Planet Money - Big Rigged (Classic)

Episode Date: January 18, 2023

Driving a truck used to mean freedom. Now it means a mountain of debt.Subscribe to Planet Money+ in Apple Podcasts or at plus.npr.org/planetmoneyLearn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

This is Planet Money from NPR. Hi everyone, it's Keith Romer. Today we're rerunning an episode we originally aired back in 2020. Enjoy. Kimberly Sikorski is a long-haul truck driver. Right now I am in Boonville, Missouri at a pilot truck stop. So I'm in the cab. Kimberly is in the sleeper area.

Basically, there's a tiny apartment behind the driver's seat of these big trucks separated from the front by a curtain. But when you close that center curtain, what matters is what's behind it because that's your home. That's where you spend the majority of your time. Kimberly has a little fridge back there.

There's a slide-out table, bunk beds. That's where she sleeps every night when she's on the road. She's been out for the last two weeks, picking up freight, dropping it off, picking up freight, dropping it off. I am taking Pepsi from the Costco warehouse in Illinois to a Costco store in Missouri. Kimberly is from a desert town halfway between Los Angeles and Las Vegas. She's had a lot of jobs over the years. She was a waitress. She was a clerk at a gas station. She was a prison guard. None of those jobs paid well.

I was working two to three jobs at a time and making maybe $1,500 a month, which living in Southern California isn't enough to even feed your kids. Kimberly was in her 30s. She was a single mom with three sons, a high school diploma, and basically nothing in the bank. So in 2017, she decided to reinvent her life. Kimberly wanted to make this new chapter of her life match up with her favorite part of the Bible. Proverbs 31 is a Bible verse that I model my life after. It's basically a woman who is hardworking, a good mother, very strong in faith, not flashy, and basically provides for her family in every way. Kimberly and her kids moved to Missouri to live with some of her friends. And that's when Kimberly started to think about trucking. I was told that you would start making about $40,000 to $50,000 a year.

I would have been fine with even making $30,000 at that point because I was only making half of that working three jobs. Also, trucking seemed like it could be a nice way to see the country. I imagined seeing the oceans and rivers and lakes and driving through forests and getting to kind of explore what was around me. I really wanted to see green. That was my biggest goal at the time because I grew up around tumbleweed and dirt. Kimberly found a trucking company called Prime, no relation to Amazon Prime. Prime is a giant company, $2 billion in annual revenue. It runs thousands of trucks. And they have a program specifically geared toward women drivers.

They call them the Highway Diamonds. And Kimberly is like, Highway Diamonds sounds so nice. She calls up a number on the website, and immediately they seem pretty eager to have her. Literally, I think I called on a Thursday night and they were ready to buy me a Greyhound ticket for Sunday to start on Monday. Kimberly was in, but what she was in for was not at all what she thought. But what she was in for was not at all what she thought. Hello and welcome to Planet Money. I'm Keith Romer. And I'm Sarah Gonzalez.

For a long time, being a long-haul trucker was a path to a middle-class life. But in the last few decades, the trucking business has transformed. It's gotten faster and cheaper and way harder on its workers. Today on the show, a story about the open road, the chance to be your own boss, and a truckload of debt. In February of 2017, Kimberly Sikorski made her way to Springfield, Missouri, to start her big trucking training with Prime. We pulled up to the hotel, which is called the Campus Inn, and it kind of looks like a shady hotel on the wrong side of town. felt like I was kind of in a circus because there's so many different people that you just make a phone call and then they ship you off to Springfield and say, come on, we're going to give you this whole future and this whole life. Training started fast. First day, a bunch of classwork. Then she was going to learn how to drive a truck, an 80,000 pound semi, except she

was not actually going to drive a truck. She was going to take a turn on a fancy truck driving simulator. It's almost like a big video game, but the first thing you're told is, don't ever call this a video game. It's a multi-million dollar machine. And the owner gets really mad if you call it a video game. Kimberly spent four whole days in a classroom, then another two weeks in the parking lot, learning how to back up the truck, drive around corners. But for a lot of the other trainees, those four classroom days were all they got before they hit the road. At the end of the fourth day, if you've passed your permit and have already

gotten your results for your drug test back and you've passed your physical, they start sending people off in trucks with trainers with their permit to do their first 10,000 mile training. You're like do training for like three or four days and play the video game. And then they're like, okay, go drive a giant truck around Missouri. No, not around Missouri, around the United States. That seems dangerous. It's extremely dangerous. They just kind of put people in trucks and say, here you go, go drive it. Prime says they follow all training regulations. But driving a semi is not easy, especially when you're just starting out. According to the Department of Transportation,

