ATA’s Card: Costs, regulations forcing out trucking’s ‘first generation’

By James Jaillet on
ATA Chairman Mike Card delivers a keynote address to the Great West Fleet Executive Conference Thursday, May 30.

ATA Chairman Mike Card delivers a keynote address to the Great West Fleet Executive Conference Thursday, May 30.

American Trucking Associations Chairman and Combined Transport President Mike Card delivered a simple — though slightly dire — message to attendees of the Great West Fleet Executive Conference Thursday, May 30: Smaller carriers can’t handle the increased costs of industry regulations and can’t hold their heads above water any longer.

Many of these smaller carriers are owned and operated by what Card calls “the first generation,” as they got their starts after deregulation in the late 1970s and early 1980s, a time when doors opened for owner-operators and small fleets to emerge.

This generation, however, “will see no baby boom,” Card said, as reregulation has given them basically only three options for leaving the industry, “merger, sale or death,” Card said.

“Trucking has been consolidated,” he said. “The primary reason for consolidation in the trucking industry is the costs associated with increased regulation. We’re the most over reregulated industry out there, in my opinion,” Card said, referencing multiple hours-of-service changes, CSA, drug testing implementation, upcoming electronic onboard recorder requirements and a litany of equipment mandates like emissions standards, anti-lock brakes, fuel standards and more.

Since deregulation, the industry’s also seen the institution of heavy vehicle use taxes, excise taxes and the creation of the Federal Motor Carrier Safety Administration, Card said.

“They’re all great regulations, but almost all of them have raised the cost of owning a trucking company,” Card said.

In today’s climate, he added, fleet age or owner experience carries hardly any weight compared to fleet size. “It doesn’t matter how old you are,” he said. “It matters how big you are. If you’re not big enough and profitable enough to handle the additional cost of regulation, you’re going to struggle to survive.”

Card said a major issue with dealing with the over regulation is that carriers and ATA can’t deal directly with Congress. They instead are dealing with federal bureaucrats from an agency. “Congress has given up their responsibility to legislate this country to regulators,” Card said.

Now, trucking is “at the whim” of the Federal Motor Carrier Safety Administration, which, unlike agencies that oversee other modes of freight transportation, does not advocate for the industry.

“Why do we have FMCSA? Why not FMCA?” Card asked. “Railroads have the Federal Railroad Administration. Ocean carriers have the Federal Maritime Commission. Why is it that the largest freight mode hauling over 70 percent of freight doesn’t have a federal bureaucratic administration to propagate our industry? Why don’t we have an administration to help us?”

Card blames Congress, and he also blames them for the country’s lack of “adequate infrastructure,” as ATA and the trucking industry have asked for Congress to increase fuel taxes to pay for better highways, Card said.

“We said ‘Do it, and give us the roads we need,’” Card said. “But they won’t because they’re afraid they won’t get reelected” if they raise taxes, he said.

Because of the issues with Congress, FMCSA and increasing regulations, Card says the industry will continue to consolidate and one day might be like the airline industry, in which customers have only four or five companies to choose from, and they simply go online and book one.

“Unless we get Congress to act, our industry is only going to be made up of the biggest trucking companies,” Card says “And those companies will be under attack constantly from [federal regulations].”

Card offered as an example of Congress yielding power to regulators ATA’s current fight with FMCSA over hours-of-service implementation — a rule Card says will have “very little safety benefit” but will cost the industry lots of money. “At ATA we worked hard and got Congressmen to write a letter to FMCSA asking for a delay. FMCSA said no.”

In years past, Congress “wouldn’t have stood for that,” Card says, and would have passed a law to get done what they wanted, which in this case is a delay in implementation of the rule.

Toward the end of his address, Card posed the question: “What can we do to keep common sense in the trucking industry?”

His suggestion, he says, starts with recreating trucking’s image in the minds of the public and moves to taking action by influencing Congress and state legislatures.

As far as image is concerned, “We cannot be Smokey and the Bandit,” Card says. “We need to get back to being knights of the road. Our drivers should be wearing uniforms and be driving clean and safe trucks. We need to get the public to trust in us again.”

