Shipper — Position Paper
A barrage of regulations continues to bear down on the transportation industry. This increased pace of transportation regulations will impact shippers; greater attention to mitigating risks is required. Those who don’t stay on top of changes risk leaving their supply chain vulnerable to capacity, compliance and safety issues.
The following guide has been developed to help shippers better understand the key points of recently adopted regulations challenging the industry, those on the horizon, the potential impact on business and implementation timing.
This rule applies to new drivers seeking their Class A or B commercial drivers license (CDL) for either interstate or intrastate and includes special training for drivers seeking a hazardous materials, passenger or school bus endorsement on their CDL. The training will be made up of two core parts: theory (classroom) and behind the wheel on a range and on a public road. There is no minimum hours of classroom or behind-the-wheel training. There is no required time that must be spent on theory training, but there are specific topics and materials that must be covered. The training must be given by a registered training provider, listed on the FMCSA’s Training Provider Registry and certify its students before a student may sit for the CDL skills exam. The final rule relies on a driver demonstrating proficiency in operating a commercial vehicle safely at the conclusion of the training, and the driver must pass a knowledge test with at least 80 percent.
The regulations call for the use of energy-efficient technologies and devices on trucks and trailers to move freight within the state of California. The CARB provides several different options for tractor and trailer regulation compliance.
The regulations require investment on the part of carriers and shippers. Retrofitting trucks for compliance ranges from $10,000-$40,000 per unit. Retrofitting trailers is estimated at $800-$1,200 per unit. Carriers will undoubtedly need to share this cost, which will be reflected in either shipping rates or surcharges for freight moving in and out of California.
Tractors entering ports and rail yards: phase-in of 2010 model year engines or equivalent. CARB Compliance Deadline: January 1, 2021
Tractors not entering ports and rail yards: all model years must be upgraded to 2010 engines. CARB Compliance Deadline: January 1, 2021
AB 5 is a California law that changes how the state determines whether a person is an employee or an independent contractor. Under AB 5, California considers a person an employee unless there is proof that:
On January 16, 2020, a federal district court granted a preliminary injunction which bars the state from enforcing AB 5 as it relates to motor carriers until the court has reached a final verdict in the case. This case is likely to involve multiple appeals, which will extend the timeline for final resolution and delay go-forward clarity.
This rule will create a national clearinghouse for DOT-regulated positive drug and alcohol tests and those who refused to submit to required tests, excluding hair test results. Drivers with a positive test will be removed from the industry, and records of drug and alcohol program violations will remain in the clearinghouse for five years or until they have completed the mandated return-to-duty process including treatment and follow-up testing, whichever is later.
In addition, the rule would require:
The rule is projected to cost $154 million annually and remove tens of thousands of drivers from entering the market. These increased costs are being passed along to shippers and consumers, becoming a permanent part of the market’s supply chain and distribution costs.
From September 2019 – May 2020, there have been 1,006,158 unique user registrations for the Clearinghouse, which includes accounts for drivers, employers, C/TPAs, MROs and SAPs. (Source)
Since January 2020 when the Clearinghouse rule went into effect, 20,678 drug violations have been reported and 489 alcohol violations, totaling 21,167 combined. (Source)
The proposed rule will allow state driver licensing agencies to waive the requirements for the commercial driver’s license knowledge tests for certain individuals who are, or were, regularly employed within the last year in a military position that requires/required the operation of a commercial motor vehicle. This program is voluntary for states, and they would not be required to waive the knowledge or skills tests. The costs of this rule are thought to be minimal and not quantifiable, while benefits would be accrued primarily by the service member and their future employer.
In August 2017, FMCSA published a follow-up notice requesting comments on a revised proposal that would require insulin-dependent diabetic drivers to get a form from their treating clinician indicating their history with insulin, date of last comprehensive exam and any diabetic complications they have had. This form would be brought to the certified medical examiner doing the driver’s DOT physical for review and to use in their determination of whether they will qualify the driver. If approved, a small number of insulin-dependent drivers may be added to the industry’s mix.
