ATA Chairman Ray Kuntz helps the industry tackle Montana-sized challenges.
Ray Kuntz was a student of the trucking industry some 30 years ago – well before he was a participant in it. In the late 1970s as a junior at Carroll College in Helena, Mont., Kuntz read about the debate over trucking regulations and chose the topic for a research paper.
The class project had practically no impact on Kuntz’s career path, but it did hint at his studious approach to running his own trucking company, Helena-based Watkins & Shepard. Kuntz also has made the most from his involvement in the American Trucking Associations, learning new tricks from his peers and from suppliers. Now he brings that same problem-solving mindset to his tenure as ATA chairman.
Like Pat Quinn before him, Kuntz is serving an extended term as ATA chairman. Tragically, Mac McCormick died just a couple of days before last year’s ATA Management Conference & Exhibition. Quinn, co-chairman of Chattanooga, Tenn.-based U.S. Xpress, stayed on as chairman for about seven months longer, and Kuntz took over at the summer board meeting about five months early. Quinn and Kuntz had to deal with the death of a close friend as well as the strain of the unexpected additional time commitment.
Purely from the standpoint of continuity, however, the sudden and tragic change of plans was not too disruptive because continuity has been a stated objective among ATA’s leadership for several years, beginning with Steve Williams’ chairmanship in 2004-2005.
“Steve Williams wanted to keep all our goals long-term and alive,” Kuntz says. That means coordination and confirmation of priorities among past, present and future leaders. A tangible example of this emphasis is the new tradition of the chairman’s retreat. Shortly after he became chairman in October 2004, Williams – who is chairman and chief executive officer of Little Rock, Ark.-based Maverick Transportation – hosted the first retreat, a gathering that included himself, the immediate past chairman, all the vice chairmen and Gov. Bill Graves, ATA’s president and CEO. Quinn continued the tradition, as will Kuntz this fall after MC&E.
ATA certainly never has suffered from a lack of leadership meetings, but Kuntz believes there is something special about the chairman’s retreat because it helps current and future top leadership come into sync. By the time someone goes from a vice chairman position to chairman, he already has been immersed in the key issues and priorities for three to five years, Kuntz notes.
Connecting the dots
A focus on consistency also means that ATA chairmen don’t spend their tenures just pushing pet projects.
“I don’t really have an issue,” Kuntz says. “I’m just carrying forth what Pat did. If I have an issue, it’s the desire to have consensus.”
Kuntz believes that major challenges help forge consensus. If that’s true, he should have no problem achieving his goal. As Kuntz headed into his tenure, he inherited the perennial pressures surrounding safety and the environment, as well as a newer debate over privatization of toll roads.
Within weeks of becoming chairman in mid-June, other longstanding issues took on more urgency. A bridge collapse in Minnesota accelerated the debate over highway infrastructure and how to finance the enormous needs. And then there was another big near-term crisis: The appeals court decision regarding the hours-of-service rules.
From Kuntz’s perspective, these and other challenges – including the longstanding bugaboos of driver recruiting and retention – are intertwined and inseparable. Consider the hours-of-service rules and the very real prospect that the industry could lose the 11th hour of driving and the 34-hour restart.
“If we lose 3 to 5 percent of productivity, we will need 3 to 5 percent more trucks on the road,” Kuntz notes. ATA puts the actual number of additional trucks needed at about 100,000. That would exacerbate highway congestion, the driver shortage, carbon emissions and safety concerns.
For Kuntz, it’s clear that the regulations the court voided have not caused safety to deteriorate, and he points to the 4.7 percent drop in large truck-involved fatalities in 2006. In that light, Kuntz sees the potential productivity loss due to the court’s decision as contrary to the stated goals of the litigants.
“To put more trucks on the road and not expect more fatalities is to ignore reality,” Kuntz says.
Similarly, Kuntz thinks the change in the sleeper berth exception, which was forced by the first round of litigation, was misguided. Ending the flexibility of drivers to manage their time to avoid congestion undoubtedly has contributed to congestion – again, contrary to what safety advocates should want, he says.
“They only see one element of the big picture.”
The battle over the hours-of-service regulations is a huge near-term worry, but it’s one waged tactically. The paths to resolution may be treacherous, but they are fairly well defined.
By contrast, the challenges of drivers, highway infrastructure and the environment seem insurmountable. The growing labor shortage throughout the United States – not just in trucking – has been one of Kuntz’s biggest concerns at ATA. Heading up an ATA-Truckload Carriers Association task force on drivers in 2005, Kuntz spearheaded several initiatives aimed primarily at bringing new drivers into the trucking industry.
For example, ATA agreed to offer matching funds to state associations to promote employment in trucking through advertising in newspapers and on billboards. The driver initiative – including a recently launched website, GetTrucking.com – has received national attention from Newsweek, the Wall Street Journal and the Associated Press. Kuntz and ATA also continue to push for changes in how G.I. Bill funds are distributed to make that program a viable way to finance truck driver training.
Even with all these programs, the demographics are against the trucking industry because the driver force continues to age. National policy simply may have to change in order to meet the needs of tomorrow’s economy, Kuntz says. “We have to come up with an immigration policy that makes sense.”
