This category covers establishments primarily engaged in furnishing "over-the-road" trucking services or storage services, including household goods either as common carriers or under special or individual contracts or agreements, for freight generally weighing more than 100 pounds. Such operations are principally outside a single municipality, outside one group of contiguous municipalities, or outside a single municipality and its suburban areas. Establishments primarily engaged in furnishing air courier services for individually addressed letters, parcels, and packages generally weighing less than 100 pounds are classified in SIC 4513: Air Courier Services and other courier services for individually addressed letters, parcels, and packages generally weighing less than 100 pounds are classified in SIC 4215: Courier Services Except Air.
484121 (General Freight Trucking, Long-Distance, Truckload)
484122 (General Freight Trucking, Long-Distance, Less than Truckload)
484210 (Used Household and Office Goods Moving)
484230 (Specialized Freight (except Used Goods) Trucking, Long-Distance)
At the beginning of the twenty-first century, there were approximately 15.5 million trucks on U.S. roads, of which 1.9 million were tractor trailers. According to the Census Bureau's Statistical Abstract of the United States, there were over 110,400 trucking establishments in the United States. Of that total, 55,800 firms were general freight trucking, and 54,600 were specialized freight trucking. Estimated annual revenue for the truck transportation industry in 2000 was $171.7 billion, with $109.3 billion generated by generalized freight transport and $62.3 billion generated by specialized deliveries. Highway miles traveled by trucks totaled 68.7 billion miles by fully or partially loaded trucks and an additional 17.9 billion miles by empty trucks.
A lack of demand during the early 2000s caused by a slowdown in consumer spending, combined with rising fuel costs and insurance premiums, led trucking companies to tighten their belts, suspend orders for new equipment, and pushed some into mergers and others into bankruptcy. Consolidated Freight, the nation's third largest less-than-truckload (LTL) hauler, closed its doors abruptly in September 2002, leaving 15,000 workers suddenly unemployed and a gap in the TLT market. For those that survived the first years of the 2000s, better times are expected, if not immediately, then at least eventually. The trucking industry will be one of the first industries to respond to an upturn in the economy as manufacturers begin increasing shipments in tandem with heightened consumer spending.
The non-local trucking industry is divided into several segments that are based on the size of freight shipments (truckload, less-than-truckload), the type of goods hauled (household goods, general freight), the size of the trucker's market (regional, national), and the nature of the availability of the trucker's services to shippers (common, contract, or private carriage). Thus, an industry firm can be categorized as a regional contract carrier who hauls less-than-truckload shipments of general freight or as a national common carrier who hauls truckload shipments of bulk goods, and so on. National carriers have the equipment, facilities, and operating authority to transport freight cross-country while regional carriers primarily serve smaller multistate geographical areas such as the southern states or the West Coast. Long-haul transport is defined as shipments of 200 to 1,000 miles or more, and short-haul transport refers to shipments of 50 to 700 miles, depending on the carrier and other variables. "Off-the-road" transport refers to primarily agricultural and construction-related trucking involving minimal use of public roads.
Less-than-Truckload. LTL carriers haul shipments of 10,000 pounds or less in combined lots from more than one shipper. Although modern trucks can carry loads of 40,000 pounds or more, a "truck load" has traditionally been defined as 10,000 pounds. LTL carriers, then, are distinguished from truckload (TL) carriers not by the weight of individual trucks but by the number of individual shipments that comprise the truck's load. Unlike TL shipments, which typically involve the direct hauling of one shipper's freight from origin to destination, LTL shipments usually involve five phases: pick-up, sorting at a distribution terminal or transfer hub, line haul (the main, and longest, leg of the shipment), sorting at a destination facility, and final delivery. The LTL market is divided evenly between general freight carriers and carriers of small packages (shipments weighing less than 500 pounds). The deregulation of the trucking industry in 1980 resulted in a flood of new TL firms, but the prohibitive costs of entry limited the number of new carriers in the LTL segment. A national LTL carrier must be able to finance a large sales force, expensive technology, and approximately 500 distribution terminals.
