Owner-operators feel pain of rate decline due to pandemic; protest blocks freeway in Houston

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Houston police chief speaks with protesters
Houston protest

In the past month, there has been a plethora of efforts to show appreciation for the nation’s drivers. Free lunches are great, but some of those drivers who operate independently are worried about how they’ll keep their businesses afloat when rates are tanking, insurance rates are rising and regulations continue to tighten.

Some owner-operators have become very selective of the loads they accept, with some parking their trucks until rates improve. Others are working but are complaining and attempting to make their voices heard via social media and other avenues. In Houston, 75 truckers were issued misdemeanor citations for impeding traffic on Houston’s East Loop Freeway on April 20. Another person was arrested and charged with inciting a riot and obstructing a highway. Both charges are misdemeanors, according to Houston Police Chief Art Acevedo.

“Everyone that was blocking the highway in protest has been cited with a Class C misdemeanor,” Acevedo said in a media briefing following the incident. “These are independent drivers protesting nonpayment by companies that have hired them to move [freight]. We’ve explained to them that this is an ongoing problem, and this is no way to fix that problem by engaging in illegal activity.”

Acevedo stressed that there is a “distinct difference between protected First Amendment rights and illegal activity.” Blocking the flow of traffic on a freeway falls into the latter category.

No matter how they’re coping, truckers are feeling the pain of the COVID-19 economy. Unfortunately, it’s not going to get better any time soon. Rates that had begun to rise in March plummeted in April and are still falling as of this writing. According to DAT Trendlines, April 13-19 rates for van freight average 15 cents per mile less than the March average. The April average is $1.72 per mile. Flatbed fared worse, dropping 19 cents to a flat $2. Refrigerated dropped by 20 cents per mile to an average of $1.99 per mile. Rates for all three modes will likely continue falling for the remainder of the month.

However, rates are only one part of the data to be considered. In the van market, for example, the load-to-truck ratio was 0.9. Anything below 1.0 means there are fewer loads on the DAT load boards than there are trucks. Good loads are taken up almost as quickly as they are posted, leaving the loads with less-than-average rates to pick from.

It’s no secret that near-record buying of Class 8 trucks in late 2018 and early 2019 resulted in an overcapacity situation in the freight market. Throw in crashing oil prices, which actually traded at less than zero at one point, and the shutdown of oil fields, and the result is a large number of trucks looking for other freight to haul. Shut down shipping from the largest U.S. trading partner, China, and another group of truckers is looking for new freight. To all of this, add the closing of businesses all over the U.S. and the loss of freight those businesses would normally generate.

Large carriers are scrambling to keep trucks moving and to keep drivers busy so they don’t leave. Many carriers are hitting the spot market more than usual for loads to supplement those from their own customer base. It all adds up to not enough freight to go around.

Accusations of broker malfeasance are commonplace, but whether those claims have substance is sometimes questionable. Undoubtedly there are brokers who take advantage of their trucker clients, but brokerages are watching their revenue dwindle too, as shippers refuse to pay more in a market where supply exceeds demand.

In the case of the Houston protest, claims were made that brokers weren’t paying owner-operators, but it wasn’t clear whether that meant some were not paying at all for loads hauled or they were simply offering lower rates than they did prior to the COVID-19 restrictions. Acevedo announced that the department will look into allegations of fraud by brokers, but he was also clear that truckers who participate in further obstruction will have their equipment impounded. Additionally, Acevedo urged the drivers to work with the police department to find other locations for them to exercise their First Amendment rights.

“Theft of wages is inexcusable and a criminal offense,” the department tweeted following the event, noting that the department will be “initiating a criminal investigation into allegations of widespread theft of wages. We won’t tolerate exploitation of hard-working people, or unlawfully impeding the movement of traffic.”

In the meantime, owner-operator Amet Borrego has organized a GoFundMe account in an attempt to raise $15,000 for Stephany Ramirez, another owner-operator who was charged with inciting a riot and obstructing traffic as a result of the protest.

A DAT press release dated April 20 states that the last two weeks of April and first two weeks of May will be “crucial for small carriers and independent operators.” The release cautions of a significant impact to agricultural and food supply chains if rates become or remain too low to operate or even if trucking businesses don’t financially survive.

Ken Adamo, chief of analytics at DAT, warned of continued rate declines in an earlier interview with The Trucker, saying, “I’m starting to think we’ll see a steep drop-off.” Adamo encouraged owner-operators to be as knowledgeable as possible and to use technology, such as DAT load boards, to make sure they’re getting the latest information. Add to this some standard business advice: Accounting for every penny and making sound decisions becomes more critical in a tough market.

