The Latest: What to Expect in Transportation Regulation

As we head into the summer, it’s time for an update on some of the important regulatory topics being discussed in Washington and the trade magazines.

As a reminder to readers, the rulemaking process in D.C. follows three steps:

  1. Issue the draft rule.
  2. Collect official comments and suggestions.
  3. Issue the final, binding rule with implementation deadlines.

The whole process does not have a prescribed timeframe, and could take months or years to complete.

Hours of Service (HOS)
Can you believe we are coming up on a full twelve months since HOS changes have been made? I’ve stopped using the adjective “new” with HOS, because in today’s age, any market change that is a year old is decidedly not new. Similarly, any regulation that reaches a one year anniversary has tremendous odds of further longevity. While there will continue to be periodic articles about attempts to roll back the 2013 HOS changes, I think we will see fewer and fewer references to the 2013 HOS changes.

Electronic Logging Devices (ELDs)
The draft rule to mandate Electronic Logging Devices for all carriers was released on March 28, 2014, with comments due May 27, 2014. With a two year proposed implementation date and tremendous opposition from some sectors of the motor carrier community, operational impact may be minimal—if and when it is actually published as a final regulation—until 2017 at the earliest.

Medical Examiner Registry
Beginning May 21, 2014, all truck driver medical examinations must be performed by an examiner who is on the official registry of approved examiners. While this will not likely have a large impact overall, there have been complaints that some areas of the country have a shortage of registered medical examiners.

Tank Endorsement
Way back in a July 2011 final rulemaking regarding broad changes to Commercial Drivers Licenses (CDLs), the definition of a tank truck was changed to include 1,000 total gallons of containers that were each 119 gallons or more in capacity. While states have until July 2015 to incorporate this change into their state regulations, some states have done so already. The result? Enforcement has been extremely inconsistent across the country. Shippers who routinely move liquid totes should ensure they are properly describing the types of freight they are moving so the carrier can accurately assign resources to the shipment. However, be prepared for an unsettled and unclear situation regarding the issue of the tank endorsement until 2016.

Sanitary Transportation of Food
The FDA issued a draft rule on Jan 31, 2014, establishing regulations for bulk liquid food inputs and many temperature controlled shipments. It is important to note they specifically exempted all shelf-stable food and food inputs. The comment date has been extended to the end of July 2014 because the FDA received tremendous feedback in their three listening sessions from many parts of the temperature controlled transportation industry. While many of the proposed rules for shippers and carriers are already standard practice, there are questions about how the proposed rules would impact cargo claims, and whether a cost of compliance should be assigned to small carriers below $500,000 in annual review (they are currently proposed to be exempted from the rule). With a one year proposed implementation from the date of issuance of the final rule, this is unlikely to have an impact on the industry until early 2016.

Minimum Carrier Insurance Requirements
In mid-April 2014, FMCSA released a report reviewing the current public liability and financial requirements for participants of all kinds in the freight transportation industry. As a result of this report, FMCSA announced the initiation of a rulemaking to increase public liability requirements for motor carriers. Currently, the most commonly applied requirement is the $750,000 of public liability insurance for general freight motor carriers (commonly referred to as auto liability insurance). Many carrier groups fear the potential increase in insurance premiums will result in a significant increase in carrier bankruptcies, but safety advocates and FMCSA point out that the current requirements were established in 1985 and have not changed since. This debate will burn very hot throughout the summer, as FMCSA has prioritized this rulemaking. The next step in this process is for FMCSA to release a draft proposal outlining any specific increase in minimum insurance levels, as well as an implementation timeline. Realistically, any impact to the marketplace is 12 to 18 months away, at a minimum.

Increased Truck Weights
Proposals to increase truck weight limits resurface whenever it is time to pass a highway bill (often referred to as transportation reauthorization). The current transportation bill funding will run out as early as August 2014, and it is likely that a short-term fix will be made. Most proposals would increase weights to 97,000 pounds with the addition of an extra axle. Whether or not advocates for higher truck weights are successful, it is highly unlikely that anything will change regarding truck weights within the next 18 months.

Driver Coercion
A draft rule was released May 13, 2014 that proposes a complaint process for drivers to report shippers, brokers, and motor carriers who attempt to coerce drivers into regulatory violations, such as driving beyond allowable hours of service rules. In addition to the complaint process, the rule outlines proposed penalties and fines for entities that are found to have attempted to coerce drivers into safety violations. These proposed penalties include fines of up to $11,000 per occurrence.

National Hiring Standard for Motor Carriers
On May 22, 2014, a bill was introduced in the House of Representatives to clarify that shippers and brokers who check to make sure the motor carrier they hire 1) are licensed and registered by FMCSA, 2) maintain the minimum amounts of insurance required, and 3) are not “unsatisfactory” in terms of safety rating cannot be sued for negligently hiring that motor carrier. H.R. 4727 was introduced to help reinforce current FMCSA definitions of safe motor carriers.

All of these individual policy discussions are being held in the shadow of the larger debate about how to pay for infrastructure funding in the U.S. The Highway Bill (a.k.a. Transportation Reauthorize or MAP-21 Reauthorization) will be debated in July and August this summer as funding expires from the previous bill. While at first glance it appears there are numerous proposed rules and pending legislation that may impact the trucking industry, none appear to be imminent. We could be entering a period of noisy calm on the regulatory front, where a number of discussions are taking place, but no actual change is likely to occur within 12 to 18 months. My sense is that the market at large has plenty to digest already!

comments powered by Disqus