Trucks and Trucking

More stories

  • 150 Shares129 Views

    in Economy

    ‘No Jobs Available’: The Feast or Famine Careers of America’s Port Drivers.

    by

    Just before 4 o’clock on a Tuesday morning, the sky still black save for the reddish glow of the freeway, Marshawn Jackson rolls over in his bed at his home in Southern California and reaches for his iPhone.He clicks on an app used by truck drivers seeking assignments. The notification he absorbs is both familiar and disheartening: “No jobs available.”Mr. Jackson is paid per delivery. No work means no income. His day is already booked with two assignments, but the rest of his week is dead. Over the next 15 hours, he refreshes the app constantly, desperate to secure more jobs — an exercise in vigorous futility.He refreshes after he pulls his tractor-trailer into a nearby storage yard to pick up an empty shipping container, and again while he rolls down the freeway, toward the Port of Los Angeles — one hand on the wheel, one hand on his phone.He refreshes as he drops off the empty box, and a dozen more times while he waits for a crane to deposit another container on the chassis behind his rig, this one loaded with toys from factories in Asia. He refreshes while he fuels his truck.Each time, the same result.“You reach a point where you’re like, ‘Man, am I even making money?’” Mr. Jackson says. “Is it worth even getting up in the morning?”The sudden disappearance of work is an unexpected turn for Mr. Jackson, 37, and the rest of Southern California’s so-called dray operators — the drivers who transport shipping containers between the twin ports of Los Angeles and Long Beach and the sprawl of warehouses filling out the Inland Empire to the east.For much of the pandemic, as the worst public health crisis in a century tore at daily life, these drivers were inundated with work, even while they contended with excruciating delays at the ports. Americans sequestered in their homes filled bedrooms with office furniture and basements with exercise equipment, summoning record volumes of goods from factories in Asia. The flow overwhelmed the ports of Los Angeles and Long Beach, the gateway for roughly two-fifths of the nation’s imports.As dozens of ships sat at anchor miles off the coast, awaiting their chance to unload, dray operators like Mr. Jackson idled for hours on land before they could enter port gates. They waited hours more to pick up their containers, and yet again before they could drop them off at warehouses.These days, the lines are mostly gone, and loading and unloading goes smoothly. But the same truck drivers who endured the worst of the Great Supply Chain Disruption are now suffering another affliction as the docks reverts to a semblance of normalcy. The frenzied chaos that dominated the first years of the pandemic has been replaced by an uneasy stillness — not enough work.Like many truck drivers, Mr. Jackson works long hours.Brandon Pavan for The New York TimesHe checks his phone many times during the day to try to secure more jobs for his two employees and himself.Brandon Pavan for The New York TimesIncoming shipments are diminishing at Southern California’s two largest ports. This is partly because American demand for kitchen appliances, video game consoles and lawn furniture is finally waning. It also reflects how major retailers are bypassing Southern California, instead shipping to East Coast destinations like Savannah, Ga., to avoid potential upheaval as West Coast dockworkers face off with port managers over a new contract.Mr. Jackson’s journey through a maze of traffic-choked freeways exemplifies the bewildering, often-perilous road confronting tens of millions of workers in a global economy still grappling with the volatile effects of the pandemic along with soaring inflation.As central banks raise interest rates to choke off demand for goods and services in an effort to lower consumer prices, they are reducing income for legions of workers who are paid per assignment. The situation is especially fraught for the nation’s 75,000 dray operators and other foot soldiers of the supply chain.Dockworkers, who wield equipment to load and unload containers at ports, are protected by fierce and disciplined unions that have succeeded in commanding some of the higher wages in blue collar American life. Dray operators work primarily as independent contractors, buying their own fuel and insurance.Their status leaves them subject to constant shifts in economic fortune. In good times, like last year, dray operators command whatever the market must pay to keep them rolling. In lean times, they are guaranteed nothing.As he navigates five lanes of traffic on the way to the port, Mr. Jackson dons headphones to conduct a series of phone calls.More on CaliforniaBullet Train to Nowhere: Construction of the California high-speed rail system, America’s most ambitious infrastructure project, has become a multi-billion-dollar nightmare.A Piece of Black History Destroyed: Lincoln Heights — a historically Black community in a predominantly white, rural county in Northern California — endured for decades. Then came the Mill fire.Warehouse Moratorium: As warehouse construction balloons nationwide, residents in communities both rural and urban have pushed back. In California’s Inland Empire, the anger has turned to widespread action.He talks to his wife, sharing worries that they might not be able to close on their purchase of a newly built home. His income has fluctuated wildly in recent months. The mortgage company is demanding more documents, filling him with dread.He speaks with two men who drive a pair of trucks that he owns. He coordinates their schedules and helps them navigate unfamiliar shipping terminals. He frets that they may not bring in enough to cover the expenses on his other rigs.He passes billboards for beachfront homes in Baja, flights to Las Vegas, spa resorts. He wonders when he will be able to take his wife and 13-year-old daughter on a vacation.He contemplates the tenuous nature of American upward mobility, the forces tearing at the life he has constructed.“The way we’re living is hard times right now,” Mr. Jackson says. “You’ve still got to smile through it. You’ve still got to be positive. But, man, I’m dealing with a lot right now.”Container ships waited to enter the Port of Los Angeles during a large backlog last year.Erin Schaff/The New York Times‘Pray you can make it out.’Raised in South Central Los Angeles, Mr. Jackson says he embraced trucking as a form of liberation from a community he described as chronically short of good jobs and bedeviled by gang violence.“You get used to seeing things,” he says. “All you can do is pray you can make it out.”Growing up, he helped his grandmother with a hair care products business, packing boxes in a warehouse when he was only 10. But when the company failed in the aftermath of the long recession that began in 2007, Mr. Jackson sought a reliable way to support his partner and their then-infant daughter.A friend told him there were good jobs in long-haul trucking. He signed up for a training program arranged by Swift, a giant in the industry.He hopped the Greyhound to Phoenix for the three-week program, sharing a motel room full of scorpions with two other trainees. They practiced on aging rigs that lacked air conditioning despite summer heat reaching 117 degrees.He was soon earning $1,000 a week hauling trailers from a Dollar Store distribution center in Southern California to Phoenix and back.But as the routes grew longer, the strains on his family life intensified. He was hauling refrigerated trailers full of lettuce from the fields of central California to a distribution center in North Carolina. He was routinely away for two and three weeks at a stretch.When his daughter graduated from kindergarten in 2016, he pleaded with the company to schedule him to be home, just for that day. One dispatcher — a gruff, former Marine — mocked him.“This is what you signed up for,” he said.Mr. Jackson did not make it to the ceremony.“I felt like I was letting my whole family down,” he says. “It changed my whole outlook.”He drove back to California and turned in the keys on the truck he leased from the company. He used savings to buy a used rig and began picking up routes as an independent contractor, limiting his time away to no more than three days.Then he figured out how to sleep at home every night. He began working in and out of the port.He eventually bought the other trucks and took on the pair of drivers, paying them a share of the proceeds on the loads they deliver.