Landstar Quits ATA Over Dues Dispute

Landstar System has dropped its membership in American Trucking Associations, becoming the first major company to leave the trade association since the launching of the sweeping restructuring of ATA.

Landstar Chairman Jeffrey C. Crowe announced the decision in a recent letter to ATA President Walter B. McCormick Jr.

Mr. Crowe directed Landstar employees to withdraw from all ATA councils, the ATA Litigation Center and the ATA Foundation. In addition, the Jacksonville, Fla.-based company plans to withdraw from the Truckload Carriers Assn. at the end of this year, but will remain in the Specialized Carriers & Rigging Assn. and three state trucking associations.

Mr. Crowe balked at paying more than a quarter-million dollars in annual dues to ATA, arguing that money Landstar pays to owner-operators and independent sales agents should be excluded from the dues calculation.

Landstar relies heavily on what it calls "business capacity owners" to handle its truckload freight business. The company generated revenue of $1.3 billion in 1997.

Under the new ATA dues schedule, carriers pay a single fee for a service package that includes regulatory, legislative and media advocacy, litigation, research and representation on professional councils. New dues begin at $50 annually for companies with revenue under $500,000 and top out at $526,000 for companies with revenue of more than $4.5 billion.

Based on that schedule, Landstar would have had to pay $288,750 in 1999. The company paid $230,000 to ATA in 1997, but only $86,000 in 1998, according to ATA member services officials.

In his letter to Mr. McCormick, Mr. Crowe suggested a dues cap of $150,000 for large companies.

In a response, Mr. McCormick said Landstar's proposal was put to a vote at the ATA Executive Committee meeting in Chicago in August and was rejected. The committee recommended instead that overall combined dues be reduced by 17%.

"We deeply regret Landstar's decision," Mr. McCormick said, adding that some loss of membership was to be expected, since as many as 40% of the organization's members were paying dues at a reduced rate when he took over.

Overall, ATA lost 420 members, mostly smaller carriers and private fleets, between January and August. The association gained 261 new members, for a net loss of 159 members. Total membership declined from 3,824 to 3,665.

Despite the decline, dues commitments increased from $14.5 million in January to $14.6 million in August, reflecting the fact that more carriers are increasing their dues contribution to stay in the association, according to ATA Controller Christine Kanuck.

At least one carrier, Consolidated Freightways Corp., has reduced its involvement in association activities, but remains a member.

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