Trucking, Railroads, and Industry
The plight of independent truckers
Trucking companies are doing their very best to make their business successful. They use services such as the fleet graphics services to help them promote their company. There were quite a few TV shows out there which gave trucking a romantic style of life to live. It was a lot of hard work and not quite like what was portrayed in shows like “Cannonball” or “Movin On.” Just crossing Nebraska would put you to sleep and Cannonball did not have a truck sleeper.
There is a lot of danger involved with being on the roads with trucks other than having them stop and change a tire for someone which was often portrayed. Getting around them quickly, letting them move over, and staying away from them as much as possible is the best I can offer. You will lose with them.
Coming out of Chicago and changing highways in Iowa, I watched one trucker come steaming up on our Passat’s rear end and I finally raised my hands up like being under arrest. He slowed down quickly. As my daughter the teaching nurse said, some have resorted to using Meth to make those 60-80 hour runs. That is a different story.
Much of this increased danger is from truckers trying to make a go of it on their own and driving more miles to pay for their leased rig, a semi-owned rig, and still have money left over to live on. You can not get by on 40 hours on the road per week.
Before, most driving jobs were offered by trucking companies or a part of company – owned truck fleets. Both have diminished in size or disappeared.
Companies like Con-way, XPO Logistics, CFI changed names several times as the result of takeovers and mergers. In the past they took good care of their fleets and the drivers as did the company’s who owned vehicles. However, there were dangers such as getting on the wrong side of the dispatcher. Even though they may be employees paid by the mile, one dispute with a dispatcher, and the miles offered could drop as Westword details in its story on independents.
So what do you do?
Partnered companies CFI/Pathway would sell them a gussied-up old rig with the idea they can haul for them and make $100,000 to $200,000 a year (maybe!). So they sign on the dotted line and are in business. The companies get rid of old rigs and pass on all the Overhead associated with those rigs and the Overhead of the employee to Mr. Independent Truck Driver. A former employee who becomes an independent contractor.
Myself, I am really, really reluctant to sign on the dotted line for anything which will make me beholden. I gotta have the income first, which I do. Many of these drivers remind me of the tuck-pointers and brick layers I would meet while working with my dad in downtown Chicago pre-Marine Corps and college. They were hard working in an industry which will wear you down and take your health.
The men look for ways to escape like doing side jobs which I did with my dad. Even something as small as side jobs requires a pickup or a station wagon, certain equipment, and a place for storage of ropes, cables, and scaffolds. The pay is good if you work off the books but you still need constant work and “will” still wear down. The dust from Portland, sand, and silicate sand tears into your lungs.
To get a rig, the trucker is not allowed to test drive the rig they are looking to lease much less see the history. Typically, the rigs need a bit of repair as they come with hundreds of thousands of miles on them. Discovery of issues are found out after it is off the lot and the rig driven. The leasing company can tell you where to take a rig for repairs and the amounts you will pay
Conditions to the lease to own may include not being able to drive for other companies. Lease payments are deducted before pay or settlements. Like I have said, this is the passing of Overhead to Labor, in this case the independent operator, and consists of capital and other costs such as healthcare, SS, etc. The companies become little more than investors in a mini-operation
This was a gamble for independent truckers them and most of them lose.
Some Explanation on Today’s Issues
With the passage of the 1980 Motor Carrier Act, many of the giant trucking firms disappeared. The new system, allowed anyone to haul any good, to any place, for any price. The result was large companies downsizing to as small as a couple of dozen rigs,
There are not a lot of trucking companies of the same size and capacity existing today as in the seventies anymore. Much of the freight you see standing in line at Long Beach, Los Angeles, Portland, etc. are not going to the Midwest. That container freight arriving on the west coast is going to the Midwest goes over the mountains via railroads. The truckers you see waiting on loads are probably on the way to places like El Paso to cross into Juarez, Mexico and deliver to US plants there or Mexicali or stay in El Paso. They make sure to have Overweight Permits before traveling on highways. And in case of truck accidents, a truck accident lawyer may be contacted for professional legal assistance.
