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who are small businessmen and part of the largest industry in the United States.
According to a study of the motor carrier industry made by Shields & Co., we quote: “Along with farming, the trucking industry is the largest employer of labor in the country. More than 7 million men and women are directly employed in trucking, and many thousands more get indirect employment in manufacturing tractors, trailers, tires, etc. By way of comparison both the steel industry and the railroads employ well below 1 million people each.” With reference to national defense, we quote further from the same report: “During at least the early stages of World War II the motor carrier industry found itself in an unfortunate position, with no new vehicles available, gasoline rationed, and tires and repair parts difficult, if not impossible, to come by. However, it did not take too long for the Government to recognize that the trucks were a vital cog in our all-out war effort, and restrictions were substantially relaxed." With the world situation as it is today, this must not again be tolerated.
The railroads have long transported automobiles and until 1958, they shipped all automobiles in boxcars. Automobiles shipped by rail in boxcars had to be dismantled before shipment, and all bumpers and accessories had to be removed in transit. Upon reaching the railhead, it took as many as six or more men and 6 to 8 hours to unload a boxcar and then reassemble the cars so they could be driven to the showroom. It was such a complicated procedure that many years ago the dealers wanted their cars to come directly to them. They started what is commonly called dealer-drive or owner-drive, and after the invention of tractor-trailer combinations, cars were shipped to the dealer by this latter method because of the better service rendered. Until 1958, truck-trailer shipped more cars than the rail ever did, even from the onset of automobile production.
Trucking companies cannot compete with the railroads' rate-cutting prices. This is resulting in loss of jobs for the truckaway driver, who has made a large investment in his small business. Consequently, he suffers a great monetary loss and perhaps loses his home and car, due to the fact he has had to mortgage everything when he started into the trucking business. Very often the age of the driver prevents him from finding other employment, and he has no other recourse than to accept relief.
It is our opinion the Interstate Commerce Commission does not give much thought to this situation or they would take steps to remedy the unfair pirating of the trucking industry business.
The driver-owner is being forced into a squeeze play. The companies are pushing for a rate reduction, and the railroads are forcing our men into unemployment. If we agree to a rate reduction, the only one to benefit will be the car manufacturer, who in reality is not sharing the savings with the consumer. Since July 1, 1961, when this Congress passed President Kennedy's highway bill, our highway use tax was doubled. Thus, our tax burden is substantially increased, and at the same time, driver-owner employment is steadily decreasing.
We are enclosing for your information the three different terminals' requests for rate reduction. This will mean that instead of being paid by the weight of the load hauled (a heavier weight causes more wear to the equipment), there will be a standard weight price. One will be for under 3,150 pounds and one for over 3,150 pounds.
On the one hand, if we take a rate cut, the companies contend they won't lay off men because we will be able to compete with the railroads. On the other hand, what assurance would we have that the automobile manufacturer will utilize the truck-trailer method of transportation.
We are in a precarious position. In the Arco report on page 2 it states: "If something should happen to change the competitive rate situation, we shall immediately take steps to make an adjustment upward at the earliest possible moment.” However, we have no assurance we will be allowed to raise our rates. As the situation is at present, it is hard to keep up with the mounting maintenance bills on the trucks. To take a further cut is suicide. As things stand, either way we lose. Our only hope lies in bill S. 1197 and its immediate passage.
KENOSHA, Wis., June 27, 1961. To All KAT Drivers, Kenosha Terminal:
The motor carriers transporting automobiles from Kenosha and American Motors, are all under a continuing barrage of proposals from various railroads for the bandling of automobiles in multilevel rail cars to points that are still
receiving their shipments by truck. There is now almost no part of the country that is exempt from these efforts.
As distances become shorter the savings that can be offered by multilevel rail cars grow less and less and we therefore have an opportunity to do something to combat this competition. Price is the only thing that has diverted this business to the railroads so if we can meet them ratewise we should be able to stop further diversion.
