The trucking industry was a key source of stress in the supply chain disruptions we saw over the last two years. But even outside of the recent turbulence, the space faces unique challenges. For one thing, it's prone to extreme boom/bust cycles, even outside the normal US business cycle. But beyond that, the industry faces legal challenges as well. How should truck drivers be classified legally? Should brokers face legal liability for accidents? On this episode, we speak with Rachel Premack, Editorial Director at FreightWaves, to learn more. This transcript has been lightly edited for clarity.
Key points from the pod:
How many truck drivers are there in the US? — 3:47
What it takes to launch a trucking company — 5:22
Job quality in the trucking industry — 6:27
Owner-operators vs. “true” owner-operators — 10:04
The history of truck regulation — 18:09
Trucking’s macro conditions — 24:26
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Joe Weisenthal: (00:10)
Hello, and welcome to another episode of the Odd Lots podcast. I'm Joe Weisenthal.
Tracy Alloway: (00:15)
And I'm Tracy Alloway.
Joe: (00:16)
Tracy, when you think about like the gig economy or gig economy workers, what first comes to mind for you?
Tracy: (00:23)
Uber. Lyft. Has to be.
Joe: (00:26)
Right, I think for everyone that's the answer that most...
Tracy: (00:30)
Freelance journalism, maybe...
Joe: (00:31)
Freelance journalism, that might be like the next one. But it is a good point that what we call the gig economy: everyone has this idea of like these sort of like marginally attached workers. People think of it as a new thing. It's actually been [around] forever. So obviously something like freelance journalism has been around forever, long before anyone had heard of a Uber or Lyft.
Tracy: (00:50)
Absolutely. I think gig economy workers just kind of gave it a new label that made it sound a lot more modern than it maybe was. But one of the classic examples, I suppose, of a gig worker has to be a trucker, an owner-operator in in the trucking industry.
Joe: (01:05)
Right. And we've obviously talked about trucking several times on several past episodes, but when you think about an individual who's also their own boss, who may, you know, goes from one company to another, who, you know, does not have sort of some permanent full-time arrangement — it looks like trucking. I think it is the number one in terms of the sheer number of people, or number two, maybe like Amazon warehouse workers are up there, but the most common job I think in the US, or one of them. And I think it by, by any sort of definition of what we would call a gig worker, I think many truck drivers would obviously qualify.
Tracy: (01:44)
And in recent years, we have seen efforts to improve working conditions for gig workers, but it kind of gets into this gray area where yes, a lot of gig workers are exploited. A lot of them are working under suboptimal labor conditions, earning less pay than they would if they were actual employees, certainly less benefits. But there's also a certain type of gig economy worker that maybe values some independence, right? And likes working as an independent contractor.
Joe: (02:15)
Right. So this really gets at the question and people look at arrangements like with Uber, and there are people who view this as exploitative or unfair to the worker or the workers are being deprived, benefits that perhaps an employee should get. And then there are also people who say, ‘You know what? I like the flexibility of being an Uber driver. I like the arrangement of not having a company being my full-time employer.’ And I think all of these things clearly apply to truck drivers as well. And knowing the right legal frameworks to think about these things is pretty complicated.
Tracy: (02:47)
Yeah. And you know, I mentioned this idea of a gray area and trucking. I mean, it's already a gray area and it's sort of like just stepped into another gray area because it's been caught up in some of the legal issues around gig economy workers, specifically in California. But there's also legal issues elsewhere in the US as well.
Joe: (03:07)
Well, let's dive more into this question about how some of these sort of legal thinking regarding gig economy workers or gigs in general are intersecting with the trucking industry. We have a friend of the podcast, Rachel Premack, the editorial director at Freight Waves, and the author of the great MODES newsletter joining us. She's written a lot about these issues. So Rachel, thank you for coming on the show.
Rachel Premack: (03:30)
Thanks for having me.
Joe: (03:31)
Absolutely. So why don't you sort of, I mean, first of all, is that kind of right? That we talk about gig workers, but you know, in terms of basically the employment arrangements of truck drivers, what do they look like and do they basically fit in with what people generally have in their mind of what a gig worker is?
