Some 25 years ago when his father sold off the family business, Bill Graves figured his days in trucking were over. He shifted his sights and went on to pursue a career in politics, which would eventually include two terms as governor of Kansas.
But his past was not so easy to put behind him. During his second term in office, Graves began getting feelers from members of an influential trade group who saw him as the obvious choice for their next leader. Today, his career has come full circle and he's back in trucking—this time as the voice of the motor freight industry in Washington, D.C. For the past four years, Graves has served as the president and CEO of the American Trucking Associations (ATA), the U.S. trucking industry's powerful advocacy group.
Before getting pulled into politics, Graves earned a degree in business administration from Kansas Wesleyan University in his hometown of Salina, Kan., and attended graduate school at the University of Kansas. He met last month with DC VELOCITY Editorial Director Mitch Mac Donald to discuss the trucking industry's strategy for easing the driver shortage, the critical state of the nation's infrastructure, and why he's optimistic that the push to develop a national transportation policy might actually succeed this time around.
Q: Let's begin by talking about your decidedly unusual career path. How did you come to be here today in this capacity?
A: My grandfather and father and some uncles—a lot of the family members—got involved in trucking as far back as the 1930s, so as a very young child I was exposed to the industry. I grew up in a trucking family and really always anticipated that I would work on the operational side of trucking. In fact, I did start as a fairly young child doing odd jobs around the freight dock and at our various terminals in the Midwest. I did things like loading or unloading trailers.
Q: What was the company's name?
A: It was called Graves Truck Line.
Q: So what caused you to change your plans?
A: After I completed my undergraduate degree, I was all set to join the family business, which by that time had become a publicly traded company. But my dad, who could see deregulation on the horizon back in the late '70s, encouraged me to get a little more formal education. So I went off to the University of Kansas to do some graduate work. Then from out of the blue came a very good offer to buy the business. Dad just didn't feel like he could pass that offer up.
All of a sudden I found myself, at the age of 26 or 27, facing an uncertain future—the thing that I had aspired to do all my life was no longer an avenue that was available to me. That was the point at which I transitioned into politics. I worked on the 1980 George Bush presidential campaign. While we weren't all that successful in his presidential aspirations that year, he did become Ronald Reagan's vice-presidential running mate. I, probably for the first time in my life, discovered how opportunities sometimes present themselves in ways you never anticipate. Doors open, you meet people, you network.
The next thing I knew, I was employed in the state capital building in Topeka, where I worked hard for six years in sort of an administrative position within the Kansas Secretary of State's office. I had an opportunity in 1986 to run for Secretary of State. I was elected. I was re-elected in 1990. I had an opportunity in 1994 to run for governor. I was elected. I was re-elected in 1998 and completed my term in January 2003.
The early years were terrific because I loved the trucking business and I learned so much about the industry. The 22 years of public service were terrific because I love politics and taking care of people, serving people. It is just a great, wonderful coincidence for me that the American Trucking Associations was looking for a new leader. They were kind enough to contact me late in my tenure as governor and inquire as to my interest, which was of course very high. This is an association that my dad had been involved in when he was in trucking. All the stars aligned, and Jan. 15, 2003, was my first day at the American Trucking Associations. Now almost four years later, I am enjoying this immensely. I am energized every day about trying to make a difference for this industry.
Q: What are some of the challenges facing the industry as we begin 2007?
A: There are several important issues. We are clearly concerned already about the next congressional re-authorization of the surface transportation bill. Everyone in our industry understands the importance of moving freight in a timely manner, moving it safely, moving it as inexpensively as possible. One of the huge impediments to doing that is congestion. The U.S. population passed the 300 million mark a couple of months ago, and we're exponentially growing faster than we ever have before. Adding to that, you've got a tremendous growth in import/export activity, especially with countries like China,Mexico and Canada. There is going to be a large amount of freight moving on the nation's highways and on the nation's railways. We as a country have to recognize that and do a better job of planning and of executing a plan that provides an opportunity for that freight to get moved. So I would say that certainly high on our list is a re-authorization in the next two to three years that focuses on freight and appreciates how important the movement of freight is.
Number two would be the chronic shortage of truck drivers. When you've got all these mouths to feed and freight to be moved, you've got to have drivers behind the wheel and the trucks to get it done. That has been a longstanding challenge for the industry. We have initiated some things here at ATA trying to make people more aware of careers. And trucking fleets, particularly in the truckload segment of the industry, have begun making adjustments in how they dispatch drivers.
