Fuel expenses currently account for a disproportionately large share of customer revenues, which translates into significant pressure on freight rates. As our customers have indicated in the results above, smaller transportation companies and independent owner-operators have little leverage when it comes to negotiating higher rates to offset fuel price increases, and are thus the first to feel the effects of high prices. At the same time, even the largest trucking fleets are adjusting their outlook to account for this sometimes unmanageable operating expense.

The onset of war in Iraq, while unsettling to the international community, has delivered a dose of relief at the fuel pump, as the world anticipates increased stability in that region. Looking to the future, the achievement of a resolution in Iraq, combined with the restoration of more consistent oil output from Venezuela, would mean lower diesel fuel prices and improved profitability levels for our customers. But rather than rely on that expectation, our customers are taking other steps to ensure the long-term success of their business.

Since our customers have little control over fuel costs, they're forced to manage fuel consumption and do everything possible to eliminate fuel waste. In an uncertain time, the most successful trucking companies are those that can efficiently manage those operating costs that remain within their control.

To help our customers adapt to this new reality, International recently has taken some actions focused on helping our customers maximize fuel economy, including streamlining the aerodynamics of our International® 8000 and 9000i Series Class 8 trucks.

Our newest designs lower the drag caused by wind resistance and reduce the amount of fuel required to move the truck.

	The new International® 8600 delivers outstanding drag reduction that reduces fuel consumption. This is achieved with features like: a streamlined design that includes a curved and sloped wraparound windshield as well as a patented, pod-style roof fairing a wide-radius, curved front bumper curved wing vent design a patented "A" pillar and window vent design		The International® 9000i Series models are built to deliver fuel efficiency with features like: a patented pod-style roof fairing aerodynamic sun visors unique hood curvatures an industry-leading under-bumper air dam

As a result, we can improve our customers' fuel economy by as much as 14 percent over trucks without the same features. International is well positioned to help our customers succeed, especially in a time of higher fuel prices.

Likewise, International engineers are hard at work developing the kind of diesel engine technologies that represent the wave of the future in the trucking industry. Because of inherent design features, diesel engines are up to 30 percent more fuel efficient than their gasoline counterparts, because the diesel combustion process extracts more energy from fuel. It's also worth noting that by 2007, diesel engines used in trucks and buses will have removed 99 percent of the particulate matter emitted when regulation began in 1988. In fact, International's Green Diesel Technology school bus has already been certified for meeting EPA's 2007 PM and hydrocarbon standards.