Time to get off our Butts

[Michael P.Dorsey]

Time To Get Off Our Butts

That’s steam, not smoke, coming out our ears By Timothy D. Brady We’re mad and we’re not going to take it any more! Think this statement came right out of the Occupy Wall Street crowd of protesters? No; it’s coming from truckers, mainly truckers who’ve been on the highways earning a living for a decade or more. But maybe there’s more in common with the independent trucker and the Occupy Wall Street crowd than meets the eye. These independent truckers are the folks lured into the trucking industry for the freedom it promised those who transported the goods of America. The Idea of life, liberty and pursuit of happiness has been a part of the American truckers’ lifestyle going all the way back to the nineteen thirties. The atmosphere of the trucker’s life was a simple one: get the freight on his truck delivered where the shipper wanted it, on time, undamaged and safely. While the vast majority of truckers throughout the years followed the approach that safety is job one; like in any industry, there was a small minority that decided it was all about the money and if they did it faster, the shippers would come to them in droves. However, during the ICC era of trucking, fast was o.k., but it didn’t increase revenues for the quicker picker-uppers and deliverers, as they still had the restraint of time and rate bureau-controlled freight rates. Then in 1980, the entire picture changed as deregulation began its march through the industry, dissolving the rate bureaus and letting individual carriers and shippers negotiate what rate a carrier would be paid for its hauling services. With the advent of free-market trucking came discounted hauling rates, manipulating the fuel surcharge and mega-carriers coming into existence with the idea of volume pricing of freight rates for shippers who transported a huge number of loads. Suddenly there was an attack on the existence of the small motor carrier and the single truck carriers, with the limitations the Hours of Service rules placed on their operations. These small carriers couldn’t compete with the volume pricing of the larger carriers. The only way they could compete was being able to haul loads faster and more efficiently than their mega-carrier counterparts. The next attack on the small carrier came from allowing the mega-carriers to be self-insured. This permitted the mega-carriers to hire newly-trained, inexperienced drivers by the thousands with pay that was (and remains) far below what an experienced, qualified trucker would accept. Added to this, because the independent trucker has to rely on getting his trucking insurance from an insurance provider, he doesn’t control who he can or cannot hire to drive his trucks. This is all decided by the insurance company through driving records and number of years of trucking experience, usually requiring a clean DMV and a minimum of two years’ experience for a driver needing insurance. This equates to smaller carriers having to pay a considerably higher rate both in insurance premiums and driver pay to obtain qualified truckers. Herein lies the disparity between the two trucking camps. Mega-carriers can charge a much lower freight rate based on their ability to throw hundreds if not thousands of trucks into a freight lane with low-paid newbie drivers. One CEO of  a very large carrier was quoted as saying with over 16,000 trucks on the road, he just has to keep them rolling with freight in the trailer and if he can profit 1 cent per mile his company makes millions of dollars. As anyone knows, a small independent trucking company couldn’t begin to survive on a penny per mile profit. Plus, with the added profit these mega-carriers create through their “trucker turnover” programs (Note I said programs) they’ve created a whole other profit center. Their lease/purchase programs allow them to pay for their tractors and the cost of operating them by saddling the drivers who drive them with paying that expense. In other words, when a driver signs on to a lease/purchase program with the vast majority of mega-carriers, the intent of that carrier is to make sure that trucker fails before completing the lease. Another area that impacts the ability of the smaller carrier is the lack of training provided the drivers coming up through these mega-carriers’ “training programs.”  What the mega-carriers have realized is it costs too much time and money to properly train a truck driver, so the better way to handle this, in their opinion, is by creating direct driver monitoring systems like electronic logbooks and Electronic on Board Recorders (EOBRs). The problem with this approach, again in their eyes, is that if their drivers have to be ‘babysat’ then to level the playing field, all truckers need to be babysat. But here’s the real problem. These mega-carriers have tried to set up a working alliance with the Federal agency that oversees truck safety, the FMCSA. What they’ve done is opened a Pandora’s Box of problems. The mega-carriers’ endeavor to change the HOS and add EOBRs has turned into a constant court battle between safety advocate groups like Public Citizen and PATT versus the American Trucking Associations, OOIDA and the Teamsters, with the trucking groups never consistently on the same side. The additional problem is the FMCSA and DOT, under the leadership of Ray LaHood, see their mission as one of continually coming up with new and innovative trucking regulations in the effort to create safer highways. So now with truck safety being kept in the limelight with rule after rule being implemented, what’s the independent trucker supposed to do? Should he roll over and accept the inevitable? Should he just give it up and find another line of work? Should he stand and fight? Or is there another alternative? Think. One: Independents must remember as a group they haul far more freight than the large mega-carriers could ever dream of. Two: Independents will always be the backbone of the American Economy. As a group, independent truckers can muster far greater numbers of drivers than any mega-carrier will ever be able to bring together. But first you’ve got to save yourself before you can save the world. Here’s my formula for getting the industry back in favor of the small independent trucker. 1. Put your business house in order. If you are an independent with your own authority, know your business, know your numbers and what’s required to make a profit and then do it. Wean yourself from the rate-per-mile/fuel surcharge approach the mega-carriers want you to think is the right way of conducting your trucking business and move towards setting monthly and quarterly revenue goals based on your true costs and required profit. 2. Don’t try to compete with the mega-carriers on their turf. Locate and develop a specific niche within which they’re unable to compete. Think nimble and quick. 3. Develop your plan of attack to include working within the current HOS and don’t be afraid to communicate those requirements to your shippers and receivers. 4. At every opportunity, mentor those truckers who are coming up in the ranks of the mega-carriers. Get them to stay away from the predatory lease/purchase programs the mega-carriers are offering. It’s up to the independents to keep the pressure on and demonstrate to the new drivers in the industry the downside of these programs. 5. No matter the niche, if there's decent money in it eventually some doofus is going to discover it and attempt to undercut your freight rates. Prepare yourself for the eventual occurrence by providing your shippers with such superior service a cheaper carrier won’t be able to match it. Be ready on the sidelines to go and rescue your shipper when the cheap carrier fails. 6. My recommendation is to focus on your business. Learn to use the system to your benefit and don't try and fight everyone’s battles. Put your energy and effort into your carrier and pick only the battles which will have a direct benefit to your operation. 7. Get involved with commenting on regulations the FMCSA proposes. Be on a first-name basis with your Senators’ and Representatives’ Transportation Liaison person and have regular conversations with him or her concerning the plight into which these new regulations put your business. 8. Recruit other like-minded truckers to do the same. Don’t depend on the ATA, Teamsters, OOIDA or even journalists like myself to express what will be the best policies and regulations to promote safety and profitability for your operation. You must be in control of your destiny, as there isn’t anyone better qualified to stand up for what you believe and know what you need than YOU! Here’s to great loads and good roads. Timothy Brady © 2012     Contact Brady through  www.timothybrady.com/contactus For more information on Trucking Business Courses go to: www.truckersu.com

[David Naus]

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