Rumors of a Truckers Strike Run Rampant

The news bytes are reporting a 'truck strike'over the high price of diesel fuel scheduled for April 1^st. It's somewhat surprising to even hear anything about the problems of truckers on the evening news. Major media usually studiously ignores trucking issues like the plague, unless they can find a spectacular accident to report. Whether anything in the way of a strike develops remains to be seen. It's highly unlikely that anything will come of the so-called strike, except for another 'ho-hum' reaction to what will undoubtedly be a poor turn-out. This will again prove to the news pundits that there's no serious problem and they'll go back to ignoring the issues once again.

It would be unreasonable to expect good participation in a strike. For one thing, there's no organization behind it. No one group or organization has put a definite stamp on the issues involved. As only 15%-17% of truck drivers are unionized, there's no authority for striking. Union carriers have no interest in participating. Neither have non-union carriers. That automatically removes about 70% of the long-haul trucks on the road from the equation. Of the 30% or so left, about 20%are owner-operators leased on to a carrier. They won't delay a load to strike if they don't want their lease torn up on April 2^nd. Of the remaining 10%, perhaps half may strike-or may not: it all depends on whether or not they have a good-paying load on that day. Their situation is so desperate at this point they can't turn down a load to participate in a strike without concrete benefits being guaranteed. And there certainly is no guarantee of results. So, depending on whether or not it's a slow news day, the so-called strike may or may not get some television play.

Consider the issues: the only one reported is the high cost of fuel. This is an issue Joe Public understands. After all, he has to fill up the family van every few days and knows how painful that can be. He may even realize that diesel is more expensive that gasoline and that trucks use a great deal more of it than he does. What he and the news media don't understand is that the cost of diesel isn't the same for every truck. It all boils down to the fuel surcharge and if the guy who buys the fuel actually gets it. For the unenlightened, the 'fuel surcharge' is a negotiated rate of extra pay per mile when fuel goes over a certain amount. This rate is negotiated between the shipper and the carrier, but is currently up to $.56/mile. Since the average truck gets no less than 5 miles per gallon on average, with this fuel surcharge $2.80 is an extra rate paid on top of the actual price of the freight move. Actual cost of fuel on this paid freight move then is $1.20/gallon. That's on the paid miles of a loaded truck-unpaid miles or empty miles don't get this.

The problem is, not every shipper pays this. Most of the large carriers have negotiated the fuel surcharge into the contract price. However, Congress, despite repeated pleas from truck drivers has refused to mandate that this fuel surcharge be passed on to the guy who actually buys the fuel. Some carriers pass none of this extra fuel money on to the owner-operators that are leased to them. Others only pass on part and pocket the rest. A few truckers with independent authority (authority to negotiate and broker their own freight) have solid fuel-surcharge contracts as trusted carriers for a few shippers. These independents aren't doing anywhere near as badly as those who don't get the fuel surcharge.

That leads to the second issue: there isn't enough freight to keep all trucks filled in this economy. Here, the bean-counters with the larger carriers have a distinct advantage. They have a larger freight base and can keep deadhead (unpaid) miles to a minimum. As most large carriers have gone into brokering freight in a big way, they are just as likely to sell their freight to an outside carrier who will run it more cheaply that they wish to transport it for. They pocket some or the entire surcharge and leave both their own company drivers and leased owner-operators sitting unpaid. It's very easy for them to assign good return runs to their own drivers to make sure they maximize paid and surcharge-paid miles-after all, they want to offset the cost of fuel that would have no return if they had to move the truck without a paid load. Owner-operators then are assigned freight they either must pay out of pocket to get to, or will have no fuel surcharge attached. As none of the drivers in this scenario are being paid by the hour, but only by the mile, even company drivers are hurt by this. The different schemes by which drivers are paid, both company and leased, makes it hard to compare pay scales as it becomes impossible to figure in all of the variables. This makes it difficult for many beginning owner-operators to figure out why they are going broke. They naturally seize on the cost of fuel, never fully realizing they are being victimized by profit-taking by their own company.