new truck drivers are 41% more likely to get in an accident than more experienced ones. On Kimberly's second day on the road, she drove through a blizzard in Pennsylvania. My trainer was in the back, laying in the bed, watching TV. So I had to just focus and try to think of what was the best thing. Make sure that I wasn't, you know, doing the things that they told you could make you crash. Like if you start to slide on the ice, don't slam on your brakes because it'll actually make you jackknife or can pull you off the road. She manages to keep the truck on the road, keeps going. And after a few months, Kimberly is ready to go out on the road on her own,

no trainer. But before that, she has a decision to make, a decision that is way bigger than she realizes. The company tells her there are two ways you can be a solo driver for us. So you're given the option to either be a company driver or a lease operator. Okay, up to this point, Kimberly has been getting paid a steady $700 a week as a trainee driver. And if she stays on as a company driver, as an employee of Prime, she'd get paid something like 37 cents per mile that she drives. And then Prime gives her a second option. She could become a lease operator. She could buy her own truck with a loan from Prime.

Every week, she'd pay a little bit off. She'd basically be running her own one-woman trucking operation with a single client, Prime. Here's how it works. Prime charges a company like Costco to move a truck full of stuff. And whatever Prime charges Costco, like let's say a dollar per mile, they're going to give Kimberly like most of that money, like 72% of the money. And 72% feels like so much more than 37 cents per mile. Plus, she says the folks at Prime were pretty clear that this is the path you wanted to be on. They paint it in a very politically correct way. But they say if you're not stupid and you're not lazy, then you'd make a lot more money being a lease operator. And you're kind of dumb if you pass that up.

Kimberly was not going to pass that up. So she signs up for the lease option, the be your own boss option. You actually have to make your own LLC, and they have a CPA on site, and they file all the paperwork for you. They do absolutely everything for you. You basically pick a name for a business, and if you want, you can pick fancy stickers to go on your truck. She names her company 31 Diamonds. Diamonds after the Highway Diamonds program she was in, 31. After that part of the Bible she modeled her life after, Proverbs 31. Kimberly picks out her truck, a brand new blue freightliner that she names Sapphire.

To make it official, all she has to do is sign this giant pile of contracts. And did you feel like you, like, genuinely understood what you were signing? I had no idea what I was signing. She moves her stuff into her new blue truck. She puts up some pictures of her three sons. She tries to make it look nice. I had it totally decorated and it was a complete chick truck. I had matching comforters with throw pillows, little string lights around it to give it different mood lighting. It kind of looked like a girl's college dorm room. Almost immediately, Kimberly gets her first load, starts driving,

and she's making trips, driving all around the country. This is exactly what she wanted. But when she starts getting her paychecks, she's like, wait, hold on, there's something not right here. A lot of times when I'm expecting to see a check for a couple of thousand dollars, I'm getting a bill for like $200 or $500 or $1,500. She was getting bills, not paychecks. And Kimberly's paycheck, by the way, isn't even officially called a paycheck. It's called a settlement. Because remember, she is not an employee. She's her own boss with her own company.

And week after week, her settlements, her paychecks, they keep coming out negative. Kimberly keeps getting bills, not checks. She is making no money, even after driving thousands of miles. And this, Kimberly working without getting paid, this is not the system failing. This is the system working exactly the way it was designed to. Kimberly and thousands of drivers like her losing money, driving all our stuff around. That is part of how we consumers, how we can have cheap things. How we got here?

That's after the break. I first heard that some big changes had happened in trucking from a new book that's coming out called The Secret Life of Groceries by Benjamin Lohr, which is this kind of brain-bending look at how and why these massive stores filled with every possible kind of food are even possible. Trucking is obviously a big part of that. Someone's got to get all the food to the stores. And the story of how Kimberly's job can earn her bills instead of paychecks, it's kind of the story of the last 40 years of the trucking industry. For the next few minutes, we're going to do a very abridged version of that history. Benjamin put me in touch with Steve Veselli, a sociologist at the University of Pennsylvania who specializes in trucking.

When you look at the big box supply chain, it's all about cheap trucking. Steve has been studying the trucking industry for years. As part of his research, he actually worked as a long haul truck driver himself for six months. And I might start in upstate New York and pick up a load of beer, drive it a thousand miles up to Michigan, you know, pick up a load of steel coils, bring those down to Mobile, Alabama. Okay. Starting in the 1930s, Steve says long-haul trucking became highly, highly regulated. Prices were set not by supply and demand, but by cartels of trucking companies. The federal government did have to sign off on those prices. But once they did that, that was it.

