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JOC Guide to Trucking, August 2018

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August 2018 | The Journal of Commerce 21 www.joc.com 2018 JOC Guide to Trucking of various types, including but not limited to parcel delivery, drayage and less-than-truckload pickup and delivery, and potentially short-dis- tance linehaul work. Over time, the "electrification" of transportation, freight and passenger, could have a significant effect on the transportation and energy industries, depending on how far electrification eventually goes. According to The Jour- nal of Commerce parent IHS Markit, trucking accounts for 35 percent of petroleum fuel demand worldwide. EVs could change trucking's cost structure. IHS Markit is preparing a multidiscipline study on "Reinvent- ing the Truck" that will examine trends driving the truck market toward electrification, alternative fuels, and autonomous vehicles and how they will affect energy markets and petroleum fuel consumption in coming decades. It may be years before trucking abandons the pump for the plug, but change is coming. Swiss bank UBS forecasts electric vehicles will account for 14 percent of global car sales by 2025, up from just 1 percent last year. China, where more than 600,000 electric vehicles were sold in 2017, wants 20 percent of all cars sold in the country to be EVs by 2025. Improved battery technology is pushing down overall operating costs for electric vehicles. DTNA expects to launch full production of its electric trucks by 2021. The electrification of trucking, however, won't be as easy as throwing a switch. First, the next generation of electric trucks must prove equal to the task of hauling freight. Second, the infrastructure needed to operate the trucks — especially a network of charging stations — must be built out. "We think electrification is getting really close to starting to make sense financially," Scott Phillippi, UPS senior director of maintenance and engineering, international operations, said in July. Building the charging net- work is critical. "When you want to put 100 vehicles in a facility, you have to think about how to deploy a vehicle that uses that much energy." There's little question such a network eventually will be built, however long that may take. Shippers want EVs that will reduce transportation costs and help meet emissions reduction targets set by corporate sustainability programs. Carriers want relief from volatile diesel fuel costs and the rising cost of heavy-duty trucks as diesel emis- sions regulations get stricter. Emissions controls costly The increasing cost of diesel emissions controls is one factor driv- ing interest in alternative fuels, both electricity and compressed natural gas. "With CNG, we're trading diesel after-treatment systems for spark plugs. That's been a good trade for us," Phillippi said. He sees a mix of fuels in trucking's future. "Electric As an entrepreneur, Arthur Imperatore has worked on highways and waterways. The 92-year-old businessman founded trucking company A-P-A Transport in 1947 and passenger ferry operator NY Waterway in 1981. The famed regional less-than-truckload carrier closed down in 2003, but the ferry business still connects New Jersey and New York City. If you own a business and have money to invest, invest it in people, Imperatore told other current and former trucking executives at the LTL Legends Evening in Pittsburgh June 12. At A-P-A, "we learned how to hire for character," Imperatore said. "I hired every truck driver myself. We flew them in from as far away as Maine and Virginia. I wanted to know who I was hiring." Imperatore had the reputation of a tough competitor and tough employer. He founded A-P-A with three brothers in 1947, buying two trucks for $2,100. "We were green as grass," he said. "We had no experience, I didn't go to school. We'd all been in the [US] Army." His job at the time — Fuller Brush salesman. "I'd ply my wares during the day, and drive at night." A-P-A, later based in North Bergen, New Jersey, started out in New York City's garment district. "We didn't have much territory at first; we didn't even have ICC (Interstate Commerce Commission) rights," Imperatore said. "We'd move anything for a buck but dried into freight." On occasion, he'd see one of his brothers taking a break rather than driving. "I'd tell them take my name off the truck if you're not going to work. Being a wise guy, I wound up running the company." He set high productivity and performance standards, famously measuring all the tasks involved in picking up and delivering freight by time down to the minute. If an employee showed merit, though, he or she moved up and did well, Imperatore said. "What's important is that we gave a great life to a lot of good people," he said. ― William B. Cassidy Imperatore employed hands-on hiring Murat Uzman Photography "We think electrification is getting really close to starting to make sense financially."

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