An Economic Incentive

An Economic Incentive

Copyright 2003, Traffic World, Inc.

The current "truce" among the major railroads and the trucking industry over truck size-and-weight limits is bad for shippers but good for those two industries. They have a keen economic incentive for getting along, a major trucking executive said last week.

Thomas L. Finkbiner, president and CEO of Quality Distribution, Tampa, Fla., North America''s largest bulk carrier, calls the truck-rail agreement to back off on each other''s lobbying efforts a result of economic necessity and one that is not necessarily good for shippers. "Shippers like it when there''s a lot of competition out there," Finkbiner said. "This truce is borne of the fact that rail and truck people have more in common" as allies than enemies.

To shippers, the rail-truck relationship used to look like "an intramural fight or a gang war," Finkbiner said. "But the issues have lessened. People have discovered they have more in common. It''s a natural progression."

The truce, announced two months ago by the American Trucking Associations and Association of American Railroads, came as truckers realized they were not going to convince Congress any time soon to relax the current freeze on longer-combination vehicles. Finkbiner says that''s an issue that may be dead for a long while.

"We''re at the practical limits to size and weights," he said. "I think 53-foot trailers and three 28-foot pups are about the limit where we max out on the roads."

Finkbiner, who has held senior executive posts in both industries, says truckers and railroads making nice is because of a new breed of leadership in both industries'' leading companies and their trade groups.

"There are new people in charge of the NIT League, ATA, AAR and there''s been some CEO changes at the railroads," he said. "As people change, things change. As you get new NIT League and ATA presidents, you get people who are not wedded to any past philosophy. They''re saying, ''How do we get one step better?'' That''s the kind of realistic thinking that''s taking over in the industry."

Besides, Finkbiner says, the railroads have realized their best and largest customers are truckers - UPS, Schneider National and J.B. Hunt, among others.