Post by HardTimeTrucker on Aug 9, 2009 8:53:20 GMT -5
Truckers Feel Pinch as Port Traffic Drops
hamptonroads.com/2009/08/truckers-feel-pinch-port-traffic-drops
By Michael White
As he read the paycheck, anxiety set in. Charles Robinson couldn't believe what he saw.
$2.52.
$2.52 for two weeks of work.
Not enough to buy a movie ticket. Not enough even to get popcorn.
It certainly wouldn't cover his $745 monthly truck payment. He called his dispatcher to confirm the amount. He was shocked to learn that after insurance and taxes, the number on the check was accurate.
On Feb. 7, Robinson, 60, missed a truck payment for the first time in 14 years. Four days later, his tractor-trailer was repossessed.
Once secure in his line of work, Robinson, an independent trucker from Petersburg, fell victim to a drop in Hampton Roads port traffic caused by the recession. Compared with the same month a year ago, June saw almost 18 percent fewer imported TEUs, or 20-foot equivalent units, which measure volume and, in turn, total goods shipped through the port.
The 10 months s tarting in October 2008 marked the longest downturn in port activity since the Virginia Port Authority began tracking that data in 1991.
"You hear about the housing collapse, you hear about retail chains going under, but you don't hear about trucking," Robinson said.
After losing his truck, he found work driving in a friend's fleet. But he still couldn't find a full week's work. Robinson estimated he makes $4,000 less each month than he did in 1999.
Independent operators make up about 95 percent of all truckers, according to Joe Rajkovacz of the Owner-Operator Independent Driver Association, but they hold little power in their industry.
In 2007, about 7,000 independent truckers operated out of the Hampton Roads port facilities. That number has dropped by about 15 percent in the past year. The independents face hurdles that corporate trucking companies do not, such as higher overhead for fuel and maintenance.
Robinson and other truckers who own, maintain and fuel their trucks out of their own pockets are among many casualties of the port's downturn. The shops that repair, fuel and inspect the trucks have seen decreased business as well.
The economics of the port's import plunge mirrored the tale of other sectors of the economy. Consumer spending shrank considerably and took the demand for imports with it. Fewer imports resulted in less work for the truckers moving foreign goods from port to retailer. Not only were the jobs scarce, but some commercial shippers, faced with decreased revenue, began slashing the rates they paid drivers.
Robinson said his corporate trucking counterparts, who work for hourly wages, were largely unaffected while independent truckers bore the brunt of the downturn.
Robinson wasn't always a trucker. He served 20 years in the Army, driving a fuel truck, among other jobs. He worked at the Virginia Department of Corrections as a correction officer and, after receiving his bachelor's degree in sociology, in an administrative position. But in 1995 he wanted to get back into trucking, so he put a down payment on a rig and set out for the port.
The average trucking job from the Norfolk port to Richmond would net Robinson about $500 when he started, he said. By 1999, with higher gas prices but stagnant gas stipends, higher insurance premiums and slashed rates, he'd net about $290 for the same run.
"I enjoyed it to the utmost at the beginning," he said. "It was a respectable living."
Last year, Robinson suffered a toxic combination of personal mishaps and business misfortune.
In October, while waiting for a repairman one morning on the side of southbound Interstate 85 in Brunswick County, Robinson saw another truck crash into his. The other driver died on the scene. Shortly afterward, his home in Petersburg caught fire. Fortunately, he had insurance to cover his losses, but that was the last month he managed a full five-day workweek.
Like many struggling independent truckers operating out of the Norfolk port, Robinson saw his paychecks turn meager, starting him on a downward spiral that cost him his tractor-trailer truck, his Ford F-150, much of his savings, and many nights' sleep.
"Everything I had saved, it was put into that truck, or my car. Of course I want them both back, but the money's gone," he said. "That's incredibly painful to have happen."
As the economy shrank, Robinson said, some of the routes he was offered would result in financial losses, between maintenance and fuel costs. Other runs would bring in so little after fuel, taxes and insurance that they were equally unattractive. The same route that in 1995 would pay $500 before taxes and insurance now offered $150.
Now, working in his friend's fleet, Robinson said his gross income this year will be $72,000, down from $120,000 a decade ago. After taxes, insurance and repairs, the remaining income, which was $62,000 years ago, will be just over $30,000.
Robinson's story is not uncommon.
Late payments in the industry are rarely forgiven, even for those with perfect payment records, as Robinson said he had. A repossessed truck creates an out-of-work trucker, and bills go unpaid. Within months of a late payment, a trucker can fall through the cracks.
It wasn't that he and his colleagues refused to work. As he had for months, Robinson remained on call throughout the two-week period resulting in the paltry $2.52 check, but the work just wasn't there. At least not at a price worth taking, he said.
