Why are we still struggling to earn every dime?

By Todd Spencer, OOIDA Executive Vice President

Editor’s note: In this issue’s Inbox, OOIDA Member Joshua Reis asks a couple of questions that we took to the top for an answer. Why is there not a minimum per-mile rate, set by the government? Why do owner-operators have to fight with the huge companies, brokers and each other – to earn a dime? Here’s our reply, written by OOIDA Executive Vice President Todd Spencer.

The answer to all of your questions is passage of the Motor Carrier Act of 1980, which removed virtually all economic oversight of rates and routes in trucking, the theory being that unbridled competition would lower costs to consumers and produce innovation in trucking. Some of that happened and there have been success stories. However, the vast majority of the truckload segment of trucking seems trapped in what appears to be a race to the bottom. Big carrier execs have said for decades now that they need to boost driver pay by 50 percent and even more to attract and keep good, professional, safety-conscious drivers, but they simply won’t do it. Increasing labor costs is a no-no with Wall Street investors that back most of the large trucking companies. Instead, these companies find ways to insulate themselves from driver turnover of 100 percent and even more and reach out to the government to create new regulatory burdens and costs for their small-business competitors. What keeps this wacky game of “last man standing” going is the unique method of compensation for most drivers being paid only for miles driven and nothing for a driver’s time. This means drivers bear the costs for inefficiencies of others throughout the supply chain. It’s hardly a surprise that new drivers quickly leave the industry. And while too many in DC prefer to look the other way on tough issues, how long can they justify the exemption from overtime pay for truckers in the Fair Labor Standards Act when big carriers openly acknowledge they want every minute of a 70-hour driving stint behind the wheel? Some in the industry were upset several years ago when an economist characterized trucking as “sweatshops on wheels.” It really doesn’t have to be that way. Will it ever change? It can. More drivers are catching on to the game and pushing back over the theft of their time. All of them should. LL