Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.
Speaker 1: I'm Joe Wisenthal and I'm Tracy Halloway. Tracy, you know,
Speaker 1: we've done a lot of truck driving episodes on the show,
Speaker 1: by note, but it is kind of crazy that we
Speaker 1: haven't actually spoken to a truck driver all trucking all
Speaker 1: the time, except with the drivers themselves apparently. Yeah, it's
Speaker 1: kind of bad. We we really, you know, because essentially
Speaker 1: people talk about poor conditions, they talk about poor pay,
Speaker 1: they talk about certain ways. You know, there's a lot
Speaker 1: of talking the industry about a so called truck driver shortage,
Speaker 1: which is this talking point media has reported for a
Speaker 1: long time. But how can you discuss these things, you know,
Speaker 1: without actually hearing from a truck driver. Why perhaps the
Speaker 1: industry has had trouble hiring and retaining drivers, right, but
Speaker 1: also just talking about some of the supply chain issues
Speaker 1: as we happen for the past two years or so,
Speaker 1: and all the talk about you know, things being stuck
Speaker 1: at the ports or things being stuck at rail yards
Speaker 1: and truck drivers getting caught up in those and having
Speaker 1: to wait hours and hours and hours to pick up
Speaker 1: or drop off a load. But we haven't actually spoken
Speaker 1: to the people who are living that very experience, right.
Speaker 1: So one dynamic, and we talked about it on a
Speaker 1: recent episode with Rachel Premac, is this fact that truck
Speaker 1: drivers are paid by the mile, right, and you even
Speaker 1: see it on the back of trucks. Often when they're
Speaker 1: trying to recruit drivers, they talk about how much you
Speaker 1: can get paid per mile, which has the drawback potentially
Speaker 1: of you don't get paid for time. And therefore, if
Speaker 1: you're at a warehouse and you're depositing a load or
Speaker 1: picking up some goods, you can wait around for a
Speaker 1: really long time, potentially hours if the warehouse is inefficient
Speaker 1: or blocked or just sort of very crowded, which a
Speaker 1: lot of infrastructure has been over the last couple of years,
Speaker 1: and you're not getting paid for that time. It's detention,
Speaker 1: is they call it in the industry, And if it's
Speaker 1: really bad, if it's an efficient, that's just hours of
Speaker 1: your life wasted because it's not a mile, right. And
Speaker 1: so the supply chain crisis has kind of shown a
Speaker 1: light on this practice, and the question now is whether
Speaker 1: or not it starts to change, because clearly, if you're
Speaker 1: talking about how difficult it is to get stuff from
Speaker 1: point A to point B. And a big part of
Speaker 1: the choke point is while people are just waiting all
Speaker 1: day to pick that stuff up at a particular port
Speaker 1: or rail yard or depot or whatever. Then you could
Speaker 1: see people maybe want to start to alleviate some of
Speaker 1: that weight time and right. And that's what happens, I
Speaker 1: think in a so called supply chain crisis, is you
Speaker 1: noticed various choke points or an efficient that you maybe
Speaker 1: you tolerated private or previously, or that weren't a big deal,
Speaker 1: and so, okay, we have this problem where people are
Speaker 1: wasting their time at the warehouse is waiting for load
Speaker 1: or unload, but whatever, it's okay because things are still
Speaker 1: moving smoothly. When you get the real seas up and
Speaker 1: you're like, oh, these are like dramatic inefficiencies and the
Speaker 1: cost of adjustment falls on the truck drivers themselves because
Speaker 1: they're the ones that have to essentially eat the cost
Speaker 1: by wasting time. Yeah, exactly. So when you get these
Speaker 1: choke points, as you mentioned, it seems like a good
Speaker 1: time to sort of evaluate the process on a whole
Speaker 1: and what can be done to alleviate them. And you know,
Speaker 1: some people are like, oh, it's apps and we need
Speaker 1: like algorithms like uber and stuff like that and make
Speaker 1: everything more efficient. But you know, at that point it's
Speaker 1: just speculations. So let's talk to a driver and let's
Speaker 1: find out what really is going on and how much
Speaker 1: time and waste and if there are any potential solutions
Speaker 1: to this issue of truck driver detention. Let's do right,
Speaker 1: I'm really excited about our guests. We're gonna be speaking
Speaker 1: to a truck driver and also the author of the
Speaker 1: Autonomous Trucker's Substack, Gordon McGill. Gordon, thank you so much
Speaker 1: for coming on, Odd Lots, Hello, Odd Lots, Hi Tracy,
Speaker 1: Hi Joe, thank you for having me on. Thanks for
Speaker 1: coming on. What do you sort of give your some
Speaker 1: wary How does a truck driver get paid? And what
Speaker 1: is detention? There's numerous three ways truck drivers get paid.
Speaker 1: Some get paid by percentage of hall, some get paid
Speaker 1: by the mile, some get paid salaries, some get paid
Speaker 1: by the hour. It depends on what part of the
Speaker 1: market you're in, what capacity you're working in, whether it's local, regional,
Speaker 1: or over the road, or if you're like a drade
Speaker 1: trucker working on ports, there's many different pay models, but
Speaker 1: the pay is downstream of basically piece work and the
Speaker 1: quoted rate that the company you work for gives to
Speaker 1: their customer. So talk to us a little bit more
Speaker 1: about driver detention then, why exactly does detention happen at all?