The industry needs to make use of social media, YouTube, earned media and purchased media to remake its image, Card says, and to educate the public about trucking.

That education needs to extend to Congress, too, to influence a better regulatory environment. ATA has reached out to other trucking-related associations like the Truckload Carriers Association, the Owner-Operator Independent Drivers Association, the Teamsters, FMCSA and others “trying to make this a collaborative effort,” Card said.

“Working together we can make a difference and influence government in such a way that we bring common sense back to trucking,” Card said. “We’re either going to lose our first generation, small carriers and owner-operators or make Congress step up and listen.”

“That’s how we’re going to make the trucking industry strong,” he said, “and that’s how we’re going to make the country strong.”

James Jaillet

James Jaillet is the News Editor for CCJ and Overdrive. Reach him at jjaillet@randallreilly.com.

35 comments
ALEXANDER FISHER
ALEXANDER FISHER

ALL THE ARGUMENTS EXPRESSED HERE MAKE SENSE, BUT ALL OF THEM ARE A DEAD END.

IT ALL BOILS DOWN TO RATES. THE ONLY WAY NOT ONLY TO BE PROFITABLE, BUT TO BE ABLE TO EXPAND, BUY OR LEASE TOP QUALITY EQUIPMENT, HIRE AND TOP PAY THE BEST OF THE BEST DRIVERS, DISPATCHERS AND FLEET MANAGERS, COMPLY AND EXCEED ANY AND ALL FEDERAL AND STATE LAWS OR REGULATIONS IS TO CHARGE MORE, A LOT MORE.

A GOOD RULE OF THUMB IS TO CHARGE A MINIMUM PER MILE EQUAL TO PRICE PER GALLON PLUS ANOTHER DOLLAR PER MILE IF ANY TOLLS ARE INVOLVED, GET RID OF THE SHORTEST ROUTE TARIFF AND START USING REAL MILES FOR BILLING. EXAMPLE: DIESEL @3.899 = $3.90 PER MILE +$1.00 FOR ALL MILES IF ANY TOLLS INVOLVED.

IF WE AS AN INDUSTRY ARE TO SURVIVE, WE MUST STOP CUTTING CORNERS, AND STOP CUTTING COST. WE MUST INSTEAD DEMAND THE CORRECT RATES, DO OUR JOBS PROFESSIONALLY AND LET OUR CUSTOMERS DO THE LOBBYING IN WASHINGTON,  WE MUST BUY THE BEST EQUIPMENT, BEST TIRES (MOST EXPENSIVE), HIRE ONLY THE BEST PEOPLE, REQUIRE MINIMUM 1 YEAR TRAINING AS CO-DRIVER BEFORE LETTING ANYONE

DRIVE OUR EQUIPMENT SOLO.

WE MUST BE ABLE TO PAY TOP WAGES WITH A MINIMUM OF AT LEAST $1,500 PER WEEK TAKE HOME AFTER TAXES TO ANYONE EMPLOYED WITH OUR COMPANY IN ANY POSITION. AND IF WE ALL CHARGE ENOUGH FOR OUR SERVICES THE ISSUES WILL DISAPPEAR  AND WE CAN ALL CONCENTRATE IN PROVIDING THE BEST SERVICE EVER FOR OUR CUSTOMERS.

FOOD FOR THOUGHT EVERYONE...

DarkPride1
DarkPride1

The Government needs to keep there nose out something they don't understand.  I been in the trucking industry for the past  28 years and found out that the government doesn't understand the industry and every time they stick there nose in trying to make things better, they always seem to screw things up.  You need to find someone that understands the industry such as the American Trucking Association instead of the Federal Government

Doublejhauling
Doublejhauling

Mr. Card is right I left trucking over a year ago. I was an owner Operator and I seen all the changes coming and nothing to increase my earning. What is funny all the big trucking company are lobbying the government and receiving our tax dollars  to help them but little coming to the owner/operator. I still enjoy driving but the government has taken a great job and turn it into a pile of you know what.

