It's Time the Trucking Industry Stops Putting Drivers Under the Bus
It’s already bad that truck drivers work punishing hours in a highly regulated environment; being treated poorly is pushing it a bit too far.
A hearty welcome to the 36th edition of The Logistics Rundown, a weekly digest that aims to put some perspective on what’s brewing within the logistics industry. This is a space where we religiously dissect market trends, chat with industry thought leaders, highlight supply chain innovation, celebrate startups, and share news nuggets.
Unless you were under a rock, you'd have heard of the 110-year sentence handed out to 26-year old Rogel Aguilera-Mederos — the truck driver who crashed into stopped traffic on Interstate 70 that resulted in the deaths of four people in 2019.
After an outpour of public disbelief at the sentence many considered overly harsh, Colorado Governor Jared Polis decided to commute Aguilera-Mederos' time to 10 years, docking 100 years from the original sentence. Meanwhile, District Court Judge Bruce Jones, who gave the sentencing, has not taken this lightly, slamming Polis on his decision and calling it a sign of disrespect as it was done without his consultation.
But beyond the story of who's right, these are the facts. Aguilera-Mederos was a driver transporting timber in Colorado in April '19 when his brakes failed on a downhill stretch and led him to ram the truck into a bunch of vehicles, resulting in a 28-car pileup. The accident could have been averted if he had used an emergency exit ramp, which he didn't, due to a lack of adequate training.
However, another angle to this account isn't getting enough limelight — the story of what happened to the trucking company that employed Aguilera-Mederos and put him on that fateful truck without providing him the needed training to haul freight across mountainous regions. For starters, it closed down a few months after this incident.
…but only to come back. Public records show that the owner of Castellano 03 Trucking, the carrier that Aguilera-Mederos worked for, registered a business named Volt Trucking in Texas — just a day after the crash.
Public records show that the owner of Castellano 03 Trucking, the carrier that Aguilera-Mederos worked for, registered a business named Volt Trucking in Texas — just a day after the crash.
The problem? Easy access for motor carriers to their own authority. The hot trucking spot market has birthed thousands of new carriers over the last year, who move in with hopes of making quick cash. In this melee, drivers often get handed the short end of the stick.
"There needs to be a better vetting process to give motor carriers access to their own authority. Castellano 03 Trucking hired a young man and put him in a position he should have never been in — aside from giving him a truck with mechanical issues. They've now reopened under a different name without any problem, while the driver is stuck in prison. This is completely wrong," said Lewie Pugh, executive vice president at Owner-Operator Independent Drivers Association (OOIDA) to The Logistics Rundown.
Vetting apart, Pugh contended that one of the reasons motor carriers remain impervious to issues that concern driver safety is the availability of drivers within the ecosystem. "There's no driver shortage in the industry; 400,000 CDLs were issued just in 2021. The problem we have is with low pay, lack of adequate training, and a massive driver churn."
While the FMCSA does announce grants to improve commercial motor vehicle safety, Pugh explained that it wasn't enough and that governments must push fleets to provide mandatory training to drivers before they sit behind the wheel.
Today, the industry needs proactive investment to improve safety rather than building it via indirect measures, like raising insurance premiums after an accident. "This problem will continue till carriers spend more money on dash cams identifying bad drivers than on training their drivers. The government could come out and mandate 1,000 hours of training to get a CDL or ask for driving experience across different terrains and weather conditions or even enforce apprenticeship with minimum hours behind the wheel with a trainer. There are more than a few ways to get this done," said Pugh.
The government could come out and mandate 1,000 hours of training to get a CDL or ask for driving experience across different terrains and weather conditions or even enforce apprenticeship with minimum hours behind the wheel with a trainer.
As for the trucking carrier, there's little to no incentive to train a driver, especially considering annual driver churn rate in the industry is over 90% (this means less than 10% of drivers stay at the job for more than a year). To an owner-operator or an SME fleet, the quicker they put a driver behind the wheel, the quicker they realize profits — closing the doors to effective onboarding and safety programs.
"There's an unfortunate disconnect between drivers, motor carriers, and governing authorities like the FMCSA and DOT. The administrators do not take the time to listen to drivers, as motor carriers get their ears more often than drivers do," said Pugh. "If after all these years of trying to improve road safety the government still hasn't seen considerable success, it's maybe time for them to listen to the men and women who are out there on the road."
The Weekly Roundup
The surge in retail demand, and e-commerce in particular, has led to a considerable number of acquisition deals within final-mile logistics facilities like warehouses and micro fulfillment centers around urban regions. One of the biggest acquisitions of late happened this week with industrial real estate giant CBRE Group announcing a $4.9 billion takeover of Hillwood Investment Properties' logistics assets. With a majority of this real estate spread across Europe, CBRE is poised to earn from the continent's e-commerce boom.
With maritime freight rates staying consistently high, intercontinental railroad freight movement between China and Europe has gained steam. Between 2016 to 2021, freight volumes have risen by 30% year-over-year on this route, reflecting the meteoric rise in interest. However, the significant part of this growth is attributable to heavy subsidies from the Chinese government, which have since come down from its peak subsidy highs of $3,000-$5,000 per container.
Fresh cases reported across the Beilun district in Ningbo, China, have led to restrictions on truck movement in and around yards and warehouses in the region. Any disruption in Ningbo disproportionately affects global supply chains as it is home to one of the busiest maritime terminals in the world. With Chinese New Year on the horizon, shipping companies expect things to worsen, forcing shippers to scurry for alternatives — inevitably hitting freight prices.
While the holiday season has come to an end, the chaos at the West Coast coasts are far from over, with a record 105 ships stationed in and around the ports of LA and LB in the first week of January. The record number of vessels berthing outside ports is not only restricted to the San Pedro Bay, as a similar situation is playing out across ports like Savannah with 30 ships anchored and 11 vessels off the port of New York.
…said who?
"Input-cost inflation is at a 10-year high and labor shortages and other issues are causing disruptions across our supply chain, from our suppliers to manufacturing to distribution. These disruptions are driving down service levels and driving up costs above and beyond inflation throughout the industry."
- General Mills Inc. CEO Jeff Harmening in the company's earnings call, mentioning the challenges associated with doing business in 2022.
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