Competition drives the trucking industry

Monthly Labor Review

Volumn 121, Issue 4, 1998, Pages 34-41

  Engel, Cynthia ^a  

^a NONE

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EID: 0039075868     PISSN: 00981818     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (58)

1. "Low Shipping Prices May Curb Inflation," The Wall Street Journal, June 24, 1997, p. A2. The source of the data is Cass Information Systems. Estimates refer to freight movement by truck, rail, and sea. While reductions in the rate of revenue growth per ton-mile have occurred across all sectors, they have been most significant in rail and water transport. Also, see National Transportation Statistics, Historical Compendium, 1960-1992 (U.S. Department of Transportation, Bureau of Transportation Statistics, 1993), p. 44.
2. "Low Shipping Prices May Curb Inflation," The Wall Street Journal, June 24, 1997, p. A2. The source of the data is Cass Information Systems. Estimates refer to freight movement by truck, rail, and sea. While reductions in the rate of revenue growth per ton-mile have occurred across all sectors, they have been most significant in rail and water transport. Also, see National Transportation Statistics, Historical Compendium, 1960-1992 (U.S. Department of Transportation, Bureau of Transportation Statistics, 1993), p. 44.
3. When measured by value rather than tonnage. See 1993 Commodity Flow Survey (U.S. Department of Transportation, Bureau of Transportation Statistics, 1995).
4. For-hire truckdrivers are those employed in SIC 42, Trucking and Warehousing, rather than across the spectrum of industrial classifications.
5. Excludes the warehousing and storage component of Trucking and Warehousing, SIC 42. Rate of decline is calculated using annual averages.
6. According to the 1996-97 Occupational Outlook Handbook (Bureau of Labor Statistics, 1996), p. 3.
7. Employment data are from the Current Employment Statistics surveys as they were published prior to June 1997; some large companies, previously classified as trucking, were recently reclassified as air courier companies (SIC 4513). Data published since June 1997 reflect this reclassification; the new series for both trucking and air courier services begin with data for 1988, and therefore could not be used for long-term analysis.
8. For freight volume by commodity type, see American Trucking Trends, 1996 ed. (Alexandria, VA, American Trucking Association, 1997).
9. According to "Fleets change with time," Logistics Management, May 1996, pp. 35-45, "for-hire and contract carriers frequently are taking over roles traditionally filled by private fleets. Often, those vehicles carrying a company's colors belong to a leasing company...." Cited in the same article, a forecast of U.S. freight transportation to 2004 predicts greater outsourcing of private fleet tonnage, resulting in greater revenue growth for for-hire carriers compared to private carriers.
10. "Regulation and Economic Performance: Lessons From the States," Cato Journal, spring/summer 1994, pp. 55-64.
11. "The Impact of State Economic Regulation of Motor Carriage on Intrastate and Interstate Commerce," DOTT 9012 (U.S. Department of Transportation, May 1990).
12. A report by the Brookings Institution estimates annual savings of up to $20 billion. See "The Economic Effects of Surface Freight Deregulation" (Washington, The Brookings Institution, 1990), p. 5. Gains of up to $65 billion have been estimated in "The Disunited States: A Country in Search of an Efficient Transportation Policy," Policy Analysis No. 84 (Washington, The Cato Institute, Mar. 10, 1987). In C. Winston, "Economic Deregulation: Days of Reckoning for Microeconomists," Journal of Economic Literature, March 1993, pp. 1262-69, savings were estimated at $10 billion in 1990 dollars, with consumers reaping $15 billion in welfare gains, and producers losing $5 billion.
13. A report by the Brookings Institution estimates annual savings of up to $20 billion. See "The Economic Effects of Surface Freight Deregulation" (Washington, The Brookings Institution, 1990), p. 5. Gains of up to $65 billion have been estimated in "The Disunited States: A Country in Search of an Efficient Transportation Policy," Policy Analysis No. 84 (Washington, The Cato Institute, Mar. 10, 1987). In C. Winston, "Economic Deregulation: Days of Reckoning for Microeconomists," Journal of Economic Literature, March 1993, pp. 1262-69, savings were estimated at $10 billion in 1990 dollars, with consumers reaping $15 billion in welfare gains, and producers losing $5 billion.
