This guest post is provided by Michael Koploy. Koploy, an ERP Analyst at Software Advice, provides consumers with reviews and comparisons of transportation management software for Software Advice. The original post on this topic can be found here.

Businesses are successfully run on efficient transportation, and efficient transportation requires cheap gasoline to survive. When fuel costs rise, this affects many businesses' bottom lines. And while many businesses don't pass this on to consumers, this isn't the case for many commodities, including corn, rubber, aluminum, beef, wheat, and cotton, among others. All of these are easily outpacing inflation.

Let's take a look at the impact of rising fuel prices, from both a consumer and business standpoint. It doesn't just affect how much it takes to fill up.

Rising Gas Prices

The '79 oil crisis brought gas to close to $3.50 when adjusted for inflation. Funny that $3.50 gas today seems the norm...even "cheap," by some standards.

US Gasoline Prices vs World Gasoline Prices

In Mid-May, gasoline in Denmark, Greece, Ireland, Portugal, Puerto Rico, Sweeden, and Italy cost over twice the average US price.

Businesses are Raising Gas Prices In Response to Higher Fuel Costs

As fuel prices increase, so do the operating costs for businesses. In response, many are forced to raise their prices.

The "Trickle Down" is Leading to Rising Commodity Prices

The change in commodity prices from January 2010 to January 2011 is outpacing inflation - to put it mildly. See what I mean below.

PPI/CPI Inflation

To see the effect on the economy as a whole, just take a look at the indexes.

Last year, the National Highway Transportation Safety Administration (NHTSA) and the Environmental Protection Agency (EPA) made a groundbreaking announcement about their efforts to reduce fuel consumption and greenhouse gas emissions for heavy trucks and buses. As Washington tightens standards, the impact of reducing weight, a largely uncharted area with a great potential for growth and influence in meeting these new standards, becomes more evident.

Potential weight savings from a host of aluminum applications available today. Photo courtesy of The Aluminum Association, Inc.

The simple fact is, lighter vehicles use less fuel and create fewer emissions. Next generation commercial vehicles will need to be lighter, cleaner and more fuel efficient – and aluminum delivers on all fronts. To this point, The Aluminum Association’s Transportation Group (ATG) commissioned Ricardo Inc. to study the fuel efficiency impact of lightweighting Class 8 trucks and trailers in the United States. The results were quite compelling.

The study showed that fleets downweighted with aluminum have potential to carry 6.5% more payload per trip. This means fewer trips, and a 6.5% savings of fuel and emissions. To give you some specific examples of savings in individual components, substituting aluminum for roof cabs saves 60 pounds, cab floors save 56 pounds, frame rails save 435 pounds, cab rear walls saves 49 pounds, and cab cross-members saves 38 pounds. On a larger scale, the annual return on investment on a single vehicle was estimated as high as 1,612 gallons of fuel and 17.9 tons of CO₂.

So, taking it a step further and considering these results applied to the total United States Class 8 truck fleet, approximately two million vehicles, the overall economic and ecologic impact of weight savings is estimated at one billion gallons of diesel and 10 million tons of CO₂ annually!

The study simulated different configurations of vehicles and payload conditions (i.e. unloaded, gross vehicle weight [GVW] and half-GVW load) for the major drive cycles that represent commercial transportation, which showed a 14 percent reduction potential with aluminum applications. When reduced weight is combined with other improvements such as, aerodynamics, engine optimization and low rolling resistance, the results were further enhanced.

Additional benefits also were revealed, including lower maintenance costs associated with wear and tear on brakes and tire treads; improved durability due to aluminum components’ corrosion resistance; and an increased truck life cycle and higher resale value.

As the industry looks for cleaner, more efficient, affordable vehicles, it is clear that part of the answer is a holistic approach, which includes low-weight, high-strength, affordable materials matched with smart design, advanced powertrains and cleaner fuels. Therefore, for sustainable, more profitable, higher-performing commercial vehicles, aluminum is an essential part of the solution.

A full copy of the study is available for download here. Or visit here for a copy of the executive summary.

On Earth Day, it seems quite appropriate to reflect on Con-way’s sustainability efforts and how we fit into the goals (and the politics) of today’s environmental movement. As a framework, we must acknowledge that our primary business is dependent on petroleum and will be for quite some time. As a result, we are not going to be the poster child for the environmental movement. That being said, our sustainability efforts have been widely recognized by a variety of academics, government officials and agencies, customers, peers and even some environmental groups.