“It was one of those things where you’ve got to take a risk,” he says. “Why wouldn’t I bet it all on myself? It was something I knew I could do.”He and his family moved into a rented apartment in the Inland Empire, east of Los Angeles, and then into a modest house they bought just off the freeway. They vacationed in Mexico and Hawaii.His daughter’s name, Bailey Jackson, is painted in white letters on the door of his rig. She is the reason he keeps rolling, he says. He takes her shopping — for clothes, for books.“That girl is always reading,” he says. “Some days, she’ll finish more than one book.”This year, he signed off on buying a four-bedroom home with space for a swimming pool in a quiet community carved into the desert in Riverside County.It was a five-minute drive from the yard where he parks his truck.It was a lifetime away from South Central Los Angeles.Dray operators like Mr. Jackson have to idle for hours on land before they can enter port gates.Brandon Pavan for The New York Times’We’ve got to survive.’Though the Inland Empire lies roughly 60 miles from the ports, its clusters of warehouses are an extension of the docks.Here, major retailers stash the bounty delivered from Asia via container ships. Distribution centers supply consumers across much of the American West.In the same way that massive slaughterhouses turned Chicago into a rail hub in the late 19th century, the Inland Empire has burgeoned into a dominant center of warehousing in the age of big box retail and e-commerce.At 5:43 a.m., the sun still a vague suggestion to the east, Mr. Jackson sits behind the wheel of his enormous blue Kenworth tractor. He guides it into a Shell station and climbs down to the pavement.Diesel is selling for $6.19 a gallon, an eye-popping number. He puts $100 in the tank, enough to get to Los Angeles to drop off the empty trailer he has picked up this morning from a warehouse for a home appliance company.Fifteen minutes later, as the sun glimmers through hazy skies, he is headed west on I-60.He wonders what the day will bring.A year ago, he could take his pick from scores of jobs at the Dray Alliance, the online platform where he secures assignments. Not anymore. Whenever a new job appears, he clicks immediately, knowing that dozens of other drivers are also keeping vigil on the site.The uncertainties of the trade are wearying. Three times in the past week, Mr. Jackson has wound up on so-called dry runs — journeys aborted because of a glitch. Sometimes, the paperwork is not in order. Other times, a pickup appointment has been made incorrectly. He heads home with a $100 fee from the shipper. It barely covers the cost of gas.Last year, when dozens of container ships were waiting their turns to unload, he sometimes sat parked in lines for as long as five hours to pick up and drop off, even as the Dray Alliance’s app steered him to jobs with the least congestion. He would grab his neck pillow and pass out in the front seat.Now, no app can redress a basic reduction in demand. Not only are jobs scarce, but compensation has fallen.Less than a year ago, Mr. Jackson was earning about $700 to haul a container from San Bernardino to the port of Los Angeles, a 70-mile journey that can take more than two hours when traffic is bad. This morning’s job brings $500, even though the price of fuel has increased.Trucks waiting to enter a terminal at the Port of Los Angeles in June.Stella Kalinina for The New York TimesStill, every job draws fierce interest, because drivers are stuck with bills.“They know we’ve got to keep working,” Mr. Jackson says. “That’s how they take advantage. We’ve got to survive.”At 7:20, a vivid sun gathering force, Mr. Jackson pulls into the container storage yard near the port, rumbling over bumpy pavement. He backs into a space between two other containers, steps out of the cab, and turns a crank handle to lower the landing gear on the chassis. Then he detaches the box.He quickly finds the empty container he is picking up. But he notices that the chassis below it is painted pale yellow — an indication that it is old. This could trigger an inspection.He drives to port, entering the gates of APM Terminals at 7:40. The terminal is controlled by Maersk, a Danish company that is one of the two largest container shipping operations on earth.The security guard waves him through. A few minutes later, a dockworker driving a top loader — a machine that lifts containers — motions for Mr. Jackson to pull up to an appointed space so he can pluck the box off the rig and add it to a stack.Mr. Jackson scans the app on his phone for his next destination: space E162, the letters painted white on the dock. He pulls in tight, his passenger-side mirror grazing the container to his right. A crane lifts a box off the stacks and deposits it onto his chassis. It lands with a thunderous boom.The morning is proceeding so smoothly that Mr. Jackson indulges visions of dropping the container, at a Mattel warehouse, with time enough to spare for a proper meal — his first of the day — before heading back to the port.But then a dockworker notices the old chassis. He diverts him to a special maintenance area. There, Mr. Jackson sits for more than an hour while a mechanic administers a repair.He pulls in to a truck stop in Long Beach, and adds another $400 worth of diesel to his tank.He walks across the lot, stepping between other tractor-trailers, on his way to the restroom — his first pit stop since dawn.One of his drivers calls to report that he has accepted an assignment from Dray Alliance to drop off an empty container at the port, and is now headed back to the Inland Empire, pulling nothing.Mr. Jackson is distressed. He had arranged for the driver to pick up a load at the port this evening. He should have waited to do both jobs on a single journey. Instead, he is burning gas on two round trips — at Mr. Jackson’s expense.“How does that cover the cost of me paying you?” Mr. Jackson asks. “The rates are down. It’s slow, bro’.”Mr. Jackson is an independent contractor who owns his truck and two others.Brandon Pavan for The New York Times‘I’m taking care of business.’At 11 in the morning, he is on the freeway again, headed back to the Inland Empire to drop off the container. He shovels a handful of popcorn into his mouth. Then he puts the bag on his console, and picks up his iPhone to refresh. No jobs.Fat clouds hang low over the Arrowhead Mountains as Mr. Jackson arrives at the Mattel warehouse just after noon. He drops the container, picks up an empty, and returns to the freeway, headed back to the port for the second half of his long day.Many truck drivers obsessively consume caffeine, perpetually fearful that they might otherwise descend into a dangerous state known as highway hypnosis.Mr. Jackson abstains. “I drink a lot of this,” he says, taking a swig from a bottle of Fiji water.To stay alert, he relies on the vibrations of his $6,000 sound system. He cranks up the dial on an old Isley Brothers classic, “Work to Do.” “I’m taking care of business, woman can’t you see. I’ve gotta make it for you, and gotta make it for me.”He rolls past a billboard for Fastevict.com, past tent cities full of homeless people, past self-storage units.He makes it to the port in time for a meal before his 3 p.m. pickup.He winds through the cracked streets of Long Beach, looking for a curb long enough to park a tractor-trailer. He finds a spot around the corner from the truck stop. He waits for an Uber Eats driver, who arrives bearing a Chipotle bowl — brown rice, chicken and avocado.He drops the container, picks up another, and parks again in Long Beach, taking a nap in the back in the cab while waiting for rush hour traffic to ease.At 6:30 in the evening, twilight settling over the parched land, he rolls toward home while again on the phone with his wife.The mortgage underwriter does not understand the division between Mr. Jackson’s personal finances and his business — a blurry line. The closing appears in danger. (He will eventually pull it off, though that will leave him staring at mortgage payments with diminished income.)Darkness fills his cab. Brake lights flicker ahead. He and his wife struggle to understand where their road leads.“People are like, ‘If you get through this point, you’ll be OK,’” Mr. Jackson says. “And I’m like, ‘How long is this point going to last?’”Major retailers are bypassing Southern California, instead shipping to East Coast destinations like Savannah, Ga., shown here, to avoid potential upheaval.Erin Schaff/The New York Times More

