Posted on July 29, 2015  by Chris Kemmer

Traveling the “Teeth-Jarring” Dalton Highway

I traveled the Dalton Highway last week as part of an Alaskan tour.  Most of the traffic is truckers making the run between Deadhorse and Fairbanks.  In fact the road was not open to the public without special permits until 1994. Wikipedia describes it as “a 414-mile road in Alaska. It begins at the Elliott Highway, north of Fairbanks, and ends at Deadhorse near the Arctic Ocean and the Prudhoe Bay oil fields. Once called the North Slope Haul Road (a name by which it is still sometimes known), it was built as a supply road to support the Trans-Alaska Pipeline System in 1974. It is named after James Dalton, a lifelong Alaskan and an engineer who supervised construction of the Distant Early Warning Line in Alaska and, as an expert in Arctic engineering, served as a consultant in early oil exploration in northern Alaska.” 

It’s brutal …………totally gravel (although I saw mention of some pavement, I honestly don’t remember that), no shoulders, with up and down mountain passes through the Brooks Range.  There are stretches with absolutely no services.  When we left Coldfoot (The last place you can get a shower and a meal enroute), there is a sign that says “No service for 240 Miles”.  I was traveling in a 12 person van with decent suspension, I suppose, and the ride was teeth-jarring.  It’s hard to imagine driving a truck continuously up and down this road day after day.  Most of the trucks I saw were either Peterbilt or Kenworth and older models – I’m certain you wouldn’t want to place a new vehicle in this environment.  I was told that most of the truckers are owner/operators or represent very small fleet operations.  Most of the trailer I saw were flats or dropdeck.  Think of the challenges in keeping trucks rolling in this environment with not many support services.  We talk about “driver comforts” in the lower 48 to entice people to consider truck driving as a profession and to come to work “for us”.  Comforts on the haul road are non-existent not forgetting the -40° weather and no sunshine in the winter with “Hordes of mosquitoes emerging in mid-June and lasting into August. Biting flies and gnats that last into September.”

Again from Wikipedia “Truckers on the Dalton have given their own names to its various features, including: The Taps, The Shelf, The Bluffs, Oil Spill hill, Beaver Slide, Two and a Half Mile, Oh Shit Corner, and the Roller Coaster. The road reaches its highest altitude as it crosses the Brooks Range at Atigun Pass, 4,739 feet.”  That gives you some idea of the challenges.  

As part of our Q3 Fleet Sentiment inquiry, we asked the following question:

There are many factors in play now that will affect trucking fleets and their suppliers in the next 1-5 years.  I’d like to get an idea of how operations like yours will address some of the following (or other issues that may impact you more):

* Mandates (ex. Collision Avoidance, Electronic Data Logs, etc.)
* New regulations (ex. New Phase 2 GHG targets, etc.)
* Industry issues (ex. drivers, accelerated vertical integration, etc.)
* New trucks and trailers that are performing better (I think) than previous models

Can you briefly discuss how this dynamic environment we’re in is most likely to 1) change equipment purchase plans or (2) change your operations or maintenance practices?

I wanted to get some insight into how individual fleets were viewing all these upcoming changes and overall found that there is not as much worry over these issues (with the exception of drivers) as I expected.  For the most part, fleets are simply adapting.  I expect with as many changes as they’ve seen over the last ten years, the current environment is just the next challenge they will meet. 

Key points from the responses we received:

-Majority approve of mandates for items like e-logs and collision avoidance – good for the industry.  Many fleets see these types of mandates as “leveling the playing field” against marginal carriers
-Associated costs for mandates, new regulations, etc. will be passed on to shippers in higher rates
-Drivers remain the biggest challenge and some do feel that regulations are hampering their ability to get the most from this resource and/or reducing the pool available to hire.
-Worry about cost and complexities of repairing new technologies – especially engines
-There are some plans (but not wide-spread at the moment) to change buying patterns – maybe more full service leases and possible pre-buys ahead of Phase 2 GHG.  One large fleet is purchasing (2) units now to test Phase 2 GHG technology.  Results from those tests will determine how they plan around (or not) this technology introduction
-Most of the fleet representatives that responded agree that post 2010 engine technology trucks are performing better – some after working out the “bugs”
-New technologies may increase out-sourcing of some repairs to OEM’s, but based on overall responses, I think most fleets are adjusting their capabilities as technology is introduced
-Most challenged fleets are the ones dealing with CARB in addition to federal regulations
-One smaller TL carrier is considering glider kits – however recent news indicates this might not be an option to by-pass Phase 2 GHG.
-Fleet executives are very invested in analyzing metrics and evaluation techniques to make the right decisions on equipment.  While vertical integration has hampered some spec’ing options, the stronger analytics employed especially by the larger carriers gives them added information to push OEM’s and component manufacturers in their direction.  In my view, they still hold (most of) the cards.

