Tag Archives: DOT

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.

Understanding The Third Factor In A DOT Audit

Welcome back to our series covering how to prepare your business for a Department of Transportation (DOT) audit. We’ve discussed what an audit is and why you may be subject to one and we’ve also gone over the first two factors in an audit, which were:

  • General
  • Driver

Today we will discuss the next factor: Operational. It’s important to remember that every factor in a DOT audit is extremely important. Audit outcomes can have a serious impact on your business. So without further delay, let’s dive back in.

Factor Two: Operational

Regulations covered under this factor, Part 395 of the Federal Motor Carrier Safety Rules (FMCSR), are some of the largest and most complex components of an audit.

If you are a business operating a commercial motor vehicle (CMV), you are subject to driving limitations and proper documentation surrounding the number of hours your truck drivers are logging. While some carriers may get an exception, for the most part the DOT will expect to see six months of driver logs and supporting paperwork.

You will be expected to keep a file – whether electronic or by paper – for each regulated truck driver in your operation. Truck drivers are required to complete a standard graph log. During their audit, the DOT will examine these logs.

The three primary factors they will be addressing when examining the logs are:

  • Form and Manner
  • Hours of Service
  • Log Falsification

The form and manner of the log is quite simple. Was there information in the log, including graph completion? Hours of service covers potential violations of the FMCSA’s hours of service requirement. Log falsification comes into play if supporting documents show a truck driver intentionally falsifying facts or information in the log. Fully formed logs must be returned to the fleet manager’s office within 13 days of their completion.

The operational factor also addresses whether you have a procedure in place to account for on-duty hours. On-duty hours include any compensated work performed by the driver outside of their normal employment with the motor carrier.

What About Logging Exceptions?

It might be easy for a fleet to assume that if they are using a logging exception, such as in the case of a 100-Air Mile Exception (Section 395.1), that they may be exempt from some of the logging requirements. Beware, because this isn’t true.

A carrier must always comply with recordkeeping requirements, despite using any exemptions. Using the 100-Air Mile Exemption again as an example, a carrier must be in compliance with four requirements before a logging exception can be used.

  1. The truck driver must stay within 100 air miles of his or her normal work reporting location;
  2. Must return to the work reporting location within 12 consecutive hours so that he or she can be relieved of duty;
  3. Cannot drive a CMV in excess of 11 hours within that mandated 12-hour period;
  4. Is required to take 10 consecutive hours off duty in between his or her shifts.

You are required to keep clear and accurate records showing that these requirements were met. Again, these documents should be kept for a period of six months. Supporting documents should include the regulated trucker’s daily start and stop times, the total number of hours he or she is on duty, and your method of tracking the 60 or 70-hour rule.

Considering the hours of service rule has been subject to all manner of change and debate in Washington, it is especially important that you make sure every aspect of your operation complies with whatever the rules were at the time that regulated trucker was on the road.

While it would be nice to be able to blame any slip ups on the constant change, DOT regulators won’t be so sympathetic. Make sure you are operationally accurate as you get through factor three. In our next segment dealing with a DOT audit, we will cover factor four, the vehicle.

Are Cheap Trucking Tires Worth The Cost?

Yup. We’re talking about tires again. Why? Because they’re important. And with the U.S. Environmental Agency’s recent SmartWay list expansion, we are about to experience a flood of cheap tires on the market.

Consider this: Last year there were 325 steer, drive, and all-position tires on the EPA’s list. Now, in the last twelve months alone, 287 tires were added to the list.

The verified list now stands at 612 tires, which is an 88 percent increase over 2014. In addition, the number of tire brands has swelled from 93 to 193 – a staggering jump. One must ask, where are these tires coming from, and how are they affecting the current market?

Made in China

As the data proves, a large majority of these tires are coming in from China. And while they may offer a broader selection, should we be standing up and cheering about it?

The fact is, retreaders are nervous. Fleets are also nervous because the pull of a cost-saving option could result in safety problems. Although the prices of some of these tires are too low to discard, it’s important to ask yourself what you’re not getting for your money.

Many of the new entrants on the list can’t even be found on a Google search. Some that can be found are only available on E-Bay, and even then only from container lots, paid in advance of shipping.

That being said, it’s important to note that not all Chinese-made tires are bad options. Several Chinese manufacturers have been operating in the North American market for some time, and they know what it takes to stay competitive here.

Learning the Market

A lot of Chinese manufacturers have done their research. They know that North American fleets will not be returning customers if they have repeated bad experiences with a tire. If they want to rake in American dollars, they know they need to increase the quality of their product.

Familiar names like Sailun, Hercules, and Roadmaster are all manufactured in China, yet they are commonly found in fleet yards nationwide. The difference is in cost.

Even the aforementioned brands will come in at a price point higher than the newer, cheapest options on the SmartWay list. Some of them, such as DoubleCoin, are solid Tier 3 tires trying to get up to Tier 2.

What $150 Gets You

So, let’s say you are considering buying one of the cheaper, $150 tire models. What are you (or aren’t you) getting for your money? In many cases, $150 tires only make sense when $150 is all you have to spend on a tire.

Keep in mind that even if a tire is on the SmartWay list, it may still be shipped in without a DOT code, which makes them illegal to sell in the U.S. The tire warranties are also questionable. Fleets must also look at cost-per-mile. Often, the cheapest option in the short term is not cost effective in the long term.

Also consider that many cheap, imported tires cannot be retreaded. So once they’re done, they’re done. But this doesn’t mean a flood of imports doesn’t have retreaders looking over their shoulder.

Should Retreaders Worry?

It’s hard enough for retreaders to convince fleets to retread their tires. It might get even harder once fleets realize they can buy a brand-new tire for the same price as a retread.

While this shouldn’t be as much of a problem for retreaders working with big, Top 100 fleets, it’s those working with smaller fleets that might have to worry. Cost-saving options are much more appealing to fleets who don’t have a huge mound of cash and credit backing them, as many of the largest fleets do.

Although a flood of cheap imported tires killed the passenger car industry, don’t expect them to take too much of a bite out of commercial retreading interests, mainly because the largest, most profitable fleets will never use cheap tires and will continue to retread.

SmartWay or the Highway

So you may be wondering how these potentially illegal tires got on the SmartWay list. Surprisingly, SmartWay does not do its own testing, and instead relies on the word of the manufacturers.

It’s actually quite easy to get on the SmartWay list. As long as a manufacturer can prove their tire saves at least 3 percent or more on fuel, it’s in.

Could this flood of cheap tires on the SmartWay list result in higher incident numbers down the road? Only time will tell.