  • 75 Shares149 Views

    in Economy

    The Long Road to Driverless Trucks

    by

    Self-driving eighteen-wheelers are now on highways in states like California and Texas. But there are still human “safety drivers” behind the wheel. What will it take to get them out?This article is part of our series on the Future of Transportation, which is exploring innovations and challenges that affect how we move about the world.In March, a self-driving eighteen-wheeler spent more than five straight days hauling goods between Dallas and Atlanta. Running around the clock, it traveled more than 6,300 miles, making four round trips and delivering eight loads of freight.The result of a partnership between Kodiak Robotics, a self-driving start-up, and U.S. Xpress, a traditional trucking company, this five-day drive demonstrated the enormous potential of autonomous trucks. A traditional truck, whose lone driver must stop and rest each day, would need more than 10 days to deliver the same freight.But the drive also showed that the technology is not yet ready to realize its potential. Each day, Kodiak rotated a new team of specialists into the cab of its truck, so that someone could take control of the vehicle if anything went wrong. These “safety drivers” grabbed the wheel multiple times.Tech start-ups like Kodiak have spent years building and testing self-driving trucks, and companies across the trucking industry are keen to reap the benefits. At a time when the global supply chain is struggling to deliver goods as efficiently as businesses and consumers now demand, autonomous trucks could alleviate bottlenecks and reduce costs.Now comes the most difficult stretch in this quest to automate freight delivery: getting these trucks on the road without anyone behind the wheel.Companies like Kodiak know the technology is a long way from the moment trucks can drive anywhere on their own. So they are looking for ways to deploy self-driving trucks solely on highways, whose long, uninterrupted stretches are easier to navigate than city streets teeming with stop-and-go traffic.“Highways are a more structured environment,” said Alex Rodrigues, chief executive of the self-driving-truck start-up Embark. “You know where every car is supposed to be going. They’re in lanes. They’re headed in the same direction.”Restricting these trucks to the highway also plays to their strengths. “The biggest problems for long-haul truckers are fatigue, distraction and boredom,” Mr. Rodrigues explained on a recent afternoon as one of his company’s trucks cruised down a highway in Northern California. “Robots don’t have a problem with any of that.”It’s a sound strategy, but even this will require years of additional development.Part of the challenge is technical. Though self-driving trucks can handle most of what happens on a highway — merging into traffic from an on-ramp, changing lanes, slowing for cars stopped on the shoulder — companies are still working to ensure they can respond to less common situations, like a sudden three-car pileup.As he continued down the highway, Mr. Rodrigues said his company has yet to perfect what he calls evasive maneuvers. “If there is an accident in the road right in front of the vehicle,” he explained, “it has to stop itself quickly.” For this and other reasons, most companies do not plan on removing safety drivers from their trucks until at least 2024. In many states, they will need explicit approval from regulators to do so.But deploying these trucks is also a logistical challenge — one that will require significant changes across the trucking industry.In shuttling goods between Dallas and Atlanta, Kodiak’s truck did not drive into either city. It drove to spots just off the highway where it could unload its cargo and refuel before making the return trip. Then traditional trucks picked up the cargo and drove “the last mile” or final leg of the delivery.In order to deploy autonomous trucks on a large scale, companies must first build a network of these “transfer hubs.” With an eye toward this future, Kodiak recently inked a partnership with Pilot, a company that operates traditional truck stops across the country. Today, these are places where truck drivers can shower and rest and grab a bite to eat. The hope is that they can also serve as transfer hubs for driverless trucks.“The industry can’t afford to build this kind of infrastructure from scratch,” said Kodiak’s chief executive, Don Burnette. “We have to find ways of working with the existing infrastructure.”They must also consider the impact on truck drivers: They aim to make long-haul drivers obsolete, but they will need more drivers for the short haul.Executives like Mr. Burnette and Mr. Rodrigues believe that drivers will happily move from one job to the other. The turnover rate among long-haul drivers is roughly 95 percent, meaning the average company replaces nearly its entire work force each year. It is a stressful, monotonous job that keeps people away from home for days on end. If they switch to city driving, they can work shorter hours and stay close to home.But a recent study from researchers at Carnegie Mellon University and the University of Michigan questions whether the transition will be as smooth as many expect. Truck drivers are typically paid by the mile. A shift to shorter trips, the study says, could slash the number of miles traveled and reduce wages.Certainly, some drivers fear they cannot make as much money driving solely in cities. Others are loath to give up their time on the highway.“There are many drivers like me,” said Cannon Bryan, a 28-year-old long-haul trucker from Texas. “I wasn’t born in the city. I wasn’t raised in the city. I hate city driving. I enjoy picking up a load in Dallas and driving to Grand Rapids, Mich.”Building and deploying self-driving trucks is far from easy. And it is enormously expensive — on the order of hundreds of millions of dollars a year. TuSimple, a self-driving truck company, has faced concerns that the technology is unsafe after federal regulators revealed that one of its trucks had been involved in an accident. Aurora, a self-driving technology company with a particularly impressive pedigree, is facing challenging market conditions and has floated the possibility of a sale to big names like Apple or Microsoft, according to a report from Bloomberg News.If these companies can indeed get drivers out of their vehicles, this raises new questions. How will driverless trucks handle roadside inspections? How will they set up the reflective triangles that warn other motorists when a truck has pulled to the shoulder? How will they deal with blown tires and repairs?Eventually, the industry will also embrace electric trucks powered by battery rather than fossil fuel, and this will raise still more questions for autonomous trucking. Where and how will the batteries get recharged? Won’t this prevent self-driving trucks from running 24 hours a day, as the industry has promised?“There are so many issues that in reality are far more complex than they might seem on paper,” said Steve Viscelli, an economic and political sociologist at the University of Pennsylvania who specializes in trucking. “Though the developers and their partners are putting a lot of effort into thinking this through, many of the questions about what needs to change cannot yet be answered. We are going to have to see what reality looks like.”Some solutions will be technical, others logistical. The start-up Embark plans to build a roaming work force of “guardians” who will locate trucks when things go wrong and call for repairs as needed.The good news for the labor market is that this technology will create jobs even as it removes them. And though experts say that more jobs will ultimately be lost than gained, this will not happen soon. Long-haul truckers will have years to prepare for a new life. Any rollout will be gradual.“Just when you think this technology is almost here,” said Tom Schmitt, the chief executive of Forward Air, a trucking company that just started a test with Kodiak’s self-driving trucks, “it is still five years away.” More

