Unions

I think everybody has heard of the Teamsters Union. Are all truck drivers union members? or are there union-free companies out there. Do you have to be a union member to be a truck driver?

Very few driving jobs are union jobs. The only one I can think of off the top of my hand is auto haulers tend to be union.

Steven, the unions have pretty much collapsed under their own weight in the trucking business. There are still a few (maybe two or three) unionized companies around but they are not doing very well. Most of the trucking jobs available will be non-union jobs.

Unions were needed 100 years ago, but not so much anymore. Of the few trucking companies that are still union I think it's mostly LTL companies. YRC I think is union, maybe Estes, I heard UPS was union until pretty recently but it isn't anymore. Not sure of any others.

Unions tend to suck, from a truck driver stand point.

1) Most union leaders tend to come from the government sector (a Democratic Party appointee), and went to law school. Very few union leaders come from the rank and file.

2) Any pay raise you get tends to go towards union dues.

3) Most companies offer what unions demand (ie. health insurance, 401k, etc.).

Dave

Yep like I said... maybe 100 years ago unions were a good idea when people were being burned alive in factory buildings with no fire exits and that sort of thing. But today, any reputable company offers good wages, good benefits, lots of focus on safety, and all that jazz. Textile workers in Bangladesh need union representation, not professional drivers in the U.S.

Well! That is great news. You all have said what I was thinking. This is wonderful!!! Thank you!

I'm not necessarily for or against unions in general. I think they are desperately needed at times and at times they become their member's worst nightmare. It all depends on how they're run and the context in which they operate. But I'll throw this at you for thought...

My first year in trucking I made $40k. That was 1993. Today you're lucky to make $40k your first year and most drivers don't. So in 20 years a truck driver's wages haven't gone up, but of course inflation has.

If you punch those numbers into the Bureau Of Labor Statistics Inflation Calculator you'll see that $40,000 today is the equivelant of $64,741 back in 1993. So basically truck drivers today are making about 40% less than they were 20 years ago. That's not so good. With those numbers you might think, "Hey, drivers are getting screwed by their own companies! We need higher wages!"

But that's not the case.

Freight rates have plummeted since the deregulation of the trucking industry with the Motor Carrier Act of 1980. That pretty much allowed open competition in the trucking industry and with that came a tremendous increase in competition amongst companies and therefore the efficiency of transporting goods, exactly as had been anticipated. But that came at a price.

Trucking companies made a whole lot less than they used to and subsequently so have drivers. The profits for trucking companies (or lack thereof) have pretty much been on par with the salary of drivers - neither have moved much in decades. Freight rates, company profitability, and driver salaries have all remained pretty stagnant while inflation continued its normal upward trajectory. That meant shipping rates for the general public dropped dramatically, along with truck driver wages and the profits of trucking companies.

Now if you brought in unions to help bring up driver salaries you'd have to do it throughout the industry or union companies couldn't compete with non-union companies. So you'd basically have to unionize the entire industry or nobody at all. Forcing trucking companies to pay higher salaries would also force them to command higher freight rates. That would help the drivers make more money but the profitability of trucking companies still wouldn't increase. At the same time you'd be charging the general public more money to transport goods which would damage the economy.

So raising driver wages through unionization would help driver wages, would have little or no influence on the profitability of trucking companies, and would hurt the economy in general. Because there are 3.5 million drivers that stand to benefit but 315 million (or so) Americans that would be hurt by higher truck driver salaries, nobody is in any kind of a hurry to unionize trucking. Add to that the fragmentation of the industry which would make unionization a million times more difficult than in an industry with only a few major players (the Airlines for example) and you come to the only conclusion you really can - unionization of the trucking industry is not going to happen anytime soon, if ever.

That's the basics of it.

There is talk that one of the few trucking companies that is unionized (ABF) is about to go on strike.

Dave

Very informative post Brett. I started in the retail flooring industry (carpet, vinyl, laminate) in the early nineties. I used the same freight rate when figuring costs on carpet all the way up until late 2011. I always wondered how in the world this was possible especially since the cost of gas had gone through the roof!

The freight companies did implement a fuel surcharge, I think the highest being around 15%, but still far less than the inflation rate. The freight companies took a hit, the retailers also took a small hit trying to keep costs to customers down in a very competitive market. I always wondered how in the world O/O's ever made a dime when fuel sky rocketed the way it did.