fbpx
  • DATVF.ATLPHL
    1.707
    -0.036
    -2.1%
  • DATVF.CHIATL
    1.840
    -0.138
    -7%
  • DATVF.DALLAX
    0.937
    0.021
    2.3%
  • DATVF.LAXDAL
    1.421
    -0.025
    -1.7%
  • DATVF.SEALAX
    0.971
    -0.035
    -3.5%
  • DATVF.PHLCHI
    1.033
    -0.036
    -3.4%
  • DATVF.LAXSEA
    2.041
    -0.059
    -2.8%
  • DATVF.VEU
    1.527
    -0.070
    -4.4%
  • DATVF.VNU
    1.404
    -0.040
    -2.8%
  • DATVF.VSU
    1.179
    -0.002
    -0.2%
  • DATVF.VWU
    1.506
    -0.047
    -3%
  • ITVI.USA
    9,646.100
    305.090
    3.3%
  • OTRI.USA
    6.600
    -0.170
    -2.5%
  • OTVI.USA
    9,653.700
    312.670
    3.3%
  • TLT.USA
    2.760
    0.020
    0.7%
  • WAIT.USA
    156.000
    -2.000
    -1.3%
  • DATVF.ATLPHL
    1.707
    -0.036
    -2.1%
  • DATVF.CHIATL
    1.840
    -0.138
    -7%
  • DATVF.DALLAX
    0.937
    0.021
    2.3%
  • DATVF.LAXDAL
    1.421
    -0.025
    -1.7%
  • DATVF.SEALAX
    0.971
    -0.035
    -3.5%
  • DATVF.PHLCHI
    1.033
    -0.036
    -3.4%
  • DATVF.LAXSEA
    2.041
    -0.059
    -2.8%
  • DATVF.VEU
    1.527
    -0.070
    -4.4%
  • DATVF.VNU
    1.404
    -0.040
    -2.8%
  • DATVF.VSU
    1.179
    -0.002
    -0.2%
  • DATVF.VWU
    1.506
    -0.047
    -3%
  • ITVI.USA
    9,646.100
    305.090
    3.3%
  • OTRI.USA
    6.600
    -0.170
    -2.5%
  • OTVI.USA
    9,653.700
    312.670
    3.3%
  • TLT.USA
    2.760
    0.020
    0.7%
  • WAIT.USA
    156.000
    -2.000
    -1.3%
AskWavesInsightsOnline Haul of Fame

The Roaring Twenties are upon us yet again

Life and logistics are so different this time around

The Roaring 20’s are upon us yet again. Generations have passed since the last time we got to say that and civilization has changed so much since then. Life was very different on New Year’s Day 1920. 

The world was on the path to recovery from the First World War. New uses of emerging technologies were starting to take their place in society. Mack Trucks had become a core part of the military arsenal, proving worthy of helping the Allies during the war. 

The first radio news broadcast had not taken place, but this would happen within a few months. 

The average age was 55 years old and living conditions were incredibly poor by 2020 standards. Most work was incredibly dangerous, with the workplace fatality rate 30 times greater than it is today. There was no FMCSA in those days, so historical safety records for transportation are hard to come by. The work day was also much longer, leading to an average work week of 55 hours per week. 

Women were unlikely to be working outside of the home in those days, but male children older than 14 probably were. Only one-quarter of male teenagers under 17 were enrolled in any form of schooling and over half of families were involved in farming as their primary income source. 

Families spent over half of their monthly income on food, twice the current level. Lard was a primary source of calories, with about the same consumption levels of chicken. 

Alcohol would be banned through prohibition in 1920, creating an underground economy dedicated to trafficking and transporting booze. 

America was a country full of renters, with a family four times more likely to rent than own the house they lived in. If they did try to buy a home, it would require around a 50% down payment to secure financing. 

Infant mortality was as high as 10% and women had a 4% chance of dying giving birth (women had far more children in those days as modern birth control had not been invented). Antibiotics had not been invented, so a basic infection could result in death.

Motorized vehicles had only recently been outfitted with electric generators, which allowed lights to be added to trucks at night. Prior to this, trucks would pull over at night and wait for daybreak before continuing along the journey. 

Hours of service did not exist, but motorized vehicles were so finicky that it was unlikely that a truck could go a great distance without having a maintenance issue to tend to. 

Gas stations were also a relatively new thing. From their beginnings in 1914, they provided dedicated gasoline service as a core part of their business. Standards for the quality of gasoline varied widely by station, state and even time of year. Engines were unreliable and produced a loud knocking noise as they ran. Lead would later be added to gasoline to control engine knocking as they burned fuel and allow the fuel to provide higher engine performance (it was a known poison at the time, but added anyways. It was eventually banned).

