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An August Regulatory And Enforcement Update From Washington For Trucking

The trucking landscape has been changing, both from within and through regulatory action taken on the outside. As enforcement actions change, part of our job is to keep you informed on anything that could impact the industry we all know and love.

This month’s regulatory update from Washington is no less full of intriguing information as past updates. Each month, new moves from Congress, the Trump Administration, states and/or other major players keep the industry on its toes. Motor carriers have learned to become quick on their feet in adjusting to a new normal.

Let’s first look at the ELD mandate and the new adjustment period announced by the Commercial Vehicle Safety Alliance (CVSA).

The New Adjustment Period

While commercial motor vehicle inspectors can still issue a citation to a truck driver who is not operating with an electronic logging device (ELD) beginning on December 18, they cannot place a vehicle out of service until at least April 1, according to the new guidance.

Of course, even if the vehicle is not taken out of service, the mark would still be notated under the Compliance, Safety, Accountability program and recorded in said carrier’s safety measurement system (SMS) profile.

According to the CVSA, the new phase-in timeframe is designed to encourage compliance, but not in an unreasonable way. While enforcement is still a tool, the agency wants to allow fleets to adjust without creating unnecessary traffic problems or supply chain disruptions.

It is also important to consider that certain aspects of the phase-in plan differ from state to state. When local law enforcement gets involved, it adds to the question of who has final jurisdiction.

Yet, when you’re at the receiving end of a violation, jurisdiction matters little. That this will be noted in the record and followed up on in future inspections matters far more. The last thing a motor carrier wants is a stain of a violation, no matter what that violation is for.

The issue of jurisdiction came up when the CVSA sent a letter to the Federal Motor Carrier Safety Administration raising the question. Specifically, they advocated for a phased-in approach to addressing jurisdiction.

In their letter, the CVSA used the 2004 cargo securement rule as an example of a phased-in approach to enforcement in this case, an approach that likely saved many lives.

Meanwhile, as is often the case in so many of these debates, other industry participants seek an altogether different outcome. In this debate, the Owner-Operator Independent Drivers Association (OOIDA) has come out openly petitioning the FMCSA to delay it even longer than April.

The group points out that many states – a full 26, to be precise – have not yet codified or incorporated the E-log enforcement language into state law. Until then, the OOIDA asserts that there is no enforcement mechanism in place.

According to OOIDA’s Todd Spencer, “We are concerned about numerous states issuing citations for the violation of non-existent state laws. State law enforcement should not be implementing the ELD mandate until they actually adopt the mandate into state law and train and equip their enforcement personnel to enforce it properly.”

It’s no secret that OOIDA has made many attempts in court to block the ELD mandate. Not only has it failed in federal courts, but the Supreme Court has also declined to review it. For these reasons alone, the FMCSA has confidently moved forward with ELDs and coming enforcement and fleets should be too, whether through a phased-in approach or not.

The CVSA asserts that the enforcement community is ready to begin enforcement of the rule on December 18, 2017. Still, will the ELD mandate even take effect?

If so, FMCSA will require that all interstate motor carriers use ELDs instead of paper logbooks. Fleets who are using older ELDs that don’t conform to the new standard – such as AOBRDs or automatic recording devices – will be forced to upgrade, but will have a two-year window in which to do so.

Since the ELD mandate is built upon a congressional component, any major changes to the mandate will have to be passed through Congress. The question now is: How likely is that?

Republicans Breathe New Life into An ELD Delay

Who would have thought, this close to the deadline, even as fleets prepare for it, the ELD mandate might be back on the chopping block? Yet here we are.

When we last reported on it, an ELD mandate was slowly making its way through committee. Now, it appears there is some taste in the House for such a stall after all.

Republican Reps. Brian Babin of Texas, Lloyd Smucker of Pennsylvania and Doug LaMalfa of California recently offered an amendment to the must-pass 2018 fiscal funding bill that would prohibit the Department of Transportation (DOT) from funding any regulation relating to or mandating ELD usage.