If the shortage of freight wasn't enough to deal a death blow to many of these truckers, the increased movement of freight by rail adds even more pressure. Large carriers prefer to broker freight to the railways whenever possible. Although the railroads demand their own surcharge, they are becoming more efficient in delivering the freight and are getting increasing subsidies from the federal government. Carriers can cut down on the number of trucks they have on the road, saving on maintenance, driver pay and benefits and liability, all the while taking a brokerage fee.

Additionally, the lack of oversight in the industry has allowed an unknown number of illegal drivers, working for quasi-legal carriers to enter the field. These carriers hire drivers who have illegally-obtained Commercial drivers Licenses, may not be in the country legally and will work for considerably less than a US driver. Major carriers and independent freight brokers buy and sell freight both between each other and to these illegal carriers, pocketing more of the fuel surcharge at every step along the way. Legal drivers, both company employees and owner-operators have their income impacted by these behaviors but the world of business sees nothing unethical about these practices. They're in business to keep the stockholders happy-and they're happy: transportation stocks have outperformed their previous records over the better part of five years.

Assuming there was to be a well-represented strike: would the government take heed? Perhaps, but it is doubtful that any response made by government would be helpful to these truck drivers. The rising price of oil and fuel has already had major impact on many American families and industries and they have so far declined to act to limit the damage caused by oil futures trading. The best that could be expected is that congressional hearings would be scheduled and selected congressmen would consult with and take testimony from the American Truckers Association. It was the ATA's self-serving recommendation that convinced Congress not to require the fuel surcharge be paid to the fuel purchaser in the first place. Congress appears to believe they are consulting truck driver representation when they listen to the ATA. Nothing could be farther from the truth. The ATA is an association of the representatives of the largest carriers and shippers. They are the very employers of the truck drivers who are being cheated by the system. they put in place Their recommendations invariably support their self-interests, and if past experience holds any weight, they're pretty likely to prevail in pushing legislation to their own advantage.

Supposing there was to be a strike of such magnitude that it seriously disrupted freight movement for even a period of a few days. This would engender little sympathy from government or the public. A situation might quickly develop similar to the Air Traffic Controllers strike under Reagan with similar results: there are many trained truck drivers both as veterans and active military who could be pressed into service in an emergency. Cabotage laws could immediately be eased to allow Canadian drivers to haul US freight. Legal CDLs might even be issued to the thousands of illegal drivers for temporary service that would lead to many strikers permanently losing their jobs and create further downward wage pressure in an industry whose wages still stand at 1976 levels . The Mexican Truck Pilot program, currently being fought on many fronts, could immediately be swung into full action with little protest-and satisfy current NAFTA intent to allow for the free migration of labor to the detriment of native truckers. This genie would never be forced back into the bottle. And the ATA and other power groups in the industry would advise more restriction and even more control be placed on individual drivers to contain their ability to cause economic harm.

Certainly, trucking is headed directly for the 'perfect storm'-for the truck drivers. There is little evidence that major carriers are suffering much due to the fuel prices, except when forced to deadhead to find freight. Their major emphasis has been on limiting unpaid miles and eliminating idle for mandatory breaks and stops. Truckers meanwhile, both owner-operator and company alike, are in serious financial trouble, with home foreclosures and truck repossessions increasing rapidly. Their major complaint, then, should be aimed at government for not doing what was necessary to protect them from the dire effects of increased cost of fuel. Assuring the fuel surcharge be paid to the fuel purchaser would go far toward assuring that brokers and carriers could not grow rich at their expense. Demanding that company-employed drivers be placed under Fair Wage and Hour rules would end abuse on that level. And before any of that happens, weaker and less-experienced excess owner-operators will be forced out of a business they were ill-prepared to sink their life savings and future into. Hoping that the FedGov will act to correct the futures trading problem they knowingly created is probably a lost cause.

A strike won't do any of those things. It will simply antagonize the public and add fuel to anti-trucking sentiment among Congress. Trucking is in dire need of organization over sensible concrete issues. The black hole that constitutes leadership among truck transportation workers has resulted in more restrictive regulation of individual drivers to the point they have become wage slaves to the Simon Lagree of the large carriers. A wildcat strike will open the door to even more restriction and abuse under the color of law. There's whole lot wrong with the trucking industry; it would cease to function at all except for the fact most drivers sincerely love their work and want to do a good job. But even a good dog will eventually bite if faced with life-threatening abuse. Right now, it's only growling with this strike.