From the Ashes

| October 07, 2002

When terrorists struck America on Sept. 11, 2001, Jerry and Judy Reese responded quickly. The couple left Michigan that day with a load of batteries, supplies and water and delivered it to within a few blocks of Ground Zero.

“It was devastating to see the faces and talk to the people,” Jerry Reese says. “You couldn’t get out of the truck for long, and you had to wear masks. It took a week to get all the film off of our truck.”

Weeks after the attack, the Reeses experienced their own disaster – a financial one. The company they worked for, which recruited drivers for large carriers at truck shows and truck stops, went bankrupt when the economy slowed and the driver shortage dwindled following Sept. 11.

“We almost lost our truck,” Jerry Reese says. “We were sitting with a $175,000 truck that we didn’t have the money to pay for.”

The Reeses weren’t alone. While financial hardships among owner-operators were severe before the attack, the subsequent economic downturn – a steep decline in freight and an increased cost of doing business – pushed many over the edge. Those who stayed in business these past 12 months have faced bigger delays at border crossings, more scrutiny from law enforcement and more security at shipper and receiver locations.

“The last year is the hardest year it’s ever been to be an owner-operator,” says Jeff Amen, vice president of American Truck Tax. “Failure rates doubled. Repossession rates went way up.”

While not all of the downturn was related to the Sept. 11 attacks, the economic climate afterwards hastened the descent of struggling carriers and slowed freight to the lowest level in years. Amen and his brother Todd, president of American Truck Tax, say owner-operators tended to do the best. Small fleets often have one customer that makes up the bulk of its loads, and if that customer continued to survive, so did the carrier, the Amens say. At large national carriers, the diversification of customers guaranteed owner-operators loads even in a scarce market. But most medium fleets downsized quickly and at the expense of owner-operators when they lost one of their primary customers.

Tom and Angie Cameron know all about that. The Camerons are based in Coopersville, Mich., where they are leased to Foreway Transport. Like the Reeses, they delivered supplies to New York City and then saw their own situation worsen.

“There was no freight from January through March,” Tom Cameron says, citing a slump in rates and freight. “I literally did not receive a paycheck. We’d make a little run here and there. Even C.H. Robinson did not have any loads.”

The Camerons also saw costs increase. Their insurance premium went up about $60 a month – a small amount compared to increases some owners faced. Insurance providers picked up billions of dollars in claims related to Sept. 11 and raised their rates for businesses across the board. Fleets, in particular, have been hit with double- and triple-digit percent increases. Owner-operators who get insurance through their carriers have shared those large increases.

Owner-Operator Independent Drivers Association customers have experienced slight rate increases, says Brenda Guffey, OOIDA’s property and casualty insurance manager. “But they’ve gone up due to loss history and regular increases in rates. A lot of the motor carriers have been getting fleet discounts, and their loss ratio doesn’t substantiate that discount.”

Still, owner-operators buying building and excess freight insurance have seen substantial increases, even at OOIDA. The spike in insurance rates has even forced bridge and toll road operators to increase tolls in some states. “Scales have gotten more expensive,” says Tom Cameron. “Everybody is raising rates. Each thing dribbles more and more out of your pocket.”

A year after Jerry and Judy Reese made this delivery to Ground Zero, they have rebounded from an economic setback that nearly cost them their truck.

Costs are mounting in other ways, too. Canadian trucker G.M. Patterson, who crosses the border a couple of times a week, says delays at customs can amount to several hours. But that’s better than the weeks after Sept. 11, when delays typically lasted four to five hours.

“Border guards are doing a lot of spot checks and asking for ID,” he says. “But delays are a hit or miss thing.”

In the past 12 months, hazmat fleets have added photo ID badges and increased scrutiny of their satellite tracking systems. Since federal officials first revealed that terrorists might hijack a truck and turn it into a bomb, enforcement officials have increased their inspections of trucks and routinely pull over hazmat loads.

“Hazmat is looked at more dramatically all the way around,” says Cameron. “The minute they see placards, everybody stops and everybody looks. It used to be that they would notice a hazmat load, but it would be no big deal.”

James Suttles, president of Dana/Suttles, a large fleet specializing in hazmat, says his drivers are delayed frequently. Enforcement officials are letting up on inspections somewhat, he says, but chemical plants are getting tougher.

For most of last autumn drivers flocked to truck stop chapels and ministries, says Joe Hunter, president and founder of Truckstop Ministries. “Needless to say, our phone lit up 24 hours a day after Sept. 11,” Hunter says. “There was significant anxiety there.”

Hunter, a former trucker, and others say time has allayed the concerns of many truckers. The economy is also slowly picking up. Load boards and freight brokers have reported large increases in available loads. Fuel prices have remained relatively low.

Jerry and Judy Reese say the past 12 months were rough, but things are looking up. “God works in mysterious ways. When you do a good deed you get it back in return.” The couple founded a new business hauling trade show materials and equipment this year and have returned to showing their rig at truck shows. They’ve also started a second trucking enterprise, hauling furniture from North Carolina. Their children are partners in that venture.

For many truckers, the return from the brink is ongoing. Income for the owner-operators who use American Truck Tax dropped 5 percent to 8 percent after Sept. 11. But that should change as the economy rebounds.

That’s the experience of the Camerons, whose income is beginning to bounce back. Regardless of Sept. 11′s financial impact on him, Tom Cameron says, the personal involvement of hauling medical supplies, water and other aid will have a lasting impression.

“I wish I could do that every day – to do something good is really rewarding,” he says. “I’m ex-military, so I’m trained not to cry. But an experience like that brings tears to your eyes.”

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