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that are made by the people who hold the rights are justified and feel they get a return for it. I take it, you people do not feel that that's correct; is that right?
Mr. FREYMILLER. That's correct.
Mr. BEDELL. You feel that if you were operating independently without having to lease your equipment
Mr. FREYMILLER. An example of that is there are a lot of truck brokers in the State of California who make a large profit on 8 percent on gross of hauling exempt commodities from California to the Midwest. Most of the regulated carriers are charging 15 percent on the return, on the exempt. Then they are getting 25 percent on the westbound loads.
Mr. BEDELL. You believe that you would be able to get these loads of meat that you are carrying as an independent if you did have certification; is that correct?
Mr. FREYMILLER. That's 100 percent correct. Because the packinghouses are calling our dispatcher every day.
Mr. BEDELL. Do you believe, Mr. Scandridge, if you could get work-if it was legal for you to do so and if you were certificated, that you could get work as an independent without having to pay this commission?
Mr. SCANDRIDGE. Absolutely. I have people coming to me all the time and I have to turn them down.
Mr. HUNGATE. Mr Jensen, do you have a question?
Mr. JENSEN. Yes. I notice that Iowa is having its own little feud between State officials and the State legislature regarding the truck regulations, at least on length. You spoke of truck regulations, Ms. Fitzgerald.
Ms. FITZGERALD. Right.
Mr. JENSEN. I was just wondering how this ruling of Wednesday or Thursday_limiting truck lengths to 60 feet will affect independent truckers. Is it going to affect your group particularly?
Ms. FITZGERALD. I would say no. The thing that affects the independent truckers is the fact that the Iowa carrier can prorate into the West at a greater weight and operate at a greater rate, 78,000 pounds and 80,000 pounds and a 60-foot length.
But when he comes back to Nebraska and gets to the Missouri River, he doesn't dare come back into his home State because here he is restricted to a 55-foot length and he is restricted to 73,280 pounds.
Now, the independent trucker in Iowa and in the Midwest will not be affected by the 65-foot double-bottom deal that is going on in Iowa presently. But they are affected by the fact that in Iowa they are facing a hopeless picture of ever getting an increased weight or an increased length.
It's their feeling that if Congress can tell the States, "You will go 55 miles an hour or you do not get certain Federal funds," but they could also tell the States, "Come on now. Let's have uniform weights and sizes."
It's a little bit ridiculous that the carrier can run legal to the Western States and then get back into their own home State and they must either unload or run the risk of being picked up for being overweight.
I have had the carriers tell me that if they had the opportunity to haul at uniform weights and sizes, that that would help offset the increased costs of fuel and increased costs of insurance.
Mr. JENSEN. This length problem in Iowa is interesting. We have heard the request before that Congress ought to do something about weight and length limits on trucks under the same rationale as the 55-mile speed limit. If Congress did step in and, say, make it uniform throughout the country, it would be my opinion that it would only apply to the interstate highway system. Would that be a benefit
Ms. FITZGERALD. Yes, it would.
Mr. JENSEN [continuing.] to the truckers even though it would involve only the Interstate Highway System and not the State highway? MS. FITZGERALD. Yes, it would because the Iowa truckers are not just concerned about the truckers in Iowa. They are concerned about truckers nationwide.
If it will help the carriers who are traveling from the Western States into the Chicago market, who will be coming through Iowa on the Interstate, yes, they would be for the increased length.
I just want to say one thing. The thing that is intriguing to me, as reported in the Des Moines Register, when they had the hearings, the chairman of the transportation committee or commission admitted it's a political issue in Iowa signified by the double bottoms. Any truck issue is a political issue.
The trucking industry shouldn't be a whipping boy for the politician.
Mr. JENSEN. I have no further questions, Mr. Chairman.
Mr. HUNGATE. Thank you, Mr. Jensen. Ms. Fitzgerald, thank you for your statement of testimony. You come recommended as one of the leading authorities on some of these problems in the Nation. I see why you are.
Ms. FITZGERALD. Thank you.
