2.1 Industry Profile

2.1.1 Industry Dynamics

The trucking industry is a very large and complex sector of the U.S. economy. The largest sector of the freight industry in both tonnage and freight revenue, the trucking industry utilizes a wide variety of vehicle configurations to move nearly ten billion tons of goods every year, representing almost 70 percent of all domestic shipments.

The recent upswing in both the domestic and international economies is likely to increase the size and complexity of the industry. Past market forces that impacted the trucking industry included just-in-time deliveries and deregulation. Developing influences include increasing competition, driver shortages, security concerns, an expanding regulatory environment, and growing technology investments. In total, these effects are changing the way the trucking industry moves goods.

The hazardous materials transportation sector of the trucking industry is experiencing similar changes and impacts. Hazardous materials themselves are constantly changing and evolving along with the federal programs that govern them. It is clear that hazmat shipments are growing in synchronization with overall freight growth, although hazmat shipment data are difficult to access and analyze. One minor exception to this trend is that was a slight increase in small package hazmat shipments in 2002 (1 to 1.5 percent) while there was a similar decrease in the number of overall small package freight shipments.²

2.1.2 Sector and Commodity Growth

RSPA estimates that daily hazmat shipments exceed 800,000, resulting in 300 million annual shipments.³ Again, it is difficult to collect specific data on hazmat since it is a secondary category, rather than a specific commodity description, and most data sources do not provide data at the commodity level. It is known that services and manufactured commodities associated with hazmat shipments are growing. For instance, over the next five years it is estimated that the following industry sectors will experience healthy growth (Table 4).

It is intuitive that requisite growth will occur in the hazmat components used in these sectors.

Overall, government forecasts put hazmat tonnage growth at approximately two percent per year.⁴ In a growth economy, this would quickly result in a dramatic increase in hazmat capacity demand within the trucking industry.

2.2 Hazmat Industry Technology Analysis

2.2.1 Objective

The FOT was focused on a limited number of participants; approximately nine trucking companies and 100 vehicles. In an effort to determine how representative the FOT findings are to the hazmat industry as well as increase the reliability and validity of the FOT, the Battelle Team gathered comprehensive data on the hazmat trucking industry.

2.2.2 Methodology

The data collection approach was developed with significant input from the Battelle Team, FMCSA, and the Independent Evaluation Team. Data for a small group of representative hazmat carriers were gathered to test the effectiveness of the proposed approach. Based on the results of that effort, revisions were made and the larger effort was undertaken. Ultimately, data on 164 hazmat carriers were obtained. These carriers were culled from several different carrier information databases such as the National Fleet Directory, intrastate databases, and the National Tank Truck Carriers membership.

2.2.3 General Findings

The data gathered focused on several different types of information such as:

• Respondent demographics, e.g., fleet size, range of operation, carrier type
• Routing and other operational issues
• Hazmat commodities hauled
• Security concerns and issues
• Current and future technology use

The following are highlights from each of these areas.

Respondent Demographics

The analysis tool collected data on the number of power units operated by their company. These were categorized using FMCSA-designated categories (Table 5).

*FMCSA database August '03

Thirty percent of hazmat carriers operate more than 20 power units, according to the Motor Carrier Management Information System. This differs from the industry as a whole in which only four percent fall into this category, possibly indicating that there is a preponderance of larger carriers in the HM sector. This was also found to be the case in the FOT Industry Analysis, in which the majority of the respondents (68.5%), reported operating more than 20 power units.

Respondent Range of Operation and Hazmat Material Transported

The range of operation and type of hazmat hauled for each carrier were determined. The average length of haul was stratified using categories from the 1997 Vehicle Inventory and Use Survey (VIUS) produced by the U.S. Census Bureau [1]. The VIUS is a sample survey of private and commercial trucks registered (or licensed) in the United States as of July 1 of the survey year. It is used to measure the physical and operational characteristics of the U.S. truck population. Table 6 explores range of operation for the FOT Industry Analysis, VIUS Hazmat Carriers, and the general CVO Industry as derived from an August 2003 FMCSA database query.

For comparison purposes the percentages are compared with other data on the hazmat and general CVO industries. As can be seen it was easier to obtain data for the longer-range carriers.

Hazmat transporters move a wide variety of hazmat commodities. Figures 1 and 2 present a distribution for which the companies haul particular hazardous materials (based on classifications). In analyzing numerous breakdowns of HM shipped, flammable liquid represents the largest percentage of HM cargo by volume. This finding is congruent with data from the Commodity Flow Survey which reports that 80.8 percent of total hazardous material tonnage is Class 3 flammable liquids.⁶

*These numbers derived from an August 2003 FMCSA database query.

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Figure 1. Hazmat Transported/CFS 1997

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Figure 2. Hazardous Material Transported by Company (FOT Participants)

More than 80 percent of total hazardous material tonnage by all modes is Class 3, flammable liquids. Specifically, 82.2 percent of Class 3 hazmat is transported by trucks.

Security Concerns and Issues

The number and variety of security concerns and issues have multiplied for trucking companies since the tragic events of September 11, 2001. With new security legislation, trucking companies are faced with myriad issues that must be accounted for to ensure safe, compliant transport of commodities. The five leading security concerns and/or issues relating to hazardous materials transport were identified for many of the companies.

