Changes in Trucking: Overview of New Regulations, Legislation and Issues Affecting The U.S. Trucking Industry

Changes in Trucking: Overview of New Regulations, Legislation and Issues Affecting The U.S. Trucking Industry
By DeAnna Stephens
Date Posted: 6/1/2010

A lot is happening in the trucking world – from regulations on CO2 emissions to international relations – and there is a lot of disagreement over how to address each issue.  Many people disagree over each issue. 

As the economy starts to recover, the amount of freight being moved has begun to increase. At the same time, however, it looks like some powers in Washington are trying to shift transportation away from trucking and more toward intermodal methods, where trucking would not be used for long-distance hauling. As an article in the Journal of Commerce noted, “The Obama administration is forming a national freight transportation policy that can be boiled down to one concept: Get more trucks off the roads.”  

This article looks at some of the biggest current trends in the trucking industry and how they could affect overall logistics as the economy heads toward recovery.

Clean Truck Port Battles
Clean truck programs aimed at reducing emission from trucks have been launched by several major U.S. ports. As part of the initiatives, several organizations are pushing Congress to rewrite federal truck rules codified in the Federal Aviation Administration Authorization Act (FAAAA) to allow local governments to regulate interstate trucking and commerce. If given this authority, the ports would be able to ban trucking companies from contracting independent owner operators, as they previously tried at the Port of Los Angeles. 

The ports claim that the measures are intended to address security and clean air issues, as independent owner-operators do not have the financial ability to ensure that they will be able to afford engines that meet the clean air standards. But opponents disagree. The International Brotherhood of Teamsters is highly supportive of the measures, which does lend credence to the claim that many opponents have made that the true intention of the initiatives is not cleaner air, but banning independent owner-operators from the ports. This would leave port shipments open only to company drivers, who would be easier to unionize.

Beyond showing favoritism to organized drivers, it has also been pointed out that air quality has already been improved under current measures that do not prohibit independent drivers. 

“I believe that compliance with air quality standards should be determined on a truck by truck basis without regard to the employee or ownership status of the driver,” said, Congressman Gary Miller (R-CA). “The air quality achievements at the ports are taking place under current law and without banning independent drivers — it is abundantly clear that ports already have the necessary authority needed to implement clean truck programs. I do not believe that an individual port authority should discriminate against certain types of businesses based on the assumption that their ownership or employee structure would affect their compliance with air quality standards.” 

Objections to the plans have come from more than the trucking industry. Many other industries realize how giving authority over interstate commerce to local governments could cause much larger logistical problems by creating a patchwork of regulations and laws. In a letter to Secretary of Transportation Ray LaHood, a group of more than 30 national retail, manufacturing, importing, logistics and shipping associations, including the National Retail Federation and the U.S. Chamber of Commerce, stated that the proposed clean truck programs “will be detrimental to interstate commerce and U.S. competitiveness.” 

The letter went on to say, “If successful, these efforts will not improve air quality or port security in and around the nation’s ports, but will re-impose a fragmented, local, patchwork regulatory structure on foreign and interstate commerce, contrary to the U.S. constitution and acts of Congress.”

Big Truck Legislation
After sitting untouched for a year, the Safe Highways and Infrastructure Preservation Act (SHIPA, S. 779) started getting some attention again when hearings were recently held on the bill. Its stated goal is to keep bigger, heavier trucks off roads. The bill would maintain the current limit of 80,000 pounds and maximum length of 53 feet for tractor trailer trucks on the entire National Highway System (NHS). The NHS includes both interstate highways and smaller national highways.  Most truck size and weight restrictions already apply to the 44,000-mile Interstate Highway System. The bill would extend certain restrictions to the much bigger 160,000-mile NHS. It would also close loopholes that allow the operation of overweight trucks and would establish an enforcement program to ensure accountability. 

Supporters say that capping the weight and length of trucks will keep them safer than if they were increased.
 “Stability, mobility and maneuverability are substantially reduced on bigger and heavier trucks and therefore the larger and heavier the vehicle, the more problems it has interacting with other vehicles on the highway,” said, Todd Spencer, executive vice president of Owner Operator Independent Driver Association.

Opponents point to increased freight volume as compared to road capacity, however. They believe having heavier trucks on the road would be safer than having more trucks on the road creating higher levels of congestion.

“Truck traffic is currently growing 11 times faster than road capacity, and freight hauled by trucks in the U.S. will double by 2035, according to U.S. DOT estimates,” the Coalition for Transportation Productivity said. “If current vehicle weight limitations remain in place, even more trucks will have to take to the road to ship these goods - putting our safety at risk and hurting the American economy and our environment.”
 The House version of the bill has been sitting in limbo since last spring although renewed interest in the Senate could be what is needed to start the reforms moving again.

