Friday, January 2, 2015

Year End Regulatory Summary

Re:  Year End Regulatory Summary

2015 should be an active year for federal legislation and regulations. 

A highway funding bill is a top legislative priority and with the legislative gridlock of the past two years broken by the Fall election, hopefully a permanent funding bill will be produced.  As always, expect the bill to be used as a vehicle for addressing any number of regulatory concerns of which there are many.
 
            1.         Increased Insurance Requirements.  A Notice of Proposed Rulemaking was expected in October to increase the $750,000 per occurrence minimum requirement for operators of commercial motor vehicles.  Instead, the Agency announced an ANPRM and propounded over 2 dozen questions involving insurance and other issues.  The filing time limit for comments is February 26, 2015.  See https://www.federalregister.gov/articles/2014/11/28/2014-28076/financial-responsibility-for-motor-carriers-freight-forwarders-and-brokers.  A recent study by DAT Services reported in the Commercial Carrier Journal suggests that 99% of the judgments involving commercial motor vehicles are for less than the current $750,000 minimum and that increasing the amount would add obstacles to capacity and growth, and would adversely affect small carriers in particular.  See http://www.ccjdigital.com/potential-insurance-increase-not-worth-the-cost-analyst-says/?utm_medium=ccj&utm_campaign=share_article&utm_source=single_article_share.
 
            2.         FDA Rules.  In March the FDA is scheduled to release its final rules governing implementation of the Food Safety Modernization Act.  All segments of the foodstuff industry have been participating in this rulemaking in an attempt to explain transportation realities to a federal agency unfamiliar with trucking.  While the proposed rules are silent with respect to the "broken seal" or "reject it, crush it, and dump it" attitude prevalent by many wholesale and retail grocery houses, the tight temperature monitoring standards and shipping conditions the Agency has initially proposed are viewed as unnecessary and alarming by many.  See http://www.fda.gov/Food/GuidanceRegulation/FSMA/ucm359436.htm.

            3.         Speed Limiter Rule.  The Agency has announced that April 16 is its intended date for release of a speed limiter rule.  There has been little industry attention given to this rule which would basically set governors on all trucks, limiting their maximum speed to be determined by regulation.  Many contrarians argue that speed limiters are a bad idea, limiting a trucker's ability to respond to lane closures and highway conditions – exacerbating the "truck convoy" phenomena on congested interstates.

            4.         Safety Fitness Determination.  The FMCSA has now pushed back until June the date for issuance of its safety fitness determination rulemaking.  That is 2 years after the mandated date for issuance in MAP-21, and 7 years after CSA 2010 was initiated.  Controversy surrounding CSA 2010 SMS methodology has not abated as Secretary Foxx has turned down the request by 20 trade associations to not publish SMS data.  Legislative initiatives surfaced last year to remove publication and will be reintroduced in 2015.  While the Agency's ultimate safety fitness rule remains under wraps, it is the Agency's avowed intention to use SMS data to assign safety ratings.  Although percentile rankings may play no part in this ultimate proposal, unanswered is how the data accuracy, data sufficiency, crash causation and statistical problems in rating small carriers can be addressed.


            5.         ELDs.  The long awaited Final Rule mandating electronic logging devices could happen in the second quarter of 2015 with delayed implementation to go into effect as late as 2016.  The rule when issued will consist of four parts:  (1) Requirement for use of ELDs; (2) provisions protecting drivers against harassment; (3) hardware specifications for the devices; and (4) continuing supporting document requirements. 

            The industry is divided on this rule with the ATA supporting the proposal while OOIDA and small business truckers view the requirements as invasive of privacy and unsupported by any proven cost benefit analysis.

            6.         Increased Driver Training Requirements.  After years of study, there is simply no consensus on increased driver training requirements.  Stakeholders include safety advocates, labor groups, proprietary truck training operations, and large carriers with training schools.  The truck driver shortage makes training new drivers a national priority but there is no standard.  The Agency has established a "negotiated rulemaking" or "reg neg" process.  Arriving at a consensus with the competing interests will not be easy.

            7.         34 Hour Restart.  The HOS coalition led by ATA was successful in ameliorating, at least temporarily, some of the hardships caused by the 34 hour restart.  Included in the interim funding bill and effective upon the President's signature, two of the more onerous provisions of the restart were suspended.  Drivers are not required to lose 2 nights as part of the 34 hour restart and are not required to use the restart only once a week.

            The restrictions on the 35 restart which Congress has suspended does not end the hours of service debate.  In fact, the FMCSA is charged with conducting a comparative study to determine whether the suspended provisions have a quantifiable safety benefit supporting reimplementation.

            8.         URS.  In October, the Agency's multi-year Unified Registration System is scheduled to become active.  At that time, the multiplicity of Agency forms will be replaced by a single all-purpose 25 page application that all carriers, brokers and forwarders will be required to complete biannually in lieu of the MCS-150.  All private and exempt carriers will be required to obtain agents and file evidence of insurance, and apparently the Agency intends to separate broker and carrier operations into separate DOT Numbers as part of belated compliance with MAP-21.  Compliance with the URS will be challenging for the Agency and regulated entities alike.

In sum, the Agency has a robust regulatory agenda for 2015 and shows no signs of relenting the activist approach which has characterized the past several years.  There is a building industry consensus that legislative restraint and oversight will be necessary to rein in bureaucratic overreach.  Expect to see the issues discussed above become possible legislative as well as regulatory issues in the coming year.

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