Trucking industry in bad shape

[jsanchez]

With trucking companies going out of business left and right(Consolidated, Preston, etc)the last two years, what is happening to this industry? over 7000 trucking companies of 5 or more trucks have shut down. If you count independents its in the tens of thousands. How much of this is due to the railroads getting their acts together? This is turning into a record year for the rail industry, intermodal and car load freight. Its interesting to see the tables turn. Even Walmart is moving traffic to rail, which was one of the most truck depentent businesses in the U.S. Any truckers out their been affected? Interested to here their side of it.

[wabash1]

deregulation and union busting is what has coused this. concolidated went down to bust a union the subsidaries will pick up the frieght and move it i wouldnt be suprised to see this happen with abf roadway and yellow before long. wal-mart jb hunt ups have been shipping by rail for years. nothing new there.

[Anonymous]

It does the heart some good to see the trucking 'industry' in some straights. These people, (owners and sub-contractors) have been living on the government 'dole' far too long. We are heavily subsidizing the trucking industry through our taxes. Paying for road repair because of the damage they do. Would you like to drive behind, or try to pass a triple-trailer on the interstate like they do in Oregon or where-ever? Not paying their share of the transportation business has allowed them to gain huge market share while clogging and wrecking our highways, causing major accidents, and creating general havoc in the process. If they really wanted to compete with the R.R.'s, on a level playing field,then they should have to pay for their own 'road-bed', and pay their fair share of highway taxes. Then lets see how they do! I love it when I see the back of a truck stating that 'This truck pays $35,000 yearly in taxes'. Thats 'chump-change' considering all the problems they create for the rest of us. It's time to thin out the herd!...Hommie

[wabash1]

first off trucking company barley make a 2% profit and the sign you read is per truck in that company. when i was a owner operator. i paid fuel tax per state i ran in i paid a tax for states i didnt run in just to have the authority to go there some day then a federal road use tax. then workmans comp. as a owner operator i still paid for someone else to get hurt. i wont go into the fact that the accedents was couse by some inpatient 4wheeler like yourself the 25.00 toll to go over a bridge in new york and all the other overpriced toll charges. and if you didnt buy fuel in that state you got charged anyways for road use. i could go on but it would be worth it. the problems in trucking are far deeper than this.

[Anonymous]

Roadway, Yellow, ABF are all doing fine and are profitable. CF has been in bad health for several years and the closing was expected. Bad management caused the CF closing. Most large truckload carriers are profitable also and ok.

[Anonymous]

the trucking industry is doing better than ever. There is still more freight out there than drivers to haul it. CF went under due to bad management and the fact that they wanted to get rid of the unions. the majority of the smaller trucking companies that went under were due to rising insurance/permit/fuel costs. and many of them were just merged with other companies. at the trucking company i work for, we have had many previous owner operators sign on and 2 small companies leased on to us. when you join up with the larger companies, you get the benefits of better freight prices, lower insurance costs, and fuel surcharges.

I dont think that the railroads have anything to do with the trucking companies going out of business. far too many shippers would rather pay more to ship by truck because of the reliability and the speed.

as for the unarranted negative comments about truckers, yes, we dont pay our fair share for the roads, and no, we dont even cause half of the truck/car accidents on the highways, the small care does. check your statistics. a recent AAA study found that 69% of fatal car/truck acidents were the fault of the car.

I, personally, would love to see the railroads take up some of the slack for transcon. freight movements. the highway system was never designed for as many trucks as there are now. the highways get built to handle a certan weight, then the ICC raises the max. weights, and the roads cant handle it. if the states would keep up with maintainence, and keep the highways up to the current standard, the roads would not wear out so fast.