Shorter routes and increased use of information technology had the greatest impact on the for-hire trucking segment of the industry. Shippers continued to streamline product manufacturing cycles and required just-in-time delivery schedules. This, in turn, placed greater demand for shorter, more reliable truck supply routes. For-hire trucking firms were also faced with growing competition from doublestack rail. It forced many of them to surrender a number of long-haul routes to the railroads. Acknowledging the trend, a growing number of trucker-railroad alliances were formed. Under these partnerships, truckers handled pick-up and delivery.
Truckload. TL carriers haul shipments of 10,000 pounds or more from origin to destination. In 1992, roughly one-quarter of the non-local trucking industry's general freight tonnage was hauled by about 40,000 direct origin-to-destination TL carriers. With an onslaught of mergers, in 1995 there were some 20,000 truckload providers in the country. The TL segment hauls about 80 percent of all intercity freight and includes for-hire and private carriers. Because TL firms do not need to maintain intermediate freight consolidation facilities, the TL segment has historically been characterized by comparatively low start-up costs. When deregulation removed restrictions on new businesses entering the trucking industry, the TL segment experienced fierce competition among a large number of new, poorly capitalized firms. About two-thirds of the trucking industry consisted of such new, often high-debt, low-income firms. The largest TL carriers had low profit margins, market shares of only 1 percent to 3 percent, and revenues that ranged between $30 million and $40 million (compared with the several billion dollar revenues of the largest LTL carriers).
Common Carriers. Common carriers are "for-hire" public truckers whose operating authority is conditioned on the availability of their services to any shipper who buys them. Historically, common carriers have been categorized according to the cargo they carry and the routes they cover: "regular" (or specific, limited routes) and "irregular" (unrestricted routes).
Contract Carriers. Contract carriers provide trucks, equipment, and services (such as fleet maintenance or customer billing) on an exclusive, guaranteed basis for shipping customers who prefer the convenience of leasing trucks to owning them. As dedicated contract carriers, truck leasing firms (such as Ryder Systems) may lease drivers in addition to trucks. Such firms may also provide fuel, safety training, insurance, maintenance and other services to their customers. Contract carriers are often common carriers with an additional operating authority that allows them to contract out their services and have historically transported TL shipments. The growth of just-in-time inventory management techniques, however, has created a niche for contract carriers to haul lighter LTL "time-sensitive" parts or materials from warehouse to plant for primarily large industrial firms.
For-hire. There were approximately 48,000 for-hire carriers in the 1990s. These carriers offer their services either impartially to all shippers (common carrier authority) or exclusively for specific shippers (contract carrier authority). In 1993, distribution of goods by the non-local for-hire trucking segment represented nearly 40 percent of the total industry. By 1994, that percentage had increased to 42.5 percent. Additionally, 60 percent of the freight hauled by for-hire truckers was categorized as general freight, and 25 percent of that freight tonnage was hauled by for-hire truckers and consisted of direct origin-to-destination TL shipments.
Private Carriers. The private carriage market consists primarily of manufacturers, builders, retailers, or other firms (such as Sears Roebuck and Wal-Mart Services) who own, lease, or control truck fleets for the exclusive transport of their own goods or products. Many older private trucking fleets were created as alternatives to the inflated shipping costs charged by truckers in the industry's preregulated, heavily unionized years. Private fleets were maintained by 33 percent of manufacturing firms, 55 percent of food processing companies, 65 percent of the wood and lumber industry, and 75 percent of the construction materials industry. Private carriage allows shippers to maintain greater control over scheduling and freight handling and to customize service for specialized equipment or products.
Types of Freight. Although the trucking industry hauled 55 percent of total U.S. freight tonnage in 1994, that tonnage represented nearly 75 percent of the total dollar value of U.S. freight, reflecting the dominance of the trucking industry in the transportation of high-value goods and commodities.