So they were guaranteed a rate of profit by the Interstate Commerce Commission, the ICC. On the labor side, up to that point, trucking unions had been this localized thing. But in the 1950s and 60s, they join up into this giant national union. The union president, a guy by the name of Jimmy Hoffa, might have heard of him, he gets truckers a great deal. Truckers made great wages, even better than unionized auto workers and steel workers at the time. So it was one of the best blue-collar jobs in the United States, without a doubt. And then in the late 70s and early 80s, there was this shift in thinking for a lot of people on both sides of the political divide. Regulation, government involvement in price setting,

these things were just costing consumers too much. So Congress rewrites the rules. The government starts deregulating all kinds of industries. Telephone companies, airlines, and trucking. Now, instead of trucking companies getting together and setting prices and the government signing off on it, the market is wide open. Anybody could move anything anywhere. All you needed was a truck and a driver. And very quickly, rates plummeted.

All of a sudden, it got very, very hard to turn a profit as a truck and a driver, and very quickly rates plummeted. All of a sudden, it got very, very hard to turn a profit as a trucking company, and a lot of the old trucking companies couldn't keep up. So if we look at the largest companies that operated in the 60s and 70s, within 10 years of deregulation, all but five of the largest 50 were gone. To survive, companies started looking to cut costs wherever they could. So the first thing you do is you get rid of expensive unionized labor. That's definitely step one. You know what's cheaper than a unionized truck driver?

A non-unionized truck driver. Companies start making their drivers stay out on the road for longer stretches, weeks at a time. They used to put truckers up in hotels, but now they're like, eh, just let them sleep in the truck. They cut wages and benefits way down. To be clear, this did not happen in all sectors of the trucking industry. But at a lot of the big companies like Prime, they figured out that the absolute rock-bottom cheapest way to put somebody behind the wheel of their trucks was to actually hire people with no experience. People who'd never even been inside a semi. Just train them from scratch. And one last wrinkle, why don't we figure out a way to get the driver to buy the truck too? Which is exactly what happened to Kimberly

Sikorsky, who was getting paychecks that said, you owe us $300. Sometimes it would go as long as six weeks before I got to see a paycheck. They would constantly say right now, freight's down. It'll be better. It's just a slump. A couple months in, Kimberly starts suspecting that the deal she signed up for is not a good one. All her truck payments, all the interest she's paying on her blue truck, Prime gets that money. Her insurance, it has to come from Prime. Her gas, she has to pay for it using a Prime card. All the load she carries, dispatched to her by Prime. So they say that you're not their employee, but you're completely bound to them. You're not allowed to take loads from anyone else. You're

not allowed to ask for different loads than what they're giving you. You're not allowed to take loads from anyone else. You're not allowed to ask for different loads than what they're giving you. You're not allowed to drive that truck anywhere that they haven't authorized. So they say it's yours, but it's really not. For Kimberly, if her truck wasn't moving, she wasn't making any money. But the debt on her truck was still adding up. The clock was always ticking. It got to the point where I would be sitting in my truck crying because I'd be afraid to buy a hot dog. Because I wasn't sure I could actually afford to spend any money because I wasn't making any money. And it had been probably two months since I'd sent any money home for my kids. And at the same time, I'm working so many hours. I'm just exhausted and depleted, but I have nothing to show for it. And remember that training Kimberly got from Prime, the truck video game simulator thing?

Prime offers that training to new drivers for free. But there's a catch. You have to stay for a year. If you leave before the year is up, you're on the hook for the full cost. For Kimberly, that was thousands of dollars. Which I obviously couldn't afford that. I hadn't made any money. So I had nowhere to pull from to pay back for the training that they gave me. So Kimberly feels trapped. Her sons, they're with

her friends. Her friends are taking care of them while Kimberly is out on the road. They're paying for everything because Kimberly is not making any money. In six months as the owner of 31 Diamonds LLC, Kimberly only made money two of those months. She made $9,000. The other four months, she made $9,000. The other four months, she made nothing. And eventually, it got to be too much. It was a little less than a month before Christmas. And my friend had called me to let me know that she didn't have grocery money for the house, that she wasn't sure what we were going to do as far as holidays for children. And she asked me if there was anything that I could help with, even just $100. And looking at my bank account and having it at zeros and looking at my settlements and having it with negative numbers, I just couldn't do it anymore.

