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4/27/2009 3:15:00 AM Write a Letter to the Editor Write a letter to the Editor

Trucking Faces Core Changes, Hebe Says

By Jonathan S. Reiskin, Associate News Editor

This story appears in the April 27 print edition of Transport Topics.

OXON HILL, Md. — The entire North American trucking industry is in the midst of a fundamental reshaping, which will lead to flat tonnage levels for fleets and fewer truck manufacturers producing much more expensive vehicles and mostly in Mexico, said a senior executive of Navistar Inc.

James Hebe, the truck maker’s senior vice president for North American sales operations, said at the American Truck Dealers’ annual meeting here on April 20 that, although the current recession started in late 2007, trucking’s downturn began a year earlier.

The long slump has created “a time that shapes our industry,” he said. “We are a long way from being out of the woods, and we will continue to feel the effects of the recession long after it ends.”

Hebe, former chief executive officer of what is now Daimler Trucks North America, spoke out against a variety of federal policies and said trucking eventually would bid farewell to a number of institutions long associated with the industry, including “long and tall” tractor design, owner-operators and independent maintenance shops.

He said he anticipates something of a truck sales surge during the second half of this year, but only so buyers can avoid more expensive 2010 trucks equipped with new emissions controls.

“It will be the consummate suckers’ rally,” he said, adding that new truck sales will fall back after the brief flurry of activity.

After reflecting on his 38-year career, Hebe launched into a detailed dissection of the truck manufacturing industry, connecting trends in data and concluding that truck-making will change profoundly in response to new freight patterns, changed labor relations and permanently higher fuel prices

Starting with his trucking company customers, he emphasized the shift from longhaul irregular routes to regional hauling and dedicated contract carriage for distribution. The availability of truck-rail intermodal for many linehaul movements of more than 1,000 miles and the shock of $4.75-a-gallon fuel last year mean “fuel prices have changed the world.”

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