Mexican Trucking Relations
 Trucking relations with Mexico continue to be a cause of concern for the U.S. trucking industry. Though there are several avenues for dealing with the issue of Mexican trucks having access to U.S. roads, the general consensus is that Mexican trucks do not belong in the United States. 

Under the North American Free Trade Agreement (NAFTA) Mexican trucks were granted access to operate within 25 miles of the U.S.-Mexico border. A pilot program to allow some Mexican carriers access to all U.S. roads was started in 2007 by the Bush administration. However, following the suspension of the pilot program last year by the Obama administration, Mexico has levied heavy tariffs on U.S. exports. 

One plan for dealing with the issues, promoted by the Owner Operator Independent Drivers Association (OOIDA), is to declare the tariffs illegitimate, turning the focus of the debate back to highway safety and security. 

In a letter to U.S. Trade Representative Ron Kirk, OOIDA’s president, Jim Johnston called for Ambassador Kirk to “begin defending American jobs by challenging the tariffs that Mexico has wrongfully imposed on U.S. exports in relation to the cross-border trucking dispute.” 

OOIDA is strongly against implementing a new cross-border trucking program, saying that it would openly put U.S. truckers at a competitive disadvantage against unregulated trucks from Mexico. 

“If a new cross-border trucking program were implemented at this time, U.S. truckers would be forced to forfeit their own economic opportunities while inadequately compensated Mexican truckers, free from equivalent regulatory burdens, take over their traffic lanes,” said, Jim. 

Renegotiating parts of NAFTA that allow for cross-border trucking has been promoted by Congressman Peter DeFazio and received strong bipartisan support in Congress, as well as from the Teamsters union. 

“The U.S. government has a duty to protect its citizens by withdrawing from our cross-border trucking agreement with Mexico,” said, James Hoffa, Teamsters president. “The solution to this dispute is not to open the border, but to reopen NAFTA.”

Comprehensive Safety Analysis 2010
The new safety initiative from the Federal Motor Carrier Safety Administration (FMCSA) may contribute to a driver shortage and in turn, a shortage of capacity as the economy recovers. 

Comprehensive Safety Analysis 2010 (CSA 2010), FMCSA’s program to improve large truck and bus safety, is set to be implemented by the end of November. When CSA 2010 is operational, it will replace the Safety Status (SafeStat) measurement system as FMCSA’s tool to identify high-risk motor carriers requiring interventions. It will evaluate the safety of individual motor carriers by considering all safety-based roadside inspection violations, not just out-of service violations. It will also include State-reported crashes, using 24 months of performance data. 

The American Trucking Association (ATA) fears that CSA 2010 may increase the shortage by forcing companies to let go of drivers unfairly given bad driving records. Currently, CSA 2010 has three areas that could be problematic. First, whenever a truck is involved in a crash, CSA 2010 will report it negatively against both the driver and the company, regardless of whether the driver was at fault. Second, CSA 2010 measured a company’s exposure to crashes by the number of trucks that a company has. ATA has asked that this be changed and measured by the number of miles traveled, as they believe this would be a more accurate measurement. Third, CSA 2010 treats traffic warnings given to drivers the same as receiving a ticket. However, unlike a ticket, a driver has no way to contest a warning. 

Clayton Boyce, ATA’s vice president of public affairs, said that with these issues in the new program, companies may have to let go of drivers with bad records, regardless of how safe the driver actually is, contributing to driver shortages that are believed to be on the way. 

With the economy beginning to turn around, talk of driver shortages has started. Over the last few years, multiple trucking companies went bankrupt, leaving far less drivers to cover the volumes that are expected to grow. In 2008, over 3,000 companies with five or more trucks filed for bankruptcy; in 2009, 1,700 went bankrupt. Though there is no confirmed shortage yet, one is expected. And a driver shortage will quickly translate into a capacity shortage, causing even more issues for an economy struggling to recover. 

“Seeing the recession starting to end and volumes starting to pick up again, we think there is soon going to be a shortage of drivers,” Clayton said. “Just exactly when or by how much is not yet clear, because we have not done any rigorous statistical exercises on it yet.” 

Beyond the possibility of driver shortages, the trucking industry may face a shortage of trucks as the economy rebounds. New EPA mandates have increased the cost of engines in new heavy-trucks by as much as $10,000. Concerned about the bottom line, trucking firms are in no hurry to spend the money necessary to upgrade fleets or add capacity. 

As an industry that touches the life of every person in the United States, it is no wonder that there is so much contention over proposed regulations and legislation. And as the mode of transportation that moves the majority of the nation’s goods, any changes could have a large impact on the entire economy. For an industry as closely tied to transportation and logistics as the pallet industry, all of these issues should be watched closely, and preparation should be made for the changes in capacity and logistics that they could cause.

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