"The advantage of being an owner-operator, historically, was that the driver and his truck could pick up other stuff to balance out the cycle when ports didn't have as much work," said Curtis Whalen of the American Trucking Association's Intermodal Conference. "The flexibility used to work quite well, but we've got conditions we've rarely seen."
After 19 years of making a comfortable living, Homer Wolfe, 56, of Virginia Beach started contemplating handing in his keys and parking his truck until the economy stabilizes.
"I used to love waking up and hearing that engine humming. Now, I get up and loathe turning the key in the ignition," said Wolfe, like Robinson a military veteran.
Over 15 years, Alvin Sparrow of Chesapeake gathered a fleet of 15 trucks and lived well. But he said that in the past year, even with the bulk prices he would get on maintenance and fuel for his vehicles, the overhead barely made the stress of the operation worth his while.
He sold his trucks to work a desk job.
"I thought I'd made it," Sparrow said. "Then all of a sudden, between fuel costs and payroll, things fell apart."
Sparrow now works as an agent, with no plans to get back behind the wheel.
Rajkovacz said he sees the future as a battleground for independent owner-operators in the industry.
"We've gone through a regulation-less nightmare," he said. "Even if the economy does turn around, systemic problems in the ports and concessions to freight intermediaries will make it difficult for owner-operators to get back to the level they were at."
Even so, the American Trucking Association said it sees major earnings for those who survive the recession.
"If our economy shows a slow recovery, you won't have people jumping back in the water right away, because that isn't something a lot of people want a part of," Whalen said. "Those still around could do really well for themselves."
When the economy rebounds, there's no guarantee the trucks will still be in America. Rajkovacz said the foreign markets for 18-wheelers are larger than ever. Instead of parking trucks to wait out the recession, many former truckers are shipping their vehicles overseas to repay debt.
Wolfe said he's staying in the industry, at least for a while. Summer is traditionally the slowest time for port traffic, and the winter holiday season usually provides more work.
"Maybe it's not the best idea to stay in it when it's so bad, but we'll figure it out," he said while waiting for a call on a pickup.
"You can't get an independent trucker to think like everyone else. That's what makes us independent."
Robinson said he sees few other options to explore. At 60, he doubt s he could move into another industry. He had hoped to ride out the recession and retire when he 's eligible for Social Security.
Still, he said he'd like to work toward getting back his tractor-trailer and his Ford F-150.
"What other option do I have? I put a lot of money into this, and I doubt I'm competitive many places," he said. "By the time I got my foot in the door, I'd already be gone."
Michael White, (757) 446-2583, michael.white@pilotonline.com
hamptonroads.com/2009/08/truckers-feel-pinch-port-traffic-drops
By Michael White
As he read the paycheck, anxiety set in. Charles Robinson couldn't believe what he saw.
$2.52.
$2.52 for two weeks of work.
Not enough to buy a movie ticket. Not enough even to get popcorn.
It certainly wouldn't cover his $745 monthly truck payment. He called his dispatcher to confirm the amount. He was shocked to learn that after insurance and taxes, the number on the check was accurate.
On Feb. 7, Robinson, 60, missed a truck payment for the first time in 14 years. Four days later, his tractor-trailer was repossessed.
Once secure in his line of work, Robinson, an independent trucker from Petersburg, fell victim to a drop in Hampton Roads port traffic caused by the recession. Compared with the same month a year ago, June saw almost 18 percent fewer imported TEUs, or 20-foot equivalent units, which measure volume and, in turn, total goods shipped through the port.
The 10 months s tarting in October 2008 marked the longest downturn in port activity since the Virginia Port Authority began tracking that data in 1991.
"You hear about the housing collapse, you hear about retail chains going under, but you don't hear about trucking," Robinson said.
After losing his truck, he found work driving in a friend's fleet. But he still couldn't find a full week's work. Robinson estimated he makes $4,000 less each month than he did in 1999.
Independent operators make up about 95 percent of all truckers, according to Joe Rajkovacz of the Owner-Operator Independent Driver Association, but they hold little power in their industry.
In 2007, about 7,000 independent truckers operated out of the Hampton Roads port facilities. That number has dropped by about 15 percent in the past year. The independents face hurdles that corporate trucking companies do not, such as higher overhead for fuel and maintenance.
Robinson and other truckers who own, maintain and fuel their trucks out of their own pockets are among many casualties of the port's downturn. The shops that repair, fuel and inspect the trucks have seen decreased business as well.
The economics of the port's import plunge mirrored the tale of other sectors of the economy. Consumer spending shrank considerably and took the demand for imports with it. Fewer imports resulted in less work for the truckers moving foreign goods from port to retailer. Not only were the jobs scarce, but some commercial shippers, faced with decreased revenue, began slashing the rates they paid drivers.
Robinson said his corporate trucking counterparts, who work for hourly wages, were largely unaffected while independent truckers bore the brunt of the downturn.