Traditionally, the types of freight truckers are authorized to transport have been classified in three ways: "specific" commodities (in which a trucker is authorized to carry only certain, specified goods); "specialized" commodities (in which the commodities truckers are authorized to carry are classified in broader but still limited terms, for example, "iron or steel articles"); and "general" commodities (which includes all goods except "household goods, heavy and bulky articles, new automobiles, dangerous or explosive articles, livestock, articles of unusual value and articles injurious or contaminating to other commodities"). More narrowly classified, non-local trucking freight can be further divided into general freight or packaged merchandise; agricultural goods; hazardous materials; and miscellaneous goods. In the early 1990s, 70 percent of all steel, sheet metal, wire pipes, rods, semifinished metal products, and lumber and wood products were shipped by truck, as well as nearly 85 percent of all food, furniture, rubber products, fixtures, appliances, and plastics goods. The non-local trucking industry also hauls bulk commodities, automobiles, glass products, industrial water, heavy machinery, refrigerated liquids and solids, liquid petroleum products, building materials, synthetic fuels, and cargo requiring flatbed or specialized trailer transport.
Household Moving. The trucking industry includes 115,000 (local and non-local) household goods movers such as North American Van Lines, Mayflower Group, and Allied Van Lines. In the 1980s and 1990s, many household goods movers began to break out of the static, seasonal residential moving market by providing warehousing, logistics, LTL, and even intermodal service. In 1994 the household goods industry accounted for 4.6 percent of the industry's distribution and 7.8 percent of its revenues.
Competitiveness. Industry firms distinguish themselves from their competitors through financial strength, quality of sales force, shipment tracking technology, breadth of route coverage, efficient claim settlement, delivery performance, proper billing, size and quality of fleet, insurance coverage, and superior safety records. Larger national carriers can also provide the benefits of economies of scale including lower equipment, advertising, and insurance costs as well as sophisticated management techniques, more efficient administrative procedures, and extensive financial resources. Many of the large national carriers have also entered into logistics services, whereby they offer customers the ability to track their shipments as they travel from point of departure to destination.
Rate Bureaus. Trucker's rates are determined by nine regional rate bureaus that meet on a regular basis to determine rate increases for the carriers in their region based on those firms' revenue needs. Rate bureaus also provide legal services, disseminate financial reports and market information, categorize shipments, and provide smaller carriers with rating software. Deregulation permitted carriers to publish rates independently of the Inter-state Commerce Commission (ICC), and as a result the majority of large carriers withdrew from the rate bureaus between 1991 and 1992.
Rate bureaus continued to play a role in the non-local trucking industry, however, because international and intrastate rates could not be published independently and smaller carriers' budgets prevented them from performing the kinds of services provided by the bureaus. In the early 1990s, 25 to 30 percent of all general freight was transported under rates published by rate bureaus. Historically, two or more general rate hikes (of between 3.5 percent and 4.8 percent in 1992, for example) are implemented per year, but truckers' discounts (often ranging between 30 and 50 percent) reduce the de facto rates charged to shippers. Before industry deregulation in 1980, the ICC monitored rates more closely. However, because deregulation brought free market forces into play, new rates that did not reflect economic realities tended to regulate themselves down to natural levels by way of rollbacks and discounts.
Intermodal. From a manufacturer's perspective, the biggest advancement in trucking industry came when truckers began entering into alliances with railroads in 1990. Among them were J.B. Hunt Transport Services Inc. and Schneider National, which formed alliances with Conrail, Norfolk Southern, Southern Pacific, Union Pacific, and Burlington Northern. Such alliances offered manufacturers the speed and flexibility of trucks and the low cost of rail service. As a result, trucking companies began to use equipment that accommodated intermodal containers rather than tractor trailers so that containerized cargo could be easily moved between both transportation modes. In intermodal arrangements, truckers team with rail or maritime freight carriers to haul goods in generic dual-use containers.
The trucker supplies the shorter origin-to-railhead and railhead-to-destination portions of the transport and splits the revenue from the haul with the railroad according to an agreed-upon formula. The percentage of general freight truckers' vehicle-miles transported using intermodal rose from 1 percent in 1970 to as high as 15 percent for some TL carriers in 1991.
