While the economy may officially be in recovery mode—at least according to many politicians, pollsters, and various economic indicators—fleet owners and executives still have plenty of issues to keep them awake at night, based upon the results of a recent reader survey conducted by Fleet Owner.
The state of the economy topped the list of reader concerns for all types of fleets, but the retail/wholesale delivery segment was more worried than most, followed by construction and mining fleets. Fifty-two percent of retail/wholesale delivery fleets responding to the survey put the economy at the top of their worry list as compared to 37.8% of all respondents. Interestingly, although for-hire carriers also listed the economy as their number-one concern, it was by a smaller percentage than other fleets.
This concern about the economy was based on recent experiences, according to the survey. An overwhelming majority of all respondents said that the economy had the greatest impact on their business over the past three years, beating fuel prices, emissions regulations, and even CSA by a wide margin.
Not surprisingly, optimism about the future of the economy was tepid across the board, with most fleets agreeing that they expect business conditions to “stay about the same.” Hope triumphed over gloom in most fleet type categories, though, with notable exceptions. More respondents in the for-hire trucking and leasing category felt that business conditions would deteriorate than felt things would improve (27.6% vs. 19.3%). Construction and mining companies agreed.
When it comes to using electronic onboard recorders (EOBRs) for hours-of-service records, hold-outs far outnumbered companies that have already moved to electronic logging. A hefty 73.5% of all respondents said, “No. We will not implement electronic logs until a regulation is finalized.”This response to electronic logs reflects the general dissatisfaction and even anger survey respondents shared concerning regulations and the role of government in general. “Put a stop to any new regulations until the economy actually recovers,” one person wrote. Another said, “Leave us alone and let us run our companies. We care more than [Congress] does about doing the right thing.”
Fleets signaled their commitment to “doing the right thing” in responses to another question—this one about restricting cell phone usage. More than 81% of all respondents reported already having cell phone policies and procedures in place.
Management metrics got a warm reception when it comes to driver performance monitoring. Of all respondents, 49.9% are already using some type of driver monitoring system, with for-hire carriers, leasing companies, and fleets in manufacturing/processing and the petroleum industry leading the charge.
All this performance monitoring will not necessarily result in increases in driver pay and benefits, though, even for top drivers. Just 23.2% of all respondents reported plans to increase driver pay and benefits this year, while another 17.1% said they would do so, but only for their best performers. Fleets in the food manufacturing and distribution business are the most apt to offer drivers a raise.
In spite of all the attention alternative power is garnering, actual adoption rates are still low, according to the survey. More than 83% of all respondents reported no use of alternative fuel vehicles of any kind.
The survey also revealed a possible silver lining inside the economic cloud: The turmoil and trouble of the past few years may have helped to bring fleets and their equipment suppliers closer together. More fleets (51%) reported that they are working “more closely than ever with one preferred OEM, while 41.4% said relationships had weaked.
The following pages provide detailed results for each of the survey’s nine questions. Pie charts show percentages for the total fleet responses, and the data tables break those responses down by six fleet categories. Colors for the individual responses in each table provide the color-code for the accompanying pie chart. Percentages total over 100% in some cases due to multiple answers or rounding.
Worries about 2013 & 2013 Expectations
What worries you most in 2013?
Not much of a surprise here as the general state of the economy tops the list of worries in all six fleet categories, but concern over other issues varies significantly by application. Perhaps because they recover spikes in fuel costs through surcharges or because they face the most exposure to increasing federal regulation, for-hire carriers rank concern over fuel prices well below worries about regulation.
By contrast, construction/mining fleets run relatively few miles and are far more focused on vehicle productivity than fuel consumption. Those fleets place fuel prices at the bottom of their worry list and see lack of political clarity as much more significant.
One other issue often cited as threatening the industry—the driver shortage— is ranked at the bottom of the list by all, even by the for-hire carriers. Among write-in replies to “other,” “all of the above” was cited multiple times, while “lack of qualified technicians,” “worker productivity/competence,” and “new engine performance and reliability” also warranted written replies.
Compared to 2012, what business conditions do you expect in 2013?
Depending on how you felt about 2012, the survey result on business expectations is either good or bad news. The response here was fairly clear: Half the fleets believe 2013 business activity will be a continuation of 2012, with the other half neatly divided between optimism and pessimism.
Among the different fleet categories, those involved in areas most impacted by consumer consumption—retail/wholesale delivery and for-hire—are most optimistic that things will be as good or better this year. And fleets serving the food industry are the most bullish on a continuing economic recovery boosting business in 2013. The municipal & utility fleets also seem to anticipate a steady or improving economy, perhaps buoyed by recovering home prices and construction activity promising higher real estate tax revenues and services consumption.
The most bearish on business in 2013—construction/mining and manufacturing/ petroleum fleets—serve industries somewhat removed from the consumer economy, although the large majority in both those categories anticipate 2013 being equal to or better than last year.
Driver logs and monitoring systems
Does your fleet use electronic driver logs?
The verdict on electronic driver logs is quite clear: Most fleets will not adopt them until the Federal Motor Carrier Safety Administration finalizes rules governing and/or mandating their use. What’s not so clear is whether that reluctance to move ahead of the rules is resistance to the entire concept of EOBRs or a desire to have hard and fast guidelines in place first. Given the long, drawn-out court battles over the issue and the uncertainty caused by rules being promulgated and then withdrawn, such caution over making sizeable investments in those systems without final rules is understandable.
