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Ninth, the Secretary of Transportation should increase the amount of insurance required for any vehicle to $750,000 and coordinate with the ICC to see that there is strict compliance with this requirement prior to the issuance of a certificate or permit. The Department of Agriculture reported recently that owner-operators are driving on an average between 15 and 16 hours per day.
The Secretary is thus not adequately enforcing his regulation limiting driving to 10 hours without rest. Excessive driving hours and accompanying fatigue are recognized as a primary cause of highway accidents. Adequate insurance coverage and effective enforcement of existing safety regulations, including checking of logs which drivers must maintain and should continue to do, are minimum protections the Secretary can afford the driving public.
Tenth, the Teamsters Union requested inclusion in the 1980 Act of an employee protection program. The program was rejected with the assurance that the act would be so implemented that no dislocation of employees would result. The chairman of the House committee pointed out that the oversight hearings are required each year. He added: "If there is a lot of trouble, this subcommittee will respond as it has in the past.” Our studies show that approximately 28 percent of our members engaged in general freight are on layoff. In the light of these layoffs, the Congress should accord displaced employees income protection and priority reemployment status.
Those are the 10 points that we have enumerated that we feel must be adhered to to bring about some stability to the conditions that exist today. I want to say in conclusion that the objectives of the Motor Carrier Act as drafted by this committee were fair. Its policy was to achieve sound economic conditions so that the carriers can earn profits and maintain fair wages and working conditions.
The ICC has not followed this policy in accordance with the oath of office that they assume. They say they don't care what happens to the carriers or their employees. As part of my prepared statement there are eight actions that we feel the ICC should undertake to comply with the Congressional policy.
I sincerely hope that this committee will take appropriate action to see that the ICC does conform with these suggestions and with the intent of Congress in the passage of this act in 1980.
I might also say, if I may, as you probably know, the Teamsters Union vigorously fought deregulation during the course of the years 1979 and 1980. Shortly after the act was approved by the Congress, we had what I would call a critique in our office because we spent so much time and effort in this subject matter because it is very close to us and we are very deeply involved in the trucking industry in America.
We felt that we lost the battle as the result, with the analysis that our people came back and presented to the then-General President, Frank Fitzsimmons, myself and others. We were assured somewhat by our people that the intent of Congress was to preserve a workable and a fair national transportation policy.
We accepted that. As I said earlier, when the industry came to us to reopen the contract shortly after the act was enacted, we chose not to do it, going by what we felt the intent of the Congress was in the application of this act that things would level off and stabilize and that the act as passed would not be emasculated.
We feel and have here today and had then in our opinion credible records and evidence that the act has not been implemented as passed by Congress and this is why we are here today. I sit in my office 8 and 10 hours a day and I get letters, phone calls and complaints, petitions from carriers, from members, from local unions all over America complaining about the very things that we and others here today have complained about about the actions of this Commission.
I don't want to talk much longer about this, but I said awesome, and I say it again. It is horrendous. I offer to you and others to come and sit with me and listen to some of the problems that we have to address ourselves day in and day out, people having been displaced writing us and calling about loss of jobs because of some of the actions with respect to implementation of this act that was passed in 1980.
That is all I have at the time. We have several other representatives here which would like to give a brief statement.
The first is Mr. Jim Jesinski, the secretary-treasurer of Teamsters Local 200 in Milwaukee, Wis., who has a large freight membership and spends day in and day out addressing himself to some of the problems I mentioned a minute ago.
Mr. JESINSKI. I am James Jesinski, the secretary-treasurer of Teamsters Local Union 200, Milwaukee, Wis. I would like to share with you the conditions as they exist in the greater Milwaukee area. The local union represents approximately 5,900 members of various industries.
In 1979, that figure was approximately 12,000. The number of members in the trucking industry in 1979 was approximately 4,500 and today that number is 2,900. The balance of our local union has shrunk from 7,500 members to 6,700 members and, interestingly, that second statistic really reflects the unemployment rate in the greater Milwaukee area.
I feel that these figures are significant because they show to me that different things are happening to different segments of the economy. This is really an unusual circumstance because if you look back historically, the unemployment or growth figures between these two segments really has shown a tandem relationship.
