EQNEED) Inc. Trucking Letters and Issues frozen in time during 2001-1
Load Compensation Letter to Governor of Oregon - July 1, 2000
Governor of Oregon
I hope your agent can find the time to address issues presented hereto:
Small Trucking Business:
1). Shippers pay load miles (city to city).
2). Trucks drive extra miles to target.
3). IFTA, OR expects all miles driven reported.
4). Oregon and Washington loads pay the bulk of shipping cost to other states such as CO, NM, AZ, TX, CA, UT, ID, WY, NV, etc. I know the rates. Do you or does state governments know the rates?
5). Workers Compensation of OR doesn’t cover all 11 western states or the 48 states. Why? Yet it is mandatory to have Workers Compensation if your Trucking Business operates in Oregon. Occupational Truckers Accident Insurance provides coverage for all 48 states and protects the Driver equal to or better than Workers Compensation Insurance.
6). Eagle in Pasco, Oregon and Ryder rent or lease trucks with IRP 11 to 21 Western or 48 States. Why can’t I do the same, with my trucks to self employed Drivers, covered under Occupational Truckers Accident Insurance, there by allowing Drivers insurance coverage for every state while traveling our nations highways; and without being considered an employer, especially if Drivers choose to contract driving, file there own taxes, etc.
7). Where is a report describing in detail the costs involved in the trucking industry?
8). I have enclosed in detail, those cost and the 19 trips I achieved with my truck are well documented, and I would be more than happy to deliver them to you in order to evaluate the cost effectiveness of Small Trucking Business. I have also enclosed many reports in order that you can have a clear picture as to the amount of paper work involved. Drivers need to concentrate on driving and their expenses while on the road, leasing a truck, contracting driving, allows drivers to deduct these expenses at the end of the year. Drivers that leased my truck(s) or in the future, that may lease my truck(s) are responsible to work on the truck in the field of operation, unless the problem is major. Driver takes truck home, supervises maintenance and lives in the truck while on the road. It is difficult to find your own loads, paying loads that is. Motor Carriers dispatching loads for their employees, employees driving company trucks are paid $.25 to $.32 a mile and or 25 to 30 percent of the gross, after brokers 10%. My leased Drivers were earning 35% of load miles and or $.35 a mile of total miles driven in the case of miles driven outside load miles due to road construction, storms, fires or a cow in the middle of the road, to include all dead head miles over 50 miles. Company drivers of Trucking Companies, excluding Safeway Union Drivers ($.35 a mile with five to ten years or longer on the job) are not receiving equivalent compensation in comparison to the amount of contracted earnings a driver can earn leasing one of my trucks.
ORS 657.047 (enclosed) “The person who furnishes and maintains the vehicle is deemed the employer of others who operate it.” My Drivers maintain the truck supplied to them by me. Only Independent Truckers can afford to rent or lease a truck. Small Trucking Businesses must own the truck or buy under contract a truck for a leased Driver. If Eagle Nation Lease or Ryder can rent or lease trucks with IRP plates to a Driver with or without USDOT/MC authority, providing Driver or Drivers Company provides insurance coverage, USDOT/MC authority, etc., then why can’t I, without being considered an Employer? Eagle Nation Lease and or Ryder supply (rent/lease with or without plates covering states within IRP) the truck to a Driver, for $150.00 a day to 450.00 a week or $1,000.00 to $2,000.00 monthly, plus $.06 a mile for maintenance. Yet Eagle Nation Lease and or Ryder are not the Drivers Employer. Eagle Nation Lease or Ryder requires the Driver to have a minimum of 750,000 liability, 100,000 cargo and full coverage insurance on the truck. CDL Driver can lease on to another Trucking Business with truck rented or leased from Eagle Nation Lease or Ryder. In order to haul cargo outside Oregon, Trucking Businesses must have USDOT/MC authority, and as well, be a member of IFTA, depositing $1,000.00 surety bond with OR DOT. Being a member of IRP saves the cost of states permit, but renting or leasing Eagle Nation Lease or Ryder trucks, allow the Driver to make use of Eagle Nation Lease and or Ryder’s IRP for 11, 21 or 48 states. IFTA decals are required on a truck that hauls interstate, or the Motor Carrier can be fined. If Eagle Nation Lease or Ryder supply the IFTA decal, than they would be responsible for road and fuel taxes. Since Eagle Nation Lease and Ryder don’t purchase fuel for trucks they rent or lease, they would be unable to supply the IFTA decal, requiring the CDL Driver leasing onto a trucking Business to have the Trucking Business supply the IFTA decal and or plates within IRP, depending whether or not truck rented or leased was supplied with plates within IRP. Of course, in order for me to haul cargo, renting or leasing a truck from Eagle Nation Lease or Ryder, their plate within IRP must be added to my IRP account in order for my insurance to cover truck, liability, cargo, etc. This gets complicated and when you need the truck on the spot, could it be there rapidly to cover a load when a truck may breakdown. OR DOT requires an advance notice for an appointment to change or add plates to your IRP account. I’m not really sure how Eagle Nation Lease or Ryder can rent or lease trucks with IRP plates without being considered the Motor carrier. Yet it seems I can’t do the same without being considered an employer. Why then is Eagle Nation Lease or Ryder not considered the employer, especially since their supplying the IRP plates? Portland Freight allows Independent Truckers to lease on to their USDOT/MC authority, supplying IRP plates, insurance while under a load (no bobtail insurance), and if a driver has no trailer, Portland Freight will supply the trailer if they have an extra trailer available.
