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including the United States and Commonwealth governments (app. I, table 4).

The number and types of customers varied according to the category surveyed. General truckers serving shipping companies predominantly reported relatively few customers while those serving retailers and wholesalers, reported more. The large trucking firms served a total of about 925 truckload (TL) customers in 1967. About 73 percent of these 925 customers are regarded by the truckers as steady customers. The largest single subcategory of truckload customers was manufacturing firms contributing about 58 percent of the total reported, some 70 percent of these being steady customers. Fifty-five customers were reported to be shipping companies; this small number reflects the limited number of shipping companies rather than the volume of business provided. Retailers and wholesalers on the other hand seemed to show relatively more customers (149 retailers and wholesalers) than indicated by their business volume. Only a few sugar centrals and farmers were reported as customers by large truckers.

Although LTL cargo generates about 30 percent of large truck revenue, only 17 percent of the customers were reported by large firms as LTL customers. Most of these were from the manufacturing sector; the next largest group being wholesalers and retailers. These two groups supplied 93 percent of the LTL customers reported.

c. Power Equipment of Large Firms (Trucks and Tractors)

41

In 1967, large firms utilized 204 trucks and 514 tractors for a total of 718 power units (see app. I, table 1). In 1959, large firms controlled only 165 trucks and 254 tractors for a total of 429 power units.11 This shows a 67 percent increase in power units during this period, reflecting the large increase in traffic moving to and from Puerto Rico. Of interest is the 95 percent increase in tractors and 43 percent increase in trailers. Most of these tractors pulled 35 to 40 foot trailers. The 1967 average revenue per power unit was about $14,500 compared with $11,600 in 1959.42

The 1967 revenue per power unit, however, varies widely, ranging from about $80,000 (household goods carrier) to $2,400.43

41 Robert R. Nathan Associates, Inc., op. cit., p. 1.

42 Ibid.

43 Of the three firms reporting the lowest gross revenue per power unit, two are specialized carriers; and, thus, seasonality might partially explain this low yield. The third is predominantly engaged in general trucking. This firm, which reported 18 power units and only 5 drivers, had total revenues of about $45,000 and total expenses of about $60,000 for 1967.

d. Employment and Wages of Large Size Firms In 1967, the 16 large firms responding to the survey employed 53 officers and executives. The 20 firms comprising the entire family of large trucking firms, therefore, employed a projected 66 officers of executives. All other employees including drivers totalled 883 compared with 848 in 1959. This indicates that more equipment was apparently being operated in 1967 by approx. imately the same number of personnel as in 1959.** There are, however, only 540 drivers for 718 power units indicating a considerable underutilization of equipment. While it is known that at least some of these units were out of service at the time of the survey, it is difficult to account for the apparently large number of idle units.* 45

Sixty-six percent of all employees of large firms excluding executives and management were unionized in 1967. The majority of those unionized belonged to the International Brotherhood of Teamsters, but there are some who belonged to independent unions and at least one firm was organized by the International Steelworkers Union.

5. Description of Medium Trucking Firms a. Size of Group and Distribution of Business Firms of medium size in the Puerto Rican trucking industry may be defined as those firms that operated at least 6 but not more than 15 power units.46 Appendix I, table 1 shows that there were 37 medium-size trucking firms operating about 324 power units in 1967. Appendix I, table 1 also shows the geographical distribution of this group throughout the Island by region. Most of these firms, or 23, were located in the northern region of Puerto Rico, largely in the metropolitan area; eight in the southern region surrounding Ponce and; six in the western region surrounding Mayagüez. Total power units increased 84.7 percent during the 8year period, from 183 units in 1959 to 338 units in 1967.

44 One possibility might be that some of this equipment is leased to others for personal or proprietary use and, therefore, would not have drivers employed by the trucking firm itself. Another possibility would be that some of the vehicles are operated by owners and executives but this is less likely except in the case of small truckers.

45 Appendix I, table 2 contains the range of pay for unionized and nonunionized employees.

46 The sample survey of 34 in the 37 firms resulted in 29 replies comprising an effective sample of 78 percent on distribution of business, equipment, employment, wages, unionization, and distribution of customers by industry. In the case of the number of customers, it was 59 percent.

b. Variety and Distribution of Business

Appendix I, table 3 shows that the total revenue earned by the medium-sized trucking firms in 1967. Total revenue more than doubled between 1959 and 1967, from $1,500,000 47 to $3,218,207 representing an average increase of 21.5 percent per year in Puerto Rico's traffic and a substantial rise in the number of medium-sized trucking firms during this 8-year period. The general cargo revenues were split approximately 66 to 34 percent between TL and LTL cargo, respectively. This table also shows that generalized TL trucking operations accounted for almost 50 percent of the total 1967 revenue gaining considerably over the 10 percent of the total in 1959. The revenues earned from specialized trucking operations, such as sugar and furniture movements, declined from 50 percent of total business in 1959 to 20 percent of business in 1967. In 1967, miscellaneous cargoes and LTL shipments represented approximately 30 percent of the revenue earned by this group.