Our four tenets of sustainability — reduce energy usage, eliminate waste, recycle and practice sustainable procurement — are paying real dividends for people, the planet and our profits. We are making meaningful changes to our equipment and our systems, taking full advantage of the latest technologies. We are meeting regularly with proponents of natural gas fuels. We are re-lamping our facilities for increased energy efficiency. We are working with an international group of stakeholders to develop a logistics carbon use calculator. We recycle more than 60 percent of the material used to construct our trailers. And we have partnered with a group including a NASCAR engineer, NASA, Oak Ridge National Laboratories and SmartTruck, a new manufacturer of aerodynamic products for the trucking industry, to develop and test a new concept in trailer aerodynamics, the Under Tray System, which is now being installed on Con-way Truckload trailers.

As the environmental movement changes focus (global cooling in the 70s to global warming in the 90s to today’s battle cry about general climate change) it is through our continued efforts that Con-way will consistently provide meaningful reductions in energy usage and resultant pollutants.

On this Earth Day, I believe Con-way can hold its head high and be proud of its sustainability efforts. Have you celebrated your progress toward improving the environment?

Last month, American Trucking Associations (ATA) and Volvo Trucks North America, part of the Volvo Group based in Gothenburg, Sweden, co-sponsored an event at the Swedish Embassy in Washington, D.C. “The Future of Freight Transportation” was attended by more than 100 transportation executives and other stakeholders and served as a timely forum to discuss important issues affecting the industry in years to come — particularly as a new decade of challenges begins.

The purpose of event was to spark a dialogue that would help the industry identify how best to address the transportation challenges created by the growing U.S. population and increased demand for freight along three fronts: truck productivity, environment/fuel efficiency and safety. Representatives from Volvo Trucks North America and ATA moderated three panel discussions which included participants from commercial trucking companies, truck drivers and industry associations.

Though the group acknowledged that the industry had made a great deal of progress reducing accidents and emissions, the general consensus was that the most effective low-cost strategies have already been widely adopted. And so the question on the table remained: Is there another way to have a substantial impact on both safety and greenhouse gas emissions?

Most concluded that the silver bullet is to increase truck productivity. With that said, it’s difficult to convince the public and members of Congress that it’s safer even if we have the research to back it up. It’s simply not an intuitive concept. One of the most important comments to come out of the panel was that the debate about truck productivity is no longer about whether the science supports increased limits, but whether policy and politics will allow commonsense changes. We need to adapt the trucking industry’s rules and regulations to a changing world — and more productive vehicles would yield greater fuel efficiency, enhance safety and relieve congestion.

The event at the Swedish Embassy was truly a substantive, pragmatic discussion that enabled broad exploration of the trucking industry, where we’ve been and what we have yet to accomplish. We’ve got a great deal to be proud of, particularly with the progress we’ve made on both environmental and safety issues. The fact that truck productivity emerged as a common thread in each of the three panels was powerful and helped reveal and confirm to all those in attendance that the issue is indeed one that will take center stage in 2011 and beyond.

Companies adopt environmental sustainability programs mostly for one of three reasons: the customer asks for it, the government mandates it one way or another or the market demands it to remain competitive. But how do you know if the results of your green programs are measuring up? And how do you know if you are ready to respond when governments ramp up regulation of carbon emissions?

Unfortunately, there’s no single solution and standards vary widely. Nevertheless, transportation and logistics companies can still gain a firm grasp of the strengths and weaknesses in their sustainability programs, and develop a plan to position themselves for success as the playing field changes. They can start by taking stock of their total carbon emissions output.

The most obvious sources of greenhouse gas (GHG) emissions in the supply chain are trucks and other vehicles, such as forklifts, which use fossil fuels and participate directly in the movement of freight. But when accounting for your company’s total carbon footprint, you’ve got to consider every aspect of your daily operations and how it relates to the environment. It means understanding more than the impact of trucks, it means evaluating everything from electricity levels to natural gas use and fully understanding your operations.

Lean tools and methodologies, such as value stream mapping, are especially valuable in helping understand carbon streams and how to drive out waste from them. Understanding the larger picture provides a more complete view of where to focus sustainability efforts. All of this analysis provides insight into the true impact of your organization’s supply chain on the environment.

There are different segments which influence sustainability, and different systems for measuring their impact. Understanding what measurement is most effective for which area of your operation is an important step to accurately and fully measuring the extent of your carbon footprint. These can include, among others, the GHG Protocol, the National Greenhouse Energy Reporting (NGER) Act, the Climate Registry Information System (CRIS), EPA’s SmartWay Transport Partnership and any custom systems. Creating a plan will help to identify your carbon emissions inventory with the various registries, and integrate them into one manageable and measurable program.