Gatorman
Gatorman

Yea Jane!!! The only thing that our goverment seems to understand is a slap in the face, to make them see reality. If anything positive happens for us truckers it will be because we park the trucks for two days, maybe a week. When they reduce trucking to the giant outfits there will be no compition watch the rates go through the roof then. For the good of the economy fuel prices need to stay reasonable, and truckers need to be left alone to survive. Get the idiots off the road is the answer. A driver with common sense parks his truck when he's tired if he has only been driving for three or four hours.

jayneinmontana
jayneinmontana

perhaps when the senator or congressman goes to the bathroom and there is no toilet paper, or opens the refrig and there is no food there, or opens his closet and there are no clothes there and, then goes to the store and the stores have no product, and wonders why, maybe they will realize that there is NOTHING in this country that doesnt move but for on the back of a truck driver.if the driver would all converge in D.C on the same day and just wait with no load for 2 days just imagine wihat statement that would send and what ecomonic problem that would cause. 

Rich0107
Rich0107

The Trucking Industry, lol, Social Economic Enterprise Community destine for disaster, know it or not!  The 'idea' of social order and government is turning us into tomtoms; for 98% of us our pride and work ethic is not measured by our personal actions but rather by our conformity to regulation.  The trucking industry is unique and will prove to be an example of how a regulatory commision can turn our economy into kaos.  The evidence of the trucking industry is also an example of how our ability to respond, gather and unite as a whole is simply impossible.  History has shown us this, time and time again, the only difference now is there are so many more individuals who will suffer the consequences.  Then the ultimate idea of social order will be put into action, 'Martial Law'.  Those who receive supplies 'by truck' will be fortunate, those who don't will be held at gun point, by our Government.  History, History, History...will we never learn...that freedom comes at a price, a very high price, but the alternative that we have created and now face is a cliff with no way out but to fight, again!  You think the creative minds of our TV shows are all wrong, economic disaster is imminent.  Our economic downfall began with the creation of the, Federal Reserve, a private bank that wields its power in ways you can only imagine!

Jay Lestarge
Jay Lestarge

If only the industry would be a joint effort together instead of a lot of talk and no-one taking any action. This is a peeve of mine for 20 years now. 20 drivers of all waves, from small fleet owners to independents to company drivers and all together they agree something is wrong. Yet not one of us take steps to do anything about the problem. GUILTY!!! I am now operations manager of a small fleet and ready to throw my hat in the ring. Lets stop the rising cost of operations at the regulatory level and than maybe we as a group can address the fees that receivers push to a service that not only raises the cost of the product to the consumer but delays the truck at the receiver due to the middle man not able to release the truck when it is unloaded. The costs to the consumer should be our driving force in this battle against the FMCSA. In my opinion the FMCSA is regressing the growth of our country by pushing the middle class into the lower class because any increase in cost has to be recovered at the consumers.  

clyde kerns
clyde kerns

The strength of our industry has always been its diversity of size and configuration. Kerns trucking is a fourth generation dump truck company, we currently have 74 employees and are among the top 10 dumptruck compaines in size in our state. Unfortunately Mr. Card is absolutely correct in his assessment of size to survive in the trucking industry. Regulators and legislation are driving cost exponentially, continually shrinking our bottom line. The reality is grow, add revenue and profit faster than cost or fail. Failure is not an option; so Kerns will assume above average risk and rely on the provison of God, and a solid effort from our sales and management team to move successfully forward. My message to our regulators and regulators is simple; your imposed inflation is a reality for Kerns trucking, be prepared as reciever of my services to pay an equivalent exponentially greater cost for services rendered. Prepare your budget to pay greater amounts for highways and infrastructure; do not complain when you recieve your bill, look in the mirror.

Christine200022
Christine200022

The larger trucking companies are not hauling their frieght for less, they are just paying their drivers less.  Brokers are not the problem, it's the driver's and the carriers that accept their crappy rates that are the problem.  JUST SAY NO!

 

The trucking industry will suffer as a whole because the new generation of truck drivers don't want to work.  I am a small carrier and I can tell you my best drivers are my older drivers.  They are what trucking is really about.  They don't complain about their log books, they are still smart enough to know how to run. 