Posted on August 20, 2014 in Driver Shortage, Drivers by Chris Kemmer

All our fleet research over the last few years confirms that filling trucks with experienced drivers is a major challenge and is wide-spread across fleet demographics. Generally speaking fleets that stay close to home and have regular work fare better in this regard but there are certainly some in this segment that also wish more drivers (read “good” drivers) were available.
Since there doesn’t seem to be a quick fix to increasing the driver pool overall (as opposed to stealing drivers from each other), fleets look to make productivity gains with the number of drivers they have. During our Q3 Fleet Sentiment inquiry we asked how they are doing that in the current environment. More than a third of the answers involved changing their operations in ways that will get more from the trucks they have. Some examples:
o Doing more short hauls vs. long hauls
o Better organization of back hauls so trucks are full more of the time
o Selecting better runs and controlling logistics better
Shippers should be aware that fleets are picking and choosing the best freight to haul (since their capacity is limited with driver shortage) to maximize their bottom line…..better paying freight, customers that don’t delay their trucks, contracted customers that promise (and actually tender) regular freight, etc. The ways that truck fleets are managing the inability to hire more driving personnel is more likely to hurt shippers in the long run with higher rates and limited choices of companies willing and able to haul their freight. Shippers should treat this vendor segment as a scarce resource.


Does regulatory-induced reductions in trucking capacity equal more truck demand?

 “A drop in available capacity (due to forthcoming federal regulations) should increase Class 8 truck demand in 2016/2017”.  I have paraphrased this statement from a conversation I had with a fellow attendee at the September FTR Annual Transportation Conference.  After mulling this over for a while and figuring that maybe I just wasn’t smart enough to correlate the two, I asked “Why”? This person figured (as I understood his answer) that if the current population of trucks on the road today weren’t able to haul all the freight that needed to be moved that that would mean we needed additional trucks.  Got it……but who the hell is going to drive them?  A truck can’t haul anything (at least today) without someone behind the wheel.  
I don’t know of any fleet that will simply add numbers to their Class 8 population because there is more freight to haul versus their current capacity.  The fleets that respond to our surveys say “Sure they’d buy more trucks…….if they had more drivers”.  Many fleets already have trucks parked waiting for drivers, they won’t add to that number.  Many indicate they are being much more selective in how they use their capacity and are working hard to improve their productivity to increase that capacity if they can.
What I do think might prop up Class 8 demand over the period (if the economy stays stable and capacity remains tight) is fleets continuing to upgrade their equipment with new trucks that are likely to get better utilization or may increase their own driver pool.  But, I also believe another outcome of exasperating the driver shortage with additional regulations that take hauling hours out of system is that some freight just won’t get moved as efficiently as it is today.  Shippers and logistics companies understand this and are moving in the direction of locking up the required capacity to move the goods they are responsible for; but they are also likely to pay more for the certainty they won’t be adversely affected by any reduction in available capacity.  
Since shippers have such a large stake in the current driver-shortage environment, they also offer some of the solutions – for instance, keeping drivers moving goods and not sitting waiting to be loaded or unloaded – is one thing that comes to mind.  This could add hours back into the system as the fed is taking hours out.  
I’m certain that the players in our industry are all working towards figuring this out so all the freight that needs to be moved gets moved, but – with all due respect to my colleague, I’m not convinced that tightening capacity due to regulations, in the current driver-shortage environment, calculates easily to more new trucks being purchased and built. 

Posted on December 10, 2013 in Drivers by Chris Kemmer

Our Q4 2013 Fleet Sentiment Report and 2013 Annual Fleet Study both give positive signs for truck and trailer purchases in 2014. However issues surrounding drivers are currently affecting 60% of fleets surveyed with a majority saying that hiring and keeping quality drivers would be one of their biggest challenges next year. This situation is affecting the ability to add capacity with just 5% of planned Class 8 tractor purchases for 2014 designated to grow the fleets participating in the annual study. Driver availability was referenced by many as a factor that may increase their equipment purchases if they could find them and/or reduce purchases if the situation got worse. The persistent driving shortage and future outlook for adding this resource is really the driving force (pun intended) behind much that will happen in the industry in 2014. Certainly new Hours of Service rules increases a problem that already existed prior to hours being removed from productive driver time. Personally I don’t see a human resource resolution – a better economy just means potential drivers have other (better) employment options and truck driving is not seen as a viable option for the X and Y generations – just consider the number of drivers that will be leaving the work force as the population ages, who (or what) will replace them? Technologies that make drivers less necessary in some operations looks like a longer term solution to me; what about Amazon’s (and other package delivery services) future with un-manned drones for delivery? Another way in my view is to increase size and weight laws so one driver can haul more payload. Of course any technology that reduces the need for drivers may also reduce the need for, or at least significantly change the configuration of, future trucks and trailers.