Speaker 1: And have you, you know, personally noticed a change in
Speaker 1: the amount of time that you're spending waiting to either
Speaker 1: pick something up or drop it off. So detention is
Speaker 1: it can be caused by any number of things. I mean,
Speaker 1: you know, as they as the famous T shirt and
Speaker 1: bumper sticker says, you know, ship happens, um so sometimes
Speaker 1: it's you know, it's it's it's just you know, mechanical breakdowns,
Speaker 1: personnel shortages, whatever. But with distribe the distribution of freight
Speaker 1: in America, the entire system is set up and predicated
Speaker 1: on the fact that all of the time efficiencies and
Speaker 1: problems get downloaded onto the drivers because there's no cost
Speaker 1: associated with their time, and there never has been, So
Speaker 1: you just end up sitting and waiting and it could
Speaker 1: be for any reason under the sun. And it's been
Speaker 1: like that basically since forever. Do you have a sense
Speaker 1: of like how much time you like, what's a week
Speaker 1: look like for you or a month look like for you?
Speaker 1: And do you have any sense of how much time
Speaker 1: you in particular? And then maybe the industry drivers as
Speaker 1: a whole waste in unpaid attention. So there was a
Speaker 1: study done. I'm gonna I'm gonna quote the science seeing
Speaker 1: as how this you know, very popular thought terminating cliche
Speaker 1: circulates around the internet and the discourse. There was a
Speaker 1: study done by there's like a subdivision of M I
Speaker 1: T which studies logistics and trade, and they showed that
Speaker 1: the average trucker in America, although they are allowed to
Speaker 1: drive eleven hours a day, only drives on average about
Speaker 1: six and a half hours because their day gets sucked
Speaker 1: up with waiting to load and unload so much that
Speaker 1: they literally lose almost you know, liketent of their available
Speaker 1: driving time. There's been a lot of discourse, as you
Speaker 1: guys mentioned in your opening about problems supply chain. Well,
Speaker 1: a pretty major problem is when fortent of your available
Speaker 1: trucking capacity is being held up right, right, So you
Speaker 1: mentioned the eleven hours there, and this was gonna be
Speaker 1: my next question, like don't truckers and I apologize and
Speaker 1: advance her a very basic question but don't truckers have
Speaker 1: like a certain limit on the amount of driving time
Speaker 1: that they can do per day. But you're saying that
Speaker 1: the waiting time doesn't factor into it, or are there
Speaker 1: any sure So yeah, so it's called hours of service
Speaker 1: and all truckers in America and and most other western
Speaker 1: countries are governed by DHS rules. In the United States,
Speaker 1: you're allowed to drive eleven hours a day, and you
Speaker 1: get like a fourteen hour window to complete those eleven hours,
Speaker 1: and then the other three hours are safe pre trip inspections, loading,
Speaker 1: unloading on the other duties you have to take care of.
Speaker 1: But like you know, if those other duties exceed three
Speaker 1: hours and then eat into the eleven of driving, you
Speaker 1: lose them. And that happens all the time. And again
Speaker 1: as as Joe, as you guys mentioned at the beginning,
Speaker 1: the amount of time you sit cuts into the amount
Speaker 1: of time that you can drive. And there for the truck,
Speaker 1: which is considered you know, an asset and a part
Speaker 1: of logistics capacity is now just sitting there wasting not
Speaker 1: making any money, right, correct me if I'm wrong, But
Speaker 1: in the price of a trip or in the cost
Speaker 1: of a trip, there are sometimes attempts to compensate for
Speaker 1: expected way times or if a if a shipper has
Speaker 1: a reputation for having inefficient warehouses or for long wait
Speaker 1: times picking up or dropping off. In theory, they do
Speaker 1: pay more to the to the owner operator or to
Speaker 1: afraid broker, who then theory pass it along like there
Speaker 1: is some cost to them that sometimes factored into what
Speaker 1: they pay per mile for the trip. Well that's in theory,
Speaker 1: but again because of the hyper competitive nature of the
Speaker 1: trucking business. You know, I was speaking with an owner
Speaker 1: operator a friend of mine the other day and he,
Speaker 1: you know, mentioned, you know, he's always worried about you know,
Speaker 1: the other guy, the other guy, the other company that's
Speaker 1: willing to like forego that cost. And it's always used
Speaker 1: as a threat um, you know, like, yeah, if you
Speaker 1: guys charge us too much for the marriage time, we
Speaker 1: just won't use you and we'll use another trucking company.
Speaker 1: So there's this, you know, playing off um companies against
Speaker 1: each other to try and remove that. Some companies do
Speaker 1: pay it, typically and specialized or niche markets, there's very
Speaker 1: low tolerance for waiting time. I drove truck in New
Speaker 1: Zealand for a little while and because the cost of
Speaker 1: doing business down there is so much higher and the
Speaker 1: margins are that much thinner, they don't tolerate waiting time.
Speaker 1: And then in other countries it's mandated that drivers get
Speaker 1: paid by the hour, and because you're paying by the hour,
Speaker 1: you can't waste those people's time because it's coming out
Speaker 1: of the bottom line of the company who's holding you up.
