Regulatory Legislative Issues

  • Hours of Service

    Final note on elimination of changes to HOS restart rule

    - by Tom Sanderson

    Final note on elimination of changes to HOS restart rule

    Thanks to vigorous challenges by numerous industry participants to the flawed 2013 Hours of Service Restart Rules, the FMCSA finally and completely backed down in March of this year and the following notice appears on their website.

    NOTICE: The Consolidated and Further Continuing Appropriations Act of 2015 was enacted on December 16, 2014, suspending enforcement of requirements for use of the 34-hour restart, pending a study. Based on the findings from the CMV Driver Restart Study, the 34-hour restart rule in operational effect on June 30, 2013, is restored to full force and effect.  The requirement for two off-duty periods of 1:00 a.m. to 5:00 a.m. in section 395.3(c) of the Agency’s hours-of-service rules will not be enforced, nor will the once-per-week limit on use of the restart in 395.3(d).

    The CMV Study included 235 drivers and 3,000 restarts. The drivers included a mix of small and larger carriers, short-haul and long-haul routes, as well as a variety of equipment types. In it’s conclusion on the report to Congress, FMCSA wrote; “The study was not able to demonstrate conclusively that the restart rule that went into operational effect on July 1, 2013, provided “a greater net benefit for the operational, safety, health and fatigue impacts” [section 133(e) of The Act] compared to the restart rule in operational effect on June 30, 2013. Because the study did not demonstrate that the revised restart rule satisfied even the initial outcome requirements in section 133 of The Act, FMCSA has elected not to re-open the study to assess the additional outcome requirements of the Further Continuing and Security Assistance Appropriations Act, 2017.”

    This was a huge victory for the shipping public and the motor carrier industry. It is an excellent example of the success the industry can have in challenging misguided, costly, and ineffective regulatory actions. The other obvious example is the successful fight against the damaging CSA/SMS system. Now that the industry has proven its ability to stop damaging regulatory changes, perhaps we will also see success in pushing through positive initiative, such as greater highway funding and nationwide twin 33’ trailers.

  • Safety

    Carriers object to proposed mandatory speed limiters

    - by Tom Sanderson

    Carriers object to proposed mandatory speed limiters

    FMCSA received more than 4,500 comments on its joint proposal with NHTSA for mandatory speed limiting devices, and motor carriers and drivers were unified in their opposition. A coalition of five organizations – AEMCA, AHFA, AHAA, TEANA and TLP&SA – filed in opposition to the NPRM for three reasons:

    1. NHTSA and FMCSA have failed to make a case for speed limiters producing safer highways;

    2. The agencies have failed to adequately consider the effect of speed limiters in permitting

    commercial motor vehicles to avoid accidents; and

    3. Imposition of speed limiters by the federal government is inconsistent with the preemption of

    state law exceptions found in 49 USC 14501.

    A copy of the coalition’s comments is available at https://www.regulations.gov/document?D=FMCSA-2014-0083-4494. Other comments and the NPRM are available at https://www.regulations.gov/docket?D=FMCSA-2014-0083

  • On-board Trip Recorders

    A time for inaction–shippers and brokers should just sit back and wait during the ELD transition period

    - by Tom Sanderson

    Transport Topics published an excellent article examining the impacts of Electronic Logging Devices (ELDs) on truck capacity and in particular regarding the impact on smaller carriers. They reached out to a number of large truck brokers, including Transplace, to find out what the primary users of small trucking companies are thinking. While most of us do not buy into the gloom and doom scenario regarding capacity reduction, we also agree that even a modest 3-5% reduction in effective capacity, through small carriers exiting the business and running fewer miles per truck, would shift capacity-demand balance back to levels experienced in 2014.

    The mandate does not take effect until the end of 2017, so there is no immediate impact. In addition, there will be no impact among the larger carriers, nearly all of whom have already adopted ELDs.

