NTTC Grew Out of Time of Conflict
May 1, 1998 12:00 PM, Clifford J Harvison,
For the past 33 years, it has been my good fortune to manage the daily affairs of National Tank Truck Carriers Inc (NTTC), your industry's trade association. Of course-as with any other profession-the job description "trade association manager" implies an acquired knowledge of certain facts, basic rules of organization, and the politics of developing consensus. For instance, you learn early on that virtually every industry trade association in this nation (and there are thousands of them) was established at a time of conflict and (frankly) for the purpose of conflict. Such is the case with NTTC.
Now, perhaps it is a bit of understatement to refer to World War II as a conflict, but it's a fact that NTTC evolved from those four years of alternating devastation and triumph.
Following the formal declarations of war, enemy submarines were picking off marine oil tankers at a most disturbing rate, and our government had to find a better way of getting refined petroleum products from the south and southwest to our port areas for transshipment to the European and Pacific war theaters.
Yes, pipeline construction was accelerated, but that was a long and costly process. In the early stages of the war, the job of moving oil for both export and domestic use was given- almost exclusively-to the railroads. The task of shorthaul product movements (from the rail heads to the domestic markets) was left to what were then called tank wagons. Often, payment to the trucker was a thin slice of the overall longhaul revenue "granted" by rail traffic managers.
Unquestionably, the rails had a monopoly. As always in such business circumstances, bad things began to happen. First, the rails got a little fat, dumb, and happy. Because the tank cars were (generally) owned or leased by the oil companies, there were accusations that the cars were moved more to accommodate the needs of the shipper rather than help the war effort.
Lots of Yelling It is significant to note that much of this yelling and screaming came from the truckers. Nonetheless, these accusations fell on fertile ground. Refined petroleum-just like processed foods, rubber, steel, and other basic materials of war-were rationed for domestic use. When "Rosie the Riveter" couldn't get gas for her Chevy, blaming the railroads (if nothing else) soothed the soul.
Enter into this scenario a creature of the bureaucracy called the Petroleum Administration for War, whose prime mission was to better organize petroleum distribution and get more product to both the ports and domestic users faster and cheaper. A part of that administration was a subgroup called the Office of Defense Transportation (ODT). ODT had a big job. Move oil faster and better, and streamline the transportation of virtually all other rationed industrial products.
Thankfully (for those of us who, today, make our living off the trucking industry) ODT was overpopulated with truckers. They were dedicated and hard-working, and many of them had just a hint of deviousness in their bones. For instance, since private carriage was the natural enemy of the for-hire sector, it just so happened that a valuable shipment of rationed truck tires - originally consigned to a private carrier - would end up on the wheels of a for-hire wagon.
If there was a threshold event that eventually led to the formation of NTTC-blending the emotions and economies of a nation at war with the reality that trucking industry executives were in control of an important part of government-it was a two-page document called ODT Order #7, which became effective in early 1943. Therein the federal government ordered all domestic petroleum transportation under 200 miles to be handed over to the tank truck industry. It was manna from heaven. First, the order served to validate the importance of truckers to the war effort. Second, the order proved that organized efforts in the political arena could produce dividends--a lesson not forgotten at the war's end.
Following V-E and V-J Days, the federal government began a remarkably rapid disintegration of the wartime bureaucracy.
NTTC Founded Formally, NTTC opened for business on June 1, 1945, in a two-room suite in the American Trucking Associations building at the corner of 16th and P Streets in the northwest quadrant of Washington DC. C Austin Sutherland and Jean Gay, both expatriates from the ODT, were the only paid staff members and their office furniture had been "liberated" from their government offices. The name of the organization notwithstanding, NTTC was not (at that time) a truly "national" organization.
The industry (and, indirectly, the association) continued under the overall control of the federal government until September 27, 1947. On that date, the War Powers Act became null and void. Up to that time, carriers were able to obtain "temporary authority" from the Interstate Commerce Commission (ICC) with minimal showing of public need. As a result, individual truckers came into and exited the tank truck sector (sometimes on a monthly basis). Absent a small cadre of committed operators, there was no structure upon which to build an effective organization. In contemporary terms, the tank truck industry "...was a mile wide and an inch deep."
Since rescinding the War Powers Act forced carriers to meet greater burdens to get precious operating authority from the ICC, many entrepreneurs left the bulk business. The potential for organizing the "true believers" was enhanced considerably. All of this came together in October 1948 at Washington's Mayflower Hotel.
What was scheduled as a two-day "Annual Meeting" became a four-day convention with up-front "pay before you play" dues payments collected at the door. Realistically, NTTC as a national organization with a solid membership structure, and a Washington presence was off and running.
Winning Favor >From that 1948 meeting through the mid-l950s (including the hostilities in Korea), the association's main activities centered on identifying the enemy (always the railroads) and winning favor at the ICC. The game plans were simple: keep the railroads out of the shorthaul bulk business, and persuade the ICC to keep the entry barriers so high as to keep new entrants out of the market. There was nothing unique about this organized protectionism. The American Trucking Associations was doing the same thing for the dry freight carriers on a much grander scale.