If there was a load I needed in a week for a plant in Detroit or elsewhere, we would pay for a special truck haul and a team to haul it over the mountains. This came after getting to the dock dispatcher and pushing them to find my container. You don’t shut down Ford, GM, or Chrysler much less the Tiers supporting them.
To get to the US interior, if one isn’t going the route of purchasing shipping containers for sale in New York, the ocean containers are brought in, loaded on railroad flatbeds and carried across the mountains. It is about a week-plus travel by the time it hits Detroit and going to automotive and the Tier facilities. My planning cycle to ship to Asia was one week plus three weeks plus one week. One week on each side of the ocean and three weeks on the ocean. I would allow one week+ to get from Detroit to Long Beach. Just reverse it to get stuff out of Asia. That is JIT. And inventory consists of Material cost or money sitting around.
Railroads and Infrastructure
- US containerized imports from Asia set a new monthly record in June of 1.52 million TEU, according to PIERS, a JOC.com sister product within IHS Markit. Total laden imports into Los Angeles and Long Beach in May and June combined rose 36 percent compared with the same two-month period a year ago and 17 percent from the same months in 2019, according to PIERS. US Railroads: BNSF metering space on LA-Chicago intermodal trains (joc.com)
- According to data from the Intermodal Association of North America, the largest share of those record volumes leaving Los Angeles-Long Beach on international intermodal trains is destined for Chicago, with much of it offloaded at Joliet terminals. US Railroads: BNSF metering space on LA-Chicago intermodal trains (joc.com)
- A Midwest-based NVO told JOC.com that carriers have restricted IPI bookings into smaller cities such as Detroit . . . US Railroads: BNSF metering space on LA-Chicago intermodal trains (joc.com) This did not happen as wire harnesses, etc. for automotive are assembled in Asia (another story). There is no way they would transfer to a truck. The big three and Tier ones like Yazaki would be all over this.
- Rail Traffic always moves slowly through Chicago. While it may take 2-3 days to get to Chicago, passage through Chicago is a day from Joliet, IL.
- UP and BNSF railroads embargoed Chicago for a brief period to allow traffic there to clear out. Containers were rerouted to St. Louis and other places. Eventually being trucked into destination (not ideal and costly). US Railroads: BNSF metering space on LA-Chicago intermodal trains (joc.com)
Supplies have exceeded the transportation system’s ability to deliver if and only if the transportation has maximized capacity. For example. Long Beach and LA are operating three shifts. That is great news. Now how do we get past Chicago? And have other companies increased capacity to meet demand on transportation?
Companies and Industries which Continuously Blow Themselves Up
I have worked for the Japanese, Koreans, Germans, and Americans. The first three were really good at telling stories to your face. After a while, credibility disappears.
I like the part where one Czech company contracted by the Germans ran out of capacity to make an essential auto-receiver for keyless-go in autos. My US based German boss tells me to get after them so I do. Meanwhile, my Bavaria-based Germany associates told the Czech company to short the US so they can meet the German company’s demand. It worked once until the Czech company ratted on them and I had a few words with my German associates.
My Korean associates liked Americans. I had good relations with them face to face. There was always an undercurrent of not knowing everything and a desire to know all my corporate contacts which I gave them people who had left the companies.
With the Japanese, I took blame for a monsoon in the China sea. I did not know I could plan for such occurrence also. As a minor god, my controls do not extend beyond US borders or shores.
2009, similar chip problem was occurring the same as what we are experiencing today. The result of the 2008 Wall Street and bank blowup. Businesses shut down or and slowed down. I was working with Germans at the time and was in charge of all purchasing for North America. I had three German bosses.
Automotive woke up and placed orders for chips. Except, the chip companies had not grown the silicon wafers to make the chips because they had no orders. Wafer growth takes 4-5 weeks. The wafers go to fab plants for cutting, etching, transistor populating, and layering, etc. This process takes time also.