 

The new generation think they can earn $3000 take home, spend most of it at the chrome shop, then when their truck breaks down they are standing there looking stupid cause they dont have the money to fix it.  It's not just them, its society.  I have been through 12 dispatchers in 3 years?  Not because I am hard to work with, but it's hard to get someone who wants to come to work.  The same can be said for drivers.  No company driver will ever work as hard as an Owner Operator. 

 

I am not saying that FMCSA is out of control, they always have been, and always will be, along with DOT.  BUT, with the right drivers and the right business mind, you can survive. 

TruckerJohn
TruckerJohn

I had 3 trucks (me driving one) going, but with all of the new & constantly changing regulations there wasn't enough time to do all of the paperwork & keep up with the regs. My workload shifted from 80/20 driving/paperwork to 20/80% which didn't leave enough profit to keep running all of the trucks so I cut back to one truck. Then DMV decided to enforce all of the regs to the letter right down to having staff in the required office (which they decided they didn't like & made me get a different office that was suitable to their liking). They want someone in the office full time, well I can't make any money sitting in the office & I can't be in the office if I'm out driving the truck. Another issue was when I discontinued operations in CA, I didn't have any miles in my base state while I was looking for alternate work. They cancelled my fuel tax license. I just received an assessment from them for unfiled returns for the 2 periods AFTER they cancelled the license (the license was cancelled 3 years ago & not renewed). How can one possible stay in business with this kind of regulation & such hostile enforcement. The govt. agencies say they are short of money yet they are biting off the hand that feeds them by shutting so many of us down!

Jimmy S
Jimmy S

Big gets Bigger. Hope all the affluent people get what they want. Someday they will have to provide for themselves. That should be interesting. The Fed and State government system had better learn where there pay checks come from. I am totally nauseated by our Government. Go ahead Big Guys. When the -hits the fan, don't look at ME too bail you out. I WILL SURVIVE ALONG WITH MY FAMILY. OPEN YOUR EYES AMERICANS. We are being sold out bye our own Government.

mars trucking
mars trucking

Hopefully,we can charge the rate that it will take to kept these smaller companies open.Right now the brake even point  in a smaller company is $83 per hour,so you should be getting at least $100 per hour to make some profit.I can't stand it when I here of a smaller company 1099 the drivers and gets away with it,then there able to charge less to move the freight,while I sit there and run legal and pay,SS,workers comp,health and welfare

 

stearlymotor
stearlymotor

I am a second generation owner.  My Pop started Stearly's Motor Freight, Inc. in 1954.  I began driving a truck at 16, in the summer, did a year of college, & since 1981 have been driving a truck and/or operating the business from behind a desk.  I am seeing the same problems that have been mentioned in this article. In the mid 80's we had close to 50 trucks.  I now have 8 trucks, & have trouble finding drivers that want to put up with the constantly changing rules.  I had to hire an extra person in the office to ensure compliance.  Walt Stearly  Pottstown, Pa.  ICC MC 108411

Weezy
Weezy

I have been in this industry for over 30 years. When I started we could be proud of what we did. The drivers would help each other out on the road, the shippers would show respect to the drivers, as well as the general public. Then the investors came along and started pumping big $ into companies and demanding returns on their invested dollars. So the big companies started to look for ways to losen up the rule as to how to get new people into the industry without raising the rates of the freight they hauled. The freight rates off the East coast are still at a dollar a mile. What a joke. Now we have people in this industry that look like they just got out of bed when then they exit their trucks. They throw their trash all over the country. I read an article the other day about one your reporters that was upset with Wal-Mart because her and her husband couldn't park in a Wal-Mart parking lot for over an hour. I cannot blame Wal-Mart, they are kind enough to accomodate the trucking industry and the trucking industry trashes up their lots. ( Have you ever noticed the urine bottles along the roads. ) SO, tell me how you get respect back to an industry that does not even respect itself. There are still plenty of us that still enjoy this industry or we would not stay in it. But Mr. Card is right, there will be no new baby boom and if this industry thinks it is short of drivers now, wait till all the "Old Shool" is gone. This industry needs to start looking at itself and making decisions on how to make itself look better before it expects anyone else to. In conclusion, it's about PRIDE, everyone should start showing some.

