New Regulations Could Further Tighten Capacity

Trucking regulationsAs leaders in the House and Senate take their August recess, it’s a good time for a status report on legislative issues that affect brokers and the trucking industry. Here’s an update on various trucking related issues and proposals—many of which could affect already tight capacity.

Highway funding – The good news is that on July 31 our legislators approved a bill that will pay for the highways that are so critical to moving freight. The bad news is that it’s only a short-term patch that will last through May 31, 2015, rather than long-term, multi-year funding that industry advocates had pushed for. The bill cleared the House 270-150 and the Senate 81-13 mere hours before the DOT was set to reduce payments to states because of a dwindling Highway Trust Fund. The president signed the bill into law on Aug. 8.

Hours of service – Industry experts estimate that new HOS rules that took effect July 2013 reduced carriers’ productivity by 3 to 5 percent. Over the past year, industry groups have fought to rollback the rules and, on June 5, the Senate Appropriations Committee voted to adopt an amendment to a 2015 transportation bill that would suspend for one year two HOS provisions and require the DOT to conduct further studies. Two days later, a trucking accident on the New Jersey turnpike killed comedian James McNair and injured comedian/TV star Tracy Morgan, propelling the issue of how many hours a trucker should drive into the national spotlight. Days later, Senator Cory Booker of New Jersey offered an amendment that would undo the earlier amendment. The Senate never voted on his proposal due to procedural objections. The issue remains stalled for now.

Increased insurance coverage for carriers – Like HOS, a proposal to increase the amount of insurance required by carriers might not seem like a broker issue. But consider this: the FMCSA could implement requirements that would double or triple the $750,000 insurance requirement. That could put a lot of small trucking companies and owner-operators out of business and pull many trucks off the road. A Notice of Rulemaking is expected from the FMCSA next month, followed by a minimum 60-day comment period. A final rule would come after that.

Electronic logging devices – Again, regulations aimed at carriers affect truckload capacity. MAP-21 requires that in the future all carriers must use ELD’s. The FMCSA is in the process of reviewing the 800 comments received during the public comment period. Once the final rulemaking is released, carriers must comply within two years. An article in Commercial Carrier Journal titled Trucking analyst: e-logs the main catalyst for bankruptcies, noted that trucking companies that were audited by FMCSA and forced to use ELDs saw their utilization drop 8-10 percent and many went out of business. Although the analyst points out that ELDs help fleets become more productive over the long run, many carriers on the edge of profitability many not last long enough to experience the device’s benefits.

CARB crackdown – In July, the Transportation Intermediaries Association (TIA) sent an email to its members alerting them that several members received surprise visits from enforcement staff of the California Air Resources Board (CARB). The brokers were audited for compliance with CARB’s rules that brokers must hire only CARB compliant carriers when moving refrigerated freight through California. See our blog post on how you can use the DAT Directory or DAT CarrierWatch to see if a carrier you’re considering hiring is CARB compliant.

Prohibition of Driver Coercion – Public comments closed this week on an FMCSA rule that prohibits shippers, receivers, brokers, or carriers from coercing drivers to violate HOS or other regulations in order to complete their deliveries on time. More than 80 comments were submitted. The FMCSA will issue a final rule after reviewing the comments.

National Standard for Hiring Motor Carriers – House Resolution 4727, introduced in May, would clarify and standardize best practices for hiring safe motor carriers. It states that the FMCSA safety rating should be the ultimate determination if a carrier is safe to operate. The rule would require that, before hiring a carrier, a broker must ensure that the carrier is properly registered with the FMCSA, has obtained the minimum insurance, and has not been given an “unsatisfactory” safety rating from FMCSA. The resolution has four co-sponsors in the House and it’s possible that the national standard language could become part of a multi-year transportation bill when the current bill expires in May.