March 13, 2013 at 1:27 PM
As a part of a three segment series, I took a look inside the war that is being waged on the American truck driver. Two major issues have forced both national carriers and owner-operators to have concern about the profitability of the trucking industry. We previously spoke about the environmental compliance lurking in the shadows nibbling at the heels of the transportation industry, forcing owner-operators to go for broke. Truckers willing to take a pro-active position on becoming greener in their operations want the freedom of choice of what technology works for their fleet and budget. Many trucking fleets have been taking steps to become sustainable, and they have identified that young consumers take into consideration the environment when chosen to do business with other companies.
On the forefront of the battle zone both in the court room and the media is the California Construction Trucking Association (CCTA), an organization known as the industry voice for the independent truck driver. California Construction Trucking Association, who filed a notice of appeal to the United States Courts of Appeals for the ninth circuit, in its debate with both CARB, stating it is unconstitutional to mandate someone to give up their property threw regulation, in the name of progress on emissions compliance. The case (CDTOA v. CARB, Case No. 2:11-CV-00384-MCE-GGH), has been ongoing for two years. The purpose of the mandate under CARB, is to enforce heavy-duty, on-road truck and bus regulation that forced replacement of most diesel powered commercial motor vehicles that do not meet 2010 EPA emissions standards operating in the State of California. As discussed before these rules are forcing either the replacement of engines or retrofitting of equipment with Diesel Particulate Filters (DPF’s) that can cost upwards of $20,000 per vehicle. Many in the industry have seen through the claims used to justify this regulation. Another myth is that there is plenty of public grant funding readily to assist truckers in complying. Most small-business truckers are not qualified for the program, which the CCTA says is a program that was designed to hurt the industry from the start. The private sector has had to face the brunt of the multi-billion dollar expense to unnecessarily replace trucks originally built and certified to U.S. EPA emissions standards.
“All of these large trucking fleets and regulators wrap around themselves with the green flag, which is nothing more than a way for government and industry to create social organization of private business,” commented Joe Rajkovacz, Director of Government Affairs and Communications for the CCTA, “It truly is the demise of the small independent trucking industry in our country, and unionize trucking to become only government and large national carriers.” Rajkovacz, is a seasoned industry authority, having over thirty years in connection as a small trucking firm owner who transitioned to the advocacy side of the industry, working to protect the interest of the free market, and smaller trucking companies, who make up the majority of the owner-operator pool.
Rajkovacz has testified at hearings under the Clean Truck program and is in the forefront of the battle between the CCTA and CARB. “This is the most important case in the trucking industry for this generation,” he added. “The Ports of Los Anglos tried to regulate interstate commerce, on what is considered public property, which is a dangerous thing.”
Part of the regulation was intended to set up a licensing fee system that would cost $2500 per company, and $100 per truck thereafter to have the ability to enter the property and conduct business. Masking this under environmental concern is just a way to eliminate small trucking from the equation. Big national carriers have joined in in favor of the regulation because it gives them the ability to rid the competition (owner-operators and smaller trucking firms).
“If this case falls in favor of CARB, it will bring the wheels of free commerce to a screeching holt,” continued Rajkovacz. Providing insight to the precedence that this case will set, under the Clean Air Act, provides a special provision that allows for CARB to have more regulatory and enforcement power than US EPA, where EPA cannot regulate engines already in use, it can only regulate what comes from factory. Under the special provision, CARB can regulate both. States can opt in to choose either CARB or EPA standards when adopted environmental emissions standards. Under this provision, CARB in essence, becomes a de facto national regulatory agency, that is accountable to no legislative body; hence setting the stage for CARB to become judge, jury, and executioner.
The magnifier of this Rajkovacz highlights is that other states will look to adopt the CARB model, especially cities, counties, states that are desperate in creating new ways of generating revenue, affecting the trucking industry even further.