[Anonymous]

As a former "LTL" trucker, I can tell you first hand, as far as management is concerned, the most expensive part on a tractor is the driver. Consolidated Freightways has been planning this for decades. They started their Con-Way "sub-company" for just that reason. Why pay a Teamster
an honest wage, when they can get non-union drivers to do the same thing for peanuts? Don't think for one minute that the actual company called "CF" is out of business. They are still kicking, just under a different name, and with a bigger profit margin. Wake up and smell the economy. The days of blue collar workers being able to afford to own a home, and raise a family are quickly coming to an end. You want to change that? Two words. BUY UNION. Support organized labor. If not, we will soon be a "two-class" country. What do you think railroad workers would be getting paid today if it weren't for the unions? Would you sign your life away for $10.00 an hour? I doubt it. But if the stockholders had their say, you would. Trucking is not that different, as far as time away from home goes. Most union drivers are on daily "turns", but what of the poor soul out there sent from one coast to the other for an entire month? Union work rules would put an end to that, but what of the stockholders? Forget the man out there who is actually making the money for us, We want more! and the heck with his family life! J.B. Hunt, Schneider, etc. That's how they make the money. And they just don't care who suffers. Any non-union drivers out there that read this, you better organize soon. Or your kid flipping burgers at McD's will be making more than you as far as an hours-to-wages ratio is concerned.
Just food for thought.
Not to mention food on the table!
"Wall Street Types", don't bother to reply. Honest, hard working Americans, feel free to add, or comment on my little sermon here.
Todd C.

[jsanchez]

The trucking industry in this country is lucky that there is no movement to privatize interstates or major bridges as is being done in some countries, when roads are expected to earn their keep, it really shows the true cost of truck transport, which is not cheap to the taxpayer. Roads in the United States only cover half their costs from user fees and gas taxes, the rest comes from income tax, property taxes, etc. When you factor in traffic delays, accidents, snow removal, lost productivity due to trucks it cost even more. I know where I live everyday there is a least one serious semi accident, causing thousands to be late for work, miss appointments etc. The public is growing weary of the increasing number of trucks. Anything that gets more of these things off the road is o.k. by me.

[Anonymous]

I here run the risk of being labelled a "Wall Street Type." For the record, I do not work in RRs or trucks, and I do not own any stock or have any other investments.

Let me also say that stockholders can and do make stupid decisions based on share price, all the time.

However, I take exceptions to some of your statements. Understand that my perspective is from the business/consumer whose products move on your truck.

"Would you sign your life away for $10.00 an hour? I doubt it. But if the stockholders had their say, you would."

Okay, it's not the stockholders saying this, it's people like me. How, why? Because the market (me) is only willing to pay so much to get a product to me.

"what of the poor soul out there sent from one coast to the other for an entire month?"

Well hopefully this stuff will move by rail in the future for most of it's distance.

"Any non-union drivers out there that read this, you better organize soon. Or your kid flipping burgers at McD's will be making more than you as far as an hours-to-wages ratio is concerned."

Um, this, I would definitely not advise. I just don't think there is the kind of energizing movement behind unionizing that there was 100 years ago. Laregly, unions have stamped out that abuce which was once grossly common.

Also I'd note that McDonalds isn't unionized. Not that I would want to work there.

I guess I would just comment that if they only pay $10 an hour, it's because people -- aparently yourself included -- are willing to work for that. If people were not willing, they would have to raise the pay. I can only assume they do not do *that* because they cannot bring in enough revenue to cover it. Possibly, again, rail competition may have some influence on this. Hunt & Schneider move trailers by rail, for example, to cut their overhead.

Every company is different, but in general, most companies will pay what they can afford to pay you, because if they don't, you'll go work elsewhere. Those that don't may stick around for a while, but eventually go under, because badly managed companies don't last long in today's world.

Best Regards,
Alexander

[dt8089]

Compare the safety records of union represented companys with the non-union outfits. As the old saying goes "You get what you pay for". Also how do you think all those containers and trailers get delivered to the customers door. The D.O.T. is really cracking down on driver qualifications and insurance companys are dictating to the trucking companys on who can or cannot drive. effective 9/30 if I'm caught driving my personal car with an alcohol level of .04 or higher I lose my CDL license, no matter about Joe 4-wheeler who can blow up to .08 driving his car because he don't have a CDL. More and more drivers are getting out of it because of all the government intrusion and taking away their basic rights. And when you lose a large amount of good drivers, who do you have left? That's the scary part. A lot of these truckload carriers just want bodies that can pass a drug test. It use to be you had to have a high school education to get a decent job, now it's open season. You have CDL, pass drug screen, your hired. I'm employed by a union company. I have had no tickets in seven years and passed the Federal background check. Yes I make good money, wouldn't you think you deserve it to haul gasoline around Chicago? I'll get off my soapbox now. Next!! Dan. teamsters local 705 Chicago.

