The BIG Picture: Industry Jumping by Wealthy Capitalists
Scattered along the perimeter of the Amazon rainforest are cattle farming communities. Over the decades the Amazon rainforest has gotten smaller and smaller as land is demolished to provide grazing for said cattle. The cattle move to a new piece of property, destroy it by consuming anything of value and leaving it unable to rebound for a significant amount of time, and then simply repeat the process on a new piece of property next door.
This manner of consuming and controlling all that there is in a portion of land and then leaving it demolished only to move on to the next piece of land represents the industry jumping by wealthy capitalist over the last 100 years.
Capitalists behind the railroad industry maintained their profits by targeting whichever industry was the next up-and-comer, and that industry wasn’t always railroads.
After the railroads were used to dominate and subjugate the trucking industry, from 1935 onward railroads were free to prosper.
But this prosperity came to an end around the 1950s.
U.S. Census Data from 1891 through 1957 paints a clear picture of railroad income and expenses. In spite of a small dip during the Great Depression, things continued to look up with an overall increase in operating revenue and net income, often aided by new bankruptcy law measures to provide money to railroads to purchase safety equipment, meet their local and state tax obligations, and more.
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The Fall of Rome
However, as 1957 came to a close and the sixties were thrust upon the industry, net income began to drop. Railroads were using “side-stepping” techniques to stay afloat, such as deferring maintenance, accumulating, in the case of the Central Railroad of New York, a small but important Commuter Carrier, $500,000 each month of costs. Maintenance typically represented one-third of the railroads operating revenue so maintenance skimping meant no new rails, ties, or ballasts but better figures on the books.
These types of savings cushioned the railroads during the 1958 decline but they could not stop what was coming.
20 of the 37 large Eastern railroad systems went into the red by more than $86,000,000 in the first six months of the year. The Pennsylvania Railroad, the number one Railroad in the industry accounted for over $25,000,000 of this collective deficit and the acting president of the Pennsylvania Railroad, James M. Symes was already reporting another $5,000,000 for July of 1957.
President of New York Central, the second largest railroad, Alfred E. Perlman predicted July of 1957 to be the worst yet for railroad debt.
The New York, New Haven, and Hartford Railroad was reporting losses of $4,900,000 at the start of 1958 and expected another $1,000,000 just in July of that same year.
The Boston and Maine Railroad already noted a $3,453,528 deficit for the first half of 1958 and only had 15 months left to repay $47,000,000 in mortgage bonds.
In August of 1958 rail bankruptcy was considered a national threat and aid legislation was proposed to help this decline, as it had so often helped in decades prior. For 4 months, railroad leaders spoke before Congress testifying of the dangers of a fallen railroad industry.
The result?
Calls for legislation, cost-cutting, subsidies, or simply more traffic on the railroads.
A new Transportation Act which authorized the government to guarantee 15-year commercial loans up to $500,000,000 to the railroad industry to offset the costs of equipment and maintenance.
It wasn’t enough.
Railroads were still showing 22% below the 1957 figures. Perlman said he did not expect the industry woes to resolve until at least the end of the decade, “I see no comeback right now.”
Some rail leaders, however, maintained hope that by 1959, things would resolve. This wasn’t the case. By the start of 1959, railways were facing bankruptcy.
Backing a New Horse
Between 1960 and 1970, railroad companies started to file for bankruptcy. The New Haven railroad filed for reorganization under the Federal Bankruptcy Act in July of 1961, marking the turning point for the railroad industry. President of the railroad, George Alpert stated in a news conference, “Our battle to save the New Haven railroad from bankruptcy has been lost.”
At the same time remarks were made criticizing the government for no longer providing the same fiduciary support to the railroad industry as it had done in decades prior.
No longer paying lobbyists to encourage Congressional decisions in favor of the railroads, the industry began to collapse as wealthy capitalists profiting from railroad security and opulence pivoted their influence to the next piece of land, as it were, the next industry.
Now they backed manufacturers, distributors, and retailers to secure their interests.
Still in control of the Interstate Commerce Commission, wealthy capitalists were able to shift legal support toward shippers for the next 45 years, using the same tactics and phrases. Now it was no longer the railroads but the shippers who were “in the best interest of the people” and best for the national economy. The Interstate Commerce Commission in 1963 now focused on aid for shippers, noting that shortages for shippers.
Surcharges were suddenly postponed for the industry. So prevalent was the aid invested in shippers that it vexed international counterparts. President Johnson voted in favor of new maritime shipping enterprises to bolster the industry.
By 1966, the Interstate Commerce Commission was helping shippers with legal orders to aid equipment shortages. The following year, forums held by the Shippers Conference of Greater New York discussed how containerization could cut domestic transportation costs for shippers.