Trucks ran on gasoline, because the diesel engine had not been invented proven reliable yet for trucks. A national highway system didn’t exist. Railroads were the primary form of freight transportation, as trucks had limited use in long-haul transportation. There were over one million trucks on the highways, but they were mostly used for intra-city and regional runs. The trucks of the day closely resembled box trucks rather than trucks with trailers, because the fifth-wheel had not been invented. 

The airplane was a relatively new invention and although it had proven itself during World War I, its impact on society was uncertain. The first scheduled airmail service had just begun along the East Coast. Zeppelins (airships) were promising technology and the world was optimistic about the power of airborne travel and freight. 

The intermodal container box had not been invented. Ships largely hauled bulk goods and freight that had to be unloaded by hand or through dockside cranes. 

The war-time shipbuilding industry came under significant financial pressure in peacetime. This led to great pressure in Congress to pass legislation to support and encourage a domestic shipbuilding industry. The Merchant Marine Act of 1920, otherwise known as the Jones Act, would be passed in June of that year. It read:

It is necessary for the national defense and for the proper growth of its foreign and domestic commerce that the United States shall have a merchant marine of the best equipped and most suitable types of vessels sufficient to carry the greater portion of its commerce and serve as a naval or military auxiliary in time of war or national emergency, ultimately to be owned and operated privately by citizens of the United States; and it is declared to be the policy of the United States to do whatever may be necessary to develop and encourage the maintenance of such a merchant marine, and, in so far as may not be inconsistent with the express provisions of this Act, the Secretary of Transportation shall, in the disposition of vessels and shipping property as hereinafter provided, in the making of rules and regulations, and in the administration of the shipping laws keep always in view this purpose and object as the primary end to be attained.

Basically, The Jones Act prevented foreign flag ships from hauling between two domestic ports.

The railroads had been taken over by the federal government in 1917, in the interest of national security related to the war effort. The government invested $380 million in the railroads and promised to give the companies back to their owners within 21 months of a peace treaty. 

The U.S. was not a party to the Treaty of Versailles which would have forced the government to turn control to the owners automatically. The unions largely supported the government maintaining control. President Wilson and the public largely disagreed.

Congress ended up passed the Esch-Cummins Act, which ended nationalization on March 1st, 1920 and the railroads were given back to their private owners. The Federal government did increase power over the railroads that it had not possessed prior to nationalization. The ICC was given power to approve/block mergers, to set rates, and approve or reject services. The government also provided some funding guarantees that supported the financial viability of the railroads.

Railroads were still experiencing rapid expansion in terms of new track miles and investment as urbanization became a major driver of economic growth. At peak, railroads would have 260,000 miles of domestic track compared with just 100,000 miles today.

The trucking industry would eventually eat away at railroad freight revenues, while airplanes and the interstate highway system would kill the competitiveness of passenger trains. According to the Slate, railroads did not make a profit from passengers after the late 1930s. This was largely blamed on union contracts and hangovers related to the Esch-Cummins Act.

The decade ahead of us is going to be completely different from the last. Looking back at the state of the world in 1920, we have a lot of reasons to be optimistic about the progress of society over the next 10 years. In future articles, we will make predictions of what freight will be like over the next decade.


Tags
Show More

Craig Fuller, CEO at FreightWaves

Craig Fuller is CEO and Founder of FreightWaves, the only freight-focused organization that delivers a complete and comprehensive view of the freight and logistics market. FreightWaves’ news, content, market data, insights, analytics, innovative engagement and risk management tools are unprecedented and unmatched in the industry. Prior to founding FreightWaves, Fuller was the founder and CEO of TransCard, a fleet payment processor that was sold to US Bank. He also is a trucking industry veteran, having founded and managed the Xpress Direct division of US Xpress Enterprises, the largest provider of on-demand trucking services in North America.

3 Comments

  1. This particular author’s articles are captivating . In fact he’s one of my favorites on freightwaves . I don’t recall disliking any of the articles he’s written , at least not yet .

    I really look forward to reading his “predictions” .

    Furthermore , I like the fact that freightwaves has been increasing the amount of “educational” articles lately .

    They have aroused my interest .

    In my humble opinion …………

  2. It would be nice if an article were written on freightwaves on how trucker pay by the mile came to be , and why it’s no longer ‘fair” for drivers today .

    I’ll copy and post a part of an article I found .

    Quote :

    Why truckers are paid by the mile instead of by the hour: A Fleet Owner explainer
    One of the questions that many drivers ask us is why they aren’t paid by the hour or with a set salary like other U.S. employees.

    Editor’s Note: One of the questions that many drivers ask us is why they aren’t paid by the hour or with a set salary like other U.S. employees. Some surveys have shown that drivers, mostly over-the-road haulers, quit not because they believe they are being paid less than they deserve but that they cannot be sure how much they will earn during a week or month. Without knowing how much they will bring home, they find it difficult to budget. This is especially true for drivers whose routes often include high congestion, areas with poor driving conditions because of weather and those whose customers have extended loading and unloading times.

