WHAT is being called the “Great Recession” was ebbing as Steve Rush, president of Carbon Express Inc in Wharton, New Jersey, assumed his role as chairman of National Tank Truck Carriers Inc at the association's annual conference last May. That does not mean his year as chairman was quiet or easy.
Tank truck carriers faced plenty of challenges during the past year, some of which were even related to the improving economy. While many tank truck fleets were busy, recovery and growth were hindered by an increasing driver shortage and other capacity constraints.
NTTC declared that 2011 is the Year of Tank Truck Driver Sustainability. Rush has been an active proponent of that effort, participating in driver sustainability panels and discussions throughout his term as chairman.
There were real blizzards with record snowfall that shut down transportation in some areas, and a figurative blizzard of new and proposed regulations from federal agencies. Regulatory issues included the new Compliance, Safety, Accountability (CSA) program, driver hours of service proposed revisions, electronic on-board recorders (EOBRs), efforts to ban wetlines, and more.
It was a busy year, but Rush knows what it is like to work hard. He grew up on a farm in northern Maine and was around machinery at a young age.
“Some of my earliest memories include jumping into equipment with my father when he was moving things around on the farm,” he says. “When I was seven or eight, he showed me how to put the clutch in and shift gears. I'd do anything to drive.”
In addition to the farm, Rush's father owned a couple of businesses. His uncles also owned businesses. “I grew up knowing that I wanted to be in business for myself someday,” he says.
After a stint in the US Air Force in the mid-1960s, Rush went to work in a warehouse. “One day they sent me out to help transfer a load out of a railcar to a truck,” Rush says. “The truck driver said to me: ‘You're a hard worker. You're wasting your time in that warehouse. You need to get into the trucking industry where you can make some money.’”
In 1965, he was right, according to Rush. The Northeast was highly unionized, and the better wages were in trucking industry. It wasn't long before he had his first truck driving job.
One of his earliest driving positions was with a diversified freight carrier that had both van and tank operations. He studied the way they blended van and tank operations to maximize revenue, and that would play a role years later as he built his own trucking company.
A key moment on Rush's drive to become a truck fleet owner came when Rush met other young drivers who had their own trucks. “I started thinking this might be something I wanted to do” he says. “I studied the idea closely before taking the big step. My mom and dad co-signed a note for me, and I bought my first truck, a Brockway, and it was a brutal truck. This was in 1969, and I was 29 years old.”
Rush began setting goals for the future when he purchased that first truck. “I put down on paper what my thoughts and ideas were for the future,” he says. “Right from beginning I had plans to own more than one truck.”
Rush signed on with H R Ritter, a small owner-operator fleet that hauled jet fuel to Newark (New Jersey) Airport. “The rates were excellent at the time, and I was paid to go out and back,” he says. “Ritter had a small terminal in Massachusetts, and I got to know the manager there. He gave me loads back to the New York area. I realized if I could sign on with a company that had more connections, I could make even more money.”
At about the same time Rush bought his first new truck, the local Matlack terminal had a strike. The Operation was shut down and reopened as owner-operator terminal. Rush learned about the Matlack opportunity from Ron Dana, who went on to establish Dana Transport.
Rush joined Matlack two years after Dana. “Rates were good, and I made a lot of money at Matlack,” Rush says. “In fact, those 1970-era rates were better than they are now. My best year generated 28% profit. I started buying more trucks while at Matlack.”
While working with Matlack, Rush met a number of the company leadership, including Charlie O'Brien, a former NTTC chairman. “He was one of my early heroes in this business,” he says.
As the 1980s dawned, Rush could see that Matlack was having a hard time adjusting to deregulation. “They had everything going for them,” he says. “Along with several other big tank truck carriers, they could have owned the industry. They had the networks and terminals in place, but they failed to adapt to the changing times.”
Sensing it was time to move out on his own, Rush started Carbon Express in 1983. One of the first things Rush did after launching his own company was join NTTC.
Rush learned of NTTC shortly after getting into tanker operations. “I read industry magazines from the start, and Modern Bulk Transporter was my first find,” he says. “I would read it from cover to cover, and I saw a lot about NTTC.
He went to his first meeting around 1984. “I was intimidated and felt so detached from the other members that I didn't go back for a couple of years,” he says. “Manny Rizzuto at Sicomac Carriers talked me into returning. He told me that after three or four meetings they would know my name and would make me feel comfortable. He was right about that. These are a great group of people. I feel that I get a lot personally out of NTTC. I know that even as a small carrier, I can pick up the phone and call any of the other fleet executives I know and get help with a problem.”