The ultimate goal is putting in place effective measurement tools that provide an accurate accounting of sources of carbon emissions, and how these affect your footprint. It’s imperative to creating meaningful, realistic and, most importantly, credible sustainability and carbon management programs. A number of organizations, including Menlo Worldwide, are developing the capabilities and methodologies to help companies manage this emerging challenge.

It’s not an issue of if carbon management and reporting will become a requirement, it’s when. There’s never been a better time to take action and position your company for success. The risks of waiting for an industry standard and not starting out on your own path are simply too high.

Over the course of history, the White House Rose Garden has been the venue for many Presidential decisions which heralded a new direction for our country. Earlier this summer, I had the opportunity to participate in one such event that, hopefully, we can look back on years from now and recall as the beginning of important change for our citizens, our nation and our industry.

The event was the signing by President Barack Obama of an official presidential memorandum on Fuel Efficiency Standards, which directed his administration to establish fuel efficiency and greenhouse gas (GHG) emissions standards for commercial medium- and heavy-duty vehicles beginning with the nation’s 2014 models.

In a country so reliant on fossil fuels, increasing fuel efficiency while reducing greenhouse gas emissions is a goal worthy of everyone. The President’s action recognized the efforts of a group of industry leaders who see this goal as not only worthy for the environment, but necessary for our business.  And that’s the Heavy-Duty Fuel Efficiency Leadership Group, a diverse coalition of trucking fleets and related technology providers formed earlier this year.

The mission of the group is to assist federal agencies in formulating effective policies to reduce GHG emissions and increase fuel efficiency in heavy-duty commercial vehicles, while avoiding unintended consequences that could disrupt the industry and our economy.

This group, of which Con-way is a founding member, believes that a strong GHG/fuel efficiency program can result in significant environmental, economic and national security benefits. Encouragingly, the President’s call to action emphasized the importance of collaboration between government and industry as the path forward to developing, refining and implementing effective policy.

To that end, the leadership group created and presented to the Administration and federal agencies a Statement of Principles to support and help guide the rulemaking process. These basic principles call for future regulations to:

• Leverage and build upon on existing programs proven to be effective

• Emphasize the prompt deployment of viable technologies

• Recognize the diversity of medium- and heavy-duty fleets

• Are complemented by financial incentives and transportation policies that accelerate results

At Con-way, we’ve already taken many critical steps in that direction. We’ve implemented initiatives that include reducing the speed of our tractors, moving to single wide-base tires for decreased rolling resistance and better fuel economy, no-idling policies and reengineering our freight network to run fewer miles and use less fuel.

As President Obama noted that day, freight vehicles are thought to be responsible for approximately 20 percent of the GHG related to transportation. He believes that we can increase tractor-trailer fuel economy by as much as 25 percent using technologies that now exist.

This is an achievable goal — if industry and government work together in a true partnership to make it a reality. The outcome will be the first-ever national GHG/fuel efficiency program for medium- and heavy-duty vehicles. It’s a goal that has benefits for all — and one that, for the sustainability of our industry and our environment, deserves our full support.

Doug Stotlar is president and chief executive officer of Con-way Inc. He, along with Tommy Hodges, chairman of American Trucking Associations, and other industry executives joined President Obama at a Rose Garden signing ceremony earlier this year that laid the groundwork for new fuel efficiency standards for the trucking industry.

Source: www.streetsblog.net

Even casual observers of transportation policy have noticed DOT’s emphasis on livability and, by extension, their fascination with “active transportation’ (aka biking and walking).  Livability is a worthy goal for all communities and, though it is still a somewhat ill-defined policy concept, biking and bike paths are certainly key components.

In an effort to make Washington, DC more livable, the Mayor and Federal policymakers decided to put a bike path down the center of Pennsylvania Avenue from the White House to the Capitol with no connections at either end.  For those who do not frequent that area, this is not a typical bike path.  Instead of narrow lanes down the curb side of the roadway, this bike “path” is a full three auto lanes wide going right down the middle of Pennsylvania Avenue.  Yes, approximately one-third of the capacity of an already busy street in our nation’s capital was taken to serve a handful of cyclists.  The result has been increased congestion, increased emissions, long rush hour delays, and the ire of many DC visitors, cabbies, workers, and residents. This is not a very livable result for any but the cyclists and, in apparent reaction to public pressure, DC has just announced that autos will now be able to use the left lanes again.  Good for them, and an important lesson for other transportation policy makers.