Robinson wasn't always a trucker. He served 20 years in the Army, driving a fuel truck, among other jobs. He worked at the Virginia Department of Corrections as a correction officer and, after receiving his bachelor's degree in sociology, in an administrative position. But in 1995 he wanted to get back into trucking, so he put a down payment on a rig and set out for the port.
The average trucking job from the Norfolk port to Richmond would net Robinson about $500 when he started, he said. By 1999, with higher gas prices but stagnant gas stipends, higher insurance premiums and slashed rates, he'd net about $290 for the same run.
"I enjoyed it to the utmost at the beginning," he said. "It was a respectable living."
Last year, Robinson suffered a toxic combination of personal mishaps and business misfortune.
In October, while waiting for a repairman one morning on the side of southbound Interstate 85 in Brunswick County, Robinson saw another truck crash into his. The other driver died on the scene. Shortly afterward, his home in Petersburg caught fire. Fortunately, he had insurance to cover his losses, but that was the last month he managed a full five-day workweek.
Like many struggling independent truckers operating out of the Norfolk port, Robinson saw his paychecks turn meager, starting him on a downward spiral that cost him his tractor-trailer truck, his Ford F-150, much of his savings, and many nights' sleep.
"Everything I had saved, it was put into that truck, or my car. Of course I want them both back, but the money's gone," he said. "That's incredibly painful to have happen."
As the economy shrank, Robinson said, some of the routes he was offered would result in financial losses, between maintenance and fuel costs. Other runs would bring in so little after fuel, taxes and insurance that they were equally unattractive. The same route that in 1995 would pay $500 before taxes and insurance now offered $150.
Now, working in his friend's fleet, Robinson said his gross income this year will be $72,000, down from $120,000 a decade ago. After taxes, insurance and repairs, the remaining income, which was $62,000 years ago, will be just over $30,000.
Robinson's story is not uncommon.
Late payments in the industry are rarely forgiven, even for those with perfect payment records, as Robinson said he had. A repossessed truck creates an out-of-work trucker, and bills go unpaid. Within months of a late payment, a trucker can fall through the cracks.
It wasn't that he and his colleagues refused to work. As he had for months, Robinson remained on call throughout the two-week period resulting in the paltry $2.52 check, but the work just wasn't there. At least not at a price worth taking, he said.
"The advantage of being an owner-operator, historically, was that the driver and his truck could pick up other stuff to balance out the cycle when ports didn't have as much work," said Curtis Whalen of the American Trucking Association's Intermodal Conference. "The flexibility used to work quite well, but we've got conditions we've rarely seen."
After 19 years of making a comfortable living, Homer Wolfe, 56, of Virginia Beach started contemplating handing in his keys and parking his truck until the economy stabilizes.
"I used to love waking up and hearing that engine humming. Now, I get up and loathe turning the key in the ignition," said Wolfe, like Robinson a military veteran.
Over 15 years, Alvin Sparrow of Chesapeake gathered a fleet of 15 trucks and lived well. But he said that in the past year, even with the bulk prices he would get on maintenance and fuel for his vehicles, the overhead barely made the stress of the operation worth his while.
He sold his trucks to work a desk job.
"I thought I'd made it," Sparrow said. "Then all of a sudden, between fuel costs and payroll, things fell apart."
Sparrow now works as an agent, with no plans to get back behind the wheel.
Rajkovacz said he sees the future as a battleground for independent owner-operators in the industry.
"We've gone through a regulation-less nightmare," he said. "Even if the economy does turn around, systemic problems in the ports and concessions to freight intermediaries will make it difficult for owner-operators to get back to the level they were at."
Even so, the American Trucking Association said it sees major earnings for those who survive the recession.
"If our economy shows a slow recovery, you won't have people jumping back in the water right away, because that isn't something a lot of people want a part of," Whalen said. "Those still around could do really well for themselves."
When the economy rebounds, there's no guarantee the trucks will still be in America. Rajkovacz said the foreign markets for 18-wheelers are larger than ever. Instead of parking trucks to wait out the recession, many former truckers are shipping their vehicles overseas to repay debt.
Wolfe said he's staying in the industry, at least for a while. Summer is traditionally the slowest time for port traffic, and the winter holiday season usually provides more work.
"Maybe it's not the best idea to stay in it when it's so bad, but we'll figure it out," he said while waiting for a call on a pickup.
"You can't get an independent trucker to think like everyone else. That's what makes us independent."
Robinson said he sees few other options to explore. At 60, he doubt s he could move into another industry. He had hoped to ride out the recession and retire when he 's eligible for Social Security.
Still, he said he'd like to work toward getting back his tractor-trailer and his Ford F-150.
"What other option do I have? I put a lot of money into this, and I doubt I'm competitive many places," he said. "By the time I got my foot in the door, I'd already be gone."
Michael White, (757) 446-2583, michael.white@pilotonline.com