Rush says he never dreamed of being chairman. He was very reluctant to take on the leadership role. It turned out to be a great experience, though.
“I learned a lot as chairman,” he says. “This isn't a token position. NTTC is our association, and we as members need to be involved and lead it. We need this association even more today with all of the regulations coming out of Washington DC.
During a recent interview with Bulk Transporter, Rush discussed the current state of the tank truck industry and what is needed for it to thrive in the future.
BT: How would you describe the state of the tank truck industry?
Rush: The industry is doing well right now. In fact, tank truck industry is doing better than the economy in general. I think the van sector was affected more than tank trucks. Many trucking companies, especially larger carriers, downsized during the recession, some by 10% to 20% based on revenue reductions.
My company actually grew a little bit through the recession. We were able to get the money needed for new equipment to handle the growth.
BT: Is the tank truck industry stronger today?
Rush: I think it is a little bit stronger today. We have a combination of carriers still gearing back up, and we just experienced a winter similar to those from 30 years ago that put a strain on capacity. We got a lot of emails during the winter from truck brokers, compared with just a few over the past two years. Numerous brokers were showing up with numerous loads.
BT: How bad was this past winter?
Rush: Very tough. It affected us financially in several ways. Loads were delayed by storms. Sometimes we couldn't unload because of the weather, and we missed other shipments as a result of that.
BT: What is tank truck capacity like at this point?
Rush: We see it as tight right now. There are more loads than trucks based on what we see in the truck broker sector right now. We're seeing significant rate increases. We see this as a supply-and-demand issue, and shippers are not balking at rate increases.
At our company, we believe electronic driver logs and EOBRs are playing a role in the capacity issue. We, and other fleets, are learning our actual operating costs through electronic logging. For years, I had run this company without knowing my actual operating costs.
Electronic logs show clearly that I only have 70 hours of use each week for each driver, and I know that I have to judiciously use each one of those hours. Otherwise, the driver runs out of hours and the truck sits. Electronic logs were the best thing to hit this industry since we put the mules in the barn. I believe the EOBR is the first angel on the shoulder of the driver, so to speak.
BT: Should the federal government mandate EOBRs and electronic driver logs?
Rush: Yes. While Carbon Express is a small carrier, we were able to afford EOBRs, and they are helping us recognize our operating costs and ensure that we maximize the utility of the vehicle and the driver. They are helping us to better manage our drivers.
EOBRs for the first time give drivers somebody in the cab of the truck that is on their side. A voice comes on at a preset time (our units are set for two hours) before the driver runs out of hours.
Dispatchers have had the hardest time adjusting. It has been harder for them than for drivers to adjust to EOBRs. We have to teach dispatchers to constantly look ahead at driver available hours, and we have to make operational adjustments.
We'll do more relays. We have to do that to ensure that drivers don't have HOS violations and the customer still is served.
BT: How would the trucking industry be impacted if the Federal Motor Carrier Safety Administration reduces driving hours as it has proposed?
Rush: It's going to be very difficult because we would lose more than an hour. The new rules would be disruptive in many ways. Worst of all is the provision that calls for a 48-hour break that could be even longer if the driver shuts down after midnight. The proposed rule says he has to go by midnight twice. The current hours of service are just fine.
With the proposed rule changes, we'll need more trucks and more drivers. Traffic congestion will worsen. It's not good for the country. The trucking associations must do whatever is necessary to fight the proposal.
BT: Where do we stand on the driver shortage?
Rush: There is a driver shortage, and we believe it is going to get worse. However, I think it will be worse in some parts of the country than others.
BT: What does the CSA program mean for the trucking industry?
Rush: We need it. It's an absolutely good thing. When you combine EOBRs and CSA, it's going to make life better for our drivers. These factors also will enhance driver sustainability. Some massaging to the process is still needed, but this is still the best thing for the industry.
However, CSA will bring job losses for drivers with bad safety records and those who are not diligent when they do pre-trip inspections. Roadside inspection write-ups for lights out on the tractor or trailer and hours-of-service violations will drive up carrier and driver scores under CSA.
We can't hire a driver like that, because he would push up our score. If a driver sees that his score is rising due to vehicle maintenance issues, he needs to find a job with another carrier before his CSA record is ruined.
Drivers now have to be much more selective in the carrier's they consider for employment. The good drivers are getting smarter about this, and they are researching carriers more thoroughly. They will be more willing in the future to reject carriers that don't look out for the drivers.
