Industry regulations continue to impact trucking sector, with no clear end in sight

A wide range of trucking sector topics was front and center at this week’s NASSTRAC (National Shippers Strategic Transportation Council) Shippers Conference and Transportation Expo in Orlando.

One of the main themes of the conference centered on the myriad industry regulations.

“For an industry that was deregulated a long time ago, it seems like we have new regulations coming out every month, and that is not going to change,” said UPS Freight President Jack Holmes. “It is going to continue, and for us as an industry we would certainly like the opportunity to catch our breath. What we would like to see is a more measured approach that puts regulations together along with infrastructure spend so we can have the opportunity to mitigate these expensive regulations with the opportunity to get some productivity improvements.”

Werner Enterprises President Derek Leathers addressed the impact of electronic logging devices (ELD) on the industry in terms of what happens between now and when they are formally mandated into law in December 2017.

“If you think about it, 50 percent of the carriers handling capacity today do not have ELD,” he said. “Looking at ELD over the last ten-to-15 years among the large, well capitalized carriers using them have seen a consistent pattern of 3-to-5 percent degradation of utilization. And these are companies with significant IT investment and know how. Over time as you see the next half of the industry make this conversion, it stands to reason that impact will be greater. It is safe to say, I think, that you will see an impact of greater than 3-to-5 percent capacity degradation that the first carriers saw. I think it is a safe assumption that that costs are a factor for some carriers, as well as the impact on day-to-day operations. The concerns about ELD are greater than what is realized, shippers are saying they want to go into January 2017 with only ELD-compliant carriers. It is still far away, but I don’t see how we get there from here, but it is a valiant expectation to have.”

Werners added that the possibility exists that the ELD mandate could be overturned, as the Owner Operators Independent Drivers Association filed a lawsuit last December over the final rule, citing that it has the potential to have the single largest, most negative impact on the industry than anything else done by FMCSA.

But at the same time, he said, ELD is a piece of legislation that has been long overdue, explaining that rather than tinkering with hours-of-service or better ways to make trucks safer, the first step is put everyone on a level playing field. This is key so that everyone knows exactly what is and is not running, and what is actually happening compared to what a paper log says, explained Leathers.

Shifting gears from ELD, UPS’s Holmes touched upon the LTL sector’s need for twin 33-foot trailers to increase load factors and efficiency and reduce carbon footprints, but has failed repeatedly to get federal approval primarily over safety concerns.

“We are convinced twin 33’s are a safer configuration,” he said. “We are not going to give up the safety high ground on this one. The LTL sector thought it had this done in 2007, and the industry made its case clear. That was evident by the neutral position on the matter taken by some of the large truckload carriers and railroads that would actually be hurt by twin-33s. But some trucking companies were against it. I don’t know how that happens….as a trucking company can go out there and be completely contrary to what the shipping public is asking you to do. At some point we need to get our voice back and let people know we are safety advocates.”

FedEx Freight President Mike Ducker echoed Holmes’ thoughts, questioning how something like twin-33s that improve safety, reduces carbon footprint and congestion on the highway, cuts back on roadway wear and tear and improves capacity.

“This shows that things are not working in that we don’t have a compromised solution, and it shows an absolute lack of appreciation of the facts in this case,” he said. “A better job needs to be done in communicating to the general public what the trucking industry is doing, considering it delivers around 70 percent of the nation’s commerce.”