The top three issues as identified by the FOT Industry Analysis were as follows:

1. En route security
2. Cargo theft
3. Sabotage and tampering

Prior to 9/11, cargo theft was the number one issue based on previous surveys and continues to be a critical concern. Vehicle theft was also identified as one of the top security concerns; when "vehicle security" is included with "vehicle theft," the category moves into the top three issues and concerns. Not listed as a separate issue but often cited as a solution to vehicle theft/security is "secured parking facilities." Cargo security, traffic congestion, and awareness of security concerns were among others identified. It is quite evident that the trucking industry, and hazmat transporters in particular, have a large number of security concerns.

Current and Future Technology Use

Another objective of the effort was to determine which technologies are in use today, and which technologies carriers are likely to purchase in the future. For the purposes of this analysis, "future" was defined as the next two to three years. Vendors were identified, where possible, for each technology used. Figure 3 captures the current and future use of these technologies. The "current" use of each technology describes number of companies that indicated they presently use a specific technology. "Future" use is a cumulative percentage of those currently using a technology (assuming they will continue to do so in the near future defined as two to three year time frame) and those companies that indicated they presently do not utilize a technology but plan to invest in it within two to three years.

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Figure 3. Current and Future Technology Use

2.3 Technology Compendium

2.3.1 Objective

The Technology Compendium, an important component of the FOT, is a compilation of trucking industry technologies currently in the marketplace. Many of these technologies have the ability to fulfill a functional requirement or act as a surrogate for technologies tested in the FOT. As a stand-alone section of the final FOT report, the technology compendium will serve as an important resource for the trucking industry.

2.3.2 Methodology

Outreach efforts for the Technology Compendium began with articles and news alerts directing vendors and interested parties to the safehazmat.com website. The "safehazmat.com" website was built to provide the general public with information on the FOT and its technologies, team members, and as a portal for interested technology vendors to submit general information on their product for inclusion in the technology compendium. Internet searches were performed for additional technologies. A number of the vendor companies were contacted via phone, and approximately 35 to 40 in-depth interviews were performed to garner more detailed product information. For those companies that did not respond to telephone messages, initial e-mails and faxes, e-mails were sent out with their segment of the compendium spreadsheet to confirm information accuracy.

In addition, there was strong interest from technology vendors that had seen presentations on the FOT at various events and conferences. Lastly, interviews were conducted at trucking industry events such as the 2003 American Trucking Associations Management Conference and Exhibition.

2.3.3 Results

The Technology Compendium, currently formatted in a Microsoft Excel spreadsheet, originally had nearly 200 registered technologies. Based on interviews and system analyses, the Technology Compendium was culled down to contact information, product functionality and description, current market penetration, and pricing information for 94 different companies. Many of the original 200 technologies were identified as products that were not actually developed and were therefore not included. These 94 different companies represent 147 technologies. The research team collected pricing information for approximately 35 percent of the represented systems. A portion of the companies did not feel comfortable or were not able to share pricing for their products. Others did not respond to any of the outreach efforts.

2.3.4 Technologies

The Technology Compendium can be stratified and viewed in a number of ways. To increase direct relevance to the FOT, the research team developed a first-level category based on function. Consequently, the Technology Compendium can be analyzed as follows:

• Biometrics - Biometric systems represent 12 percent of compendium technologies. These are primarily biometric fingerprint readers that have the ability to integrate with a variety of security access and ID applications.
• Software - Software systems represent 18 percent of compendium technologies. The products provide integration capabilities and a variety of value added services such as mapping and operational efficiency metrics.
• Asset Tracking - The compendium includes 14 percent asset tracking systems. Many of these systems can be used for tethered and un-tethered trailer tracking.
• Cargo Seals - Cargo seals comprise four percent of the compendium. These seals range from sophisticated wireless GPS to adhesive seals. They also represent both disposable and reusable "e-seal".
• Locks - Eight percent of the compendium is composed of locks. These locks ranged from a king-pin lock to more sophisticated internal trailer door locks which require a wireless command to open.
• Anti-hijacking/Security - The compendium includes one system that provides a covert suite of security devices for managing trucks, including biometrics, pressure sensors, and vehicle disablement. Together they make up one percent of the compendium.
• Vehicle Tracking - The compendium separated asset tracking from vehicle tracking for functional purposes. The Technology Compendium includes 41 percent vehicle tracking systems. These systems include satellite, terrestrial, or hybrid systems. Many of them are based on, or incorporated, GPS.
• Employee Emergency Monitor - The compendium includes one product that allows a worker to send a distress signal if they are hurt or incapacitated.
• Asset Securement - The compendium includes one system that provides an automated explosion suppressant foam used primarily in tanker trucks.

See Figure 4 for percentages of compendium technologies.

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Figure 4. Compendium Technologies

The technology compendium proved to be an important part of the FOT. For those technology vendors who wished to be a part of the FOT, the technology compendium provided an avenue for them to participate in an alternate manner. It also provided valuable information on functionality, pricing, and market penetration for security technologies. The level of data found in the technology compendium has yielded extremely useful findings for the FOT. Additional findings on the technology compendium can be found in Appendix C.