Rachel: (03:47)
Yeah, so right now there are about 2 million employed long haul truck drivers in the US. About 300,000 to 400,000 of those are owner operators, and the rest are employees of either, you know, small trucking fleets of maybe 10 to a hundred or a few hundreds of, of other truck drivers, or they are employees of fleets of so-called mega fleets that would have thousands or even tens of thousands of truck driver employees. But the owner operator community in the trucking is pretty substantial.
And it does really set, you could say, the culture for the larger trucking industry as well. A lot of drivers might start out as employees and, you know, have the goal of being owner operators, but generally you know, owner operators are a pretty big part of trucking and they definitely would count and as the so-called gig economy, even though it's not really, we don't really think of them the same way we think of Uber, Lyft, or DoorDash.
Joe: (04:47)
You know, I mentioned we've done several episodes about trucking and of course we talked to your boss, Craig Fuller at FreightWaves. And that was one of the eye opening things I think for us, is just like how easy it is to launch a new trucking company, right? Tens of thousands. And we're like, well, why don't we launch our own trucking company.
Tracy: (05:03)
Right, we joke about starting our own trucking company all the time. But this kind of gets into something I wanted to ask you, which is, what are the requirements right now when it comes to being a truck driver and how does it work on a state level? Because we're gonna be getting into some of these state differences versus a federal level.
Rachel: (05:22)
So to launch your own trucking company, you need insurance. You need the authority to launch a company. You need the funding to secure your tractor and perhaps also a trailer. You need a commercial driver's license. It is absolutely one of the easiest businesses to literally start. People kind of compare it to the restaurant industry where you can very easily open your own trucking business and, you know, have be a small business owner. So people who are in favor of this current structure of the trucking industry say it is really the classic version of the quote ‘American dream.’
Joe: (06:03)
So just to make it clear, and you sort of broke it down, there's the owner operators and then people work for a small fleet and then kind of mega fleets. The people who work for the fleets, do they have the same tax and employment status that like me and Tracy would have at Bloomberg, where we're just employees of a company? What are the different, I guess, like employment and tax arrangements that one can have in the industry?
Rachel: (06:27)
There are definitely like good jobs to have in trucking and not so good jobs. It gets a little complicated because you have your classic employee of a trucking company and they're actually not paid a salary or even an hourly salary. They're paid per mile. And that's just across the entire trucking industry, is that you are paid per mile rather than per every hour that you’ve spent on the job. So you could be an employee of a so-called mega fleet, or you could actually be a leased owner operator for a mega fleet, meaning you have the benefits of employee, which, you know, are more stable work, more stable pay, but you also have that flexibility that true owner operators have. So it does get a little bit of a gray area when you're looking at lease owner operators versus full-on owner operators who just truly own their own truck and own all of their own assets.
But yeah, I think drilling a little bit deeper, whether or not you are a leased owner operator, a true owner operator, or a true employee you are still being paid per mile. In the case of a least owner operator, a true owner operator, you are, covering your own health insurance, you're paying for meals and gas and these sorts of things that you have on the road. The difference is really whether or not you want some form of protection from a large company or you'd rather just be fully, truly on your own.
Tracy: (07:55)
So when it comes to the per-mile payment, I remember this is something that came up in some of our episodes from last year where we were talking about congestions at the ports and truckers getting very, very upset that they had to wait for hours. I mean, in some cases, you know, 12 or 14 hours in order to pick up loads, they're not paid for those wait times. But obviously it's eating into their ability to earn money. So when it comes to the new gig economy regulations, specifically in places like California, on the surface it feels like there should be some truck drivers who are like, ‘Yes, pay me a salary, pay me benefits.’ And yet, according to the things that we've been reading, it seems like there's some resistance. So why is that?
Rachel: (08:41)
It’s definitely an issue that I think is really confusing to a lot of labor activists in the trucking world. You know, why we have seen protests at the port for the passing of AB5 which basically requires owner operators to become employees rather than full owner operators. It's a little unclear why the current system is really, you know, tightly held onto, and it has been sort of the case for decades in trucking where owner operators who do not have the same sort of worker rights and steady sort of pay that full on employees in trucking have, they are very defensive and protective of the system, even though, you know, from the out outside perspective, it's not really a system that is particularly beneficial to their pocketbooks and livelihoods at the end of the day.