Q: You mean like reducing the long-haul runs that keep folks away from their families for extended periods?
A: Exactly. Many companies are running more of a pony express kind of system, where people go out, make a turn and come back and have a chance to be home at night with their families a little more often. I have seen some pressure on wages as of late that is starting to make a bit of a difference in how people view this industry. There are all sorts of initiatives taking place to help ease the driver shortage. I don't expect there is or will be one single solution, but solving the driver problem would be very high on ATA's list.
Q: Over 10 years ago, I sat in an office just down the hall from here and interviewed Lana Batts, who was the head of the Interstate Truckload Carriers Conference, then part of the ATA. I recall that when I asked her to name the top 10 issues facing the truckload sector, she said, "Well, nine of them would be the driver shortage and if pressed for a 10th, I would have to say the driver shortage."
A: It still is. It has been at the front of many folks' minds—the operators, obviously, and the drivers themselves. It's not something that has gotten better or is going to go away any time soon.
Q: Do we just have to accept that finding drivers will be an ongoing struggle?
A: As long as the population keeps growing and freight volumes keep rising, I think it will be an ongoing struggle. It's kind of like climbing a hill that never seems to end—you think you're almost there, but then you look up and discover that you still have a lot more ground to cover before you reach the top. It's a bit of a moving target. Freight volumes keep advancing, and you've got to rush to catch up again.
Q: What are some of the things that your member companies are doing to deal with the problem?
A: I think they are investing in some of the new advancements in truck design, both in terms of the comfort and the features that are available to the driver. I mean, when it comes right down to it, the truck cab is their office. That's where they work. The more you can do to make it a comfortable, pleasant and attractive environment, the more people are going to be interested in that job as a career.
I think the advances in safety technologies will also help, to an extent. You know, no one wants to report to work every day to a job that puts their health—or even their life—in jeopardy. It is much easier for a driver's spouse to kiss him or her good-bye in the morning if that spouse is pretty confident that the driver will return home safely that evening.
As I said, it is a combination of all these things and several others. The kind of equipment they drive, the safety advancements we make. The way we route our freight, the way we provide some sort of quality of life incentives to people to join this industry. Still, though, I can't envision that there will ever be a time when I do an interview like this and the driver issue doesn't come up for discussion.
Q: I've been hearing reports that veteran drivers are retiring faster than young drivers can be recruited to replace them.Won't that exacerbate the problem?
A: No doubt about it, but keep in mind that in October 2006, the U.S. population hit an estimated 300 million people. I believe it is somewhere around 2040 that we are supposed to be hitting the 400 million mark, so right there you have another 100 million people in this country, all of whom are looking for work. Our job is to make sure that people are aware that we are just as viable, desirable an industry to work in as construction, manufacturing, or any other of the myriad job opportunities out there. Some people like to be out and experience the open road. Some people like the opportunity to move around and see the country. For some people, trucking is a great fit.
Q: Let's go back to the topic of congressional highway—or as it's now called, surface transportation—reauthorization legislation. It seems that every two to four years, freight industry interests find themselves marching back into the battle to secure funding from a Congress that often seems less interested in critical road improvements than in bike paths and snowmobile trails. Is there anything groups like the ATA can do to get Congress to pay more attention to the freight aspect?
A: Yes. In fact, I think the next re-authorization will be the first time that there has been a focused effort to target the movement of freight as a key element of the reauthorization. It will take a broad coalition of interests from all parts of the business community, and it starts with groups like ours as well as the U.S. Chamber of Commerce and the National Association of Manufacturers. It also needs to include private concerns like all the big box retailers. And it needs to include, of course, the trucking companies themselves.
I believe everyone is going to come to the table and encourage Congress, which I think will be amenable to this type of approach. It is going to encourage them to make sure that the bill speaks to the needs of freight—whether it's dedicating some funds to build truck-only lanes or a greater focus on new construction in areas that are already identified as significant bottlenecks for cars or trucks. I just see a moment where everyone is coming to understand that if we don't make this investment now—and of course, even if we make the decision now, the benefits won't pay out for perhaps another 15 years—then we potentially begin to put the U.S. at a competitive disadvantage vis-à-vis the rest of the world.
As your publication so often and so accurately points out, we have been blessed by this fabulous interstate highway system for the past 50 years. Perhaps we have taken it for granted and allowed it to fall into some disrepair and have failed to keep up with the growth of the nation. If we aren't real careful, we will find ourselves at a competitive disadvantage for failing to keep up. I think that we would rather have had this renewed focus on freight transportation issues occur a little sooner, but we can't rewrite history. What we can write is our future. If we do a good job with the next re-authorization, it could have a tremendous positive impact on the country going forward.