9). Many Trucking Business are failing and those that are still afloat will eventually fail unless there fleet is ten trucks or more, and of these Companies like Snider, Gordon, RLT, J.B. Hunt, Green Bay, etc., hauling for $1.05 a mile or less dry van cargo/freight, with there many thousands of trailers between them, are enabling the smaller Trucking Companies or Independent Truckers to compete in a fair market place. Shippers are more than willing to take advantage of lower cost for hauling cargo, regardless of the consequence to the trucking industry, as long as larger Trucking Companies continue to run there trucks at bargain basement prices, enabling Small Trucking Businesses and Independent Truckers a fair and partial opportunity to haul cargo, and at a fair and reasonable price per mile.
When you own hundreds of trucks and trailers, leasing on Drivers so they can drive their equity into the ground, hauling your trailer, and for 70% of the gross, or hiring Drivers at $.25 a mile, Drivers right out of Truck Driving Schools, monopolizing the available dry van/refer freight; how can Small Trucking Businesses or Independent Truckers expect a fair share of the market, and at fair and reasonable rates per mile, considering all the cost involved in owning and operating a truck and or Small Trucking business. Although Flatbed cargo is competitive, as of yet, large trucking companies have not captured the majority of the market. Hauling flatbed cargo is a difficult job. Loads must be strapped or chained. Tarps take several hours to secure on many loads, even with two drivers on board. Dry van/refer freight by far is an easier job, but unloading freight in most places, unless you pay a lumpier, is the responsibility of the Independent Trucker, Driver or Leased Driver of a Small Trucking Business. Sometimes lumpier amounts paid can be billed to the Broker or Shipper and or Receiver. I’m not against big business, the American dream, etc. What I don’t understand is why the State and Federal Governments don’t issue a more clear and precise evaluation of the Trucking Industry, thereby becoming more aware of freight rates and the daily expenses involved in owning and operating trucks. Years ago, deregulation opened the door, allowing anyone to obtain FHWA MC Authority for interstate cargo/freight transfer. This was done in order that large Trucking Companies not continue monopolizing all the available cargo/freight in America. Yet today, the same thing that deregulation was to avoid is occurring. It is time to deliver a compressive proposal, thereby eliminating Monopolization of the Trucking Industry. Deregulation did not solve the problem. The only thing that will solve the problem, is a fair and reasonable cargo/freight rate per mile, target to target; with inflation taken into consideration, surcharges to the Shippers for the purchase of fuel above $1.50 to $1.60 a gal, cost of mechanic labor for repair, parts, maintenance, OR and other states Weight and Mileage Tax, 15 day pay for delivery of cargo/freight rather then 30 to 60 days, etc. No plan is no where, and without a genuine attempt to solve the plight of the trucking Industry for the Small Trucking Business or Independent Truckers, Monopolization of dry van/refer cargo/freight shall continue, until the only trucks running the interstate will be the largest Trucking Companies with the most money. Of course there will be available jobs for the younger inexperienced truck Drivers, earning their $.24 a mile.
10). Brokers receive 10% off the top. Shippers pay brokers/Trucking Businesses 30 to 60 days after bill of ladings are turned in, requiring truckers to factor/quick pay at 4 to 8 percent. Then threes COM CHECK fees between $13.75 for up to $250.00 to $23.75 for up to $500.00 or more, depending upon the amount requested for advances for fuel or drivers draws from brokers, Trucking Companies and or a Small Trucking Businesses.
11). Through some Brokers you can average $1.20 a mile. Traveling 2,500 to 3,000 miles in a 6 to 7 day week, with one driver or 4,500 to 5,000 miles in a ten-day period, with two drivers.
12). Weight and Mile Distance Tax is a correct means for revenue for highway/bridge maintenance, construction, etc. Trouble is, AZ PUC fuel is $1.49 a gal. compared to $1.30 PUC fuel in OR. CA = $1.55 to $1.60. UT = $1.52. Since threes no consistency between other states PUC fuel, OR PUC fuel of $1.30 a gal. does not off set the cost to travel on OR Highways in relationship to the cost to operate on IFTA states highways. Many Truckers avoid scales in OR by learning the times scales are closed through the town of Donald, by passing Woodburn scale/port of entry and driving around Klamath Falls Lake. Of course some county roads require annual permits and $5,000.00 fines if caught without permit to travel various county roads in Turner, Donald, etc. Experienced Drivers can travel through OR without entering any scale, thereby not reporting miles.
Crossing over to Vancouver, WA, traveling WA Columbia Gorge state highway, returning to OR across the Columbia River by the power station, avoids the scale on I-84. This happens every day.
13). When my truck was traveling, every mile on every road, state highway and or Interstate freeway was reported. Trucks with large engines may have the horsepower to travel high speeds, but trucks should not go fast with 80,000 GVW. Truckers may disagree with me on this issue, but I accept 65 as a maximum, even though the speed limit is 55 mph. Few Truckers drive trucks at 55 mph. However, there are exceptions. One of the two drivers I leased my truck to was content to drive 55 mph. My other driver traveled the speed limit of the traffic of the freeway, usually 60 to 65, alongside other trucks doing the same. 75 mph is a normal speed for trucks in WY or NV.