Kimberly drives her truck to the Prime Terminal in Salt Lake City. She takes down the string lights and the pictures of her sons and empties out the cabinets. Kimberly was going to walk away from her blue Freightliner. She closes the door, drops her keys off with someone in the shop, and that was it. I realized that when it gets to the point of your electricity being shut off and your grocery bill not being able to be paid, there has to be something better. For reasons that Kimberly doesn't entirely understand, Prime never came after her for the cost of the training. Steve Acelli, the trucking sociologist, says that employees giving up, walking away,

is almost always the way it goes at these big trucking companies. It's basically part of their business model. There are years in which turnover is over 100% at major carriers. And it's not uncommon at all for companies to have an average tenure for a new hire of six months. companies to have an average tenure for a new hire of six months. But even with all the costs of recruiting, buying everyone a Greyhound ticket to the training, training all those new drivers, Steve says dealing with that much turnover is still way cheaper than having all full-time employees or hiring these like veteran long haul truckers.

And Steve says even then, these companies barely make a profit. Cheap is the only way they can survive. Because in other industries, you can build brand loyalty or offer fancier customer service. But in for-hire long-haul trucking, customers mostly don't care that much what company is driving all their stuff from the distribution center to the store? They just want it to not cost that much. Price is the only real way these companies can compete. And that keeps their profit margins super low. I would not try to pin this on bad actors or to try to vilify the companies that are engaged in this. This is a failure of policy.

Steve thinks that the real solution to the problem of a deregulated trucking industry is actually probably more regulation. Or maybe just do a better job of enforcing the rules that are already on the books, like labor laws. Over the last few years, there have been a wave of lawsuits, class action, by truckers against these mega carriers. Like PAM Transport.

They allegedly underpaid their workers and they settled a suit for $16.5 million. Knight Swift Transportation, they were accused of saying their employees were not employees, but independent contractors. They settled for $100 million. And Kimberly's old company, Prime,

they were accused of misclassifying their employees as independent contractors and violating minimum wage laws. Prime settled for $28 million. 40,000 people who had an experience like Kimberly can get a share of that money. Which means it's like $700 a person. Does that seem like enough? No. Honestly, if you really look at the fact that just me specifically, I worked 70 hours a week for six months.

And out of that six months, I didn't get paid for four of them. And out of that six months, I didn't get paid for four of them. So four months of working for free to get $700, it's kind of laughable. None of the three companies, PAM, Knight Swift, or Prime, admitted wrongdoing as part of their settlements. In an emailed statement, a lawyer for Prime wrote, quote, We have thousands of highly successful independent contractors and company drivers who thrive within our business model. The class action that was settled is completely unrelated to Ms. Sikorsky's allegations. The litigation was seemingly endless and was best resolved. Since leaving Prime, Kimberly has bounced between four different trucking companies, trying to find one where she can make a real living. And after three years of trying, she thinks she's succeeded,

working for a smaller company that maybe doesn't have the lowest prices for customers, but promises world-class service. I finally have gotten to a company that treats me well, that pays me well, that has respect for me and looks out for its employees. Kimberly is not an independent contractor anymore. She's an employee. Her benefits are good and she gets a regular salary, $75,000 a year. But I also have made a commitment to my family that I'm only going to be driving for one more year and then I'll be coming off the road. I'm just staying out long enough for us to pay off our house. And then what will happen next?

Then I'll probably go back to being a correctional officer and having a lot less stress. Working as a prison guard just seems like a better life than keeping on as a long-haul trucker. better life than keeping on as a long-haul trucker. We originally reported this episode in 2020. This week, we called up Kimberly to see if she's stuck with her plan of only trucking for one more year. She told us she actually wound up staying in the industry, but she's found a way to make it work better with her family life. Her boyfriend has also become a trucker, and they both just found jobs at the same company. They're going to go out on the road together. They'll live in the truck, take turns driving. They start in about a month. Got a business model you'd like to understand better?

Let us know. We are at planetmoney at npr.org and on social media at planetmoney. Today's show was produced by Liza Yeager and Autumn Barnes and edited by Bryant Erstadt. The rerun was produced by Willa Rubin and Dylan Sloan and engineered by Catherine Silva. Our acting executive producer is Jess Jang.

Special thanks to Ben Lohr. Check out his book, The Secret Life of Groceries, and to Desiree Wood. I'm Keith Romer. This is NPR. Thanks for listening. And a special thanks to our funder, the Alfred P. Sloan Foundation, for helping to support this podcast.