Memphis Swift Raids Leave More Questions Than Answers

Monday's raid by federal investigative agencies at the Swift Transportation terminal near Memphis and at three other locations in the area should bring home the enormity of the CDL fraud scandal in the United States. News reports show a total of seven Federal and State investigative agencies involved in raids that targeted primarily State licensing facilities on properties controlled by Swift and others.

The variety and scope of Federal agencies involved points out that government at least understands the security ramifications of CDL fraud, even if the news media and the public in general do not: poorly trained or illegal truck drivers present a most serious threat to national security in a climate of open borders and unmonitored cross-border freight traffic.

Although Swift officials are quick to point out that their company is not the focus of these investigations, some facts about Swift are necessary to start connecting the dots in this hidden picture:

Swift Transportation is the larges total-truckload, long-haul company in the United States.
Swift owns a Mexican subsidiary trucking company, named Trans-Mex,
Swift operates several truck driving schools to train drivers for their operations,
Swift imports and hires B-1 Visa truck drivers at its Phoenix Az main location and maintains classes there to teach them enough English to meet minimum regulations
Swift is a major transporter of retail goods, including grocery, clothing, toys and household products both to distribution centers and to retail stores.
As a brokerage provider, Swift controls not only freight pulled by their 17,000 tractors, their wholly-owned Mexican subsidiary, Trans-Max and their intermodal rail freight, but also much of the freight hauled by their 5000 carrier-partners.
Swift is non-union as are all of the largest long-haul carriers.
Swift's operation is no different than the operation of many of the large US carriers.
Swift, like other major carriers, spends a great deal of money and political capitol expounding on the fact that they have 'a driver shortage'.

Tennessee state officials apparently consider Swift's economic contribution to the area to be sufficiently large enough to warrant placing satellite licensing facilities on their premises. It is disingenuous to believe that the majority of the prospective licensees applying to these satellite facilities for CDL services are not connected to Swift, either directly or indirectly.

CDL fraud is rampant in most states, but reporting on it is relegated to small news items on a slow news day. That it is closely connected at least in some cases to immigration and Visa fraud is evident in the case of Nathan Cooper, former Missouri State representative and Cape Girardeau immigration attorney, who was sentenced last fall in a scheme to provide fraudulent Visas to truck drivers for several well-known trucking companies, including Cal-Ark and Pullen. These are NOT small fly-by-night carriers and have been in operation for many years.

Wages for truck drivers have dropped 30% on the average since deregulation of the industry in the '80s. As truck drivers aren't protected under Fair Wage and Hour regulation, pay in the long-haul sector is primarily piece-rate (by the mile) and hours and work-weeks are long. Benefits are poor, sick pay is non-existent and days off are few and far between. Inflation has eaten into the small gains made in pay scales since the mid-90's and large discount shippers demand lower rates to offset the longer miles of transport incurred under NAFTA and globalized trade.

Even in a tight job market, truck driving is hardly a desirable job as carriers find more ways to reduce actual take-home pay in return for more work. Long-haul trucking is a tough job: truck drivers as a whole have a life expectancy approximately fifteen years shorter than the general public. It is easy for carriers to force higher-paid, older drivers out of the industry by increasing work loads and decreasing pay-and the ex-driver cant even claim they were laid off. In order to prevent the limited marketplace from demanding higher wages for drivers, carriers have come up with novel and ingenious ways to artificially inflate the pool of drivers willing to work harder for less. Various Visa and immigration schemes have enabled major carriers to 'put meat in the seat' at lower and lower wages, abetted by a lack of true enforcement in the issuance of legal CDLs.

Swift is 'privately-held', meaning there is little possibility of public scrutiny other than by the IRS and federal regulatory agencies. Jerry Moyes, founder of the company, recently purchased the company back from stockholders in a $2.74 billion cash transaction financed by Morgan Stanley.

One might wonder why a conservative financial giant such as Morgan Stanley would voluntarily involve itself in supposedly-shaky finances of a trucking company that makes so little profit that it cannot even pay drivers well enough to ascertain decent driver retention. That question is easily answered with a look at the Dow Jones Transportation Average. The results show a surprising 18.28% annualized return over the last five years. These results show a huge increase in the return on transportation stocks in a climate of less manufacturing, lower wages and stagnant growth. This is particularly surprising as transportation stocks historically have had one of the lowest annual returns of the common stock indexes.

In an atmosphere of huge 'driver shortages', lower real earnings for a highly-skilled driver force continue to push earnings upwards for the big players in the transportation market. In a true scenario of limited trained workforce, the marketplace would cause driver wages to rise. Instead, the industry, with the tacit cooperation of a conveniently obtuse and 'business-friendly' government has circumvented the limited labor pool with imported, illegal and often poorly trained beginning drivers. As our current administration continues to ignore and abet takeover of the labor force by illegal foreign labor, big business interests are making a killing at the expense of the American public in general and the truck driver in particular.

This scenario explains both the Teamsters and other trucking advocate groups' opposition to the Mexican Truck Pilot project and the Bush administration's dogged insistence on continuing it in spite of heavy pressure by Congress for answers. Most large carriers, backed by big financial institutions, see more profit and less enforcement in cheap drivers than ever before. To protect themselves from liability for actual law-breaking, many large carriers broker much of their freight to small carriers who might not be so concerned with legalities. As Mexican carriers pay far less than US carriers based on their country's cost of living, moving freight in this country at Mexican wages becomes highly profitable. Big carriers, big shippers and big bankers profit; truckers and the American public loses-again.

Illegal Hispanic drivers are certainly not the entire problem, however. A visit to the major rail yards and ports will show a large percentage of non-English speaking cartage drivers from such countries as Russia, Poland, Bosnia, Somalia, etc. Since visas for the purpose of driving a truck are extremely limited and since US Immigration laws and quotas directly discriminate against Visas from several of the represented countries, one is forced to consider the fact that many, many of these drivers must be in the country illegally and obtained their CDLs thru fraud of some sort. If so, where is the enforcement against these carriers? If we are, as widely reported, prepared to enforce all transportation regulations against Mexican carriers under the Mexican Truck Pilot project, how is it we cant seem to even check the legality of thousands of truck drivers and trucking companies in Chicago, Detroit, Philadelphia and LA?

If we as a nation are concerned about the threat of terrorism and are forced to spend billions of tax dollars and untold man-hours in 'security activities', then why is there not more effort to secure the obvious holes in the entire land transport system? Certainly, illegal aliens from countries not particularly friendly to the US driving trucks anywhere they wish to go across the nation imposes a security threat of immense proportions. And the favoring of poorly-trained inexperienced drivers over seasoned professionals endangers the motoring public.

I suspect we will never hear anything about the results of Monday's raids in Memphis. I also suspect that whatever results leak out will be carefully filtered to protect the usual suspects. What will it take to expose the depths of corruption in the entire truck transportation system?