We're facing a fundamental economic problem within our industry.Canada's shippers (our customers) have too much economic leverage, carriers are only too willing to cut rates and give away services, an...
We’re facing a fundamental economic problem within our industry.
Canada’s shippers (our customers) have too much economic leverage, carriers are only too willing to cut rates and give away services, and owner/operators are inadequately compensated for the array of work that they do.
We’re at the bottom of the proverbial food chain.
In today’s fast-paced world, supply and demand plays a key role in the economy. But trucking has traditionally been a fairly easy business to enter (buy a truck and you’re in business), so there has usually been an abundant supply of trucks. In many cases the demand for trucks has been less than the supply of freight, allowing shippers to continually slash at their costs.
Shippers are fully aware of the leverage and bargaining power they have when it comes to setting rates. Many could care less about the plight of the owner/operator, and are only concerned about their own bottom line. And, quite frankly, you can’t blame them.
Unfortunately for us, there are also far too many carriers willing to take lower rates without a fight, give away operators’ services for free, and force operators to run on razor-thin profit margins, just to keep the shipper as a customer.
Many carriers seldom compensate operators for extra work. When a driver is expected to tarp a load, wait for a load, or lump a load off a trailer and is not compensated for it, phrases such as “that’s trucking”, or “it’s included in the rate” are a common refrain.
Frankly, all deliveries, pickups, lumping, tarping, border crossings, waiting time, pre-trips on company equipment, and some paperwork are expected to be free and part of the job. In a recent study conducted by the American Trucking Associations, it was determined that the average over-the-road driver spends anywhere between 30 to 40 hours a week waiting to be loaded or making a delivery. Using that study as a guide, it is not a far stretch to say that truckers (and O/Os in particular) are generally only paid for half of their job – the driving.
Another area in which O/Os are often under-compensated or work for free relates to the way mileage is determined. The “old” book miles are in many cases still being used and, even when software such as PC Miler is in use, it is often not used properly, or routed in an impractical manner.
This leads most operators to run more miles than they are actually compensated for.
I have always held the opinion that the trucking industry is its own worst enemy, due mainly to the extreme competition within it. If a carrier has too many trucks sitting around and/or wants to expand the business, the sure-fire way to get the freight is to cut the rate.
There was a time not so long ago in this industry that the majority of owner/operators were respected, appreciated and compensated accordingly. This is no longer the case, and that could lead to the very demise of the Canadian O/O.
With the current level of compensation, many operators are finding it nearly impossible to make a decent living.
Contrary to popular belief, I don’t believe that the cost of fuel is the problem. It is merely a symptom of a larger problem that is compensation.
I do not feel that the government is responsible. If the authorities choose to provide short-term fuel tax relief, that is great, but it will only delay the inevitable.
Rates must simply go up.
The majority of owner/operators are held captive not only by the poor shipping rates, but also by the poor mileage rates paid out by carriers. The days of getting an all-inclusive dollar a mile – and still making a decent living – are gone, especially if an operator has equipment to finance and maintain.
Let’s not forget that inadequate driver compensation is a safety concern. Among the provisions of the recent U.S. Motor Carrier Safety Act was an recommendation for a comprehensive study of the methods used to compensate truck drivers, and how those methods may contribute to safety.
If an O/O is having a hard time making a living, if doesn’t take a brain surgeon to figure out that maintenance takes a lesser priority to putting food on the table and keeping the truck. An O/O may also be tempted to work harder, in violation of hours of service regulations, in an attempt to not lose his livelihood. Ultimately, poor compensation may indeed lead to genuine safety concerns.
It is unethical, unfair and morally reprehensible for carriers to improve their bottom lines when the very operators on which they have based their success are losing everything they have worked so hard to attain. n
– Dave Holleman is an over-the-road owner/operator and monthly columnist in Truck News.