The advantages of container freighting—decreased theft, lower transport and handling damages, better driver retention through assignment of long hauls to railroads, and new markets for trucking companies—were virtually doubled with the introduction of "double stack" inter-modal transport in 1984. In double stack arrangements, containers are "piggybacked" on top of each other on a rail car to increase hauling capacity.
The invention of the combustion engine and the automobile in the nineteenth century and the development of the first public highways mark the origins of the modern trucking industry. The first transcontinental transport of freight by truck took place in 1912, and within five years the U.S. Army's request for a vehicle capable of hauling troops and war materials led to the creation of a fleet of trucks and specially trained drivers that formed the core of a new civilian trucking industry after World War I. While the industry began to establish itself as a serious competitor to the railroads, the Federal Highway Act of 1921 laid the groundwork for a national highway system that by the early 1990s stretched 45,000 miles.
Several factors contributed to the rise of the trucking industry in the following half century: a shift of population and industry away from cities and railheads to suburban locations accessible only by truck; a continuing federal mandate for a network of national highways; the inherently superior cost efficiencies of trucks relative to railroads with respect to loading facilities and shipment packing and handling; and the greater flexibility of trucks in providing specialized routes and delivery schedules.
Regulation. Faced with increasing competition from the trucking industry, the rail industry pushed for legislation that resulted in The Motor Carrier Act (MCA) of 1935, which gave the Interstate Commerce Commission broad powers to approve acquisitions and mergers; classify commodities that are covered by and exempt from regulation; and govern the routes, services, and rates charged by the trucking industry. The 17,000 truckers in the industry during that period were granted perpetual "grandfather" operating authority, while potential new entrants had to meet restrictive requirements regarding the "public convenience and necessity" of proposed services. The MCA also guaranteed all communities route service regardless of the cost of such service to the trucking industry.
Over the years, federal regulation emerged as an artificial structure for maintaining wages and profits above natural market levels. Under ICC protection the trucking industry's share of total national intercity freight ton-miles (a measure of freight traffic expressed as one ton multiplied by one mile) grew from 9.7 percent to 22 percent between 1939 and 1974, and its share of the dollar value of U.S. freight began to surpass the railroads for the first time.
Deregulation. Although deregulation of the trucking industry had been contemplated as early as the Truman administration, it was not until the late 1970s that significant reform of the industry began to appear possible. When it passed, the Motor Carrier Act of 1980 radically altered the non-local trucking industry by eliminating ICC control over companies' abilities to enter the industry, determine their rates and routes, and enlarge their operations through acquisition, merger, or route extension.
The most immediate impact of the MCA of 1980 was seen in the number of failures of poorly capitalized new firms and noncompetitive existing firms, and the influx of new carriers in the TL segment where start-up costs were less prohibitive. The number of trucking business failures jumped from about 400 in 1980 to over 1,561 in 1986; a total of 11,000 failures were recorded between 1980 and 1989. However, 19,000 new firms entered the industry between 1980 and 1982 alone, and the number of for-hire carriers with ICC-granted operating authority grew from less than 20,000 in 1980 to almost 50,000 in 1992.
Rate Undercharging. Since deregulation, industry firms began resorting to broad discounting programs to provide customers with rates more attractive than published tariffs. In the early 1990s, bankrupt truckers began suing brokers and their shipping customers for the difference (estimated at more than $2 billion) between these unfiled discount rates and official published rates. In 1990, the U.S. Supreme Court ruled that shippers were obliged to pay the difference between filed tariff rates and rates negotiated with defunct truckers. Two years later, the ICC eliminated all regulations covering motor carrier contracts, making binding agreements between shippers and truckers easier to enforce and thus reducing the future likelihood of undercharge disputes.
