Report: Misclassification Exploits Nation's Port Truck Drivers, Costs Gov't Billions and Pollutes Environment
A new study of the U.S. port
trucking industry finds that the nation's 110,000 port truck drivers,
who move millions of cargo containers annually from port cities to store
shelves across the country, are highly vulnerable to illegal employment
classification schemes that subject them to poverty-level wages,
frequent safety violations, and little autonomy from the employers who
dictate their financial constraints.
The report, conducted by labor market experts at the National Employment Law Project, the Change to Win labor coalition and Rutgers University, draws on in-depth interviews with drivers at the nation's major ports and concludes that the typical port truck driver is misclassified as an independent
contractor. The study also concludes that the toxic diesel-truck
pollution in the air of the nation's port regions is a direct result of
the industry's adoption of misclassification as a business model.
"Trucking
companies across the U.S. are rigging the game by forcing port drivers,
who ship everything from tennis shoes to televisions across thousands
of miles, into taking poverty-level wages. This report sheds light on an
underground economy in which companies are skirting a host of
obligations in order to profit greatly – at great cost to the people
they hire, the government, the public, and other businesses that play by
the rules," says David Bensman, professor in the School of Management
and Labor Relations at Rutgers University and a co-author of the report.
The Big Rig: Poverty, Pollution and the Misclassification of Truck Drivers at America's Ports
reflects findings from interviews of port truck drivers at 39 companies
in Seattle, Oakland, Los Angeles, Long Beach, New York and New Jersey
and hundreds of their employment documents, including truck leases, pay
stubs, insurance
provisions, safety policies, drug and alcohol policies, meeting
agendas, log books, and job applications. Combined with an aggregation
of 10 prior surveys of 2,183 workers at seven major ports and a review
of the industry's structure and economics since its deregulation thirty
years ago, it is the first-ever systematic examination of
misclassification across an entire U.S. industry.
"The conditions
under which these truckers work have virtually nothing in common with a
true independent business. Trucking companies dictate how, when and
where drivers do their work – leaving the drivers financially and
operationally dependent on their employers day-in and day-out. Labeling
them 'independent' is just a way for companies to sneak out the back
door and skirt their responsibilities," says co-author Rebecca Smith, an
attorney with the National Employment Law Project.
The report
comes at a time when misclassification – of grocery deliverers, farm
workers, janitors, home care workers, construction workers and more – is
under increasing
scrutiny. A February 2009 U.S. Treasury Inspector General estimate
found that the unpaid Social Security, Medicare, and Unemployment Insurance
taxes that companies skirt due to misclassification have alone cost the
nation $15 billion, and President Obama has made curbing
misclassification a key part of his fiscal year 2011 budget proposal as a means to save the government money and promote good jobs.
The
report estimates from the prior surveys of 2,183 drivers in seven major
ports that 82 percent of port truck drivers are treated as independent
contractors, making it the dominant business model and profit-maximizing
strategy in the sector. The report also finds that:
•Trucking
companies make drivers responsible for all truck-related expenses
including purchase, fuel, taxes, insurance, maintenance, and repair
costs. •Port truck drivers work long hours for poverty-level wages.
The average work week among surveyed drivers was 59 hours. Average net
earnings before FICA, income, and other taxes was $28,783 per year for
contractors and $35,000 per year for employees. Minimum wage violations
appear widespread. •Surveyed drivers classified as independent
contractors reported average net incomes 18 percent lower than employee
drivers. Independent contractors were two-and-a-half times less likely
than employee drivers to have health insurance and almost three times
less likely to have retirement benefits. •Economic pressures
encourage widespread evasion of safety regulations. Drivers commonly use
dangerous and illegal equipment, and safety limits on working hours and
vehicle weights are routinely ignored. •Low-wage independent
contractors bear the industry's capital expenses by owning and operating
the only equipment they can afford – the oldest diesel trucks on the
road. The industry's adoption of misclassification as a business model
is a direct source of the environmental and public health crises
surrounding the nation's ports.
"Misclassification drains public
coffers through uncollected taxes, it puts law-abiding businesses at a
competitive disadvantage, and it leaves workers vulnerable without basic
protections – not to mention the safety and environmental hazards it
creates. We need lawmakers, federal agencies and the ports to come
together to tackle these pervasive and illegal business tactics that
undermine the economy and the workers who help make it run," says
co-author Paul Alexander Marvy of Change to Win.