Trucks are not the only target of regulators. Trailers have also become the center of attention. Refrigerated trailers, also known as reefer units, are coming under attack. Reefer units are powered by small diesel engines that operate independent of the rig they are pulled by. Most reefer units stay in service for over 20 years, and consume just as much fuel as a truck over its lifespan. Carrying a $7000 price tag, most reefer units face a similar fate in having to be retrofitted with smaller versions of the DPF as older rigs. Reefer units under mandate, now have a required retirement age of service; just after seven years of seeing the road, reefer units have to be refurbished or scrapped and replaced for a new reefer unit. Industry experts project that the cost of this regulation will force the price of refrigerated goods to skyrocket. Goods such as produce to meats, seafood to dairy, are all subject to having higher prices at the grocery store to help the transporters cope with the cost of compliance.
It gets worse. To hold the industry accountable, and create a self-policing tool, regulators have adopted law, fining brokers, shippers, warehousers, truck dealers and brokers, for hiring non-complaint owner-operators or national carriers. This is war in the worse kind, pinning trucker against trucker, and dividing what once was a thriving community of men and women who ran the roads, serving our nation’s transport needs. Companies are forced to hire extra staff to track the compliance internally and externally. Fines can extend to vender chains and preferred providers within someone’s logistics chain. Many firms are hiring specialist to handle the task, to research their companies supply chain. The practice changes how most companies model out their corporate affairs, and now have to factor in finances to have a team of people who perform reverse logistics, collect data and disclosures, and compile and report the records to CARB and other agencies. CARB has been acting fast, already handing out fines, upwards to $300,000 dollars per enforcement, as they did with an Ontario based trucking company Foster Enterprises, who were not informed about the added compliance measures. The fine became court imposed by CARB.
Is CARB and EPA out of control? Many criticize the unlimited and unchecked police powers that CARB and EPA utilize to impose unrealistic policies, then they enforce them, racking up record revenues from fines. The defendant in these cases don’t have assistance or an advocate in government to turn to, thus giving the power to CARB and EPA to be the police agent that wrote the citation, are the prosecutor, the judge, jury, and executioner. In many cases where payment is not received they become the enforcer in collecting the debt. Many debate on how this action is in violation of the United States Constitution, the Fifth Amendment, where the accused has a right to a fair trial. The harsh reality in America today, is that more agencies have adopted the same policies, allowing for unlimited powers and resources on the side of government and limited if little or nothing on the side of the citizen. This directly pits bureaucratic government against the private sector. Both industry and former legislators agree that these agencies have lost vision of why there were originally founded, and have found themselves astray of their original path of being a protection only agency, not enforcement agency with unlimited police powers.
We asked former Congressman McEwen (R-Ohio) to chime in on the issue.
“The problem I have with this type of regulation from the EPA and CARB is that they are infringing upon your free market rights, and want to dictate whether you are going to drive either a tricycle or a truck. These civil agencies with police powers create unrealistic expectations, knowing that they cannot be met in a reasonable time period, then come into small business with overnight enforcement action, hurting the small business owner."
“EPA needs to set a standard, and then let the free market decide who is going to be the winner or loser, never denying people their constitutional right to freedom of commerce, thus letting the best technologies for the best price wins in the free market. Along the way, people in government have failed to recognize they are accountable to ‘We the People,” added McEwen. “EPA and other civil agencies with unlimited police powers have gone unchecked for so long, and now they can do what they wish with very little oversight from legislative bodies that represent the people, clearly violating the legislative process and the constitution of the people."
Both CARB and EPA have many of their cases heard in a civil court, since all of the imposed regulation is of a civil matter, not criminal. The American Trucking Association (ATA) have used the very tool of civil court against these agencies in a recent decision that was overturned in 2011, by the Ninth Circuit Court of Appeals, who voted in favor of the ATA on shooting down the mandate that would require the consolidation in hiring drivers to company drivers, and eliminate owner-operators from the Port of Los Angeles. There are additional parts that were bundled with this regulation, many of them under the auspice of environmental justice. Richard Pianka, ATA Vice President and general council, expects the case to be put on the courts calendar in April.