Mr. HUNGATE. You have been very helpful.
Mr. Freymiller, I see the statements that some of these regulated carriers—I mean, they don't own any trucks or trailers at all or anything like that.
Mr. FREYMILLER. We have a large regulated carrier in the State of Wisconsin that is running to the west coast. He is operating 250-plus units. He does not own one tractor. He does not own one trailer.
He does not own one gallon of diesel fuel. He does not own one air wrench or one bolt.
All he has got is an office full of pretty girls in short skirts and that's it. [Laughter.]
Mr. HUNGATE. You now have reached a subject on which Congress is an authority. [Laughter.] We will leave the girls out of it. What arguments are made, if any? And I ask you, Ms. Fitzgerald, why that situation should persist. I mean, do they have some way they argue that that has a benefit or do you know of any?
Ms. FITZGERALD. The big argument and what the regulated carriers say, if you have deregulation-and we are not for deregulation as such. We are for reregulation because the independent believes that you should have insurance requirements and safety requirements.
But the big argument is, if you do deregulate, the communities won't get service. Well, for the most part, the regulated carrier who doesn't even own a piece of equipment, what service could he give now if he didn't have the independent to call on.
Mr. HUNGATE. I am just wondering, on the face of it, it seems an outrageous situation that somebody has no equipment, no anything, and yet they are in business. I am just trying to imagine what could justify continuing that course of events.
I appreciate your statement, Mr. Freymiller, because you put flesh on bones here so we can see these problems. From testimony we have heard earlier in Washington, we have heard it down as low as 50 percent; 82 is probably as high as I recall having heard. Of course, you have a lot of equipment that you lease out.
Let me ask you, Mr. Grell, this is your prepared statement here? Mr. GRELL. Yes, it is.
Mr. HUNGATE. Without objection we will make it part of the record because of our time restraints.
Mr. GRELL. That would be fine.
[Mr. Grell's prepared statement follows:]
PREPARED STATEMENT OF GARY GRELL, VICE PRESIDENT OF IOWA DIVISION, INDEPENDENT TRUCKERS ASSOCIATION
My name is Gary Grell, and I live in Donahue, Iowa. I am Vice President of the Iowa Division of the Independent Truckers Association. It seems that I have been involved in trucking all my life. My father was one of the first interstate livestock haulers from Iowa into the Chicago market; and I used to ride with him during school vacations. I am currently under permanent lease to a private manufacturer.
Transport Topics refers to the problems of the independent truckers as "gripes"-so my biggest "gripe" is the lack of uniformity in weights and sizes. When legislation was passed by Congress and signed by the President of the United States to increase weights to 80,000 lbs. and lengths to 60 feet, it was not mandatory for each State to adopt these standards. The legislation was designed to help offset the rising cost of fuel and to minimize rate increases. But this is actually what is taking place.
Let us assume that we are taking a load of steel from Shelby, Ohio to Lewis, Kansas. Ohio has accepted the 80,000 lb. limitation. Kansas also permits this heavier weight. The average empty tractor-trailer weighs approximately 27,000 lbs. and can haul a 53,000 lb. payload. The rate on this load of steel between Shelby, Ohio and Lewis, Kansas is $2.40 per hundredweight or $1,272.00 on a 53,000 lb. payload. But between Ohio and Kansas are the States of Indiana, Illinois, and Missouri. These three states do not permit 80,000 lb. loads. The legal limit in each of those states is 73,280 lbs. Therefore the payload must be cut back to 46,720 lbs. with a resultant drop in revenue of $150.72. Assuming the carrier makes a round trip weekly there is a loss of revenue in the amount of $15,674.88. This presents a true picture of what I face. Maybe fifteen thousand dollars doesn't seem like a lot of money—but it is to me and my family. I feel that Congress has the power-and the duty-to make uniform weights and sizes mandatory.
Monthly Fuel Costs from Jaw: 1, 1973 to Dec 31, 1975.
Mr. HUNGATE. Let me ask you, Mr. Scandridge, where is Victor, Iowa?