The FMCSA proposed rulemaking on electronic logging devices (ELDs) that would require every motor carrier with interstate drivers to install a compliant ELD.
Starting December 18, 2017, roadside enforcement personnel will begin documenting ELD violations, possibly issuing citations to commercial motor vehicle drivers operating vehicles without a compliant ELD. Despite the noncompliance, these vehicles will still be allowed on the road. Beginning April 1, 2018, inspectors will start placing commercial motor vehicle drivers out of service if their vehicle is not equipped with a required device, and the truck will remain out of service for a minimum of 10 hours. ELD violations will impact a carrier’s CSA scores in the Hours of Service BASIC for two years, and it will appear on the driver’s PSP record for three years. FMCSA will be able to see which carriers are being issued these types of violations. There has been a virtual lack of ELD violations from large carriers since the mandate. Seventy-six percent of violations are from fleets with fewer than 20 trucks.
The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) finalized new emissions and fuel economy standards for medium- and heavy-duty vehicles to be implemented fully in 2017. The proposed rule calls for specific percentage reductions in carbon dioxide emissions and fuel consumption for tractors, engines and trailers with improvements throughout the vehicle. The Phase 2 proposed rule would set GHG and FE standards on trailers for the first time beginning with model year 2018 trailers, which could be achieved using tire and aerodynamic technologies already on the market. The rule is expected to lower CO2 emissions by approximately 1.1 billion metric tons, while reducing oil consumption by up to 2 billion barrels over the lifetime of the vehicles sold under the program. The agencies estimate payback time on tractors and trailers to be just two years.
In recognition of the truck driver training received while serving our country, the federal government is looking to ease the transition of military members into civilian careers by reducing onerous paperwork and simplifying the licensing process. The proposal includes:
New fines for carriers, shippers, receivers or transportation intermediaries who coerce truck drivers to operate outside of federal safety regulations have gone into effect, and any party in the supply chain found responsible for coercive acts will be fined up to $16,000 per incident. Coercing drivers to violate Hours of Service limits, drug and alcohol testing, hazardous materials rules and other regulations are prohibited. This regulation places shippers directly under the FMCSA’s regulatory purview for the first time.
Under the rule, coercion is defined as:
Shippers moving contained liquids in dry van trailers must now comply with the same tank endorsement rules as the bulk industry. The “Commercial Driver’s License Testing and Commercial Learner’s Permit Standards” rule redefined what is considered to be a tank and, for the first time, includes capacity requirements. Under the new rule, a tank is:
Tanks that are manifested as either being empty or as residue on a bill of lading do not apply under the rule. If a load meets the capacity and configuration requirements defined above, a driver with a “tank endorsement” on his or her CDL must transport it.
In 2008, the FMCSA proposed a rule that would require individuals who administer medical exams for commercial drivers to be trained, tested and certified to a national standard. Additionally, a National Registry of Certified Medical Examiners (NRCME) would be created in order to track qualified medical professionals. This rule was developed in order to improve the medical oversight of commercial drivers as well as prevent commercial vehicle-related crashes, injuries and fatalities.
May 24, 2014, marked the deadline for medical examiners to be properly certified and registered to be compliant with the U.S. Department of Transportation (DOT). Since then, standardized examinations have identified drivers who exhibit or are at-risk for conditions such as hypertension, sleep apnea and diabetes. Because of the increased complexity and administrative efforts associated with the NRCME, most medical professionals and/or healthcare providers have dramatically increased the price for physicals. These costs are being passed along to shippers and consumers.
As of January 30, 2014, all CDL holders in the U.S. must self-certify (formally disclose) to the State Licensing Agency (DMV) what type of work he or she does, using one of the following four categories:
Drivers who work in interstate commerce will also need to provide a medical certification (DOT physical) to prove they are qualified to drive. Failure to present valid medical documentation will result in the denial of the issuance or renewal of the CDL, putting them out of commission until resolved.
The FMCSA revised four sections of the existing Hours of Service rule.