When trucking becomes monopolized, Small Trucking Businesses and Independent Truckers, except for those owner operators always willing to eat there truck equity up, traveling highways for little to nothing a mile, will no longer be around.
Who has reviewed the expenses encountered and over cost of the trucking industry in relationship to Small Trucking Businesses, Independent Truckers, Consumers, and State and Federal Governments? Used trucks inventory is becoming larger throughout the United States, causing the value of trucks to depreciate; yet the cost for maintenance, repair, parts, etc., is increasing. The cost of engine rebuilding is more expensive then the value of a 1978 to 1986 Freightliner. My 1980 Freightliner while operating received CVSA sticker and was in top shape, prior to a blown piston and crank bearing failing. Truck is still in top shape, yet the cost of rebuilding the engine exceeds the value of the truck, that is to say, what a Truck Sales would give you in trade. Sold in the truck trader or newspaper to a farmer, who needs the truck, might bring $6,000.00. $3,000.00 to $5,000.00 invested in the motor to sell the truck for $6,000.00 doesn’t pencil out. Running the truck is the only option, especially when your investment is in excess of $10,000.00.
Once and for all, lets inform the Public, Independent Truckers and Small Trucking Businesses, etc., that it is extremely difficult to can be profitable in today’s market, hauling dry van/refer cargo/freight. As an employer with less then 10 trucks, your chances of actually earning a profit after all expenses are accounted for, is little to nothing, and if you can show a marginal profit, more then likely, your equity in your equipment becomes little to nothing and only good for a tax right off. Un less you do your job real well, Leasing your truck to Drivers, helping the Driver(s) find loads and doing the paper work for the Drivers, so they can concentrate on the driving job, averaging $1.15 to $1.20 a mile, hauling flatbed cargo/freight, don’t attempt to become a Small Trucking Business. Brokers and Agents do well, but the job is extremely difficult and competitive.
Maybe you can’t see the future as well as I or other truckers can, as your not traveling in a truck on the roads/highways/freeways of America. This should suggest that you find someone to ride in a truck for a week with an experienced driver. I will dispatch the loads and after the Brokers 10%, average the driver $1.15 to $1.20 a mile, for flatbed cargo/freight, dead head and load miles, city to city. When your done, add the total miles traveled, total time waiting for loading and unloading, days on the road, amount driver spends for food, state permits (if Single State Registration is not paid in advance), road tax paid at port of entries; regardless in you’re a member of IFTA/IRP in NM, prior to traveling on NM State (SH) and Interstate Highways (IH). Permit is good for 48 hours and cost $44.00 to drive from the Border of CO/NM to AZ/NM. In order to avoid paying NM road tax, Driver must travel NV SH 56 from Cedar City UT to NV SH 93 to Las Vegas, NV to NV IH 15 to NV SH 93 to NV SH 95 to CA SH 95 to CA SH 62 to AZ SH 72 to AZ SH 60 to AZ IH 10. Although these highways and freeways make it possible to avoid scale house/port of entries, Driver must wait until 12:00am for AZ scale house to close leaving NV (Parker, AZ). To avoid NM/AZ scales/port of entries is only cost effective if your truck can’t pass DOT, cargo/freight is going to Las Vegas and or your picking up cargo/freight in Las Vegas, NV. NV does not have scale houses or port of entries. NV State Highway Patrol has scales in their car. Transportation Permit, Dallas, TX (800-749-6058) handles NV permits. I’ve only achieved 19 trips in two months. Those more experience than I, can avoid any scale house/port of entrée, in the Pacific North West using NV. Driving legally works for my business. With larger Trucking Businesses pushing the smaller Trucking Business or Independent Trucker out of business, I can understand why 5 to 10 percent cheat, equally 15 to 30 million dollars revenue lost to the state of Oregon. Electronic chip (locator) on trucks license plates would solve this problem.
14). Drivers leasing my truck and or trucks is manageable but not prosperous taking into consideration monthly liability/cargo/truck insurance, IRS annual Heavy Weight Tax ($550.00), IRP fees, depending upon states registered, IFTA annual fee ($150.00), IFTA fuel tax, State Single Registration, OR Weight and Mile Distance Tax, NM, etc., truck/trailer payment, tires for truck/trailer, maintenance/repair, Phone/Fax, Office supplies and Office labor. As an employer, there are many other costs, such as Employer/Employee: SSA, FUTA/State Employment Tax, Workers Compensation Ins, IRS/State Income Tax Employee withholding, etc.
I appeal to you, to evaluate the aforementioned and put together a helpful report for those considering a Small Trucking Business or becoming an Independent Trucker. Reporting the entire facts will secure the future for Small Trucking Businesses, Independent Truckers, and or the Trucking Industry. Knowing the entire facts will allow changes in order to secure a fair and reasonable rate per mile for dry van/refer/flatbed cargo/freight distribution throughout Americas State Highways and Interstate Freeways to include every mile driven, target-to-target. I know the Governor of Oregon will more than likely never see this letter or enclosures presented herewith. Therefore, as an agent for the Governor, the people of the State of Oregon and the Trucking Industry in its entirety, please make a genuine effort to submit a proposal to the Governor, addressing the plight of Small trucking Businesses and or Independent Truckers. If you have any questions or need any further information, I am more then ready to assist, and others I know would be more then happy to stand tall to the man. Of course there are those that would rather leave things, as they are, Economic Giants in the Trucking Industry for example. I’m a Small Trucking Business, all alone, with hopes that Uncle Sam, maybe you, the Governors advocate, heck, maybe even the Governor himself, might take action before it’s to late. Without action, 3 to 5 years from today, Trucking will not be a viable means to transport cargo/freight throughout Americas State Highways and Interstate freeways by Small trucking Businesses or Independent Truckers.
