Letter to the Editor: Reregulation, Please
This Letter to the Editor appear in the July 6 print edition of Transport Topics. Click here to subscribe today.
Now that the federal government is taking over big businesses, it is time to reregulate trucking industry rating structures. We need price stabilization of rates so we can purchase equipment and train our personnel properly.
Trucking deregulation opened the floodgates for overcapacity. Desperate for backhauls, companies and owner-operators have cut — and continue to cut — rates severely in an attempt to survive. For example, the price of a $3,000 load going west would be reduced to $1,500 because of overcapacity.
On the surface, that price ap-pears to be good for everyone deriving benefit from the payload, except for the carrier performing the move.
The trucking industry is capital-intensive, and without that capital, everyone is taking shortcuts to remain viable. This is not what we need or want for trucks driving on our interstates.
When former Secretary of Transportation Elizabeth Dole was in Boston years ago to make a speech, she said she was proud to announce that when she had taken over, there were 28,000 trucking companies in the country, but that number had grown to 38,000 carriers. What she failed to mention was that many well-established, excellent carriers could no longer afford to compete with the one-truck owner-operator strapped with minimal expenses.
“Gypsies” with one or two trucks became a business without knowing about business or having a home terminal. They cut the rates so severely that even they could not compete. Even now, some major carriers are in financial trouble as a result. Reregulate the rates, and the carrier that gives the best service will get the business.
Not only is the trucking industry now in deep financial trouble, but we also are facing pro-union legislation that will cause many of us who are hanging on by a thread to close our doors.
Look at the age of the equipment on the street today. There is a direct relationship with deregulation, because no one has any monies to update their fleets.
Reason No. 1 for reregulating trucking is the need for capital to update fleets. Reregulating rates for the trucking industry will cut accidents by 75% as good carriers can keep their equipment in better shape. If the federal government brings back rate regulation, carriers can buy new equipment.
Reregulation also is necessary because of the constant burden of cost placed on the industry to educate employees about handling hazardous materials and the need to screen drivers for the Transportation Worker Identity Credential and security clearances. Other costly burdens that must be absorbed by the industry include Department of Transportation compliance stops and parking tickets in congested cities.
Since deregulation, shippers dictate what they want to pay — and it’s way off from the published rates. Shippers are getting 70% to 80% discounts and still want more. We are taking full loads back from Boston to New York or New Jersey for $300. That doesn’t even pay for the fuel. Any New England-based carrier is in dire trouble.
We need help.
Ernest Masiello
Chief Executive Officer
Crystal Motor Express Inc.
Lynnfield, Mass.