    In the meantime, some shippers and brokers are already demanding that carriers certify that they are ELD compliant. That is absurd. ELD providers self-certify to the FMCSA that their devices are compliant with the new regulations. As of today, there are six providers of ELDs that have self-certified. FMCSA does not and will not verify or challenge these self certifications. They could only be removed from the list if other organizations challenged whether the ELDs truly met the standards. Secondly, carriers self-certify that they are using a compliant device. Until roadside inspections start putting trucks out of service in 2018 for not utilizing ELDs, there is no way to be sure that carriers are utilizing ELDs.

    Carriers are allowed but not required to utilize ELDs until December 18, 2017. Shippers and brokers that create their own more stringent rules than published by the FMCSA are increasing their own liability exposure in the event that their own rules are not followed 100% of the time. They are also kidding themselves, because there is only self certification, with no verification.

    Let’s see how things play out in late 2017. There may be a short period of disruption in the transition, but I have a strong feeling that the most entrepreneurial players in our industry, the small truckers, will find a way to survive and occasionally thrive under the new rules.

  • Compliance, Safety, Accountability

    FMCSA admits CSA/SMS fix is 2 years away

    - by Tom Sanderson

    Yesterday, Transportation Secretary Anthony Foxx testified in Congress that it would take 2 years for FMCSA to  complete its review of CSA as mandated by the FAST Act. The law required that FMCSA remove SMS scores from the Web until the review was completed. After immediately removing SMS percentile scores and alerts from the Web, FMCSA exploited a loophole in the law by posting raw SMS scores without percentiles or alerts. FMCSA then doubled down by communicating its proposed new Safety Fitness Determination rule that is based, in part, on the flawed CSA/SMS program.

    So even though FMCSA admits it will take two years to remedy the flaws in the SMS system that have been pointed out by the General Accounting Office, Inspector General, and others, it still intends to utilize the system to put some unlucky carriers out of business with an “Unfit” safety rating.

    The commentary period is now closed, but numerous industry participants strongly objected to the proposed rule and Congress is considering legislative action that will prevent the rule from being implemented.

    I believe there is enough opposition to prevent this harmful rule from being implemented. Time will tell.

  • Highway Funding

    How Congress negotiates with itself to the detriment of taxpayers

    - by Tom Sanderson

    I am still perusing the 1,301 page highway bill to better understand its implications for freight transportation and infrastructure spending over the next 5 years, but today I was reading the “Joint Explanatory Statement of the Committee of the Conference”, that in 56 pages summarizes some of the changes. The transfer from the General Fund (where we spend hundreds of millions of dollars per year more than we take in) to the Highway Trust Fund (where we spend tens of millions of dollars per year more than we take in) is a beauty that could only happen in DC. I quote the exact language from the document.

    Senate Language: “The Senate amendment provides that out of money in the Treasury not otherwise appropriated, the following transfers are to be made from the General Fund to the Highway Trust Fund: $34,401,000,000 to the Highway Account and $11,214,000,000 to the Mass Transit account.”

    House Language: “The House amendment provides that out of money in the Treasury not otherwise appropriated, the following transfers are to be made from the General Fund to the Highway Trust Fund: $25,976,000,000 to the Highway Account and $9 billion to the Mass Transit account.”

    “Compromise”: “The conference agreement provides that out of money in the Treasury not otherwise appropriated, the following transfers are to be made from the General Fund to the Highway Trust Fund: $51,900,000,000 to the Highway Account and $18,100,000,000 to the Mass Transit account.”

    Isn’t that a beauty. One side wants to spend $45.6 billion more than we have and the other side wants to spend $35 billion more than we have, so they compromise on spending $70 billion more than we have. It is almost as much as the two chambers proposed if added together.

    Federal gas and diesel taxes have not been raised since 1993. The nation has just recently dropped below one trillion dollars in annual deficits. There is tremendous inefficiency in federal highway spending. And the answer is to borrow $70 billion dollars over the next five years to fund infrastructure improvements. Pathetic.

    The new highway bill is called “FAST” , Fixing America’s Surface Transportation Act. The only thing FAST about this bill is the way it plays fast and loose with our tax dollars and federal deficit.

  • Highway Funding

    California meal-break and pay rules at odds federal rules for interstate commerce

    - by Tom Sanderson

    We received a letter from one of our key motor carriers, Interstate Distributor, alerting us and its other customers to two California laws that will have devastating impacts on freight transportation in the state, if not corrected in the current Highway bill.