The report,
which includes a foreword urging an end to the "sharecropping on wheels"
by Wade Henderson, president and CEO of The Leadership Conference on
Civil and Human Rights, urges U.S. ports to adopt uniform rules that
require trucking companies to employ drivers and take ownership
responsibility for trucks they operate. It calls on the Department of
Labor, the IRS, and state enforcement agencies to implement
comprehensive enforcement strategies of tax, employment, and safety laws
in the port trucking industry. It also urges Congress to pass the Clean
Ports Act of 2010 (H.R. 5967) to allow port authorities to address
misclassification where it affects the environmental impacts, safety, or
efficiency of port trucking operations.
Rep. Jerrold Nadler
(D-N.Y.), sponsor of the Clean Ports Act, says the report "dramatically
highlights some of the major issues hindering the cleanup of our
nation's trucks and ports. This new document will be very helpful in our
collective efforts to properly classify truck drivers, to protect those
drivers and port workers, to implement robust and lasting clean truck
programs, and to bring our nation toward a future of clean and
environmentally friendly ports. This report reminds us why it is so
pressing to pass my legislation, the Clean Ports Act, and to make
federal policy on this issue clear and up-to-date once-and-for-all."
This report was published without the presentation of any known survey asking for the opinion of drivers on ownership of their own equipment or retaining their right to work as an independent-contractor/owner-operator trucker leased to a motor carrier.
Past News Articles:
‘Clean Ports Act’ introduced; could have impact on trucking beyond
ports
The Clean Ports Act of 2010 would "amend the Federal Motor Carrier Act
to allow ports to enact and enforce clean truck programs. ..."
By DOROTHY COX
The Trucker Staff
7/30/2010
WASHINGTON — Congressman Jerrold Nadler, D-N.Y., the senior
Northeastern Democrat on the House Transportation and Infrastructure
Committee, introduced the Clean Ports Act of 2010 on Thursday, according
to a statement on his website.
The bill, which has 57 original co-sponsors, would amend the Federal
Motor Carrier Act to allow ports to enact and enforce clean truck
programs and implement environmental programs “above the current federal
requirements.”
“This change to federal law would confirm that port cities like Los
Angeles, New York, Newark, Oakland and Seattle have the authority to set
the standards needed to replace diesel trucks with clean diesel and
alternative energy vehicles in order to reduce pollution in a manner
that has negligible effect on consumer prices, lowers public health
costs for taxpayers, and does not unfairly burden the workers who haul
cargo to and from U.S. seaports,” the statement said.
“With trucking a ubiquitous and central part of goods distribution
nationwide, we must ensure that the government is doing everything in
its power to decrease vehicle emissions and minimize pollution in and
around our ports,” said Nadler. “The Clean Ports Act will update federal
environmental law to allow forward-thinking ports, like the Port of Los
Angeles, to implement clean truck programs that will improve the air,
empower truckers, and reduce the incidence of illnesses exacerbated by
pollution. The movement supporting this legislation represents a truly
diverse swathe of American labor, business, environmental organizations,
consumer groups, and others working toward the common goal of greener
ports.”
Comments during a meeting May 5 by the U.S. House of Representatives
Transportation and Infrastructure subcommittee on Highways and Transit
intimated that such legislation or something similar might be
forthcoming.
Capt. John Holmes, deputy executive director, operations, at the Port of
L.A. said at the May 5 hearing that his port wants to do away with all
independent owner-operators at its facilities because most of the port
haulers are notoriously underpaid and even with heavy subsidies from
ports, governmental and other entities, the drivers can’t afford new,
cleaner trucks. He said having only carrier employees will assure that
all the older, more polluting trucks will be replaced with newer,
clean-emissions trucks.
“So to clean up the port, we realized we had to create a new system that
would provide the port with responsible trucking companies that had the
means to maintain trucks regularly and reliably control drivers,” he
said in written testimony.
The American Trucking Associations has said while it supports cleaner
air at the ports, it opposes doing away with owner-operators at the Port
of L.A., arguing it has nothing to do with clean trucks and clean air.
ATA’s Vice President and Chief Counsel Robert Digges Jr., said May 5
that the Port of Long Beach didn’t include a ban on owner-operators but
instead came up with a registration agreement using both company drivers
and independent owner-operators and that its clean truck initiative was
not harmed in any way but is rather a resounding success. Digges
emphasized that “What we are opposing is the use of a concession
contract wherein the port grants to itself the sole discretion of
selecting which otherwise federally qualified motor carriers can
participate in port transportation services.”
ATA filed suit in 2008 against the Ports of L.A. and Long Beach
challenging their use of mandatory concession contracts to implement
their clean trucks programs and last year the lobbying group reached a
settlement with the Port of Long Beach in which that port replaced its
concession contract with a new motor carrier registration process. It
received a temporary injunction from the court against the L.A. Port’s
concession to ban owner-operators.
According to Nadler, the court challenge has “highlighted the need” to
“amend federal law.”