In the meantime, expect more grumbling — and possibly more protests — as independent truckers struggle to keep their businesses afloat in tough economic times. Truckers will continue to serve in the COVID-19 era, but will they survive economically? Time will tell.

Photo courtesy of Houston Police Department

Following a protest blocking Houston’s East Loop Freeway, Houston Police Chief Art Acevedo addressed the demonstrating truck drivers, advising them to protest in other ways than blocking city roadways. The drivers were cited for impeding traffic, but the police department has said it will investigate the drivers’ accusations of fraud by brokers.

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25 COMMENTS

  1. In reality over 70,000 trucks were pulled off the roads before the pandemic hit. The industry was severely damaged by the so called “Trade War”.
    Why was such a reckless solution preferred to a lawsuit that could have brought to this great nation billions in royalties? No one knows, because that was and still is just a mistake. Guess we are all humans. Some of us make small mistakes and someone else makes huge ones but we all make them and only some realize.
    The fix? Simple – bailouts for the agriculture and bankruptcy for the trucking industry.

    So, fellow drivers, it looks like there are too many of us today.
    It’s just a stupid game which unfortunately has damaged lives and businesses, weakening the very cell of any nation – the family itself.
    Investments gone down the drain causing the world’s economy weakness before the sickness.

  2. Very insightful Mr. Constantin! Yep , we’re one foot in the grave and the other on a banana peel! But he who sits high and looks low is STILL in charge! Keep the faith my brothers and sisters, because it ain’t over until GOD says its over!

  3. I agree with the police. If you’re upset about the rates, organize and head over to CH Robinson’s headquarters or some other big broker and jam up their parking lot with trucks and trailers. I don’t get blocking the freeway.

  4. REally classy of DAT to use this as an opportunity to sell their service. And the industry that really needs to be purged is the brokerage industry. Festering pustules on the buttocks of the trucking business. If you can’t make it selling used cars or flipping burgers, there’s a place in a brokers shop for you.

  5. Lack of pay, due to brokers lying an stealing the load money from truck drivers has been going on for 20 years, it didn’t just start couse pandemic crap!!!!
    CH Robinson has a 1.1 billion lawsuit to deal with couse of theft!!!! An I’m so glad, hope they shut them down, biggest thief’s in the country!!!!
    TQL following!!!

  6. FMCSA should be the only load board in the country!!!!
    Distribution, MANUFACTURER an shipper post loads on there, truckers get them off there, showing all numbers an not hide what customer is being charged!!!!
    NO NEED FOR THESE LYING, THIEVING, CHEATING BROKERS!!!!!
    THEY ARE WHAT HAVE THIS COUNTRY UP-SIDE DOWN!!!!
    WHEN A CUSTOMER GETS CHARGED, $3.00 A MILE, THATS THE FIRST THING THEY HAVE TO GET BACK, TRANSPORT FEE’S…
    NOW, THE TRUCKING COMPANY USING THERE OWN EQUIPMENT, WILL NEVER EVER SEE A FRACTION OF THAR CHARGE, MAYBE 80 CENTS A MILE, $1,10 A MILE!!!
    ITS A CRIME SHAME!!!

  7. So, a bag of chips that cost 49 cents, has to be sold for $3.95 at the store so CUSTOMER makes 25 cents off the bag, but the “broker”gets upward of $2.00/$3.00 a mile an never touch anything!!!!
    Any one following me here ???
    A pound of peanut in GA is a $1.00 at the fields, why $8.00 at store ? HELLOOOOOOO!!!!!

  8. Is not the pandemic
    Brokers have been stealing from
    Small companies and owner operators
    Specially CH ROBINSON
    COLLOTE / CONVOY you named
    ATA supost to be on drivers side
    But is a lie they work for big companies and brokers
    Is time government
    Do something
    Or this people going to keep
    Ripping truck drivers
    They have to stop putting all
    This idiet laws like LDS
    And hours off service
    And stop helping this
    RIP OFF

  9. I have drove a truck for 35 years.I was a Broker for 10 yrs. Back from 90 to 99. I have seen guys make a 1,000 off one load, so I know what kind of money they make. I could not live with myself if I made more than 250.00 off a load ,so I went back out and bought another truck. Oh,these brokers bragg to each other if they make a 1,000 off a truck,its known as a home run in there business

  10. I’m praying for you all, independent, owner operators. There is nothing worse than a thief, in my eyes. Proverb 6:3, tells of the punishment. My son is an owner and pray for you all every morning. One thing I know for certain, two for sure, God will repay. He sees it all, keep your faith.