Highway infrastructure is a similarly complex challenge. “We’ve had a lack of political leadership,” Kuntz says of how all levels of government have dealt with highway funding and construction. Highway costs have risen dramatically, but there has been no tax increase since 1993.
“The states are in trouble. Massachusetts alone has an $18 billion shortfall.”
According to ATA’s research affiliate, the American Transportation Research Institute, an increase in the fuel tax of 20 to 25 cents is needed to meet the infrastructure needs. One of the trucking industry’s big frustrations, however, is that it must simultaneously push elected officials to address the infrastructure crisis and convince those same lawmakers why many proposed solutions are incomplete and unwise.
The latest battle is the privatization of toll roads, which ATA strongly opposes. First of all, ATA views tolls in general as less efficient than fuel taxes. Only about 1 percent of fuel tax receipts are lost to collection costs, according to ATRI’s findings. Meanwhile, 20 to 30 percent of toll receipts can be lost to collection costs.
Technology can drive toll collection costs down, but privatization of existing toll roads introduces various other costs that are wasteful from the highway user’s perspective. “The existing system doesn’t include commissions for industrial bankers, profits and so on,” Kuntz says. But perhaps most important, governments that privatize toll roads through long-term leases are trading sizable future revenues to fund today’s priorities, he says. That’s extremely shortsighted and negligent, Kuntz charges.
“Go back 99 years and try to see where our country would be today.” Suppose public officials then had decided to grant long-term leases and limit construction of competitive highways, Kuntz suggests. The results would have been disastrous for transportation and the economy. “That’s what we’re looking at.”
And there are unintended consequences. Kuntz cites Brazil, where the toll costs on privatized highways are so large that trucks crowd nonprivatized thoroughfares. “We need to look at what’s happening in other countries before we lease away our future.”
Another challenge that defies a simple and quick solution is the worldwide push to reduce greenhouse gases, like carbon dioxide. Even putting aside the scientific evidence, “the political situation shows even more strongly that we have a problem,” Kuntz says. Proposals such as a 50-cent diesel tax increase – not for road construction but for environmental initiatives – and a cap-and-trade system that could be very cumbersome and anti-competitive have gotten the trucking industry’s attention. And politically, it matters little that heavy trucks emit only 5 percent of all greenhouse gases while a single category – coal-fired power plants – emits 29 percent.
As one of his first acts as ATA chairman, Kuntz named a sustainability task force to begin the process of developing ATA’s response to the growing pressure. At a July meeting, the task force settled on several broad recommendations that were to be further developed by ATA’s policy committees. Those recommendations included a nationwide 65-mph speed limit, enforced on all drivers; a federal solution on idling; an increase in fuel taxes dedicated to congestion relief; and truck size and weight relief to increase the amount of goods carried per unit of emissions.
“Each one of these things is a way to reduce carbon responsibly,” Kuntz says.
Kuntz sees a connection between the infrastructure and environmental issues. In both cases, solutions could have been easier if society had dealt with the problems earlier.
“We’ve been a generation that’s been using everything that’s been handed to us,” Kuntz says. He thinks its time the trucking industry took the initiative to tackle these problems on terms it can live with.
A mind for solving problems
Education, involvement guides Ray Kuntz’s innovative thinking
To track Ray Kuntz’s career, you might not guess he studied mathematics and economics in college. But to talk with him is to understand and appreciate his methodical way of approaching challenges. This attitude has served Kuntz well – both at Watkins & Shepard and in his American Trucking Associations involvement.
Kuntz grew up as one of 11 children – 8 boys, 3 girls – on a farm in North Dakota. The family did a little bit of everything to make ends meet – farming grain, raising cattle and hogs and butchering. While there wasn’t much money, 10 of the 11 Kuntz children graduated from college.
For Kuntz, studying mathematics seemed natural. “I’ve been a problem solver my whole life.” He originally had planned to continue his education at graduate school, but during college he worked selling carpet. Right after graduating from Carroll College, Kuntz opened a carpet store in Helena. Immediately, he had his first experience with freight transportation – from the perspective of a shipper. “We were paying higher freight rates than we get today,” Kuntz says. He spent much of his time dealing with transportation, so when the opportunity came in the early 1980s to join Watkins & Shepard, it was a natural progression.
At the time, Watkins & Shepard primarily hauled beer. Kuntz brought on carpet and furniture accounts. Ultimately, he and a partner were able to work their way into acquiring the company from its founders.
Throughout his career, Kuntz has remained open to novel solutions to longstanding problems. During the insurance crisis early this decade, Kuntz was involved in the ATA insurance task force and decided to form a captive. Later, he was asked to head a task force on driver recruiting. From the experience, he learned that many would-be drivers are turned away due to poor credit. So he joined with a driver school and financing company to develop a model program for training and hiring financially distressed potential drivers.
ATA learned from Kuntz’s efforts as well. And it was mostly Kuntz’s drive and ingenuity in pursuing solutions to drivers and insurance that garnered Watkins & Shepard the honor of Commercial Carrier Journal’s Innovator of the Year in 2006.