  • 125 Shares199 Views

    in Economy

    Truckers’ Protests Over Labor Law Block Access to Oakland’s Port

    by

    For days, a convoy of truckers has blocked the roads that serve the Port of Oakland, crippling a major West Coast cargo hub already hampered by global supply chain disruptions.The protest is meant to send a message to Gov. Gavin Newsom: Keep the drivers clear of a California labor law that they say threatens their livelihood.The truckers, primarily independent owners and operators, are demonstrating in opposition to Assembly Bill 5, a law passed in 2019 that requires gig workers in several industries to be classified as employees with benefits, including minimum wage and overtime pay.Along with a coalition of trade groups, the truckers want Mr. Newsom to issue an executive order putting off the application of the 2019 law to their work and to bring labor and industry to the table to negotiate a path forward.A representative of Mr. Newsom said the state would “continue to partner with truckers and the ports to ensure the continued movement of goods to California’s residents and businesses, which is critical to all of us.”Smaller protests were organized last week at the twin ports of Los Angeles and Long Beach.In a statement, Danny Wan, executive director of the Port of Oakland, said he understood the displays of frustration. But he warned against more delays surrounding the ports, a vital link in a supply chain already hemorrhaging from Russia’s invasion of Ukraine and Covid-19 lockdowns in China.“Prolonged stoppage of port operations in California for any reason will damage all the businesses operating at the ports and cause California ports to further suffer market share losses to competing ports,” he said.When Mr. Newsom signed the measure into law, it received immediate rebukes from companies like Uber and Lyft, whose leaders argued that the law would change their businesses so severely that it might well destroy them.The state law codified a California Supreme Court ruling from 2018 that said, among other things, that people must be classified as employees if their work was a regular part of a company’s business.Both Uber and Lyft, along with DoorDash, quickly lobbied for a ballot measure that would allow gig economy companies to continue treating their drivers as independent contractors.California voters passed the measure, Proposition 22, in 2020, but last year a California Superior Court judge ruled that it was unconstitutional. Uber and Lyft quickly appealed and have been exempt from complying with Assembly Bill 5 while the court proceedings play out.But that wasn’t the case for the truckers. In June, the U.S. Supreme Court declined to hear a challenge by California truckers, who under the new law are viewed as employees of the trucking companies they do business with.Nearly 70,000 California truck drivers work as independent owners and operators, ferrying goods from ports to distribution warehouses. Trucking companies and the protesting drivers argue — as Uber and Lyft did — that if Assembly Bill 5 is applied to them, the drivers will have less flexibility in when and how they work.Proponents of the law say the companies could simply take the drivers on as full- or part-time employees and continue to offer them flexible schedules.A majority of port truckers in California are independent operators and do not work for a single company. A smaller number of drivers are unionized and are represented primarily by the Teamsters.Matt Schrap, chief executive of the Harbor Trucking Association, a trade group for transportation companies serving West Coast ports, said the “frustration is that there is no pathway for folks to have independence.”“That frustration is boiling over into action,” Mr. Schrap said.Lorena Gonzalez Fletcher, a former state lawmaker who was an architect of the labor bill, rejected the idea that applying the law to the trucking industry would be a disservice to drivers.“These truck companies have a business model that is misclassifying workers,” said Ms. Gonzalez Fletcher, who is about to take over as head of the California Labor Federation. “How they have been operating has been illegal.”The trucker protests come as the International Longshore and Warehouse Union is engaged in contract negotiations with the Pacific Maritime Association, representing the shipping terminals at 29 ports from San Diego to Seattle.Farless Dailey III, president of Local 10 of the longshore union, said that for their own safety, his members were not trying to get through the truck blockade.“They don’t get paid when they don’t get in,” he said. “But we’re not going to put our members in harm’s way to pass through the line of truckers.”Officials at the port said the largest marine terminal had been closed since Monday because of the protests. Three other smaller terminals have operated, but with a limited capacity.Christopher S. Tang, a distinguished professor at the University of California, Los Angeles, Anderson School of Management, who studies supply chains, said the shutdowns at the Port of Oakland should not — for now — cause major issues for consumers.“The impact will not be significant in the short term,” he said. “Many retailers have stockpiled inventory.”On Thursday, German Ochoa, a trucker who lives in Oakland, arrived at the port, as he had every day this week.As horns from semitrucks blared in the background, Mr. Ochoa said by phone that he was standing shoulder to shoulder with other truckers. Some held poster boards that read, “Take down AB 5!!!” and “AB 5 Has Got to Go!,” he said.“This is taking away my independence,” Mr. Ochoa said. “It’s my right to be an independent driver.”Noam Scheiber More

