Wednesday, February 13, 2013

Big Money Prize for Safest Road Haulage Fleets

Volvo Annual Awards Announced as Company Set to Become World's Largest Truck Producer
Shipping News Feature

US –CANADA – Volvo Trucks is searching for the safest road haulage fleets in North America and grant them with due recognition by way of the annual Volvo Trucks Safety Awards. For the fifth consecutive year, two fleets with the safest driving records and top safety programs will receive $25,000 to be used toward their safety-related activities. The automotive manufacturer will again join with Michelin in sponsoring the Awards, which highlight the importance of highway safety for the trucking industry and the motoring public. Göran Nyberg, President, Volvo Trucks North American Sales & Marketing said:

"Improving highway safety remains a top priority for Volvo Trucks and the trucking industry. We're proud to again have an opportunity, along with Michelin, to celebrate the industry's best and highlight the areas that help make them successful. Safe trucking operations do not occur by chance. Fleets must be in tune with all aspects of their operations, from their safety cultures and programs to equipment selection."

The Volvo Trucks Safety Award is open in two categories to all U.S. and Canadian fleets operating at least five Class 8 units. Fleets must have at least one Volvo tractor in operation to be eligible for the award. Entrants will be ranked by their accident frequency rates. Participating fleets will also be judged on their accident prevention activities. The two grand prizes will be awarded to the fleets with the best records in two divisions based on annual vehicle miles travelled: less than 20 million miles and more than 20 million miles. Nominations for the award can be made HERE.

The deadline for entry is July 31, 2013. The winners of the award will be announced during the American Trucking Associations' Management Conference & Exhibition in October 2013.

Volvo is currently the third largest big truck producer in the world but that looks set to change after the recent announcement that AB Volvo has signed an agreement with the Chinese vehicle manufacturer Dongfeng Motor Group Company Limited (DFG) to acquire 45% of a new subsidiary of DFG, Dongfeng Commercial Vehicles (DFCV), which will include the major part of DFG’s medium- and heavy-duty commercial vehicles business. At completion of the transaction, the Volvo Group will become the world’s largest manufacturer of heavy-duty trucks. Volvo’s President and CEO Olof Persson commented:

“This is a very exciting venture that will combine the best of two worlds, strengthening the positions of the Volvo Group and Dongfeng and offering excellent opportunities to both parties. Combining Dongfeng’s strong domestic position and know-how with the Volvo Group’s technological expertise and global presence will offer DFCV excellent potential for growth and profitability in and outside China.”

Completion of the transaction is subject to certain conditions, including the approval of relevant anti-trust agencies and Chinese authorities. The purchase consideration amounts to RMB 5.6 billion. The ambition is to complete the transaction as soon as possible and completion is expected to take place within approximately 12 months from today. Payment of the purchase price will increase Volvo’s net debt by approximately SEK 6 billion.

The transaction with DFG follows the recent agreement between DFG and Nissan Motors, in which DFG purchased the medium- and heavy-duty commercial vehicle operation from the joint venture DFL (owned jointly by DFG and Nissan Motors). The major part of the re-purchased commercial vehicle operation will be included in the new company, Dongfeng Commercial Vehicles (DFCV).

Elsewhere in trucking news, results from Transport Capital Partners’ (TCP) Fourth Quarter 2012 Business Expectations Survey found that carriers will continue to be very conservative in replacing their fleet equipment over the next twelve months. Although there is an increase in carriers planning to acquire 11-25% of their tractor fleets (in line with a four-year trade cycle), 60% of the smaller carriers (under $25 million in revenue) and 45% of larger carriers indicated they were going to replace under 10% of their tractor fleets. In essence, smaller carriers will be relying on older equipment which has higher maintenance costs and is more prone to poor CSA road inspections.

The survey also found that almost half of the carriers do not plan to add any capacity in the coming year. TCP explained that with rates remaining stable, costs going up, and an inclination to not add capacity, it’s not surprising that over half of the carriers surveyed report they are not getting an adequate rate of return to invest in newer, more expensive equipment. A slight majority of the larger carriers (51%) say they are getting enough returns to justify reinvesting in equipment, compared with only forty percent of the smaller carriers.