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Micah Bomkamp

Senior Research Paper
Mr. Scanlan
12/12/14
The Trucking Industry
The United States of America has a very complex economy. It is an economy based
on several different factors and means of production. Some of these different factors
include sources like energy production, agriculture, and the service industry. While each of these
sources are very different, they do have one common bond. That common bond is the truck
driving industry. The truck driving industry has been an extremely important part of the
American economy for decades. There would be no way the United States economy could
function without truck driving. Why is the truck driving industry so needed in our economy?
The answer is simple. It is all about transport. What transports home heating oil and gasoline to
homes and service stations around the country? Trucks. What transports corn, soybeans, and
other agricultural products to different factories where they can be processed? Trucks. What
transports goods to department stores, strip malls, and the variety of other businesses that make
up the service industry, which is the largest sector of our economy? Again, the answer is trucks.
Since the truck driving industry is so integral to the American economy, it has been a segment
that has been watched and monitored closely by the federal government as well as the private
sector to improve efficiencies, monitor safety, and pass regulation. Needless to say, the trucking
industry is beneficial to society because it contributes to the economy and has changed very
much in its history. From recession to boom, regulations, diesel prices, and market factors, the
American trucking industry has changed over the years.

First, let us look at some of the major industry changes that have occurred or are
occurring in the industry at the present moment. Probably the most important change in the huge
boom in the trucking industry at the present moment. Trucking is a job that is in major demand.
In fact, the trucking industry is expected to grow twenty one percent over the next ten years (ElBendary). This statistic is supported by several more concentrated statistics as well. It is
important first to understand some of the reasons behind these positive statistics for the industry
that is driving this upward change in demand. One of the major reasons is the natural gas boom
that has taken place in the United States at the beginning of the 21st century. Fracking shale
deposits have opened up a new energy boom in the country. As part of a national poll, ninety
seven percent of respondents believe the shale boom will have a positive impact on the trucking
industry. Also, fifty-five percent of national respondents say they have experienced some growth
in the trucking business since 2009 because of natural gas from shale (“America’s”).
One area of the country that suffered immensely from the Great Recession is the state of
Ohio. Cleveland used to be a major energy refinement center during the time of Standard Oil.
After the recession, Ohio was one of the hardest states hit. On a positive note, after gathering
data, it shows that this state’s trucking industry has changed for the better because of the shale
boom as well. Twenty-seven percent of state respondents reported shale activity has driven the
growth of the Ohio trucking industry since 2009. Plus, forty-seven percent of Ohio respondents
plan to hire between five percent and twenty-five percent more workers over the next five years
(“America’s”).
Another important industry change in trucking has happened in the area of gender
diversity. Women have struggled against men in the workforce in several different industries.
The trucking industry is definitely part of the equation. In the early days, most trucking

companies would not hire women. One of the major reasons for this was the because of the
simple fact that early day tractor-trailers were very difficult to steer, so it was a challenge for
women to drive them. These days, there have been many significant improvements in the areas
of operations. For example, tractor-trailers are easier to drive now that many of them are
equipped with automatic transmissions (Byrnes). Needless to say times change, even in truck
driving gender diversity. By 1991, two million people qualified to drive tractor-trailers and
approximately 80,000 of them were women (Maifair 3).
Another important industry change is in the volume of tractor-trailer orders. In just the
period of one year, a change was quite significant. At the end of 2013, a total of 231,700 orders
were booked for Class 8 trucks (tractor-trailers over 33,000 lbs.), a number down two percent
from the previous year. A year later at the end of 2014, these heavy-duty Class 8 trucks were up
in sales from the previous year by a margin of 56 percent. In fact, it was the best year since 2007
according to Tire Business (Fisher).
The volume of orders in the trucking industry was not the only significant change in the
industry, driver change was another factor. In 2004, many carriers were forced to increase driver
pay in order to recruit and retain as many drivers as possible. Even with the increase in driver
pay, there are still obstacles today that are causing problems with driver retention. One of the
main obstacles is hours of service. Hours of service relates to the drivers start time in the
logbook to the time they finish. Hours of service are regulated because drivers are mandated to
take periods of rest and for a certain amount of time for reasons like safety. Because of this,
drivers in 2013 report that since the hours have been more strict, sixty-seven percent of 2,300
respondents reported a decrease in pay. The data shows that it has reduced trucking productivity