The Owner-Operator Independent Drivers Association (OOIDA) is also looking to take their fight to the next level. On their agenda for the new year are legislative fights that ensure regulations that protect economic vitality of the trucking industry, and the rights for owner-operators to have an equitable work environment within the United States; which means having to battle on the environmental compliance front, and on behalf of owner-operators who want to comply but wish to have the freedom of choice to shop in the marketplace to shop for technology that best suits their needs, not the needs of only one corporate giant.
“The policy of having to install a DPF is conflicting to the constitutional practices of the free market. There are products that will limit emissions for far less cost,” stated Eddie Wiese, Owner-Operator of YZ Enterprises, “This is communism and a dictatorship when a government agency says you have to have a product that they have chosen from the free market, and if you don’t you will be fined. Someone should look into the relationship between Donaldson (who manufactures DPF’s), CARB and the EPA. Follow the money and you will surely find a bunch of rats that came up with a way to keep out any viable competitive product from being included as reasonable option. The system was designed to keep everyone else out that had a bigger better cheaper idea, and Donaldson as the only provider of DPF’s. The whole thing stinks. You’re held to a very high priced item that really does not work for the trucking industry, and fined if you do not have it. Truckers in this country have a gun to their head by their very own government, and almost no way to fight back. When all of the trucking companies close because they cannot make a profit, then who will ship the goods then if one million trucks just shut down?"
This is not the end to the war on trucking. It seems to be just a part of the process. We all have a responsibility to care about these issues. Many of us turn a blind eye to the real issues our country face. Many people have an attitude that “well this does not affect me,” I beg to differ. The next time you are at the grocery store and you wonder why $100 only gets you two bags of items instead of four as it did just a short four years ago, and the price of bread had doubled, know that a truck was involved in moving it from the manufacturer to the warehouse to the store shelf. Owner-operators are tired and either turning in their rigs for another line of work, and national carriers are raising freight charges to their record highs to continue the cat and mouse game of keeping up with the regulation. Where does it end? Where does the line get drawn? You decide with your consumer dollar, everytime you purchase an item that was hauled by a truck, who will win the war on trucking.
Samuel K. Burlum. Mr. Burlum is the CEO/President, and Chairman of Extreme Energy Solutions Inc; a company that develops, sells, and services environmental mitigation products and practices. Under his leadership, Extreme Energy Solutions Inc. “Made in the USA Manufacturing Plan” was adopted; thus creating many new jobs in the Northeast. Mr. Burlum has testified on behalf of innovative technology at many US EPA/NJ DEP stakeholders hearings, including hearings on dirty coal fired electric generation facilities, and national diesel pollution reduction campaigns. Mr. Burlum also serves as Vice President of SMART Air Fuel Saver LLC; a Board Director for ESLC Inc; while also serving as Board Secretary for the Spirit of the Arts Foundation (501c3 Non-Profit). Mr. Burlum is involved in Motorsports (Stock Car Racing) industry, as a car/team owner, and driver. Mr. Burlum has been an Entrepreneur for over 20 years, founding his first business in 1992. He graduated from Berkeley College with an Associates Degree in Business Management & Entrepreneurship in 1998. He is an active participant and Member of both Sussex County and NJ State Chamber of Commerce; NJ State Chamber of Commerce Cornerstone Member, NJ Clean Cities Coalition, California Trucking Association, Global Information Network, and UMP Dirt Car. Mr. Burlum has been interviewed on radio and television including on People of Distinction, with CBS Radio's Al Cole, Today in America with Terry Bradshaw, WIBG 1020 am News Hurley in the Morning, NTR Radio's Voice of Success Program, and Cablevision's The Neighborhood Journal, and featured in many articles including in the publication The Taxi Insider, The Alternative Press, and MPG Today Magazine. He has been a featured speaker at the World Green Energy Symposium, and the Sustainability Summit, powered by The Council (NYC) on panels discussing matters on green transportation solutions and innovative green supply chain development.
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