BRUCE WAYNE HENION
Oregon Workers Compensation
Oregon State Employment
BRUCE WAYNE HENION
Load Compensation-Letter to Idaho Statesman (March 2001)
The Idaho Statesman March 2000
1200 North Curtis Road
P. O. Box 40
Boise Idaho 83707
Ref.: Load Compensation Letter to Idaho Statesman (March 2001)
When the course we Americans take in order to communicate genuine concerns relating to those matters that affect many fail, we turn to you as our advocate and voice in pubic issues. Yet often the newspapers of America also have a deaf hear.
One hundred and fifty years ago, newspaper editors printed the truth and would rather die then print a lie or stand idle on matters that affect the public.
I have forwarded the Portland Oregonian a letter I sent the Governor two months ago, which included supporting evidences that Small Trucking Businesses and Independent Truckers are in trouble. Our Governor never responded to these concerns nor issued me a statement he received evidences on a subject that affects everyone. Oregonian never responded to me and received this letter and all information’s sent to the Idaho Statesman. I also sent my Small Trucking report to Federal legislators with no result. I have over 20 binders full of information proving my claims, illustrating detailed expenses for three months of operation and they can be provided to the state legislators. The only problem, state legislators don’t want evidence-supporting claims of trucking industry related problems. Business as usual is not good enough.
Larger Trucking Companies receive from the Federal Government for Driver Programs. Swift will cargo on their flatbed trucks from Phoenix to Los Angeles for approximately $200.00 to $250.00 are notorious for under cutting the market in order to drive the small trucking business out of business. Spot-checking trailers up to five days is a common practice. Truck Drivers report to me daily and listening to drivers on the CB illustrate unhappy Swift Drivers.
It is not cost effective to operate small fleets of trucks, and it is impossible to be an employer and expect a return on your investment operating one to two trucks.
These facts should be reported; saving others their life savings spent foolishly opening a Small Trucking business. Other facts relate to the larger Trucking Companies like Swift, with their Federal Government sponsored Driver Program. Swift will haul cargo on their flatbed trucks from Phoenix to Los Angeles for approximately $200.00 and are notorious for under cutting the market in order to drive the small trucking businesses out of business. Spot-checking trailers up to five days is a common practice. Truck Drivers report to me daily and listening to drivers on the CB illustrate unhappy Swift drivers.
Information on my web site discloses those problems affecting the trucking industry.
My letter to the Governor although three months old, still reflects the concerns of the trucking industry and with fuel cost skyrocketing to $2.00 to $2.20 per gallon in California in September and as of November 5, 2000 $1.89 to $1.95 per gallon in California and $1.70 per gallon in Oregon. Shippers unwilling to raise their rates only compile the issues.
I have dispatched trucks for local trucking businesses and in a seven-day operating period the gross averages $2,000.00 to $3,150.00 per week, dependant on drivers hours and available loads. I help many trucks on a daily bases find loads, and brokers among those on my broker list I’ve forwarded you will quote you rates city to city and issues of Internet Truck Stop of California & Oregon loads available on a daily bases provides rates if you only make a few calls. The enclosed truck list of those trucking businesses I’ve helped on occasion can be contacted for their input. Many brokers on my list also have a trucking division.
By contacting others, gathering their input, surely you could effectively communicate the Small Trucking Business and Independent Truckers plight.
Other trucking businesses with their fleets of ten trucks or more such as Child Truck Line, Morgan Trucking (40 or so trucks – total fleet not operating), Kendle Trucking, Miller Trucking, Five Bar Transportation, Covey Run Trucking, C. Miller Trucking, Canfield Trucking, Inter Mountain, Glenn Barker Trucking, Mcclanahan Enterprises, Quality Trucking, State Transportation, Sherman Brothers should be contacted by your newspaper reporters to verify the current crisis. I know the answer to solve current problems in the trucking industry and so do these trucking companies. In short, rates must be established consistent with expenses with a reasonable margin for profit and overhead. $.90 to $1.05 per mile in nearly every western state isn’t the answer and if it doesn’t change and soon, there will be record business closures throughout America and not just trucking businesses. Trucks need support from mechanics to parts.
May 30 2000 I shut down two trucks and became an Agent for Transportation Unlimited. My business failure was due to using the wrong oil in one of my trucks, which caused an engine to blow up, and mechanic shop not doing their job correctly on my second truck; law suits that I must pursue against three businesses.