    First, on top of federal hour of service regulations governing driver rest periods, California is mandating that drivers take breaks between 2 and 3.5 hours into a shift; before the 5th hour of the shift; between hours 6 and 8 of the shift; before the 10th hour of the shift; and between the 10th and 14th hour of the shift. If drivers stop on the highway it creates a safety hazard. If they pull off the road, approximately 30 minutes is lost for every break even though some of the mandated breaks are for only 10 minutes. The idea of forcing a professional driver to take three 10-minute breaks and two 30-minute breaks at government prescribed intervals during a shift is ludicrous. The penalties for failure to comply are steep.

    The second law, A.B. 1513 severely limits a trucking company’s ability to pay drivers by the mile, the long-time norm in the truckload sector of the industry. It takes effect January 1, 2016. This would be extremely harmful to the trucking industry, and ultimately to the shipping public and consumers.

    The Denham Amendment to the Highway Bill would restore a 1994 law that established Federal preemption over state law in meal/rest and piece rate regulations. Please contact your Congressional representatives to support the Denham Amendment.

    Here is one site that provides contact information.

  • Safety

    Large truck fatalities up, fatality rate down in 2013

    - by Tom Sanderson

    According to the U.S. Department of Transportation, total fatalities in crashes involving large trucks (>10,000 pounds GVW) increased slightly in 2013 to 3,964, representing a 0.5% increase and 20 fatalities over 2012. Total fatalities had declined to a 40-year low of 3,380 in 2009, but have risen slightly in each of the last 4 years. Large truck fatalities per 100 million vehicle miles traveled (VMT) fell slightly to 1.44, after rising in each of the 3 previous years. That is a remarkable 30% lower than the 2000-2009 decade average of 2.07. It is critical to view these recent statistics over the long-run, as the numbers from the last few years in no way diminish the tremendous improvements in safety made by the trucking industry in the post-deregulation years. Despite a sharp increase in the number of VMT across this period, the absolute number of fatalities has significantly declined over the years. Fatalities per 100 million VMT have fallen from a 1979 peak of 6.15 to 1.44 in 2013, a stunning 77% decrease. We congratulate and thank the trucking industry for this remarkable achievement. Still, the increase in both fatalities and the fatality rate since the recessionary low of 2009 are concerning.

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    Despite a historical trend that exhibits a consistently higher fatal crash rate for large trucks than passenger vehicles, truck safety gains had erased this safety gap by 2009. We have seen that gap open back up since then. In 1979, the last year before trucking deregulation, the safety gap peaked at 2.4 fatal crashes per 100 million VMT. In 2009, the gap decreased to 0, but has since ticked back up to 0.5. Over the longer run, the prevalence of crashes has dramatically decreased for both types of vehicles, despite significant increases in total VMT for both large trucks and passenger vehicles.

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    Every highway fatality is a tragedy and all participants in the transportation industry should seek to reduce the frequency of fatal crashes. The current and historical data paints a picture of a trucking industry that has made great strides towards ensuring that America’s highways are continually made safer.

    The uptick in fatalities and the rate of fatalities per 100 million miles since 2009 is concerning, but unfortunately the DOT report does not explain the increase. I can think of a few plausible reasons, but do not have enough data to definitively explain the increase.

    1. Congestion: With the economic recovery since 2009 it seems like we may have greater highway congestion that would lead to more accidents. But, passenger miles traveled were only up 44 billion (1.7%) and truck miles were actually down 13 billion between 2009 and 2013, so that is not a likely explanation.

    2. Distracted Driving: In 2013, for 62.8% of fatal accidents involving large trucks, the “Critical Precrash Event” was  “Other Vehicles” either encroaching in the trucker’s lane or their actions within the trucker’s lane, while only 22.6% were due to the actions of the trucker, with the remaining 14.6% being due to some other reason such as pedestrian actions. There is no question that we have a distracted driving problem in America and with over three-fourths of all fatal truck crashes being caused by something other than the truck driver’s actions, we need to look beyond the trucking industry to find solutions.