The prime source of industry information-from ICC decisions to NTTC activities and feature articles-was Petroleum Transporter (forerunner to Modern Bulk Transporter) then published every two months. While there has never been an affiliation with NTTC, the publication was owned and edited by C Austin Sutherland and his son, Don. As Austin once told me, "If I didn't print it, it didn't happen."
Outside the political and competitive arenas, the 1950s saw increased NTTC involvement in the technical side of the industry (with great assistance from the National Truck Trailer Manufacturers Association, which preceded today's Truck Trailer Manufacturers Association).
As aluminum became more plentiful (after Korea), much of it found its way into the industry. Manufacturers even introduced magnesium tanks into the fleets. After years of lobbying members of the National Fire Protection Association, an organization that authored state and local fire codes, NTTC succeeded in amending those codes to remove a ban on aluminum in the manufacture of flammable liquid trailers.
Tank Truck School The first tank truck school, the curriculum of which was composed of how to handle various types of chemicals, was held at the Kellogg Institute at the University of Michigan. It was later moved to the Illinois Institute of Technology in Chicago, Illinois, and thence to Purdue University where lectures were added on topics such as "Basic Business Administration" and the ever popular "Dealing with the Teamsters."
The industry's entry into the world of computers was chronicled in a 1956 Petroleum Transporter article. The author explained that by using an "IBM Punch Card Machine and Sorter," one could compile a quarterly payroll record in a matter of hours.On the economic side of the ledger, the battles with the railroads continued. Because the ICC had draconian power over the transportation rate structure for both rails and trucks, NTTC's overall objective was to convince the commission that the tank truck mileage rate should be the "floor" for all rail rates on hauls under 200 miles. This concept was pushed (generally) with success under the guise of "competitive equity." Also, it proved to be a marketplace disincentive for shippers who wanted to use the rails for relatively shorthaul service.
NTTC's emphasis on "new technology" continued into the decade of the 1960s. By now, construction of the nation's 42,000-mile Interstate Highway System was underway, and cement and asphalt smelled just like gold to lots of carriers. Some adventurous carriers even took on the railroads, again.
NTTC members, performing intermodal cement service with the railroads, were tearing up their equipment because the railroads refused to provide paved access to the closed hopper cars. In this case, the road to hell was paved with shattered axles, suspensions, and tire carcasses. No amount of persuasion compelled the rails to improve the situation, so the carriers found a few abandoned sidings, bought and fixed them up, and convinced the major shippers to redirect their longhaul rail movements, accordingly. Given this new access, the tank truck length of haul for cement grew from about 20 miles to (in some cases) over 250 miles. The manufacturers rushed in with new, better designed, and more flexible dry bulk units.
Working closely with some chemical companies to learn how they stored and handled various products (plus experience gained in the transportation of milk and dairy products), carriers experimented with different stainless steel alloys. While the number of chemicals transported in these hybrid units was limited, shippers of "dangerous articles" gained confidence in the trucking industry, and the way was set for the future.
Safety Emphasis Not all of the highway to prosperity was smooth. In one two-day "nationwide" safety check, ICC enforcers put almost 90% of the inspected tank trucks out of service. Within the association's list of priority items, safety vaulted to the top. NTTC began distribution of a regularly published "Engineering and Safety Bulletin" that reported on regulatory changes. The "Tank Truck School" (now at Purdue University) became a three-day safety seminar. Some classes enlisted over 125 students. NTTC hired a full-time safety engineer.
The emphasis on safety was accelerated when, on April 1, 1967, the Department of Transportation (DOT) opened for business. Two very important concepts were born. First, the DOT brought on board a staff of regulations writers and enforcers the size of which soon dwarfed that of the resources of the "old" ICC. Second, the DOT proved to be a safe haven for some academics and "theoretical economists" who publicly espoused a revolutionary concept called deregulation.
The 1970s both enlarged and refocused the safety and economic regulatory debate. While it was well-settled (within the tank truck industry) that we should be subject to strict constraints on vehicle construction and driver performance, the Feds began to create more detailed rules into the way specific products were handled in transportation. They became known as hazardous materials regulations. Carriers were playing a constant game of regulatory catch up as DOT published one new requirement after another.
By this time, environmentalism was running at full steam. Suddenly, petroleum carriers were pulling trucks off the road and into the shops for "retrofits" of bottom-loading/vapor recovery equipment, complete with overfill sensors. It was a great day for vapor recovery, but cost recovery was quite a different issue.
If all of this wasn't enough, consumer advocate Ralph Nader published a book entitled, "The Interstate Commerce Omission" in which he charged that the concept of economic regulation of the trucking industry was wasteful, inefficient, and served to protect the interests of the "in crowd." The battle had been joined.