But you know, if you are becoming a truck driver, you're probably someone who is very fiercely independent. You are taking that job because you want to be literally alone in a truck all day. It's not really a job you take if you're like, ‘Oh, I really enjoy, you know, leadership and working [with other people].’ You literally take the job because you don't want anyone bothering you. So it makes sense that even when it comes to being an owner operator, they would prefer not to have any sort of government interference. On top of that, they don't view themselves as employees. They view themselves as small business owners. They're viewing themselves as building a business, building a life for themselves rather than, you know, being a a ‘wage slave,’ you could say. Well,
Joe: (10:22)
Well, back up for one second. So if the California regulations were to go on full force and apply to owner operators, what does that mean specifically? Like who would be the employer? Who would have the obligations, the entity that they're driving a load for? Like what is the current arrangement between, I just don't really get what the theoretical end game looks like if these regulations were to fully apply to trucker.
Rachel: (10:48)
Right. So if you are a quote ‘true’ owner operator, you own your own truck, you own your own trailer, nothing really changes for you because you are literally just on your own. This is your business. That's just you. But many truck drivers, especially port drivers are those leased owner operators I had mentioned, where you are leased onto a larger company. They are the ones who are, you know, actually paying your paycheck, but you don't have the sort of protections that you would have as a full-on employee, you know, including health insurance and paid medical leave and paid time off. So in the case that this law is enforced in the way that they are saying it's going to be enforced, the carrier, the trucking company would be the one paying the salary and the so-called shippers, you know, Macy's, Home Depot, whoever it is that have the loads at the ports, they would still be paying that trucking company. So it wouldn't change much for the shippers, except I imagine their rates may increase a bit.
Tracy: (11:48)
Right. So this has been a talking point from some sides of this argument that if you have this new regulation come into effect, all of a sudden shipping rates are gonna soar at a time when, you know, we've already seen shipping rates go up quite a bit.
Rachel (12:03)
It most likely would increase the rate to move a truckload just at that point of the supply chain where you're trying to move this load from the port to a terminal to a place where they can move that to a different truck that would move that across the US or move that onto a rail car or any other sort next point in the transportation system.
I think there is some debate and some question just because of how bad the labor situation is, specifically at the port of LA and Long Beach and at those terminals. You know, some might say it's overdue and we've been paying too little at this point for this service where, you know, some drivers are allegedly working up to 20 hours a day where they might not even be receiving a paycheck or some are even paying to work. The abuses, the labor abuses at, you know, these ports have been pretty well documented and it is, you know, some critics of the current system would say, you know, it is overdue that rates go up essentially.
Joe: (13:11)
So one of the things we've learned in the course of our episodes about trucking is that there's like two distinct trucking markets. There are the port drivers, and then there are the long haul over the road drivers. And you were talking about this sort of like culture of independence and people get into trucking there might be a reason that they're not sitting behind a desk and doing some email job, but is the culture of port trucking the same as the over the road, like convoy style, they made movies about it?
Because my understanding, or at least my impression was that the port drivers were more immigrants and people who had fewer opportunities in the first place. And also, and sort of related to that, you mentioned there have been these protests in California against AB5, are the people who are coming out to protest them, do we have a reason to think that they're representative of the broader trucking industry or is it just like a certain subset within that space who is particularly threatened by this?
Rachel: (14:16)
You know what's funny, I have reached out to truck drivers kind of like in my network to ask what they think about AB5. Most of them are long haul drivers. Many of them are based in the Midwest or you know, the Southeast. And when I asked them like, ‘Oh, what do you think of this law?’ They were like, ‘I don't care. It's in California. I don't live in California.’
