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Infrastructure POSSIBILITIES

Will new Congress finally delivery for trucking in 2019?

Even as ballots were still being counted on election night, much of the mainstream discussion was focused not on what may happen next year, but who may challenge President Trump in 2020.


For trucking, however, 2019 is certainly worth talking about. It could become the year remembered for several long-sought victories, including an infrastructure funding bill. There is also optimism on more industry-specific items, most notably reforms to portions of the hours-of-service rules.


It must be pointed out that trucking has found itself at this moment a number of times before—coming out of a hotly contested election cycle believing a bipartisanship spirit would emerge.


So what makes this time different?


Bill Sullivan, executive vice president of advocacy for American Trucking Associations, summed it up in one buzzword: realignment.


“The parties have become less predictable,” said Sullivan, adding that he believes the makeup of the next Congress presents a better opportunity to see movement on infrastructure than in the past.


Though rarely mentioned during the campaign, infrastructure became a hot topic as soon as it became clear Democrats had regained a majority in the House of Representatives, and Republicans appeared to be adding to their slim advantage in the Senate.


“Infrastructure has been delayed too long,” said Rep. Peter DeFazio (D-OR), who is expected to become the new chairman of the House Transportation & Infrastructure Committee in January. “We’ve got to modernize it, and we’ve got to move people and goods more efficiently.”


During a conference call the day after the midterm election, he said the goal would be moving a bill during the first half of 2019—before presidential politics begin to dominate the landscape.


Similarly, Rep. Nancy Pelosi (D-CA), the likely next House speaker, declared Democrats “will deliver a transformational investment in America’s infrastructure to create more good-paying jobs.”


Trump expressed a willingness to work with Democrats on infrastructure, as did Senate Majority Leader Mitch McConnell (R-KY) .


“The one issue Leader Pelosi and I discussed ... where there could be a possible bipartisan agreement, would be something on infrastructure,” said McConnell.


Adding to the bipartisanship messaging was Rep. Sam Graves (R-MO), a candidate for the ranking member position of Transportation & Infrastructure Committee.


“I have a clear vision for an improved transportation network and the experience to accomplish big things,” Graves said.


His path to becoming the ranking member became easier following the close election defeat of Rep. Jeff Denham of California.


Of course, in the days following elections, saying the right thing is easy to do. The unresolved question that continues to plague the United States is how to fund all of this lofty infrastructure talk.


At the State of the Union address, Trump outlined a $1.5 trillion plan that included $200 billion in federal spending over 10 years. He left most funding decisions to Congress, but called for expanded tolling and increased privatization of assets. No action was taken on the plan during 2018.


Currently, projects are primarily funded via the Highway Trust Fund, which relies on revenue from the 24.4-cent-a-gallon diesel tax and 18.4-cent gasoline tax. These levies have not been raised since 1993, leaving the solvency of the Trust Fund in doubt.


During February, Sen. Tom Carper confirmed to the media that Trump endorsed raising federal fuel taxes during an infrastructure-focused meeting. The White House has not publicly referenced raising the tax, beyond saying in response that “everything is on the table.”


ATA’s Sullivan said he believes the group’s “Build America Fund” continues to gain support on Capitol Hill.


A core piece of the proposal is a 20-cent-a-gallon fee built into the price of transportation fuels collected from wholesalers. The fee would phased in over four years. ATA said the plan could generate $340 billion over 10 years.


DeFazio said in November he would be open to any funding options, provided they include what he called “real money” instead of relying on the private-sector dollars.


Back in 2017, DeFazio proposed legislation called “A Penny for Progress.” One piece of the 13-year, $500 billion plan was a 1-cent-a-year hike in federal fuel taxes. No action was taken by the House on the proposal.


At the same time lawmakers make bold statements on infrastructure, they remain well aware the five-year surface transportation reauthorization bill known as the FAST Act expires on Sept. 30, 2020. Without action on that measure, another round of short-term extensions would be likely, rather than all sides actually tackling the difficult infrastructure funding questions.


Sullivan summed up ATA’s position by saying that an infrastructure bill is “hard to do, but I believe it is possible.” He also acknowledged the closer it gets to 2020, the more likely it will be that Democrats “are not going to give Trump any policy wins.”


While public documents showed ATA and other trucking associations and fleets donating far more to Republicans than Democrats during this election cycle, Sullivan said “we are not partisan.”


He stressed ATA is willing to support anyone who wants to work for trucking’s interests, and was “very happy for those people on both sides of the aisle who came out unscathed.”