[wabash1]

when they split the work force apart the managment can do as they please. its been going on for years or should i say decades. in the railroad look 85 agreement pre 85 men initial and final delay full deadhead buy out of the brakemen and so on ,this last agreement sign bonus for the pre 85 people again what about the new guys when they screw up did they only get fired 80% did the unions only charge 80% dues. no if fired it was 100% fired, and 100% union dues. the utu trying to take the last real railroad union. the ble and im glad to say i voted against the company union. we as ble members rather go out with a fight than give in. are they dividing us. no they already have. i hope i get to retire before the remote control units get my job.

[jsanchez]

I noticed in the trucking industry news sources, there is a big pu***o allow 18 year olds to drive tractor trailers, push for bigger trucks again, and go after communities with trucking bans(which has really increased). The state of Florida has talked about banning semi trucks on I-4 and I-95 certain parts of the day, due to the severe impact of truck wrecks on these roads. It seems we are paying the price for relying on trucks too much for long distance and even short distance freight. I wi***here was some iniative to have high speed short distance rail freight shuttles , say between Pittsburg/ New york, Miami/Tampa, Jacksonville/Atlanta, Houston/Dallas it might require state and federal funds to increase the capacity, but it would be much cheaper than adding lanes to interstate highways. The financial benefits could be great for Railroads as much more freight moves between short distances than 1,000+ miles that railroads prefer to deal with. The added mobility to interstate highways would greatly benefit the public and save money on truck damage repairs to highways. Another problem facing trucks is the increasing tolls, the truck tolls from N.J to Pa are quadrupling this month, along with other planned increases, you can't blame the authorities for trying to cover the expenses of trucks doing damage to highways.

James

[Anonymous]

You're right about the effort to divide up the work force. Management can bargain as corporate (collective), but labor is considered wrong for wanting the same bargaining power. That's an unacceptable double standard.

The problem is, though, you can't as a practical matter expect improved compensation when the enterprise itself or even an entire economic sector is less and less profitable.

It's correctly pointed out that trucking has been heavily subsidized by the government at all levels, and that without those subsidies, most of the sector would be highly unprofitable in view of their actual costs. The fair comparison with rail transportation must reflect these costs, and for many purposes, such a comparison would show modern railroads are highly competitive.

I'd like to see the government assume ownership of the rails themselves just as government has ownership of roads and highways. Rail routes should be in common use among competing rail companies.

[edbenton]

Wabash I am a OTR and have 1.5 million miles of accident free driving to my credit till i devolped a medical conditon which revocked my driving carrer permently do to a car accident I was rear ended by a car and devolped epilepsy soon afterwords from the concussion that occoured on 6 seperarte regions of my brain you a forgetting that in the 1860-1880 the railroads were given huge tracts of land out west buy the goverment which they recived 1000 acres per mile of track on level terrian 1500 on hilly 2000 on mountainus and then sold it for 5 dollars an acre when it only cost roughly $150per mile of track to lay they made out like bandits and trucks do not do as much damage to the roads as you think the reason why the roads are in such bad shape is the highway trust fund for yearts has been on budget meaning it is used to hide the size of the deficit or increase the size of surplus the current amount extra in it that has not been spent is over 7 billion as of last year that would fix a lot of roads alos the fact that we do not require a warrenty on our roads from the contractors europe and japon require a 15-20 year gaurentee from the contracotrs that the road will be in as goo shape at the end of the time as it is when first put down blame your congress not truck we do pay our fair share the last year i drove my fuel tax bill alone was 25000 and road use taxes were 15000 not inculding tolls and plates anytime the states need money they raise taxes on trucks

[Anonymous]

