Opinion: Some Trucking Customers ‘Just Don’t Get It’

By Clifford J. Harvison, National Tank Truck Carriers

I’m a strong proponent of life imprisonment, with no opportunity for parole, for any transportation professional who uses the phrase “trucking deregulation.” The word “deregulation” implies that government rules and constraints have been removed from a carrier’s decision-making process. This is not what has happened since 1980.

What we have seen is “re-regulation.” Trucking has been spending a lot of money to meet government dictates.

If you really believe that the trucking industry has been “deregulated,” seek out truck operators who can buy and operate vehicles free of hardware and appliances mandated by the Environmental Protection Agency, the National Highway Traffic Safety Administration and the Federal Motor Carrier Safety Administration — and who can recruit and train employees with a blind eye to OSHA [the Occupational Safety and Health Administration], the Department of Labor, the Equal Employment Opportunity Commission and the Department of Transportation.

For the sake of our competitors, I note that the same is true with the railroads. The Staggers Act did not deregulate the railroads. All Staggers did was make it easier for the railroads to merge, abandon track and service, and isolate and apparently alienate so-called “captive shippers.”

I don’t want these observations to be interpreted as “bashing” shippers. Instead, I’m begging shippers to toss away their cost models, traffic lane studies, inane supply-chain management theories and destructive bidding gimmicks, and resort to some good, old fashioned common sense.

Let’s take a look at just two basic areas — hardware and people.

By “hardware,” I mean tank trailers. The past five years have seen an unprecedented growth in the number of bulk loads hauled, so it is totally reasonable that the tank truck industry should be bringing more “hardware” on line.

Yet, this has not happened. New tank trailers coming off the assembly lines have averaged about 5,400 per year for the past eight years. Our shippers told us to get “lean and mean” and we’ve done that. Overcapacity is a relic.

But there’s a downside to lean and mean. If you’re a tank carrier, the list of possible clients is pretty well confined to “big oil,” the major chemical companies, producers of edible products and dry materials, such as cement. They are all economic giants, and they don’t hesitate to flex their muscles in the pricing arena.

When you use economic leverage in such a fashion as to prevent competition, economic leverage becomes inherently destructive, and that’s what’s being done today.

Today, the tank truck industry’s margins are so slim that carriers cannot attract, train and retain drivers. We cannot compete within the nationwide employment pool for qualified individuals to drive trucks.

The gurus of automation, robotics and electronics have done wonderful things for the tank truck industry. We have global positioning, e-mails in the cab, electronic braking, driver monitoring sensors and overfill protection devices. However, we have yet to automate the driver out of the cab, and driver robotics is not on the horizon.

Looming on the horizon is the fact that DOT will soon make modifications in the hours-of-service regulations. Is there anyone so naive as to think that DOT will allow more driving hours?

If the tank truck industry is to continue providing its customers with safe and reliable service, then customer attitudes about prices must change, and here are some suggested “attitude adjustments.”

• Equipment overcapacity is either gone or disappearing rapidly. If you want assured service, work on building lasting and long-term relationships with carriers. Lasting commitment always trumps a one-night stand.
• The United States’ industrial base and the individual consumer have become captive to OPEC [Organization of the Petroleum Exporting Countries]. Until we decide to escape from this political prison, the price for petroleum will remain volatile. If we’re hauling your product, you will have to pay for that volatility.
• The current process by major shippers of “bidding freight” — that is, leveraging the resources of one undercapitalized carrier against the resources of a similarly undercapitalized carrier — is destructive and will cause carriers to cut corners that you don’t want cut.
• Despite the admonitions of philosophers, psychologists, consultants and academics who tell you that drivers want acceptance, appreciation and other warm and fuzzy things, drivers want money, and there are places other than in a truck cab to get it.
• If you think that you can get a better deal by returning to private trucking, go to it. We will sell you the trucks and the terminals and all of the hoses, valves, fittings and in-truck computers you’ll ever need. Additionally, we will provide you the names, addresses and phone numbers of individuals who won’t drive a truck for $35,000 a year.