucks at the time of manufacture. ATA is also encouraging states to focus on better enforcement of traffic laws to prevent unsafe driving actions by all drivers, including those by motorists around large trucks.
“In a carbon-intensive business like ours, conserving fuel and other forms of energy
delivers not only sustainability benefits, but bottom-line results as well.”
Douglas W. Stotlar, President and Chief Executive Officer, Con-way Inc.
There are nearly 3.5 million professional truck drivers, according to the Department of Labor, and close to 2 million tractor-trailers registered in the U.S. Commercial trucking pays more than $37 billion each year in federal and state highway user taxes, including approximately $18 billion in federal fees, or nearly 46% of the Highway Trust Fund, despite the fact that commercial trucks comprise only 12.5% of total vehicle registrations in the U.S.
As part of trucking’s commitment to progress, ATA embarked on a far-reaching, six-point sustainability program this year, the first industry-wide environmental program to reduce fuel consumption and combat global climate change through innovative ways to reduce carbon dioxide emissions.
This ATA initiative makes six recommendations:
ATA estimates that these measures can reduce fuel consumption by 86 billion gallons and decrease carbon emissions of all vehicles by more than 900 million tons in the next 10 years.
“We had a good environmental record to build on,” says Charles “Shorty” Whittington, president of Grammer Industries and ATA chairman. “A quarter century of commitment and technological advances have made particulates from diesel engines all but disappear. We’re standing up to be counted for our sound environmental efforts. Our programs make common sense, they make economic sense, they make business sense, and above all, they make environmental sense.”
The trucking industry consumes 53.9 billion gallons of diesel fuel and gasoline annually at a cost of over $200 billion. Its tab for diesel alone this year is estimated at $160 billion, up from $112.6 billion last year. Carriers are trying to offset a portion of that fuel bill by slowing down and increasing efficiency.
Bringing speed limits for trucks down to 65 mph, for example, would save 2.8 billion gallons of diesel fuel in a decade and reduce CO2 emissions by 31.5 million tons — equal to a year’s CO2 generated by 9 million Americans, or the total population of Connecticut. Automobile consumption of gasoline would drop by 8.7 billion gallons, with an accompanying drop in CO2 emissions of 84.7 million tons.
This year, Con-way Freight’s initiatives — speed management, idling and aerodynamic control strategies, and engine and equipment upgrades — yielded diesel fuel savings of 3.6 million gallons, or 3.8% savings of total fuel used. This savings equates to a huge reduction in CO2 emissions for Con-way’s fleet of 8,400 tractor-trailers, which logged nearly 600 million miles on America’s highways in 2007.
“In a carbon-intensive business like ours, conserving fuel and other forms of energy delivers not only sustainability benefits, but bottom-line results as well,” says Douglas W. Stotlar, president and chief executive officer of Con-way Inc., a $4.7 billion trucking and logistics enterprise. “It makes us a more competitive, attractive business partner for shippers who are pursuing parallel efforts to reduce the environmental impact of their supply chains.”