My recent employment office hearing establishing me as an employer testifies to the fact that the State of Oregon Employment Division is deaf to the inherent facts relating to the expenses of trucking on our highways. Employment division representive told the hearings Judge that paying drivers $.35 to $.40 per mile wasn’t an incentive for self-employment because a driver could just drive more miles. The law only allows a driver to operate 70 hours in a one-week period and total hours on duty cannot exceed 15 hours without an 8-hour sleep period. Loading and unloading can eat up 5 hours. The majority of trucking businesses pay their drivers as employees 25% of the load or $.25 per mile and if you lease onto a trucking businesses authority, your settlement is approximately 80 to 85% of the gross and you must haul the trucking company’s loads. Yet the employment division sees a self-employed contractor leased to a trucking company, as independent and able to pull any loads desired without the direction of the trucking company. Name me one leased driver to a trucking company’s authority that doesn’t haul the trucking company’s loads. The fact that I owned my trucks and the drivers contracted their services is not acceptable under the state employment division guidelines or as it seems, Oregon State Law. Even though Drivers signed lease agreements in order that they could be paid top earnings makes no difference, suggesting citizens do not have the right to decide their own employment terms. The law is the problem and should be adjusted and if the law can’t change, making it cost effective to operate one to two trucks without being an employer, declare the facts allowing others a clear and precise understanding that Small Trucking Businesses are not feasible. Workers compensation is another issue that must be addressed as Oregon workers compensation doesn’t extend to all states yet you must have work comp if you’re based in Oregon.
RATE PER MILE
Merced, CA to San Diego, Ca., $1.00 per mile as of October 25, 2000.
Larger fleets are part the blame for shippers rates so low as these large fleets haul for less then small trucking businesses can afford to. Larger fleets deploy many tactics from spotting trailers five days in advance to contracting nearly all-dry van freight in areas like Seattle, Washington. Dry van freight from LA to Texas for example on a daily bases is $1.05 per mile. Your lucky to find a flatbed load from Sacramento to Oregon and nearly all loads leaving northern California are less then $1.05 per mile. Shippers in states like NV, UT, ID, NM, CO and TX don’t have a clue to the expenses a truck has, as these areas shippers allocate less then a $1.00 per mile with a 5 to 10% broker fee with no fuel sure-charge, what’s that! Refrigeration freight from mid Washington to Colorado is $1.13 per mile pallet exchange and when you can find a round trip, often you must load cargo yourself receiving $1.10 per mile. Of course you must buy your own refrigeration fuel and in Colorado you must buy a permit in order to haul produce. If your traveling in Colorado on a regular bases, you buy your permits quarterly or annually saving a little.
Refrigeration cargo from Seattle, Wa. to Sacramento, Ca., as of October 27, 2000, rate per mile was $1.12 per mile with a 8 percent fuel sure-charge allowed by one shipper and this load was brokered.
Shippers will move their goods to market the cheapest way possible and if larger trucking companies continue to under cut the market in order to haul most the cargo, Small trucking Businesses will continue to go broke. Unfortunately, it will come to this end before shippers and the federal and state governments wake up.
It won’t take much encouragement from me or anyone else to bring trucks to the state capital if things don’t change. Other Small Trucking Business owners I’ve spoken to have written letters to their elected officials with no result.
I would hope that your newspaper’s insight could see the problems at hand. The choice is yours. Do nothing like the Oregonian, Oregon’s Governor and Legislators and kick back in your Jacuzzi with your Champaign glass filled to the top, and when its empty, ask yourself where it came from and who will bring it tomorrow and the day after when trucks stop. I will respond to another newspaper reporting that you were sent this information if you do nothing. If that doesn’t work I will join when other small trucking businesses and protest the state capital. Were ready you known?
BRUCE WAYNE HENION
ISSUES & POSITIONS ON FUEL SURECHARGE & EQUITABLE COMPENSATION ON LOADS FROM CARRIERS, BROKERS & SHIPPERS - March 2001
Mandatory fuel surcharge legislation, HR 4441 (The Motor Carrier Fuel Cost Equity Act of 2000, was passed by the full House, without objection, on October 10th and currently awaits Senate approval.
“This bill had two possible expedited paths in the Senate. One would be to amend it to another bill that was assured of passing the Senate. The second would be to pass the bill under “Unanimous Consent,”” as reported by Paul Cullen, Jr., The Cullen Law Firm. Cullen said, ““Unanimous Consent” procedures had been approved for HR4441 and the chances of its attachment to another bill were uncertain. If this bill does not pass the Senate, we will have to wait until next year when the bill must be reintroduced in the new Congress and start the entire process again.”
Jim Johnston, President, OOIDA calls those who rip off truckers “Scum-sucking bottom feeders.” Johnston’s article in the November issue of Land Line Magazine is very informative and the bases for information supplied in this article. Johnston continues to express his frustration that the mandatory fuel surcharge legislation had not been passed yet. I agree with Mr. Johnston and I think he expresses genuine concerns relating to the trucking industry.
As stated by Johnston “It’s time to cut loose from those scum-sucking bottom feeders and get rid of those in this industry who either get rich by underpaying professional truckers, or who simply don’t have the backbone to standup to their shippers and demand reasonable rates. They drive down the rates for the entire industry, make it impossible for the better operators to establish and maintain reasonable rates, and have forced the occupation of professional truck driver into nearly poverty level status. Our cost of operations figures for 1999 show that at 120,000 miles a year, and 93 cents a mile for all miles traveled, take home compensation is approximately $35,000 a year. Considering the amount of time and work required, that’s barely minimum wage. This doesn’t take into consideration this year’s fuel cost increases or the substantial deterioration in equipment values that have occurred over the past.”
Transportation Intermediaries Association, the association that represents truck brokers is a major opponent to the fuel surcharge and reports on their web site that they will “be keeping close watch to assure that any attempt to impose pricing in the industry fails.”