by three percent (Fisher). Of course, this is only the tip of the iceberg in regards to truck driving
law.
Laws related to this industry have changed greatly over the years, for better or worse.
The beginning of federal regulation and the passing of laws pertaining to the trucking industry
have its roots in the late 1800s. Before trucking became a mainstay in the transport industry,
railroads were the ones hauling freight. In this time, it was pretty much every man for himself in
regards to commerce. There was very little happening in the area of regulation. Railroads
started charging unfair freight rates and practicing unfair competition. This was when the
government finally stepped in and broke up monopolies and trusts to ensure fair competition (ElBendary).
In the early 1980s into the present day, regulations became more rampant in the industry.
In 1982, the Surface Transportation Act of 1982 was passed. This set uniform size and weight
limits for the trucking industry. This act made it so that trucks that use interstate highways may
not weigh in excess of 80,000 pounds (El-Bendary).
The North American Free Trade Agreement (NAFTA) was another piece of landmark
legislation that placed significant change in the trucking industry. As a result of the passage of
this agreement, since 1994, Mexico’s northern states along the United States border have created
over 2,000 manufacturing plants. This has helped the trucking industry in regards to location of
production hubs and has enabled them to improve “just in time” deliveries around the holidays.
Canada also became a major player in American trucking and transport. In 2002, Canadian
customs began the Free and Safe Trade program (FAST) which promises to revolutionize the
processing of transborder trade. Another regulation was the Carrier Reform Act first
implemented in the early 1990s. This act reduced the amount of time customers have to file an

overcharge claim from three years to two years. This was effective from December 3, 1993 to
August 26, 1994. After August 26, the time was reduced to six month to file an overcharge
claim. Carrier Act regulations also have changed the trucking industry in the area of safety
reforms (El-Bendary). Effective July 29, 1996, drivers of commercial motor vehicles operating
in intrastate commerce must meet the federal medical standards and present a valid federal
medical card when they apply for a commercial driver license unless they have been
grandfathered or are exempt by federal or state law (Wisconsin Commercial Driver’s Manual 9).

In 1999, the Motor Carrier Safety Improvement Act was passed. This outlawed the
practice of Mexican trucking companies leasing their vehicles and drivers to carriers in the
United States. As of 2004, Mexican trucks are still not allowed to travel freely throughout the
country. That same year, the Federal Motor Carrier Safety Administration was created. It’s
purpose is to reduce the number and severity of large-truck involved crashes through more
commercial motor vehicle training. This brought about the Commercial Driver’s License
regulations we are familiar with today (El-Bendary).
Laws and regulations in the area of safety have also applied to the number of hours in
regards to driving time. In 2004, new driver hours of service rules took effect in January. It
reduced the amount of on duty time for drivers and increased the time a driver must take off
between shifts. The maximum driving time is eleven hours. After eleven hours behind the
wheel, the driver must have ten hours of rest. The maximum on-duty time is fourteen hours.
After fourteen hours on-duty, the driver cannot operate a commercial vehicle until he has had
ten hours of rest. The fourteen hour on duty time begins when drivers come on duty and can
only be stopped with a minimum two hour break in the sleeper (El-Bendary). Finally, there is a

maximum of sixty hours on duty in any seven consecutive days. If a company operates seven
days per week, maximum time is seventy hours in any eight consecutive days, drivers may
restart the ⅞ day period with 34 hours or more off duty (Congdon). In 2006, the Federal Motor
Carrier Safety Administration had the greatest impact on the driver shortage by making a change
in hours of service. One of the few industries that have been given some exemptions is the oil
industry. Oilfield drivers get an exemption to their hours of service regulation because of the
time they have to wait to be loaded and unloaded (“America’s”).
Cargo and identification regulations have had an impact as well. In 2006, the
Transportation Security Administration issued a notice of proposed rulemaking regarding cargo
regulation. The plan required all commercial truck drivers delivering or retrieving goods at ports
to have special ID cards. In 2007, the trucking industry was required to submit electronic cargo
manifests to customs and border protection for trucks entering the United States (El-Bendary).
Since 2010, environmental regulations put forth under the Obama administration have put
major changes on the trucking industry. Since, July 1, 2014, all CDL drivers will need to provide
a certified birth certificate or passport at the time of application (Wisconsin Commercial Driver’s
License Manual 9). In 2013, more than 2,300 drivers were surveyed by the American
Transportation Research Institute. Eighty-two percent said the new rules have had a negative
impact on their quality of life. In 2014, There have been twenty-six potential initiatives brought
forward. This is the largest collection of regulatory changes in the history of the trucking
industry. It will have a huge impact in the near future. President Obama has directed the
Department of Transportation and the United States Environmental Protection Agency to develop
higher fuel standards for medium and heavy-duty trucks by 2016 (Fisher). Of course, with
changes in laws and regulations, there will be correlating changes with costs in trucking.