BT: Why was it important for NTTC to call 2011 the year of tank truck driver sustainability?
Rush: It is critical because when you look at drivers, the average ages are climbing. I heard one fleet executive say that the average age for drivers at his company is in the range of 59 to 61. I have a 69-year-old driver working at my company.
BT: Where will tomorrow's drivers come from?
Rush: That's a very good question. I look back at my start when I was working in a warehouse (in the late 1960s), and a driver told me I could make a lot more money driving a truck. No way would they tell me that today. Today, the guy driving a forklift in the warehouse makes more than my drivers.
When I got into this business, it was not uncommon to find truck drivers who had just finished a four-year college degree. That's a real exception today. People simply can't make a good living driving a truck today.
BT: How can the industry fix that?
Rush: It's pay. I think the growing driver shortage will fix the pay. At one petroleum hauler, the average driver pay is now $75,000. I think we all need to be in that range. That's a decent living, and the driver's family doesn't have to live in a trailer. His wife may be able to stay home and take care of the family. We need more of that.
BT: How does the tank truck industry make driving a career of choice again?
Rush: We have to give them a better lifestyle. Many of them want consistent start and finish times. We have to find a way to do that. We're already doing it with some of the hauls we handle at Carbon Express.
We have to find more ways to go back to the days when carriers had interline agreements. We need ways to share freight between carriers to get our drivers back home. This is especially important for medium and small carriers. The days of sending a driver to run all over before bringing him back home three weeks later are over.
BT: What is the fleet obligation for promoting health and wellness as part of driver sustainability?
Rush: Fleets do have an obligation. One of my goals is to set up an exercise room at our terminal. I talk a lot with my drivers about dieting and lifestyle. Part of the reason for getting drivers home at the end of a shift is to give them time to go to a gym. We have one driver who lost 70 pounds, and he's a changed person. It's an incredible achievement.
Driver health affects carriers in many ways. Our health insurance rates have been climbing 20%, 30%, 40% since Obamacare was passed. It's disgusting.
BT: How big an issue are wetlines and the regulatory effort to ban them for the tank truck industry?
Rush: When you look at a foodgrade trailer, you don't see the piping. When I got started in this industry, I wondered why we didn't have that on all tank trailers. To me, it's more of a security issue than a safety issue, though.
Current trailers configurations do present a challenge. In Europe, they cage the piping on many tank trailers.
BT: What does the industry need to do in addressing rollovers, which continue to be a problem?
Rush: We're not going to stop our educational effort at NTTC. It will be difficult to stop rollovers completely, but that has to be our goal. Rollovers are a significant problem in this industry, and many are tied to driver error.
I've heard a lot of discussion about mandating speed controls in the trucks as a way to reduce rollovers. We need to do that, because it will help us. We need to embrace other technologies with the potential to reduce rollovers. The tank truck industry needs to lead the way, but we also need some government action.
BT: What would be the impact if the Occupational Safety and Health Administration regulates fall protection on tank trailers?
Rush: I don't think we need OSHA's involvement. Vapor recovery on chemical and petroleum trailers has gone a long way in keeping drivers off the tanks. We've had vapor-recovery systems on our tank trailers since 1997, and drivers don't need to climb on top of trailers very often. From our experience, falls from tanks haven't been a major issue.
I've had more of a fall problem over the years with drivers climbing onto the deck behind the tractor than going up on top of the tank. We've tried to address that by putting the gladhands lower so drivers can reach them from the ground.
BT: What are your views on higher truck weights?
Rush: My personal feeling is no. There are many more ways to improve efficiency in our industry without higher gross weights. We cut tare weight and gained payload in our fleet by switching from sleepers to daycabs. There are many other things we can do to squeeze weight out of existing equipment.
BT: What is the potential in the tank truck industry for alternative fuels such as natural gas?
Rush: I think we have to look at all fuel options. We have an abundance of natural gas in this country, and major sources are close to the large population centers. Natural gas would enable us to reduce our reliance on imported oil, and it could be cost-competitive with diesel.
We don't need to abandon petroleum-based diesel, but we can certainly reduce the amount used by the trucking industry. It should be a gradual process.
BT: What does NTTC still mean for the tank truck industry?
Rush: NTTC is vital for tank truck carriers. We need more people to become involved with it. We need our voice in Washington DC more than ever before. Our membership is slowly growing. John (Conley) and his staff are doing an excellent job of finding new members. We're feeling more energy in the group, and meeting attendance is growing. ♦