Q: What's the level of urgency here?
A: On a scale of one to 10, with 10 being the most urgent, I would say we are probably at a seven, rapidly approaching eight. It has economic consequences for the business community. It has huge quality of life implications for every American who travels the nation's roads. It has implications for every American who commutes to work.
I think that one of the reasons it will get greater attention on Capitol Hill and in state legislatures is that there's political peril in failing to act. In many parts of the country, congestion is something that can no longer be ignored. There's nothing more frustrating to a commuter than getting stuck in traffic for hours. There's nothing more exasperating to a plant manager than having to shut down a production line because a critical delivery has been delayed by traffic. We used to joke that freight doesn't vote. I think freight is about to show up at the polls.
Q: Let's talk a bit about the push for a national freight transportation policy. Is this something a single organization can bring about or will it require a collaborative effort?
A: It will be a collaborative effort. I have already had opportunities to meet with the leadership of ASHTO, the Association of State Highway Transportation Officials. They are taking a significant leadership role in plans for future infrastructure, as is the American Automobile Association. They obviously have a tremendous interest in this. You also have the support of fine folks like John Ficker, the head of the National Industrial Transportation League, as well as Tom Donohue, who preceded me here at ATA and is now leading the U.S. Chamber of Commerce. These are all people and groups who have a very keen awareness of what we need to get done, and I think are all coming together. We all sense a great opportunity to shape a very positive, bright future for the country's infrastructure, something that has never been very sexy. It has never been something that has been easy to sell, but again, the stars seem to have aligned where the opportunity now presents itself and shame on us if we don't seize that opportunity.
Q: As business professionals, DC VELOCITY's readers—55,000 high-ranking logistics executives who work for some of the planet's largest corporations—clearly have a vested interest in the development of a national freight transportation policy. But what about private citizens? Why should they care?
A: They should care for a whole lot of reasons. It could be as simple as they should care because they are commuting to work every morning and they want to get there in a timely manner so they can be productive. They should care because they and their loved ones travel on the nation's highways and roads. They should care because they have enjoyed the great quality of life that America provides all of its citizens—a quality of life made possible at least in part by our ability to whisk goods around the country by truck, rail, barge or plane. They should care because the future economic vitality of this country may hinge on it. As you know, we are probably not going to be able to compete with foreign countries on labor. But distribution capabilities are another story. One of our key competitive advantages is distribution systems. In my opinion, we would be making a very serious mistake not to invest heavily in distribution capabilities for this country.
Q: I've often commented that the logistics business is among the most important, yet most transparent parts of the U.S. economy. The general public doesn't pay much attention to it until something goes wrong. It sounds like you folks aim to change that.
A: We're not going to reshape the public's view single handedly, but we will continue to try. For instance, a couple of years ago, we launched our "Good Stuff. Trucks Bring It" campaign to help make people aware that there is stuff, good stuff, in those trucks. Those trucks carry the clothes they're going to buy tomorrow at a retail outlet. They bring the pharmaceuticals they're going to pick up at the drugstore. They deliver the food they're going to shop for in the next couple of days. Trucks deliver all the prod- ucts. We are either the first mile or the last mile or some portion in between. We are part of delivering the American quality of life, and we have to keep the trucks moving in order to sustain that quality of life.
Q: You've mentioned the driver shortage. You've mentioned congestion. You've talked about the importance of a cooperative effort t establish a national freight transportation policy What else is on your mind as the head of the ATA?
A: Another item I would point to is the fuel issue. That manifests itself in several ways. The volatility of fuel prices is a challenge for the industry. It challenges you because of the way you price freight, yet it creates almost a mini-panic type of situation when people don't know from day to day the availability of fuel in certain areas of the country. The Katrina situation drove home the vulnerability of our nation's refining and distribution capabilities.
There is also a tremendous amount of discussion right now about alternative fuels. We think those conversations are appropriate and are important—especially as they contribute perhaps to a lessening of our dependence upon foreign oil—but we also have to have it happen in such a way that we know that the fuel conforms to quality standards and specifications and will deliver the performance that we expect with the new clean burning diesel engines.We have to make sure that we don't create operational difficulties. There are so many unknowns.
Q: With the new clean diesel rules taking effect, should consumers brace themselves for higher costs?