Although fuel prices in September were higher then they are now, fuel prices are steadily increasing and in the next several months we may see fuel shortages due to the world oil market projected cost increases and consumption rates cautioning oil producers to exploit less in order to secure reserves for the future.
Mr. Johnston expresses “Do not accept another load that does not contain a fuel surcharge adequate to compensate you for your increased cost of fuel! Do not pull another load for a carrier or broker that retains a portion of the fuel surcharge while you pay the entire cost of fuel. And most important, do not accept any excusses, delays, or partial reimbursements. If you dot immediately draw the line and take a stand then you will be contributing to the continuation of this problem, not only for yourself, but for everyone else as well.”
Although I agree with Mr. Johnston, it is presently impossible to enforce fuel surcharge fees allocated by motor carriers, brokers and or shippers. Small trucking businesses and Independent Truckers presently are at the mercy of those becoming rich at the expense of Small Trucking Businesses and Independent Truckers/Owner Operators. Everyone makes money on trucks except the owner. A thirty dollar part on a truck when it breaks can cost the truck owner $1800.00 when the truck is on the road hauling cargo, freight or produce when the engine sensor breaks and you call Detroit Diesel in Boise Idaho. Emergency repair is as high as $98.00 an hour charged the minute this companies mechanic is dispatched and $1.50 per mile charged by the after hours mechanic. November 25, 2000 one of the trucks I dispatched a load for, traveling to New Mexico broke down 80 miles from Boise. Towing was $500.00 and after hours opening of the Parts Department cost $100.00 and they did not have the engine sensor for a 1994 Freight Liner. Mechanic hours consisted of 8 1/2 hours with the use of diagnostic equipment. $3.13 per mile towing charge + $833.00 mechanic labor + $240.00 mechanic driving fee + western union sending cash as VISA was not accepted over the phone + $30.00 used part cost = $1,603.00 + Western Union fee. Don't break down in Boise Idaho. Once again, everyone makes money but those operating trucks. This load paid the Small Trucking Business $1.26 per mile + plus a fuel surcharge of 4 percent of the gross allocated on 1,360 miles. Dead head to another state leaving New Mexico is common rather than accept loads under $1.00 per mile if you can find a load.
Their are those that will take anything to leave places like NM, UT, ID, NV, AZ, TX, etc. UT Shippers know they can rip off anyone. Salt hauled to WA from Salt Lake "$626.00" and shippers know they will find someone that will take the load.
Some brokers negotiate fuel surcharge fees from shippers and a few shippers’ volunteer fuel surcharge fees. Fuel surcharge fees presently in the Western United States are not based on 10.5 cents per loaded miles. Four to nine percent of the gross load revenue allocated is routinely accepted motor carriers, shippers and or brokers as equal to a per mile fuel surcharge, that is, if you can get it. Taking into consideration low rates for hauling cargo, freight or produce and shippers unwilling to increase rates, presently averaging $1.00 per mile in northern CA, UT, ID, NV, AZ, TX, NM, CO and other states, those hauling loads for rates at present are in a do or die position and many are able to continue, hoping for a better year ahead because they own their own trucks and trailers, even though their eating up their equity in their equipment in order to generate more then minimum wage.
Evaluating all cost involved operating trucks, unless your receiving a minimum of $1.35 per mile for every mile traveled and more in Oregon in order to off set the Weight and Mile Distance Tax, you are working for free and or not setting anything aside for truck and trailer replacement for those who own their own trucks and trailers. Small Trucking Businesses and or Independent Truckers whom have truck and trailer payments for new or used equipment are in my opinion, working for less then minimum wage and in the case of a Small Trucking Business operating 1 to 5 trucks, business operating expenses, dispatch employee, office and driver phone calls, truck/trailer expenses, employee responsibilities, etc., make Small Trucking Businesses a tax write off more then a profitable business. We should remember that Driver’s make mistakes on occasion from turning a spread axle trailer to sharp, causing breakage to curbing front tires. Front tires cannot have any defects. Front tire and mounting expenses are as high as $350.00. Having replaced front tires on a truck doesn’t mean they will last their life expectancy. A driver may not be aware that the front tire has a chunk of rubber missing until the state police or weigh scale inspector sites the driver, often shutting down the truck until repairing the tire. The cost to a Small Trucking Business for driver mistakes or neglect is enormous. Although drivers are required to inspect their trucks and trailers daily, often a driver’s inspection of the boss’s equipment is not sufficient. Some drivers will push a truck as fast as it will go up a hill even though the rear ends may be geared low. There are literally hundreds of possible problems that could occur every load. Lets don’t forget a driver parking your truck with a load on it, 1,000 miles from home base and quitting.
The fuel surcharge is a good start. Establishing minimum rate standards of $1.35 to $1.85 with annual increases is necessary if Small Trucking Businesses and or Independent Truckers are to survive. I will continue to advocate fair and reasonable rates per mile. When everyone gets tired of working for free may be things will change. I thought truckers were fighters, yet I see limited action on the part of everyone working for free.
BRUCE WAYNE HENION
NAFTA Mexican Trucks (March 14, 2001)
March 13, 2001 the USA Today reported that $150 billion in gross revenue from goods transported by trucks will come from Mexico to the U. S. This amount will be greater if 190,000 Mexican Truck Businesses and Owner-Operator trucks are allowed to travel in the U. S. The 7-mile and or 12 kilometers border restriction for international truck commerce has prevented Mexican Truck Businesses and Owner-Operators in the U. S. market.