Congressman Babin has also recently proposed legislation that would delay the ELD mandate by two years and claims 43 co-sponsors on that bill. How likely is it that the Congressman’s efforts will bear fruit?

When he first introduced the amendment, Babin stated that, “If trucking companies want to continue implementing and using ELDs, they should go right ahead. But for those who don’t want the burden, expense and uncertainty of putting one of these devices into every truck they own by the end of the year, we can and should offer relief.”

Well, to see this amendment go anywhere, the House must first vote to adopt it and then advance the funding bill to the Senate. The Senate would then have to sign off on the House version of the bill and get it to President Trump’s desk for a signature.

If the Senate were to amend the legislation and leave the ELD mandate in place, the House would then have to clear the Senate’s version of the bill and send it on for a presidential signature.

Will It Happen?

While the legislative calendar looks bloated, Congress has until September 30 to get a government funding bill on President Trump’s desk and avoid a costly government shutdown. With House Speaker Paul Ryan recently admitting his conference would “need more time,” it increasingly looks like a stopgap measure will be adopted until something more permanent can be put into place.

President Trump himself has signaled that he would not be particularly opposed to a shut down if there is no funding in the bill to build a border wall with Mexico.

The only thing that is currently known are the number of unknowns. With the ELD mandate looming a scant 3 months away, the regulatory outlook needs to come into focus rather quickly.

A Look at Post-ELD Spot Rates

When the ELD mandate does go into effect in December, there is one thing that many analysts pretty much agree on and that’s a tightening spot market. What’s the result? A likely rise in rates, at least in the short-term.

Further analysis shows that the ELD mandate could result in up to a 7% loss of capacity in the for-hire carrier segment. Overall industry capacity loss is said to total almost 4%. The main driver of this change is the inability of motor carriers to fudge the numbers and spend less time on the road.

This essential “re-benchmarking” of the industry could result in a total of 5 to 15% increase in overall spot rates. Whatever the number is, almost everyone agrees that capacity and spot rates will tighten.

One online survey points to a 2 to 4% rate increase, with some over-the-top “doomsday” scenarios saying we could see a 20 to 25% year-over-year increase during peak season.

In fact, the ELD mandate is already having an impact on the spot market before the implementation deadline happens. As shippers and brokers do their best to procure more capacity, they find it in scarce supply.

The global supply chain has become so fragmented that disruptive events can have lasting impacts. While the ELD mandate – should it pass – could be one of those disruptors, it is likely the spot market would follow more long-term trends.

Motor carriers will become far more precise in how they operate. While some truck drivers and small companies may be priced out of the market, for the most part, large players and companies who have been in the game for a long time will be well-positioned to make the adjustment.

Fortunately, if you look at history as a guide, fluctuations in spot market pricing aren’t entirely new. As an example, tightened HOS rules in 2013 resulted in a 4% capacity squeeze. The polar vortex weather event earlier in 2014 created another capacity problem in the spot market.

Point is, the market has survived volatility before, so there’s no reason to think we won’t come out on the other side of this one in good shape. No matter how you look at it, from the ELD mandate to spot rates and more, it’s been a busy August. Thanks for taking this journey with us and we’ll see you next time with our next update from Washington.

Welcome To Trucking’s New Classroom – Entry-Level Driver Training – ELDT

FMCSA published an entry-level driver training (ELDT) on February 6th 2017 but it will be followed by a 3-year grace period, allowing trucking companies time to adjust to the new training requirements.

The new core requirements establish training standards that govern both core classroom instruction and behind-the-wheel training requirements.

FMCSA-Approved

There will also be a FMCSA-governed registry of approved trainers available to train entry-level truck drivers across the nation. There will be separate standards of training for Class A and Class B CDL applications. For those looking for hazmat or passenger endorsements, additional training will be required.

In what may be a rarity for trucking industry advocacy groups, both the American Trucking Associations (ATA) and the Owner-Operator Independent Drivers Association (OOIDA) strongly support the new training rules.