The time to act is before the business is lost. The way we can hold the business that now moves over the road is to review our rates, and the drivers and the company share in a reduction of revenue into the territories where we have to do so. What the carriers at Kenosha propose is to adjust rates into all territories except the close-in States of Illinois, Indiana, Iowa, Michigan, Minnesota, Ohio, and Wisconsin. Six-car rates will be published to the East, where they have not been published heretofore. We feel that rate reductions to be accomplished by publication of the six-car rates in the East, and reduction of present six-car rates in certain other territory, will stop further diversion of traffic from the motor carriers.
KAT will convert or build a sufficient amount of equipment to handle six-ear loads to the territory affected. These will be designed to be used with the same type of power units now in the fleet and so the trailers can be loaded and unloaded by one man with reasonable ease and speed. Even with the proposed rate reduction the adding of a sixth car to the truckload will result in a substantial increase in revenue per mile for the driver-owner.
A few comparisons of present rates and truckload revenues against the proposed rates and revenues are listed as follows:
1 On average weight of 5 at 2,905 pounds each, 14,525 pounds per truckload.
You will see that though the proposed six-car rates are lower than present rates, the conversion to six-car equipment will produce more revenue per truckload-mile than the present five-car rates. Also, the new five-car rates will be in some cases slightly higher than present five-car rates, and in other instances slightly lower. This comes about by application of the rate formula, and the proposed changeover from rates per hundredweight to rates in dollars and cents per auto.
Along with this action on rates we recommend that the drivers' wage rates be reduced. In KAT's operations this is more a technical thing and will merely mean that driver-owners will receive smaller checks in wages leaving a cortespondingly greater portion of earned revenues to be credited to the operating accounts. The benefit to the driver-owner here would be that a smaller amount of his earnings would be assigned to wages subject to withholding of income taxes. For the company there would be some saving of taxes and premiums paid on payrolls. We suggest that a wage scale be worked out that would hold present wages on all distances to 500 miles, and put into effect the following flat rates and mileage rate beyond 500 miles, this to apply to six-ear operations and with five-car rates to remain as they are with the six-car rates as maximum:
Viles 501 to 520.
$101.90 521 to 540
16.70 541 to 560_
105.30 561 to 580_
106 70 581 to 600---
10000 Over 600 miles, 18 cents per loaded-mile. These rates to include all cost of living increases to date, and to be computed on noncumulative basis
These wage rates would apply only on traffic originating in Kenosha. No other business is affected by this proposal at this time.
A ballot for the purpose of voting on these two questions is appended hereto. Each qualified employee member of the Kenosha local is requested to complete the ballot and put it in the locked box provided for this purpose at the checkout window. The ballots do not require signatures. All ballots should be in not later than July 8, 1961. Check off your name on the list as you deposit your ballot. Very truly yours,
KENOSHA AUTO TRANSPORT CORP.
SPEEDWAY TRANSPORTS, INC. A general rate revision is under consideration by the four Kenosha carriers for the purpose of making rail service less attractive to American Motors. As you know, truck service has been supplanted by rail service to the Southeast and to most east and west coast points. Other rail proposals covering practically all hauls over 500 miles are now under consideration, with proposed savings per car of $10 and up.
To meet this competition as closely as possible, we believe our rates should be changed as follows:
1. Make all rates in dollars per car, instead of cents per hundred, and cut the cost differential between light and heavy cars to a flat $3.
2. Revise six-car rates to a realistic cost basis of $60 per load plus 60 cents per mile.
3. Revise five-car rates to a basis of 10 percent above the new six-car rates.
In our territory, these changes will generally produce increases in five-car revenue up to 500 miles, and hold five-car revenue close to present levels on longer hauls.
The new six-car rates will be lower than at present by amounts ranging up to $3 per car for shorter hauls, and averaging $6 to $8 per car lower on longer hauls.
The attached tables show examples of present and proposed changes to representative points and revenues per mile which will be produced under these changes.
