The Future of Trucking; Who pays for the costs of safer roads?

My parents grew up in a relatively small town. After they married, they moved to a bigger city. But my dad’s brother married my mom’s sister, and then my aunt and uncle took over a dairy farm which was in the family. For years, my family drove an hour north on many Sundays of the year to have a big family meal with two sets of grandparents, aunts, uncles, and lots of cousins.

I often spent vacations there, including a few weeks in the summer when I helped with the haying, feeding the chickens, gathering eggs, playing in the hayloft, cutting the big country lawn, chasing the cows out of the cornfield, repairing the fences, and picking strawberries from the patch.

Now it is no more. For one thing, the government bought them out to put an expressway through the old farm. They moved into a new house which they built nearby next to the family sugarbush. These days, it seems odd to shop at a major grocery store where I used to pick apples, explore old family outbuildings, bale hay, and hide in the tall, waving grass.

Two of their sons–my double cousins–bought some property a few miles away and managed a dairy farm of their own. They took out some loans to build a new barn and get new milking equipment.  It got to a point where it was no longer affordable to run the small family dairy farm and make a living wage.* They sold the cows. And now they have sold the farm.  An era is over.

I thought about all of this, on a recent trip “back home”, as I reflected on the plight of small trucking companies and independent owner-operator truck drivers. Are the costs of owning a company and the pressure to drive many miles creating a situation where they won’t be able to stay in business?

Frequently, I hear that changes of one kind or another in the trucking industry–in order to improve safety (i.e., reduce crashes, injuries and deaths)–will result in increased costs for the trucking companies. I hear that it will put them out of business.

Is this true? According to whom and based on what information? If it is true, then does something need to change in the trucking industry itself in order to allow for the beneficial work, which trucking provides, to continue but to also allow for truckers to make a decent living wage–without jeopardizing their health and the safety of travelers on the roads?

Will this someday be an era that is over, or can we fix the problems for the benefit of all? Who pays for Safety? And can we figure out how to fairly and logically spread the increased costs around? The alternative seems to be unacceptable: Forget safety and let the cost be spilled blood.

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(* I might not have gotten all of the details of the family farm history exactly correct, but I hope you can see the picture that I am trying to paint.)

Cost of Electronic Logging Deviceshttp://www.vdoroadlog.com/products/electronic-logging-devices-eld/roadlog-eld/ “As you probably know, the fees for other manufacturers’ electronic log systems can add up to thousands of dollars in just a few years time, and that’s a real roadblock for many Owner Operators. RoadLog is available with no fees and no monthly contract.”

Cost of Improving Underride Guardshttp://www.bloomberg.com/news/2014-12-16/dead-girls-mom-says-100-truck-fix-may-have-saved-them.html

Cost of trucking liability insurance:  http://www.thetruckersreport.com/insurance-calculator/ and http://annaleahmary.com/2015/02/speak-up-for-increased-trucker-minimum-insurance-rally-with-us-to-be-heard-above-the-vocal-opposition/ and

http://annaleahmary.com/2015/06/uncovering-new-information-on-trucking-minimum-liability-insurance-rates/

Also, note the information quoted from this link, http://annaleahmary.com/2015/06/trucking-minimum-liability-insurance-trucker-wages-a-facebook-conversation/:

OOIDA contends that an increase in insurance would be a death nail for the small businesses that comprise over 90 percent of the trucking industry.

In response to OOIDA’s comment about “fewer than one percent,” our son Peter made this observation prior to our meeting with FMCSA on May 5, 2014,

The 1% issue is at best a red herring. Refusing to raise a limit because such a small percentage reach the limit only indicates that the increase in cost should be minimal. It can’t be both ways, either this increase should raise the cost of doing business or the effect should be minimal.

This isn’t life insurance where all the money is always paid out. Nor is this homeowner’s insurance in which you have a set amount of house that can be destroyed. This is liability insurance in which the amount paid out is based on the amount of damage being done. If such a small percentage of claims reaches the limit, then greedy lawyers, increased costs, and mythical “windfall” payments are all proven absurd or irrelevant.

Furthermore, not everyone in the trucking industry would agree with OOIDA. We noted a Public Comment on December 3, 2014, by Brian Taylor as a spokesperson for a trucking company ( http://www.regulations.gov/#!documentDetail;D=FMCSA-2014-0211-0057 ):

We are a 23 truck fleet and carry 25 million in liability insurance. We carry that much to protect not only us but our customers. The argument that only 1 % of the claims exceed the current threshold for insurance makes no sense. You carry insurance to cover you no matter what happens. 1 % exposure is too much. The fact that it seldom happens makes the coverage cheap. The actuaries price according to probability. I don’t believe that this coverage will be cost prohibitive unless the carrier has a dismal safety rating in which case they shouldn’t be in business. When carriers don’t carry enough coverage the expose responsible carriers, shippers and the general public. We need responsible carriers, pricing their services correctly to cover all costs and excepting responsibility for the liability created by their business. Skirting this liability and charging for services is deceptive to shippers and puts the public or state at financial risk in the form of a claim that is part of a service they get no remuneration for. When you provide a service, charge fees and profit you must also be responsible financially which means carrying adequate insurance.

“. . . many of the truck drivers/companies which I see making comments complain about how the premiums will skyrocket. But on what are they basing that opinion?

John Lannen, executive director of the Truck Safety Coalition, has shared background information with us which he has gathered from numerous sources, presentations, and conversations regarding the economics of additional insurance coverage for motor carriers.  It turns out that the first million dollars’ worth of  trucking insurance is the most expensive and each incremental amount is cheaper. . . . ” (For more details, go here: http://annaleahmary.com/2015/06/trucking-minimum-liability-insurance-trucker-wages-a-facebook-conversation/ )

http://www.insurancejournal.com/news/national/2014/06/13/331775.htm

http://www.thetrucker.com/News/Stories/2015/6/4/HousedefeatsamendmenttostripTHUDriderbanninghigherinsuranceminimums.aspx

The Cartwright Amendment, which would allow FMCSA to continue the process of updating trucking minimum liability insurance–to protect both trucking company and crash victims–was defeated in the House today:

Truck Safety Coalition Statement on the Cartwright Amendment:   http://trucksafety.org/tsc-statement-on-cartwright-amendment/

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