Posted on December 17, 2013 in Axles by Chris Kemmer

I just finished a Best Practice study for fleets who wanted to participate by asking and/or answering questions from their peers. Since I’ve been doing this (about 6-7 years) there is usually an inquiry about disc brakes and whether they are a good choice. In the latest installment – the inquiry was pretty basic – what are the pros and cons of disc brakes for heavy vehicles? While we don’t ever get a ton of participants to these quarterly studies, usually 25-30 fleet decision makers, they do give us an idea of fleet position on issues and technology. What struck me as I was compiling the responses to the question about disc brakes was how, over time, the consensus has totally flipped to the positive side for the use of disc brakes. Certainly the acceptance that this technology does improve stopping distances was likely initiated by new rules incentivizing fleets to take a serious look at the data (and in some cases doing their own testing). And generally, this benefit was mentioned most often on the “pro” side of the debate. But additionally reduced cost of ownership, less labor to change pads, better pad wear, the fact that no slack adjuster is required, and “no frozen brakes causing flat spotted tires” were identified as other benefits from the technology. Of course there are still some negatives – most often cited being added weight and the initial cost of the products. The other negative which ultimately will be fixed as the technology becomes more wide-spread is the lack of service knowledge and available parts. A couple of respondents just said “don’t see any negatives”. This wouldn’t have been the case five years ago when most fleets we heard from were leery of switching from the tried and true drum brakes.

Posted on April 3, 2014 in Uncategorized by Chris Kemmer

Recently, one of the fleet representatives that routinely helps with our surveys, posed the question “When disc brakes may be mandated by the government?” I included this question in a Best Practice Survey we were conducting with fleets in March, not expecting much. For me, I knew that the new stopping distance regulations were impacting the acceptance of disc brakes as an alternative technology for trucks. But, a “mandate” for disc brakes was not on my radar. I must have been sleeping through this class.
Lo and behold….. 50% of those responding to the question believe a mandate is, in fact, coming for Class 8 vehicles to have disc brakes (on what axle positions was not discussed) – most thinking in about five years. This was not a huge group – total 28 fleets – but many who believe a mandate is likely are good size, OTR fleets with lots of experience in the industry.
I subsequently had some conversation at MATS with a supplier about this issue and was told – a mandate is “probably not going to happen” because of the negative business effect on drum brake manufacturers and their component suppliers.
Whether a mandate happens or not – just the fact that many fleets think it will – has the potential to change the dynamics of truck specifying, timing of new equipment purchases and ultimately replacement part purchases.

Posted on May 5, 2015 by Chris Kemmer

Average Age of Class 8 Trucks – Which number matters to new equipment demand?

There is usually a number quoted as average age of Class 8 trucks that forecasters tend to use in determining replacement demand. If the average age remains high as it is now, in spite of large truck purchases over the last 15-18 months, it’s believed that orders will continue to flow in to reduce it.

I have a theory (which might be completely wrong-headed) that the only average age that matters for new truck replacement demand is the age of the vehicles in the fleets that actually buy new trucks.  By my not-very-sophisticated estimate….more than two million of the total Class 8 trucks in operation (and used in calculating average age) are owned and operated by 2nd, 3rd, 4th, etc. owners and of course they are the oldest of them.  This number would typically drive up average age.  Maybe it’s more important to know average age of first time buyers (fleets who actually place the orders with OEM’s).  Just recently I queried by fleet group (primarily made up of these types of fleets) about actual average age of their trucks and what they’d like it be.  Here’s the results:

Posted on November 25, 2013 in Axles by Chris Kemmer

This morning I received a note from Carl Tapp, now working as a consultant in our industry, asking me if our fleet research is picking up “a big wad of trailers with lift axles, 10 inch members, and composite flooring?” He tells me “that’s the new way to save fuel and have a light floor that meets the AIAG 24,000# rating”. Carl’s been around the industry for a long time with a reputation for flushing out efficiencies so I tend to pay attention when he tells me something. Interestingly, during our annual fleet survey completed in October we did indeed see a significant increase in fleets who are adding lift axles to their trailers vs. what we saw just last year: 21%+ of the survey group in 2013 versus 7% in 2012. Improved tire wear was an added benefit to some on top of improved fuel economy. The types and sizes of fleets in the survey group who were adding lift axles is diverse; from private fleets running 59 trailers to for-hire fleets with more than 6,000+ trailers. Not included in the 21% who are already spec’ing lift axles is a logistics contract carrier operating 8000+ trailers who is testing lift axles for his fleet because he thinks they may “fit in some roles with diminishing loads”. Lift axles, if they improve fuel efficiency and tire wear, would seem to be a worthy spec consideration since they may address two of the largest operational/maintenance cost items at most fleets.

