In The News

"'Crisis' Now"
Traffic World - January 22, 2001

FMCSA's Cirillo calls for national dialogue to upgrade freight infrastructure, driver pay

The nation's top truck-safety officer is calling for a nationwide freight strategy to repair aging facilities and prepare the country for a forecasted doubling of freight volumes in the next 20 years.

Julie Anna Cirillo, acting assistant administrator and chief safety officer of the Federal Motor Carrier Safety Administration, told a trucking productivity technical session at the 80th annual meeting of the Transportation Research Board that the time to act is now.

"I believe we are in a transportation crisis now," Cirillo said. "Moving freight is vital to the economic wellbeing of our nation. A safe, well-designed and efficiently operating highway system is our responsibility as professionals. Can we make that happen? Can we persuade the public that we need to act now, or do we need a major city to go into total gridlock to have the problem recognized?"

Cirillo said it's "important as a nation that we come to grips with the real potential for this transportation crisis." She said static infrastructure combined with a growing economy, just-in-time delivery; an increase in e-business and an aging driver population all combine to create a potentially chaotic transport system in freight.

"What do we do?" Cirillo asked. "Can we change the way drivers are paid? Can we increase truck size and weight? Or just size or just weight? Should we? What happens if we don't? What happens to the infrastructure if we do? Can we rebuild the infrastructure? Can we build separate truck ways? Should we? Who will pay? What are the safety impacts? What are the economic impacts?"

"What role can technology play in insuring safety is not degraded? How can driving a truck be made a more desirable occupation? How can it be made a safer occupation? Truck driving is one of the most hazardous occupations. These are obviously complex, comprehensive, interwoven questions, which will generate much debate from the diverse interests in transportation. The issues are controversial but their solutions are critical for our national well being."

Cirillo said the nation must not wait for the "inevitable crisis of complete urban gridlock" before we start the dialogue in earnest.

"We must resist our national tendency for crisis management and muster the political will to start immediately to study and discuss these issues, identify alternatives, listen to all the points of view and decide 'on a national agenda for safely moving freight:' she added.

Sophisticated shippers know their side is to blame for some of the reasons for congestion, such as keeping trucks waiting at docks for as long as five hours a day.

"Carriers, shippers, receivers and consignees are all part of the problem of congestion," said John A. Gentle, logistics manager for Owens Corning, Toledo, Ohio, and a 28-year transportation veteran.

"The congestion is not just on the roads. It's in the receiving community on the docks. We are part of the problem. We have to look at ourselves for the solutions;" he said.

Cirillo called on the TRB to lead this endeavor. But that would seem an ambitious undertaking for a tradition-laden group whose primary purpose appears to be chasing federal grant money to study the next generation of asphalt and discussing the coefficient of concrete in the latest generation of highway mix. ("Galvanic Cathodic Protection for Reinforced and Prestressed Concrete" was a typical seminar title at the recent TRB confab in Washington).

Besides, it takes more than TRB to bring together the diverse stakeholders with nearly as many agendas as constituents.

These include the trucking industry and its various factions, labor, shippers and receivers, road builders, safety interests and politicians.

If TRB can get all those people on the same page, it's going to be quite a best seller indeed.

Cirillo said FMCSA stands "ready and willing to work" with others to improve truck and bus safety, so that it can make highways safer for all their users. Tinder the Clinton administration, the agency had the stated goal of trying to reduce truck fatalities by 50 percent by 2010. Nobody from the Bush administration so far has ventured whether that's a goal of the new president, who nevertheless will have the services of expert career civil servants such as Cirillo at his disposal.

Cirillo also cited several reasons for the decades-long shortage of truck drivers. The industry is forecast to need approximately 80,000 drivers each year just to handle the freight volumes of today. Cirillo's reasons for the driver shortage:

• Low pay/long hours. "Most drivers are paid by the mile, not by the hour, and work in excess of 3,000 hours per year (50 percent more than most Americans) for between $35,000 to $40,000:' she said. o No overtime pay. Truck drivers are exempt from the overtime provisions of the Fair Labor Standards Act, the only large group of U.S. workers not covered by most labor laws.
• Quality of life issues: There is "stress to produce more from management, the job held in low esteem by the public, dealing with disrespectful shipping and receiving personnel:' she said.
• Coping with traffic and congestion.
• Just-in-time delivery schedules.
• Waiting, loading and unloading for no pay. Labor expert Michael Belzer in his "Sweatshop On Wheels" states that only 46 percent of nonunion drivers are paid for loading and unloading.