There are some differences, however, from the prior guidance the FMCSA put out in March. In this new version they have removed the requirement that potential truck drivers must complete 30 hours behind-the-wheel prior to getting their CDL.

Left in were the requirements for behind-the-wheel and public road training, but it no longer requires the 30-hour timeline. As the rule is now written, new applicant training will be considered completed when trainees are able to show they have successfully completed both behind-the-wheel training and that “all elements of the curricula are proficiently demonstrated while the driver-trainee has actual control of the power unit during a driving lesson.

The Specifics

The FMCSA has also removed the time requirement where classroom training is concerned. Instead, the agency requires that the training make sure to cover all aspects of the suggested curriculum:

  • Basic operation of the vehicle
  • Backing up and docking
  • Coupling and uncoupling
  • Pre- and post-trip inspections
  • Distracted driving
  • Vehicle communication – including signals and other equipment
  • What to do in an emergency
  • Roadside inspections
  • Trip planning
  • Cargo handling
  • Regulatory compliance

For those applying for a Class A CDL, the required curriculum will include elements administered by the FMCSA-approved trainer. The state will be required to certify people applying for their CDL have been properly trained according to the guidelines. Only then should they be allowed to take the skills test and move on to get their CDL.

But who are these trainers? The agency is pushing to use trainers from registries managed by the states. They will go by the term Trainer Provider Registry (TPR).

Motor carriers who want to conduct their training in-house are permitted to do so, but their trainers must complete a curriculum that meets the standards any other trainer in the registry will had to have gone through. For an individual to personally train a friend or family member, they must go through a process and receive verification from the FMCSA.

The Costs and Benefits

As always with new rules like these, there is an associated cost. The FMCSA estimates the total cost of the rule will run the trucking industry over $3.6 billion by 2029. That breaks down to over $366 million per year, starting when the regulation goes into effect – 2020.

But while some people say the cost is too great, the FMCSA points to potential cost offsets in the way of $2.38 billion saved from increased fuel efficiency, more efficient operational capacity, reduced maintenance costs and far fewer accidents.

Considering these training programs are coming as a mandated rule, motor carriers are increasingly preparing to get out in front of this change. Whether they are utilizing video systems, on-site training or other methods, they are preparing their truck drivers for the future of trucking. After all, if they don’t do it, who will?

Entry-Level Driver Training Rule For New Truck Drivers

The Department of Transportation (DOT) released the final rule on the Entry-Level Driver Training rule. The rule essentially establishes a core curriculum that new truck drivers will be required to learn. They will also be required to go through 30 hours of behind-the-wheel training. Finally, the rule outlines a minimum level of qualification for instructors, tests, vehicles and more. All this information would be used to create a truck driving trainer registry.

While some argue this is an unnecessary measure, something like this has been in the works for a long time, and industry players from all sides have waded in on the matter. Let’s dig a little deeper.

The Details

The proposed rule is set to thoroughly outline how classroom and practical training should go.

New truck drivers would be required to learn:

  • The basics on driving the truck
  • Operating the controls
  • Reading the instruments
  • Pre- and post-trip inspections
  • How to safely back into a dock
  • Hours-of-service regulations

The training will also require a minimum of 10 hours driving on a range and either 10 hours on public roads or 10 trips at 50 minutes a piece, again, on public roads.

The Federal Motor Carrier Safety Administration (FMCSA) has estimated that the 10-year cost of the rule will ring in at just a little over $5.5 billion. This cost considers carrier, driver, trainer and state agency costs.

The Costs

Digging deeper into the estimated costs, it looks as though the bulk of the program costs will be carried by the truck drivers themselves. By 2020 these costs are estimated to ring in at around $27 million dollars. By 2029? Almost $30 million.

Still, the FMCSA defends these numbers by saying that the rules perceived benefits will outweigh the high price tag, though they do admit some of those benefits are indirect. As an example, they cite that better training will lead to safer, more efficient driving techniques. This will result in a reduction in fuel consumption and lower environmental costs.