Posted on February 27, 2014 in Driver Shortage by Chris Kemmer

Just saw an article in Transport Topics with headline “Execs Link Driver Shortage to Slower Equipment Buys”

Our fleet research contributors have been telling us for more than (2) years that the driver shortage was having an impact on their fleet including their ability to add capacity.  We’ve been reporting from this information that even if a fleet wants to grow (and in fact has solid customer requirements), they can’t because of lack of drivers “Need more drivers not equipment. We have enough demand for freight that if we could find qualified drivers to fill the seats we could haul more freight and possibly add more equipment”

Chart reflects current situation among fleets reporting in January (50+ operating 40,000 Class 8)

I attended the I.A.A. Commercial Vehicle Show in Hannover last month. What stood out to me, other than the overall size and glitz associated with this trade show, was the way drivers were portrayed and treated within the confines of the truck manufacturers’ exhibits, especially Daimler ……as THE key resource to be satisfied.  Just an example, the driver’s lounges were more like you would see in the U.S. for company executives.  Not beer and hotdogs but full bars and catered food in areas set aside fit for a king.  Just the ambiance shouted YOU ARE IMPORTANT….REALLY!  We do a lot of lip service here at home about how important truck drivers are and there certainly are fleets that are treating them accordingly, but there are far too many of us in the industry as well as Joe Q Public that still sees them as a necessary evil, not a key component driving the U.S. economy.

Working Exclusively in the Heavy Truck Industry


Posted on October 7, 2015  by Chris Kemmer

Trucker at Coldfoot along the Dalton Highway

Posted on February 17, 2014 in Truck Pricing by Chris Kemmer

For the Q1 2014 Fleet Sentiment Report we recently asked our fleet group about increasing truck pricing and how the current price of Class 8 trucks affects their equipment buying decisions and whether they are seeing an equal increase in value commensurate with the increase in price. Our results indicated the increased pricing is impacting smaller fleets more than larger fleets, but not exclusively; one Top 100 fleet operating 1000 tractors has altered their buying habits due to cost: “Yes, we operate older tractors and trailers longer”. If anything increased pricing does encourage a fleet buyer to really scrutinize how a truck is spec’d including whether to add new technology; the budget for equipment purchases, once it’s spread over number of vehicles a fleet wants to buy to replace older vehicles or add capacity, may not easily allow added line items on the spec. As new truck prices continue to rise, new technology component suppliers must make a strong case that adding their product will bring a quick return on investment and add value to the truck. While there are some fleets that are experiencing increased value in new trucks being purchased from improved MPG (for some) and better quality; there is the offsetting added cost for maintenance on new vehicles due to current emission standards. It was hard to find a respondent who unequivocally saw enough added value in new trucks to offset totally the increased price they need to pay.

Posted on September 2, 2014 in Uncategorized by Chris Kemmer

To look at a recent picture I saw in one of the major trade publications depicting a group of “TMC attendees networking” you’d think there were NO women in leadership roles in our industry….because there were zero included in this picture of probably 50 attendees.  I know how few of us there are working in the industry and attending events like TMC believe me, but really to have an image from one of the premier groups showing not a single woman “networking” with her peers (and by the way no minorities either) gave me pause.  I get a questionable look all the time from people I meet when I tell them I work in trucking and no wonder.  The image is still of an all-male majority industry.  Our own fleet research work, my own contacts in the industry as well as a list of some of the most influential trucking media personnel actually tells a different story…..there are quite a few women in significant leadership roles at manufacturers, trade groups and publications and at fleets with many very active in our industry.  Knowing this might encourage young women to see trucking as a viable career path (and not simply in back-office roles) and could expand the pool of resources that might have some new ideas to solve some of the issues facing our industry.  Just a thought!

Posted on August 18, 2015  by Chris Kemmer

Posted on May 5, 2014 in Drivers by Chris Kemmer

I just finished the second quarter Fleet Sentiment Report survey and what’s clear is that business is excellent – plenty of freight, trucks moving, etc. Planned orders for replacement trucks is also positive although a little behind the first quarter. A better comparison is that our power index (planned activity and expected volume of orders in the next three months) is 4% better than same quarter last year.
What’s also very clear is the impact the availability of drivers is having now (and expected in the future) on truck purchase plans for any added capacity. In Q2 only 2% of power units being purchases are for growth. The problem is widespread across fleet demographics – a few are immune but not many and not OTR fleets which are generally impacted across the board by the shortage of qualified drivers. A few comments we received:
• We would buy more units if we could find drivers
• Cannot commit to new freight (without drivers)
• We have more work than drivers, Need additional drivers not equipment
• Could increase freight in we had more drivers
Etc., etc., etc.
We asked an additional question about factors that impact equipment purchases other than general business conditions and freight demand. The driver shortage was mentioned by 55%.

Posted on October 14, 2014 in Drivers, IAA by Chris Kemmer