Trucking Regulations Update: MORE RED TAPE

New HOS tweaks top the list of regulatory changes heading into 2020. Carriers say flexibility is key to effective industry regulation covering the niche sectors that make up this dominant, $700 billion industry.

There’s a new rule looming just ahead for the nation’s 3.5 million truck drivers. The change is coming after more than two years of few new regulations from the Federal Motor Carrier Safety Administration (FMCSA), which had been accused by some truckers as being too heavy handed under the Obama administration.

After much consternation and public input, the FMCSA wants to tweak drivers’ hours of service (HOS) rules. The changes are part of a long-awaited modernization of the HOS rules that govern nearly every truck driver on the road.

The adjustments would happen in five areas: flexibility in the mandatory, 30-minute rest break after eight hours of driving; allowing a split-sleeper berth exception; allowing one 30-minute off duty break during a driver’s 14-hour on-duty time; flexibility in bad weather; and changes in short-haulers’ HOS exceptions.

Any proposed changes in on-duty or driving time are sure to be met with mixed emotions due to the fact that truck drivers are not paid by the hour—they’re paid by the mile. So any reduction in miles driven can be an immediate hit to a driver’s wallet.

This month, Logistics Management (LM) takes its annual deep-dive into the potential regulation changes on the table that cover the more then 700,000 carriers registered at the Department of Transportation. Once again, regulators face a difficult balancing act, as they need to weigh the safety of the public on one side and the cost of regulations on an industry with scant profit margins on the other.

Safety first, last and always

Some trucking executives quietly smile when they hear someone say that trucking is a “deregulated” industry. Perhaps financially it is; but in terms of labor, environmental, safety and many other niche areas, trucking remains highly regulated on both the federal, state and local levels.

Derek Leathers, president and CEO of Werner Enterprises, says that he would argue in fact that trucking “is one of the most highly regulated industries in this country…and probably rightfully so. We believe some regulations with an eye toward safety are important, and our industry record on safety and the environment is one that stands up very well under scrutiny.”

According to Kyle Bonini of the FMCSA, it’s no contest. If it’s an issue of truck safety before his agency, nothing else matters. “Safety is FMCSA’s top priority in any rulemaking, and the agency has not proposed weakening safety for commercial drivers,” he says. “The intent of this HOS rulemaking is focused on improving safety by making hours of service rules more effective and efficient.”

Some leading trucking industry executives told LM that some of these changes are welcome—but not all of them. And how the federal regulators iron out their final rulemaking is critical to fleets’ efficiency and legal use of time. For example, a truck driver has 660 minutes (11 hours) of legal driving time during his or her 14-hour “on duty” time. How those minutes are divvied up not only matters to safety, but it’s a huge factor in both the driver’s compensation and the carrier’s financial wellbeing.

Trucking leaders say it’s difficult to craft a single, appropriate answer for the entire industry. That’s because instead of being a monolithic $700 billion industry, trucking is more of an amalgam of perhaps as many as 20 niche industries—truckload (TL), less-than-truckload (LTL), tank truckers, bulk carriers, small parcel, near airfreight, expedited and hazmat—few of which federal regulators know in any true depth of knowledge.

Already this year, there have been more trucking failures than there have been in any year in the last five—and twice as many as in all of 2018. Starting with New England Motor Freight closing on Feb. 12, some other large trucking cessations this year include Falcon Transport (585 drivers on April 27), Williams Trucking (48 drivers on May 1), ALA Trucking (32 drivers on June 26), LME (424 drivers on July 12), Terrill Trucking (36 drivers on July 30), Carney (25 drivers on July 31), and HVH Transportation (344 drivers on Aug. 28).

The current regulation has been in place since the Obama administration issued them in early 2012. According to Bonini, in 2018, the FMCSA sought public comment on HOS and received over 5,200 comments—with most wanting greater flexibility to make driving safer. In 2017, the last full year for which statistics are available, there were 4,657 large trucks involved in fatal crashes, a 9% increase from the year before.