“The current motor carrier statute enacted as part of the Federal
Aviation Administration Authorization Act (FAAAA) of 1994 allows state
and local entities to regulate trucking companies only for ‘safety’
related programs, and an injunction has been issued to temporarily block
Los Angeles’ ability to directly enforce, through concession
agreements, a ban on motor carriers from bringing dirty trucks into its
port. The court injunction also prevents Los Angeles from placing the
burden of cost to upgrade and properly maintain expensive, new clean
trucks onto motor carrier companies rather than onto truck drivers
themselves. Because of the injunction, drivers continue to be hired as
‘contractors’ by the companies and, therefore, are expected to replace
and maintain trucks themselves – a prohibitive and unreasonable expense
for the vast majority of drivers, which threatens the efficacy of the
entire clean truck program.”
Nadler continued that ports in New York, New Jersey, Oakland, Seattle,
Houston and Miami “are grappling with similar obstacles presented by
port trucking, but are unable to implement a comprehensive program given
the legal uncertainty and injunction against the program in Los
Angeles.”
A source who is a former Teamster and port hauler told The Trucker that
such measures would eventually be used to see that unions take charge of
major distribution centers.
“It’s not just about local drayage trucks,” said the source, who wanted
to remain anonymous; “this would affect every truck coming into the
ports, all cross-dock operations” and “unionize distribution centers.”
Nadler said his bill is supported “by a broad coalition of over 120
civic, environmental, labor and civil rights groups, such as the
Leadership Conference on Civil and Human Rights, Change to Win, Blue
Green Alliance, International Brotherhood of Teamsters, Sierra Club,
Apollo Alliance and NRDC (Natural Resources Defense Council).”
Dorothy Cox of The Trucker staff may be contacted to comment at: dlcox@thetrucker.com
Port of Savannah Truckers Protest Lack of Fuel Surcharge Payments
Truckers' boycott affects gates at Port of Savannah
By Dorothy Cox The Trucker Staff
3/13/2008
SAVANNAH, Ga. — Intermodal truckers at the Port of Savannah held a press conference March 11 at the port’s front gates to protest not getting fuel surcharges passed along to them.
According to a news release from the drivers, who now have an association called the Intermodal Owner Driver Association or IODA, the meeting was held to inform the public and the media “about what is really happening to diesel fuel surcharges that the American consumer, along with most steamship line customers, are paying.”
Most of the fuel surcharges “never make it to the individuals that actually buy the fuel,” they said.
Keith Liverman, a driver and member of IODA, hastened to add that “We are not on strike and we are not boycotting the port. We want the industry to understand we can no longer just stand by while individuals or companies collect surcharges belonging to us and use this money for their own personal profit.”
He said, “Legislation needs to be introduced in Georgia that would make it illegal to use this money for anything other than what it was intended for.
“We believe that in exchange for working during these tough times, we have earned the right to make enough money to support our families.”
B.J. Langford told WSAV news in Savannah that he doesn’t receive a surcharge, just a flat fee for picking up cargo. “My average paycheck is dropping anywhere from $250 to $300 a week,” said Langford. “It’s coming directly out of my pocket to move the same freight I was moving last year.”
The port haulers were hoping their event would put some pressure on companies not passing along surcharges.
By Joseph Bonney / The JOURNAL of COMMERCE April 4th,2008
The Port of Savannah
reported a sharp drop in truck gate activity Friday as scattered
nationwide protests continued by truck drivers angry about increases in
diesel fuel prices.
"During the last two days, we've experiences
about a 50-percent drop in gate moves," said Robert Morris, spokesman
for the Georgia Ports Authority . Morris said port gates remain open and
that the slowdown in truck activity has not caused significant problems
within the terminal. "We expect that by Monday that the situation will
be back to normal."
Demonstrations by truckers were reported
Friday outside state capitols in Richmond, Va., and Columbia, S.C., but
spokesmen for the Virginia and South Carolina state port authorities
said they had seen no evidence of trucker boycotts on port gate
activity.
Keith Liverman, a Savannah driver who last year helped
organize the Independent Owner Driver Association, said many truck
brokers who hire drivers to haul containers to and from port and rail
terminals aren't passing along all of the fuel surcharges paid by their
customers and by ship lines. He said drivers can't keep operating that
way with diesel fuel prices around $4 a gallon.
Liverman said
drivers are circulating petitions urging state or federal legislation to
require all fuel surcharges to be passed on to drivers who buy their
own fuel.
"This is a broken industry, and if they don't fix it,
they're going to be out of trucks," he said. "They're running these guys
off left and right. I know we're probably not going to be able to do
anything about the price. Our big issue is the surcharge and the fact
that we're not getting all of it, and we need it."
The 
