Cash Market Moves

7 Feb 2017

By Mary Kennedy
DTN Cash Grains Analyst

A number of regulations affecting the U.S. trucking industry were in the works last year. But now, two executive orders signed by President Donald Trump aimed at curbing federal regulations, could put the brakes on the new rules.

On Aug. 26, 2016, The U.S. Department of Transportation's National Highway Traffic Safety Administration (NHTSA) and the Federal Motor Carrier Safety Administration (FMCSA) proposed speed limiter on all large commercial vehicles in an attempt to increase safety, in addition to boosting fuel and emissions savings. However, this proposal may not become law since the release of Trump's executive orders. Another FMCSA regulation in limbo is a rule to establish national driver training standards.

The speed limiter proposal would establish safety standards requiring all newly manufactured U.S. trucks, buses and multipurpose passenger vehicles with a gross vehicle weight rating more than 26,000 pounds to come equipped with speed-limiting devices. The proposal discusses the benefits of setting the maximum speed at 60, 65 and 68 miles per hour, but the agencies stated in the FMCSA press release that they would consider other speeds based on public input.

"This is basic physics," NHTSA Administrator Mark Rosekind said in the press release. "Even small increases in speed have large effects on the force of impact. Setting the speed limit on heavy vehicles makes sense for safety and the environment." Here is a link to the press release and proposed rule: https://goo.gl/…

Joe Rajkovacz, head of regulatory affairs for the Western States Trucking Associations, was quoted in numerous trucking publications as saying, "[Trump's regulatory] freeze, I think, is a death knell for the speed-limiter mandate -- that's an easy one since so many in the industry have ripped it apart."

On Oct. 6, 2016, the American Trucking Association (ATA) released a statement on their website condemning the proposal. CEO Chris Spear stated: "Despite ATA's decade-old, pro-safety policy on speed, the new joint rulemaking from the National Highway Traffic Safety Administration and Federal Motor Carrier Administration proposes a menu of three speed options for commercial trucks, not one. It provides insufficient data, and fails to make a recommendation regarding which of the three proposed speeds it believes is best and why. Most disconcerting is the fact that DOT's new rulemaking does not address the differentials in speed that would exist between any of the three proposed national speed limits for trucks and the speed laws of multiple states -- allowing passenger vehicles to travel at much higher speeds than commercial trucks. This lack of data and direction only elevates the safety risks to the motoring public."

ATA added that a mandate for a "one-size-fits-all speed limiter" will squelch innovation in technologies to enhance safety and accommodate not only highways, but potentially secondary roads and beyond.

DRIVER TRAINING LAW IN JEOPARDY

On March 4, 2016, the U.S. Department of Transportation's Federal Motor Carrier Safety Administration released notice of proposed rulemaking of comprehensive national prerequisite training standards for entry-level commercial truck and bus operators seeking to obtain a commercial driver's license (CDL).

Under the proposal, applicants seeking a "Class A" CDL -- necessary for operating a combination tractor-trailer-type vehicle weighing 26,001 lbs. or more -- would be required to obtain a minimum of 30 hours of behind-the-wheel training from an instructional program that meets FMCSA standards, including a minimum of 10 hours of operating the vehicle on a practice driving range.

Applicants seeking a "Class B" CDL -- necessary for operating a heavy straight truck (such as a dump truck or box truck) or a school bus, city transit bus, or motorcoach -- would be required to obtain a minimum of 15 hours of behind-the-wheel training, including a minimum of seven hours of practice range training. Here is a link to the entire proposal on the FMSCA website: https://goo.gl/…

On Feb. 1, 2017, in light of the Jan. 31 executive order, the FMCSA published a notice officially delaying the effective date of a new rule establishing national truck driver training standards.

ELD MANDATE

Another new regulation affecting the trucking industry, the electronic logging device (ELD) rule, is intended to help create a safer work environment for drivers, and make it easier and faster to accurately track, manage and share records of duty status (RODS) data. An ELD synchronizes with a vehicle engine to automatically record driving time, for easier, more accurate hours of service (HOS) recording. The effective date of this rule was Feb. 16, 2016, which was the date 60 days after the rule's publication in the Federal Register.

Carriers and drivers who are subject to the rule must install and use ELDs by the appropriate deadline. Carriers and drivers who are using paper logs or logging software must transition to ELDs no later than Dec. 18, 2017. Carriers and drivers who use automatic on-board recording devices (AOBRDS) prior to the compliance date must transition to ELDs no later than Dec. 16, 2019. Here is a link to the final rule published by the FMCSA: https://goo.gl/…

This rule has been challenged in court by the Owner Operators Independent Drivers Association (OOIDA), an organization that represents small-business truckers. The OOIDA called the ELD mandate devices "arbitrary and capricious," saying that it violates 4th Amendment rights against "unreasonable searches and seizures" and filed a lawsuit against the FMCSA on March 16, 2016. OOIDA contends that requiring electronic monitoring devices on commercial vehicles does not advance safety since they are no more reliable than paper logbooks for recording compliance with hours-of-service regulations. A three-judge panel on the appeals court ruled against the lawsuit in October 2016.

The OOIDA then filed a petition on Dec. 14, 2016, to the U.S. Court of Appeals for the 7th Circuit for a rehearing of their case against the Federal Motor Carrier Safety Administration. This appeal means that OOIDA wants all 12 judges on the 7th Circuit bench to hear their case. Jim Johnston, president and CEO of OOIDA, said in a press release that the association is preparing for "the next phase of the challenge with an appeal to the Supreme Court but will also continue to pursue the issue on the congressional side."

"It's clear now that we have to pull out all the stops to convince lawmakers and the new Trump administration of the need to set aside the ELD mandate," said Johnston.

The OOIDA is the only national trade association representing the interests of small-business trucking professionals and professional truck drivers. The association currently has more than 150,000 members nationwide. OOIDA was established in 1973 and is headquartered in the Greater Kansas City, Missouri, area.

I spoke to a retired independent truck driver who currently farms 1,400 acres of corn and soybeans in Michigan, and he told me that, in his opinion, large trucking firms are trying to use safety regulations as a way to force smaller companies to spend their limited budgets and manpower on things that don't generate revenue. "Assuming owner operator trucks are not safe is no different than assuming dairy farms abuse their cattle," he said.

He went on to say that professional drivers are safety oriented because its makes long-term economic sense. Drivers face a physical fitness requirement that in any other industry would be considered discrimination. Couple that with wild swings in fuel and road usage costs, and there is more burden placed on drivers by the USDOT. If government regulatory agencies can't prove the benefits of these new rules, then the regulations should be stopped, he said.

Like farming, the trucking industry is already heavily regulated enough and is an economically challenging industry, he concluded.

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

(AG/BAS)