They point to trained truck drivers saving the industry $75 million in fuel costs by 2020 and almost $180 million by 2029. Lower maintenance and repair costs could bring in almost $45 million by 2020 and more than double that by 2029. Indirect benefits could include less severe crashes.

Voices at the Table

Fortunately, the FMCSA underwent a thorough negotiation session with the American Trucking Associations (ATA) and the Owner-Operator Independent Drivers Association (OOIDA). They also consulted major training school and trucking safety advocacy groups. Finally, they took public comment before submitting their text to the Office on Management and Budget.

The fact is, the DOT has been working on something like this for over 30 years. They began the process in 1985, as a part of the OMB’s Office of Information and Regulatory Affairs.

The question now is how the final rule will impact trucking’s bottom line. From the truck driver to the motor carrier and state level, what kind of impact will this have on trucking operations? With the final rule set to land any day now, you can bet we’ll be back here telling you all about it here at the QuickTSI blog.

Trucking Braces for New Environmental Protection Agency Regulations

As the administration continues to focus on efforts to combat climate change, President Obama has added emission rules for big-rigs to the agenda.

Some time ago, the president gave the Environmental Protection Agency (EPA) the go-ahead to develop new rules designed to improve fuel efficiency and lower carbon emissions for heavy-duty trucks. Now the industry is looking to see whether smaller fleets can meet the standard without going out of business.

The New York Times has come out saying they already know what the proposed rule will be, although it has not yet been published to the agency’s register. According to their report an official notice could come any day now. Although the exact number may not yet be known, let’s take a look at the signals we’ve been getting from the agency to date.

New Governmental Regulations

Although many at first assumed these regulations governed only the truck and the engine, the EPA has also added emission regulations for trailers, fairings and rolling resistance. According to one administration official, the unveiling will be a “big rule” that contains so many different components, it easily could be broken down into separate regulations by themselves.

While there is much anticipation of this new rule, it won’t actually go into effect for another four years. In 2011, the EPA outlined rules for vehicle model years 2014 – 2018. This new rule will govern vehicle model years “post-2018,” likely through 2027.

The government has reported that these changes will reduce petroleum consumption by more than 530 million barrels of oil and reduce carbon emissions by 270 million metric tons.

Current long-haul truck fuel economy averages are in the neighborhood of 5.5 to 6 miles per gallon (mpg). The 2011 rule pegged the standard to a 20 percent savings. The final number for later years is set to have heavy-duty commercial trucks increase their fuel economy by as much as 40 percent through 2027, when compared to 2010 levels.

These new heavy-duty truck rules are in addition to a bevy of hotly contested emissions rules the government is instituting for power plants, dubbed the Clean Power Plan. The president is using emissions reductions as a key final part to his second-term legacy-building efforts.

From Trucking’s Perspective

Fleets have been moving to greater efficiency for some time now. One truck from the 1970s belched out more carbon emissions than 67 of today’s trucks running at full throttle. While more can always be done, trucking wants to make sure jobs and commerce aren’t threatened by regulation.

As Owner-Operator Independent Driver Association (OOIDA) Representative Scott Grenerth pointed out, there are two main concerns that industry has regarding the rule. “The cost of the truck, and reliability of the truck – that’s the bottom line,” he stated.

After traveling to Washington, D.C. last month to meet with the White House budget office, Grenerth came away saying reliability and downtime for truck repairs were the focus. They also discussed a cost-benefit rule and how to mesh emissions goals with fuel economy standards.

Glen Kedzie, environmental counsel for the American Truck Associations (ATA), while saying he has no idea what the eventual rule will be, conceded that the EPA has done an extreme amount of outreach to win over industry insiders. In his own words it has been “a lot more than I have ever seen on a rule.”

Even so, Kedzie is not without reservation. These regulations are broad in their scope and carry major implications for the trucking industry.

“A truck is a mobile office,” he went on to say. “It’s a cog to keep this economy moving along. The EPA is dealing with this economic aspect here. They have to be careful not to make the standards cost prohibitive.”