  • 125 Shares189 Views

    in Economy

    As Dockworkers Near Contract’s End, Many Others Have a Stake

    by

    LOS ANGELES — David Alvarado barreled south along the highway, staring through the windshield of his semi truck toward the towering cranes along the coastline.He had made the same 30-minute trek to the Port of Los Angeles twice that day; if things went well, he would make it twice more. Averaging four pickups and deliveries a day, Mr. Alvarado has learned, is what it takes to give his wife and three children a comfortable life.“This has been my life — it’s helped me support a family,” said Mr. Alvarado, who for 17 years has hauled cargo between warehouses across Southern California and the twin ports of Los Angeles and Long Beach, a global hub that handles 40 percent of the nation’s seaborne imports.He weathered the blow to his paycheck early in the pandemic when he was idling for six hours a day, waiting for cargo to be loaded off ships and onto his truck. Now the ports are bustling again, but there is a new source of anxiety: the imminent expiration of the union contract for dockworkers along the West Coast.If negotiations fail to head off a slowdown, a strike or a lockout, he said, “it will crush me financially.”The outcome will be crucial not only for the union dockworkers and port operators, but also for the ecosystem of workers surrounding the ports like Mr. Alvarado, and for a global supply chain reeling from coronavirus lockdowns and Russia’s invasion of Ukraine. Inflation’s surge to the highest rate in more than four decades is due, in part, to supply chain complications.The contract between the International Longshore and Warehouse Union, which represents 22,000 workers at 29 ports from San Diego to Seattle, and the Pacific Maritime Association, representing the shipping terminals, is set to expire on Friday. The union members primarily operate machinery like cranes and forklifts that move cargo containers on and off ships.In a statement this month, representatives of the two sides said that they didn’t expect a deal by the deadline but that they were dedicated to working toward an agreement.The negotiations have centered largely on whether to increase wages for the unionized workers, whose average salaries are in the low six figures, and expanding automation, such as using robots to move cargo containers, to speed up production, a priority for shipping companies.“It will crush me financially,” David Alvarado said of any work stoppage.Stella Kalinina for The New York TimesTrucks lined up to enter the Port of Los Angeles. Any slowdown, strike or lockout could further snarl the global supply chain.Stella Kalinina for The New York Times“Automation allows greater densification at existing port terminals, enabling greater cargo throughput and continued cargo growth over time,” Jim McKenna, the chief executive of the Pacific Maritime Association, said in a recent video statement on the negotiations.In an open letter posted on Facebook last month, the union president, Willie Adams, attacked moving toward automation, saying it would translate to lost jobs and prioritizes foreign profits over “what’s best for America.”The State of Jobs in the United StatesJob gains continue to maintain their impressive run, even as government policymakers took steps to cool the economy and ease inflation.May Jobs Report: U.S. employers added 390,000 jobs and the unemployment rate remained steady at 3.6 percent ​​in the fifth month of 2022.Downsides of a Hot Market: Students are forgoing degrees in favor of the attractive positions offered by employers desperate to hire. That could come back to haunt them.Slowing Down: Economists and policymakers are beginning to argue that what the economy needs right now is less hiring and less wage growth. Here’s why.Opportunities for Teenagers: Jobs for high school and college students are expected to be plentiful this summer, and a large market means better pay.“Automation,” Mr. Adams wrote, “poses a great national security risk as it places our ports at risk of being hacked as other automated ports have experienced.”As the negotiations, which began in early May, continue, record levels of cargo have arrived here.In May, the Port of Los Angeles had its third-busiest month ever, handling nearly one million shipping container units, largely stocked with imports from Asia. Twenty-one ships were waiting to dock outside the local ports this week, down from 109 in January, according to the Marine Exchange of Southern California.On a recent trip here, President Biden — who authorized a plan last year to keep the Port of Los Angeles open 24 hours a day — met with negotiators to urge a swift agreement. Leaders on both sides say Mr. Biden has worked behind the scenes on the matter, hoping to avoid delays.When a breakdown in talks resulted in an 11-day lockout in 2002, the U.S. economy lost an estimated $11 billion. President George W. Bush eventually intervened, and the lockout was lifted. In 2015, when negotiations went on for nine months, the Obama administration intervened after the standoff led to a work slowdown and congestion at West Coast ports.Mr. Biden’s early intervention could help stave off severe backlogs, said Geraldine Knatz, a professor of the practice of policy and engineering at the University of Southern California.“In the past, the federal government would swoop in at the end when negotiations were at a stalemate,” said Ms. Knatz, who was executive director of the Port of Los Angeles from 2006 to 2014. “The relationship that developed between the ports and the Biden administration as a result of the supply chain crisis is something that did not exist before.”The contract between the International Longshore and Warehouse Union and the Pacific Maritime Association is set to expire this week. Stella Kalinina for The New York TimesEven so, contingency plans are in place, said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation. Some retailers began pushing up their timetables months ago, ordering supplies long before they needed them, he said, and using ports along the East and Gulf Coasts when feasible.In an interview, Gene Seroka, executive director of the Port of Los Angeles, said he didn’t believe the looming contract deadline would lead to any delays: All the parties involved, he said, know that it’s already an exceptionally busy time for the region.Retail imports account for 75 percent of all cargo coming into the ports, and with back-to-school and holiday shopping seasons nearing, Mr. Seroka said he did not expect cargo volumes to shrink to more typical levels until next year.“Everyone is working as hard as they can,” Mr. Seroka said.But for some retailers, the current limbo brings back painful memories.In early 2015, as delays arose during contract talks, Charlie Woo laid off more than 600 seasonal workers from his company, Megatoys.“It was rough back then,” Mr. Woo said on a recent morning from his 330,000-square-foot warehouse in Commerce, Calif., an industrial city in Los Angeles County not far from the ports.Mr. Woo started Megatoys in 1989 and now imports around 1,000 cargo containers from China every year. The 40-foot containers come filled with small toys like plastic Easter eggs and miniature rubber soccer balls and basketballs, which his employees package into baskets sold at grocery stores and bigger outlets like Walmart and Target.During the pandemic disruptions last fall, some of his shipments were stalled by nearly three months — delays that ultimately translated into a 5 percent drop in sales for his company, which Mr. Woo said brings in tens of millions of dollars annually.He’s bracing for another hard year.“I expect problems; I just don’t know how big the problem will be,” said Mr. Woo, who also owns a manufacturing plant near Shenzhen, China, and said he hoped more U.S. terminals moved toward more automation.“We must find innovative solutions to catch up with the ports in Asia,” Mr. Woo said.Charlie Woo started Megatoys in 1989 and now imports around 1,000 cargo containers from China every year. Stella Kalinina for The New York TimesShipping containers at the Port of Los Angeles. The current limbo brings back painful memories for some retailers.Stella Kalinina for The New York TimesOn a recent afternoon, Mr. Alvarado, the truck driver, reminisced about the early days of the career he’d been born into.During summer vacations as a little boy, he’d ride shotgun with his father, who has driven a semi truck for nearly four decades at the ports, and they’d listen to Dodger baseball games together.“This is all I ever wanted to be,” Mr. Alvarado, 38, said. Over the years, he has seen many childhood friends move away because they could not afford to live here.It hasn’t always been easy for him, either. Last fall, with more than 80 cargo carriers anchored off the coast here, in part because of the lingering pandemic and a surge of imports ahead of the holiday season, he sometimes waited for hours before he finally got a load, said Mr. Alvarado, who is among the roughly 21,000 truck drivers authorized to pick up cargo at the ports.For an independent contractor, time is money: Mr. Alvarado works 16 hours some weekdays and aims to pick up and drop off four loads each day. When he does that consistently, he said, he can make up to $4,000 a week, before expenses.During the worst of the pandemic delays, he was lucky to get two loads a day, and although things have improved in recent months, he now frets about fuel prices.“Inflation has been intense,” he said.Filling up with 220 gallons for the week now typically costs $1,200, double that of several months ago, Mr. Alvarado said.“It all starts to add up,” he said. “You wonder if you should think about doing something else.”As for the prospects in the labor talks, Mr. Alvarado said he was trying to remain optimistic. The union workers, he said, remind him of his own family: men and women from blue-collar upbringings, many of them Latino with deep family ties to the ports. A work stoppage would be painful for many of them, too.“It will hurt all Americans,” he said.As he drove past the ports, Mr. Alvarado turned his truck into a warehouse parking lot, where the multicolored containers lined the asphalt like a row of neatly arranged Lego blocks.It was his third load of the day, and for this round, he didn’t have to wait on the longshoremen to load the carrier onto his truck. Instead, he backed his semi up to a chassis, and the blue container snapped into place.He pulled up Google Maps on his iPhone and looked at the distance to the drop-off in Fontana, Calif.: 67 miles, an hour and half.It might, Mr. Alvarado said, end up being a four-load day after all. More