TGIOOT
TGIOOT

Everybody who voted to put the "DUMBASS" in office again deserve what is happening. Vote responsibly in

next election and things will change for the better.............

David P. Wisla
David P. Wisla

This has been said before and will be said again; Everything you interact with every day came to you on a truck. Your house, your car, your food, your clothes, your TV and even your, (guys), E/D pills. It would be interesting if the ten or twenty largest trucking companies were to be given the task of delivering everything to everyone for a one week period. All other carriers would be asked to shut down for that week. I wonder if Uncle Tim who is scheduled for kidney transplant surgery gets that kidney that's supposed to be flown in to a small airport in his city, and delivered to the hospital on the day at the time he is in surgery. (That gets to the hospital on a small truck, but a truck none the less.) How many animals bound for pet stores will die that week? An Ambulance is a truck. How many frozen loads of food will be lost that week?

 

In 2008 fuel went through the roof and has settled at $4.00 a gallon, a little more here a little less there, for both gas and diesel fuels. Insurance has quadrupled in cost since 2008 due to the litigatious nature of tort law which has been allowed to flourish, specifically in the trucking arena, helped by the flood of regulations that have been implemented during this time. Mr. Obama has said that it is his goal to get every truck off of the street. His union and green friends have told him it's a good thing. And, like every person at their first job, he listens to the friends who got him there. He's trying real hard, I'll give him that, he's skirting the law and everything! Ya gotta give him props for the effort, no matter what side of the debate you fall on, the realistic or the completely unrealistic.      

jfitz58
jfitz58

Is he running for office? Sounds like it. Why don't we do something even more surprising and give drivers respect and listen to there issues about trucking. Yea I know it's opening pandora's box but respect is deserved and needed. You want to change the public view, change the way you hire. You want congress to hear you do the above.

DHatch
DHatch

I am sorry but recreating the trucking image is not going to keep the small man in business.  This article makes me sad, makes reality really set in.  It has been harder and harder every year to keep our head above water.  We have clean trucks, great drivers, use social media....those alone are not going to fix the trucking industry for the small owner operated trucks.  A huge deal is all of the regulations BUT I also believe that we cannot compete with these huge trucking companies that can haul loads for less.  Brokers want to move loads for as little as possible, it's their paycheck.  And these big companies can take them for less.  Just depressing....absolutely depressing.

Shawn Kemmer
Shawn Kemmer

Out of one side of Mike's mouth we hear support for EOBR and increased size/weight limits, then we hear him say it's killing the small players in the industry. Isn't that ATA's focus, Mike?

Jay Lestarge
Jay Lestarge

That hit a home run on what I was conveying. Finally I hear the exact nature of what has been happening. It all stops when WE stop putting people that aren't qualified and really don't care if a business fails or not. You have to do more then sit at a desk and set up driver runs. You have to research your own company needs and find your break even, add like Alexander did your factors for the future aspects of continuing to be able to be in business. If a top quality driver comes to you seeking employment, then proves to you he is top shelf, PAY HIM top PAY. My customers get to know my drivers because I repeat business them. I get higher rates because of my drivers. I buy new trucks after 3 years. Believe me when I say, it wouldn't happen if not for the drivers. A new broker/customer may get my services at a cheap rate for the first 2 or 3 loads. After that they will have to pay at the professional rate I Quoted on our first conversation. Taking the time to provide professional service. That's every ones duty in the company. It has, and is, working for this company and can work for all of every one else's too. Do diligence, has its due diligence rewards. Reap what you sow, so sow diligently.

TruckerJohn
TruckerJohn

 @DarkPride1 Job security, create a problem that needs to be fixed, fix it creating another problem that needs to be fixed, repeat............

