Waynes World - July 2008
CONGRESS GOES AFTER BROKERS WHO
KEEP FUEL SURCHARGES, AND...
ATA PREPARES LAWSUIT
AGAINST SOUTHERN CALIFORNIA PORTS
by Wayne Schooling
CONGRESS GOES AFTER DISHONEST BROKERS
The Truthful Reliable Understanding of Consumer Costs (TRUCC) Act (Senate Bill S2910) was introduced by Congress in April. The bill proposes to stop middlemen from taking fuel surcharges and not passing them on to the motor carrier. Independent owner-operators have long relied on brokers to negotiate with companies to ship their goods and then pass the shipments along to the motor carrier. With the increased costs of fuel, many of these middlemen have been adding a fuel surcharge to the price of their contracts. Unfortunately, some of the more unscrupulous middlemen only pass on a small percentage to the motor carrier, if anything at all. With the price of diesel through the roof, this is making it increasingly difficult for small owner-operators to stay in business.
Currently, there are no restrictions on how much a middleman must give one of his contracted motor carriers. As such, there has been little that any state or federal agency can do in order to stop such behavior. In the past few months, the price of diesel has had a negative effect (to say the least) on the independent owner-operator. There have been reports that say more than 1,000 motor carrier businesses have failed in the first quarter of this year alone. With the price at the pump unlikely to go down anytime soon (it seems that fuel prices will continue to rise through the end of the year), the number of failed businesses could continue to rise.
The bill has received wide bi-partisan support: it was written by Sen. Olympia Snowe (R-ME), and co-sponsored by Sen. Sherrod Brown (D-OH). When she first introduced the bill, Sen. Snowe commented on the plight of owner-operators saying, “For too long, our small business motor freight carriers, who struggle every day to make ends meet, have had their concerns ignored and neglected.” The NTA enthusiastically supports this bill. The bill will go a long way toward helping truckers and their shipping customers weather the brutal cost of fuel.
Everyone who reads this magazine should contact their Senator and voice their support for this bill. If you would like to know more about this bill, simply search “Senate Bill S2910” on the internet. If you would like to contact your Senator about this bill, call the Capitol Switchboard at (202) 224-3121 and provide them with your zip code and they will connect you to the right office.
ATA PREPARES LAWSUIT AGAINST SO. CA PORTS
Four months after adopting what was widely assumed to be an industry-friendly plan to replace thousands of polluting diesel trucks in the harbor, the Port of Long Beach is facing a legal showdown with the nation’s largest trucking association. It has recently been confirmed that the American Trucking Association (ATA) will file a lawsuit against port authorities in both Long Beach and Los Angeles. L.A. Councilwoman Janice Hahn said the previously-adopted clean air plan did nothing to address the terrible working conditions being faced by our port truckers, and now it appears that the ports may require companies to offer their contract drivers health insurance coverage and worker’s compensation. Port of Long Beach Executive Director Richard D. Steinke called the health insurance stipulation “a work in progress”.
Now I ask you, first it started with clean air, then they added that everyone had to be an employee, then vehicle maintenance, safety and truck insurance became an issue, and now poor working conditions and health insurance – where does it end? If working conditions are so bad, how do both ports and trucking companies continually break records in moving containers by truck?
The ATA objects to this proposal that would occur in both ports (Los Angeles and Long Beach). Both plan to issue concession permits to trucking companies before they allow them to haul goods to and from the ports. Basically, only certain companies, which comply with all of their restrictive rules, will be allowed to haul goods in or out of the ports. The ATA stated, “There was a reason the federal government deregulated the trucking industry in 1980 and it was to allow for a more free and open market.” Someone from the port should explain, in writing, why this plan is not discriminatory toward business and is not a restraint of trade under federal commerce laws.
The problem of clean air is one thing which is hard to argue, but the rest is simple economics. Because California has so many regulations on the trucking industry, this has a direct effect on every trucking company’s bottom line. Let’s face facts – it is more difficult for a trucking company to make a profit in California than in any other state. After expenses like fuel, truck insurance and maintenance there is little left over.
The average operating ratio for trucking companies in the U.S. is 95.2%. This means that for every dollar of revenue that comes in, the trucking company has a cost of 95.2 cents, leaving them with a profit of 4.8 cents on every dollar earned. And it’s no better in Canada. The latest figures (2006) show that Canadian-domiciled for-hire carriers earning $1 million or more annually that perform local and long distance movements only had a 94% ratio. You could almost do better by selling everything and putting all your money in a savings account – and there would be no risk or work involved!
I do not believe that there is a trucking company out there that wouldn’t raise their driver’s pay if the public would pay for the increase in prices at the stores. That is the problem. Just look at what the higher fuel costs have done to the prices of everything we buy. It’s no wonder that everyone, not just truck drivers, are struggling out there.
~ NTA remains a name you can trust. Our website (www.ntassoc.com) is your official U.S. DOT Internet Training Site and we are administrators of a Nationally Accredited Drug and Alcohol Program. If you have any questions, call me at (562) 279-0557 or send me an e-mail to wayne@ntassoc.com. Until next month, “Drive Safe – Drive Smart!”