Truckers acting as common carriers or contract carriers were predominently engaged in generalized trucking operations and had many and varied types of customers. Of the 37 medium-sized firms operating in 1967, 29 firms reported the distribution of their customers by industry categories as shown in table VII-5 below.

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c. Power Equipment of Medium-Sized Firms (Trucks and Tractors)

Appendix I, table 1, show that medium-sized firms employed 168 trucks, 156 tractors (324 power units), and 107 trailers in 1967, compared to 145 trucks, 109 tractors (254 power units), and 114 trailers in 1959. The 324 power units in 1967 represented a 28 percent increase in power units during the 8-year period. The rise in generalized TL traffic is reflected in this increase in power units. Tractors increased 43 percent and trucks 60 percent. During the same period, the average revenue per power unit increased 16.1 percent from $8,200 in 1959 to $9,521 in 1967. The 1967 average revenue per power unit of $9,521 for medium firms was approximately 35 percent less than for the large-trucking firms. The majority of the medium firms reporting in 1967 indicated that their equipment was owned rather than leased.

d. Employment and Wages of Medium-Size Firms

Employment in the medium-sized trucking firms between 1959 and 1967 is shown in table VII-6 below.

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Source: FMC and Commonwealth of Puerto Rico Joint Survey of Puerto Rico Trucking Industry-1968.

These truckers were largely involved in serving manufacturing plants, water carriers, and food stores which shipped or received primarily general cargo. Of the 29 firms reporting, only 8 were engaged in the movement of specialized cargoes (i.e., sugar and government shipments).

47 Robert R. Nathan Associates, Inc. op. cit., p. 29.

Sources: (a) FMC and Commonwealth of Puerto Rico Joint Survey of Puerto Rico Trucking Industry-1968; and, (b) Robert R. Nathan Associates, Inc., op. cit., pp 39-42.

In 1967, the medium-sized operators had approximately an equal number of drivers (i.e., drivers plus assistant drivers) and power units, 322 to 324. In 1967, the number of helpers and loaders decreased from a total of 146 employed by 22 firms to 28 employed by 37 firms indicating that far fewer trucking operators are now supplying their customers with such help. Mechanics are employed by medium-sized trucking firms in about the same ratio to the number of power units as in large-trucking firms. But unlike the large firms which have full-time mechanics, only 50 percent of the

medium-sized firms employed them full time. Between 1959 and 1967, the number of mechanics of mediumsized firms decreased slightly at a time when the total number of power units operated by these firms increased by 85 percent. This is probably due to the fact that many firms now have their power units serviced and maintained by regular garages.

Office employment is unevenly distributed. Nine had no office employees in 1959 and about 50 percent of the office workers reported in that year were actually employed by the firms dealing with household goods. By 1967, these firms decreased their office employee and executive staff by about 15 percent while at the same time more than doubling the number of drivers. In practice, much of the office work is performed by owners or other executives of the medium-sized trucking firms.

Appendix I, table 2 illustrates the wage rates for medium-size firms in 1959 and 1967. Unionization of the medium-size firms declined between 1959 and 1967. By 1967, only 21 percent of the medium-size firms were unionized. In 1959, 27 percent of the medium-size firms had been organized by the labor unions. The total union membership was only 94 (distributed in the San Juan and Ponce).

6. Description of Small-Trucking Firms a. Size of the Group and Power Equipment

Trucking firms are defined as small if they operate more than one truck or tractor-trailer combination but not more than five. Appendix I, table 1 shows that in 1967, there were 325 small-trucking firms operating 708 trucks, 259 tractors, and 179 trailers. Appendix I, table 1, also shows their geographic distribution throughout Puerto Rico by region. In 1967, these 325 small-trucking firms operated 967 power units. It is estimated that in 1959 there were 370 small operators of this class operating 1,000 power units including about 30 tractor-trailer combinations. Although the small firms controlled more trucks than did the large firms, their volume of business in terms of revenue earned was far less than that of the large or medium truckers. A large proportion of their trucks operated mainly during sugar harvest; an, for this reason, average truck utilization was not as high as the medium and large firms.

b. Variety and Distribution of Business

In 1967, the small truckers were engaged mainly in three categories of distribution: movement of gen

eral cargo, sugarcane transport, and building material operations. It is estimated that 148, or approximately 45 percent, of the small firms confined their business principally to carrying general cargo (app. I, table 6). In contrast, only 40 operators, or approximately 11 percent, of the total specialized in carrying general cargo in 1959.48 In addition, the survey indicated that the percentage of small truckers engaged primarily in carrying construction material dropped from 47 percent, or 170 operators, in 1959 to 30 percent, or 96 operators, in 1967; the percentage of carriers carrying sugarcane dropped from 42 percent, or 160 operators, to 25 percent, or 81 operators, during the same period. The latter changes reflect Puerto Rico's diversification of agriculture and the trend towards industrialization as well as the declining condition of the world sugar market (ch. II).