Ken Fennell
Ken Fennell

 @Gatorman

 It will take a shutdown to get anything done.  We are seen as 3rd class citizens in this great country of ours and we have no rights as citizens.  The FMCSA has become the judge ,jury and executioner to say who survives and who is put out of business.  We have no recourse for our grievances but to go along and behave like good little truckers.  The ICC is where we used to go for fairness over issues.  These guys now remind me of the USSR from back in the 60's and 70's.  I've shut my truck down for every strike and protest since the fall of 1977 and I'll park it again.  This just isn't a job, for some of us it has been a way of life for generations

Cdavies58
Cdavies58

@TruckerJohn I am interested in discussing a solution for your office base situation.

jayneinmontana
jayneinmontana

 @TruckerJohn

 do u use your ssn # when filing ur taxes or r u an LLC? if you become a LLC in wyoming (which is legal) u get a registered agent, they can be your office person.

Alcarmal
Alcarmal

 jfitz58

 we do not DESERVE respect, that is earned not handed out like the noble peace prize to OBAMA. Park in any truck stop lot and watch drivers walking through, and decide if they respect themselves> If you walked in a doctors,or attorneys office and that professional looked like many drivers. I suspect you would not have any respect for them or want to have them work with you. If I were a shipper and some of these drivers came to load my product I would refuse to load them,they do not respect themselves they will not respect MY COSTOMERS> Do not cry that you get no respect. THINK, do you believe you present yourself in dress and manner to DESERVE RESPECT ???.

jayneinmontana
jayneinmontana

 @DHatch

 i had a company today tell me they were docking my settlement check by 500 because a) the rate confirmation sheet was not returned to them, which it was and b) the driver did not do a daily check call on a LTL load which the broker was advised of the delivery date that the shipment would deliver several time during transit and the delivery arrived on the day that was stated. The load was an engine out of Colorado, the driver arrived and they had not even removed it. The driver agreed to wait and agreed to $250 in detention. The broker originally stated they were taking away the detention, then change and said it was because the rate sheet was not signed. I have the signed faxed rate sheet in my possession. These bokers are out of control. If the government doesnt get you the brokers do.

Brendan McCullough
Brendan McCullough

I think the point is that the small carriers have the most difficulty with new technology but also have the most to benefit from it.  The solutions to industry problems are not simple.

TruckerJohn
TruckerJohn

 @Cdavies58  @TruckerJohn I'm open to any suggestions, but at present I'm afraid to do anything unless I know I'll be able to get a truck up & running. I was planning on building a shop/office near Lovelock. I already purchased the property, but construction is on hold until I know I can get these DMV issues resolved.

TruckerJohn
TruckerJohn

 @jayneinmontana I have a regular "C" Corporation in Nevada. Would the NV process agent be satisfactory as an office person? The DMV also had issues with my office. I went & rented a shop & they didn't like that either as it was in zoned residential & the county regulations didn't allow a business to be operated out of a building zoned as residential unless I was the owner of the property, so I rented an office which they reluctantly approved after they made me put signs & installed the required land line phone. Then they said I had to have a NV drivers CDL license before they would renew the truck registrations. (I still live in NC & only have the business set up there. At present my move is on hold indefinitely because of this)

 

jayneinmontana
jayneinmontana

 @Alcarmal

 I totally agree with you the quality of a lot of the new driver's is very poor in their personal appearence. If they don't respect themselves, then they dont respect the trucks that the companies provide for them and they don't respect the product that the shipper puts onto their trailer. The truckstops are littered with garbage and urine bottles as well as places like Wal-Mart parking lots.. It really only takes a few to spoil it for the rest, but when you see a driver that has his dash with a foot of garbage on it then opens his door and garbage falls out, what does this say about the driver? and it reflects in his attitude.

TruckerJohn
TruckerJohn

 @Cdavies58  @TruckerJohn A virtual office is not acceptable to DMV, they disapproved of my original office because it was shared. They actually went the all the places I leased & inspected them in person. They apparently have total say in what is & isn't acceptable. They require an office which I have exclusive use of with it's own door, a land line phone in the company's name & staff in the office during "regular" business hours. "regular" being whatever they deem to be proper, but they won't give guidelines on exactly what they want them to be. Thanks anyway!!!

Cdavies58
Cdavies58

@TruckerJohn we have a dispatch service and offer our services as a virtual office. We set everything up, complete contracts, handle faxes and forms. Our service frees up drivers to just drive.

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