Therefore, one must ask one's self why? I find that the only explanation to me is deregulation, and believe me, those effects have been devastating. I used to enjoy going to work in the morning. However, today it becomes very difficult, because I know when I get there virtually every morning there is an endless list of members who have been displaced begging to get back into this industry.
If I could help them, that would be one matter, but with the deregulation and the state of the economy in general, I actually feel helpless. The attitude of the financial institutions down to the vicious rate-cutting, the reasons are many but the effects are all the
Good local, stable companies, they are gone and with them the jobs of our members are gone. So people will say to you that statistically truck drivers do not experience greater unemployment. I
say that is just not true. The fact is that when our members are laid off many find lower paying jobs in or outside the industry. Because they are thus unemployed they never enter the statistics.
Remember, these are people whose livelihood has been affected, not numbers. They are people who want to work and they want to work in a stable, well-paying industry. It is not as though they are leaving the industry voluntarily. They are being forced out by suppressed profits, bankruptcies and irresponsible rate cutting. It is essential that the rates be established that prohibit carriers from operating at less than total cost, including fixed and variable costs, because I think it is essential that we all remember that you can't lose money on every sale and make it up in volume.
Thank you for the time this afternoon.
Mr. SHEA. I would like to introduce next William F. Lyden, vice president and organizer of Teamsters Union 25, Boston.
Mr. LYDEN. Madam Chairperson, I have been introduced as the vice president of Teamsters Local 25, which is correct, and a former employee of W.L. Mead. That outfit is no longer serving Boston and subsequently and consequently about 20 jobs went with it.
I have to say that history in a way is repeating itself. Prior to 1935, the trucking industry was not in fact regulated and it was in a state of chaos pretty much as it is today, and again because it was not regulated. Since 1935, with the intervention of the ICC and regulated industry, that group became stable and responsible to the needs of the American communities and in doing so the truck driver, dock worker, office worker, and mechanic received a decent wage and fringe benefits, health plans, holidays and vacations and with the regulated work week would and could spend time with his family, a luxury he could not afford in the past.
He could look forward to a meaningful pension, be self-sufficient, not have to rely on his children or the government for financial support. Gentlemen, the sad result is many thousands of workers, as a result of deregulation, are being laid off. The way of life, the protections that they had, the dreams of a decent retirement have vanished. Please, ladies and gentlemen, with what testimony you have heard today, bring back to the trucking industry meaningful regulations and enforcement of them. Thank you.
Mrs. KENNELLY. Thank you, sir.
Mr. SHEA. Next, I would like to present Mr. George T. Mueller, secretary-treasurer, Teamsters Local Union No. 43, Racine, Wis.
Mr. MUELLER. I address the Chair and the committee. I am George Mueller, secretary-treasurer of local 43, representing approximately 2,500 members in the industrial area between Chicago, ill., and Milwaukee, Wis. I can also claim title to the fact that in my heart I am a truckdriver with 20 years of experience and I feel that the effects of the Motor Carrier Act of 1980 has caused many employees, or I should say exemployees of regulated carriers that have gone out of business as a result of rate cutting to purchase equipment and attempt to make a living as-some of these persons have purchased equipment in an attempt to make a living as an ITO, which we refer to as an independent truckowner.
In a field that is already overcrowded and sometimes competing with individuals who have little or no knowledge of the trucking industry, the net result is ratecutting to a point where it becomes impossible to haul at a profit.
Therefore, in order to keep from having a truck repossessed by the dealer he must skimp somewhere. The first place is usually on public damage and liability insurance, cargo or bobtail insurance, hence operating as a hazard to the general public on the highway.
The next way to cut costs for the individual truckowner may be to hold down the cost of repairs and sacrifice the safe condition of a unit, again creating an unsafe condition. In the past, a driver could work a full week and enjoy time off with his family. Now many are forced to drive at least 60 or 70 hours a week and spend their time off maintaining their truck because they can no longer afford to have the work done by qualified mechanics.
We have a driver overtired on the highway operating an uninsured, unsafe unit. Although the DOT has placed rules against such unsafe practices, it is impossible to police because of the open entry in effect as a result of the action taken by the committee in 1980.
