Facing unique challenges, Wisconsin dump truck advocates seek to revive owner-operator rate

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After an early summer focus group with the Wisconsin Department of Transportation (WisDOT), dump truck industry advocates were unable to find the revival of owner-operator trucking rates they were after.

George Schroeder, who owns a trucking company in Burlington, said a lack of raised truck rates over the span of nearly 30 years and inflationary costs are causing turnover among dump truck drivers, many of whom are owner-operators. He and other trucking advocates met with WisDOT officials to discuss different issues in the industry, including raising truck driver rates since owner-operator truck rates were appealed by the Legislature in 1995.

According to 1995 Wisconsin Act 215, all employees, including laborers, workers, mechanics and truck drivers working on a project site, are required to be paid the prevailing wage and aren’t permitted to work beyond prevailing work hours, which the law defines as 10 hours per day or 40 hours per week.

Under the law, “prevailing wage rate” for any trade engaged in construction projects gets an hourly basic rate of pay with contributions for health insurance, pension and vacation benefits. Truck rental rates and prevailing wages were separate before 1995, but the law changed to include truck drivers under prevailing wages and labor hours.

Another section of the law reads, “A truck driver who is an owner-operator of a truck shall be paid separately for his or her work and for the use of his or her truck.”

But Schroeder warns that without increased trucking rates, the amount of turnover due to costs would risk the supply of local trucks to haul aggregate for state highway projects. He said costs for items such as fuel, maintenance, repairs, labor and benefits have vastly outpaced mandated wages.

“Only financial support is the answer. Reinstate the owner/operator truck rate. By doing that smaller contractors will have an opportunity to bid on (WisDOT) jobs because the truck rate will be mandated, making it easier for everyone to have a chance to be able to bid on the job,” he said in a letter to the transportation agency.

After a focus group with trucking officials in May, Scott Lawry, a deputy division administrator for WisDOT, said in a follow-up email the agency didn’t have the power to change policy for trucking rates. The agency was able to address issues such as fuel cost adjustment, nighttime work and workforce development, however.

“We also wanted to offer some transparency on the following topics discussed in the focus group: Setting trucking rates, organizing a union or developing laws for broker rates. We have had additional discussion internally since the focus group and determined these items are not within our control as a department of state government. If your group does choose to pursue solutions in these areas, we are happy to take any additional questions if we can offer helpful information, insight or historical perspective that may assist your efforts,” Lawry added.

If truckers want to establish a new owner-operator trucking rate, they will have to go to the Wisconsin Legislature and consult their local lawmakers to take action, a WisDOT spokesperson said.

A revision to Chapter 66 of the state statute restricted prevailing wages on state-funded public works projects.

According to Wisconsin Statute 66.0903(1m)(c), “A local governmental unit may not enact and administer an ordinance or other enactment requiring laborers, workers, mechanics, and truck drivers employed on projects of public works or on publicly funded private construction projects to be paid the prevailing wage rate and to be paid at least 1.5 times their hourly basic rate of pay for hours worked in excess of the prevailing hours of labor or any similar ordinance or enactment.”

“It would defeat the purposes of facilitating broader participation with respect to bidding on projects of public works, ensuring that wages accurately reflect market conditions, providing local governments with the flexibility to reduce costs on capital projects and reduce spending at all levels of government in Wisconsin,” the spokesperson added.

Steve Baas, executive director of the Wisconsin Transportation Builders Association, acknowledged that the trucking industry faces inflation and workforce challenges like most job sectors, and added overall his members have been able to adapt.

“Every job is unique in terms of cost and capacity drivers for contractors, but on the whole our members have been able to adapt so their ability to compete for work and do the work is not adversely impacted,” Baas added.

Dan Zignego, president of Zignego Co., said his company had good relationships with its partners, trucking companies included.

“From our experience, the dump truck industry is a very commoditized market and it would be wise for those who choose to do business in that industry be aware of that fact and be aware how sensitive it is to supply and demand,” Zignego added.

However, infrastructure dollars and lobbying efforts have kept Wisconsin transportation projects with fat pockets. According to a February 2023 report from the White House, the federal government announced $2.1 billion in federal funds through the Bipartisan Infrastructure Law for roads, bridges, roadway safety and major projects statewide.

Despite trucking woes, some companies experienced growth

Amy Hacker, who co-owns White Buffalo trucking with her husband Cale, said her business grew from one truck to five since starting in 2013. She credits her company’s success to the drivers she works with, money management and negotiation. Hacker was awarded as one of The Daily Reporter’s 2023 Women in Construction.

“There is always some give and take, but trucking companies tend to be on the giving end. The price of doing business is on a steady increase, but the rates seem to not follow the trend,” she added.

She said trucking doesn’t follow the rules of other trades, but added trucking companies should work together to negotiate for better rates from primary contractors.

“Trucking is a beast of its own, and everyone knows it. I think trucking companies need to learn how to come together, while working separately,” Hacker said.