New Year, New Regs AHTD

New Year, New Regs

The new year’s regulatory calendar is complicated by the November elections and all of the congressional posturing that goes with it, to say nothing of a lame duck administration with a lot of political appointees likely spending more time polishing résumés than hammering out policy. The DOT's initial schedule for 2016 is summarized here.

A YEAR AGO, THE TRUCKING INDUSTRY faced a daunting regulatory calendar, and 2015 was indeed a busy one for the Federal Motor Carrier Safety Administration (FMCSA), both in terms of the number of items on the agenda and their significance. In fact, several of the expected new rules are so important and complex they were pushed well beyond the projected delivery windows and even into this year. Throw in an array of demands that Congress included in the new highway bill (the FAST Act) and the year-end appropriations packages, and FMCSA once again has a lot on its plate. Just for starters, there’s the electronic logging devices (ELD) rule, driver coercion, hours of service, driver training, speed limiters, drug and alcohol test clearinghouse, and hair testing.

There are some changes that most in trucking support, others that most in trucking have problems with, and several on which opinions vary, depending on one’s place in the supply chain. The new year’s calendar is also complicated by the November elections and all of the congressional posturing that goes with it, to say nothing of a lame duck administration with a lot of political appointees likely spending more time polishing résumés than hammering out policy.

And historically, as Dave Osiecki, American Trucking Assns. (ATA) executive vice president and chief of national advocacy, suggests, regulations roll out much more slowly in presidential election years, so 2016 will mean plenty of proposed rules but few final rules.

“Given the pipeline that’s already there, we’re going to see some of these—but I don’t think the administration is going to get to the point where it finalizes many,” Osiecki says. And, looking to this time next year, a change at the White House—specifically if the next administration is a Republican one—also will impact the regulatory schedule. “It remains to be seen which rules they would pull back on and which they move forward on, but a large part of that decision making will be which rules are congressionally mandated,” he adds.

Complicating matters even further, among the requests coming from Congress is one that will require FMCSA to review how it crafts rules and their impact on various segments of the industry. Lawmakers also have required FMCSA to take another look at the Compliance, Safety, Accountability (CSA) program—and, in the meantime, to remove the carrier BASICs from public view.

CSA, CARRIER FITNESS

“We still believe the scores are absolutely valid, and having them on a public website is a good thing. It holds people accountable—that’s the ‘A’ part of the CSA program,” says Bill Quade, FMCSA associate administrator of enforcement. “We are going to work to complete the verification steps that Congress wants in order to make some assurances that the data is meeting those standards. I would hope that, at this point next year, we’ll have that review done and have the carriers’ safety scores be public knowledge. I really don’t think it’s healthy to have the U.S. government’s assessment of any regulated community to be secret.”

In practice, taking down public access to CSA scores might not make a substantial difference, suggests Quade.
“All the data is out there, and our formula is out there. People will undoubtedly put together CSA scores and make them available,” Quade says, noting similar services are already used by carriers to track drivers—information FMCSA does not provide to the public. “Carriers are still going to have access to their own information, and if the shippers want this information, they’re going to ask for it—and carriers are going to give it to them if they want that business.”

The reforms called for in the highway bill, similarly, will not impact the Safety Fitness Determination proposed rule, which, at the time this issue of American Trucker was going to press, was just “a few weeks” from being published, Quade notes.

He emphasizes the Safety Management System (SMS) scores within the CSA system are “relative,” as carriers are ranked among comparable fleets. In the pending fitness rule, “absolute standards” will be used to rate carriers. Additionally, the “data sufficiency concerns” that CSA critics harp on will be “less relevant,” he explains.

“Our hope is that we can move forward with a new system to rate [carriers] for their recent on-the-road performance,” Quade says. For instance, a trucking company he reviewed in 1994 still has its satisfactory rating based on that review. “I have no reason to believe they’re not still a safe company, but I don’t believe a review I did 21 years ago is of relevance today.”

Because the new system is two-tiered—every carrier is either fit or unfit to operate—the matter of unrated carriers will essentially “go away,” Quade adds. “Either you don’t have enough bad performance data so that we’re not worried about you, or you do have enough bad performance data and we are worried about you.”

A straightforward, official assessment of carriers is exactly what brokers and shippers have been requesting. The issue has been that brokers are exposed to negligent hiring claims by plaintiffs’ attorneys who argue the percentile rankings, rather than official safety ratings, should be used in carrier hiring decisions. Tom Sanderson, CEO of billion-dollar 3PL Transplace, has led the push to have the CSA scores removed from public view.

“The whole CSA system is so flawed that nobody can rely on it. As a 3PL, we’re not equipped to go out and evaluate the safety practices of tens of thousands of trucking companies—that’s FMCSA’s job,” Sanderson says. “What we are good at is knowing which carriers are going to pick up and deliver freight on time, at a competitive price, and deliver the capacity that our customers need. You really expect the federal government, through FMCSA, to make sure those carriers that are unfit are closed down.”

But tweaking the system still doesn’t satisfy the Owner-Operator Independent Drivers Assn. (OOIDA). “The reforms don’t go far enough,” argues Scott Grenerth, OOIDA director of regulatory affairs. “It’s been made abundantly clear by everybody in the entire universe, except for FMCSA, that it’s a failed program.”