The same lobbyists were sent to Washington to use the Motor Carrier Act as a way to drive transportation costs down so that they could profit as other companies struggled to pay higher prices. Overall, wealthy capitalists jumped from the railroads into the larger shippers—manufacturers, distributors, and retailers. This form of industry jumping was not a new phenomenon, and represented one of the many rules in an antiquated playbook by which they operate.
Why is No One Talking About the Elephant in Long Haul Trucking?
Long Haul Trucking is a Virtual Mountain of Gold Just Waiting to be Mined.
What makes the proverbial mining of gold in the trucking industry so interesting is that the mountain is owned by shipping companies. The more figurative gold trucking entrepreneurs take, the less gold the shipping companies keep. It’s a zero-sum game. And because of that, the elephant in this industry is a creation of the larger shippers to impede the productivity of trucking entrepreneurs to mine gold, so to speak.
Not removing the elephant is a monumental mistake by trucking entrepreneurs. The cost is hundreds of billions of dollars in forfeited wealth, since 1980.
Let’s talk about the elephant.
It’s the reason why larger shippers have carte blanche when it comes to setting the terms of service i.e., unreasonable delays in loading and unloading; the irony of charging penalty fees for not being on-time; and nominal detention pay, at best, or nothing at all.
It’s the reason why the broker population is so prolific and why they almost always kowtow to the larger shippers—manufacturers, distributors, and retailers.
It’s the reason why freight prices and rates will never reach the level you want them. It’s the reason why your only real growth comes from M&A, which is extraordinarily risky and expensive, especially now.
And it’s a BIG reason why your driver turnover is so high and retention so low. Let’s be real, IF more than half of your employees quit every year, you have a systemic problem!
But most of all, the elephant is the reason why your net earnings last year was only $400 million and not three times more! I’m not kidding—the elephant is a wealth-eater, and it has got to go!
What is the Elephant? And How Did It Come to Be?
The elephant is an oversaturated market.
That means there are too many for-hire truck owners—about 415,000 too many. They compete for full truckload freight and nothing they do is healthy for LHTDs, other truck owners, or the industry as a whole.
Let’s visit the forgotten history of American trucking to understand why the elephant came to be.
Believe it or not, wealthy global capitalists declared war on trucking companies in 1935. They were heavily invested in the railroad industry and were outraged when the railroad began losing business to trucking companies in the late 1920s. The response was a declaration of war. They paid experts and academics to influence politicians—ensuring Acts of Congress were drafted to their advantage.
These wealthy global capitalists used Acts of Congress as strategic weapons.
The Motor Carrier Act of 1935 outlawed competition, supressed growth, and heavily affected the income of trucking companies while benefiting the railroad companies. The act further constrained truck owners by forcing them to fix prices, in blatant violation of antitrust laws. Having forced trucking companies into operating illegally, the Reed-Bulwinkle Act of 1948 backtracked by simply exempting freight carriers from prosecution while leaving the other constraints intact. Truck owners suffered yet another income blow when the Motor Carrier Act 1980 allowed excessive competition, which achieved the goal of flooding the market [thus forcing a change in market structure from something resembling an Oligopoly to Perfect Competition] with unsophisticated trucking entrepreneurs, lowering the rates of the industry overall to the great financial advantage of the larger shippers.
The Motor Carrier Act of 1980 is still devastating trucking companies in 2021.
It created a highly competitive environment which allowed wealthy capitalists to maneuver into a position where the market would set prices. Whereas the 1935 act gave the power to set prices to the government, the 1980 amendment put the power firmly in the hands of the market—larger shippers. The scheme was so masterfully executed, that trucking companies didn’t even realize that there was an option to take back their only power [to set the price] and once again control their own industry.
Is it Even Possible to Remove the Elephant? What Does “Remove the Elephant” Actually Entail?
Anyone who understands that too many truck owners—the elephant—is the root cause of every complex problem that plagues long haul trucking today, also understands that you cannot turn back the clock. This is true, which explains why no one is talking about the elephant.
But what those same people don’t understand is that the destructive effects of the Motor Carrier Act of 1980 can actually be reversed, so much so that the end result would create an industry operating as though the act of 1980 was actually revoked, and every change that followed it: in effect, restored to its original form.
That means a mass exodus of hundreds of thousands of truck owners, trucking companies, and brokers too, over a timespan of about 20 years. It also means a forced shift in market structure from where it is today—Perfect Competition—back to something that every trucking company deserves: an Oligopoly.
The larger shippers will begin to panic as they watch the larger trucking companies grow organically as they take-up the freight lost by the smaller departing companies. This will trigger a massive reaction from crony capitalists, who will respond by sending millions of dollars in political contributions to lobby groups who will also join the fight to find ways to stop trucking entrepreneurs from removing the elephant.