The application where electronic logs have gained the most acceptance is among fleets serving the food industry, with over 40% indicating they have or will use them. Even there, though, less than one-quarter are actually running today with EOBRs, with the rest in the process of switching sometime this year. The highest rates on non-implementation are in two categories (government/ utility and construction/mining) where many drivers are exempt from federal hours-of-service regulation. But on the for-hire side, where most drivers are bound to maintain logs, over 70% of the fleets are waiting until there’s a regulation.
Do you use a driver performance monitoring system?
Monitoring driver performance is seen on one hand as a key to improving fleet productivity and safety, but on the other as potentially detrimental to driver morale, which perhaps explains why responding fleets seem divided with only half currently using such systems.
Given the wide range of possible approaches to gauging driver behavior and skill, the survey question was deliberately vague, asking only if respondents currently use “some sort of driver performance monitoring.” The goal was to uncover fleet interest in the concept rather than use of onboard or back-office systems.
The table shows interest varies a bit between the six fleet categories, with for-hire carriers unsurprisingly leading in adoption, followed closely by manufacturing/petroleum. Based on percentages of those reporting plans to eventually move to some type of system, it appears that driver performance monitoring will continue to gain in popularity among fleet managers of all types, but at a relatively modest rate.
Benefits & Alternative Power
Do you expect to increase driver pay and benefits in 2013?
Although truck drivers are predicted to be in increasingly short supply this year, fleet plans on pay and benefits reflect some resistance—or at least uncertainty—about responding with more lucrative compensation packages. Less than one-quarter have definite plans to increase pay and benefits, but an equal number say they’re not sure, and 17% say they’ll find more money for their top performers only. A solid one-third just say no to increases for drivers this year.
For-hire carriers, who are expected to face the brunt of any driver shortage, are among the most resistant to increasing pay; nearly 40% say there will be no pay raise for drivers this year. Perhaps reflecting a desire to lure customers with superior service in that highly competitive segment, a solid one-fifth of for-hire carriers do report that they will concentrate on rewarding their best drivers this year.
In line with their overall expectations for a decent economy in 2013, both food and retail/wholesale delivery fleets are the best place to drive a truck if you’re looking for a raise. However, those are also two segments where unions still play significant roles and contracts would dictate pay and benefit activity.
Do you use alternative power vehicles?
Trucking’s new love affair with natural gas apparently has not abated, fueled by the significant price differential between natural gas and diesel or gasoline, emissions regulations, and (to a lesser extent) the urge to go green. While the results of this Fleet Owner survey show natural gas still enjoying a lead over other alternative power choices, it also shows how relatively few natural gas vehicles are at work right now—or how great the potential is for future growth, depending upon your perspective.
If you add together gasoline-electric and diesel-electric hybrids, that category actually edges natural gas in terms of current usage. The low figure for all-electric commercial vehicle usage reflects the ongoing effort to improve operating range and performance characteristics in order to broaden the pool of potential applications for this zero-emissions option.
Cell phone use, business impact & equipment suppliers
Do you restrict cell phone use by drivers?
Most fleets have clearly gotten the message when it comes to the safety risks associated with mobile phone usage while driving. An impressive 81.3% of all respondents reported having policies and procedures in effect to restrict mobile phone use by drivers. Another 6.4% said they had plans to do so.
Retail and wholesale delivery fleets along with manufacturing/processing and petroleum fleets are leading the way by a small margin. Interestingly, for-hire carriers and construction/mining fleets apparently harbor the most hold-outs when it comes to actively managing mobile phone use, in spite of FMCSA regulations in 2010 and 2011 and fines of up to $11,000 per citation for fleets and $2,750 for individual drivers caught breaking the rules.
The battle against distracted driving is picking up still more steam, too. For example, the National Highway Traffic Safety Administration developed a new federal grant program to help states combat distracted driving beginning this year. Laggards be warned: It will become increasingly risky to be among the non-compliant minority.
What has had the greatest impact on your business in the past three years?
Fleets of all types reported that the state of the economy has impacted their businesses more than any other single factor in the past three years. Fuel prices, emissions regulations, CSA, and the driver shortage trailed distantly behind in that order. Comments from respondents brought these data tables to life. “I firmly believe they [Congress] are legislating businesses and our economy into the ground,” wrote one person. “We are trying so hard to ‘equalize’ wealth that we are crippling businesses, the very ones that create wealth.”
“Stabilize and improve the economy by allowing businesses to create jobs,” said another. “Don’t hamper the business world.” “Give the trucking industry a chance to catch its breath,” wrote another respondent. “Institute a moratorium on all in-process and/or pending legislation and regulations targeted for the trucking industry for at least three years.”
How would you describe your relationships with equipment suppliers?
Responses to this survey question raised as many new questions as answers. Clearly, the pressures of the past several years have caused bone-deep shifts in the industry that will be felt long after the extreme belt-tightening measures of the recession years are over. The nature of the relationships between fleets and their equipment suppliers appear to be one of those areas altered by adversity.
More than half of all respondents reported that they are working “more closely than ever with one preferred OEM and its dealerships.” In the case of food manufacturing/ distribution fleets, the number jumped to a whopping 78.3%. Only fleets in the government, public utilities, sanitation and services areas along with construction and mining reported working with a greater diversity of suppliers than in the past.
Now the question on the table is: Will fleets and OEMs work together to fine-tune equipment specs for specific applications? Will dealerships become even more intertwined in day-to-day fleet operations?