Messed Up For The Truck Drivers In Long Beach And LA Ports

I know I am new to this, but this is messed up!

https://www.usatoday.com/story/news/pr/2017/06/16/usa-today-network-investigation-uncovers-enterprise-corruption-and-mistreatment-hundreds-truckers-us/102913362/

That article makes no sense to me, unless maybe it's illegal immigrants who re driving the trucks?? Or just saps who got suckered into a lease purchase?

If they're legitimate CDL A drivers, they're obviously choosing to work there. I don't believe anyone has twisted their arm.

That was an exceedingly long article for sure. I think everyone is thinking about the same thing - why didn't they just take one of the 10,000 normal trucking jobs available?

One of the big problems was that California raised their emissions standards and a lot of those guys were owner operators with really old trucks. They couldn't drive the old trucks anymore and they didn't have the cash or credit to buy a new one. They wanted to keep working the ports so the only real option a lot of them had was to sign one of those lease agreements. You can tell from the article that most of those drivers know very little about how business is really done, or the nature of those contracts they signed, or the ruthlessness of some of these business owners. They just traded in their old trucks as a down payment on the lease, signed on the dotted line, and went to work in their new lease truck. By the time they figured out they weren't making any money it was too late. The contracts were written in such a way that they had no choice but to walk away empty handed - no truck, no job, no money.

People really underestimate how ruthless and how fiercely competitive the business world is. The trucking industry has 3% profit margins. It's one of the worst industries you can be in as a business owner, and yet people flock to it in great numbers. It's pretty sad, really. It ends badly for a lot of people.

But hey, most businesses are that way. The failure rate in any business is super high. If you followed business startups in the restaurant or clothing or tech industry you'd hear the same stories there that you hear in trucking. If there was an industry where you could make easy money we'd all be there getting rich.

I think if people who are new to business ownership would spend even a week or two as an apprentice to a business owner in the industry they're considering it would be a real eye opener.

Lori Greiner from Shark Tank likes to say:

"Entrepreneurs: The only people who work 80 hour weeks to avoid working 40 hour weeks."

The contracts were written in such a way that they had no choice but to walk away empty handed - no truck, no job, no money.

People really underestimate how ruthless and how fiercely competitive the business world is. The trucking industry has 3% profit margins. It's one of the worst industries you can be in as a business owner, and yet people flock to it in great numbers. It's pretty sad, really. It ends badly for a lot of people.

And it is the fierce competitiveness that leads some companies to develop rutheless schemes that prey on the ignorant. Yes, all business is tough, but I think we'd all agree that the business savvy of your average port truck driver is not at the same level as someone starting a tech company or a million dollar restaurant franchise, so they (truck drivers) are easy prey.

Brett, maybe it would be a good idea to expand that small section on company leases to warn others of the truth potential pitfalls behind some of these contracts?

That article makes no sense to me, unless maybe it's illegal immigrants who re driving the trucks?? Or just saps who got suckered into a lease purchase?

If they're legitimate CDL A drivers, they're obviously choosing to work there. I don't believe anyone has twisted their arm.

Lease purchase is always a bad idea, so everybody who does one is a sap? And there is no way for truck drivers who already hold a CDL to be "illegals". And you need a TWIC card to even enter any US port facility, so no, they are not "illegals".

In the article it clearly states the devious tactics used by the companies: " Many drivers thought they were paying into their truck like a mortgage. Instead, when they lost their job, they discovered they also lost their truck, along with everything they’d paid toward it. Eddy Gonzalez took seven days off to care for his dying mother and then bury her. When he came back, his company fired him and kept the truck. For two years, Ho Lee was charged more than $1,600 a month for a truck lease. When he got ill and missed a week of work, he lost the truck and everything he’d paid. "

Brett, maybe it would be a good idea to expand that small section on company leases to warn others of the truth potential pitfalls behind some of these contracts?

We've always told people it's a bad idea. And our true mission is to help new drivers break into the industry, so leasing should be out of the question for them anyhow. You really need to know how to handle a rig, how to manage your time, and know the in's and out's of this industry before attempting to start any sort of a business, which is exactly what leasing is.

For two years, Ho Lee was charged more than $1,600 a month for a truck lease. When he got ill and missed a week of work, he lost the truck and everything he’d paid.