Pre-my arrival, the German company had an inventory of 3 million to which there was no demand due in 2008, They decided to sell-off the excess inventory. Selling them was a big mistake.
Automotive went back to placing more orders after canceling most of them. And the industry struggled with the same old lead times and capacity issues we are experiencing today. This occurred in other industries as well. The latest shortage is more serious due to the longevity of the pandemic and money chasing inventory.
Supply Chain Summation
No doubt companies are milking the pandemic. Were there any reasons for Biden having to tell Long Beach and LA companies to add more unloading shifts? Increasing shifts partially solves the issue.
What about the Joliet-Chicago bottleneck which still remains problematic. This is an old issue which I was aware of 20 years ago. Railroads have been falling behind decades now. They are an important part of the US infrastructure requiring modernization through investment. Planning for a new railroad center away from Chicago . . . maybe?
Owner-driven rigs associated with companies like CFI are worst than Uber. Transferring debt, capital costs, and taxes to the rig owner-drivers who can not make enough money in a 40 hour week to keep up is a scam. In the end, transportation and supply chains will remain behind.
And the companies which wish to operate offshore with little or no inventory based upon lead times are problematic and need to plan better.
Two thoughts: the first your trucker analogy reminds me a lot of what we old loggers went through in the seventies, as the (unionized) mills began laying off the loggers and “gypoing” out to “Independent Contractors” the harvest of raw materials for their mill operations; and two perhaps not a thought but half question half observation: it is my understanding the Amazon Prime delivery model is built around just what you’ve described. Not just Amazon, I think FedEx was the first to gypo out, to sell old trucks to uber contractors …
If Carter had not signed what he thought would be a benefit to America, the Motor Carrier Act of 1980, places like WalMart, Sams, Amazon, FedEx, etc. would never have grown to be as large as they are today. Granted the old system was constricting the economy, transportation, and needed modernization. Instead, we got 100% deregulation which put the ball in big business’s court, they took it, and changed the market.
They are not a crowd I would hang out with, even I did with my dad’s work-relationship-friends. I came from a similar background as they did and was that geeky skinny kid in high school. Marine Corp and as a Sergeant changed my perspective of myself as I could out shoot and out run the big guys. Into my forties I was lifting weights and changed my image enough so that even the really good weight lifters (far better than me) recognized me. In my fifties I changed again and picked up a blue-belt in wing chun do.
My point here, is I did not have to be an openly tough guy. I could just be a quiet guy who read books, write, teach, and still be a person. Who would have thought?
That logging industry is dangerous business. Splitting a Winter supply of wood was enough of an adventure for me to know I did not want a part of it. Working with my dad and listening to what he said about his job, I figured out correctly what I did not want to be. Trucking around the nation hauling goods is a tough assignment. They should ne be treated this way.
In my last year in AZ I had lunch with two different truck drivers that were on the road. Both of them had stopped for the day as they had driven the max hours they could that day (8-10 hours I think). They both had computers in the truck that connected them to their dispatch office and when they reached the max their trucks would not run anymore. I think the days of “60 to 80 hour runs” is long gone.
Meanwhile, might be looking up:
PHOENIX (3TV/CBS 5 ) – Truck drivers are in high demand and companies are willing to pay big bucks to get them behind the wheel before the holidays.
Drivers say the money is great, but the work is grueling, thanks to a massive shortage of drivers around the country. It’s really a trickledown effect right now – the supply chain has shortages all over the place, so everything is taking longer to ship nearly anywhere, so companies hope these big incentives will help solve the problem.
“Certainly $100,000 gets people’s attention because quite frankly people don’t think truck drivers can make that kind of money,” said Tony Bradley, President of the Arizona Trucking Association.
But that’s reality now as demand surges with a big driver shortage.”
Transportation in general is a tough business. My dad has been in logistics at major oil and gas and chemical companies, to now running a small regional outfit. With the large companies in the 70s and 80s, there was incentive to work there – pensions. Now days it’s Healthcare and a decent wage, but I have seen many horrific scenes from the business, specifically rail yard. My dad treats it like war stories, but the files he is still made about me looking at in his brief case were rather conclusive that railroad workers are under appreciated, under paid, and the work is not for me.
