I might or might not be erudite, but I make no pretense of being particularly knowledgeable about US constitutional law. No coursework in it and not my field of studybor profession. My BA was in Central European history so I actually know something about the German Basic Law.
Getting back to the original thread, and the reasons for the closing, namely costs rising but rates not keeping up or declining due to less freight available, it reminds me of a thread years ago about āzombie truckers.ā Small companies or owner-operators who were taking loads at rates less than their operating cost just to have some cash flow. Those operations would eventually fail, but until they did they threatened other companies, both rail and truck.
We often discuss the effects of railroad deregulation. Rarely does anyone talk about the effects of motor carrier deregulation. While never regulated as heavily as railroads, agricultural commodities being the least regulated, the easing or elimination of some regulations changed the game.
One thing it did was ease entry into trucking. Instead of a few companies allowed in a market, now anyone could compete in that market. Too many companies chasing the same freight led to the zombie truckers. Business cycles come and go. Either feast or famine. It seems that now during the feast periods, operators have to keep their belts tight, not being able to develop a reserve to get them through the eventual famine.
Jeff
1 Like
The unintended consequences of deregulation.
Yes deregulation had some unexpected issues with overall supply and demand issues. However it also created a logistics industry that can and does meet the demands that get thrown upon it regardless of what happens. Most zombie carriers donāt last longer than 6 months before they fold. Why that long itās about that long before their trucks fail from lack of maintenance.
1 Like
What I find admirable (although Iām not privy to their motives), is a certain decent size carrier who has a program to train and hire ex-cons. So many complain when they go back to a life of crime, yet unless they have decent job prospects, that is all that many have the āskillsā to do.
1 Like
Not only did deregulation bring in many more competitors, but those competitors didnāt have to pay the large sums of money to buy their ālanesā. For those who donāt know what a ālaneā is, itās basically that back in the āold daysā, a company could only run certain routes. In order to expand, they either had to buy a ālaneā or buy a another company that already operated that lane.
1 Like
When my family moved to Streator Illinois there were 3 small carriers that had the glass plants and brickyard traffic as their own services under the ICC lanes. R&L Express took the glass to Missouri mostly going to Budweisier with return loads of beer to local distributors or pallets back to the glass factory. Melvin Sales had Wisconsin as their lanes serving Miller and Schiltz brewing in Milwaukee. Miller was the flatbed outfit that had the bricks and pipe plant loads. We used to have a tube plant here. Then deregulation hit Melvin sold out to Millis in the early 90s. R&L sold out to Lucky when they wanted to create a van division.
1 Like
Deregulation did exactly what it was supposed to do, lower rates for shippers. Especially the large corporate shippers. How much of that benefit passed down to the average person is debatable.
It probably helped more freight move to trucks faster than it otherwise would have. In a history of the Bangor and Aroostook railway written in the mid 1980s, early into deregulation and before the BAR unraveled, a senior officer talked how the trucking competition changed. It went from a few companies that were similar in nature to the railroad, with a mostly unionized work force, to anyone who could buy a truck. Small companies popped up with lower operating costs. Many such companies failed, but there was always others to take their place.
I remember years ago, long enough that I canāt remember who I talked too, that the Amana Refrigeration plant at Middle Amana IA (southwest of Cedar Rapids, now part of Whirlpool) was served by A W Schmidt Transfer out of Cedar Rapids. Any other truck line with a load in or out of the plant had to āinterchangeā with them to service the plant. The Milwaukee Road was the rail carrier for the plant. My first cab ride, over 50 years ago, was with the switch job that came down from Cedar Rapids/Marion to work the plant. By the late 1980s they had switched completely to trucks.
Jeff
Maybe the downturn is reversing soon?
And from FreightWaves:
And back then the trucking industry was controlled by the teamsters. Essentially the mob. Good riddance I say.
1 Like
I thought it was controlled by the company executives and their shareholders?
Yeahā¦ so much better now.
My late father was a Teamsters in the early to mid 70s when he was working for a larger carrier that had the blue harvetstone silo contract. Well in 73 the Teamsters decided to go on strike during the oil embargo. My father asked his local president if heās giving up his own salary for solidarity with his union brotherās that are walking the picket line. Union president said no Iām not a knuckle dragging peon like youāre. Not a single one of his local stayed on strike they all crossed the picket lines.
All it cost my father was being blacklisted by the union from his pension plan when he became disabled. But as screwed up as the central states pension plan was after Hoffa and his friends got done fleecing it not a big problem.
1 Like
Harold:
Interesting hearing of the Streator, Il carriers. I used to call on carriers and other companies in Streator.
I still work with a number of trucking companies, although my career is slowing down. It is a tough industry. Lots of issues - post covid build up and rapid reduction in rates is primarily the big issue now. Things are leveling off. Activity in the OEM sector (trailer and tractor sales) are beginning to trend up.
Interesting to see Heartland Expressā financials the last few years. The mighty have truly fallen, but it is blamed on the recent purchases of other trucking companies. Heartland was very difficult to deal with, squeezing the last penny from vendors. Nothing wrong with thatā¦that is capitalism.
I have always maintained that trucking company owners are some of the best business people around. Margins are so thin they must be, or they must create a niche market that is price resistant.
Regarding Super Ego and other Eastern European trucking companies (primarily in Chicago), most of those have dispatch ops in their home country. I did some work with a couple of those companies, but they tended to utilize their own āpeopleāā¦and the product shows with failures.
I have tended to move away from the truckload common carriers and into companies that either have a niche or into the private fleets.
Trucking is a tough, tough industry.
Oh, BTW, check out some of those ānuclear verdictsā. There was one which I believed involved Werner regarding a driver who went thru median and struck a truck and was killed, even tho the passenger vehicle CROSSED he median. Awarded over $400m. The reasoning is the truck driver, who was driving legally, should have been driving slower and the collision would not have occured.
Or check out the verdict in Texas of the drunk driver (.3 bac) who ran into the rear of a Wabash National trailer and was awarded a similar verdict (his surviving family). The reason? Lack of a second ICC bumper on the trailer and the driver (extremely drunken) ran under the trailer, killing himself. You think the excessive drinking and bad behavior had anything to do with his decapitation?
Love the comments about ābad managementā. Most trucking company owners would agree with that. They should have SOLD their company years ago and invested in S&P 500. Poor decision indeed!
Ed
2 Likes
Railroads and trucking have been intertwined with politics ever since the Baltimore businessmen conceived of the idea of the Baltimore & Ohio Railroad and began the political process of seeking a charter and the rights to obtain land to bring their idea to reality.
Saying that a railroad forum should be apolitical is to limit it to the color of paint everyone likes. Everything 21st century railroads do is wrapped up in multiple layers of politics - politics that have absolutely nothing to do with the question at hand and everything to do with the personal animosity of the players involved and the blackmail, greenmail, whitemail and every other form of financial chicanery.
2 Likes
I donātthink the moderator bans political discussions that are relavent to transportation, railroadc transportation in particular.directly or indirectly. This thread has been free of personal attacks or venum, and the sjubject certainly has my interest.
I know that weāll never have this information, but Iād be curious to see if many of these political/contentious debates are being flagged by the same one or two people?
4 Likes
I know that certain people here have made it clear they hate my point of view along with my stance on multiple issues. Iām not naming them but I can certainly name them if I was messaged.
2 Likes
I think this is a good principle to follow in matters like this online:
āIf you canāt stand the heat, get out of the kitchen.ā
----Harry Truman