  • 125 Shares189 Views

    in Economy

    Ford Plans 6,000 New Union Jobs in Three Midwestern States

    by

    Ford Motor said on Thursday that it was planning to invest $3.7 billion in facilities across the Midwest, much of it for the production of electric vehicles, which the company said would create more than 6,000 union jobs in the region.“We’re investing in American jobs and our employees to build a new generation of incredible Ford vehicles,” Jim Farley, the company’s president and chief executive, said in a statement. “Transforming our company for the next era of American manufacturing requires new ways of working.”The announcement, made jointly with the United Automobile Workers union, detailed investments in three states. Ford said it would invest $2 billion and create about 3,200 union jobs in Michigan, including many tied to production of the new F-150 Lightning pickup truck, the company’s highest-profile and most important bet on electric vehicles.In Ohio, Ford will spend over $1.5 billion and create nearly 2,000 union jobs, primarily to build commercial electric vehicles in the middle of this decade. The company also said it would add over 1,000 union jobs at an assembly plant in Kansas City, Mo., that will produce commercial vans, some gas-powered and some electric.The company had indicated that some of the investments would be coming, like the expansion of production capacity for the F-150 in Michigan, but had not detailed the magnitude.The moves follow Ford’s announcement last year that it would build four factories in Kentucky and Tennessee — three battery factories for electric vehicles and a truck assembly plant — irking union officials and elected leaders in Midwestern states, who worry about losing manufacturing jobs to the South.In addition to the new Midwestern jobs, Ford said it would convert nearly 3,000 temporary jobs into permanent full-time positions before the date that its contract with the U.A.W. calls for — which is after two years of employment.“We are always advocating to employers and legislators that union jobs are worth the investment,” the U.A.W. president, Ray Curry, said in a statement. “Ford stepped up to the plate by adding these jobs and converting 3,000 U.A.W. members to permanent, full-time status with benefits.”Assembling the F-150 Lightning at the Dearborn Truck Plant. Ford will add about 3,200 jobs in Michigan, many tied to the electric truck’s production.Brittany Greeson for The New York TimesSam Abuelsamid, an auto industry analyst at Guidehouse Insights, said the changes were important as a way to help Ford attract and retain labor in a tight job market, while potentially helping the company avoid costly labor unrest during negotiations over a contract that expires next year as it spends billions on the transition to electric vehicles. A six-week strike by workers at General Motors in 2019 cost that company billions of dollars.“I’m sure one thing Ford would absolutely love to avoid is the potential for a strike,” Mr. Abuelsamid said. “Keeping a positive relationship with the U.A.W. now is to their benefit.”But the investments appear unlikely to substantially diminish the broader threat that the shift toward electric vehicles poses to the autoworkers union and to employment in the U.S. vehicle manufacturing industry, which stands at around one million.“It’s about changing the perception of what’s happening,” Mr. Abuelsamid said. “It’s a balancing act between your work force and your investors,” who would prefer to see labor costs rise more slowly or decline at unionized automakers like Ford and General Motors.Because electric vehicles incorporate far fewer moving parts than gasoline-powered vehicles, they require significantly less labor — about 30 percent less, according to figures that Ford has generated.As a result, estimates suggest that the toll of electrification on auto industry jobs could be significant absent large new government subsidies. A report released in September by the liberal Economic Policy Institute, which has ties to organized labor, found that the auto industry could lose about 75,000 jobs by 2030 without substantial government investment.By contrast, the report found, if additional government subsidies encourage the domestic manufacturing of components and greater market share for vehicles assembled in the United States, the industry could add about 150,000 jobs over the same period.President Biden has backed substantial subsidies for electric vehicles, including vehicles made by unionized employees, but those measures have languished in the Senate and their prospects are uncertain.In the meantime, much of the job growth tied to electric vehicles has occurred at nonunion facilities owned by newer automakers like Tesla, Rivian and Lucid, or U.S.-based battery facilities owned wholly or in part by foreign companies like the South Korean manufacturers SK Innovation and LG Chem.In Thursday’s announcement, Ford noted that its new battery and vehicle production facilities in the South would create about 11,000 jobs. But those employees will not automatically become union members, and workers in those states tend to face an uphill battle in unionizing.For investors, however, Ford’s additional investments in electric vehicles appears to be welcome news as the company seeks to reinvent itself amid competition from the likes of Tesla and Rivian. Ford’s stock price, which had dropped substantially this year, rose more than 2 percent on Thursday.Ford also said Thursday that it sold 6,254 electric vehicles in May, a jump of more than 200 percent from a year earlier. That number included 201 F-150 Lightnings, which the company started producing in April.The company has about 200,000 reservations for the Lightning, which is central to its efforts to catch up to Tesla, and stopped accepting new ones because production will take months to meet demand.Ford indicated that sales of the truck would be much higher in the coming months as production increased and trucks in transit reached dealerships. Ford is aiming to produce 150,000 Lightning trucks a year by the end of 2023.Sales of electric vehicles — and conventional cars — have been limited by a shortage of computer chips. Ford’s overall sales of new vehicles in May fell 4.5 percent from a year earlier. Auto executives are also increasingly worried that the supply of lithium, nickel and other raw materials needed to make the batteries that power electric cars is not keeping up with the growing demand for those vehicles.Vikas Bajaj More

  • 125 Shares129 Views

    in Economy

    Trump Officials Gave Pandemic Loan to Trucking Company Despite Objections

    by

    WASHINGTON — Democratic lawmakers on Wednesday released a report alleging that top Trump administration officials had awarded a $700 million pandemic relief loan to a struggling trucking company in 2020 over the objections of career officials at the Defense Department.The report, released by the Democratic staff of the House Select Subcommittee on the Coronavirus Crisis, describes the role of corporate lobbyists during the early months of the pandemic in helping to secure government funds as trillions of dollars of relief money were being pumped into the economy. It also suggests that senior officials such as Steven Mnuchin, the former Treasury secretary, and Mark T. Esper, the former defense secretary, intervened to ensure that the trucking company, Yellow Corporation, received special treatment despite concerns about its eligibility to receive relief funds.“Today’s select subcommittee staff report reveals yet another example of the Trump administration disregarding their obligation to be responsible stewards of taxpayer dollars,” Representative James E. Clyburn of South Carolina, the Democratic chairman of the subcommittee, said in a statement. “Political appointees risked hundreds of millions of dollars in public funds against the recommendations of career D.O.D. officials and in clear disregard of provisions of the CARES Act intended to protect national security and American taxpayers.”The $2.2 trillion pandemic relief package that Congress passed in 2020 included a $17 billion pot of money set up by Congress and controlled by the Treasury Department to assist companies that were considered critical to national security. In July 2020, the Treasury Department announced it was giving a $700 million loan to the trucking company YRC Worldwide, which has since changed its name to Yellow.Lobbyists for Yellow had been in close touch with White House officials throughout the loan process and had discussed how the company employs Teamsters as its drivers, according to the report.Mark Meadows, the White House chief of staff, was a “key actor” coordinating with Yellow’s lobbyists, according to correspondences that the committee obtained. The report also noted that the White House’s political operation was “almost giddy” in its effort to assist with the application.The loan raised immediate questions from watchdog groups because of the company’s close ties to the Trump administration and because it had faced years of financial and legal turmoil. The firm had lost more than $100 million in 2019 and was being sued by the Justice Department over claims that it had defrauded the federal government for a seven-year period. It recently agreed to pay $6.85 million to resolve allegations “that they knowingly presented false claims to the U.S. Department of Defense by systematically overcharging for freight carrier services and making false statements to hide their misconduct.”To qualify for a national security loan, a company needed certification by the Defense Department.According to the report, defense officials had recommended against certification because of the accusations that the company had overcharged the government. They also noted that the work that the company had been doing for the federal government — which included shipping meal kits, protective equipment and other supplies to military bases — could be replaced by other trucking firms.But the day after a defense official notified a Treasury official that the company would not be certified, one of Mr. Mnuchin’s aides set up a telephone call between him and Mr. Esper.The report indicated that Mr. Esper was not initially familiar with the status of Yellow’s certification. Before the call, aides prepared a summary of the analysis and recommendations of the department’s career officials that concluded that the certification should be rejected. Before those reached Mr. Esper, Ellen M. Lord, the department’s under secretary for acquisition and sustainment who was appointed by Mr. Trump, intervened and requested a new set of talking points that argued that the company should receive the financial support “to both support force readiness and national economic security.” Ms. Lord could not immediately be reached for comment.After the call with Mr. Mnuchin, Mr. Esper certified that the company was critical to national security, and a week later the approval of the loan was announced.Mr. Mnuchin then sent an email to Mr. Meadows that included news reports praising the loan. He highlighted positive comments from James P. Hoffa, the longtime president of the Teamsters union, who according to documents in the report made a direct plea to President Donald J. Trump about the loan.Mr. Esper and Mr. Mnuchin declined to comment. A former Treasury official familiar with the process said the loan saved 25,000 union jobs during an economic crisis and prevented disruption to the national supply chain that the Defense Department, businesses and consumers had depended on. The former official said that because of the terms of the loan, taxpayers were profiting from the agreement.A spokesman for Mr. Esper said that the company met the criteria to be eligible for the loan and emphasized that the report made clear that senior staff at the Defense Department recommended that he certify it. The Treasury Department made the final decision to issue the loan, the spokesman added.The Trump InvestigationsCard 1 of 6Numerous inquiries. More