OOIDA, Union Leaders, Motor Carriers and Small Trucking Businesses are pressuring President Bush to explore possible systems ensuring Mexican Truck Businesses and Owner-Operators adhere to U. S. FHWA, FMCSA and U. S. DOT regulations/standards governing truck commerce on the highways and byways of America. With no limited mile restrictions presently placed on Mexican international truck commerce, an increase of 190,000 trucks is expected.
The loss of revenue and jobs for Mexicans over the last five years is an important issue to President Fox and the Mexican truck industry. American truck commerce related jobs are also of major concern to American’s as Mexican truck drivers “earn less than one-third the typical U.S. trucker's wage.” Trucking related expenses for Mexican Truck Businesses and Owner-Operators do not equal American Truck Businesses and Owner-Operators truck related expenses.
USA faces sanctions if Mexican trucks aren’t allowed full access to U. S. highways and byways.
FMCSA, FHWA, U. S. DOT and Customs have their work cut out for them. There are 60 federal safety inspectors scattered throughout boarding states with Mexico. In 1995 seven federal safety inspectors were responsible to ensue that federal safety requirements were adhered to by Mexican Truck businesses and Motor Carriers. Texas state safety inspectors in 1994 totaled 250. Today 401 Texas safety inspectors patrol the counties of Texas, with 47 safety inspectors stationed in the boarding counties.
“In 1995, 54% of Mexican trucks failed inspections. By 2000, the number dropped to 36%, compared to a national average of 25%. In the four Texas counties where the bulk of Mexican trucks enter the USA, there has been no increase in truck-accident fatalities even as the number of trucks entering the state rose 50%, according to Department of Transportation statistics,” as reported by the USA Today March 13, 2001.
“The Kasickis, owners of a Cleveland-based small trucking company, says it the best: "We work hard to meet safety standards. The decision puts us at a disadvantage as business people and as drivers. Nothing good comes from reducing safety standards."
“Mexico’s largest trucking organization spoke at a press conference announcing the necessity for a five-year delay before opening up cross-border trucking between Mexico and the U. S. The National Chamber of Cargo Transport (CANACAR) called for a postponement of the trade panel ruling, warning that Mexican trucks needed time to prepare themselves for competition with U. S. Carriers. CANACAR President Miguel Quintanilla expressed that the border should remain closed “while the conditions for (fair) competition are not in place.” Mexico’s “aging fleet” consisting of approximately 375,000 trucks had an average of 15 to 20 years hard service on very rough Mexican roads and were in no condition to compete with U. S. trucks, whose age average five years,” as reported by Landline Magazine March/April 2001 issue.
Hundred’s of Teamsters' union members staged a protest in the border city of El Paso, Texas, expressing their concerns relating to open cross-border trucking with Mexico.
Out spoken Congressional leaders that have voiced their concerns to President Bush have the support of many and include Rep. James L. Oberstar (D-MN), Rep. Sherrod Brown (D-OH), Rep. Jack Quinn (R-NY), Rep. Frank LoBiondo (R-NJ), Rep. Nick Rahall (D-WV) and others. American Trucking Association (ATA) applauds opening the border for cross-border trucking.
U.S. Congressman Sherrod Brown, OOIDA Director Ray Kasicki and Joan Kasicki, representatives from the Owner-Operator Independent Drivers Association, AFL-CIO, Public Citizen and Advocates for Highway and Auto Safety (AHAS), Teamsters' President James Hoffa and many others including trucking businesses urged President Bush to keep unsafe trucks off U.S. roads.
“Congressman Brown called the situation critical and implored the Bush administration to stand firm on safety requirements. "On average, Mexican trucks are ten years older than American trucks," he said. "In 1999, the U.S. border patrol was only able to inspect one-and-a-half percent of four million Mexican trucks that entered the U.S. If President Bush opens the border without strengthening inspection in a real way, he will be responsible for the safety of Americans on the road.
Brown and 13 House colleagues, both Republican and Democrat, sent a letter to President Bush, calling on the administration to take as much time as necessary to address the United States' preparedness for an open U.S.-Mexico border. The letter also requests that Bush create a comprehensive plan to strengthen border inspections and ensure that our motorists will not be endangered,” as reported by OOIDA.
President George W. Bush and Mexico's President Vincente Fox have it in their power to solve the Mexican truck international commerce related problems. The key to the Mexican trucking crisis is in BA JA, California, Mexico. La Salina Marina was developed for private homes and slips for boats. LTL freight could be shipped from this marina and the area of Ejido Ursulo Galvan as a hub for international commerce would house a Distribution center and Regional Mexican DOT/U. S. DOT inspection and customs center. The area is well suited and the developers in the area would welcome new businesses. Shipping LTL freight by barge to ships from La Salina Marina to the San Diego and Los Angeles ports and vise versa would be a good start. Designing a package everyone can accept, safety a major issue must be the goal and with the possibility of international sanctions against the U. S. if Mexican Truck Businesses and Owner-Operators (an increase of 190,000 trucks having full and unrestricted access to U. S. Highways and byways) aren’t allowed international commerce under NAFTA; a plan forth coming is inevitable. The recent ruling by a NAFTA arbitration panel made it clear that the U. S. was not honoring NAFTA.
