Landstar Quits ATA Over Dues Dispute
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.
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.
Membership in conferences, such as TCA, are to be available for an added fee.
Under the old system, members were assessed separate dues for ATA, councils and conferences, plus the ATA Foundation and ATA Litigation Center.
For most carriers, the combined schedule represents a decrease in dues. However, it means an increase for some carriers, like Landstar, that have been paying less than full dues, and for carriers that belong to conferences but not ATA.
New ATA dues begin at $50 annually for companies with revenue under $500,000 and top
ut at $526,000 for companies with revenue of more than $4.5 billion.
Based on that schedule, Landstar would have had to pay $257,400 in 1999, compared with $385,000 under the old dues system. The company paid $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.
r. McCormick, in a response, said Landstar’s proposal was put to a vote at the ATA Executive Committee meeting in Chicago and was rejected. The committee recommended instead that overall combined dues be reduced by 17%.
A dues cap of $150,000 would have “destroyed” ATA, according to Mr. McCormick, forcing the layoff of half of its staff and increasing the dues burden on smaller firms.
In an interview, Mr. McCormick said members’ response to the new dues schedule has been “overwhelmingly positive.”
“A number of companies have voted with their pocketbook. They believe in what we’re doing and they’re willing to pay their fair share,” he said.
Among the companies that have recently made new financial commitments to ATA are FDX Corp., Frozen Food Express Industries, Ryder System and Knight Transportation.
“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.
“ATA has established its price. There will be no special deal on dues,” he said.
The loss of Landstar involves more than money, Mr. McCormick said. Political power is also diminished. “Every carrier that drops out decreases the effectiveness of ATA ... ,” he said.
At least one Landstar employee expressed regret at being forced to resign as treasurer of the Transportation Loss Prevention and Security Council. “It is tough for me,” wrote John O’Dell of Landstar Ranger’s risk management department, “ending my association at a time when the council is accomplishing so many good and exciting things in the areas of liability and security.”
Mr. Crowe, through a spokeswoman, declined to comment further on the matter.
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.
TCA President Lana Batts said she’s “very disappointed” in Mr. Crowe’s decision to leave her association while retaining Landstar’s membership in the SC&RA and other groups, including Kentucky, Florida and Illinois state trucking associations.
Both TCA and SC&RA have expressed opposition to a provision in the ATA restructuring plan that would force members of affiliated conferences to join ATA.
Unlike SC&RA, however, Ms. Batts said, TCA has left open the possibility of a compromise before the ATA plan takes effect in January 2001.
Ms. Batts said she expects to continue working with Landstar on some issues.