Intermodal. Although some rail hauling of empty and loaded truck trailers existed in the 1950s and truckers subsequently began buying "piggyback" services from railroads, it was not until 1989 that the trucking and rail industries formally recognized the importance of inter-modal transport with the signing of the first major inter-modal agreement between a trucking firm (J.B. Hunt Transport) and a competing rail carrier (Atchison, Topeka and Santa Fe Railway). Between 1970 and 1991 alone, the percentage of vehicle-miles transported using intermodal by some TL carriers rose from 1 percent to 15 percent. In 1991, the Intermodal Surface Transportation Efficiency Act (ISTEA) was adopted, with the goal of reducing the amount of paperwork required by forcing states to adopt uniform measures, such as making fuel tax payments to a single state.
While the long-distance LTL segment experienced decreased revenues, regional LTL carriers experienced double digit growth by encroaching on the overnight delivery market once monopolized by small-package ground couriers, which are covered in SIC 4215: Courier Services Except Air. This trend was fueled by the widespread adoption of so-called "zero-inventory" production techniques by U.S. manufacturers, which entailed the creation of distribution centers or parts storage facilities within a delivery zone of two days or less in traveling distance from manufacturers' sites. The growing emphasis on regional markets was also enhanced by the industry's need to retain drivers by offering them shorter hauls, the rail industry's increasing competitiveness in long-distance freight, and growing emphasis by shippers on on-time delivery guarantees.
Legislation. Congress passed the International Registration Plan and International Fuel Tax Agreement, taking effect in 1996 and 1998, respectively, to allow truckers to avoid repetitive state-by-state vehicle registration requirements and fuel tax payments. The Clinton administration's gasoline and diesel fuel tax ratified in 1993 added 4.3 cents to per-gallon fuel costs, raising industry operating expenses by an estimated $3 billion annually.
Additionally, several federal programs continued to affect the trucking industry's response to safety concerns. The Motor Carrier Safety Assistance Program, for example, gave the Federal Office of Motor Carrier Safety and relevant state agencies greater latitude in carrying out annual vehicle safety inspections. The resulting $6,000 to $9,000 per truck spent annually by the industry on maintenance and repair was expected to be offset by lower insurance premiums and cost savings derived from fleets maintained in optimal operating condition.
During the early 2000s, trucking firms around the nation were negatively affected by lower freight demand—a result of a sluggish economy—as well as high fuel costs and increasing insurance costs. Freight levels fell an estimated 5 to 15 percent in 2001 and remained flat throughout 2002. Diesel fuel hit a two-year high in 2003, running $1.542 a gallon in February 2003, while insurance rates increased as much as 15 percent. High driver turnover rates, which can run in excess of 100 percent annually, and driver shortages are also a consistent problem in the industry. The biggest hauler to stumble was Consolidated Freight, a long-standing leader in the industry, filing for bankruptcy in September 2002. Many other smaller companies also closed their doors or sold out to bigger firms.
Despite some tough years early in the decade, trucks continue to be a staple of the American economy. Trucks carry over two-thirds of all freight tonnage moved in the United States. For those who survived the downturn in the industry, there are positive signs for the future. For example, capacity has shrunk as weaker companies have been pushed from the playing field, leaving room for possible modest rate hikes as demand will pressure availability once the economy rebounds. Also, the decrease in trucks on the road has provided at least a temporary relief from the nagging problem of driver shortages. Some companies have taken the opportunity to restructure their driver compensation packages to save money. In December 2002, Jim Mele noted in Fleet Owner : "It's entirely possible such optimism is premature, but I think the fundamentals for trucking's recovery are all in place now, and whether it takes one month or six, you're going to reap the rewards of sticking to business when the times got tough."
Two firms dominate the national LTL general freight market. Yellow Freight and Roadway Express, Inc. Consolidated Freight was the nation's third largest LTL hauler until closing its doors in 2002. Although no national TL carrier claimed a monopoly of the TL market, several firms, including Schneider National, J.B. Hunt Transport, and Werner Enterprises, Inc. have historically led that industry segment. The contract carrier/truck leasing sector is dominated by Ryder Systems, Inc., Penske Truck Leasing, and Rollins Truck Leasing Corp. Historical leaders in the non-local household goods moving segment include North American Van Lines, Mayflower Group, and United Van Lines.