It sounds far-fetched or perhaps even impossible. But it’s really not. Not when you consider the fact that all that will transact is the reverse of what happened 40 years earlier i.e., post deregulation. The only difference is that the transformation is being directed by trucking entrepreneurs rather than wealthy global capitalists and corrupt politicians.
What Would Change IF the Elephant was Successfully Removed? Who Stands to Benefit Most?
The face and landscape of the trucking industry would never be the same.
The top trucking companies would each own upwards of 80,000 to 100,000 trucks. Their business models would resemble a highly efficient and productive UPS or FEDEX enterprise. Independent owner-operators would be living the dream and driving for the passion, while those who get out, will do it for the money on the other end. Long haul truck drivers would be highly skilled and seasoned professionals, and embrace the many opportunities to advance during their career. But best of all, they will retire debt free and rich in under 12 years.
You would see conventional trucks, alternative energy trucks, and driverless trucks all fully integrated into a state-of-the-art long haul trucking ecosystem with blockchain and geospatial management technologies all producing profit for every LHTD and trucking company.
You would see the Great Wall of Freight Brokers dismantled and replaced with a revolutionary new infrastructure with charging stations, city and city-limit hubways, new and highly-efficient dedicated lanes, one robust end-to-end logistics solution, fueling centers, healthy eating for LHTDs, interstate transfer plazas that are purpose-built for driverless trucks, medical centers for LHTDs and their friends and family, and certified training centers.
Would you see consumer prices across the board increase? Maybe. Or maybe the vanishing revenue to the massive freight broker machine would absorb the fundamental change.
Those who will stand to benefit most from this change are LHTDs and the top trucking companies.
What Enables Trucking Entrepreneurs to Remove the Elephant? Moreover, What Would Cause the Mass Exodus of Hundreds of Thousands of Truck Owners and Trucking Companies?
If you remember, wealthy capitalists used the Motor Carrier Act of 1980 as their weapon of choice to flood the market with unsophisticated trucking entrepreneurs and force an all-important change in market structure, from something that resembled an Oligopoly to what we have today, which is Perfect Competition.
Today, our weapon of choice is a revolutionary new retirement plan for LHTDs. It will permanently end the driver shortage in 90 days, but more than that, it will force another major shift in market structure from where it is today—Perfect Competition—back to something that every trucking company deserves: an Oligopoly.
The name of this retirement plan is TruckonomicsTM.
As the premier retirement plan, Truckonomics is offering LHTDs the one thing that they want more than anything: the option to get out of their truck… with a passive income that keeps them out of their truck permanently.
Every trucking company, large and small, has a fatal vulnerability that has never been tested. That vulnerability is disloyal drivers. IF your competitor can give your drivers the one thing that they want more than anything else in the world, they will abandon your company in a heartbeat!
Truckonomics was designed to give LHTDs that one thing.
Truckonomics is offering LHTDs the chance to:
- Retire from driving
- Own their own home debt free and clear
- Live debt free
- Earn a passive income [from a fleet on income-producing trucks] that meets their every need
- Have at least six months worth of emergency money, available at any time
- Accumulate six figures in retirement savings
All six achievements to be realized in under 12 years.
As a virtual weapon, Truckonomics will be used to force trucking companies out of business and into bankruptcy by exploiting their single-largest vulnerability—disloyal truck drivers. It sounds brutal, and for the owners of those companies, it might be. But for their drivers and support personnel, it will be an enormous step up to a future that has never looked brighter.
Our approach is to offer Truckonomics to LHTDs exclusively through a network of select trucking companies. That means, any LHTD who chooses to opt-in to the Truckonomics retirement plan must be first actively employed or sponsored by a trucking company in our network.
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Moving Ahead for Progress in the 21st Century Act
This bill further governed United States federal surface transportation spending, reducing government spending by ⅔, enforcing environmental policies to which the saturated market must adhere, and creating a national freight policy.
Transportation Equity Act of 2005
A funding and authorization bill, this continued regional transportation plans with federal spending designed to switch all state transportation programs to the metric system, promote specific management of transportation, force increased options (competition) for freight and in so doing, continue to saturate an already oversaturated market structure.
Transportation Equity Act for the 21st Century
Another program for federal surface transportation programs for highways, this act also provided additional programs to control competing trucking companies under the auspices of enacting highway safety.
ICC Termination Act of 1995
No longer needed to regulate the industry, this act abolished the Interstate Commerce Commission and replaced it with the Surface Transportation Board, in favor of continued deregulation and market saturation to the point that the trucking industry remained untenable.