  • 125 Shares199 Views

    in Economy

    Truck Drivers’ On-the-Job Training Can Be Costly if They Quit

    by

    Wayne Orr didn’t yet know that his foot was broken as he made his way back from Texas to his home in South Carolina, but he did know that he couldn’t continue pressing the pedals on the tractor-trailer he had been driving.A new driver only a few months past his training period, he had to sit out for six weeks without pay. Then, when his foot finally healed, he discovered that his company, CRST Expedited, had fired him. Frustrated and needing a paycheck, he found a new job driving for Schneider International, but was once again stymied: CRST threatened to sue Schneider for hiring him, he said.“I called CRST and they told me that they would not take me back and that I had to pay them $6,500 or I could never drive for another company, either,” Mr. Orr, 59, said.He had signed a contract to work for CRST for 10 months in exchange for a two-week training course. If he didn’t last 10 months, the contract required him to pay the company $6,500 for that training.Each year, thousands of aspiring truck drivers sign up for training with some of the nation’s biggest freight haulers. But the training programs often fail to deliver the compensation and working conditions they promise. And drivers who quit early can be pursued by debt collectors and blacklisted by other companies in the industry, making it difficult for them to find a new job.At least 18 companies, employing tens of thousands of drivers, run programs aimed at qualifying trainees for a commercial driver’s license, or C.D.L. Typically, to get free training, the new hires must drive for the company for six months to about two years, usually starting at a reduced wage.The companies “sign them into this indentured servitude contract where they basically have to drive and be a profit source for the company,” said Michael Young, a lawyer in Utah representing a former trainee in a lawsuit against C.R. England, a privately held trucking company that employs about 4,800 drivers.With e-commerce leading Americans to expect quick delivery, trucking companies face pressure to haul more and do it faster. The American Trucking Associations, a trade association, has warned of a vast truck driver shortage. But researchers and drivers’ representatives maintain that the high turnover occurs because too many large companies fail to make their jobs attractive enough. The industry has been plagued with class-action lawsuits about working conditions and wages, leading to hundreds of millions of dollars in settlements.Nine in 10 drivers leave their jobs within a year at large carriers like CRST and C.R. England, according to the trucking trade group. The companies need a constant flow of new recruits to keep revenue up, and without locking them into a contract, they risk losing their newly trained drivers to competitors offering a higher wage.“We think paying for C.D.L. school is a great benefit we can offer but not one that we can afford to do if folks do not come work with our team or ultimately pay us back,” said TJ England, chief legal officer of C.R. England. “If people just want to go to a different company, that’s where we try to protect our investment.”On the Road With America’s Truck DriversThe Cost of Quitting: Thousands of aspiring truckers sign up for training each year. But if they quit early, they may be pursued by debt collectors.Trucker Shortages: The real reason there aren’t enough drivers? It is a job full of stress, physical deprivation and loneliness.Supply Chain Issues: A wave of trucker retirements combined with those quitting for less stressful jobs is exacerbating shipping delays.‘We’re Throwaway People’: Trucking is no longer the road to the middle class that it once was. In 2017, we asked drivers why they do it.CRST, an Iowa-based company, would not answer specific questions for this article but said in an emailed statement that its training program “has brought thousands of drivers into the industry who may not otherwise have been able to obtain a commercial driver’s license.” As for Mr. Orr’s account, a spokeswoman would say only that it omitted key facts.The New York Times and The Hechinger Report, a nonprofit news organization, interviewed more than 30 current and former truckers with direct knowledge of company training programs, including 15 who had gone through them. Almost all 15 left before their contracts were up, despite intending to stick it out. One was given only four days at home in the four months he drove for CRST, just a quarter of what he said was promised in his contract, according to a complaint filed with the Iowa attorney general’s office.Others described weeks of unpaid time spent waiting for trainers. Many said they were never told that they would sit for hours, unpaid, while they waited for their trucks to be loaded and unloaded, or even for days to get a new assignment. Many drivers said they were told by the companies that they would make more than they did. Since drivers are paid by the mile, the time spent waiting cut significantly into their paychecks.In job advertisements and in their pitches to recruits, companies promise earnings of up to $70,000 in the first year and even higher salaries in the future. But the median annual wage for all truck drivers, regardless of experience, was $47,000 in May 2020, according to the most recent data from the Bureau of Labor Statistics. Only the top 10 percent of earners were making above $69,500.Wayne Orr attended CRST’s training program in 2019. “That training program is like a money mill to them,” he said. Sean Rayford for The New York TimesStill, many are attracted to trucking despite its sometimes punishing demands, seeing it as a possible on-ramp to the middle class. New drivers can train at independent schools, which can be expensive, or community colleges, which may take more time. Company training programs are a popular option for those eager for a paycheck right away.Many large companies start classes weekly; keeping a constant flow of people is crucial. They deputize their drivers, offering referral bonuses for every new person brought on board, and employ recruiters to pursue anyone who has expressed interest. In a training manual filed as an exhibit to a lawsuit in 2021, CRST instructed recruiters: “Create urgency. Tell the applicant we have a ‘few’ spots open. Our school and orientation will fill up quickly.”At most company schools, trainees typically spend two to four weeks learning in a classroom and in parking lots. Many former trainees said that the instruction was insufficient and that they spent little time in trucks.Amy Jeschke attended C.R. England’s program in Indiana in 2019. She went out on the road only twice during her training, she said, and the rest of the time did maneuvers in a yard or memorized what to do on a pre-trip inspection.“Honestly, we weren’t doing anything for most of the time,” Ms. Jeschke, 46, said. “You’re lucky if you got in the truck once a day.”Joy Skamser, 44, who also attended C.R. England’s training program in 2019 and lives in Southern Illinois, said she felt unprepared to drive, despite earning her commercial driver’s license at the end of the training.“They do not teach you how to drive a truck, they just teach you how to pass the test, and that’s very dangerous,” she said.Mr. England said the company gave high-quality training to its students that includes time in the classroom, on the driving range and on the road, with skill assessments throughout. Students who fail the assessments are given additional practice, he said.Once they have earned the license, drivers haul actual loads for their new employers. For typically four to 12 weeks, they are accompanied by a trainer. They earn a set weekly rate, varying by company but often $500 to $800, according to company websites. Mr. England said his company’s pay was $560 a week in 2019 and about $784 today.Trainers may be barely trained themselves, often needing only six months’ experience, and they are allowed to sleep in the back while the new driver is alone in the cab, according to industry experts and many companies.Ms. Jeschke said she finished her training without being able to back up, a crucial skill for truckers. She said she once spent a week at a truck stop, unpaid, waiting for another driver because she didn’t yet have the expertise to pick up a load on her own.Frustrated with the working conditions and the low pay, she and Ms. Skamser left C.R. England before their contracts were up and went to work for another trucking company, Werner Enterprises, where they say they were more fully trained.“I do not have words for how bad it was,” Ms. Jeschke said. “They do not care about drivers, only the loads.”Ms. Skamser said a debt collection agency was pursuing her for $6,000 that C.R. England says she owes for her training.It’s reasonable for companies to want to recoup the cost of training an individual, said Stewart J. Schwab, a professor at Cornell Law School. Still, he noted, like noncompete clauses, these contracts can significantly restrict worker mobility and hinder competition. In 2021, Mr. Schwab worked on a proposed law about restrictive employment agreements, such as the ones trucking companies use, with the Uniform Law Commission, a nonpartisan organization that drafts laws for states.The proposed legislation calls for the repayment of the training cost to be prorated based on when an employee leaves and says it should not exceed the actual cost of the training.Many major trucking companies don’t prorate their charges, meaning a driver who leaves on Day 1 after training would owe the same amount as one let go the day before fulfilling the contract. And companies are generally not made to account for how much they spend on the actual training. In 2019, a judge found that CRST’s charging $6,500 for its training “when in fact the cost was thousands of dollars lower” was a “deceptive practice.”That finding came as part of a class-action lawsuit that Mr. Orr eventually joined. The suit, which contended that drivers were being overcharged for their training and paid less than minimum wage for their hours worked, was settled for $12.5 million in 2021.Companies can come after drivers for money — or send them to debt collection — regardless of the reasons they leave or are let go. They also can try to prevent drivers from taking other jobs, as CRST did with Mr. Orr, lawyers for the drivers say. Such actions effectively deny those who want to leave a company the opportunity to do so and pay off their debt.Drivers who leave trucking companies before their contracts are up can be pursued by those companies — or by debt collectors — to pay thousands for training.Sean Rayford for The New York TimesA lawsuit filed in 2017 on behalf of drivers contends that eight companies, including CRST and C.R. England, are conspiring to block drivers under contract from changing jobs. Some companies refuse to release drivers’ records to prospective employers or send letters threatening litigation to competitors who don’t abide by a no-poaching agreement, the complaint says.Mr. England described the allegations as meritless but acknowledged in an interview that his company had “sued or threatened to sue some of our competitors for unlawfully interfering with those contractual relationships.”He said his company’s competitors had “unfairly taken advantage” of the training C.R. England provides to its drivers.Worried about being blackballed wherever he went, Mr. Orr took out a loan — the lowest interest rate he could find was 14 percent — and paid CRST. Through the class-action lawsuit, he was reimbursed for about two-thirds of what he had paid.“That training program is like a money mill to them,” he said. “They pretty much sell you a lot of dreams.”This article was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. More

