# Presentation: 168674

## Can Trucking Prep for the Future?

- Comments by
- Todd Spencer, Exec VP, OOIDA

## Trucking in Broad Strokes	

-   2.5 mil. Class 8 Trucks
- 	-1⁄2 are in “Private Carriage”
-  	-1⁄2 are in “For Hire Carriage”

## For Hire Trucking

-   Less Than Truck-Load  (LTL)
- 	-Dominated by Yellow Roadway & Overnite
- 	-Have a operating ratio of around 95
- 	-Earnings per mile $4.15 to $4.20
- 	-Expenses per mile of around $4.00
- 	-Profits at 15 to 20 cents per mile

## For Hire Trucking

-   Truckload (TL)
- Close to 520,000 carriers (only 45,000 are large carriers)
- 70% of carriers have less than 6 trucks
- 80% of carriers have less than 20 trucks
- Have the same 95 operating ratio but
- Earnings are $1.36 a mile and expense $1.30
- Profits are 6 cents a mile on 110,000 milers per truck or $6,600 a year

## Owner-Operator Truckers

- Own and Drive their own truck
- 350,000 of them, average owning 1.4 trucks
- 	-75% of them are leased to a larger carrier
- 	-25% of them have their own authority
- They have sole responsibility for purchase and maintenance of their truck
- They earn around $35,000-$37,000 a year
- They work approximately 100 hrs a wk for that pay

## From Dr. Francine La Fontaine, Economist, Umich, Ann Arbor

## Owner-Operator Truckers

- They are on an average 48 yrs old
- They have 20 yrs professional driving experience
- According to the insurance industry, they are the safest segment of truck drivers, having fewer and less serious accidents
- They chose truck driving as a career before drivers became a commodity to be used and discarded
- (Raises the question: “Where will tomorrow’s million-mile safe drivers come from?”)

## Company Drivers

- They are on an average 44 yrs old
- They have 15 yrs professional driving experience
- Many change employers often

## Trucking Equals2 to 2.5 Regular Jobs!

- _Office Workers_			_Truck Driver_
- 40 hrs per week			100 hrs per week
- 50 weeks per year		50 weeks per year
- 2000 hours	per year		5000 hours per year

## Owner-Operator Truckers

- Truckers are being coerced to wait inordinate lengths of time at docks, or load, unload, and  re-palletize their loads for free.
- This free labor and it’s attending lost and wasted time, represents the one single largest challenge to the trucking industry.
- This forced labor affects many issues: driver fatigue: highway safety; driver retention; 100% driver turnover; and drivers’ ability to earn a reasonable wage.

## Under the Old HOS Regulations

- The annual cost to the trucking industry to move from “free waiting time, and free loading and unloading labor,” to “strict compliance with the 60 hour rule,” would have been an additional $3.2 to $7.5 billion

## Under the Old HOS Regulations

- If, however, the industry could have reduced the waiting, loading and unloading times to reasonable levels while increasing a driver’s “drive time,” it would have saved the industry the same $3.2 to $7.5 billion.

## HOS Regulations

- If drivers earn $40,000 a year, the best case scenario of wasting $3.2 billion a year in lost productivity means we were wasting 80,000 man-years per annum, just because there are no costs passed to the parties wasting that precious time.

## Where are the dollars spent on freight hauling going?

- In the past twenty years as the freight rates  have remained flat, and the truck driver has seen his wage’s buying power shrink by 30%, the freight brokering and forwarding industry has grown to become a industry of the same size, but with none of the capitalization challenges of carriers, i.e. owning and operating trucks.

## Truck Parking Spaces

- A “Programatic” challenge which cries out for solutions.

## 2004 OOIDA Truck Parking Survey

- Follow up of a similar 1999 survey.
- 70% of the drivers said that since the new hours of service regulations have been in effect, truck parking has become harder, or much harder to find.
- Instances of police telling resting truckers to leave rest areas has doubled in the past 5 yrs

## 2004 OOIDA Truck Parking Survey

- Drivers said they drove beyond their available log driving hours either: 1) every night; 2) 5 times a week; or 3) 3 times a week
- 	_1999_				_2004_
- 	30.3%			47.9%

## 2004 OOIDA Truck Parking Survey

- Five years ago only 22% said they would even consider paying for safe secure parking spaces.
- Today that figure has nearly doubled to 38%.

## 2004 OOIDA Truck Parking Survey

- The issue of truck parking spaces will require creative solutions that do not necessarily rely on Federal legislation (Maybe as simple as large graveled lots).
- Additional truck parking spaces are not in the best bottom line interest of Truck Stops (due to their being filled to optimum capacity already).
- Highway safety stakeholders need to continue to seek feasible solutions together.
- Without sufficient truck parking spaces in locales where trucks congregate, tired truckers are forced to remain behind the wheel out on the nation’s highways.

## In Conclusion . . .

- We are an industry only half way though the shakeout envisioned by the deregulation economists of the 1940s.
- In this shakeout, profits have been so difficult to come by, that the drivers have been squeezed of the next to last drop of blood they have.

## In Conclusion (cont.)

- The safe and dependable small business truckers move much of the truck freight in this country.
- Right now they do it out of the love of the job, but there are no young replacements waiting in the wings.