    3, Hours of Service: The restart provisions of the the 2013 Hours of Service rules change pushed more trucks out on the road in the morning hours. In 2013, 65.5% of large truck-related fatalities occurred during the 6 AM to 6 PM time frame. While, given the timing, it is obvious that the HOS change did not cause the increase in fatalities between 2009 and 2013, the FMCSA admits it did not study the consequences of pushing trucks onto the highways in morning rush hour and an American Transportation Research Institute study showed that truck accidents are more frequent during congested daylight hours. The roll-back of the restart provisions should improve safety.

    4. CSA: Is it concerning that fatal accident frequency has increased since CSA/SMS was made public. The FMCSA has cut back on the number of carrier Compliance Reviews it conducts while increasing roadside inspections. Given that CSA scores bear no relationship to individual carrier accident frequency, perhaps the FMCSA should reconsider whether this highly flawed and much criticized system may be more of a problem than a solution for improving highway safety.

    One thing that is clear is that the American Trucking Associations and nearly all truckers are incredibly focused on safety and are leading the way on issues and initiatives such as electronic logging devices, speed limiters, hair follicle drug tests, collision avoidance systems, America’s Road Team, Share the Road, and many other actions and programs that are designed to make our highways safer for everyone.

  • Highway Funding

    Long term highway bill; a lot of talk but little action

    - by Tom Sanderson

    On 7/31 president Obama signed the 3rd extension of the MAP-21 highway bill, extending funding until October 29, 2015. MAP-21 was original passed July 6, 2012, covering the remainder of FY2012, plus FY2013 and FY2014, expiring September 30 2014. The bill was first extended last August through May of this year; and then again in May through July of this year; and now again in July through October of this year. For five weeks of the three month extension, Congress is on summer recess.

    Separately, the Senate passed a six-year highway bill on July 30, which was negotiated by majority leader Mitch McConnell (R-Ky.) and Sen. Barbara Boxer (D-Calif.) but House Republicans refused to take up that plan leaving town the day before it passed, forcing the Senate to pass the three-month extension. This is the 34th short-term extension of highway funding legislation approved by Congress since 2005.

    The key challenge is how to pay for the $16 billion per year gap between proposed highway spending and highway user fees raised primarily from federal fuel taxes. Federal fuel taxes have not been raised since 1993, since which time the dollar has lost 40% of its purchasing power due to inflation and fuel economy is up 14%.

    The current Senate six-year proposal has a grab-bag of gimmicks that generate $48.7 billion to pay for three years of incremental spending, punting on how the final three years of spending would be financed. The two main gimmicks are cutting dividends paid by the Federal Reserve to member banks ($17 billion) and selling oil from the Strategic Petroleum Reserve ($7 billion). Talk about buying high and selling low! Increases in fees paid to the Transportation Security Administration, customs fees, and the elimination of Social Security benefits for people with outstanding warrants for their arrest would all contribute a few billion dollars toward the new program.

    There are also proposals to change the U.S. tax that companies pay on overseas profits to provide tens of billions of dollars for highway funding, but Mitch McConnell ruled that out on August 6, correctly pointing out that corporate tax reform and highway funding are two separate issues. Also on August 6, Delaware Democrat Sen. Tom Carper, offered a bill designed to raise fuel taxes by four cents per year in each of the next four years to fund highway spending. Increases in fuel taxes are widely opposed in Washington, but favored by the American Trucking Associations.

    So where does that leave us? Likely with another short-term extension in late October, within days of the expiration of the current extension. The can continues to get kicked down the road.

  • Mexico Cross Border Trucking

    Rail is growing faster, but truck still dominates U.S.-Mexico cross-border freight transportation

    - by Tom Sanderson

    The flow of trucks and rail containers across the U.S. Mexico border is growing, but not at a tremendously fast pace according to data from the U.S. Department of Transportation Bureau of Transportation Statistics. In 2014, 3.8 million loaded truck containers and 474k loaded rail containers crossed the U.S.-Mexico border including northbound and southbound flows. That means there were 8 truck crossings for every one rail container crossing in 2014, and the ratio has been 10:1 or more in some years, including 2009 and 2010. The compound annual growth rate from 1996 to 2014 was 4.5% for truck and 6.9% for rail.