The primary reason that trucking companies go out of business is same reason there are so many trucking companies in the first place that is to say it does not take much capital to gain entry into the market relative to a railroad, airline or ocean carrier. One starts off with a truck as an owner/operator and then when there is sufficient capital built up buys a trailer and goes out on your own. Then one truck becomes two trucks etc. In order to gain business one only has to offer rates a few cents a mile lower than the competition. If you can control your overheads then you can make money at a lower margin. As companies grow the overheads grow and the complexity of the organization grows requiring higher margins thereby always leaving traffic available for the low cost carriers. Since the margins are so slim for most carriers it only takes a spike in one or two items such as insurance rates or fuel prices to cause many of them to go out of business.
The previous comments have been quite right about working for a low rate of pay per hour. Truckers like most railroad operating crews get paid by the mile and as a result there is a lot of unproductive time that they are really on duty for and should be showing on their logs that they don't get paid for. They usually have to fight to get paid for waiting time getting loaded, unloaded, clearing customs and sitting in traffic. This causes the rate of pay per hour of work to be significantly lower from what it appeared to be when they signed on with a carrier. The result of this coupled with long periods of time away from home is a high turnover rate. Unless a company has a steady stream of new recruits coming on line it is then saddled with the cost of under utilized equipment.
Keep in mind that the legal hours of service per week is 60 hours and in Canada this is being increased to 84 hours per week.
When the trucking industry tries to counter the railroad industry's claim that it doesn't pay its fair share it always likes to include fuel taxes in the amount of tax money paid for infrastructure. In most jurisdictions' fuel tax money goes into general revenue to fund many government programs if for no other reason that the other programs have no tax base to provide a similar amount of money. They fail to remember that railroads also pay fuel tax to most jurisdictions and practically none of that money goes back into paying for railroad infrastructure.
The infrastructure costs of a railroad are sunk costs that cannot be easily moved if the flow of traffic changes unlike the trucking industry which just puts more trucks on to handle the volume in any direction. It is then up to the funding authorities to expand the infrastructure to meet up with the demand. With governments becoming more strapped for cash and the highway system basically being built more and more new highways will be built as toll highways.

[jsanchez]

I know more states/provinces are considering making existing roads toll roads. (Virginia, New York, PA, British Columbia). They can't afford to keep repaving the roads only to have them torn up after two years. The Northeast has the problem of rapidly deteriorating bridges and antiquated interstates(Schyukill Expressway in Philly, I-95 in Conn.)Let's face it they are for the most part a financial black hole that gets bigger every year. I still think the private sector would do a better job running, maintaining and building roads as is being done in many countries. Make them a contributing factor to the economy not a taxpayer drain.

[Anonymous]

I have ready every post related to this lengthy subject and it seems that everyone, in one way or another, tends to agree that the trucking industry is in a bad way. The whys and hows of course vary depending on one's outlook. That stated, I have to impart my personal outlook.

First and foremost is the thought that everyone going union will fix the problem. Sorry, but I would have to disagree. Case in point, Eastern Airlines: for years one of the most respected, profitable Airlines around. They also had the happiest well compensated employees. However, in the late 70's or early 80's "some" pushed for a Union and got it. Unfortunetly, the company couldn't survive and Eastern died, along with the great benefits the company had previously provided.

2nd case in point: Chrysler, doomed in the early 80's till Iacocca stepped in. During the rebuilding, the Fenton, Missouri plant was regearing up for multiple shifts. The offer was put to the first shift workers, "We can either bring on a second shift or you may work the overtime to keep up with increased production." An overwhelming majority voted for the overtime (so much for helping out the brotherhood, eh?).

As to 7000 companies with 5 or more trucks failing, very simple logic, truckers are not typically business men, they are drivers. Through success with one truck, they falsely believe they can multiply their successes with more trucks and live the life of Riley.... it just isn't so. With 5 trucks you run a business and you darn well better have some idea how to do it or hire someone who does and get back in the truck. Trucking IS NOT the only industry effected by bad singular judgement.

Road Taxes etc... these are a cost of doing business and have to be included in the quoted amount of payment for any given load. Even a doctor (and we all know how rich they are right?) would soon go broke if he did not account for and charge within his fee, for his malpractice insurance and other incidentals that are a cost of doing HIS business.

The economy. Absolutely a factor, when the economy slows, spending slows, manufacturing slows, housing slows, all the things that move on trucks to support all of those things slows to a crawl. It is the nature of the beast. Any business person should realize that. And if they don't, they should go back to driving the truck.

The major haulers are all doing just dandy, very much in the black, Consolidated was an accident waiting to happen. However their tactless way of closing was irreprehensible.