Speaker 1: Whereas in the United States there's nothing to force anybody
Speaker 1: to a out for drivers time like whatsoever. So there's
Speaker 1: a very small minority of companies that will pay for that,
Speaker 1: but they're so inconsequential that the rest of the business
Speaker 1: they just they just don't pay. Well, maybe this is
Speaker 1: a good time to talk about how we ended up
Speaker 1: with that system in the US, because, as you mentioned, like,
Speaker 1: it does seem strange. You know, for most people in
Speaker 1: the States, they work forty hour weeks and then if
Speaker 1: they work over time, they'll get some sort of extra compensation, um,
Speaker 1: you know, to compensate them for that. But in the
Speaker 1: case of truckers it seems to be different. So how
Speaker 1: did we end up with this system? In nineteen thirty eight,
Speaker 1: during Roosevelt administration, they passed a piece of legislation called
Speaker 1: the Fair Labor Standards Act, which included the idea of
Speaker 1: paying people over time and included the idea of the
Speaker 1: standard forty hour week, and a few different occupations were
Speaker 1: exempted from that included transportation and truck drivers were explicitly
Speaker 1: exempted from being paid overtime. And it's been like that
Speaker 1: ever since. So the entire industry has built it's like
Speaker 1: rate structures, the way it does business, the way it
Speaker 1: pays people, the way it schedules things around the fact that, hey,
Speaker 1: we don't have to pay these guys any extra for
Speaker 1: their overtime, and that's fine, and we're just gonna keep
Speaker 1: doing that. So they've created like a two tier system
Speaker 1: where you know, you might be at a Walmart warehouse
Speaker 1: or whatever distribution center and everybody that works there gets
Speaker 1: paid over time if they have to work for the hours,
Speaker 1: except the dozens or hundreds of truckers sitting outside in
Speaker 1: their cabs waiting to get loaded or unloaded. So what
Speaker 1: would it is there would it have to be a
Speaker 1: law that would change this, Like what would be a
Speaker 1: way out to so that? Okay? Because what you first
Speaker 1: of all, what you say makes sense that in countries
Speaker 1: in which you have to pay truckers by the hour.
Speaker 1: Then it becomes a real cost to the shippers if
Speaker 1: they're just holding you there for hours. So what would
Speaker 1: it take to get into a mode where that's how
Speaker 1: truckers are paid. You make a good point, Joe, um
Speaker 1: the the system here, because there's no cost associated with
Speaker 1: the driver's time, it creates what they call a market failure.
Speaker 1: Like I lean a little bit libertarian. I used to
Speaker 1: be a pretty strident libertarian in the past, but like
Speaker 1: we're we're seeing this confluence of different factors where because
Speaker 1: it's not legally acquired and because there's so many humongous
Speaker 1: so called mega carriers in the market who have built
Speaker 1: their business model around turning and churning through drivers and
Speaker 1: not paying them what they're worth. And as you know,
Speaker 1: the professor Steve as Shelley said in his book The
Speaker 1: Big Greg Walking in the Client of the American Dream,
Speaker 1: that it doesn't cost them any extra money to manage
Speaker 1: driver attention and driver turn So these companies have essentially
Speaker 1: built it into their operating model that you just don't
Speaker 1: pay over time and you don't worry about it. So
Speaker 1: it just might be you know, as much as the
Speaker 1: libertarian part of my brain doesn't want this that the
Speaker 1: government has to basically say, look, you're this industry and
Speaker 1: the supply chain system that keeps America going is dependent
Speaker 1: on having professionals and safe people that are happy with
Speaker 1: their jobs don't want to stick around, and this model
Speaker 1: of not paying them isn't sustainable. So maybe, and I
Speaker 1: could be wrong, but maybe it is the you know,
Speaker 1: like the Guaranteeing Overtime for Trucker's Act, where there's that
Speaker 1: requirement that drivers be paid for their time in order
Speaker 1: to force all of these clowns to actually pay people
Speaker 1: what they're worth and to stop the ongoing churn retention cycle.
Speaker 1: Can I just ask a Devil's Advocate question because I
Speaker 1: think this comes up a lot. But so in the States,
Speaker 1: truckers are paid by the mile or per trip for
Speaker 1: the most part. And one of the things that comes
Speaker 1: up when you start talking about well we should pay
Speaker 1: them over time is well, how are you actually going
Speaker 1: to track and monitor? And then you know, I'm so
Speaker 1: glad you brought up just to be clear, Devil's Advocate,
Speaker 1: but please give us your response. That is a fantastic question.
Speaker 1: And um, y'all went to grade school and high school
Speaker 1: before they had uh smartphones, and some of those places
Speaker 1: they taught you how to use this thing called a calculator.
Speaker 1: And then the calculator got turned into an app on
Speaker 1: your cell phone and on your laptop. And there's this
Speaker 1: little thing we can do called pro ration. And guess
Speaker 1: what the government does pro ration on the miles you
Speaker 1: travel to figure out who to allocate fuel taxes to
Speaker 1: the states. Why can we not pro rate miles to
Speaker 1: figure out what your average hourly mileo D rate is,
Speaker 1: to then figure out what your base hourly rate would
Speaker 1: be based on those miles, to then calculate what your
Speaker 1: overtime would be. This is so simple, but like I
Speaker 1: think that, like truckers have spent so many decades of
Speaker 1: just being abused and pummeled by all these forces beyond
Speaker 1: our control, and then you have people like the American
Speaker 1: Trucking Association who represent these mega carriers that just go
Speaker 1: right along with it, that we can't imagine something as
Speaker 1: simple as a calculator being able to figure this out
Speaker 1: for everybody, especially given that many trucking companies these days,
Speaker 1: much like Twitter who elon Musk, just cut out all
Speaker 1: of these sort of like parasitical non work people that
Speaker 1: don't produce anything. Trucking companies have the same problem with
Speaker 1: like compliance and human resources managers and all these people
Speaker 1: that like have to basically make sure that the trucking
Speaker 1: companies don't get crushed by the d O T. So,
Speaker 1: like can they not operate calculators? Can they not figure
Speaker 1: out how to pay people? Like? This is real simple.
