The Great Recovery… Or NOT A Trucking Company’s Prospective Harold Sumerford, Jr., CEO J & M Tank Lines, Inc. March, 2011
Major Issues Hindering Recovery Energy Cost Equipment & Component Cost Government Regulations and Laws Driver Shortage
Energy Cost Anybody's Guess? Increase in Fuel Prices Reconstruction of Japan Fuel is 33.7% higher than last year
Equipment & Component Cost Higher demand for metals to make equipment Truck cost increased about 30% since the 2007 EPA engines Increased Tire Cost ◦ Possible 20% increase this year ◦ Low supplies due to the economy ◦ Extreme weather & aging trees: limited supply of natural rubber ◦ Tsunami in Japan shutdown many tire manufacturers ◦ China buying a larger portion of the tire manufactured in China ◦ Cost of natural rubber is up almost 100% since August 2010
Changes in Government Regulations & Laws Highway Bill Truck Size and Weight Mandating Onboard Truck Technology
Onboard Trucking Technology: People Net ◦ Enforcement of the Hours of Service ◦ Inexpensive to use as compared to paper logs ◦ Low cost of entry into an e-log system ◦ One reason not to use the e-log: to run illegally Changes in Government Regulations & Laws
FMCSA: Proposed Changes in the H.O.S. ◦ Trucking productivity would go down about 5% ◦ Cost to Shippers will increase probably 1% to 3% ◦ Driver pay will have to increase a minimum of $2,500 per year Changes in Government Regulations & Laws
CSA 2010 ◦ Drivers and Companies are held accountable ◦ Accident: Driver at no fault; score increase ◦ Pre-employment Screening Program (PSP) Help identify the problem drivers Probably force out more drivers than the CDL program and Drug Testing Changes in Government Regulations & Laws
Truck Drivers & Capacity Driver Shortage ◦ Leaving industry during the recession ◦ Leaving due to CSA 2010 ◦ Drivers’ pay down compared to other industries Trucking companies replenishing their fleets, not increasing the size
Harold A. Sumerford, Jr. Chief Executive Officer J & M Tank Lines, Inc Meadowlark Drive Suite 102 Birmingham, AL Any Questions?