So there is definitely this kind of idea of like that's happening in California, ‘I don't like really care about California because I don't live there.’ And that's by design. The port drivers though it is definitely a different, like, ethnic makeup, I would say. So, you know, the current statistics that I've seen is that, you know, long haul truck drivers tend to be median age around 55 to 60, mostly white, you know, but there are plenty of black or even Punjabi truck drivers but, you know, probably like 60 to 70% white, you know, mostly conservative, basically everything you kind of picture when you picture a truck driver.
But the port drivers are definitely quite different, especially in southern California. It is mostly immigrants from Latin America or East Asia. The ages are a bit more diverse. It's not all, you know, people in their fifties or sixties or seventies. And I can't really comment on what their political leanings are, but it is definitely a much different demographic, I'd say.
Joe: (15:45)
Can I just ask one follow up? You said when you talk to truck drivers, they're like, ‘Well, I'm not from California, what do I care?” But my impression is actually it really does matter, and part of the reason this is now a legal debate is because you have Californiasetting the rules for the entire country. And if there are differences in rules, then that creates problems because trucks cross borders. So can you talk about like, the tension of California having its own distinct set of laws versus the other ones?
Rachel: (16:17)
Yeah. The main threat that people in the trucking industry who are against AB5 is other states implementing the same law. It's not so much that the concern is like, ‘Oh, California's doing this now, we all have to do this.’ It's more, you know, California's doing this and now we're looking at Massachusetts or Illinois. Both of these states are ones that are moving towards laws like this.
So that's really the big concern in the industry. My understanding is that if your company is not based in California or Massachusetts or Illinois, it doesn't really matter what those state laws are because your company is based not in those places. And the way the trucking industry is right now is that most owner operators specifically are based in states or areas with lower cost of living just because the job has a median pay around $5 to 50,000 a year. So it doesn't really make sense to live in the Boston Metro area, or Palo Alto. So most truck drivers, most inter operators tend to be based, you know, in the Midwest or Southeast or Appalachian area.
Tracy: (17:34)
So you mentioned earlier this idea of a very low barrier to entry to become a truck driver or an owner operator. And I think deregulation sort of goes hand in hand with the American dream sometimes, you can start your own business from scratch and you don't have to jump through that many legal hoops in order to do it. Can you talk to us a little bit more about deregulation efforts in trucking in the eighties and nineties? Because as I understand it, they were quite unusual for the industry and this is really where some of that tension between the state laws versus the federal regulation is coming from.
Rachel: (18:09)
Yeah this is literally one of my favorite things to talk about. I'm very glad that we're talking about this. Actually we're going to go back all the way to 1935, which is when the trucking industry was really in its infancy and it was first regulated in part because of motivations from the rail industry. They're saying, ‘Okay, this industry is getting too big. Basically their rates are incredibly cheap. We need to sort of interfere and make sure it’s not as economically viable to go to trucking rather than go to rail.’
So that was one kind of reason why we saw in 1935 that the trucking industry was regulated. And by regulated I mean that every single thing that you move via truck, besides agriculture — which is a whole other topic — basically if you're moving widgets from Des Moines to Detroit, you have to apply to the federal government and say, ‘Hey, I wanna move widgets from Des Moines to Detroit.’
And they could accept your offer. They could reject it, most likely someone else already has that lane, so you know, they're gonna reject it because they already have that lane. So it was very challenging to enter the trucking industry at that time. And by 1980, which is when the trucking industry was deregulated, we had about 17,000 trucking companies. So still quite a few, but by the end of the 1970s with stagflation, all these other topics, lawmakers and economists were really looking at deregulating industries to make things cheaper essentially.
So the idea was, ‘okay, if we deregulate trucking, the cost of everything will go down.’ What they didn't realize is that by deregulating it, that that would also really cut pay for drivers. A lot of the trucking companies were raising rates, raising rates in negotiation with teamsters. And the rates retailers were paying eventually, essentially just went straight to employees. So by 1980, the industry was deregulated. It wasn't the first deregulation, but it was definitely the most impactful. And they basically said, ‘Okay, actually no routes are regulated.’ Basically it's a free for all and you can move whatever you want, wherever you want. It doesn't matter. After that, we saw hundreds of trucking and trucking companies go bankrupt. Most of those were unionized trucking companies. They went bankrupt within the first few years of deregulation.