Speaker 1: As an avid Twitter user who wants the site to
Speaker 1: remain stable, I'm a little worried that he may have
Speaker 1: let go of people who are crucial but and not
Speaker 1: entirely all parasites. Um. But nonetheless, I take your I
Speaker 1: take your point. I just I want I want the
Speaker 1: site to remain functioning and high quality engineers to work there.
Speaker 1: But that's a sidetrack I want to get. You know,
Speaker 1: you just mentioned um, the A T A and you know,
Speaker 1: for years you hear about the so called truck driver shortage.
Speaker 1: But as you just pointed out, or as you argue
Speaker 1: that for also years that the mega carriers have had
Speaker 1: this like churn mentality, they're like, well, it's okay if
Speaker 1: a driver only stays in the industry for a few
Speaker 1: months or a year, etcetera. Can you talk a little
Speaker 1: bit more about that model the churn that, like, let's
Speaker 1: just turn through the driver's model and it's okay if
Speaker 1: it's cheap and it's okay, and how sustainable that is
Speaker 1: and what the cost of that is? Well, okay, So
Speaker 1: the short answer is is, A, it's not sustainable and
Speaker 1: B it's not sustainable because of the costs that have
Speaker 1: been externalized. Right, So the costs are on both the
Speaker 1: drivers themselves who again enter these models working for freight
Speaker 1: companies where they go through some kind of truck driving
Speaker 1: school and often enough owned by the carriers themselves, and
Speaker 1: then they get either the carrier gets subsidized by the
Speaker 1: government in some way through subsidies of grants to hire drivers,
Speaker 1: or they offload the cost of the training onto the
Speaker 1: drivers through these like credit obligations with ridiculous interest rates,
Speaker 1: and then they have to sign a contract and stay
Speaker 1: with the company. But then the company abuses them, and
Speaker 1: then they discover that they waste half of their life
Speaker 1: waiting at docks or being at the mercy of dispatch
Speaker 1: systems that are often wonky, and nobody seems to care
Speaker 1: because you're at the other end of a surveillance technology
Speaker 1: like a qual calm or something in the truck, and
Speaker 1: and and the companies don't necessarily care about where you
Speaker 1: are what your time is. So there's a lot of washout.
Speaker 1: And then there's also a lot of accidents. Um. There
Speaker 1: was a a report released here recently that showed UM,
Speaker 1: since the in position of the electronic Logging device mandate
Speaker 1: that like truck accidents continue to climb. So there's this
Speaker 1: cost sent to society. I like to I like to
Speaker 1: call the drivers shortage narrative. I've come to this recently.
Speaker 1: I want to call it the Pardo's truck driver shortage.
Speaker 1: So there's there are companies who are short drivers, right
Speaker 1: like the guys some people I used to work for
Speaker 1: in Canada have about twenty trucks sitting. But they're a
Speaker 1: specialized niche carrier and they need competent, good drivers that
Speaker 1: know what they're doing. And so what happens is because
Speaker 1: the other eight percent of the business is stuck going
Speaker 1: through this retention problem and churning through drivers because they
Speaker 1: can get away with it because the government subsidizes it,
Speaker 1: and or they offload the cost of training onto the
Speaker 1: drivers and get them stuck in this credit problem, and
Speaker 1: it sucks in all kinds of people into the business
Speaker 1: who shouldn't be driving. That basically turns off the number
Speaker 1: of people who would come into it, who are competent
Speaker 1: and who would graduate through the system, the pipeline, so
Speaker 1: to speak, from being a new driver to a good
Speaker 1: competent driver to moving on to a really good paying
Speaker 1: job that's you know, in a niche market saying doing
Speaker 1: oversize or hazardous materials or or some such other commodity
Speaker 1: that pays a little better, and then sticking with it.
Speaker 1: So the percent of the parado distribution that's locked in
Speaker 1: by this really bad model of turning through drivers that
Speaker 1: drivers shortage is fake. They just keep going through them.