To understand changes in trucking costs, it is necessary to have an understanding of the
numbers. In the United States, trucks deliver seventy percent of the freight transported annually.
This accounts for $677 billion dollars worth of manufactured and retail goods. The average
costs for trucking is about $1.73 per mile which figures out to approximately $83.68 per hour in
2008. The average driver earned 30.3 cents per mile for an average of $32,000 per year. Also,
trucks consumed 53.9 billion gallons of fuel for business (Baldyga). The average speed of a class
8 tractor-trailer moving at a speed limit of 55 miles per hour uses about 6.8 gallons of fuel per
hour (Ro). With these facts, statisticians calculate that for every dollar in revenue the trucking
company earns, there is a cost of 95.2 cents (“America’s”).
With these costs, an overabundance of used trucks, and rising diesel fuel prices, the
demand for used trucks has dropped greatly in the present time (El-Bendary). However, there is
a silver lining in some regulation in regards to fuel. The regulations have increased demand for
new technologies that have enabled the industry to save fuel (Congdon). This is essential
because the cost of fuel on average has gone up as well.
In 1998, the national average of diesel fuel was $1.0440 per gallon. In 1999, the price
was up to $1.1210 per gallon. By 2000, it was up to $1.3191. Coming into 2001, the cost was
up to $1.42 per gallon. In 2002, diesel fuel finally had a drop to $1.32 per gallon. In 2003, the
trucking industry paid an estimated $465 million more for its fuel in the same week compared to
2002. Those years saw diesel fuel rise to a new record of $1.51 per gallon. By October 13,
2004, diesel fuel hit the two dollar mark and reached $2.092, a fourth straight weekly record and
would ultimately reach an average of $1.81 per gallon. In 2005, diesel reached $2.402 and
$2.745 by September 2006. October 2007 saw diesel reached the three dollar mark at $3.048 per
gallon. In 2008, prices took a drastic jump and hit four dollars in July of that year, but went

down to $2.515 (El-Bendary). The cost pattern of constant change shows steady increases and
dips, but an overall rise in fuel prices (El-Bendary). Changes in costs, regulations, and
recessions would lead to problems and difficulties in the trucking industry.
Some of problems the trucking industry faced stemmed from recession. From the fall of
1999 through the spring of 2000, the entire trucking industry faced a crisis. Going into March of
2001, the trucking industry fell victim to recession after ten years of growth. In 2002, the
collapse of the largest carrier ever, Consolidated Freightways, led to declaring bankruptcy on
Labor Day and cost more than 15,000 jobs. Also in 2002, 330,000 fewer trucks were on the road
than two years before, a loss of thirteen percent. Five thousand of the 11,500 trucking businesses
when out of business in 2003 alone. The war in Iraq and corporate scandals also hurt growth in
the industry (El-Bendary). The main sector of trucking that was affected was small, independent
trucking outfits (Baldyga).
The American trucking industry, a vital component of the American economy, has
evolved and changed very much in it’s history. It has seen its up and downs over the years, but
one thing has stayed true. It is still the main means to transport goods across the country. The
industry has weathered some difficult storms including the recession of the late 1990s and early
2000s, as well as the Great Recession of 2008. They have battled rising fuel prices and
regulations that may be good for the planet, but are hard on the trucking industry. While the
change has put many companies out of business, the trucking industry has still moved along.
With the Great Recession coming to an end, trucking is now in demand more than ever.