Now, lest you believe I am anti-bike, I want to assure you this is not the case.  Two of my three grown children bicycle regularly in Old Town Alexandria, a nearby Washington suburb.  One does not own a car and cycles to work every day.  If for no other reason than their safety, I support adequate accommodations for cyclists.  That having been said, if cyclists are to be taken as serious members of the transportation community, perhaps it is time that reasonable requirements be placed upon them to insure they can safely interact with other road users and provide the necessary funding to support their projects.

Items that DOT and other transportation policy makers might consider are:

• Training, testing, licensing, and minimum age requirements for cyclists.
• Required insurance coverage to protect cyclists, pedestrians, and other road users.
• Minimum equipment standards and safety inspections.
• Mandatory helmet laws.
• Bike path user fees.
• Bicycle and tire excise taxes to fund bike path construction and maintenance
• Enforcement of all traffic laws for cyclists.

For policy makers who support increased use of cycling, failure to consider and provide proper regulatory oversight of new policies – and appropriate funding mechanisms to pay for it all -- is irresponsible and unfair to other road users.

The real issue is not bike paths.  It is how do policymakers determine the best use of limited transportation dollars to improve our transportation system while increasing mobility for all Americans?   There are many worthy projects, in all modes, that are well worth considering.  A bike path to nowhere is not one of them.

source: outdoor.com

As concern about global climate change continues to rise, more and more people are talking about shifting freight from trucks to rail. Rail is more efficient, many believe, and it requires less fuel consumption.

“This would really benefit the environment,” they say.

We say, “Not so fast.”

A recent analysis published in Transportation Fundamentals examines the truck vs. rail question and finds some interesting answers. According to author Noël Perry, managing director and senior consultant at FTR Associates, most of the U.S. freight now traveling by truck would actually require more energy consumption if transported rail-only. While rail itself is more fuel efficient, it creates far more of certain emissions than trucks are allowed to under current standards. Clearly the addition of trucks, at least in some stages of the supply chain, allows for the most effective — and greenest — combination of resources.

As Perry writes, “Existing market forces have already done an excellent job of maximizing fuel efficiency by allowing rail and truck to do what they do best.”

What they do best, according to Perry, is intercity long-haul for rail and more local short-haul transportation for trucks. The biggest challenge to combining those strengths is accessibility to intermodal terminals to enable convenient truck-to-rail transloading. The government should, Perry argues, support increased accessibility to those terminals. He also favors modifying truck size and weight standards and lowering rail’s nitrogen oxide (NOx) emissions limits to current truck standards. These actions would represent significant steps toward a greener transportation system.

Valid points, all.

There’s also the question of congestion in the nation’s freight system, a problematic issue that could become very serious in the event of a major increase in rail freight. Industry analysts have predicted that adding even 25 percent more freight into the already overburdened rail system would create serious congestion, efficiency and productivity issues. What repercussions could we expect from adding even more freight than that?

When it comes to road congestion, the picture looks no rosier. While many rail proponents push for a modal shift that would remove 10 percent of freight traffic from America’s highways, that remains an unachievable goal. In fact, an American Trucking Associations (ATA) analysis found that doubling the freight tonnage traveling by rail would result in only a roughly 1 percent reduction in trucks on the road by 2018.  To multiply that figure by 10 would require tremendous rail infrastructure investments, which seems highly unlikely — especially given that the last major line-haul route built in the United States was constructed in 1909.

Clearly, there are no quick answers. But with freight tonnage projected to grow 28 percent by 2018 , it’s good that analysts like Noël Perry are asking — and finding answers — to the questions. Let’s keep that conversation going.

A long-running battle over reducing diesel emissions from port drayage trucks has turned into a serious threat to nearly 30 years of trucking deregulation.

Several years ago an alliance of union and environmental groups threatened to make it politically impossible for the ports of Los Angeles and Long Beach to expand unless they cracked down hard on emissions from the thousands of trucks used in drayage of containers to and from rail yards and distribution centers in Southern California

Their package deal was that the ports would henceforth deal only with companies rather than thousands of individual owner-drivers, on the grounds that only large companies could afford to replace all those trucks with new trucks compliant with 2007 Federal diesel emission standards.

The not-so-hidden agenda was that drivers in truck fleets would be easy for the Teamsters to unionize, whereas they can’t do anything with owner-drivers.

The entire goods-movement industry, including the American Trucking Associations, objected to this plan as violating the Federal pre-emption of state or local economic regulation of trucking—and they prevailed last March in the 9th Circuit Court of Appeals. The Port of Long Beach dropped out and set up its own registration and certification program, pertaining solely to requiring clean-air compliance on a truck-by-truck basis. Both ports are offering subsidies to help truckers purchase compliant trucks, and as of a recent count, over 5,500 trucks have either been replaced or retrofitted in less than a year. An October headline in the Los Angeles Times said “Diesel Emissions Down Drastically at Ports of L.A., Long Beach.”