Well to be fair, a lease is not a purchase. I'm not defending, nor accusing the business owners. But if you thought you were buying a truck when you were actually leasing it then you didn't even understand the most basic premise of the business you were running.

I leased my pickup truck for two years. After two years of making payments I turned the truck in and walked away. I don't own that truck. I don't have anything to show for those payments I made. I was paying for the privilege of using the truck anyway I wanted to use it.

I have since purchased a truck. However, I'm making payments on it, so technically the bank owns it. If I stop making payments the bank will send a repo guy to get the truck and I lose the truck and everything I've put into it.

So I think they've really gone out of their way to vilify the business owners when in fact the drivers agreed to something they clearly didn't understand. And you can see from the drivers in those pictures that these are not 18 year old kids straight out of high school. These are grown men, many of them with families, in their 40's and 50's and 60's who should understand the basics of business by now. They should know the difference between owning something vs leasing vs financing to own. They should also know you don't sign a contract you don't understand.

Leasing anything means you're paying the owner of that item a fee for the privilege of using it. Whether it's an apartment or a vehicle or heavy machinery, leasing means you're simply paying for the privilege of borrow something from the owner. You never walk away with anything in the end.

Brett, maybe it would be a good idea to expand that small section on company leases to warn others of the truth potential pitfalls behind some of these contracts?

We've always told people it's a bad idea. And our true mission is to help new drivers break into the industry, so leasing should be out of the question for them anyhow. You really need to know how to handle a rig, how to manage your time, and know the in's and out's of this industry before attempting to start any sort of a business, which is exactly what leasing is.

For two years, Ho Lee was charged more than $1,600 a month for a truck lease. When he got ill and missed a week of work, he lost the truck and everything he’d paid.

Well to be fair, a lease is not a purchase. I'm not defending, nor accusing the business owners. But if you thought you were buying a truck when you were actually leasing it then you didn't even understand the most basic premise of the business you were running.

I leased my pickup truck for two years. After two years of making payments I turned the truck in and walked away. I don't own that truck. I don't have anything to show for those payments I made. I was paying for the privilege of using the truck anyway I wanted to use it.

I have since purchased a truck. However, I'm making payments on it, so technically the bank owns it. If I stop making payments the bank will send a repo guy to get the truck and I lose the truck and everything I've put into it.

So I think they've really gone out of their way to vilify the business owners when in fact the drivers agreed to something they clearly didn't understand. And you can see from the drivers in those pictures that these are not 18 year old kids straight out of high school. These are grown men, many of them with families, in their 40's and 50's and 60's who should understand the basics of business by now. They should know the difference between owning something vs leasing vs financing to own. They should also know you don't sign a contract you don't understand.

Leasing anything means you're paying the owner of that item a fee for the privilege of using it. Whether it's an apartment or a vehicle or heavy machinery, leasing means you're simply paying for the privilege of borrow something from the owner. You never walk away with anything in the end.

Moral of the story?

Never ever lease a commercial truck.

Never.

Sounds simple but for some people the company sells pitch gets them to sign. And in the above case you have immigrants who probably have a limited command of the English language being used & abused by unscrupulous business owners. How many newbie "American" truckers have gone to a sponsored CDL school to be a company driver then told all of a sudden after all the training and paperwork is signed there are no company trucks and if you want to make money you better sign up for a lease purchase? High pressure sales tactics. It is legal though, right?

Don't forget also that the average profit margin in the trucking industry is a measly 3% after paying the driver. So think about the revenues you'd have to turn to make a nice profit while driving an expensive new vehicle. You'd have to turn some serious revenues. Those guys in the ports had super old, crappy trucks that they had paid off years ago. And they were able to work on those trucks themselves. So they could haul freight cheap.

When California changed their laws and required trucks to pass high emissions standards those old trucks had to go. Well there's no way the people paying for shipping are suddenly going to increase what they're willing to pay by a huge percentage overnight. It's going to take time to get the freight rates up to where they need to be in order to support the more expensive equipment. In the process a ton of companies and drivers got squeezed out. There's always going to be a lot of collateral damage when legislation makes a drastic change to an industry like that.

And again, I'm not defending or prosecuting anyone. I'm just saying don't be so quick to point 100% of the blame at unscrupulous business owners. There are a lot of moving parts, especially when you factor in that major shift in legislation.