I am sure that in 1980 many persons thought that the act would help the consumer because of increased competition resulting in a savings to the community, the consumer, and the general public. As I see it, this has never happened. I have yet to see any statistic that shows that the consumer is enjoying reduction of any cost because of the act and yet it creates a situation which makes the highway transportation system unsafe for any driver and puts persons out of work and weakens the ability of our National Highway Transportation System to meet a national emergency if necessary.
I feel that this committee has a responsibility to the industry, the general public, to take steps to stop the deterioration of the trucking industry. In addition to those points that were brought out by Mr. Shea, I am asking this committee to see if it isn't possible to set up spot checks or field checks to get out into the field where the people that are being affected by deregulation are and can no longer afford to come before this committee and present their position. They don't have the money to appear in Washington and I am asking that you see if it isn't possible to set up field checks and go out into the streets and find out what is really happening as a result of deregulation.
Mr. SHEA. Next, I would like to present to you W. C. Smith, the coordinator for the Southern Conference of Teamsters, Hallandale, Fla.
Mr. SMITH. My name is W. C. Smith. I live in Jackson, Miss. My primary area of responsibility is the freight industry in 19 Southern States. For the last 34 years, I have had an opportunity to work and make a living in and around this industry. For 17 years, I was a truckdriver. For 17 years, I have worked for this union.
In the last 2 years I have seen this industry deteriorate faster than I ever thought was possible. In the Southern Conference of Teamsters, we have approximately 30 percent of the people who were employed in general commodity freight now out of work. It takes approximately 83 to 84 cents a mile to run a truck and a trailer down the highway. That is before labor is added; that is before cost of cargo insurance is added.
We have employers in the Southern Conference of Teamsters today attempting to operate for 75 cents a mile and less. To take an industry and to think that it can operate for less than cost is foolish. It is a short term cure-all that cannot last. This country can't operate on the fact that we can do something cheaper than somebody else. We must do it better than anybody else.
The deregulation act as it was passed is not being enforced. There are companies today being given 48-State authority by the ICC who don't have 48 trucks. They couldn't serve the 48 States of the United States with the equipment they have. We simply ask you to force the ICC in your own way to enforce the act as it was meant to be in 1980.
Mr. SHEA. Next, Mr. Chairman, we would like to present to you George Rohrer, who is the chairman of the freight division of the Western Conference of Teamsters out of Los Angeles, Calif.
Mr. ROHRER. Mr. Chairman, as the chairman of the Western Conference of Teamsters Freight Division, I am responsible for the administration of freight contracts throughout the Western States. I believe to explain my viewpoint on the trucking deregulation and its effect on our members in the West, I would have to revert to that point in time immediately after passage of the act when the industry woke up in this country and found its operating rights basically having no value.
They could no longer be used for collateral or for debt protection. They found themselves in a severe cash flow problem. The only place they could turn for relief was to their employees. The ease of entry that has been brought about has placed your major carriers in this country in the position of having to expand their operations into every geographic area to try and maintain or gain on their market share.
Hand in hand this examination has come to the tariff cutting, rate reductions, kickbacks, or anything else that the sales solicitors have to guarantee to a shipper to get his freight. The tariff of the Western States run from 12 to 15 percent for the large shipper. That puts the little guy in the business against the gun. He can't compete against the bigger shippers for trailer space or volume.
The result of the expansion is the all-new mobile trailers being put into communities in the West by Consolidated Freightways. Those trailers are 8 feet wide, 45 feet long, they have elephant stanchions on under them, hardwood floors, rollup doors opening on both sides, a roll-through freight dock. They have an office in front, drop down a gig once they park in a community; you walk in the office, everything is there: the desk, the bathroom, the communications system.
Anyplace they can get three or four large accounts they will place one of those trailers in that community and open up for business. You may say that is good; that is going to help competition, but it takes away the interline freight, the mom and pop carrier, puts him against the gun; all he has left is intrastate freight from which he makes little or no profit.
It will put him out of business. They have on order $140 million worth of those units. I have seen them, gone through them, looked