ELDS, DRIVER COERCION

The ELD and driver coercion rules have come through the process together, after OOIDA successfully blocked the previous coercion rule in a court challenge based on the lack of driver harassment protections.

ATA, which has long advocated for e-logs, called the publication “historic” and says the rule would “forever” change trucking for the better. Osiecki suggests the two-year transition to comply with the ELD regulation, along with a four-year grandfather window to allow current electronic logging systems to be brought up to the new specification, allows plenty of time.

FMCSA’s Quade adds that the agency is “well poised” to support the transition from voluntary to mandatory use, including a series of webinars.

But OOIDA is no fan of the new rule, even with the procedural and technical provisions to prevent harassment resulting from ELD-generated information. And the association once again has filed suit to block the rule, saying it has the potential to have “the largest, most negative impact on the industry” of any regulation FMCSA has imposed.

“It’s simply a compliance tool; it’s not an actual safety tool,” Grenerth says. “If fleets or drivers want to use one, that’s totally fine.”

The small-business trucking group, however, lobbied for and supports the coercion rule, with Grenerth calling it “a really good step in the right direction.

“Pressures are put on drivers for things that are out of their control, and this finally is an opportunity for that to be addressed,” he says. “We’re very pleased FMCSA is taking action on something that’s going to help drivers out in a very big way.”

Yet many in the industry say driver coercion is a complex problem best solved in the marketplace.

“With the looming shortage of drivers, the market economy will dictate that those shippers that tie up drivers and tractors aren’t going to be well served by the trucking industry,” Transplace’s Sanderson says. “Trucking companies today, more so than ever, will not put up with any kind of abuse or coercion of their drivers by a shipper or broker.”

ATA likewise has supported market-based solutions, but Osiecki concedes the rule “is probably needed and a good idea.”
“Ideally, it will remain primarily a business relationship between carriers and customers, but it became clear the government was going to make an effort to regulate this—and we think they’ve done a pretty good job,” Osiecki says.

DRIVER TRAINING

While the highway bill package spells out a number of initiatives to make it easier for servicemen and women to transition into truck driving careers, negotiators did not retain language that would have let states permit CDL holders under age 21 to cross state lines. Instead, the bill calls for a pilot program to study the feasibility, benefits, and safety impacts of allowing drivers between 18 and 20 to work in interstate commerce.

ATA calls it puzzling that the very similar language in both the House and Senate versions of the bill to support the younger driver initiative was replaced with a pilot program that’s “so starkly different.”

FMCSA, however, defends the study-first plan. “We recognize we have to do something about the driver shortage, and there is a disconnect between high school and the 21-year-old age limit when you can get into the over-the-road trucking business,” Quade acknowledges. “But we would prefer to take it in measured steps, as opposed to a mandate throwing the country open to younger drivers. The need is there, but the statistics are very much against younger drivers with respect to safety. Then again, the truth is that the stats are very much against inexperienced drivers—and it just happens to be that most of the inexperienced drivers are younger.”

The pilot program will provide the data FMCSA needs to determine whether, in fact, a new 19-year-old driver is more or less safe than a new 22-year-old one, he adds.

Quade also emphasizes the agency’s support for the initiative to bring more veterans into trucking. “We’re going to continue working to make the transition from military into civilian life as a commercial truck driver easier,” Quade says. “We’re working with the Dept. of Defense [to ensure its] training and testing programs are good enough for a civilian license, so when you get out you can turn in one and get another without having to retest or pay fees.”

He notes that all 50 states have adopted a waiver on the CDL skills test, “but there are still some things we can do to make it easier on them. They’re good people with a great work ethic who’ve had top-notch training and experience. They’re the type of people we’d like to put on the road.”

Along these lines, the entry-level driver training notice of proposed rulemaking (NPRM) went to the White House for review in November, and while the review could take as long as 90 days, the process should be speedier since the proposal originated as a negotiated rulemaking, Quade notes, and that would mean an early-2016 publication date.

Both ATA and OOIDA had representatives on the advisory committee that developed the training proposal and expect FMCSA to stick closely to the recommendations that focus on driving skills rather than simply classroom study minimums.

“It’s not going to fix everything—there’s not a single answer to driver training,” Grenerth says. “But it initiates programs that are going to [require] FMCSA, for the first time ever, to track the performance of individuals and their training. There’s so little data on entry-level drivers; it’s something we’ve pushed for 30 years.”

SPEED LIMITERS

A speed-limiter mandate, an ATA policy priority since 2009, is getting nowhere fast, however. “Unfortunately, this administration took until 2011 before it decided to accept the petition and move forward with the rulemaking,” Osiecki says.

The proposed rule from FMCSA and the National Highway Traffic Safety Administration (NHTSA) has been under review at the Office of Management and Budget (OMB) “for months and months.” It was originally scheduled to be published in March 2014.

“There just doesn’t seem to be an appetite to slow speed. We are a country of mobility,” Osiecki says. “We spend millions of dollars on safety every year. But as a government, we don’t seem to want to tackle one of our biggest causes and contributing factors to crashes, and that’s speed.”