I used to work in insurance. Trucking insurance has gone through the roof. At $20k per truck and many conditions, the cost just to look at a truck is immense. Without tort reform, personal injury attorneys and hack doctors will continue to convince people to go under the knife for big payouts. It’s tough, sometimes people need the money but the whole process is mired in icky.
Either way, our transportation sector is a mess and continues to get worse. Like one guy I know “well if Amazon is going to pay me 15 an hour that’s double per hour what I’m making. I’ll be pissing in bottles either way.”
The hazards and stresses of all forms of transportation have kept civil defense law firms like mine in business for many years and will, I’m sure, do so for the foreseeable future. Not all or most of those claims are phony or exaggerated either, by the way. There are serious human costs to the transportation industries.
The roadways are far more crowded than they were in the sixties seventies, and eighties. Here is AZ, I am over by 10 mph on the Loops in the second land and they are flying by me at 20+ mph faster than the limit. The two-passenger lane in used to go even faster. I have seen trucks in the left lanes too which in a no-n0 in Michigan.
Hard to believe Run, but I spent 16 years in AZ and the last 2 in IL and they drive much faster here than in AZ. And I agree they drive much too fast in AZ.
I believe traffic in Chicago is worse than all but DC and LA. I lived in NY, PHL and Phx, and traffic there was brutal, but not close to those.
EMichael, have you been to Florida or Southern California?
Yes, SoCal driving is a mess. Couple years in Boynton Beach, FL was so long ago the traffic was no problem.
Having done the drive during rush hour from the Loop out to the Northwest side, we could not move at the speed as they do in Phoenix. The 2+ lane is entitlement for faster yet. I do not know how you could use that lane at 75 in Phoenix and not piss people off when the legal limit is 65.
My last trip from Park Ridge to Loyola (to lecture) on the Northwest to the Kennedy at 4PM didn’t get much above 55 and once you hit the Kennedy to Ohio, it was stop and go. Traffic has worsened in Chicago over the years and metro population is twice that of Phoenix without the highway infrastructure Phoenix has with its Loops.
You crawl through the Loop-Chicago to get to the Dan Ryan , Congress, or the Southwest. The Dan Ryan lanes are always full and again the traffic is constrained till you break free non rush hour. LA is nuts too. I let the Koreans who live there, drive.
Yes you can drive faster if you hit the highways at the right times; but, the speeds driven is still far faster in Phoenix as there is more room and lanes all over.
I would rather drive Power than get on the 202. They drive too fast and too close. You can not do that on the Kennedy after 4 PM. We also learn the direction and landmarks by staying off the highways.
It’s why I called Chicago traffic so bad. I’m in Gurnee, about 45 miles from downtown. For my vaccine I had to go to the United Center downtown. I’m 5 minutes from I94, and 8 lane highway which joins I90 halfway there. Rush hour for both shots. 4 to 5 hour round trip.
However, when there is not a traffic jam on I94 the average speed on the cars is over 80 mph, zigzagging through all 4 lanes. Beyond scary.
EMichael, I’m in Wilmette so I understand your experiences. I’m not contending Chicago area traffic is good; only that it can be pretty awful in many places. My Florida reference was to Orlando. As in most places, the time of day is critical to driving trouble. Like run, I avoid the major highways when I can. For example, to go downtown, I’ll use Ridge to Hollywood to Lake Shore Drive instead of Edens to the Kennedy. From Gurnee is a different matter.
I went to a downtown deli on a Saturday AM. Still took longer than 3 hours round trip. My neighbor is a long time Cub fan who grew up in the city until he moved here 20 years ago. He stopped going to games over a decade ago.
Wrigley Field is less than 40 miles from here, and he could not stand the 4 hour (or more) round trips.
Your neighbor’s mistake was in driving t Wrigley. The only sensible way is to drive to 4th and Linden in Wilmette and take the el to Addison. No fuss/no muss.