Speaker 1: There's no shortage. There's tons of people with CDLs. They
Speaker 1: just end up quitting. And then at the other end,
Speaker 1: the of people who are really competent, the companies and
Speaker 1: that part of the market, they can't get people because
Speaker 1: the people who would come through the system and graduate
Speaker 1: towards those good jobs quit before they get a chance,
Speaker 1: because they're just like this is the ship show, Like
Speaker 1: why would we stay here? Why would we stay in
Speaker 1: this business that doesn't value our time? And they end
Speaker 1: up quite It seems like there's a really interesting sort
Speaker 1: of like kind of perverse economic phenomenon where people here
Speaker 1: about how there's a driver's shortage, and they say, Okay, well,
Speaker 1: why don't we subsidize going to drivers school, Why don't
Speaker 1: we make it easier to get your CDL bring new
Speaker 1: people in? But the real upshot of that, essentially it
Speaker 1: sounds like it's just sustained the churn model rather than
Speaker 1: that's right because what what what they're what they're doing
Speaker 1: is they're they're they're using these systems to take care
Speaker 1: of the bottom end of the problem rather than the
Speaker 1: top end of the problem. Right, So like instead of
Speaker 1: trying to keep people, like why pay people more, why
Speaker 1: treat them better? Why improve the material conditions if you
Speaker 1: can just keep on going through. And I hate to
Speaker 1: sound like, you know, a snob or anything, but like
Speaker 1: these systems suck up people who are desperate. And one
Speaker 1: of the problems in our economy over thirty forty years
Speaker 1: of you know, Reaganomics, neoliberalism, whatever you want to call it,
Speaker 1: um shipping at all of our manufacturing base to China
Speaker 1: and Mexico and whatnot. Well, you can't ship out the
Speaker 1: truck drivers. So the trucking industry, as represented by the
Speaker 1: American Trucking Association, may they burn in hell? Uh, they've
Speaker 1: basically created the system where it's like, we can't get
Speaker 1: rid of the drivers, so somehow we have to make
Speaker 1: them as cheap as the third world places we've sent
Speaker 1: all of the other jobs too. And so they've created
Speaker 1: this system, and now, you know, any suggestion at changing
Speaker 1: that system is met with like a wall of inertia,
Speaker 1: right like, oh, no, you can't do this because then
Speaker 1: it's gonna cost the economy more money. Or you know,
Speaker 1: it's gonna affect the supply chains because now you're constricting
Speaker 1: the available drivers. If you say, make it more difficult
Speaker 1: to get a cd L or can I pay? Just
Speaker 1: just on this point, um, And this is another sort
Speaker 1: of devil's advocate question, But I feel comfortable asking you
Speaker 1: this because you mentioned your libertarian roots. Is there is
Speaker 1: there like attention between the deregulated trucking industry low barriers
Speaker 1: to entry, you know, sort of maybe attracts a certain
Speaker 1: type of person to be a driver, someone who wants
Speaker 1: to work for themselves, who wants to have freedom, not
Speaker 1: have to jump through a red tape and then actually
Speaker 1: reforming the industry, maybe putting in more restrictions, more training,
Speaker 1: more regulations. Is that like a sure that that is attention?
Speaker 1: And that's a very good question, and I'm glad you
Speaker 1: asked it, because what happens with that tension is so
Speaker 1: there's been a lot of discourse around about the downstream
Speaker 1: effects of the nineteen eight Motor Carrier Acts finned into
Speaker 1: law by Jimmy Carter and the effects that's had on
Speaker 1: the trucking business and the you know, the downward pressure
Speaker 1: on rates and wages. And that's a thing that's true.
Speaker 1: And it was a first identified academically by this guy
Speaker 1: named Michael Belzer who wrote a book and that was
Speaker 1: published in two thousands called Sweatshops on Wheels. And a
Speaker 1: thing that Belser identifies in the book, which I have
Speaker 1: also seen and a lot of other truckers have also seen,
Speaker 1: is that instead of regulating the business side of it,
Speaker 1: like freight lanes, how much your rates are gonna be
Speaker 1: all that side of the business, they now overregulate the
Speaker 1: operational side, so they regulate the driver's right. So and
Speaker 1: and there's gonna be another book being published next month
Speaker 1: by an academic at Coronell named Karen Levy, which is
Speaker 1: called data driven Trucker's in the New workplace, a veilance,
Speaker 1: and she has spent ten years studying like the effects
Speaker 1: of all of the regulatory imposition on the driver through
Speaker 1: surveillance technology, driver facing cameras, e l d s, all
Speaker 1: of this stuff that's meant to regulate us because of
Speaker 1: the public sphere of you know, drivers driving tired, over
Speaker 1: their hours, all this stuff, which is an effect of
Speaker 1: the fact that the market has been pummeled by deregulations.
Speaker 1: So there's this regulation question, but it's not looked at
Speaker 1: correctly that that they've deregulated the market. But they just
Speaker 1: moved the regulation from the operations of the companies and
Speaker 1: the rating and the business side of it, and they've
Speaker 1: moved all the regulation onto the operations and onto the driver.
Speaker 1: Which is another reason people wash out because if you're
Speaker 1: somebody like me who has been in the business my
Speaker 1: entire life, my dad was a trucker, both my uncles
Speaker 1: were truckers, my grandt was a trucker. I was fixing,
Speaker 1: helping mechanics, fixed trucks and driving around when I was
Speaker 1: a teenager after school and I'm one of the sort
Speaker 1: of last of the big game hunters. I know what
Speaker 1: I'm doing. If somebody is a professional and knows what
Speaker 1: they're doing, they don't want to be told how to
Speaker 1: do their job by some human resources heridan or health
Speaker 1: and safety pencil neck person that's breathing down their neck.
Speaker 1: And that's a factor. Like another thing, and this applies
Speaker 1: more to than just trucking, is like the psychology of
Speaker 1: people who work for a living. Most people that work
Speaker 1: for a living just want to do their jobs and
Speaker 1: be left alone. And we have this like management mentality,
Speaker 1: were like every single thing has to be done exactly
Speaker 1: as the computer models tell us and as safe as possible,
Speaker 1: and like they're trying to impose theory on material real reality,
Speaker 1: and it drives the people actually doing the work insane.
Speaker 1: So you know, you want to like end driver churn
Speaker 1: and driver attention. One of the factors causing that is
Speaker 1: that they've overregulated the people doing the work rather than
Speaker 1: the people in charge of the markets and which the
Speaker 1: work is being done. Like does that make any sense? Yeah,
Speaker 1: that's and that's an incredible point. And I hadn't really
Speaker 1: thought about this before. This idea that's like, okay, the
Speaker 1: business of trucking, the business of pay etcetera increasingly deregulated,
Speaker 1: even as more burden gets shifted to the driver in
Speaker 1: the truck. And the idea of monitoring and so essentially
Speaker 1: sort of redistributing the imposition of where the regulation happens.