A: Well, it's going to be expensive and yes, ultimately, consumers will pay more for the products they buy in the stores. No matter how a trucking company proceeds, it will find cost increases unavoidable. If you're running a trucking company and you go out and buy 10 new clean burning diesel engine 2007 model trucks and you pay $7,000 to $10,000 more per unit, you immediately have to figure out how to recoup your cash investment. If, on the other hand, you decide to continue to run your old pre-2007 trucks, you'll probably have some pricing advantages in the near term, but in a short period of time, your older equipment will start to cost you more to maintain.
At the same time, truckers are taking a hit when it comes to fuel efficiency. The new trucks are probably going to be a little less fuel efficient than their predecessors. In addition, the ultra low sulfur diesel now in use has a lower energy content, so you get less bang for the buck. So it's costing more and more to run a fleet all the time. Again, that ultimately gets passed through to consumers. Rates go up.
Q: In the past, relations between the rail and trucking industries could generally be characterized as a fierce rivalry that occasionally erupted into public relations warfare— the debate over the use of LCVs (longer combination vehicles) comes to mind. But in an odd twist of fate, some motor carriers have now become the rail industry's largest intermodal customers. So I have to ask, does the trucking industry see rails, from a market competition standpoint, as friend or foe?
A: I would simply say rails are a critical partner in freight movement in America. That has been recognized by those motor carriers you mentioned that are the railroads' biggest customers. I think we have a good relationship, certainly, with the Association of American Railroads. I think we have a good relationship with many of the industry leaders in the railroad industry. They are fierce competitors, as are motor carriers. We compete within our industry as fiercely as we compete with others who move freight on the railroads and I assume the railroads compete pretty fiercely amongst themselves as well.
I think, however, that we have reached the point where again some reasonable people, some forward-thinking people have recognized that we should all put aside what probably at the end of the day are some minor differences. I think we have discovered that we probably can collaborate together 80 or 85 percent of the time. If we do, we stand to create a brighter future for all of us in terms of the way we impact the U.S. economy and the businesses we serve. But are we going to continue to fight pretty fiercely over the 15 or 20 percent of the issues where we disagree? Of course we will. That is just the nature of competition in business. I think you are going to see more and more reliance upon intermodal movement, especially when you get the kind of expansion of imports that we are going to see. Container movement is going to be growing exponentially faster. We have data that shows it is the fastest-growing segment of freight movement in the country, so we see the partnerships with the railroads growing stronger and stronger every day.
Q: What about the LCVs that triggered so much debate? It wasn't so long ago that trucking interests were lobbying hard for permission to expand use of the bigger, heavier trucks, which the rails denounced as a threat to public safety. But the ATA now seems to be backing off from its crusade. With the next re-authorization, will the ATA be advocating the expanded use of LCVs or not?
A: We have a policy in favor of harmonizing LCV operations in the western United States and we would at least like to have what I call an adult dialogue about whether there are opportunities for the use of LCVs in other parts of the United States—maybe along key freight corridors. ATA is not seeking a broad rollback of size or weight restrictions on trucks, but given the rising freight volumes and congestion problems that we face in America as well as the need to keep the U.S. economy competitive with the rest of the world, we think it would simply make sense for us to at least allow the productivity of trucks, trains, barges and any other mode of transportation to be included in the discussion of where we're headed. I think that as long as we can frame it in that way, we can contribute to the national debate. As you know, we are also strongly advocating a number of safety initiatives that we hope will also demonstrate to people how sincere we are in wanting to be more productive, but in no way do we want those productivity gains to come at the expense of safety.
Q: Any closing thoughts?
A: I'd like to share some observations on the state of the industry today. This is not my father or grandfather's trucking industry anymore. It used to be that it was basically the guy who could outwork the other guy who succeeded in this business. It was a more physical kind of business. I have been tremendously impressed at how technologically advanced trucking has become.
To a certain extent, much of the efficiency and effectiveness we have with product movement is driven by information. Information about product from the time it is identified to be loaded, during the entire time it is in transit to the time it gets delivered. Information about the drivers, the hours they have driven, information about the truck, the speeds, the maintenance records. Everything in this industry seems to be about information. It is all about understanding your business.
There is a part of me that wishes more people understood just how complex it has all become. This isn't just about grease and tires and the old-fashioned kind of trucking. This is a very sophisticated business that has adapted itself to the needs and demands of the U.S. economy, and we are going to continue to do that in some really remarkable ways over the next 25 years.