"The fact that many drivers aren't paid for waiting time means there is no incentive for shippers, receivers, or motor carriers to be efficient." Cirillo said.

Motor carrier representatives agreed with Cirillo that something must be done soon to address the hydra-headed evils of congestion, capacity; wages, demographics and their effects on the driver shortage.

Timothy P. Lynch, president and CEO of the Motor Freight Carriers Association, called the situation a "dilemma" rather than a "crisis" that even extends to the unionized carriers facing a mountain of retirements of drivers eligible for the "25-and-out" provisions of the latest National Master Freight Agreement that guarantees them $36,000 retirement income.

The average age of a Teamsters-covered driver in the Central States pension plan is in the mid-50s, Lynch said. More than 22,000 of those drivers have more than 20 years' experience, where they are eligible for $24,000 pension, Lynch said. Of six leading LTL carriers, 7,000 drivers are over 55, with 2,000 over 60.

"If half of those drivers those to retire that would mean we would have to replace 3,500 drivers." Lynch said, hinting at the problem. "Remember, that's only six companies contributing at one pension fund. "We do recognize we have a pool of drivers to replace. Hopefully, as we grow our businesses, we'll need even more drivers," Lynch added.

Citing statistics that show anywhere from a 50 to 100 percent growth in trucking services forecast by 2020, Lynch said the two primary restraints on the industry are drivers' hours of service and equipment size and weights. Hours-of-service reform is on hold at least until Oct 1, and perhaps longer if trucking lobbyists can persuade the Bush administration to place it on the back burner of DOT priorities. Size and weights effectively have been frozen since the railroads won that freeze as part of the 1991 highway authorization act.

So with hours of service frozen at 10 hours driving with 15 hours maximum on-duty (and with a movement to reduce even that), and equipment basically frozen at 80,000 pounds maximum in a 53-foot trailer, where are the truckers going to find the capacity for all this additional freight?

"Something has to give." Lynch said. "These are not easy choices. Quite frankly, the public is not too keen on bigger trucks or allowing drivers to work more hours. At the current stage, we have far more questions to these problems than answers."

Michael Conyngham, director of research for the Teamsters union, says shippers have had the upper hand for far too long enjoying the fruits of 20 years of trucking deregulation. The IBT, of course, is somewhat biased in this regard - it has lost at least 150,000 freight members to companies that have folded since deregulation, or about one-third of all its trucking members in 20 years.

"To say we have a dynamic trucking industry today without acknowledging the human cost is rather symptomatic of the problem of this industry." Conyngham said. "The driver has gotten lost in the equation. We have created an occupation that very few workers want to come into. It's always been the Teamsters' contention that shippers have far too long been the beneficiary of deregulation."

The Teamsters contend that 20 years of deregulation has resulted in a 25 percent reduction in real earnings for nonunion drivers who get little or no overtime and are uncompensated for such nondriving activities such as loading and unloading, as well as for waiting at shippers' and receivers' docks.

"The effective hourly rate of nonunion drivers is about $8 when driving, waiting and unloading is measured," he said. "What makes the difference is Teamster drivers are compensated for nearly all the hours they work."

Noting that the cost of recruiting and training one new driver at a nonunion truckload carrier is about $9,000, Conyngham said that's just about the annual contribution a Teamster-covered carrier makes to a union pension plan. While some nonunion carriers such as Overnite Transportation Co., Richmond, Va., the nation's sixth-largest stand-alone LTL carrier and biggest nonunion LTL carrier, have come within 10 percent of the Teamsters' freight scale of roughly $21 an hour for a driver, fringe benefits can cost a unionized carrier as much as twice what some nonunion carriers contribute.

"Shippers clearly have a responsibility in this," Conyngham said. "They need to realize that their supply chain breaks down when drivers have to wait three or four hours at a dock. Drivers are the critical factor in that."

By John D. Schulz