Speaker 1: And I hadn't really thought about it before, but it
Speaker 1: sort of leads me to where I was going to
Speaker 1: go with my next question. And you know, one of
Speaker 1: the things that Tracy and I have talked about, and
Speaker 1: we interviewed the CEO of a freight brokerage kind of
Speaker 1: is this attempt to make it even more computerized, like
Speaker 1: the like the uberization of trucking, that all deal are,
Speaker 1: all gigs are an app and you put in your
Speaker 1: requirement and then a job shows up. What have you
Speaker 1: seen in terms of how that affects you? This attempt
Speaker 1: to essentially apply apply this sort of algorithm uper model
Speaker 1: to your industry. Well, that model can work in certain sectors,
Speaker 1: but not all of them. So trucks move everything right,
Speaker 1: and not all commodities, not all products get moved in
Speaker 1: the same type of truck right right now, eye haul logs,
Speaker 1: you cannot do anything with logging trailer I pulled except
Speaker 1: haul logs. That's it. That's all it's good for. Right.
Speaker 1: A really good friend of mine, owner operator is name's Chris.
Speaker 1: He has a he works for a company that does
Speaker 1: bulk pneumatic stuff. So like it's like bulk commodities that
Speaker 1: are like either powder eyes or small pellets and they
Speaker 1: get blown in and out of his tanker trailer with
Speaker 1: a vacuum or or a pressure system. You can't just
Speaker 1: put that on uber. The uberization of trucking is only
Speaker 1: for like freight, where like you have a box trailer
Speaker 1: with doors on the back and everything comes in and
Speaker 1: out on the forklift. And so the trucking industry because
Speaker 1: it's so diverse and there's so many different angles on it,
Speaker 1: like the uberization thing only applies to certain parts of it.
Speaker 1: Does that make sense? Yeah? Absolutely? Can I ask one more,
Speaker 1: one more like specific example, which is I was reading
Speaker 1: your blog, which is great, by the way, but you
Speaker 1: mentioned that in your three decades of trucking experience that
Speaker 1: you had one experience with someone who actually paid you
Speaker 1: over time for trucking. Can you talk a little bit
Speaker 1: about that, like why why would some people pay overtime
Speaker 1: versus the vast majority who are not paying extra. How
Speaker 1: does that work? Yeah, that one employer was b here
Speaker 1: in the United States, and I'm not sure if that
Speaker 1: was a function of state law or just the fact
Speaker 1: it was like hazardous materials and they wanted to be
Speaker 1: able to keep people around. And it was seasonal right.
Speaker 1: The commodity I held with propane, and a lot of
Speaker 1: people in the North used propane to heat their homes.
Speaker 1: Soince it gets really busy in the winter, busy to
Speaker 1: the point where you're working seventy eight hours a week,
Speaker 1: and if it didn't over time, they probably wouldn't get
Speaker 1: anybody to work for them, whereas other companies I've worked for,
Speaker 1: it was either straight mileage or percentage. And you know,
Speaker 1: I learned very early on in my truck and career
Speaker 1: that you know the freight market, the you know, pulling
Speaker 1: a box trailer, it's because of all the factors we've
Speaker 1: just discussed. It's not it's not the place you're gonna
Speaker 1: make tons of money. And I've always done oversized loads,
Speaker 1: heavy stuff, bualt, commodities, hazardous materials of all a lot
Speaker 1: of fuel blogs. I've tried to stay away from the
Speaker 1: freight market. But the I mean, it's easy enough for
Speaker 1: somebody who's been in the business long enough like me
Speaker 1: and who is competent to say that, but we still
Speaker 1: have to have something for the vast majority of drivers
Speaker 1: who are stuck in this freight market that just won't
Speaker 1: seem to heal itself and correct the factors which make
Speaker 1: it underpaid. Turned through drivers cause accidents, offload all of
Speaker 1: these costs onto society insurance claims for accidents. There's this
Speaker 1: whole discourse around like what do they call it nuclear claims?
Speaker 1: Were like or nuclear verdicts, where you know, there's an
Speaker 1: accident and some people are killed and then like the
Speaker 1: judge just goes to crazy on the on the trucking
Speaker 1: company in question. And then there's another issue in the
Speaker 1: trucking business with self ensuring. A lot of these large
Speaker 1: mega carriers, they're so big and they and they have
Speaker 1: have so much throughputting, they make so much money that
Speaker 1: they self ensure. And when you self ensure, you're not
Speaker 1: playing by the same rules as other insurance companies who
Speaker 1: might want to vet drivers better or impose experience limits. Right,
Speaker 1: So there's there's just all these different factors affecting the
Speaker 1: business that make it very difficult to say, you know,
Speaker 1: here's one solution that's gonna work for everybody. Right, I
Speaker 1: want to get to just sort of the current state
Speaker 1: of the sort of marketing, the economy and diesel prices.
Speaker 1: But one last sort of very just a detail question.
Speaker 1: What do you do while you're waiting there for hours?
Speaker 1: What do you truck drivers do while you're waiting? Do
Speaker 1: you like do you like haunk your horn and complain
Speaker 1: and say I don't know. You know, the few times
Speaker 1: back in the day when I hauled freight, I just
Speaker 1: carried lots of books with me and I read. Some
Speaker 1: guys polished their wheels. Some guys catch up on sleep.