In the mid-1970s, the Federal Trade Commission (FTC) published a decision that required cement companies to publish a two-tiered pricing system. One tier was to include the cost of transportation to the consignee; the other tier was to eliminate that cost (so-called "rack pricing"). Almost immediately, the bottom fell out of the cement transportation market as scores of smaller carriers jumped in and cut rates. In terms of the ongoing debate on deregulation, that event should have been a harbinger. But it was largely ignored because it affected only one commodity.
In 1978, the Congress deregulated the air transportation industry, and it became clear that trucking was next. Because the American Trucking Associations was in obvious disarray on the issue, the political eventuality of deregulation now was framed in terms of "when" not "whether." NTTC adopted a position that "mandatory minimum insurance requirements" should be substituted for ICC entry rules. In July 1980, President Jimmy Carter signed the Motor Carrier Act of 1980, and deregulation was a fact of life. Over the strong objections of the insurance industry, the NTTC proposal of mandatory coverages was included in the final version of the legislation.
Time of Turmoil For absolute turmoil and uncertainty, you just couldn't beat the 1980s. Carrier management, who thought that a contract was a written agreement with a labor union, all of a sudden was sitting across the table from sophisticated shippers negotiating three- and five-year transportation agreements. The old ICC "System of Accounts" (upon which carrier management had been weaned) had little relevance to the new economics of deregulated transportation, so determining carrier costs became a risky game of chance.
Some carriers tried to be "all things to all people." They began investing in sophisticated chemical and stainless steel foodgrade equipment, only to find that the shippers' concept of loyalty often was measured in months rather than years. Classic "call and demand" common carrier service became the exception rather than the rule.
Even the vocabulary of the industry changed. Gone were words and phrases such as single line, tacking, trip leasing, and gateways. They were replaced with backhaul, continuous movement, and dual authority.
Environmental March The environmental crusade continued its march. In late 1980, the Congress passed a law called Superfund. It was a mess (even federal judges, trying to interpret the new law, would refer to it as "...a statutory swamp"). Soon after passage, many NTTC members began receiving letters from the Environmental Protection Agency (EPA) telling them that they were "potentially responsible parties" in a site cleanup and citing them for enormous liabilities. This was "quite enough" for the domestic and foreign reinsurance industries and, by early 1985, the tank truck industry participated in the miseries of "the insurance crisis."
Underwriting premiums soared, in some cases by up to 400%. Some carriers simply left the industry, while others merged with those that could handle the premium burden.
If there was a silver lining to these economic clouds, it was also in the environmental area. In order to compete, carriers began finding ways to reduce empty miles. This move, in turn, gave birth to the need for more and strategically placed interior cleaning facilities. The construction and marketing of those cleaning sites became a cottage industry serving the NTTC membership and helped upgrade both the techniques and hardware necessary to serve our customers in an environmentally friendly manner.
DOT Activity Not that things were quiet at the Department of Transportation. In 1980, DOT signed a contract with a Phoenix, Arizona-based research outfit to look at the maintenance and repair of tank trucks. What research found was not encouraging, and DOT soon began a regulatory activity to completely rewrite the existing tank specifications, and to impose specific requirements for tank testing, inspection, maintenance, and repair.
More than five years of NTTC committee meetings, public hearings, and written submissions ended in late 1989 with publication of the final rules in Docket HM-183. That document produced a new family of tank trucks (DOT406, 407 and 412 specifications) and a nationally uniform set of quality-control-oriented standards for maintaining over-the-road units in hazmat service.
The 1990s literally began on a sour note. A husband/wife driver team went to a major West Coast newspaper with allegations that they transported foodgrade product that had been contaminated by a prior load. The major wire services and news organizations picked up the story and before you knew it, tank truck industry representatives found their way onto "The Today Show," "Good Morning America," and "20/20." Even the Prince of Sleaze, "Geraldo," joined the fray. NTTC meetings with the food processing sector abounded; and led by the then senior Senator from Tennessee, Al Gore, Congress passed legislation entitled the "Safe Food Transportation Act of 1990." The new law did little, but everybody felt better.
That controversy helped fuel the flames of the quality movement. All of a sudden, everybody was going to Dr (W Edwards) Demming's seminars. "Do it right the first time, every time," was management's collective mantra. If you didn't have 12 tons of paper implementing statistical process control for your telephone operator, you were considered an administrative leper.
On the safety side, the tank truck industry was learning to live with the new (and costly) testing and maintenance provisions of DOT Docket HM-183. Carriers began buying tanks built to the new DOT400-Series specifications.
The flood of DOT regulations continued unabated. Drug testing, alcohol testing, and specific hazmat training requirements added costs and were (partially) responsible for what has become known as the driver shortage. Of course, the industry had to accommodate the consequences of a mid-decade healthy economy. The industrywide merger and acquisition trend accelerated.
Well, here it is 1998. The decade is almost over, and we meet in celebration of our 50th Anniversary Annual Conference. It's been a great ride.
Thanks to a strong and supportive membership, together with the help and cooperation of our service providers and suppliers, the tank truck industry is smarter, better organized, and well-prepared to face the future. So, in a literal sense, let's lift a glass and toast our own success. But, remember, it's back to work on Monday. The ride's not over.
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