Local Union No. 707 AFFILIATED WITH THE Highway and Local Motor Freight Drivers, 66-20 QUEENS BOULEVARD LOUIS J. ALIMENA President NICHOLAS P. GRANCIO Vice President LEO SCHWARTZ 433 Recording Secretary The Honorable Donald J. Mitchell U.S. House of Representatives Dear Congressman Mitchell: Since the inception of deregulation in the Trucking Industry in 1980, the economical impact on our industry and our Union has been devastating under the 1980 Law. The impact on our own Local Union has resulted in approximately 1,000 job losses. This is approximately 30 percent of our membership being unemployed in freight, when the national unemployment rate is only 9.4 percent. The following is a list of companies that have gone outof-business in our Local Union: Ajax Business Machines Inc. Blue Line Transfer Co. Inc. Blue Line Dolphin Trucking Inc. C&T Trucking Inc. The Davidson Transfer & Storage Co. Farer Transportation Co. Feder Trucking_Corporation Great Eastern Transport System Intercity Transportation Co. Kaiser Aluminum & Chemical Co. Kimball's Motor Dispatch, Inc. Leco Distributors, Inc. P&G Motor Freight, Inc. United Transportation The Interstate Commerce Commission is supposed to promote safe, adequate, economical and efficient transporation. Congress also directed the Commission, in carrying out the Motor Carrier Act of 1980, to minimize disruption within the industry. Nevertheless, Commission actions and failure to act seriously aggravating conditions in the industry which result in unnecessary layoffs and many bankruptcies in companies. Dur We are urging that there be a Congressional hearing focusing on the Commission's administration of the act. ing the inquiry, the following areas are among those which should be questioned: At 1. Some large and financially strong carriers, having taken advantage of derulation to obtain extensive additional operating rights from the ICC, thereafter discount their rates by as much as 50 percent to obtain traffic in their new areas. With the current level of operating costs, it is readily apparent that such rates will not cover the cost of service. least one major carrier, (Spector-Red Ball) attributes its bankruptcy directly to the below-cost rate wars raging in the industry and to deregulation. Although the National Transportation Policy condemns unfair or destructive competitive practices (49 U.S.C. s10101(a) (4)), the Commission ignored complaints against such tactics. Also, it has failed to take a stand against prohibited volume discounts which discriminate between shippers. Congress should determine why the Commission permits destructive rate cutting. 2. The common carrier service obligation is at the very foundation of this nation's transportation system. The Commission has been extremely liberal in granting new authority, but is not enforcing the common carrier's obligation to serve the area covered by the trucker's certificate. This allows carriers to engage in selective and often destructive competition for traffic they deem to be attractive, while disregarding service needs involving less desirable traffic. Congress should inquire why the Commission has failed to require carriers to fulfill their obligation to the public. 3. Carriers using the services of owner-operators pass the major burden of cuthroat ratemaking on to the independents who have no way to protect themselves. Owner-operators Bust bear virtually all of the operating costs in providing essential service. As their share of revenue has become inadequate to cover those costs, large scale losses by owneroperators have caused many to leave the industry. Congress should decide whether carriers utilizing owner-operators should be required to show that their rates will at least cover the operating costs which must be met by the owneroperator. 4. The Department of Agriculture has determined that 37 percent of independent owner-operators are spending 16 hours per day on the highways. Such long hours clearly constitute a safety hazard that jeopardizes all who use the nation's highways. At the same time, independents are complaining of the growing amount of extortion by exempt brokers. In addition to determining the reasons for these conditions, Congress should find out why the Commission has failed to require contracts of haul for agricultural products, as required by Section 16 of the Motor Carrier Act. Sincerely yours, Lori Alimena Louis. Alimena LJA/mc cc: Roy Williams Enclosed is a letter I recently received from one of my constituents, It is my understanding that the Subcommittee will be holding oversight Any comments you might have on the issues raised would be greatly appreciated. DRIVERS, SALESMEN, WAREHOUSEMEN, MILK PROCESSORS, I am alarmed by the vast number and the pace at which trucking companies are in or facing bankruptcy. The number and size of these financial disasters threatens the continuation of adequate service by our nation's motor carrier industry. Very recently one of the largest trucking companies in this nation declared bankruptcy, putting well over 6,000 union members out of work into the already swollen lines of the unemployed. This is in addition to the clerical and management staff who also have lost jobs. It is estimated that job losses in the trucking industry now range close to thirty percent (30%). Thus, job loss and layoffs in the trucking industry far exceed that of industry in general. Bob, obviously something is radically wrong. The Teamsters have done their part as a labor union to reduce costs and increase productivity through our contract with the trucking industry. Many of our members have made substantial loans in an effort to save their employer and their jobs. Even after these sacrifices, companies by the numbers are going into bankruptcy or closing their terminals in an effort to survive on greatly diminished operations. Remember, this economic crisis in the trucking industry is not limited to any specific area, size of company or type of carrier. The actions and inactions of the Interstate Commerce Commission are contributing to the destructive, predatory competition running rampant throughout the trucking industry. |