There is not one single common denominator among those trucking bankruptcies. But one common thread, according to trucking experts, is their over-dependence on competing in the spot market, rather than contract rates.

Spot market rates, where some shippers try to seek out bargains instead of long-term contract rates, plummeted this year, falling as much as 20%. That has caused twice as many bankruptcies in the first half of this year than all over last year, taking slightly more than 2,000 trucks out of the TL market, according to figures compiled by Donald Broughton of Broughton Capital LLC.

“I expect more of same for those (overexposed) in the spot market,” Broughton told LM. “As long as spot prices are weak, I suspect current issues to contain.”

Not all of these carriers closed because of excessive regulations. But rarely does a one-size-fits-all regulation work in the complex and deregulated nature of modern trucking. And nothing affects the entire industry more than the hours-of-service rules.

HOS is not the only area to watch when it comes to truck safety initiatives. Recently, FMCSA said it’s proposing a rule to streamline the process for men and women interested in entering the trucking workforce.

FMCSA stated that the proposal is intended to allow states greater flexibility in conducting skill tests for individuals seeking a commercial driver’s license (CDL). The proposal would alleviate testing delays and eliminate needless inconvenience and expense to the CDL applicant—without compromising safety, FMCSA says.

Transportation Secretary Elaine Chao has mentioned that her department is committed to reducing unnecessary barriers to employment for people interested in obtaining jobs in the trucking industry. In fact, last March, FMCSA reduced one regulatory barrier for CDL applicants. A final rule streamlined the process by reducing costs to upgrade from a Class B to Class A CDL—a deregulatory action that the agency says will save eligible driver trainees and motor carriers $18 million annually.

Speed limiters ahead?

While a longshot to pass any time soon, the legislative conversation is already starting around the possibility of limiting heavy trucks to speeds around 65 miles per hour to 68 miles per hour.

Two senators, Johnny Isakson (R-Ga.) and Chris Coons (D-Del.) are sponsoring a proposed bill that they say has “languished in the federal process” for over a decade. Called the “Cullum Owings Large Truck Safe Operating Speed Act of 2019 (S. 2033),” the bill would direct the Secretary of Transportation to create a federal safety standard that requires all large commercial trucks to not exceed a certain speed, probably around 65 miles per hour on the nation’s highways.

The Alliance for Driver Safety & Security (Trucking Alliance), an industry-based safety coalition, is supporting this legislation. The American Trucking Associations has not taken an official position on the bill.

“I’ve spent my entire career in the trucking industry,” says Steve Williams, chairman and CEO of Maverick USA. “There’s simply no legitimate reason for an 80-foot tractor trailer to be driven within a few feet of other motorists at speeds of 70 mph or 75 mph or 80 mph. The safety benefits of the bill are obvious.”

Truckers throughout Europe already have speed governors that are mandatory to operate in that more tightly regulated environment. But, the idea never caught on in the United States. “We could comply with the legislation being talked about,” says Leathers. “My concern is broader based.” Leathers and other trucking executives say that they’re worried about the effects of regulating one portion of highway traffic—heavy trucks—while leaving cars, motorcycles and other motorists regulated to a different, higher speed limit.

A so-called “split-speed limit”—one speed for trucks, another for everyone else—would only increase the likelihood of automobile-caused, rear-end accidents of trucks, experts say. “In a world of distracted drivers, I believe we will continue to see a rise in trucks being rear-ended,” adds Leathers. “That needs to be considered.”

Rather than legislate split-speed limits, trucking leaders say they would rather the government focus on policies that encourage new equipment with the latest accident-avoidance technologies. Those technologies—some of which are in use today on a small scale—include adaptive cruise controls, active and automatic braking, lane diversion warnings and other high-tech improvements.

If truck speed governors were legislated, owners of older trucks without speed limiting technology will not be forced to retroactively install speed limiters. But, even limited to new trucks, it’s estimated that governors would save between 63 lives and 214 lives a year.

In 2017, the last year for which statistics are available, there were an estimated 1,115 fatal crashes involving vehicles with a weight of 26,000 pounds or more on roads with posted speed limits of 55 mph or more.

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