Tracy: (20:47)
There was just a price war and people couldn't stay afloat?
Rachel: (20:51)
Yeah and when all those companies went out of business, most of the companies that replaced them were not unionized. They were smaller drivers, they were smaller companies. So we saw the industry go from 17,000 companies that I mentioned at the end of the seventies, to now there are more than 200,000 trucking companies. Some people have called it destructive competition, just how it's essentially a race to the bottom when it comes to these routes.
Joe: (21:23)
How unionized is trucking still today? Because, you know, it's funny, when I think of the teamsters or something, that's the industry that first comes to mind is trucking. But how prevalent is unionization? What is their role in this?
Rachel: (21:35)
It's not common. I would need to check on what the most recent numbers are, but it's a few thousand, I believe. Maybe a few 10,000s who are employed, and again, this is out of 2 million drivers.
Tracy: (21:49)
So you were talking about federal deregulation versus the AB5 when it comes to gig economy workers. So how much of a mess is this for the trucking industry? And how are people navigating it right now?
Rachel: (22:04)
So I forgot to mention after 1980 the industry was deregulated all the sort of follow up from that happened. And then in 1994 under President Clinton, he passed something called the Federal Aviation Administration Authorization Act.
Tracy: (22:22)
Catchy.
Rachel: (22:23)
I know, I literally wrote it down in my notes to make sure I got every, every word — but it's also called F4A, so we don't ever have to say that again. It's just F4A. And what that says is that you cannot pass a law that interferes with deregulation. Basically no state can have any sort of law that would regulate the pricing or the route or any of these other factors of a trucking movement. And that relates to trucking companies as well as intermediaries and any sort of other company involved in the trucking world. So the argument is that AB5, by preventing who can be a truck driver, and who can be a truck driver employee and versus owner operator and what have you, the argument is that that law interferes with F4A because it introduces a regulation to the trucking industry that's not on the federal level.
Joe: (23:23)
What I think is really interesting about all this is that the last time we had this big bout of inflation, the answer was, ‘Right, deregulate everything, deregulate trucking, deregulate ports, deregulate airlines, deregulate electricity, and so forth.’ It's interesting how now, obviously we're in this other phase of inflation, and yet no one really talks about that because I think everyone thinks, well, we've already squeezed everything out of the deregulation lemon [that] we're gonna get. And now if anything, our approach is very different and much more like, at least the Democrats’ approach, is like much more active involvement in industry, like purposeful efforts to expand the supply side.
Tracy: (24:02)
This is kind of what we were speaking about with Ezra Klein recently, right? The idea that previous supply side measures were all about cutting taxes, deregulating, making it easier for people to produce more that way, whereas this new supply side liberalism is more about actually smoothing the business cycle and how to encourage investment.
Joe: (24:19)
What's happening with the business, I think the last time we were talking about trucking before, it was probably when prices were way up but now they’re down, huh?
Rachel: (24:26)
So on the business, on the market side we are seeing, especially for spot rates, which are more likely to be taken by owner operators or leased owner operators, those are going way down. Contract rates, there are signs of that finally softening, and that affects more of the larger trucking companies. So we're definitely seeing a softening in the trucking market right now. You know, diesel is still really an affordability issue especially for smaller companies. Equipment is still hard to come by. There's still all of these major headwinds and it is definitely a challenging time to be a small trucking company right now.
Tracy: (25:11)
What's the sort of macro take on trucking rates coming down? You speak to people in the industry all the time, what are they saying? Is it that inventories are too big and they need to start reducing, or, you know, consumer demand is falling off a cliff? How important do people think this drop actually is?
Rachel: (25:30)
Yeah, so one estimate from Convoy, which is a freight brokerage, they estimated before that half of all trucking recessions were the harbinger for a larger macro recession. So, for instance, in 2019, we did see a recession in the trucking rate...
Joe: (25:46)
The trucking recession predicted the pandemic, right?
Tracy: (25:50)
Just like the yield curve curve.
Rachel: (25:51)
Okay. I wrote a story in 2019 about how trucking was the precursor for the yield curve inverting...