(1) General Cargo Carriers.-In 1967, approximately half of the small truckers, or 148 operators, did not specialize in any particular type of cargo handling, but instead carried various types of general cargo. The service included movements for wholesalers and manufactures as well as other mixed shipments. These operators used 438 power units in 1967 compared to 130 units in 1959. Their employment increased from 210 in 1959 to 502 in 1967.

In 1967, these truckers made use of a substantial number of platform and stake trucks to carry general cargo. Only a few small truckers had specialized equipment such as tank trucks, panel trucks, etc. Since many of the small truckers carried general cargo which was picked up at the piers for distribution inland, they had a considerable effect on the water carrier's operation.

Small truckers come into direct competition with the large and medium truckers when they haul import cargo. According to large- and medium-sized truckers, the lack of effective regulation over small trucking has permitted these truckers to engage in practices which result in destructive competition.

(2) Building Material Carriers.-In 1967, an estimated 96 small trucking firms, or 30 percent of this group, confined their business principally to the support of the construction industry in Puerto Rico compared to 170 operators in 1959. In 1967, these operators used 287 power units including low beds, dump trucks,

48 Robert R. Nathan Associates, Inc., op. cit., p. 46.

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cranes, platform and stake trucks, and tractors, compared to 400 in 1959. Employment dropped from 400 in 1959 to 292 in 1967.

The predominance of dump trucks is characteristic of the type of business conducted. The 1959 Robert Nathan Study found that some dump truck operators carried small amounts of construction supplies not lending themselves to dumping. The materials carried included cement in bags, concrete pipe, and other building materials. Most of this cargo originated at the plants in Puerto Rico where they were produced (mainly in the Ponce and San Juan areas) and, thus, were largely intraisland movements.

(3) Carriers of Sugarcane.-In 1967, approximately 81 small truckers, or 25 percent, confined their business to the movement of sugarcane compared to 160 small truckers in 1959. The number of units and power employment declined between 1959 and 1967 from 470 power units and 350 persons employed in 1959 to 330 power units and 200 persons employed in 1967.

Most of these truckers operated on a seasonal basis only and confined all of their trucking business to the sugar harvest. Since the income from this activity was often not sufficient in itself, many operators engaged themselves in some other type of business. It is estimated that 18 percent of this group grew sugarcane themselves. Other carriers of sugarcane engaged in other businesses during the off-season such as automobile repair shops. Still others indicated no off-season employment.

The transport of sugarcane is strictly an intraisland activity and it only affects ocean transportation indirectly through its effect on the trucking industry of Puerto Rico. Although sugar is exported from Puerto Rico, it is exported primarily in a bulk unrefined form. These small truckers are not involved in the movement of sugar from the refinery to the port area. Appendix I, table 8 shows that the seasonal effect is a relevant factor in the business operations of certain small trucking firms.

This seasonal condition is especially applicable in the case of the sugarcane industry and the manufacturing industry. In the sugarcane industry, 92 percent of the trucking business was seasonal while in the manufacturing industry almost 30 percent of the trucking was seasonal. In the mixed category, 33 percent was also seasonal. Out of a total of 325 small trucking firms, 29 percent (94 firms), operated seasonally, or principally so.

7. Description of One-Truck Operators a. Size of the Group and Distribution of Business

Trucking firms are defined as one-truck operators when they operate only one power unit. The survey disclosed an estimated 3,500 one-truck operators in Puerto Rico in 1967 (app. I, table 1).49

(1) Equipment of One-Truck Operators.— Appendix I, table 1 shows that in 1967, this group operated approximately 3,530 straight trucks of various descriptions and about 90 tractor-trailer combinations while, in 1959, there were about 2,200 trucks operated by members of this group with no tractortrailers reported separately. This represents a 65 percent increase in power units over the past decade. Appendix I, table 1 also shows the geographical distribution of one-truck operators. Approximately the same percentage of total units were employed in Puerto Rico's northern region as were employed in 1959 (70 percent) although proportionately more of these were used in the San Juan metropolitan area in 1967. The proportion of units employed in the southern region rose from 15 to 20 percent between 1959 and 1967 reflecting the increased activity in the petro-chemical complexes located in the region, while the numbers in the western region decreased from 18 to 10 percent during the same period due to the decline in sugar production.

Although the sample reporting operation of tractortrailer units is small, it does indicate that a significant increase occurred in the number of one-truck operators who have tractor-trailers reflecting the increase in containerization and TL movements.