  • 113 Shares99 Views

    in Economy

    Soaring Cost of Diesel Ripples Through the Global Economy

    by

    Farmers are spending more to keep tractors and combines running. Shipping and trucking companies are passing higher costs to retailers, which are beginning to pass them on to shoppers. And local governments are paying hundreds of thousands of dollars extra to fill up school buses. Construction costs could soon rise, too.The source is the sudden surge in the price of diesel, which is quietly undercutting the American and global economies by pushing up inflation and pressuring supply chains from manufacturing to retail. It is one more cost of the war in Ukraine. Russia is a major exporter of both diesel and the crude oil that diesel is made from in refineries.Car owners in the United States have been shocked by gasoline prices of more than $4 a gallon, but there has been an even bigger increase in the price of diesel, which plays a critical role in the global economy because it powers so many different kinds of vehicles and equipment. A gallon of diesel is selling for an average of $5.19 in the United States, according to government figures, up from $3.61 in January. In Germany, the retail price has shot up to 2.15 euros a liter, or $9.10 a gallon, from €1.66 at the end of February, according to ADAC, the country’s version of AAA.Fueling stations in Argentina have begun rationing diesel, jeopardizing one of the world’s leading agricultural economies, and energy analysts warn that the same could soon happen in Europe, where some businesses report spending twice as much on diesel as they did a year ago.“Not only is it a historic level, but it’s increased at a historic pace,” said Mac Pinkerton, president of North American surface transportation for C.H. Robinson, which provides supply chain services to trucking companies and other customers. “We have never experienced anything like this before.”The sharp jump is putting immense pressure on trucking firms, especially smaller operations that are already suffering from driver shortages and scarce spare parts. Many can pass increased fuel costs on to their customers only after a few weeks or months.Eventually consumers will feel the effect in higher prices for all manner of goods. While hard to quantify, inflation will be most visible for big-ticket items like automobiles or home appliances, economists say.“Really, everything that we buy online or in a store is on a truck at some point,” said Bob Costello, the chief economist for American Trucking Associations.Trucks lining up on Terminal Island between the Port of Long Beach and the Port of Los Angeles.Alex Welsh for The New York TimesManufacturers are also heavy users of diesel, leading to higher prices for factory goods. Food will go up in price because farm equipment generally runs on diesel.“It’s not just the fuel we put into pickups, tractors, combines,” said Chris Edgington, an Iowa corn farmer. “It’s a cost of transporting those goods to the farm, it’s a cost of transporting them away.”At the start of the pandemic, diesel prices dropped steeply as the global economy slowed, factories shut down and stores closed. But beginning in early 2021 there was a sharp rebound as truck and rail traffic resumed. Prices, which increased pretty steadily last year, picked up momentum in January as Russia massed troops near Ukraine and then invaded. Low stockpiles of the fuel, particularly in Europe, have added to the price pressures.“Diesel is the most sensitive, the most cyclical product in the oil industry,” said Hendrik Mahlkow, a researcher at the Kiel Institute for the World Economy in Germany who has studied commodity prices. “Rising prices will distribute through the whole value chain.”Refineries, which turn crude oil into fuels that can be used in cars and trucks, have tried to play catch-up on both sides of the Atlantic in recent months. But they have not been able to make more diesel, gasoline and jet fuel fast enough. That is in part because refineries have closed in Europe and North America in recent years and more of the world’s fuels are being refined in Asia and the Middle East.Since January 2019, refinery capacity has declined 5 percent in the United States and 6 percent in Europe, according to Turner, Mason & Company, a consulting firm in Dallas.Europe is particularly vulnerable because it relies on Russia for as much as 10 percent of its diesel. Europe’s own diesel production is also dependent on Russia, which is a big supplier of crude oil to the continent. Some analysts say Europe may have to begin rationing diesel as early as next month unless the shortage eases.Diesel prices and Germany’s dependence on Russian energy were among the factors that on Wednesday prompted Germany’s Council of Economic Experts to cut its forecast for growth in 2022 by more than half, to 1.8 percent.Russian diesel has been flowing to Europe since the invasion last month, but traders, banks, insurance companies and shippers are increasingly turning away from the country’s diesel, oil and other exports.Several large European oil companies have announced that they are leaving Russia. TotalEnergies, the French oil giant, said this month that it would stop buying Russian diesel and oil by the end of the year.The market for oil and diesel is global, and companies can usually find another source if their main supplier can’t deliver. But no oil company or country can quickly make up for the loss of Russian energy.Saudi Arabia, for example, has not increased diesel exports because one of its largest refineries is undergoing maintenance. The kingdom and its allies in OPEC Plus have also refused to ramp up crude oil production because they are happy to have oil prices stay high. Russia belongs to the group and has significant sway over its fellow members.Christine Hemmel is a manager of a trucking company in Ober-Ramstadt, Germany, that has been in her family for four generations. Her family’s business has almost all the challenges that medium-size haulers have faced since the pandemic’s outbreak.The Russia-Ukraine War and the Global EconomyCard 1 of 6Rising concerns. More