According to the U.S. Department of Labor, Bureau of Labor Statistics, the trucking industry employed nearly 1.6 million people in 2001. Of that total, 765,000, or 48 percent, were drivers of heavy trucks or tractor trailers. Drivers' annual mean income was $35,580. Truck driving is consistently ranked as one of the most hazardous jobs in the United States, due to highway crashes, loading/unloading injuries, and crimes against drivers. Long-haul drivers spend extended periods away from home, leading to a higher-than-average divorce rate among drivers. Finding, training, and retaining qualified drivers is one of the biggest challenges in the industry.
Fewer than 60 percent of new truck drivers lasted longer than four weeks on the job, and driver turnover rates (which rose as high as 100 percent for some firms) were considered to be among the most critical issues facing the industry. The president of American Trucking Association, Walter McCormick, Jr., in a 1998 interview for Traffic World, indicated that the lack of trained drivers was of top concern for the industry. Besides bonuses, benefits, and higher pay, methods used to retain drivers included expanded use of husband and wife teams, "relay" driving in which routes normally handled by one driver are divided up, increased scheduling of short hauls, and equipment amenities designed to make the driver's job less taxing.
Large LTL freight carriers with unionized employees often pay out 60 percent to 65 percent of their revenues in wages and benefits (including wages to independent drivers) compared with 40 percent to 45 percent in the mostly nonunion TL segment. Long-distance truckers are usually paid by the mile and receive increases based on seniority.
Teamsters. Although the International Brotherhood of Teamsters (IBT) has historically been the most effective and politically influential union in American industry, it has been plagued by a long tradition of scandal involving organized crime connections, racketeering, pension fund dipping, insurance abuses, and federal investigation. In the 1970s, the IBT represented about 500,000 drivers, but by 1980 that number had declined to 300,000. After deregulation allowed scores of nonunionized carriers into the industry, the number of Teamster drivers continued to decline. Between 1981 and 1991, Teamster representation in the regulated for-hire sector alone fell 50 percent.
Nondriving Positions. Dispatchers are responsible for notifying drivers assigned to them (or traveling in their zone) where and when to pick up and deliver freight. They routinely juggle a continuously changing roster of drivers, destinations, routes, schedules, and freight categories to determine the most efficient distribution of the company's fleet resources.
Raters determine the minimum amounts a company can quote its customers for shipping freight based on such variables as the type of commodity to be shipped, current shipping rates and discounts, competitors' rates, and the relative profitability of the shipment.
While dispatchers focus on specific shipping zones and individual drivers, planners are responsible for the efficient distribution of drivers throughout whole regions and must take into consideration such factors as fluctuating seasonal shipping levels or mistaken sales of company services to unserviced areas.
U.S. involvement in foreign trucking has historically centered primarily on the Canadian market. The degree of internationalization in the industry was expected to grow, however, as a result of the ratification of the North American Free Trade Agreement (NAFTA) in late 1993, the implementation of new phases of the General Agreement on Tariffs and Trade, the emergence of a formally unified European economy, and the openings to trade offered by the democratization of the former Soviet Union and Eastern Europe.
Canada. The United States and Canada trade more goods with each other than with any other economies, resulting in transportation costs—including trucking—of $4 billion to $7 billion a year. In 1989, Canada and the United States signed a trade agreement to promote cross-border commerce, which was expected to be further bolstered by the gradual implementation of NAFTA throughout the 1990s.
The NAFTA agreement called for opening cross-border traffic in the U.S. and Mexican border states by 1996. Other geographic and ownership access would be expanded by 2000, and virtually all access and investment restrictions on trucking companies would be lifted by 2003.
