Proposed FMCSA regulation regarding ‘driver coercion’ could be a game changer for trucking industry

When the Federal Motor Carrier Safety Administration (FMCSA) issued a notice of proposed rulemaking request for comments for a rule entitled “Coercion of Commercial Motor Vehicle Drivers” last May, there was a fair amount of confusion in regards to how specifically this rule would work among shippers, carriers, receivers, 3PL’s and brokerages and other freight transportation and supply chain stakeholders.

And since comments on the proposed rule were submitted to the FMCSA in August, the confusion remains intact.

Commonly referred to as the “Driver Coercion Rule” in industry circles, 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.

The Driver Coercion Rule is being viewed through a careful lens by industry stakeholders, as there is not yet a final rule in place, although industry sources expect it to be rolled out closer to the end of the year.

“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.

“We are telling our members not to jump off the cliff yet,” he quipped. “Instead, we are telling them to stand on the ledge.”

Stifel Nicolaus analyst John Larkin said the rule will prevent brokers and shippers from pushing carriers to break the HOS rules and the speed limits, adding that it will hurt the small carrier, reduce capacity, and drive labor away from the industry.

Voltmann said Larkin was spot on in his assessment, explaining that he is not worried about TIA members exiting the industry. Instead, he said, it might increase the amount of freight that ends up getting brokered, because shippers are going to want to distance themselves from the rules.

“What it will have an effect on-and all of this is cumulative-when talking about ELDs and very strict HOS rules and now you are talking about coercion, is that there is very tight capacity,” he said. “Shippers and receivers that are not 100 percent on it in terms of getting a truck loaded and unloaded quickly and keeping drivers moving and treating drivers nicely are going to stop getting capacity, period.”

The fear of the unknown in terms of what the final rule will be comprised of remains a major concern, according to Mike Regan, chief relationship officer at TranzAct Technologies.

One of the biggest issues cited by Regan is what responsibility will shippers have for validating that the driver has sufficient time to fulfill the commitment that the customer is mandating or imposing on them.

“At this juncture we just don’t know, so there are a couple of different scenarios,” he said. “One is if you are using a carrier and they have a driver show up at the door and they understand your requirement/commitment and a shipper presumes that the carrier has validated that the driver they have provided can meet the requirements the shipper has. Then what is the duty and responsibility of the broker before it provides a carrier to a shipper? And if dealing with an owner/operator, what level of responsibility does a shipper have in terms of the company tendering freight to the carrier for validating they can do what the carrier is being asked to do within the legal parameters.”

Based on conversations he had with former FMCSA Administrator Anne Ferro, Regan explained that the FMCSA’s thought process for the rule was that shippers are turning a blind eye to creating conditions that they could or should know are unsafe.

“It is a game changer, because it is forcing upon shippers the duties and responsibilities they did not have,” he said. “What we are saying is shippers will be forced to take responsibility for validating and verifying their carriers information, which has not been the case before.”