Observers are suggesting that the EPA will take a bit longer than The New York Times posited to issue the new truck standards. As the trucking industry holds its breath, only time will tell what the final rule will be. When it hits, you can be sure we’ll report on it.

Trucking Update from Washington

Congress met on April 29th to discuss issues affecting truck drivers and the trucking industry. The title of the hearing was The Future of Commercial Motor Vehicle Safety: Technology, Safety Initiatives, and the Role of Federal Regulation.

The congressional hearing covered everything from hours of service to CSA scores to entry-level driver training. Owner-Operator Independent Driver Association’s (OOIDA) Danny Schnautz spoke on behalf of his group, while the American Trucking Association (ATA) was represented by Tom Kretsinger.

What the congressional hearing showed is that Washington still has a long way to go in squaring government regulation with the needs of the trucking industry. At times the hearing grew heated on both sides, with passionate points and counterpoints being lobbied back and forth.

From Trucking’s Perspective

In his testimony, Schnautz, who is an operations manager for a national freight line, explained how burdensome regulatory actions and technological “solutions” run amok are affecting the industry. The shadow of government mandates and ever-changing rules can hinder small businesses and push longstanding safe drivers and carriers out of business.

“The current focus on technology initiatives actually hinders safety by placing more pressure on drivers when they are already caught between a regulatory rock and an economic hard place,” Schnautz said.

In his expansive testimony Schnautz tried to convey that technology can never be a substitute for skilled, professional truck drivers. He states that the focus on an alert system, rather than drivers making real-time safety decisions, degrades the skill of the truck driver and de-values the entire supply chain.

From Washington’s Perspective

Rep. Sam Graves, R-Mo., chairman of the Subcommittee on Highways and Transit, convened the meeting. After the opening hearing, he didn’t waste time jumping right into the issues. His first target was the Federal Motor Carrier Safety Administration (FMCSA).

Graves stated that he is concerned about the agency’s rapid growth since it was created in 2001. “While I support a strong safety program,” he began, “we need to ensure that funds are being spent on initiatives that will move the needle in terms of reducing crashes, injuries, and fatalities on the nation’s highways.”

One of the initiatives that Graves mentioned as a solution seeking a problem was the push to increase insurance requirements for motor carriers. Brian Scott, who spoke on behalf of the United Motorcoach Association stated that raising insurance requirements on carriers would surely put some out of business.

Assessing Regulatory Burdens

For much of the session, subcommittee members focused their questioning on rules recently outlined by the FMCSA, with hours of service being the most talked about. Rep. Richard Hanna, R-N.Y., said that the hours of service rule “actually made the world less safe for people in your industry.”

Speaking on behalf of the ATA, Tom Kretsinger highlighted how micromanagement of truckers’ hours can end up with “laws of unintended consequences.”

The final target for committee members was the Compliance, Safety, Accountability program. Schnautz testified that “under its current methodology, CSA inaccurately paints small carriers as unsafe, reducing access to business and opening them up to misguided enforcement activities.”

Even law enforcement got in on the action, as Idaho State Police representative Captain Bill Reese endorsed legislation to remove CSA data from public view. OOIDA also backed this view, saying some of the data doesn’t have real bearing on a fleet’s ability to carry out safe operations.

Not All Bad

It wasn’t all doom and gloom, however. The subcommittee’s ranking Democrat, Eleanor Holmes Norton of Washington, D.C., stated that she was pleased to see the industry and FMCSA working together on rules for entry-level truck driver training programs.

“More robust driver training is something Congress has directed DOT to consider for nearly 25 years,” she said. “The first directive was in a bill in 1991. To say this rule is overdue is putting it fairly mildly. I hope this new Entry Level Driver Training Advisory Committee can facilitate a rule that all parties can agree on,” she concluded.

Even though there was some good and some bad on both sides, the hearing highlighted a glaring deficiency between industry and government, and within government itself. As Republicans drive for less regulation, and Democrats more, which way this regulatory battle plays out is anyone’s guess.

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