Joe: (26:01)
Trucking predicted the yield curve inverting, and the yield curve inverting predicted Covid-19 so...
Rachel: (26:06)
Exactly, but trucking is a really great window to look through the rest of the economy because you can see consumer behavior, you can see home building, you can see industrial. There are all these sorts of elements that you can see through the trucking industry. And for instance, in the 2019 downturn, that wasn't so much a sign of consumer softness, but it was definitely a sign of industrial softness. And now the current downturn in trucking is, I would say, more widely reflects a consumer softness. So there are many macro elements to this.
Tracy: (26:49)
I suppose the big question is how much of that is just people buying less stuff, because they've loaded up on it in the past couple years. And now we're gonna see a shift to services and the economy might still be okay.
Joe: (26:59)
So you mentioned the freight brokerage Convoy. In May at the FreightWaves conference, we interviewed the CEO of a competing brokerage, Matt Pyatt at Arrive Logistics. This is another legal thing you've been talking about. So I imagine the industry must be insured out the wazoo because truck drivers get into accidents from time to time, and that's bad. And that could be extremely costly. There's issues now with whether the brokerages themselves could be liable. Can you talk about that particular dimension?
Rachel: (27:33)
Yeah. So also seen at the Supreme Court this summer, along with the AB5, there was this case involving CH Robinson, which is by far the largest trucking brokerage in the US. They arranged a movement that went through the state of Nevada. That truck driver who was the client of CH Robinson, I believe went over the median of a road and crashed their car into a 20-something man. It was a very bad accident. The young man was rendered a quadriplegic.
And as a result of that, the family and the law firm wanted to not only hold the trucking company accountable for that, but also CH Robinson, which arranged the move. So under F4A, as we discussed, a state cannot have any sort of interference or regulation of a brokerage that is not already at the federal level. So the argument that CH Robinson and the broker community as a whole, they argued that, you know, trying to hold CH Robinson accountable for this accident would be in violation of F4A. The Supreme Court looked at this and did not want to weigh in, and as a result, the circuit level decision on this case stood and the brokerage is going to be held accountable in court in a few months.
Tracy: (29:05)
So my big question is, you have this federal law F4A — I can't even remember the actual title of it — and then you have these changes at the state level, like in California and Massachusetts, it was Massachusetts, right?
Rachel: (29:22)
Massachusetts and Illinois are considering kind of similar laws.
Tracy: (29:25)
Okay. Why won't the Supreme Court hear these cases? Like, the Supreme Court seems to be very into activism, for lack of a better word, right now. So why wouldn't they try come up with some sort of decision on something that seems quite disruptive and confusing.
Rachel: (29:40)
That's a great question. I cannot answer that because I'm not the Supreme Court, but I would like to know, I'm sure many people in the industry are definitely interested in knowing that. My assumption is that perhaps they agree with the lower court decision and therefore they're just gonna let that stand. But it does kind of get into this broader issue where we really don't see the federal government want to get involved in trucking at all, which I think the industry says is a good thing. But now with the current issues with AB5 as well as the Robinson case the industry is saying like, ‘Please, we need guidance. Like, please someone step in,’ which is really unusual for any industry, but especially unusual for the trucking industry, which is historically pretty anti-regulation. But at this point, the struggle is really that, you know, in the industry they're not really sure how best to move goods across the US because it could get to the point where we have 48 distinct countries essentially in one country.
Joe: (30:50)
So I guess this is kind of the argument for the case against state-level regulation, right? Or why states, in theory shouldn't be allowed to interfere, which is that that can interfere with like cross state commerce and create 48 separate countries if you wanna move something from California to Florida and you have to comply with like each state's law on the way. I just want to like go back though, to like this like question and the AB5 question. We know about the protestors and the culture of trucking, etc. Have you encountered people — there must be people who drive today — who want these rule changes. Because again, like when you read, you know, USA Today won a Pulitzer a few years ago for [writing about] pretty awful conditions for a lot of these drivers. Have you found any that want these changes?