Speaker 1: Some guys, I mean, you know, now they're smartphones, so
Speaker 1: they just scroll reads, catch up on sleep whatever. And
Speaker 1: I mean it should be noted that during the COVID regime,
Speaker 1: where everybody was like scared of this marginally if effective virus,
Speaker 1: that many distribution centers and facilities across America and Canada
Speaker 1: wouldn't let drivers into use their facilities. A lot of
Speaker 1: them don't. As a matter of course, anyway, there's this
Speaker 1: whole problem with like distribution centers not letting you use
Speaker 1: their lunch rooms or bathrooms or anything. They just expect
Speaker 1: you to stay in your truck the whole time. So
Speaker 1: you're basically being treated like a pariah as a matter
Speaker 1: of course, like it's sort of an industry standard thing.
Speaker 1: And then COVID like crank that up to eleven and
Speaker 1: made it even worse. So you basically spend a lot
Speaker 1: of time sitting with yourself. Why don't we broaden it
Speaker 1: out a little bit and talk about the general environment
Speaker 1: for trucking at the moment, because you know, this has
Speaker 1: garnered quite a lot of attention. People like to look
Speaker 1: at freight rates as indicative of where we're heading in
Speaker 1: the economic cycle. So what are you seeing in terms
Speaker 1: of I guess load activity and also the rates that
Speaker 1: you're actually being paid. I'll give you a good reference
Speaker 1: my friend Jamie Hagen, who's very active on Twitter, real
Speaker 1: good Twitter follow at hell bent hagen Um. He's an
Speaker 1: owner operator, has a bunch of his own trucks. He
Speaker 1: made a tweet on the weekend about watching um the
Speaker 1: spot load market. Loadboards drop almost instantaneously like you would
Speaker 1: try and book a load, and like a load might
Speaker 1: pay a dollar fifty a mile and then it would
Speaker 1: all of a sudden drop down to a dollar a mile.
Speaker 1: And we had a conversation about this, and he mentioned that,
Speaker 1: you know, typically trucking gets really slow in January and February.
Speaker 1: There's always this like post holiday lull, and that's that
Speaker 1: happens regardless of whatever the other economic circumstances are. It's
Speaker 1: sort of like a truism and trucking that you know,
Speaker 1: January and early part of February or slow. We're seeing
Speaker 1: now that that drop off and slowness is happening now
Speaker 1: when it should be peak season. Um loads, loads being
Speaker 1: moved in advance of Christmas holiday shopping, you know, um,
Speaker 1: you know, people ordering things from Amazon. So you know,
Speaker 1: there was there was an article on freight waves recently
Speaker 1: about like FedEx is like furlowing drivers. But it's it's
Speaker 1: only mid November, right, So the market such as it is,
Speaker 1: seems really unhealthy right now. Plus you know we're I
Speaker 1: I live in upstate New York. Uh, six dollars and
Speaker 1: five cents a gallon seems to be fairly average around
Speaker 1: here for fuel. That's unsustainable without significant fuel search charges
Speaker 1: out of the freight bills. I can't I can't speak
Speaker 1: for the rest of the country, but like you know,
Speaker 1: the we're not looking at a very good time. So
Speaker 1: I just have I guess one last question here, but
Speaker 1: whether it's you know, this sort of broader the sustainability
Speaker 1: of existing trends, the current macro climate and sort of
Speaker 1: all of it put together, do you see any prospect
Speaker 1: for change positive in the industry and or internally or
Speaker 1: self motivated or is it all sort of going to
Speaker 1: like setting aside, whether things even improve, or whether there's
Speaker 1: a new pay model which was probably not gonna happen
Speaker 1: for a while. What do you see as lasting changes
Speaker 1: from the sort of the ructions that we've seen during
Speaker 1: all the supply chain stress in COVID. Well that's hard
Speaker 1: to protect. But I mean the nice thing has been
Speaker 1: the sort of level of awareness And I wanna, you know,
Speaker 1: credit you guys with this a little bit. You know,
Speaker 1: since the whole COVID thing for the last couple of years,
Speaker 1: a lot of people being that they're sort of stuck
Speaker 1: at home in the in the in the brighter amongst
Speaker 1: them are wondering how everything is still moving while the
Speaker 1: keyboard warriors and email case stays at home. Is that
Speaker 1: like there's this new there, there's there's some attention being
Speaker 1: paid to the to the material economy. Um, whether or
Speaker 1: not that attention manages to last, and whether or not,
Speaker 1: you know, people like you know, Representative Andy Levin who's
Speaker 1: been primaried out and won't be in Congress next year
Speaker 1: and is guaranteeing overtime for Trucker's Act bill keeps moving forward.
Speaker 1: Remains to be seen, but like you know, a lot
Speaker 1: of these problems have been highlighted. I don't I don't
Speaker 1: know whether or not whether or not I should be
Speaker 1: optimistic about this, because you know, the truck dry verse,
Speaker 1: they're deeply cynical people, right because this the exemption to
Speaker 1: us being paid overtime has been around for so long.
Speaker 1: The sort of like the just nature of the business
Speaker 1: and and so many different factors affecting trucking and making logistics.