The final published rule includes the following updates:
The FMCSA estimates the annual cost savings of this rule to be $277.4 million. The revised rule will have very minimal impact on shippers.
FMCSA is collecting feedback on the training, qualifications, driving limitations and vehicle safety systems that should be considered in the pilot design. The data from the pilot would then be used to determine if a change to the current requirement for interstate drivers to be 21 years of age be reduced to allow drivers age 18-20 with military training to operate commercial motor vehicles (CMV). There is a possible second pilot program to allow non-military drivers age 18-20 to operate CMVs in interstate commerce.
The proposed Unified Registration Rule will do the following:
The URS will streamline the registration process and serve as a clearinghouse and depository of information on, and identification of, motor carriers, brokers, freight forwarders, intermodal equipment providers, hazardous materials safety permit applicants and cargo tank facilities required to register with the FMCSA.
The new proposed bill, Improving National Safety by Updating the Required Amount of Insurance Needed by Commercial Motor Vehicles per Event (INSURANCE) Act was introduced to replace the rule on minimum liability insurance, which was withdrawn in 2017. The Insurance Act would raise the minimum liability insurance requirements for carriers and tie the minimum to the inflation rate of medical costs. The current mandatory minimum of $750,000 hasn’t changed since 1980 when the Motor Carrier Act passed. In a 2014 report the FMCSA concluded that $750,000 did not cover serious accidents due to inflation and increased medical costs. The new bill would set the insurance minimum at $4.9 million per accident.
The proposed Safe Roads Act would set a new standard requiring new commercial motor vehicles to be equipped with an automatic emergency braking system and be installed in commercial motor vehicles to be used while in operation. The automatic emergency braking system would, based on a predefined distance and speed to an obstacle in the path of the vehicle, alert the driver of an obstacle and automatically apply the brakes if necessary to avoid a collision.
The proposed bill known as the Cullum Owings Large Truck Safe Operating Speed Act of 2019 would require all new Class 7 and Class 8 trucks to be equipped with speed-limiting devices that would be set to a maximum of 65 mph. The bill would also require that trucks with existing speed limiters would extend the 65 mph maximum speed requirement. Trucks without speed limiters would not be forced to install them retroactively.
The proposed bill (H.R. 1374; S.569) known as the DRIVE Safe Act has been reintroduced. This bill would allow 18- to 20-year-old interstate commercial motor vehicle (CMV) drivers under certain conditions.
FTR Transportation Intelligence conducted an analysis of the 18- to 20-year-old population, accounting for gender breakdowns, high school graduation rates, college enrollment, labor participation rates for young adults and the current trucking participation rate. This analysis combined with the proposed DRIVE Safe Act could result in 48,000 new interstate heavy truck/tractor-trailer drivers initially and an estimated 16,000 each year after.
A pending rule by the U.S. DOT issued by both FMCSA and NHTSA will mandate the use of speed limiting devices — automatically calibrating a vehicle’s speed — on the electronic control modules (ECM) of newly manufactured trucks weighing more than 26,000 lbs., effective three years after the final rule is published. The rule was withdrawn when the DOT moved the speed limiter mandate to a long-term agenda item, away from the active rulemakings list.
The FMCSA and Federal Railroad Administration (FRA) requested data and information regarding the prevalence of moderate to severe obstructive sleep apnea (OSA) for individuals occupying safety-sensitive positions in rail and highway transportation. The agencies also sought information about the potential economic impact and safety benefits of regulatory action for transportation workers with multiple risk factors for OSA to undergo medical evaluation and treatment. The rule was withdrawn after the agencies determined there was not enough information available to support moving forward with a rulemaking action.
The FMCSA withdrew its January 21, 2016, notice of proposed rulemaking on March 23, 2017. The notice had proposed changing the current Compliance, Safety, Accountability (CSA) system to a one-rating system that would deem carriers “unfit” if they failed two or more CSA BASICS. The withdrawal was prompted by reactions to the initial proposal.
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