After 25 years in the dump-truck industry, Ron Lingford decided to sell his six trucks in January and get out for good.
Now, as president of United Dump Truck Association of Wisconsin, his primary goal is to help others from having to make the same difficult decision. He and other owner-operators of Wisconsin dump-truck companies have been warning for decades that they aren’t making enough on road-building contracts to stay in business. The recent combination of rising fuel and materials prices has made an already bad situation even worse.
“This inflation is compounding it,” Lingford said. “But we were in bad shape even before this inflation.”
In the hopes of getting policymakers to intervene, Lingford and other representatives of the industry have scheduled a public meeting at 9 a.m. Saturday at Burlington Town Hall. Assembly Speaker Robin Vos and Sen. Van Wanggaard, two powerful Republican lawmakers representing the Burlington area, have been invited to attend.
Lingford intends to use the meeting to argue for the re-institution of a guaranteed truck rate similar to the one Wisconsin had had in place until 1995. He said there’s a chance Gov. Tony Evers could even bring the rate back using an emergency executive order.
The guaranteed rate was meant to ensure truck owner-operators received enough money to cover obligations such as paying employees Davis-Bacon prevailing wages and performing regular truck maintenance. The rate was eliminated nearly three decades ago amid hopes that greater market competition would help lower project costs.
Dump-truck companies have struggled ever since, said George Schroeder, owner of SPS Trucking in Burlington. Contractors’ current rates of $120 to $125 an hour are often insufficient to cover owners’ obligations to maintain their trucks and pay employees Davis-Bacon prevailing wages, which run around $59 an hour. The situation is especially difficult in a state like Wisconsin, where cold winters force owner-operators to make all their money for the year in the space of about eight months.
“It’s a failed business plan right from the get-go,” Lingford said. “There’s simply not enough money in the formula.”
To ensure owner-operators can meet their responsibilities, Schroeder and Lingford said, the rate should be set somewhere between $180 and $200 an hour. Unfortunately road contractors have virtually no incentive to pay more under the current system, which instead encourages them to reduce costs as much as possible so they can submit low bids.
Schroeder said the time for policymakers to act is now. With the Wisconsin Department of Transportation preparing to let out some big projects this fall, road contractors are already thinking about setting their truck rates.
The danger is that a day will come when contractors can find no owner-operators who are willing to work.
“People are getting out,” Schroeder said. “They’re selling their trucks. They can’t pay their bills. They can’t understand how they can continue to do this. So they’re finding a different way. They’ll go drive a truck for Walmart.”
Lingford and Schroeder said they’re both convinced the only way some owner-operators can stay in business is through fraud. Many truck owners are either not paying employees mandated prevailing wages or are skimping on maintenance. Schroeder said the situation is so bad that he’s written U.S. Sen. Ron Johnson, R-Wisconsin, a letter saying the state should refuse any assistance from the federal $1.2 trillion infrastructure bill until a remedy is found.
Meanwhile, inflation is showing little sign of abating. The average price of diesel fuel in the U.S. was $5.611 on Wednesday. That was down from the recent record high of $5.816, on June 19, but still far above recent averages.
Lingford said the re-institution of a minimum trucking rate would at least provide owner-operators with temporary relief. In the long run, though, the industry might have to resort to organized work stoppages or even unionization to get its message across.
With a work stoppage, Lingford said, “There would be some slight increases, but you would still have rogue companies that would accept inferior rates because they are lying, cheating and stealing. It’s a big fat mess.”