A Fairer Shake

Twenty-five years ago, at a town meeting in Clinton, Mass., President Jimmy Carter surprised his audience, his White House staff and many of his cabinet members and closest advisers.

An independent trucker had asked Carter if he would back legislation that would let independents compete on a level playing field with the big carriers. The president shot back that federal regulation of the trucking industry created “gross waste” and “unnecessary constraints.” He was, he said, a believer in “substantial deregulation”.

Previous administrations had spoken of deregulating the industry, and Carter’s predecessor, Gerald Ford, had even had some potential legislation drawn up. But Carter’s effort succeeded with the Motor Carrier Act of 1980 and the deregulation horse was out of the barn, off and running. Legislation from later administrations had completed the deregulation job by 1994.

“Log book regulation is a nuisance. I appreciate the government wanting us to be safe, but the trucking companies have taken the log book qualification too personally. CDLs are a joke and have served no purpose. They are a money making gadget. Urine testing is a joke, too. There is as much drug use in trucking as there was before the urine tests.”
Donnell Witcher, an owner-operator, who has been driving for 33 years.

The deregulation battlefield was a fierce place, with unions, trucking companies, shippers, owner-operators, company drivers and independents all trying to influence the way it worked out. Consider some of the oddities of the regulated world of trucking in 1977. Anyone could haul a load of freshly picked vegetables to factory, but only a federally regulated trucker could haul a load of canned vegetables away from the factory. You might haul a load halfway across the country and, by regulation, have to drive home without a load of any kind. If you had to take a load from Milwaukee to San Francisco for a regulated carrier you couldn’t necessarily take the shortest route. You may have had to drive through certain cities, even if you had to go hundreds of miles out of your way, and you may have had to stop at certain
carriers that had local operating authority and allow them to inspect your paperwork and equipment. Sometimes along the way you could collect freight from a company on one side of the street but not one on the other side. If you wanted to haul a load of beef from St. Louis to Fargo, N.D., you’d have to apply to the Interstate Commerce Commision for permission and they would publish a notice saying you were applying and the public – or any carrier opposed to your success – could object, and the processes that followed could keep you wound up in red tape for a long time. Or maybe you were a small, regulated trucking company and you wanted to lower your prices on a particular haul. No can do. And as a company you had to file a mountain of paperwork, including registering every single one of your trucks in up to 39 states.

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Two years after the passage of the Carter legislation there was little doubt the trucking landscape was changing dramatically. Some big name companies were out of business (more than 70 freight haulers who were open in 1978 were closed by the end of 1982) while 5,122 new truck companies had registered with the ICC. Motor carriers had filed more than 18,700 applications for new company freight routes, and freight bills had been driven down by 10 to 20 percent. The American Trucking Associations said a 1982 survey showed there were 208 trucking companies with annual revenues of more than $1 million. In 1974, there had been 338. But many existing companies had successfully expanded and some also bought weaker rivals.

But 1982 was also a time of recession. Transportation Secretary Elizabeth Dole conceded that trucking companies had “the worst year in 1982 that they’ve had since the ’30s”, but, she said she was convinced the recession was to blame. Many industry analysts disagreed with Mrs. Dole.

Deregulation made the leased owner-operator the typical independent trucker.

“I’ve had it with the government. They interfere and have their nose into everything.
The younger generation is going to pay.”
Jerry Fagan, an owner-operator from Dallas, Texas.

And shippers became ‘kings of the road’ as more trucking companies sought a limited amount of freight and lower rates were how the companies went after it.

Twenty years after the Motor Carrier Act of 1980, CFI President Herb Schmidt blames low rates for the depressed wages and high driver turnover that have plagued trucking for years. “The industry can’t afford to pay drivers enough because they can’t collect enough from shippers,” he said. Michael Belzer, author of Sweatshops on Wheels: Winners and Losers in Trucking Deregulation says drivers and owner-operators lost a lot of money after deregulation. If real wages had remained constant for truckers (from 1977 to 1996) he writes, “the average worker in the trucking industry would have earned a total of $140,658 more than he did between 1977 and 1996, making him and his family much wealthier than they are today.”

But even opponents admit that deregulation created the environment for the truckload market to expand to what we see today and allowed a lot more drivers, owner-operators and small companies to make a living in the trucking industry, albeit having to fight off more and more competitors to do so.

Belzer estimates nearly a tripling in the number of carriers from 1977 to 1991. Federal records show the number of carriers doubled during the 1990s.

Today, at least you can take the shortest route from Point A to Point B and you can find a load to backhaul.

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