We also believe that a cut in drivers wages is justified under these reduced rates. We propose no change in present contract wages up to 500 miles, but ask your approval of the following wage scales for longer hauls:
Miles 500 to 520.--
$101. 90 521 to 540.
103. 70 541 to 560-----
105. 30 561 to 580.
106.70 581 to 600.
108.00 601 and over, per mile.
60.20 64.00 69.50 69. 50 74.00 79. 20 84. 30 91. 70 100.80 108.80
48.40 49. 30 52.70 58.00 60. 70 66. 20 70. 40 76.50 76.50 81. 40 87. 20
92.70 100.90 110. 90 119. 70 124.70
53. 36 58.00 70.76 68.34 82.07 74.82 87.87 89.32 96. 86 103. 82 111.07 119. 48 125. 86
Proposed rates [6-car load equals $10 per car and 10 cents per mile; 5-car load equals $11 per car plus 11 cents per mile)
Proposals are being made to American Motors by the railroads for multilevel car service to almost all points that are over 500 miles from Kenosha. The rates that they are proposing are all less than our present truck rates. The savings are such that American Motors cannot afford to turn them down. When these proposals are accepted by the shipper-which will most likely be near the start of the 1962 model year production-we expect to lose approximately two-thirds of our traffic, and two-thirds of our drivers will be out of jobs.
Remember that if we lose the eastern business we will no longer bare equipment in the East for the return movement of foreign car traffic.
We all know what has happened at other shipping points when this type of competition has come into the picture. Don't let it happen in Kenoaba We must act before this business is lost. After that-it is too late to set it back. These jobs can be saved if we act now. Here is how we can save tbes:
(1) You and the company sharing in a reduction of revenue, br filing redo ed rates to meet these railroad proposals into all territories except Michigan Obia Indiana, Illinois, Iowa, Wisconsin, and Minnesota.
(2) With a reduction in rates, it will also be necessary to make an adjasto in wages for all trips of over 500 miles.
The following points are typical of the reductions in rerence that will be required:
There may be some slight deviations in the above to certain points where it is ecessary to meet railroad rates.
The wage adjustment that will be necessary in order to correspond with the reuction in rates is as follows: p to 500 miles.--1 to 520 miles-----------
$98. 75 21 to 540 miles.--
100.75 11 to 560 miles--
102. 75 11 to 580 miles..
104. 75 31 to 600 miles--
106. 75 11 miles and over-
(o) 1 No change. 2 18 cents per mile, noncumulative.
This proposal applies to Kenosha traffic only. There are no changes contemated on any other traffic. If something should happen to change the competitive rate situation, we shall imediately take steps to make an adjustment upward at the earliest possible oment. The following is an example of how these changes will affect the brokers :
TATEMENT OF MILTON E. NEELY, EXECUTIVE VICE PRESIDENT, OMAHA GRAIN
EXCHANGE, OMAHA, NEBR.
OMAHA GRAIN EXCHANGE,
Omaha, Nebr., August 14, 1961. n. WARREN G. MAGNUSON, airman, Senate Interstate Commerce Commission, ishington, D.C. Ir. Chairman, my name is Milton E. Neely. My occupation is that of 'cutive vice president of the Omaha Grain Exchange, Omaha, Nebr. The Omaha Grain Exchange, organized in 1903, is a corporation duly organd according to the rules of the State of Nebraska with its principal offices 728 Grain Exchange Building, Omaha, Nebr. It has for its purposes, among er things, the establishment and maintenance by carriers of just, reasonable, i equitable freight rates; rules and regulations on grain, grain products, | related items, and there are comprised among the exchange members indiuals, firms, and corporations engaged in the business of buying, selling, shipg, processing, storing, and otherwise handling of the above commodities in h intrastate and interstate commerce.? 'he Omaha market is one of the large primary grain markets of the United tes to which the surpluses of grains produced in this trade territory are
See app. A for list of members.