    The story begins in the early 1930s when the United States was coming out of the Great Depression. Farms were producing a lot of food and the country needed many trucks to deliver produce and meat to consumers who were just getting back on their financial footing. There was no refrigeration in those days so truckers drove as much and as quickly as they could before the food spoiled. There was little  regulation either, and drivers drove as many hours as they could, some driving to exhaustion before pulling over to the side of road and continuing their route after a short nap. Truckers were often paid by the mile, but they were fine with it because they made more money than if they were paid a minimum wage which came along in 1938 as part of President Franklin D. Roosevelt’s New Deal.

    In 1938, the Fair Labor Standards Act, also known as the Minimum Wage Law, mandated that employees, with a few exceptions, would be guaranteed a minimum wage per hour. This minimum wage would help put money in consumers’ pockets, protect workers from unscrupulous employers and, more importantly, inject money into an economy that was still recovering from the Great Depression.

    Everyone was on board with the idea of exempting truck drivers from the minimum wage laws. First, truckers themselves preferred it because they could make so much more money. In the 1930s, there weren’t as many cars on the road as today especially in rural areas and outside big cities so, in some cases, trucks had much of the roads to themselves. Second, FDR favored it because there was a starving nation to feed. He wanted as many trucks on the road as possible. Third, the trucking companies were happy with the situation because they only paid when the driver produced. This lowered their business risk and maximized their profits because an idle worker did not have to be compensated. However, nothing in the rules prohibited carriers from paying by the hour, and some did choose to do so.

    Fast forward to 1980, when, in an environment of deregulation, Congress passed the Motor Carrier Act which did away with the Interstate Commerce Commission (formed originally in 1887 to regulate railroad transportation among states) and deregulated the trucking industry. However, with this deregulation Congress did not remove trucking’s exemption from the Minimum Wage Law. Truckers were still being paid by the mile, but there was a problem looming for drivers. New Hours of Service rules, which came along as part of the Motor Carrier Act and subsequent additions, essentially put a cap on how much a truck driver could earn by limiting their driving hours.

    And that’s where it stands today.”

    End quote .

    1. Second and final part of article copy and pasted above .

      Quote:

      (Actually, The Interstate Commerce Commission  promulgated the first federal hours-of-service regulations in the Motor Carrier Act of 1935. The regulations remained largely unchanged from 1940 until 2003, except for an important amendment in 1962. Prior to 1962, driver hours-of-service regulations were based on a 24-hour period from noon to noon or midnight to midnight. A driver could be on duty no more than 15 hours in a 24-consecutive-hour period. In 1962, among other rule changes, the 24-hour cycle was removed and replaced by minimum off-duty periods. A driver could “restart” the calculation of his or her driving and on-duty limitations after any period of 8 or more hours off duty. For more details, see the August 25, 2005 Federal Register.)

      One of the arguments drivers make for being covered by minimum wage is that they should not be penalized for situations beyond their control. One comparison, for example, is that factory workers are still paid even if they’re idled while a machine is being repaired. Office workers are also paid even if they don’t have an immediate task to perform. Economists also argue, as did Adam Smith, the ‘Father of Capitalism’ in his 1776 book Wealth of Nations, that workers are not actually selling their labor to a company but their ability to provide labor when called upon.

      Carriers contend that they should not have to pay a driver for non-driving tasks such as filling their fuel tanks and waiting at warehouses because drivers are paid to drive. This has changed for some drivers recently with compensation such as detention pay. Carriers also contend that in a capitalistic economy, workers are free to work where they please and that no one is forcing anyone to drive a truck if they don’t wish to do so. They say the working conditions and pay-by-mile are well known to anyone who makes the effort to learn about the industry before they join it.

      We thank former OTR driver Dave Ashelman, now a Phd. student at Carleton University, in Ottawa, Ontario for his insights. Ashelman studies ‘precarious labor’ from the economic side as well as the social side.
      Shane Hamilton, author of Trucking Country: The Road to America’s Walmart Economy and head of the International Business, Strategy and Management Group at York Management School (UK), also contributed to this explainer. His podcast, that offers more detail on the history of driver pay, is here.”

      End quote

      Carrier arguments are beyond ridiculous .

      Here is one of them among many :

      Quote :

      “. Carriers also contend that in a capitalistic economy, workers are free to work where they please and that no one is forcing anyone to drive a truck if they don’t wish to do so. ”

      Now you know why some carriers are experiencing a “driver shortage” . Then they dare complain about it !

      They want to have their cake and to eat it too ! DING – DONG , is anybody home ???

      The only shortage that the trucking industry is unfortunately in a severe case of is :
      A SHORTAGE OF DEVEOPED BRAIN CELLS & ETHICS !

      In my humble opinion ………….

Leave a Reply

Your email address will not be published. Required fields are marked *

Close