Drivers & Owner-Operators
Truck drivers, whether employees or owner-operators, have been significantly affected by deregulation. As non-union truckload carriers slashed costs as well as rates in order to compete in the new cutthroat environment, driver and owner-operator pay was one of the casualties.
"The proponents of deregulation kept talking about $16 billion worth of waste in the trucking industry," says Lana Batts, former president of the Truckload Carriers Assn. "What in essence happened was the savings from deregulation came out of the drivers' pockets, whether he was a union or non-union worker. There's not much differences in wages today than in 1980, which is why we have a truck driver shortage."
Todd Spencer, vice president with the Owner Operator Independent Drivers Assn. (OOIDA), paints an even bleaker picture.
"Real incomes for drivers have actually fallen by 40% since 1980," Spencer says. "As a result, what you see now is an industry that has a great demand for the service it provides, but it is unable to retain drivers behind the wheel." An average industry turnover rate of more than 100% "is not an economically healthy industry," Spencer says. "If you're talking about the truck driver being the most important element in truck transportation, and when he is little more than an easily replaceable commodity, you don't have a healthy industry."
There are also factors beyond pay. Before deregulation, trucking companies were more likely to be regional, Spencer points out. "Most drivers went to work for them and worked for years and years, even until retirement," he says. "Trucking jobs were good-paying, stable jobs, knights-of-the-road stuff. After deregulation, every regional carrier became a national carrier, and drivers were recruited to spend weeks on the road.
"These are all things that contribute to an industry becoming less and less attractive to the kind of people you really want to attract."
For owner-operators, Spencer says, deregulation was "sort of a mixed bag." Prior to deregulation, options for owner-operators were extremely limited. It was virtually impossible to get operating authority, so you had two options: working in the exempt sector, which typically meant hauling produce or logs; or you could lease to a regulated carrier.
"Virtually all of the big trucking companies had owner-operator divisions that they called special commodities divisions or something like that," Spencer says.
"I even worked in one of those - the Ranger division of Ryder Truck Lines." (Yes, the same Ranger that ended up part of Landstar, he says.)
So some owner-operators were excited by the prospects. OOIDA as an organization never officially advocated a position for or against deregulation.
"It was felt a great many owner-operators would be forced out of business, that it would necessitate the widespread use of freight brokers. We saw no advantage in replacing certificated carriers with unregulated freight brokers. And that's exactly what happened."
Like drivers, owner-operator pay has suffered. "There are certainly advantages to owning and operating your own truck," he says, "particularly if you enjoy having your own equipment."
But when it comes to stagnant real-world pay, he says, owner-operator and drivers are basically in the same deregulated boat.
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