Rachel: (31:41)
So a lot of them are fearful of speaking out. It is really challenging to find drivers who will speak honestly about these. They mostly speak anonymously, but there is definitely a sector of the trucking community right now that does want more regulations. The other thing to know is that there is definitely some misinformation in terms of like what being an employee can do for you. There is some misunderstandings around if you are classified as an employee, you can get health insurance, you can take time off when you wanna take time off.
I think the other sort of larger complication here is how much will this law be enforced? Because we have seen other court decisions, you know, ruling on how, you know, certain ways that the trucking industry needs to operate. Maybe they have to pay the fine, they have to pay out the class action fine, but it doesn't really change how the industry works. So I think there is kind of some opinions around, you know, is this even gonna happen? Will this even help me?
Joe: (32:50)
Rachel Premack, thank you so much for coming on Odd Lots.
Rachel: (32:53)
Thanks for having me.
Tracy: (32:54)
Thanks Rachel. That was fun. Thank you.
Joe: (33:09)
You know what I was thinking about, Tracy, with F4A in particular, I don't know if you remember at the beginning of the Biden administration, it was like, ‘oh is neoliberalism dead?’ with Mike Konczal but one of the things, or one of the points that he made was this idea of okay, neoliberalism setting some rules and then encasing it so you can't change the rules. And I didn't know about F4A before, but thinking about like the Clinton years and part of the law itself is that states can't come up with their own laws, this sort of like self-reinforcing law. It's very Clinton era.
Tracy: (33:47)
We need a European Union for America, for the free movement of goods and people so that we don't end up with 48 countries.
Joe: (33:56)
Well, right. I mean that's like what Britain is dealing with right now. I mean, there are probably some really good arguments in favor of not having a patchwork of 48 different transportation regulations.
Tracy: (34:09)
Yeah. I mean you could see someone arguing that this is an industry that is basically cross state. And therefore maybe someone wants to coordinate a little bit. But I mean, I'm sort of amazed the number of times that this like patchwork of state rules actually comes up in our conversations.
Joe: (34:26)
It's kind of striking that anything gets done. Like, it's really hard to imagine how you could have cross-state transportation if each state can come up with its own rules. It's also just interesting, and I was really struck by hearing Rachel talk about like how much deregulation was in response to a past period of inflation, which is a theme that's been coming up lately and how, like, we're kind of taking very different approaches now to this period of inflation.
Tracy: (34:53)
Yeah. I think that's a really interesting theme to pull out. The other interesting thing to me is just that that trucker culture which we've kind of spoken about a number of times now, and this idea that you have an industry that values their independence that seems to be de facto against stricter rules, even if some of them might ostensibly help them out. It's interesting to sort of observe that, and I guess it's hard to Rachel’s point, it’s hard to get a read on people who maybe feel differently to the consensus because no one really wants to speak out.
Joe: (35:28)
Right. And I think that there's like, who can speak out? The over the road drivers, owner operators who they make movies about and are glamorized, presumably they could speak out, but also, my assumption would be that if you are a leased owner operator and you are an immigrant with tenuous networks here, limited English, that’s less easy. And so when you think about like this culture of truckers, I keep wondering, is there a culture of truck drivers that doesn't break through to the media? Another culture of truck drivers.
Tracy: (36:01)
And the other thing that this reminded me of, and this was what we spoke about at the FreightWaves conference, was the future of the freight brokerage market, right? So here you have essentially a middleman role matching people who wanna ship goods with actual drivers. And it just seems like with that liability issue, that could be a burden on, I think, an industry that's already facing some pressures. But at the same time, if their only job is to match customers with safe drivers and then that driver has an accident, then you're kind of asking what are they even doing?
Joe: (36:36)
Well then the question is how well did they screen right? Like that would be presumably the question.
Tracy: (36:46)
Well, I suppose they would argue that drivers are regulated, like they have to pass a commercial driver's license. And so it's the government's fault if if the driver isn't very good. But anyway. Okay. We’re just speculating. We can argue this back and forth.
Joe: (36:58)
Speculating about other companies legal strategies that we really have no idea about.
Tracy: (37:02)
Shall we leave it there?
Joe: (37:10)
Let’s leave it there.
You can follow Rachel Premack on Twitter at @rrpre.