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Issues & Positions
Damned if you do, and damned if you don’t

By Jim Johnston
OOIDA president and CEO

 

About mid-March, OOIDA began getting a number of calls and e-mails from members and non-members demanding aggressive action by the Association in the way of organizing a strike or shutdown. When fuel prices continued to skyrocket and failed to stabilize, those demands increased to a fevered pitch.

This is neither a new nor unexpected occurrence; it has happened almost every time a major spike has occurred in fuel prices since 1973.

In fact, as most of you know, the Association grew out of the turmoil of the first fuel crises and nationwide truck shutdowns of 1973 and 1974. With the exception of the ’73-’74 shutdowns, none have ever succeeded in gaining significant support or participation. I don’t recall who, but someone famous once said those who don’t learn from the mistakes of the past are condemned to make those same mistakes in the future.

Some are suggesting that we call for and promote a nationwide truck shutdown.

Others, perhaps the majority, are saying they have no intention of participating in any shutdown or strike. They point out that trucking is a business, and as a business they recognize the importance of knowing their costs and refusing to haul anything that doesn’t cover all of those costs – including fuel plus a reasonable profit. They say, “Why should I shut down my truck in support of someone who does not properly manage his business and who, in fact, may be contributing to the problem by hauling those loads below cost.”

Unfortunately, things aren’t always that black or white. There are always shades of gray in between. And while some may be experiencing difficulty because of poor business skills or bad decisions, others have certainly been caught off guard by changing industry and economic conditions beyond their control.

Regardless of which category you may fit into, it’s important to recognize that a shutdown, even one that gains widespread support, would not solve the problem of high fuel prices and low freight rates. The short-term benefits would go to the fleets, who wouldn’t shut down, and to those small-business truckers who are currently operating at a profit. There would be further damage and no gain to those already at the brink.

As for the Association’s direct involvement in promoting this type of action, it would be a clear violation of federal anti-trust and possibly other laws that prohibit organizing and promoting collective actions of independent business operators designed to affect rates or costs.

In addition, anyone who was adversely impacted by the action could file civil lawsuits against us – and possibly even individual strike participants – to recover their damages. The Association would likely be put out of business, or at the very least would be tied up in court for years defending against both criminal and civil actions.

To those who say we’re afraid or don’t have the cojones, I say bull. Check our history. OOIDA has never been afraid to stand against anyone to fight for the interests of our members. That includes state and federal government as well as opposing industry organizations and multibillion dollar companies.

Our position on truck shutdowns has nothing to do with fear or self-interest. It has everything to do with the best interests of our members. Would it be in the best interests of our members to advise them to shut their trucks down when we know the majority of trucks will continue to operate and the objective could not possibly be achieved?

Would it be in the best interests of our members to sacrifice the future of the Association because of a short-term fuel pricing problem that will, as with all similar problems in the past, stabilize by itself in a short period of time?

And if we did, who would be left to fight the significant long-term issues like the efforts to allow free access to competition from Mexican trucks; or the efforts to privatize and toll interstate highways; or attempts to mandate truck speed governors; or unfair changes to hours-of-service regulations; or the abusive practices of brokers and motor carriers?

The solution to this problem is not a nationwide shutdown. Who would we strike against anyway? The oil companies? The Arab oil cartel? The government? The futures traders at the New York Mercantile Exchange who bid the price of oil higher every day to profit investors?

The solution is not to throw the only organization capable of representing the interest of truckers on the sacrificial scrap heap of a short-term problem. The only real solution is to know your cost of operation, add on a reasonable profit, and refuse to haul for anything less. No one else can do that for you – and if you don’t do it, nothing anyone else may do will help.

The Association is working on some solutions to address the problem. While none of them amount to the magic bullet that some seem to expect, they are achievable goals and, if successful, will result in long-term improvements.

OOIDA is working with lawmakers on legislation that would require 100 percent pass-through of all fuel surcharges paid by shippers to the person paying for the fuel. In addition, the legislation would require full disclosure of the trucking transactions between shippers and brokers or other intermediaries. Truckers would be in a much better position to decide whether or not to take a load if they could see exactly what the shipper is paying as far as rates and surcharges.

In early April, we succeeded in getting that legislation introduced in our U.S. Congress, and we are asking for truckers to help get that bill passed. Your phone calls of support are critical. In the past, drivers have set the phone lines to DC on fire for us, only to back off when the price of fuel falls back. It’s imperative the drumbeat continue until this bill is law.

OOIDA has asked President Bush to stop diverting oil to the Strategic Petroleum Reserve. The president continues to purchase 70,000 barrels of oil each day to send to the reserve, even though it contains enough oil right now to provide for more than two months of domestic demand.

This diversion not only exacerbates the problem of tight oil supplies, but also uses taxpayer dollars to purchase oil at a time when the price per barrel is at record high prices.

OOIDA also supports opening the Outer Continental Shelf of the Gulf Coast and Pacific Coast as well as the Arctic National Wildlife Refuge in Alaska to drilling for oil as a means of reducing America’s dependency on foreign oil.

In addition, OOIDA has been working with lawmakers on legislation that would provide tax credits for the purchase of auxiliary power units or other idle-reduction technology. In the House, the bill is HR139. The Senate bill is S894. Both bills would provide a 25 percent tax credit of up to $1,000 for the purchase of idle reduction devices.

Just one final thought to consider regarding shutdowns. Thinking back to my own first glimpse of the fuel crisis that began in the fall of 1973, I remember pulling up to the fuel pump at the truck stop in Stroudsburg, PA. The attendant (they had them back in those days) put the nozzle in my tank. I glanced down, saw the price on the pump, and said “Get that damn thing out of my tank!”

The price I refused to pay and pulled away from was 32 cents per gallon.

Prices climbed to around 50 cents per gallon (and more in some locations), and the shutdowns had no effect on rolling them back. Although we did get a fuel surcharge and many things on the government agenda, most of those things wouldn’t be resolved until many years later after a lot of additional work when we became organized and capable of working within the system.

Common themes heard at that time, and at every significant sudden run-up in fuel prices since, are “we can’t survive at these prices” and “we will all be driven out of business.”

The fact is that trucking is an essential part of the national economy. There is no viable alternative and won’t be until someone dreams up a way to levitate freight from one point to another. All costs, as they have in the past, can and will be absorbed into the system. By the way, the price of a new truck back then was about $28,000.

Many small-business truckers have been forced out of business over the intervening years, not by increased costs but by the inability or lack of willingness to demand the compensation to recover those costs. Those who demand adequate compensation and receive it prosper. Those who don’t either fail or struggle to survive until costs and compensation realign through the natural cycle of supply and demand.

As I said before, it’s up to you to set the price you need and refuse to haul for less. No one else can do that for you. LL

 

jim_johnston@ooida.com

Aug/Sept Digital Edition