Before NAFTA, Mexican cross-border trucking was highly restricted. Mexico required foreign shippers to use Mexican drivers and Mexican equipment to handle shipments there. This forced U.S. shippers and carriers to form alliances with Mexican carriers. In response to the restrictions, the United States established an embargo in 1982 that limited Mexican access to U.S. markets. U.S. certificates of registration restricted Mexican carriers' access to a border zone generally ranging 10 to 25 miles north of the U.S. border. But just before NAFTA's passage some 4,354 Mexican carriers held registration certificates. Only three Mexican motor freight carriers, however, held broader authority and none held 48-state authority.
U.S. trucking companies sending freight to Mexico were especially subjected to lengthy delays at border crossings since their trailers had to be unloaded from their tractors and re-loaded onto Mexican tractors. With NAFTA's passage, American truckers won access to all of Mexico in 1999, and Mexican truckers were granted full access to the United States.
NAFTA was regarded as bad news for U.S. trucking companies that faced difficulties retaining drivers for long hauls. Mexico lacked good roads, hotels, communications, and gas and repair stations—four requirements of most truckers. Meanwhile, the Mexican government began efforts to build a 7,240-mile network of superhighways that would crisscross the nation and connect most of Mexico's major ports with its principal commercial and industrial centers. As more American and Asian manufacturers began using Mexico for assembly of products, and trade increased with all of Latin America, many executives began seeing the traditional East-West, West-East trade routes replaced with an emphasis on North-South, South-North routes. The devaluation of the peso in 1995, however, had devastating effects on U.S. truckers operating there, causing many to rethink their involvement in Mexico.
Amendments to Mexico's federal weights and measures law in 1994 were met with enthusiasm by U.S. truckers. The new law lowered Mexico's weight limit for trucks to just under 90,000 pounds for an 18-wheel tractor-trailer, only 10,000 pounds shy of U.S. limits. Trucks from Mexico had been weighing in excess of 140,000 to 160,000 pounds, an amount considered unsafe in the United States. Prior to the amendment, many Mexican vehicles weighing high amounts came across the border into the United States since resources to monitor all vehicles at border crossings were lacking.
With the advent of the European Union in 1992, U.S. carriers quickly established a presence to control the European leg of their shipments. European operators like steamship line Nedlloyd began offering land-based transportation in Europe and employed the services of U.S. trucking companies to provide the U.S. leg of the shipment. Nedlloyd Road Cargo signed a contract with Consolidated Freightways' subsidiary Con-Way in 1992 to provide door-to-door LTL service between the United States and Europe, with Nedlloyd handling the European part of the venture. Carolina Freight opened an office in Rotterdam, the Netherlands, to provide faster service for its customers' European needs. Dutch motor carrier Bleckmann B.V. handled sales and marketing for Carolina's transportation services within the Dutch market, served as its general agent within the United Kingdom, and provided international trucking services within Europe. In 1993, Yellow Freight and The Royal Fran Maas group in Europe entered into an agreement to provide transatlantic LTL shipments.
The trend in the European trucking industry was toward increased concentration of business activities within the industry, decreased border restrictions, harmonization of excise duties and value-added taxes, and increased grants of operating authority for trucking firms.
New Markets. The number of trucking companies with international operations has grown, and American non-local truckers have been among the most active global firms. Expanding and potential markets included South America (arrangements by Consolidated Freightways and Carolina Freight, for example, with Argentina/Chile and Colombia, respectively), the Pacific Rim (direct service by Roadway Express to Australia, New Zealand, and 10 Asian countries), Russia (joint marketing agreement by Mayflower Transit with SovTransavto in 1990), and China (U.S.-China shipping accord signed in 1992).
The non-local trucking industry has not historically been associated with advanced technologies. Reliable braking and cab heating systems did not come into use until the 1940s, the diesel engine was not common until the 1950s, and as late as 1971 few trucking companies used computers for even basic office-related administrative applications. By the early 1990s, however, a typical heavy truck featured 3 to 20 forward gears, electronically controlled fuel-injection systems, aerodynamic airfoils, and roof-mounted satellite antennae linked to computers inside the cab and remote data storage centers.