14. A report by the Brookings Institution estimates annual savings of up to $20 billion. See "The Economic Effects of Surface Freight Deregulation" (Washington, The Brookings Institution, 1990), p. 5. Gains of up to $65 billion have been estimated in "The Disunited States: A Country in Search of an Efficient Transportation Policy," Policy Analysis No. 84 (Washington, The Cato Institute, Mar. 10, 1987). In C. Winston, "Economic Deregulation: Days of Reckoning for Microeconomists," Journal of Economic Literature, March 1993, pp. 1262-69, savings were estimated at $10 billion in 1990 dollars, with consumers reaping $15 billion in welfare gains, and producers losing $5 billion.
15. Commercial Carrier Journal, July 1, 1995. Savings estimates are by Cass Information Systems, a logistics company that has been producing an analysis of the logistics industry since 1989.
16. Data on self-employed truckers are from the Current Population Survey.
17. Statistics cover SIC 421, Trucking and Courier Services, Excluding Air, and exclude leasing by companies in other industrial classifications.
18. See Motor Freight Transportation and Warehousing Survey, 1994 (Bureau of the Census, 1995), pp. 11-12; and Motor Freight Transportation and Warehousing Survey, 1995 (Bureau of the Census, 1996), p. 6. While leasing is not the exclusive domain of independent truckers, they are an important component.
19. See Motor Freight Transportation and Warehousing Survey, 1994 (Bureau of the Census, 1995), pp. 11-12; and Motor Freight Transportation and Warehousing Survey, 1995 (Bureau of the Census, 1996), p. 6. While leasing is not the exclusive domain of independent truckers, they are an important component.
20. Motor Freight Transportation and Warehousing Survey, 1995, p. 6.
21. American Trucking Trends, 1997 ed., p. 16.
22. Sharon Cohany, "Workers in alternative employment arrangements," Monthly Labor Review, October 1996, p. 43. On-call workers are those workers reporting only when they are asked to do so, typically for temporary work assignments.
23. "Outsourcing in distribution: the growth in importance of transportation brokers," Business Horizons, November 1995, p. 40.
24. Data are from the May CPS Supplement for 1975 and 1978, while data for 1983 forward are annual averages. The chart refers to the total transportation category, which includes for-hire trucking, railroad transportation, and air transportation. Trucking employment is the largest single component, comprising 37 percent of total employment in that category in 1980.
25. Barry Hirsch, "Trucking Regulation, Unionization, and Labor Earnings," The Journal of Human Resources, summer 1988, pp. 296-319.
26. Among employed wage and salary truck drivers aged 16 years and older. Estimates are CPS 1996 annual averages.
27. One study indicates that 63 percent of the reduction in truckload operating costs was due to reduced labor expenditures, while in the LTL (less-than-truckload) sector, it was an even greater proportion of reductions. See T. Corsi and J. Stowers, "Effects of a Deregulated Environment on Motor Carriers: A Systematic, Multi-Segment Analysis." Transportation Journal, March 1991, pp. 4-28.
28. The agreement allowed up to 28 percent of freight to be moved through rail-truck combinations; it also allowed "sleeper teams" of drivers, in which one driver sleeps while the other continues with delivery.
29. Hirsch, "Trucking Regulation." Real wages are calculated as usual weekly earnings divided by hours worked per week. Earnings are converted to real wages by dividing by the Personal Consumption Expenditures component of the GNP deflator to convert to 1985 dollars.
30. N. Rose, "Labor rent sharing and regulation: evidence from the trucking industry," Journal of Political Economy, December 1987, pp. 1146-78.
31. Hirsch, "Trucking Regulation."
32. According to Corsi and Stowers, compensation per employee in the highly unionized LTL (less-than-truckload) sector declined by 25 percent between 1977 and 1987, compared with almost no reduction in the highly competitive TL (truckload) sector. Less than truckload is a quantity of freight less than that required for the application of a truckload rate. It is usually less than 10,000 pounds and generally involves the use of terminal facilities to break and consolidate shipments, which a full truckload shipment would not. See Corsi and Stowers, "Effects of a Deregulated Environment," p. 15.
33. James Peoples, "Trucking deregulation and labour earnings in the USA; a re-examination," Applied Economics, July 1996, pp. 865-75.
34. "Collective bargaining after deregulation: do the Teamsters still count?" Industrial and Labor Relations Review, July 1995.
35. Corsi and Stowers, "Effects of a Deregulated Environment."
