AP Centerpiece: Truckers Fear Rising Costs, Stalled
Freight Rates Will Run Them Off the Road
NEW YORK (Associated Press) - Trucker Robert Griffith is on the road
three weeks out of four, pulling oversize loads like crane booms, railroad
ties and air conditioning ducts. One of his biggest worries: How he'll
find the money to buy his daughter a prom dress.
As the cost of diesel doubled over the last four years, his take-home
pay has plummeted, from $50,000 to $11,000 last year. He's literally burning
money; he spent $64,000 on diesel in the last eight months. Since he canceled
his satellite radio, he's on citizens band radio constantly (handle: Instigator)
talking about what needs to change so truckers like him can survive.
"I had to learn to live totally different," said Griffith, 41, of Lebanon,
Tenn.
No more $150 family outings to Shogun sushi. No more weekly washes for
his Western Star 4900 EX truck. No more health insurance for him and his
family.
"It hurts," he said. "I'm a man who's trying to make a living for my
family and I'm not succeeding."
Trucking's owner-operators, the self-employed drivers who haul everything
from Hummers to hay, are suffering. Many say they're running on the edge
of bankruptcy, about to disappear unless they get help. While a wave of
trucking failures now might be invisible to consumers, when the economy
rebounds, it would push up shipping rates, helping increase prices.
The housing downturn and decreased consumer spending have cut into loads;
the extra trucking capacity is pushing down freight rates. Diesel prices,
which are always higher in the winter, have hit such highs that Truckinginfo.com
runs ads for thief-stopping fuel-tank locks.
"If you can run all week without a flat tire, you're a little bit ahead,
otherwise, you're basically just running to put the money right back into
the fuel tank," said trucker Benjamin Stanley, 40, of Spotsylvania, Va.
"Truckers are in the same spot farmers were in a few years back."
Reposessor Nassau Asset Management repossessed 110 percent more trucks
in 2007 than it did in 2006, according to president Edward Castagna. And
it's taking less time to pick up a truck, which he sees as a sign that
there's less work to keep them on the road _ and out of his reposessors'
reach.
"It used to take weeks, now it takes days or hours," he said.
Industries that depend on independent truckers, like logging, are starting
to suffer. Maine Gov. John Baldacci declared a civil emergency at the end
of November, speeding fuel tax reimbursements for logging truck operators
and asking the Department of Transportation to identify roads that could
tolerate logging-truck weight, allowing truckers to take more direct routes
and save fuel.
About nine percent of the nation's 3.4 million truck drivers are independent
owner-operators, according to the Department of Labor. Without the independents,
trucking will turn into a group of "regional and national oligopolies"
that would send shipping prices higher when the economy improves, said
John Saldanha, who teaches logistics at Ohio State University.
A Baird & Co. research report said the one positive note is the
likelihood of more bankruptcies could eventually push freight rates up
for the survivors.
Truckers, who felt unappreciated in the best of times, say they feel
even more marginalized now.
Rumors of a nationwide truck strike are a nearly annual occurrence _
but this year an effort in January generated more talk than usual on MySpace
and the Sirius Satellite Radio show "Freewheelin.'"
"If you eat it, drink it, wear it ... sit on it, if it is anything other
than the air you breathe, an American truck driver made it possible!" wrote
trucker Joe Misilewich of Norwich, New York in an e-mail. "Don't forget
it! Without truckers, America is nothing!"
Nanette Jenkins Rudd, 40, a third-generation trucker based in Mapleton,
Ill., kept her five trucks off the road the week of the strike.
"I pray that this strike is successful, so that we only have to stop
rolling for a week _ and not forever," she said.
Like other truckers, she's hoping for government help. "The government
stepped in and helped the farmers when they were in trouble," she said.
"Why? Because the farmers feed America, the farmers put food on the table.
But who do you think delivers that food?"
Truckers say they want caps on diesel prices, or tax credits for truckers,
as well as increased regulation for the middlemen who broker truck loads.
While independents struggle, the large public trucking companies seem
to be on a different road. Their stocks have, for the most part, climbed
since January.
J.B. Hunt Transport Services Inc. and YRC Worldwide Inc., with more
than 10,000 truck tractors each, buy everything from fuel to tractors in
bulk. The big companies buy thousands of gallons of diesel at a time on
the commodities market, then store at their depots; Griffith buys his at
truck stop pumps, where prices increased 38 cents a gallon over two days
last month.
Independent truckers are increasingly dependent on freight brokers,
middlemen who match shippers with drivers one load at a time, taking a
cut for themselves. At one of the country's largest brokers, Landstar System,
Inc., revenue from brokered loads was $881.57 million in 2007, more than
double what it was four years before. But the company said it paid less
for transportation in fiscal 2007, while its revenue per load was nearly
flat at $1,612.
Jim Gattoni, Landstar's chief financial officer, said payments were
lower because volume was lower. Drivers carrying brokered loads from the
company earn between 80 and 90 percent of the value of the freight they
carry, he said, depending on the weight and complexity of the load.
"Our margin, at the end of the day, is seven percent," he said.
At brokerage sites like getloaded.com and internettruckstop.com, freight
rates are where they were in 2002, said Roger Carpenter, a Binghamton,
N.Y. trucker who hauls dairy and chickens. The middlemen behind the boards
"are so competitive, they chop each other's rates up like hungry dogs trying
to get a scrap of meat," he said.
Truckers complain that the brokerage system is unregulated and lacks
transparency: They know what they're getting paid, but they don't know
what the shippers are paying the brokers. They say they're also forbidden
from showing the shippers their contracts. Many independents have a story
about a shipper's shock after finding out what the trucker was being paid.
A load traveling 800 miles that cost a shipper nearly $3,000 to send
may pay the trucker $1,000, out of which the trucker would pay all expenses
including fuel and insurance.
"It's truly highway robbery," Misilewich said.
Jim Butts, vice president of transportation at C.H. Robinson, a company
whose business includes brokering loads, said his company serves truckers
well, acting as their sales and marketing arm and paying them even when
shippers fail to pay.
"Not all these competitors are playing the same game and not all abide
by the same rules," he said.
Griffith, who's been driving a truck for 20 years, stopped working with
brokers six months ago and started hauling specialized loads, which pay
$2 or $3 a mile more than standard.
Not that it's helping.
Three-quarters of his pay is going to fuel and maintenance, up from
half in the past. And how much work he can cram in is regulated, with the
number of hours he can drive capped by federal regulations at 11 a day,
all of which must be recorded in a log book.
"People will say, 'Run harder,'" he said. "I can't run harder. You can't
run beyond your log books."
Back on the CB, "someone will get on about trucking, someone will get
on about the fuel prices, then everyone will start arguing and cussing."
Listen to CB for an hour he said, "you'll feel the animosity, the hatred,
the despair."
Griffith longs for the old Teamsters Union boss Jimmy Hoffa, who led
truckers in their most powerful _ and profitable _ years. Hoffa disappeared
in 1975 and was declared presumed dead in 1982.
"We need to band together instead of fight each other and somebody needs
to help us do that," he said. "I wish Jimmy Hoffa were still around."