The areas of technology with the greatest potential impact on the non-local trucking industry were vehicle and freight tracking systems and information storage and interchange systems. Because these technologies enabled industry firms to increase productivity, enhance responsiveness to customers, and distinguish themselves from competitors, they played increasingly critical roles in the industry's profitability in the early 1990s.
Tracking technologies use sophisticated computer systems to record the progress of freight from origin to destination and satellite technologies to provide precise locations of fleet trucks. Bar code labels on freight packages and portable bar code scanners permitted industry firms to process extensive data on individual loads and monitor the movement of those loads during transport. Such electronic data interchange (EDI) systems allowed truckers to "capture" data automatically and permitted shippers to link up with a carrier's computer to access data on proof of delivery, invoices, shipment routing, and freight consolidation in "real time" with greater accuracy, and with reduced administrative paperwork and storage.
Handheld, laptop, and dashboard-mounted computers let truckers communicate with company computers, keep track of information on fuel taxes and fuel management performance, store navigational maps and information on truck stops and repair facilities, record departures and arrivals, send and receive messages, monitor vehicle speed and engine conditions, and register mileage or the results of trailer inspections.
Although satellite technology for vehicle tracking and navigation has been available since the early 1980s, active industry interest began only in 1987 when the first LT carriers began installing satellite tracking equipment. These systems enabled trucking firms to locate trucks to accuracies of 300 yards by linking on-board computers with company dispatchers via specialized satellites. Less expensive "meteor burst" systems bounced VHF radio waves off meteor trails to obtain the same positioning coordinates offered by satellite signals.
Using satellite tracking equipment, C. R. England and Sons achieved 98 percent on-time performance in the early 1990s. Although satellite tracking systems can add as much as 2 percent to operating costs, 2,000 U.S. trucking fleets had two-way satellite data links in 1992, and 30,000 trucks were equipped with position location systems. The number of trucks equipped with vehicle tracking equipment was expected to continue to grow.
Legislation. Several industry innovations have been direct responses to government regulations in the areas of vehicle emissions, radar evasion devices, and highway safety. Environmental Protection Agency pollution mandates and related clean air laws drove industry firms in the 1980s and 1990s to explore alternatives to diesel and gasoline fuels. In 1993, for example, all trucks were required to begin using low sulfur fuels. Although the practicality of other fuel sources such as compressed natural gas and liquid petroleum was unclear in the early 1990s, research breakthroughs in fuel modification, exhaust after-treatment, and engine redesign resulted in reductions in diesel engine emissions of 40 percent over preregulatory levels.
So-called "double-bottoms"—trucks hauling two trailers—were estimated to increase truckers' load capacity by 35 percent, offering the industry improved ability to compete with rail carriers' stacked container methods. In the early 1990s, industry firms continued to push for legislative reforms permitting them to use double- and triple-trailers and other "longer combination vehicle" arrangements more widely.
Other Technologies. A wide range of technology applications were introduced or were under development, ranging from "early warning systems" that use radar technology to inform drivers when they are approaching a vehicle too quickly; cab-mounted computers that reduce accidents by enabling dispatchers to remotely monitor the status of the driver and vehicle; electronic systems for registering automatic payment of tolls without requiring trucks to stop; systems for automatically monitoring freight and engine temperatures and setting temperature levels in refrigerated vehicles; and diagnostic and prognostic software packages that allow engine computers to predict component failure based on engine performance trends.
Trucks themselves have been subject to technological research and advancement. German truck manufacturers Freightliner and Mercedes Benz tested a second generation of truck design that uses an interactive video computer system. Called Vector, the system videotapes the highway as the truck drives along, interprets data such as speed and traffic, and directs the truck as to what speed it should operate. Application of this technology was not expected to reach the marketplace until well into 2000.
Potentially important technologies outside of the truck cab included laser image-processing and optical character recognition devices for speeding up paperwork using electronic scanning techniques; driver training simulators based on aerospace industry designs; shipment planner software to allow truckers to reduce "deadhead" (or empty trailer) miles; and fax and voice response systems that provide shippers with constantly updated rate quotes, transit times, and locations of in-transit shipments.
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