36. In "Effects of a Deregulated Environment," this argument was rejected because several trucking segments that experienced a decline in operator leasing also experienced a decline in employee compensation per mile.
37. This also is supported in "Effects of a Deregulated Environment," which suggested an average increase of 100 miles among all truckload carriers between 1977 and 1987.
38. With growth of just-in-time demands, this is also changing as some companies employ "sleeper teams" of two drivers, so that trucks can keep moving as one driver sleeps and the other completes the delivery.
39. A method of production planning that minimizes inventory stocks in order to reduce overhead costs. Inventory is ordered "just in time" to meet production needs.
40. A declining ratio of ton-miles per intercity trucking employee implies shorter trips and/or lighter volumes, although these workers represent only about 40 percent of employment in trucking and courier services. See National Transportation Statistics, 1996 (U.S. Department of Transportation, Bureau of Transportation Statistics, 1995), pp. 40-42.
41. Class I and Class II carriers increased their average length of haul, according to "Effects of a Deregulated Environment," p. 20. Also, average miles per truck in the for-hire industry increased according to the 1992 Census of Transportation, Trucking Inventory and Use Surveys, 1987-1992 (Bureau of the Census, 1995).
42. Large truckload carriers are those earning revenues in excess of $30 million. Data are from the Trucking Activity Report, 1995-1996 (Alexandria, VA, American Trucking Association, 1996).
43. Movement of freight that is consolidated into full truck loads at terminals.
44. "Driver Turnover and Management Policy: A Survey of Truckload Irregular Route Motor Carriers," Transportation Journal, winter 1994, pp. 15-21.
45. "Driver Management Policies and Motor Carrier Safety," The Logistics and Transportation Review, February 1988, pp. 153-64.
46. "J.B. Hunt pay hike will jolt industry," Journal of Commerce, Sept. 9, 1996, p. 1A. In the first quarter of 1997, pay raises at Hunt reduced turnover by more than one half.
47. See also "Pay raises for drivers trim truck companies profit," Journal of Commerce, Apr. 17, 1997, p. 2B.
48. These are trucks that include a separate power unit combined with a trailer (or trailors).
49. See National Transportation Statistics, 1995, pp. 111, 114.
50. Fatalities were lower in 1993 than in 1975, although an increase in fatalities did occur between 1975 and 1985. See National Transportation Statistics, 1995, p. 107.
51. Statement of Federico Pena before the Committee on Transportation and Infrastructure Subcommittee on Surface Transportation, May 2, 1996, Press Release (U.S. Department of Transportation, 1996).
52. Intermodal Freight Transportation, GAO Report NSIAD-96-159 (U.S. General Accounting Office, 1996), p. 20.
53. For example, Cue Network of Irvine, CA, has about 140,000 subscribers to its paging services, of which more than 50 percent are truckdrivers, according to the Mobile Data Report (Alexandria, VA, Telecom Publishing Group, Jan. 15, 1996).
54. QUALCOMM, Inc. has been marketing state-of-the-art satellite-based mobile communication systems for the transportation industry, as well as decision support tools to achieve the maximum rate of revenue generation for the industry. See Transport Technology Today (Maple Publishing Co., November 1995), p. S9-S11. In another example, the truckload motor carrier Contract Freighters combines global positioning system satellite tracking of trucks and equipment with electronic data interchange to provide customers with real-time status on vehicles and shipments. Customized reports identify where delays and added costs in the supply chain are occurring. Improvements have enabled the firm to reduce the number of dispatchers and fleet managers it employs.
55. Calculated by dividing the ton-miles of intercity freight by annual average trucking employment, where a ton-mile describes the movement of one ton of freight a distance of one mile. Ton-miles are computed by multiplying the weight in tons of each shipment transported by the distance hauled. Increasing weight is correlated with larger trucks. See National Transportation Statistics, 1997, p. 20.
56. Transportation Energy Data Book, 16th ed. (U.S. Department of Transporatation, Bureau of Transportation Statistics, 1996), table 2.22.
57. "Intermodal transportation: evolving toward the 21st century," Transportation and Distribution, February 1996, p. 43.
58. J. Coyle and E. Bardi, The Management of Business Logistics (St. Paul, MN, West Publishing Co., 1984), pp. 287-88.