August 6, 2013

In wake of appeals court's hours-of-service ruling, it could be time for industry to head on down the road

Opponents unlikely to test justices' patience a fourth time.

By Mark B. Solomon

It's doubtful that Justices Janice Rogers Brown, Thomas B. Griffith, and A. Raymond Randolph have anything in common with rock musician Tom Petty. But in ruling Friday to uphold virtually all of the federal government's rules governing truck drivers' operations, the judges sent a message that could have been pulled from the title of a popular Petty song: "Don't Come Around Here No More!"

For the third time in a decade, the federal appeals court in Washington, D.C., ruled on the legality of the government's attempt to exert greater control over truckers. This time, the court, in the form of the three judges, spoke emphatically. They affirmed all of the Federal Motor Carrier Safety Administration's (FMCSA) 2011 driver hours-of-service (HOS) rules except for a provision requiring a 30-minute break for local drivers such as those that work for express carriers.

The opinion technically does not end the matter. Aggrieved parties can petition the court to rethink its decision within 45 days of the Aug. 2 ruling date. But Sean McNally, a spokesman for the American Trucking Associations (ATA), which led the fight to overturn the rules, said it's unlikely the group will appeal the decision.

Congress could intervene and incorporate driver rules into federal statute, which would supercede the agency's rules. However, that scenario is unlikely since lawmakers have not acted before in spite of numerous opportunities to do so. In last year's law that re-authorized the nation's transport funding programs, for example, Congress only ordered the FMCSA to conduct a cost-benefit analysis of the rules. The analysis has not been completed, but no one expects its findings to profoundly change the game.

An amendment to the HOS rules was also attached to a recently introduced $44 billion bill to fund the nation's transportation and housing agencies. But that bill has gone nowhere. The House tabled consideration of the bill, titled the "Transportation, Housing and Urban Development Appropriations Act of 2014," or T-HUD, at least until lawmakers return next month from a five-week summer recess. The amendment in the House bill would cut off FMCSA funding to enforce provisions requiring drivers to restart their 34-hour rest clocks once a week and include in that cycle two consecutive rest days between 1 a.m. and 5 a.m. It would also effectively eliminate language requiring long-haul drivers to stop driving after eight hours if they haven't taken a 30-minute rest break.

What does seem to have come to an end is the court's patience with the 10-year saga. In issuing the opinion, Justice Brown wrote, "It is often said the third time's a charm. That may well be true in this case, the third of its kind to be considered [by the appeals court]."

The justices strongly implied that their ruling marks the end of the road. "With one small exception (overturning the 30-minute break for short-haul drivers), our decision today brings to an end much of the permanent warfare surrounding the HOS rules," Justice Brown wrote.

TIME TO TAKE STOCK
Those who've been fighting the HOS battle spent much of the day taking stock. Dave Osiecki, ATA's senior vice president of policy and regulatory affairs, said the agency should now spend less time rulemaking and more time fostering a safer driving environment by utilizing proven methods that focus on unsafe road behaviors. Osiecki cited the court's own language that FMCSA prevailed "not on the strengths of its rulemaking prowess, but through an artless war of attrition." The court's opinion should "serve as a warning to FMCSA not to rely on similarly unsubstantiated rulemakings in the future," Osiecki said.

Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association (OOIDA), said the industry must put the HOS squabbles behind it and now focus on strengthening training standards for new drivers. Although all new drivers must pass a test to obtain a Commercial Driver's License, the test only covers basic operations and doesn't prepare drivers either for the real world behind the wheel or for the growing number of regulations they must comply with, Spencer said.

OOIDA said it has launched a program called "Truckers for Safety" designed to train the next generation of drivers. The program is aimed in part at offsetting the disruptions caused by rapid turnover and by older experienced drivers leaving the field and being replaced by younger, less-seasoned recruits, Spencer said.

FMCSA issued a brief statement praising the decision. "The ruling recognizes the sensible data-driven approach that was taken in crafting this important regulation to increase safety and reduce driver fatigue—a leading factor in truck crashes," it said. FMCSA continued to say that the ruling "provides added certainty for all affected, moving forward."

FMCSA's statement, however, is drastically at odds with the sentiments of much of the industry. In a letter to lawmakers last week, Bruce Carlton, president of the shipper group National Industrial Transportation League, recommended that the HOS study mandated under last year's transport funding bill be completed before the provisions "adversely affect our economy."

The American Transportation Research Institute (ATRI), ATA's research arm, said in June that the rules would cost the industry $374 million annually by reducing driver flexibility and productivity. Trucking firms have estimated a 2- to 10-percent productivity hit due to reduced truck miles driven. Fleets may have to raise the pay of their existing drivers to compensate them for the lost hours or hire more drivers to fill the void. Either scenario would result in rising costs that would be passed on down the line.

MUCH ADO ABOUT NOTHING?
Because enforcement of the rules only began July 1, it is too early to determine its impact on supply chains. Most over-the-road trucking occurs east of the Mississippi, in densely populated regions where the typical truck length of haul is less than 400 miles—run lengths that are easier to schedule around the new rules. Longer lengths of haul, which might run afoul of the rules, are becoming less prevalent as a growing number of those movements are shifting to lower-cost rail intermodal service.

Some experts believe shippers will need to improve their scheduling if drivers are to make their normal runs without violating the law or harming supply chain productivity. According to Michael P. Regan, president and CEO of TranzAct Technologies Inc., an Elmhurst Village, Ill.-based consulting company, the key is for shippers to eliminate any slack in their schedules. Because of the mandatory clock-stopping period, shippers can no longer afford to delay drivers at the loading dock and expect them to deliver a long-haul shipment without bumping up against the new guidelines.

"The issue with shipper scheduling is going to be a huge factor," Regan said. He suggests shippers and their carriers allow drivers to take their mandatory 30-minute break at the dock instead of on the road while en route with a load.

If nothing else, the court's ruling affirms that FMCSA's clout has grown beyond highway safety and into the trucking industry's business operations. Most expect an emboldened FMCSA to push for even tougher safety rules in the future. Highway safety advocates are not expected to rest either. The FMCSA maintained the 11-hour maximum driving time per day, even though safety advocates had aggressively lobbied to reduce drive times to 10. Safety groups are likely to continue pushing the agency to shorten the driving hours to 10, something the FMCSA seriously considered before sticking with the status quo.

John G. Larkin, lead transportation analyst for investment firm Stifel, Nicolaus & Co., said safety advocates will not be satisfied until fatalities associated with big truck operations are significantly reduced, despite industry data showing most accidents involving big rigs are actually caused by motorists or light truck operators.

"There is no stopping the highway safety ideologues," Larkin wrote in an e-mail. "Logic and economics don't legitimately enter the discussion, or so it seems."

About the Author

Mark B. Solomon
Senior Editor
Mark Solomon has spent 25 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. Mr. Solomon graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

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