Are we ready for the consequences of making bad decisions? I’ve made some bad ones. Number one, I thought a trucking business could be profitable. Boy was I wrong. Small trucking businesses with two trucks are not profitable unless your fuel purchase is $1.30 a gallon and your rate per mile is consistently $1.35 per mile to include deadhead miles. If you must deadhead 100 to 300 miles your load delivered or next load must make up the extra expense encountered. C. R. England posts their minimum for Refer loads out of Los Angeles as $1.00 per mile. U. S. Small trucking Businesses will continue to go out of business if $.96 to $1.00 per mile prevails as the amount shippers will compensate U. S. Truck Businesses and Motor Carriers. Flatbed rates paid by shippers in western states range from $.50 per mile to $1.25. Oregon and Washington shippers are burdened with higher shipping cost then states like CA, NV, UT, ID, NM, CO, AZ, TX and MT. Backhaul loads are available for $.50 to $.90 from CA shippers/brokers for trucks hauling cargo into California for $1.05 to $1.25 per mile compensated by Oregon and Washington shippers/brokers.
BRUCE WAYNE HENION
SMALL TRUCKING BUSINESS REPORT
I believe FHWA, USDOT, OR DOT, and or Small Business Agencies and or Insurance commission should report the following.
1. Small Trucking Business's cannot be profitable as an employer unless rate per mile is increased, as employer obligations makes it impossible to expect profit. If you own your trucks and trailers your equity allows generated revenue but profit is limited as over head, expenses and low rates per mile hauling cargo make it impossible to expect trucking to be a profitable business.
2. Every truck in a Trucking Business must have its own liability, equal to the cost of the first trucks liability and if you receive a discount once your business has been established for several years and if you have many trucks, the discount is not enough to make any real difference.
3. Small Trucking Business's when they first start out, must pay the highest insurance premiums on the market for the trucking industry.
4. Insurance Agent's and Insurance Companies providing commercial insurance for trucks, require the entire year paid in advance, collect a down payment of half the cost of the policy of liability they finance for you, through their choice of financial institution, at any interest the financial institution decides upon, regardless if your credit is good or bad.
5. If you sell or loose insurance on a truck, you must turn your plate into ORDOT, regardless of the situation, and you do not receive a credit for registration fees paid in advance for the year. Unused registration fees paid to IRP states are not reimbursable nor can the unused fees be credited to other related expenses such as Oregon Weight and Distance tax or IFTA.
6. OR DOT will store registration fees paid for the year in advance until a business can reestablish insurance on the truck, thereby utilizing what was paid for, but a new plate must be purchased.
7. There is no regulation for companies who ship their products by common carriers or independent truckers, to have scales on their business site, allowing trucks to leave the business location with legal weight on trucks steering/drive axles, and trailer axles, without driving to the nearest scale on city and county roads, as well as highways and interstate overweight. Independent truckers and common carriers may also be required to have scales onboard if the business' cry to loud.
8. The state police and other law enforcement officers of cities, counties, DOT Inspectors, etc., can issue overweight tickets regardless if your traveling to the nearest scale from the business you picked up your load to determine your weight.
9. Business's that over weigh your trucks cost the driver of either independent or common carrier driver's, valuable traveling time and drivers on duty hours are increased, thereby delaying a scheduled load.
10. Insurance companies can break a small business with high premiums.
11. Insurance Agencies acting as a rep. of insurance companies must specialize in commercial insurance if you desire a full understanding of all costs involved.
12. It is recommended that common carriers and independent truckers, contact insurance companies providing commercial insurance direct.
13. When an agent or insurance company provides insurance coverage for commercial policies, for common carriers or independent truckers, they should provide the client with detailed expenses of commercial policies for 1, 2, 3, 4, 5, 6, 7, 8, 9, and 10, etc., trucks added to the existing policy.
14. Agent or Insurance companies should provide the information in number 14 to the client before the client engages in the addition of another truck to the existing policy, full disclosure before issuance of insurance.
15. If you pay for 1,000,000 liability the insurance company should report to FHWA said same, rather then 750,000.
16. The state commissioner of insurance of Oregon is the only resource available to ask help from when an insurance company or agent providing truck insurance doesn’t conduct their offerings fairly; although the commissioner is limited in action that can be taken.
17. Be smart, do not open a Trucking Business unless you can afford to bond yourself and never attempt to employee drivers unless your trucking fleet has ten trucks or more. Independent Truckers have a much better opportunity to generate an income.
18. Sell your trucks to drivers or lease them the truck based on a set amount monthly payment.
19. Insurance agents and insurance companies that provide commercial insurance for independent truckers or common carriers, should be required by law, to inform the Base State of operations of either independent truckers or common carriers, USDOT and, FHWA, within 7 days of insurance of commercial polices, that a independent trucker or common carrier has deposited the necessary funds and that insurance is current. Electronically filing policy to USDOT/FHWA and all changes to policy should be established as a law in order to sell commercial insurance.
20. Oregon Workers Compensation doesn’t cover all states. Other insurance companies covers drivers accident insurance for the 48 states. Yet its mandatory to have Oregon Workers Compensation if your trucking business is stationed in Oregon.
21. New trucking business Oregon workers compensation cost around $13.00 per $100.00 earned by the employee.
22. Maintain excellent records and keep your trucks in excellent condition in order to avoid delays at state weigh/inspection stations.
BRUCE WAYNE HENION