For years, I drove between Queens (NY) and Cambridge (MA). Every Friday afternoon down to Queens. Every Sunday night (or was that Monday morning?) back to Cambridge. Years later, I drove from Charlottesville to Dulles and from Charlottesville to Roanoke (all in Virginia) several times a week for decade or so.
And, during those trips, I knew that I always had to stay to the right, high beam someone when I wanted to pass, and return to my lane when I was done. How did I know that? I learned that from the long-distance truckers.
These professional drivers were generally the best. They had to be- because their income depended upon their reaching their destination safely and efficiently.
I really got to know the archetype when I started my own trucking company. No, that was not my original goal, but to provide the service our customers (hospitals and clinics) wanted- just in time delivery and they generally had no loading docks- it’s what was necessary to meet the needs of our market.
I learned that most drivers got paid by the mile. Back then it was about 20 cents for each mile they drove (with freight on board; if they were empty, there was no compensation). Our model was different- because we wanted our drivers to arrange stock for our customers and they had to make inside deliveries. So, we paid by the hour and we paid by the delivery. We required them to take showers (some of our drivers elected to sleep in our well-equipped tractors- with air-conditioning, CB radios, televisions, heaters, etc.)- so they needed to go to a truck stop for that shower.
I also joined OOIDA- Owner/Operator Independent Drivers Association– and got to know lots of drivers who owned their own rigs. (Our drivers used our equipment- with our logos, our service requirements, etc.) Most of these guys were solidly in the middle class- but they worked long hours and were away from home for days on end. (That was another advantage to driving for us- you were home almost every weekend, from Friday night to Sunday night.)
Not so true anymore. Most of these drivers are barely making it. They are being paid 23 to 25 cents a mile- and with fuel costs (don’t forget most tractors barely get 9 mpg on the open road and about 5 in city traffic) and tolls and road taxes (trucks must keep records of each mile they drive in each state and pay the states a tax based upon those miles, with credit for fuel tax if they bought gas in that state). And, that assumes they own their truck free and clear. A tractor-trailer combination can run $150K or more- which means at least $ 1500 a month in payments over 7 years. Plus insurance.
You see, these truckers are solopreneurs in the truest sense of the word. They run their own businesses- their trucks and the deliveries they make. So, after they cover their expenses, they get to keep what is left over as income. Well- not quite.
Because they are “owner-operators”, they have to pay self-employment taxes. Those run 15.3% of every dollar left over after expenses. And, then, they have to pay income taxes. If these truckers only clear $ 30K, they have to pay $ 4600 in employment taxes- and if they are married and this is their whole income, they owe no income taxes. But, if they were employees making a salary of $ 30,000, their employers would pay half of those social security and Medicare taxes (there is an employee and employer share). That means they would only pay $ 2300- and still owe no income taxes. In other words, they would have more take home pay.
It’s why the truckers went on strike last month in Long Beach and Los Angeles. Most of the drivers there pick up freight at the ports and bring them to the railroad terminals. They don’t do long distance driving- which is where there is more chance for more revenue.
These drivers allege they are employees of the Ports or the trucking companies that have the contracts with the Ports. The drivers are told where to go, when to come to work, and how to do their jobs, Oh, they can’t drive for another firm, either. (Yes, that is exactly the definition the IRS uses to determine if one is an employee.) They may own their own rigs, but that’s like engineers in the 70’s that used to bring their own slide rules to work (some of them were pretty expensive and ornate)- and they were employees.
With the way our products come into the US, it is pretty important that we have a viable trucking industry- or our products will be stuck at the ports.
It’s back to that living wage conundrum, isn’t it?
