Can Trucking Prep for the Future?

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Can Trucking Prep for the Future?

• Comments by
• Todd Spencer, Exec VP, OOIDA

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Trucking in Broad Strokes

• 2.5 mil. Class 8 Trucks
• -½ are in Private Carriage
• -½ are in For Hire Carriage

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For Hire Trucking

• Less Than Truck-Load (LTL)
• -Dominated by Yellow Roadway Overnite
• -Have a operating ratio of around 95
• -Earnings per mile 4.15 to 4.20
• -Expenses per mile of around 4.00
• -Profits at 15 to 20 cents per mile

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For Hire Trucking

• Truckload (TL)
• Close to 520,000 carriers (only 45,000 are large
  carriers)
• 70 of carriers have less than 6 trucks
• 80 of carriers have less than 20 trucks
• Have the same 95 operating ratio but
• Earnings are 1.36 a mile and expense 1.30
• Profits are 6 cents a mile on 110,000 milers per
  truck or 6,600 a year

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Owner-Operator Truckers

• Own and Drive their own truck
• 350,000 of them, average owning 1.4 trucks
• -75 of them are leased to a larger carrier
• -25 of them have their own authority
• They have sole responsibility for purchase and
  maintenance of their truck
• They earn around 35,000-37,000 a year
• They work approximately 100 hrs a wk for that pay

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From Dr. Francine La Fontaine, Economist, Umich,
Ann Arbor
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Owner-Operator Truckers

• They are on an average 48 yrs old
• They have 20 yrs professional driving experience
• According to the insurance industry, they are the
  safest segment of truck drivers, having fewer and
  less serious accidents
• They chose truck driving as a career before
  drivers became a commodity to be used and
  discarded
• (Raises the question Where will tomorrows
  million-mile safe drivers come from?)

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Company Drivers

• They are on an average 44 yrs old
• They have 15 yrs professional driving experience
• Many change employers often

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Trucking Equals2 to 2.5 Regular Jobs!

• Office Workers Truck Driver
• 40 hrs per week 100 hrs per week
• 50 weeks per year 50 weeks per year
• 2000 hours per year 5000 hours per year

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Owner-Operator Truckers

• Truckers are being coerced to wait inordinate
  lengths of time at docks, or load, unload, and
  re-palletize their loads for free.
• This free labor and its attending lost and
  wasted time, represents the one single largest
  challenge to the trucking industry.
• This forced labor affects many issues driver
  fatigue highway safety driver retention 100
  driver turnover and drivers ability to earn a
  reasonable wage.

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Under the Old HOS Regulations

• The annual cost to the trucking industry to move
  from free waiting time, and free loading and
  unloading labor, to strict compliance with the
  60 hour rule, would have been an additional 3.2
  to 7.5 billion

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Under the Old HOS Regulations

• If, however, the industry could have reduced the
  waiting, loading and unloading times to
  reasonable levels while increasing a drivers
  drive time, it would have saved the industry
  the same 3.2 to 7.5 billion.

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HOS Regulations

• If drivers earn 40,000 a year, the best case
  scenario of wasting 3.2 billion a year in lost
  productivity means we were wasting 80,000
  man-years per annum, just because there are no
  costs passed to the parties wasting that precious
  time.

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Where are the dollars spent on freight hauling
going?

• In the past twenty years as the freight rates
  have remained flat, and the truck driver has seen
  his wages buying power shrink by 30, the
  freight brokering and forwarding industry has
  grown to become a industry of the same size, but
  with none of the capitalization challenges of
  carriers, i.e. owning and operating trucks.

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Truck Parking Spaces

• A Programatic challenge which cries out for
  solutions.

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2004 OOIDA Truck Parking Survey

• Follow up of a similar 1999 survey.
• 70 of the drivers said that since the new hours
  of service regulations have been in effect, truck
  parking has become harder, or much harder to
  find.
• Instances of police telling resting truckers to
  leave rest areas has doubled in the past 5 yrs

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2004 OOIDA Truck Parking Survey

• Drivers said they drove beyond their available
  log driving hours either 1) every night 2) 5
  times a week or 3) 3 times a week
• 1999 2004
• 30.3 47.9

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2004 OOIDA Truck Parking Survey

• Five years ago only 22 said they would even
  consider paying for safe secure parking spaces.
• Today that figure has nearly doubled to 38.

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2004 OOIDA Truck Parking Survey

• The issue of truck parking spaces will require
  creative solutions that do not necessarily rely
  on Federal legislation (Maybe as simple as large
  graveled lots).
• Additional truck parking spaces are not in the
  best bottom line interest of Truck Stops (due to
  their being filled to optimum capacity already).
• Highway safety stakeholders need to continue to
  seek feasible solutions together.
• Without sufficient truck parking spaces in
  locales where trucks congregate, tired truckers
  are forced to remain behind the wheel out on the
  nations highways.

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In Conclusion . . .

• We are an industry only half way though the
  shakeout envisioned by the deregulation
  economists of the 1940s.
• In this shakeout, profits have been so difficult
  to come by, that the drivers have been squeezed
  of the next to last drop of blood they have.

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In Conclusion (cont.)

• The safe and dependable small business truckers
  move much of the truck freight in this country.
• Right now they do it out of the love of the job,
  but there are no young replacements waiting in
  the wings.