Mr. SCANDRIDGE. East of Des Moines about 75 miles on the interstate. Right on the interstate.
Mr. HUNGATE. How many States have you operated in?
Mr. SCANDRIDGE. Right now I am covering 22.
Mr. FREYMILLER. I am covering 37.
Mr. GRELL. About 11.
Mr. HUNGATE. I was just wondering, now, with your addressing when you talk about the forms and things, Ms. Fitzgerald, it would be about someone who operated in 50. But I gather that it's not uncommon to operate in 30?
Ms. FITZGERALD. No, it isn't.
Mr. HUNGATE. Which would be a bulk of this paperwork. Now, when they deduct these charges from you, $3, and $12.50, and all that, what can you do or what do you do? Anything?
Mr. SCANDRIDGE. There is nothing you can do. Usually I will call them up and I will complain about it. And usually you don't know all this.
Just like the one load, I asked them, I said: "I had a bad experience on my last trip. What do you pay?"
They say: "We pay 73 percent and that's it. You're responsible for everything."
I said: "That's fine because I had one permit to run these States." I turned around here and they took out some $50.
Mr. HUNGATE. I gather from your statement that on the 50 cents, and the $1, and the $3, and the $12, it's not enough for you to have a very big fight about but it's a lot of money when it's all added together.
Mr. SCANDRIDGE. Well, that's it. These are three incidents that happened to one independent trucker.
Like I stated, on this one deal, it ended up $112.01.
Mr. HUNGATE. All those little items?
Mr. SCANDRIDGE. Yes.
Mr. HUNGATE. Even though you're not going to hire a lawyer to send him to court?
Mr. SCANDRIDGE. Right. There is nothing we can do about it.
Mr. HUNGATE. If you banded together, you would have an antitrust problem; wouldn't you?
Ms. FITZGERALD. That's right. Well, Jim did mention one problem. We have had independents coming in our office every day complaining that they have not even received their settlements.
You were fortunate that you were paid, but we have some who have never been paid and they have already had expenses in delivering the
Mr. FREYMILLER. I would like to emphasize on the 27 trucks, I have about $500,000 at my business because I am waiting for money.
Mr. HUNGATE. $500,000?
Mr. FREYMILLER. And 27 trucks. That's my receivables waiting for them to pay me.
Mr. BEDELL. Would that be greater or lesser, you believe, if you were billing directly to the people for whom you're hauling?
Mr. FREYMILLER. A lot less because the Interstate Commerce Commission says they have to pay within 7 days. But they don't say when the regulated carrier has to pay the independent.
Mr. HUNGATE. The concern I have is we are into all kinds of areas. We get into Federal Trade Commission, maybe, and the Interstate Commerce Commission, and antitrust ideas in your testimony. Some of our antitrust laws are well intended but they seem in some of these cases to be protecting the wrong fellow from where they started out.
The big man can go and do what he wants. And if two or three of you fellows fight back about these $3 charges, I suppose the Government would be after you?
Mr. FREYMILLER. I think, yes, it would. May I ask you one thing at this point, too. Another problem, like you say, may be the laws protecting the wrong guy. But these regulated carriers-now, I mean exempt commodity haulers, but they trip lease any type of products that I could haul as a backhaul and they make good under one way. 'They use the commodities I have to haul and use them for a backhaul. Mr. HUNGATE. Because they can haul unregulated commodities? Mr. FREYMILLER. Sure.
Mr. HUNGATE. Mr. Jensen, did you have a question?
Mr. JENSEN. Just one question on the $500,000 you have in receivables. How much of that would be over 1 week old?
Mr. FREYMILLER. There would be probably about 50 percent of that 50 days old.
Mr. HUNGATE. Mr. Lynch, would you have a question?
Mr. LYNCH. Just one question, Mr. Chairman. Most of the witnesses we have heard so far have been from the Eastern States and they have been telling us about the unloading racket which apparently exists every day. Now, is it as severe out here as it is in the East?
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