Sullivan cited Sen. John Tester of Montana as one example of a Democrat who has shown a willingness to listen to trucking. He also praised Sen. Bill Nelson for his recent work with the Florida Trucking Association.


Nelson had been in a contested recount battle for his Senate seat with Rick Scott (R), the state’s governor and the son of a truck driver, but conceded on Nov. 18 after a manual recount of votes. He was also a candidate for ranking member of the crucial Senate Commerce Committee. Since Nelson was defeated, Sen. Maria Cantwell (D-WA) is a logical choice for that post.


Sen. Roger Wicker (R-MS) is projected to become chairman of the committee.


After winning re-election, Wicker said if he was to become chairman of the committee, he would “work on a wide range of issues there to make Mississippi better and make America stronger.” Wicker noted that includes increasing rural broadband access.


HOS reforms could become a reality in 2019


For years, the trucking industry has sought changes to pieces of the federal hours-of-service rules. And it seems the current leadership of the Federal Motor Carrier Safety Administration (FMCSA) is prepared to offer some relief during 2019.


Speaking at American Trucking Associations’ Management Conference & Exhibition in late October, FMCSA’s chief counsel said, “But for [electronic logging devices], we probably would not be going through this process.”


Jim Mullen, who was previously general counsel for truckload carrier Werner Enterprises, said less than 1% of drivers have been caught without an ELD during 1.5 million roadside inspections since April and that HOS violations have fallen nearly 50%.


The industry’s ELD compliance is “assisting greatly” as FMCSA considers a variety of changes that could offer drivers greater operational flexibility.


Though Mullen declined to discuss an exact timeline for making changes, he said FMCSA was reviewing more than 5,000 comments that have been filed in areas including livestock exemptions, 30-minute rest break, split sleeper berth provision, short haul exemption, ability to extend the work day when facing adverse driving conditions, and ability to pause the 14-hour clock.


If FMCSA decides changes should be made, it would need to file a notice of proposed rulemaking, which then kicks off an additional public comment period.


Regardless of whether or not there are changes, 2019 will mark the official transition to the full-time ELD era. Since the mandate went into effect in December 2017, fleets previously utilizing automatic onboard recording devices (AOBRDs) were granted a two-year waiver. However, on Dec. 17, 2019, all interstate fleets covered by the mandated will be required to use ELDs.


During a question-and-answer session following Mullen’s presentation at the ATA conference, several fleet executives raised concern with that deadline.


One fleet executive went so far as to suggest there should be an extension to allow additional time to train drivers on the new devices they will need to use.


Jack Van Steenburg, FMCSA’s chief safety officer, was in the audience and said it was the first time he had heard these concerns. He added there was “no internal discussion” regarding a delay.


Steenburg said the discussion served as a reminder for FMCSA to be more proactive in issuing reminders and updates regarding next year’s deadline.


In a webinar shortly after the midterm elections, Avery Vise, vice president of trucking research at FTR, downplayed the significance of the transition to ELDs. However, he pointed out that if there are changes to HOS, all devices would need to be updated to reflect the new rules. That could potentially cause short-term confusion.


In looking ahead to next year, he shared a fairly straightforward assessment. “For trucking, 2019 is going to be all about hours of service,” Vise said.


Experts see more economic growth in coming year

While 2019 may bring with it a host of political uncertainties, experts said the U.S. economy should remain on solid footing.


Bob Costello, senior economist of American Trucking Associations, expressed confidence during the group’s recent annual meeting that the fundamentals remain in place for a solid next year. That includes a healthy labor market and growing construction activity. He added that the updated trade agreements with Mexico and Canada provide U.S. businesses additional confidence, even if the details had not yet been formally signed and ratified.


Similar messages were shared by the top executives of Daimler Trucks North America and Volvo Trucks at media briefings during ATA’s comments.


In early November, research firm FTR raised its 2019 forecast for Class 8 trucks and trailers. The group said North American Class 8 factory shipments would be 350,000 units in 2019, and U.S. commercial trailer production would be 310,000 units.


“We increased our forecasts for 2019 based on our models indicating continued strong freight growth generating robust demand for equipment through Q3 of next year,” said Don Ake, FTR vice president of commercial vehicles. “OEM component suppliers have also done a much better job delivering on time, allowing production rates to increase. If this continues, we expect a record Class 8 build in 2019 for a year not impacted by a pre-buy. Trailers could also set a record, if sales are steady through the end of the year.”

 

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