Well, here I am late again! The magazine is ready to go to the printer and my editorial is still not ready! The problem isn't that I don't know what I want to say. The problem is finding the right words to use. The problem is particularly difficult this issue because I want to talk about the legal actions OOIDA has filed against motor carriers over "alleged" (see there's one of those words you have to use) violations of the federal leasing regulations.
Using the wrong words (sometimes referred to as plain English) in referring to ongoing legal actions can give the other side ammunition to use against you in court. Or if you go too far, it can give them the opportunity to file a separate action against you. Among us regular non-attorney type folks, if somebody takes your money or property without your permission and keeps it, that's called stealing. If they do it through devious or deceptive practices, that's called fraud.
Back in the late '70s, OOIDA succeeded in getting the federal government to investigate the relationships between owner-operators and the motor carriers who they leased with. The Congress, The Department of Justice and the ICC conducted those investigations. The findings were that because of the unequal bargaining position between owner-operators and motor carriers, many motor carriers used their advantage through contracts and other means to deprive owner-operators of compensation they otherwise would be due. Those practices were referred to as skimming. The result of those findings was the development of the ICC leasing regulations.
Aggressive enforcement of those regulations in the early '80s forced many motor carriers to clean up their act while others either ignored the regulations or manipulated their contracts to find new ways to deprive owner-operators of income they should be getting. It is obvious to us from the volume of complaints we receive that reduced or non-existent enforcement of the leasing regulations in recent years has emboldened some carriers in their search to find ways around the regulations or to simply ignore them. And whether you call it stealing, fraud or skimming, it deprives small business truckers of hundreds of millions of dollars every year of income they should be receiving.
What is not widely understood, is that the effect of these practices reach far beyond the immediate victims to substantially impact the entire industry. The motor carrier who is able to generate or increase his profits at the expense of the owner-operator or driver is able to cut hauling rates for lower than what would otherwise be required, thereby gaining a competitive advantage and forcing down the rates of those carriers who must compete with him. Other carriers are eventually either put out of business or forced to adopt some of those same tactics in order to survive.
Truck lease purchase programs that create huge profits for the carrier who provides them and result in the failure, bankruptcy or burn out of many and often a majority of the drivers who participate in them not only create the ability to put further downward pressure on freight rates they also deprive the industry of individuals who might otherwise go on to become healthy profitable small business operators or qualified drivers.
Is it really any wonder why the trucking industry is faced with a huge driver shortage? Or why, with a booming economy and an abundance of available freight to haul that most motor carriers are operating at lower profit margins than an other segment of the economy? Think about it.
So, I guess I'm not going to talk about the lawsuits OOIDA has filed against motor carriers. I think instead I'll talk about the association's plans to develop a motor carrier rating system. But since I used most of my space not talking about lawsuits I'll need to summarize and get into more detail in the next issue.
One of the most frequent questions we are asked by members is "who is a good carrier to lease on with?" Unfortunately, this has also been one of the most difficult questions for us to answer. Not because there are no good ones, but because we seldom hear anything about the good ones. The carriers we do hear about most frequently are those that fit the category of my previous comments (when I wasn't talking about the lawsuits). Over the next few months we will be working to develop a system that will enable us to rate motor carriers in a way that will assist members in identifying the better opportunities available and weed out some of the less desirable opportunities. When we get a little further along with this, I hope we will be able to count on your help in providing the detailed reliable information that will be required to make the program work. LL