ELD and Driver Coercion rules take steps forward in final rule making process

Two pending trucking sector regulations have received a fair amount of attention from the White House’s Office of Management and Budget (OMB) in recent days.

One regulation relates to the final rule on Electronic Logging Devices (ELD), which OMB cleared today and the other is related to the driver coercion rule.

In mid-September, the much anticipated final rule for ELD was pushed back one month from September 30 to October 30, according to the Report on DOT Significant Rulemakings issued by the United States Department of Transportation. But now in mid-November, the final rule is not yet published.

An FMCSA official told LM that until a Final Rule is published in the Federal Register, with the matter still in Rulemaking –the Agency is prohibited from commenting. Once the final rule is published, the sector would have two years from the published date to be compliant.

According to DOT, this ruling would establish:
1- minimum performance and design standards for hours-of-service (HOS) electronic logging devices (ELDs);
2-requirements for the mandatory use of these devices by drivers currently required to prepare HOS records of duty status (RODS);
3-requirements concerning HOS supporting documents; and (4) measures to address concerns about harassment resulting from the mandatory use of ELDs
FMCSA said in March 2014 that its proposal requires interstate commercial truck and bus companies to use ELDs in their vehicles to “improve compliance with the safety rules that govern the number of hours a driver can work,” adding that “the proposed rulemaking would significantly reduce the paperwork burden associated with hours-of-service recordkeeping for interstate truck and bus drivers…and improve the quality of log book data.

Perhaps the largest takeaway of the ELD rulemaking, noted FMCSA, is that it would ultimately reduce HOS violations by making it more difficult for drivers to misrepresent their time on logbooks and avoid detection by FMCSA and law enforcement personnel. It also pointed to an analysis that said it would help reduce crashes by fatigued drivers and prevent approximately 20 fatalities and 434 injuries per year for an annual safety benefit of $394.8 million.

FMCSA Acting Administrator T.F. Scott Darling III wrote in a message issued by the FMCSA on September 15 that a final rule on ELDs is being issued by the Office of Management and Budget and is scheduled to be out later this year.

“Although we cannot discuss the provisions of a Final Rule before it is made public, I can say that the rule is designed to benefit everyone by improving hours of service (HOS) compliance, which we estimate will prevent about 20 fatalities and over 400 injuries each year; helping businesses cut paperwork and save money; protecting drivers from harassment; and making it easier for law enforcement and safety inspectors to review driver HOS records,” wrote Darling.

Many industry observers maintain that the need for ELDs is obvious, with most explaining that the industry has been reliant on paper logs for far too long.

And there could likely be economic tradeoffs through ELD usage. The mandated use of ELDs could likely reduce the effective number of miles a driver could log, further tightening trucking industry capacity at a time of limited truck driver supply, rising pay and higher overall costs for fleets.

“We believe this was the last and most significant step to seeing a final rule published on the matter and should serve as a positive catalyst for the transportation industry,” wrote Brad Delco, transportation analyst at Stephens Inc. in a research note. “In short, we believe as a result of this rule the trucking industry is one step further to equally enforcing the Hours-of-Service (HOS) regulations while improving safety on our nation’s highways. Our sense is we could see a final rule on ELDs over the next couple of days.”

Delco added that long-term the ELD mandate could lead to tighter trucking capacity and subsequently translate into higher rates, with an around 7 percent of capacity potentially exiting the industry due to the rule. This, in turn, he said could place further emphasis and value on drivers, coupled with the expectation that driver pay could likely rise as miles traveled become more eventually enforced.

Driver coercion rule: OMB said that the review of the “Coercion of Commercial Motor Vehicle Drivers,” more commonly known as the driver coercion rule. is also finished, with the final rule expected to be published as soon as Monday, November 23.

The rule has various moving parts that have the potential to fundamentally change various facets of how freight is moved by motor carriers, tendered, and brokered, with many industry stakeholders maintaining they will not be changes for the better.

According to the FMCSA, the Driver Coercion Rule proposes to “adopt regulations that prohibit motor carriers, shippers, receivers, or transportation intermediaries from coercing drivers to operate commercial motor vehicles (CMV) in violation of certain provisions of the Federal Motor Carrier Safety Regulations, including drivers’ hours-of-service (HOS) limits and the commercial drivers’ license regulations and associated drug and alcohol testing rules or the hazardous materials regulations.”

FMCSA added that the rule would prohibit anyone who operates a CMV in interstate commerce from coercing a driver to violate the commercial regulations, adding that the rule includes procedures for drivers to report incidents of coercion to the FMCSA, which the agency would follow in response to allegations of coercion.

And it added that an act of coercion by a carrier, shipper, receiver, or transportation intermediary does not absolve the driver of responsibility to comply with safety regulations, including HOS rules. It went on to explain that the FMCSA definition of coercion prohibits threats by the aforementioned parties to withhold future business from a driver for objecting to operate a vehicle in violation of safety regulations. What’s more, FMSCA explained a threat would not constitute coercion unless the driver objects or attempts to object to the operation of a vehicle for reasons related to HOS or other regulations.  Violations of the driver coercion rule would result in a fine of up to $11,000, said the FMCSA, coupled with the agency able to suspend, amend, or revoke the operating authority registration of a for-hire motor carrier, broker, or freight forwarder.

“Our biggest concern with this rule is that it changes the presumption to what you knew to what you should have known, and it puts that onus on every shipper and every receiver and anybody who engages a truck,” said Bob Voltmann, president and CEO of the Transportation Intermediaries Association (TIA). “It is what you should know about the driver, which means you have to ask and means you are increasing their vicarious liability because now you have to know it creates a catch-22 situation.”

Putting this rule into practice as an example, Voltmann said that if a shipper calls a carrier to move a shipment, and the carrier says that can be handled, a situation can occur in which a driver arrives and tells the shipper he does not have enough hours to make this run, meaning that the shipper was not correctly informed.

This situation, in turn, leaves the shipper in a predicament, Voltmann, said, because if the shipper tells the driver he needs to make this run, it is viewed as coercing the driver into breaking the rules. And he said that premise would also apply if the shipper intended to call another motor carrier to move the load and is also coercion as the driver has been threatened financially.

Voltmann said this rule leaves more questions than answers, because to fully be in compliance it is unknown if stakeholders would need to boost staffing levels or learn and adopt new systems to be compliant.