Trucking Regulations: Washington U-Turns; States put hammer down

During President Barack Obama’s two terms, Washington’s alphabet game of regulations came down hard on the $748 billion trucking industry.

There were regulations from the Federal Motor Carrier Safety Administration (FMCSA) on electronic logging devices (ELDs); hours of service (HOS); safety reporting of accidents; hair follicle testing for drug cheaters; speed governors; and sleep apnea testing. Meanwhile, the EPA turned up the heat on emissions and new fuel mileage standards; OSHA turned the spotlight on overtime pay; and the Labor Department concentrated on visas for foreign workers who might help to ease the truck driver shortage.

In President Donald Trump’s first year, that regulatory onslaught has diminished quite a bit. While ELDs are due to take effect next month, full enforcement of violators won’t start until the second quarter of 2018. Diesel emissions limits are being reviewed, HOS is no longer being tinkered with, and there’s a feeling within the industry that the regulatory burden is being lessened.

“It certainly seems that regulatory pressures have been eased under the new administration,” says Derek Leathers, president of Werner Transport, the nation’s 5th largest truckload (TL) carrier. “Honestly, we have enough regulation that needs to be digested for a long time. Many are well intended, and we support them, but we need time to digest them all.”

John White, president of the truckload group of U.S. Xpress, the nation’s 7th largest TL carrier, says that while the federal regulatory environment is easing, states are more relentless than ever. “Most of the regulations are now done by states,” he says. “Unfortunately, states are pretty aggressive because it’s a needed revenue stream for them.”

As the Trump administration nears the end of its first year, LM takes a deeper dive into the potential impact of regulations that are about to come on line, then we delve into what various states are up to when it comes to ingenious regulations that many industry leaders say will be disruptive to the efficient flow of interstate commerce.

The ELD effect

The organized trucking industry, led by the American Trucking Associations (ATA) and several large truckload carriers, has long pressed for ELDs to eliminate paper log books—or “comic books,” as many drivers derisively call them.

Werner uses Transflo Telematics and ELDs to log driver statistics. Learn how the system works with this short video.

Cheating on HOS is said to be widespread among smaller carriers and owner-operators. In the meantime, the federal government has found that fatigue has played a major role in about one-third of the more than 4,000 trucking-related fatalities every year.

ELDs are supposed to make cheating on hours difficult—if not impossible. The so-called “black boxes” have been in use for decades in Europe and elsewhere with few problems, while most of the top TL carriers in the United States have used ELDs for the better part of past decade. However, industry insiders say that the biggest impact will be on smaller carriers and the hundreds of thousands of small owner-operators. Opinions vary widely, however some expect it to reduce capacity by 4% to 7%, with others contending that it will be the trucking industry’s equivalent of Y2K.

Werner Enterprises started testing ELDs in 1995, becoming the first large TL carrier to implement the technology throughout its fleet. Leathers said that while there “certainly will be an impact in productivity” industry-wide when they’re fully adapted, the increased safety and efficiency that the data provides more than offset any initial setbacks.

“The positives are improved visibility of freight, and it will work to alleviate chokepoints in your network and improve the ability to reduce general delays,” says Leathers. “In the short term, there will be some pain with ELDs. But, what gets overlooked is that the visibility you gain is more valuable than the short-term pain. It will only increase your ability to drive more efficiency into the supply chain.”

In fact, Leathers adds that the group of carriers that stands to gain the most efficiency will be the smaller fleets—or those with fewer than 50 trucks. “As they get visibility into their networks, they’ll improve more than anyone. But all of us—shippers, carriers and receivers—stand to benefit as we finally pull the curtain back on the remaining inefficiencies that need to be addressed.”

However, some of the nation’s largest trucking operations are asking for slight exemptions from some of the fine print of the ELD ruling. For example, UPS and YRC Freight want a distinction between ELDs and “automatic on-board recording devices” (AOBRDs), which have slightly different operating systems

UPS and YRC also want an exemption from the requirement that an ELD automatically records certain data elements upon a duty status change when a driver is not in the truck and to allow ELDs to be configured to a special driving mode for yard moves. Also, UPS wants to allow vehicle movements of less than a mile on UPS property by non-driver UPS employees to be annotated in the ELD as “on property–other.”

In its exemption request, YRC said current requirements restricting the use of new AOBRDs during the transition period would cause company drivers to operate a “mixed fleet” of ELDs and AOBRDs, causing “significant training challenges and inefficiencies.” YRC says having a “mixed fleet” would make it more difficult for driver trainers, who would be responsible for training on both ELDs and AOBRDs.

The FMCSA has said that there will only be “soft enforcement” of ELD violators until next April—meaning that the truck will get shut down, but no fines. As of early October, truckers had been fined more than $200 million for HOS violations, a figure that’s expected to rise next year when full enforcement of ELDs starts.

Action at state level

Trucking executives say that the states are becoming more aggressive than ever in targeting their industry. Strapped for cash, many states see trucking as a “rolling piggybank” for fines and other revenue for issues such as enforced overtime, mandatory sick leave pay, air quality emissions, as well as routine safety violations and speeding.

Truckers contend that they can’t operate with any efficiency with a moving set of 50 different state regulations. In turn, they’re calling for the federal government to enforce what is known as the “F4A” federal preemption law that covers interstate commerce and says that the federal government—not individual states—should determine the rules for interstate trucking.

Truckers add that a single set of rules is vital for the safe and efficient flow of interstate commerce; so, it’s important that the rules carriers use to plan their routes and services remain consistent from state to state.

“The wisdom of Congress back in 1994 with the F4A Act was not to have a patchwork of rules every time you cross a state border,” says Mark Rourke, executive vice president and COO of Schneider National, the nation’s 2nd largest TL carrier. “What we’re seeing out of the states is as concerning to us as what comes out of Washington, D.C.”

The ATA adds that federal preemption is “under attack,” with class action lawsuits trying to force drivers and carriers to adhere to a patchwork of state-by-state rules rather than the nationally uniform federal rules.

“Nothing fits the definition of interstate commerce better than trucking,” says Werner’s Leathers. “We want federal preemption. It has nothing to do with paying drivers less or getting their proper rest. We just need a federal framework in which to do it, as opposed to a ‘gotcha’ set of state regulations.”

Among various state proposals causing indigestion in the trucking industry are:

• California and other states want a patchwork of mandatory rest breaks that are different from those already governing the trucking industry;
• Cook County, Ill., and San Francisco are among 100 different municipalities in 22 states considering rules that would affect minimum wages for truck drivers;
• Maryland is considering mandatory sick leave that would require a business with 15 or more employees working at least 12 hours a week to be offered paid leave at a rate of one hour for every 30 hours worked; and
• California, which already has its own diesel fuel standard, is threatening to impose a de facto national standard on diesel emissions that supersedes federal rules.

In a recent survey by finance firm Merchant Cash USA, California ranked as the worst state for trucking based on operating costs, tickets issued and miscellaneous rules. California is followed by Virginia, Ohio, New Jersey and Massachusetts in the survey. The best state for trucking based on ease of operations in the survey was Tennessee, followed by Washington, Oklahoma, Texas and Indiana.

“The only thing that’s a sleeper for our industry that nobody is paying much attention to this F4A initiative,” adds USX’s White. “California is in the forefront, and our fear is that there will be others. You’d think the federal government would try to resolve that so we don’t have to deal with myriad state regulations.”

As one prominent trucking official put it: “As long as truckers are rolling through every community in all 50 states, we’re going to have a bullseye on the back of every one of our trucks.”