Speaker 1: You just kind of sort of shrug your shoulders and
Speaker 1: say it is what it is. And I know that's
Speaker 1: not like a complete answer for you in your audience,
Speaker 1: but like it's hard to tell, but I am sort
Speaker 1: of heartened somewhat at the interest shown to this business
Speaker 1: in the wake of the COVID stuff. You know, guys
Speaker 1: like yourselves and the popularity of people online such as
Speaker 1: like huntsmen and various logistics specialists. You know, that's good.
Speaker 1: Whether or not that translates into legitimate attempts to fix
Speaker 1: the business, I don't know, but like one of the
Speaker 1: reasons I wrote my latest substract about the American Trucking
Speaker 1: Association is if UM norms in like you know, NPR
Speaker 1: American podcast listeners keep coming to the American Trucking and before,
Speaker 1: so thank you for that. Well we had, we had Gordon, before,
Speaker 1: we had an at least. Okay, that's good. That's good. No,
Speaker 1: but like um, it's good that you guys spoke with me,
Speaker 1: and I think like speak with more people on the ground,
Speaker 1: you know, to borrow my friend Oliver Bateman's phrase, doing
Speaker 1: the work, like doing the actual work of the material economy,
Speaker 1: and and and like the last thirty forty years of
Speaker 1: whatever you want to call it, Reagonomics, neoliberalism, Clinton whatever, globalism,
Speaker 1: global much in ad whatever you wanna call it, has
Speaker 1: shifted so much attention away and concern away from the
Speaker 1: working class. If you keep focusing on those people, keep
Speaker 1: having use conversation you know, as they say, the devil
Speaker 1: is in the details and where the folks on the
Speaker 1: ground actually doing things. Keep keep keep that up and
Speaker 1: you might actually start fixing things. Gordon McGill such a
Speaker 1: treat speaking to really appreciate you taking time out of
Speaker 1: your day to talk and I hope to have you
Speaker 1: back on at some point. That was a really fantastic
Speaker 1: and thank you so much. Oh no, thank you guys,
Speaker 1: Like I say, keep it up. I appreciate your fetishization
Speaker 1: of freight, nursery and logistics and whatnot. It makes it
Speaker 1: fell feel good. Thank you, sure, take care of Thank you.
Speaker 1: I thought that was a fantastic conversation with Gordon and
Speaker 1: just extremely in a short time, extremely illuminating about some
Speaker 1: of the pain points and trucking that I hadn't fully appreciated. Absolutely.
Speaker 1: I also I hadn't realized that we had not actually
Speaker 1: spoken to a truck driver. I'm pretty sure. I'm pretty
Speaker 1: sure we've spoken to some informally at various conferences over
Speaker 1: the years, but not officially on the podcast. But I
Speaker 1: also thought, you know, the point he made about if
Speaker 1: you're concerned about supply chain issues, choke points at ports
Speaker 1: and depots, and things like that. The idea of having
Speaker 1: an actual chunk of your trucking capital tied up waiting
Speaker 1: and not being particularly efficient. I thought that was a
Speaker 1: good point, and I really thought it was interesting. You know,
Speaker 1: I hadn't thought it's like, okay, there's a shortage of
Speaker 1: you know, people keep talking about the truck driver shortage,
Speaker 1: and on some level, fun we can accept that. But
Speaker 1: I hadn't really thought it's like, Okay, it makes sense,
Speaker 1: like make it easier to get a CDL, make it
Speaker 1: easier to go to truck driver school, make it easier
Speaker 1: for people to come into the business. But I hadn't
Speaker 1: thought about this idea that what that does, ultimately is
Speaker 1: it just sustained a churn model where yes, you solve
Speaker 1: the problem of people coming in, but you don't solve
Speaker 1: the problem of truck driver retention people actually staying in
Speaker 1: the industry. Yeah. Absolutely, all right, Well, plenty more trucking
Speaker 1: episodes to come. I'm sure. Shall we leave it there
Speaker 1: for now? Let's leave it there, Okay. This has been
Speaker 1: another episode of the All Thoughts podcast. I'm Tracy Alloway.
Speaker 1: You can follow me on Twitter at Tracy Alloway, and
Speaker 1: I'm Joe Wi isn't, though. You can follow me on
Speaker 1: Twitter at the Stalwart, check out the autonomous Trucker subject
Speaker 1: of our guest Gordon McGill, follow our producer Kerman Rodriguez
Speaker 1: at Carmen Arman, and for all of our podcasts at Bloomberg,
Speaker 1: check out the handle at podcasts. And I wanted to
Speaker 1: let you know about a special event that we're holding
Speaker 1: four listeners. My co host Tracy Alloway and I will
Speaker 1: be speaking with past guest Josh Younger as well as
Speaker 1: Columbia law professor levmanand in a special live episode of
Speaker 1: The Odd Lots podcast on November twenty nine. We're gonna
Speaker 1: be holding it at Bloomberg h Q, and you're welcome
Speaker 1: to come Mingo Joint. We're gonna have cocktails, cannapay and
Speaker 1: other stuff on that day along with the live recording.
Speaker 1: So if you're interested in attending a live episode of
Speaker 1: the Odd Lots podcast as well as meeting me and Tracy,
Speaker 1: as well as meeting our guests, and as well as
Speaker 1: meeting other Odd Lots listeners, go find the rs VP.
Speaker 1: Both Tracy and I have tweeted about it. It's also
Speaker 1: on Bloomberg dot com slash odd lots. Sign up and
Speaker 1: join us in New York City at Bloomberg h Q
Speaker 1: on November twenty nine. Thanks for listening.