The speed setting in the proposal remains unknown.  ATA has asked for a 65 mph limit. But OOIDA opposes any such mandate.
“Speed limiters are just the cause of so many problems—it’s ridiculous. They do not do anything to really help with safety,” Grenerth says. “The majority of accidents are happening at much lower speeds. They’re not happening because drivers are going 80 mph down the Interstate. And speed limiters are certainly causing grief for everyone on the roadways where they are being used.”

FMCSA anticipates the speed limiter proposed rule to be published in the first half of the year, Quade reports.

DRUG TESTING

Also due in the first half of 2016 is the drug and alcohol test clearinghouse final rule, which would set up a national CDL testing database.

“We’ve been talking about this for 15 years. But we’re not an advocate for the DOT approach. It’s incomplete. It’s an 80% solution,” ATA’s Osiecki says. “That means you will pull [driver background information] from the clearinghouse, but you may also have to go back to previous employers for violations not in the clearinghouse. We need to figure out how to get this clearinghouse to be a one-stop shop.”

ATA has been more successful in getting Congress to include hair testing in the FAST Act. “Hair testing is a really good thing for this industry and safety,” Osiecki says.

OOIDA, however, questions the need for “yet another government data­base” to be made secure, and argues that hair testing, done properly, is complicated and arguably unfair to some people because of hair type. More to the point, Grenerth contends these are solutions in search of a problem.

“Drivers with drugs is not a rampant problem to begin with,” he says. “To say it should be mandated because some big carriers feel they have to hair test to get decent people in their trucks is just not the way to go.”

BEYOND COMPLIANCE

On the drawing board at FMCSA for several years, and now on Congress’s wish list as well, a “beyond compliance” program would reward trucking companies that exceed regulatory requirements and invest in additional safety technologies and programs.

“I love the concept of beyond compliance,” Quade says, “but I don’t have enough people to go see all of the bad carriers. So I certainly don’t want to divert them to go make sure the good carriers are doing what they say they’re trying to do. But without a verification aspect, that program is not going to survive.”

Indeed, FMCSA funding didn’t get a boost from the FAST Act.

“The biggest hurdle, frankly, is just resources,” Quade says. “The highway bill has us putting in place a crash preventability program and a beyond compliance program. Congress also has us doing major revisions or reviews of the rulemakings that are out there. And yet the funding is hardly enough to keep up with inflation. Doing more with less—you can only take it so far.”

UNDERRIDE PROTECTION

In late December, NHTSA announced an NPRM that focuses on upgrading the federal motor vehicle safety standards that address underride protection on trailers and semitrailers.

Most trailers and semitrailers are already required to have bars, known as rear impact guards, or “DOT bump­­ers,” hanging from the back of the trailer to prevent underride. This NPRM would require trailer and semitrailer guards to remain in place in crashes of up to 35 mph versus the current requirement of up to 30 mph.

The Insurance Institute for Highway Safety (IIHS), which has long called for more robust underride protections, called the proposal “a step in the right direction.”

Russ Rader, IIHS senior vice president of communications, explains that NHTSA has aligned U.S. standards with those already in place in Canada—and most trailers already comply.

“IIHS crash tests show that even guards adhering to the Canadian rules can fail and allow catastrophic underride in crashes that involve the outer edges of the guards,” Rader says. “Some manufacturers are already going beyond the Canadian standard, and tests show those guards do a better job in more kinds of crash scenarios.”

ECONOMIC IMPACT

Even as FMCSA attempts to do the economic impact math in every rule it develops, that can be an inexact science. Many in the industry have long argued these studies are skewed in favor of administration initiatives.

The U.S. economy is complex indeed, but one transportation economist routinely calculates the impact of federal rules into his freight forecasts. And an unprecedented capacity crisis, driven by these trucking regulations, will be followed by a revolution in productivity, he suggests.

“We are on the cusp of the biggest event in transportation since the invention of the superhighway in the ’50s. The size of the threats we have—or the opportunities—are bigger than they’ve been in a long time,” says economist Noël Perry, senior consultant for FTR Transportation Intelligence. “The problem is that the precise timing of these events is not clear even though the events themselves are. If we haven’t prepared, we’ll be left behind.”

The supply and demand imbalance will initially tilt toward carriers, with the extent of the capacity shortage to be determined by how quickly FMCSA imposes its regulatory agenda, and tempered by the freight demands of the economy, Perry explains.

“If FMCSA does what it says it’s going to do, [the capacity imbalance] will peak at levels we’ve never experienced before,” he says. “So if you’re a broker, in 2017-18-19 your survival will depend on your ability to find trucks.”

By the next decade, however, new transportation technologies—specifically, automation—will reverse the trend. Until then, Perry notes that 2016 “most likely” will look a lot like 2015. But he advises carriers and shippers to plan for a recession to begin in 2017, along with those federal regulations that will have a huge negative impact on truck productivity and capacity.

“This is the time to be sucking up to your customers like crazy,” Perry says. “Because your customers know your exposure [to the regulations] is out there, they’re much more likely to do long-term deals with you now.”

 

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