  11. I use to own 12 trucks I sold them all without making any profit. Just to cover all the cost. I buy 2 brand new pre emission trucks. And 2019 with the truckers bood bath I lost everything but of Capitol I had all 80k trying to stay a float. Now my truck haven’t run for over 3 weeks. I have a 5k month truck payment and a 3600 a month insurance. I cannot run the truck for 5 loads a week totalling 1500 or 2000 when I finish paying the driver i cannot buy fuel or pay toll nor my insurance mor truck payment. I dont know how i will pay for the parking or any of my personal Bill’s

  12. All truck drivers owner/operators need come together and SHUT the whole industry down like corona19 let world feel us as a hold for 1 or 2 months and see what’s the antibiotic for that.if there’s a will there’s away

  13. You can thank president Clinton for the cheaper rates he’s the one who signed free trade agreements he was told that wouldn’t work that’s when your bigger trucking companies started cutting fright rate to run owner operators out of business

  14. To the Houston Police. Dear sirs, if you look on the DAT or 123 load boards and put in pickup in Pink Hill NC for flatbed. You will see several loads going to Lake George MN, these loads range in price offered from $1935 To $1550 . This customer is a direct customer to me and my trucks are currently doing the work. The rate set by the customer Viking Mat Co is $2350 per load and $2450 for weekend delivery’s. This info can be obtained by calling Me and I will send you the rate cons or you can call Viking directly.

    So please STOP HARRASSING THESE DRIVERS WHO ARE GETTING SCREWED BY FLY BY NIGHT BROKERS.

    If you require I can give you other examples of direct customer rates versus broker rates in your home state of Texas. Starting with TSH rates out of Big Tex trailers and Shippers Choice rates out of Scott’s Co in Tyler.

    These men and woman have a point to make and they are well within there rights to protest if they want when there BEING SCREWED.

    Sincerely
    Eric L Cameron
    Cameron & Cameron Shipping Inc
    Jacksonville, Tx

  15. Well as you all know first thing get rid off the brokers get company connect directly with TRUKING companies not brokers they take to much money that the driver or owner operator should make but remember that l’ll the big trucking want to get rid off the owner operator so you and I become their pet while they get rich enough is enough
    You know is funny no one want to shut down their truck for 3 day but no no now they are going to do what ever they want

  16. I am a 3rd generation trucker and you know my dad and grandfather way way back made more money then I am making today. I have also been on the other side of the game but I never screwed not one driver. transparency of rates is what we need along with deregulation some brokers take more then 70% of what the load is actually paying. We need to come together or we won’t be. Go to your transportation secretary in your state inform them of unfair brokers maybe we petition the senate and congress to investigate brokers. Let’s also think about separating 4 wheelers and trucks make super highways just for trucks in closing i am disgusted with brokers,insurance,DOT you guys need to work with us not against us let’s be proactive not reactivate

  17. Well I think that is time to shut down
    If we don’t do something is going to keep happening and this is the time to do it or keep been the rug Matt and slaves good luck

  18. Company’s like VALLEY TRANSPORT
    MEADOW MN CRST NATS CH ROBINSON STILL OW me 1400 dollars
    CARMA TAKE TO LONG THIS THEFTS
    GOT TO PAY

  19. Owner-operators are one of the least organized businesses
    I don’t know anybody have you ever tried 2 make a real !!!!!!organization for owner operators
    No and don’t mention ooida!!!!
    Because they’re useless!!!!
    Brokers have a real Association that is strong
    Brokers laugh at the b**** fits the trucker are making on the freeway because they know there ain’t going to get what they want!!!!
    That’s not the way to do it
    Owner operators should have a Association with lawyers and lobbyists sure it will cost some money but I’ll be well worth it
    But it’s like talking to a brick wall.

    There’s more money in the service side that service the truckers
    truck stops, repair shops they’re raking in billions

  20. I am home and still staying home until better time is come. That’ll I am hiding from this covid thing. Thanks for ur info what’s happening.

  21. I am a sprinter o/o since 2008 and have over 1million accident free miles under my belt. Never have I seen a more disorganized business as this. We are all being used by the brokers and carriers to make them rich. They eliminated all the perks the truckers and sprinter/van operators used to get before, because no one has the guts to do anything about it. I am talking about the perks like insurance, actual gps miles, true presentation of price, true detention, true fuel charges, paid empty miles, on time pick up and delivery ……etc. Truck drivers and sprinter /van drivers should unite in a broker and carrier independent association armed with lawyers that will pursue every wrong against us and hold accountable the politicians, heads of government transportation industry , regulators of the industry and their lobbyists, bankers , insurance industry, and so on and on. It will take a lot of guts and money but if we don’t do it now with a business oriented president we are doomed. So lets start today and unite for the future and well being of our families, country and the American way of life, liberty and the pursuit of happiness.

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