(2) Distribution of Business of One-Truck Operators.-Appendix I, table 6 shows the distribution of one-truck operator business in 1967.

(a) General Cargo.-The general cargo customers consisting of wholesalers, retailers, manufacturers and miscellaneous others, were served by 2,300 carriers in 1967, an increase of 350 percent over 1959. The largest subcategory of customers in this group was the wholesalers. Approximately one-third of the one-truck operators reported serving wholesalers in 1967 with numerous pickups at the carrier's ocean terminals, while

49 The sample survey of this group resulted in 118 replies giving an effective sample of 3.26 percent. All data concerning one-truck operators has been derived by projection of this sample. Although it is still not possible to determine the probable limits of error for data related to this group, it is felt that improved record keeping by one-truck operators has resulted in increased reliability of the source data used in compiling the universe of one-truck operators.

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two-thirds reported some carriage of general cargo. These truckers created a highly congested condition. at some terminals (ch. VI).

(b) Construction.-Approximately one-third of all one-truck operators reported at least some cargo carried for the construction industry during 1967. The bulk of these operators listed construction material as their single most important item of transport. Of an estimated 1,130 truckers carrying construction materials, approximately 800 were dump truck operators whose ability to compete for general cargo such as is available from ocean carriers is minimal. Thus, the onetruck operators handling imported construction materials probably accounted for only a small amount of carriage of construction cargo.

The total number of carriers of construction materials increased about 31 percent between 1959 and 1967. Dump trucks, however, increased less than 10 percent. 50

Appendix I, table 5 shows the seasonality of business of the one-truck operators. As in the case of small trucking firms, seasonality is a relevant factor in the business operations of certain one-truck operators. This is especially true in the case of the sugarcane industry where 60 percent of the trucking operations are probably primarily seasonal.51 In the mixed category 40 percent of the trucking is seasonal while 37 percent is seasonal in the trucking of farm products, 30 percent is seasonal in retailing operations and almost 20 percent is seasonal in the construction industry. Thus, out of a total of 86 firms reporting, almost 20 percent (18 firms) consider their business primarily seasonal. This further substantiates findings that seasonality has considerable influence on the trucking industry of Puerto Rico.

(c) Sugar, Sugarcane, and Agricultural Products.The number of one-truck operators engaged in the transport of either sugarcane or processed sugar declined about 70 percent between 1959 and 1967. Only about 245 are currently engaged in the sugar and cane movements. Since cane-carriers use medium-size stake and platform trucks,52 their vehicles should be well

50 In the Robert L. Nathan study, each operator was assigned to the cate gory of carriage furnishing the largest part of his business and was not included in any other category. In 1967, operators were listed in all categories from which they derived more than 5 percent of their business. Since the results of both represent an estimate of the conditions applying to the universe of truckers, they are comparable.

51 It is recognized that the sample is marginal. It is logical, however, to presume from the nature of the industry that a large amount would be seasonal.

52 These trucks are generally of 2% to 10 ton size.

adapted to the transport of general cargo. Only about one-third, however, reported carriage of cargo other than cane.

About 650 operators carried agricultural products; cane and farm products together were carried by about 860 truckers.

b. Employment and Wages of One-Truck Operators

The majority of one-truck firms are owner/operator businesses in which the owner is the driver. Of the 118 firms reporting, 116 indicated a total of 120 ownerdrivers.53 An additional 25 hired drivers were reported by 25 of the firms. This represents a total of 3,680 owner/operators and 770 hired drivers for a total of 4,450. Seventeen assistant drivers were also reported. Other employees totalled 400.

Appendix I, table 7 shows the wage rates of onetruck operators. Most hired drivers and other employees work on a piece rate basis. Their pay was based on either the value or revenue units of cargo handled. Although it is not possible with available information to translate these piece work rates into a reliable hourly wage rate, it is estimated that their average wage rate is well below that of the large and medium-truck operator drivers. This lower wage rate and lower overhead plus lower equipment expenses partially explains the reason for their generally lower pickup and delivery rates.

C. Rates and Competitive Impact of One-Truck Operators

Members of the organized trucking industry and water carriers uniformly agree that rate levels are unrealistically low, particularly in the case of small and one-truck operator firms.

At least one of the large ocean carriers reported that its contract rate with large truckers is regularly undercut by the smaller firms negotiating directly with the shipping public. On the other hand, some of the smaller truckers have alleged that the ocean carriers and large ti uckers are "freezing out" the smaller operator by not allowing the small truckers sufficient business to maintain adequate service. For this reason, some small truckers have indicated a desire for regulation by the PSC including equitable and effective rate regulation to afford small truckers a reasonable chance at securing

customers.

53 Generally speaking, brothers, sons, and other members of the immediate family were also classed as owner/operators.

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