Having lost in court, the Coalition for Clean and Safe Ports, representing 80 environmental and labor groups, has mobilized to change federal law. Besides Los Angeles Mayor Antonio Villaraigosa, they have recruited the mayors of Oakland, Newark, and New York (and their ports) to urge Congress to amend the Federal Aviation Administration Authorization Act of 1994 (the most recent law dealing with federal pre-emption of transportation economic regulation) to permit ports to exclude owner-driver operators and deal only with fleets. Their aim is to get union-friendly legislators to slip such a provision into the surface transportation reauthorization bill.

Source: www.boston.com

That would be a huge mistake. As Journal of Commerce editor Paul Page wrote recently, “We’re talking about setting unprecedented limits on the pre-emption of federal regulatory authority over state laws that has been established and upheld in court rulings over many decades. We’re talking about the legal fabric of commerce in the United States.” Moreover, should individual ports be allowed to create this patchwork of policies, those that did so would put themselves at a competitive disadvantage. The ports of L.A. and Oakland compete with Canada’s Vancouver and Prince Rupert and Mexico’s Lazaro Cardenas, all well-served by long-distance rail. And the Port of New York and New Jersey competes with major ports in Virginia, Georgia, Houston and elsewhere.

Even partially rolling back trucking deregulation would set a terrible precedent, emboldening those who would like to undo railroad and airline deregulation as well. Let’s hope cooler heads prevail as Congress drafts and debates reauthorization.

The recent fuel efficiency report by the Federal Railroad Administration (FRA) derives conclusions that may look good on paper, but they offer limited real-world application and misrepresent the ability of railroads to provide a more fuel efficient alternative to trucking. While there is clearly some competition between trucks and railroads, the two modes of transportation typically serve different market functions, and the instances where one mode presents a viable alternative for the other are relatively rare.

Given the unique characteristics of each mode, we cannot compare them using the same criteria. By design, railroads are optimal for carrying much heavier, bulk commodities such as coal and stone, resulting in increased efficiency when using the ton-mile-per-gallon (tmpg) metric. Trucks are better suited for hauling lower density, higher value goods, like food, clothing, medicine and electronics. Comparing these very different modes based solely on fuel efficiency (tmpg) and consumption is overly simplistic and one-dimensional. Because trucks carry low-density freight, a more accurate metric is cubic capacity, not load weight. Whether it’s by air, water, or land, a larger vehicle with greater hauling capability will always yield stronger results on a tmpg basis when compared with a smaller vehicle with less hauling capability.

The report also relies heavily on tank car movements to bolster fuel efficiency claims, followed by a few other applications. Naturally, the tank car movements resulted in the highest efficiency ratio, compared to tanker trucks. Liquids are some of the densest cargo available. A more relevant comparison would be to look at the relative efficiency between the two modes when moving low-density items, like consumer goods, which are shipped almost exclusively by truck.

As we look at fuel efficiency across modes, the report points out that truck requires fewer intermediate steps and can be routed more directly than trains. According to the report, over-the-road movement of freight accounts for 93 percent of fuel use by trucks, while trains waste up to 45 percent of their fuel during short, intermediate movements or yard-switching operations. While trucks do not achieve the same fuel efficiency on a tmpg basis as railroads, they are still an efficient mode of transportation. Today’s trucks are also cleaner than ever. By 2010, clean engine technologies will reduce particulates by 90 percent and nitrogen oxide emissions by 95 percent of the amount produced by trucks manufactured a decade ago. More importantly, trucks are essential for delivering freight where it needs to go.

Intermodal rail is only possible with a strong fleet of trucks to move goods to rail yards and deliver to final destinations. Trucks are the only viable option for most delivery destinations. At best, railroads serve only 20 percent of U.S. communities. Trucks, by comparison, deliver virtually all consumer goods that make our lives comfortable and about 70 percent of overall freight tonnage in the United States. Even if rail was more accessible, trucks are a more effective shipping option for smaller, lower density loads.

The FRA’s report focuses on one metric for comparing trucks and railroads, and offers little relevance to the debate on modal advantages. The trucking industry recognizes the value of railroads as part of the freight network. Trucking companies are among the railroads' best customers, and place freight on railroads whenever the distance of travel and nature of the cargo make an intermodal rail-truck freight movement economically viable. However, these opportunities are extremely limited and make up less than 2 percent of the freight market. Each shipping need must be looked at holistically to determine the best mode of transportation, or combinations of modes, depending on what is best suited to the specific task.