Trucking in the United States has a very long history.
“According to Bob Costello, chief economist for the American Trucking Associations (ATA), trucks move roughly 72.5% of the nation’s freight by weight.”
Freight moves from distribution centers and retail stores to wholesalers who in turn sell to retailers or directly to consumers. This movement of goods is critical to the U.S. economy. It is the life blood that keeps our factories running, our retail businesses healthy and our country moving. But this vital lifeline has been choked off by unnecessary federal regulations and bureaucratic red tape.
That’s why trucking is one of the most heavily regulated industries in America. The ATA says regulations now burden the average trucking company with about 18 different laws and regulations they must follow. And many experts say the number of regulations actually exceeds 40. Whatever the actual number, it is clear the regulatory tsunami has caused a severe shortage of qualified trucking companies. As a result, shippers have little choice but to use “me too” carriers who are not only grossly inefficient, they are often unsafe as well.
Trucking in the United States has a very long history. It goes back to the early 1800s when “teamsters” began moving goods for the Produce Exchange in New York City. These teamsters were independent contractors who worked for individual farmers and merchants. That system worked fine until Congress decided farmers and merchants should no longer be allowed to sell directly to the public.
So in 1913, the federal government took over the Teamsters and established the Federal Produce Exchange which was designed to eliminate the competition of local produce markets. The Federal Produce Exchange was a miserable failure. It was plagued with graft, corruption and cronyism.
In 1921, President Warren G. Harding signed the Walsh-Healey Act. This law made it possible for states to establish their own trucking departments and take over the regulatory function previously performed by the federal government. State trucking departments were created in all 50 states but it took almost 20 years for them to get up to speed and become really effective. During that time, thousands of miles of roads were built and many were abandoned because there was no way to get freight from point A to point B without driving on them.
Equally important, the trucking industry became highly decentralized as independent owner-operators began doing most of the work. That trend continued right through the 1980s when deregulation once again came to the industry. Independent owner-operators were hit with all kinds of new regulations. They were required to have costly employee benefits, pay fuel taxes, pay highway use fees, obtain more and more expensive licenses and much more. All this put a severe “toll” on the ability of independent owner-operators to serve their customers. And that, of course, had a negative impact on the profitability of the companies they worked for.
Then, in 1984, President Ronald Reagan signed the Interstate Commerce Commission (ICC) Reform Act which ended the regulatory burden imposed on trucking by the Federal Government. It was one of the most important pieces of legislation passed in the history of Congress. But state governments didn’t get relief right away. Many of them had to wait almost 10 years before they could start to effectively regulate trucking. And boy, did they ever. The result was many thousands of miles of roads went unused for long periods of time and the ability of trucking companies to make a profit was severely compromised.
In 1994, President Bill Clinton signed the National Motor Vehicle Title Act. This law made it possible for states to no longer have to purchase “title tags” (also known as “pink slips”) from the federal government for each vehicle they issued a license to operate. Prior to this act, every vehicle that traveled the highway was required to have a title tag. And those tags had to be obtained from the Secretary of Transportation at a cost of about $300 per vehicle. This was one of the most expensive items states had to pay out every year.
Conversely, now that states can issue their own licenses, they have an enormous incentive to ensure all vehicles are roadworthy and properly insured. They also have an enormous incentive to keep tabs on their drivers and make sure they are obeying the law. All this has produced some unexpected benefits for truckers. It has made the roads more useable. Instead of hundreds of thousands of miles of roadway going unused, now there is a constant stream of commercial traffic using the highways.
The trucking companies who operate within the borders of these 50 states benefit from this activity because it creates a demand for their services. The extra business they get from this source alone more than compensates for any reduction in profit they might experience from lower fuel prices. In fact, since states have much more control over the regulatory environment, the real profit potential of the industry has dramatically increased.
The trucking industry has been around a long time and no matter where you live or work, there is almost no part of the country that cannot support a trucking company. According to Bureau of Labor , there are currently 1,951,600 truck drivers in the United States. The industry needs a lot more drivers than there are available and that means I am a hot commodity. I’ve been trucking for 27 years and I’m not going anywhere.
Check out this article about truck drivers pay.