Not to union bash by any means, but another point has to be made related to the thought/idea of privatizing the roads etc.. It will never happen in America for one basic reason. Please refer to the Davis/Bacon Act. This act states without question that any type of "construction" albeit roads, buildings, whatever, while not mandatorily built Union, MUS pay union scale with benefits or the equivilent thereof. For those of you not in the know, this means that even though there are QUALIFIED contractors out there who are very capable of building "X" project for 3 million dollars.... it is MANDATED we must pay the union scale in wages so therefore it just cost 4.5 to 5 million dollars. Do the math across the nation and you'll see the difference, it's down right scary.

Now, for the facts, I do work in the trucking industry. I am a broker, not a trucker. I hire truckers everyday to move loads across this great U S of A. I hear the complaints daily, but the fact is I know MANY truckers whom are very successful and live better than myself. They have learned the art of growing and running a business. There is no gain in hauling a load that doesn't cover the bills. Find the loads that do or don't move the rig.

The one thing I've caught in this thread is that the "truckers" themselves complain about being paid by the mile. If it is insufficient, then don't accept it. You know going into it, the potential for waiting/layover etc..., cut your deal to cover yourself. Nothing is ever better than a win win for all involved.

Last but not least, I have to address the real problem behind the large companys like Consolidated Freight etc... The big wigs of the companies are generally paid a bonus on results. Whether that is through stock options, cash or whatever isn't relevant. The relevant thing is the "period of time factor." Almost every company I've seen has paid BIG BUCKS for increased sales/profits etc.. on an annual report type of basis.

Am I the only one that realizes most of those same big wigs only stay 3 to 7 years with any given company? Point being... the results of their full movement won't be felt for years. I for one belief those benefits are great...but should be paid on say 10 years results. Not immeidate gains. Then managers would learn how to go back to managing "people" instead of "numbers" as is the current trend.

Okay, time for me to take a break and breathe. My apologies to any I've angered and Good Morning to any of you I've woken up. Everyone enjoy and let's get back to the TRAINS!!!! Roll em outtttttttttttttttttttttttttt!!

Blacksheep13

[Anonymous]

Howdy, having worked in trucking through 2 recessions, there are numerous reasons "7000" companies have closed. Unfortunately the RR's had little to nothing to do with it. The primary eason is costs. Fuel has gone from under $1 a gallon to nearly $2/gallon several times over the last decade.
Fuel is about 25% of the cost of running a trucking company. If a typical operating ratio is over 90, it doesn't take much of a spike to drive it to 110.
Insurance is the 2nd factor. 9/11 raised rising prices dramaticly, just as it did to the RR excursion business. Some companies with good records can't afford insurance.
Technology, primarily EDI and Qualcomm/highway master is rapidly making the less than 50 truck fleet very non competitive.
Don't get me wrong, the railroads are doing very well, but we will never see them have the freight share they did in 1950 again. We do not haul coal, iron ore, grain, etc in the volume we did 50 years ago and never will again. One 53' trailer probably holds a million DVD's or CD's or thousands of copies of Mircosoft Train Simulator. We simply do not produce the stuff that railroads do well hauling in the quanities they used to.
Frank

[Anonymous]

Todd, you hit the nail on the head.....The unions raise the prevailing wage for an area, and they make sure that we the workers get paid fairly. The days of the union are dwindling and that kills me. I'm so pleased to hear somebody feel strongly about unions. Before I hired out on the RR, I was a union Steelworker. I had many discussions with college grad types who were against unions. My reply...lets compare paychecks. Of course I'm not comparing to the few that actually get good jobs. I'm comparing to the many that are working waiting tables with their degree. And you are absolutely correct, if it were up to the big business men there would be only two classes. These business clowns don't realize...a better paid workforce buys more of their products. A lesser paid workforce cannot afford to buy..........

[Anonymous]

Right on union brother The BLE is in the process of merging with the Teamsters. We may end up being union bros.

[Anonymous]

Wabash, I'm in the process of jumping ship from the UTU to the BLE. Good idea or bad plan?

[wabash1]

i dont recruit for the unions. the only thing i can tell you to do is belong to the union that holds your contract. or if you are a conductor and going to be a engineer soon then maybe its time for a change. but that is my opinion for what it is worth.

[Anonymous]

Don't forsee going to engine service anytime in the near future. Have heard of quite a few trainmen going over to the BLE because of dissatisfaction with the UTU. Just wanted your take on the picture.