Trucking Forecast: Lower Speeds, Higher Costs, Uncertain Profits

Implications:   Trucking leaders are mulling installing governors on trucks that would limit speeds to around 62 miles per hour. Already, one major trucking company (Con-way Inc.) has done exactly that in an attempt at fuel conservation.   Trucking will spend in excess of $130 billion on diesel fuel this year. Any attempt at conservation should help their bottom lines, but what will the impact be on time-sensitive services?

Analysis:    It's a great idea in theory for everyone -- drive more slowly.
   It saves money, it saves lives and really doesn't cost anything -- except time.
   Now leaders of the American Trucking Associations are floating the idea that maximum truck speeds ought to be governed at around 62 miles per hour. Con-Way, a leader in innovation in the industry, already has installed governors on its trucks at exactly that speed.
   The idea has plenty of merit. It's just a question whether two key constituencies -- drivers and shippers -- can go along with the idea.
   One anonymous shipper quoted by Logistics Management Magazine in this story says the idea has "some plausibility." At a time when shippers are being hit with fuel surcharges as high as 50 percent of their freight bills by some truckload carriers, you bet it does.
   Drivers are another story. Because trucking is one of the few remaining industries that largely does not pay its workers by time worker -- over-the-road drivers instead are paid by the mile -- any attempt to slow down hits these drivers right in the pocket book.
    Recently, a Schneider National executive said that when his company reduces the amount of miles a driver can legally cover in a day, it has no plans to raise base per-mile pay to compensate for the fewer miles covered.
   Because of that, don't look for representatives of the Owner-Operator Independent Drivers Association (OOIDA) to go along with any move that would limit their speeds.
   It's a tough call. On one hand, it surely would help safety by saving lives on the roads. On the other hand, when lower- and middle-class folks throughout the country are being squeezed financially on all fronts, is it fair to take money out of drivers' wallets in order for trucking companies to save a few million dollars on their fuel tab?
   I can't see Congress making this tough call, especially in an election year. The blowback from the reduction of the national speed limit in autos from 65 to 55 in the early 1970s still is being felt. In fact, that law was repealed under President Reagan. Currently, it is up to the individual states to set interstate speed limits -- and most opt for 65, with 75 the limit in some Western states.
  The trucking industry should be applauded for even floating this trial balloon. Of course, their motivation is mostly financial. But if it gets this country even thinking about adjusting its speed limits at a time when crude oil prices have tripled in less than a decade, then it deserves kudos just for that.