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    The annual percentage growth or decline in rail container crossings is much more volatile than truck crossings, growing faster when the economy is strong but shrinking more when the economy is weak (and when rail service is challenged). Trucking companies reduce prices in weak economies to hang on to freight and keep their trucks moving. In stronger economies trucking companies take price increases to improve financial results when there is a shortage of equipment. Rail picks up the slack. The annual numbers show that there is only one year since 1999 that truck crossings have grown by more than 10% year-over-year, while rail growth has exceeded 10% in 7 of these years. In 2014, it is likely that industry-wide rail service and capacity issues prevented rail from continuing to grow at a faster rate than truck for U.S.-Mexico trade.

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    It is also clear that cross-border trucking has become more balanced between northbound and southbound flows, while rail container crossings remain highly imbalanced. In the late 90’s there was almost one empty truck border crossing for every loaded truck crossing. In 2014, 71% of all truck crossings were loaded. Given that there is more northbound than southbound freight, there are probably relatively few northbound empty crossings so the numbers imply that there is still about 1 empty for every 1 loaded southbound truck move. Rail crossings remain highly imbalanced and only in the last 2 years have there been more loaded than empty rail container crossings. Again, given the stronger northbound flows, the number suggest that there are very few southbound loaded rail container moves. The dramatic difference in equipment balance between truck and rail reduces the overall economic advantage of rail versus truck  because of the need to move empties southbound to handle the northbound flows. Despite this inefficiency, intermodal is growing at a faster pace than truck driven by the long haul nature of cross-border freight, the shortage of long haul truck drivers, customs clearance advantages, and the overall economic advantage of rail over truck for long haul transportation.

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  • Compliance, Safety, Accountability

    FMCSA taken to task for ignoring GAO and Congressional direction on CSA and HOS

    - by Tom Sanderson

    On March 5, the Senate Commerce Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety and Security held a hearing that was harshly critical of FMCSA’s lack of action and follow up on the Compliance, Safety, Accountability (CSA) system and Hours of Service (HOS).

    Director Physical Infrastructure Issues General Accounting Office (GAO), Susan Fleming’s testimony was critical of CSA, “First, SMS uses violations of safety-related regulations to calculate a score, but GAO found that most of these regulations were violated too infrequently to determine whether they were accurate predictors of crash risk. Second, most carriers lacked sufficient data from inspections and violations to ensure that a carrier’s SMS score could be reliably compared with scores for other carriers. GAO concluded that these challenges raise questions about whether FMCSA is able to identify and target the carriers at highest risk for crashing in the future.”

    Fleming indicated that FMCSA has done nothing to address these issues, “FMCSA did not concur with GAO’s recommendation to revise the SMS methodology … Therefore, FMCSA has not taken any actions.”

    The committee chairman Deb Fischer (R-Neb) criticized the FMCSA regarding HOS. “For example, FMCSA issued the final 34-hour restart rule in 2013 with complete disregard for congressionally-mandated requirements for an efficacy study on the rule’s impact.  When the study was eventually issued several months late, the sample size was not representative of this diverse industry.  In addition, serious concerns were raised about the rule’s perverse impact on safety because, in effect, it pushed drivers onto the roads during workers, students, and families’ morning commutes.”

    Senator Fischer was also highly critical of FMCSA’s disregard of the GAO review of CSA. “In 2014, the GAO investigated the methodology behind FMCSA’s Compliance, Safety, and Accountability Program.  Inaccurate CSA scores, publically available online, have cost companies contracts and raised insurance rates – all of this has occurred without a clear correlation to increasing highway safety. When confronted with these findings, FMCSA completely disregarded GAO’s recommendations.  To address flaws in CSA implementation, major stakeholders, including law enforcement, requested that FMCSA remove CSA scores from public view.”

    It is terrific to see congressional scrutiny of a federal agency that continues to disregard science and hard facts while promoting regulations that harm carriers and shippers while doing nothing to improve highway safety, and in the case of HOS rules, actually make the roads less safe.

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