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Regulatory and Legislative Update - October 2021

By Dan Boaz

Contents

Regulation and Enforcement

Legislation

Courts

Advocacy and Comment

 

Regulation and Enforcement

DOT seeks input on ‘supply chain resilience’ in freight and logistics

The U.S. Department of Transportation is requesting comments by October 18 on ways to address near-term and future constraints in the transportation sector, especially for ports, rail, and trucking. The information request is part of the Biden administration’s efforts to strengthen the nation’s supply chains and is more specifically linked to the Supply Chain Disruptions Task Force established by the White House in June. DOT is one of several departments that have issued such requests in response to the White House efforts regarding supply chain disruptions.

Although the request is broad, DOT asked for input on various specific topics, including infrastructure and operational bottlenecks; shortages of essential cargo-handling equipment (such as chassis and containers); warehousing capacity and availability; challenges and opportunities related to technology; and workforce development.

The information request presumes some key Biden administration priorities, such as addressing climate change and promoting unionization. For example, one of the specific topics DOT seeks input on is “the effects of climate change on transportation and logistics infrastructure and its implications for supply chain resiliency.” The document also requests input on “key opportunities and challenges with respect to the existing and future workforce to ensure a well-functioning freight and logistics supply chain and achieve the President's goal of increasing good-paying jobs with the choice of a union.”

For the Federal Register notice, visit https://www.federalregister.gov/d/2021-19974. To view comments, visit https://www.regulations.gov/document/DOT-OST-2021-0106-0001.

FMCSA rule to link clearinghouse data to CDL

FMCSA issued a final rule that will require states to take action to downgrade a commercial driver’s license (CDL) or commercial learner’s permit (CLP) if they receive notice from the agency that a driver is barred due to a violation in the drug and alcohol clearinghouse. The rule also will require states to query the drug and alcohol clearinghouse before issuing, renewing, upgrading, or transferring a CDL or CLP and to block such actions if the driver is barred. The rule is effective November 8, but compliance is not required until November 18, 2024.

The rule aims to minimize a blind spot under current regulations. Today, a motor carrier cannot hire a CDL driver unless the carrier queries the clearinghouse and confirms that the driver has no drug and alcohol violations for which the driver has failed to complete a return-to-duty protocol. However, a driver who tests positive in a pre-employment drug test for another employer might be able to drive for up to a year in the most extreme cases until his or her current employer conducts a required annual clearinghouse query. Or a driver who tested positive arguably could obtain operating authority and fail to comply with the drug testing consortium requirements under the regulations. Although this latter situation would be a severe violation, enforcement might prove difficult until FMCSA conducted the new entrant safety audit.

The new rule adds another layer of enforcement by eliminating commercial driving privileges if FMCSA notifies the state of a violation or if a prohibited driver seeks to renew, upgrade, or transfer a CDL. The change also will permit all traffic safety enforcement officers – not just those operating under the Motor Carrier Safety Assistance Program – to readily identify prohibited drivers by conducting a license check during a traffic stop or other roadside intervention, FMCSA said.

One change that surprisingly did not generate any opposition from driver groups is a clarification of how employers’ reports of “actual knowledge” of prohibited drug or alcohol use would be maintained in the clearinghouse. The final rule states that reports of actual knowledge based on a citation or other document charging driving under the influence in a CMV would remain in the clearinghouse for five years or until a driver completes a return-to-duty process regardless of whether the driver is ultimately convicted of the offense.

For the Federal Register notice of the final rule, visit https://www.federalregister.gov/d/2021-21928.

Reporting requirement for FMCSA COVID declaration kicked in October 1

The most recent version of the emergency declaration concerning relief from certain regulatory requirements for trucking operations that directly assist coronavirus (COVID) relief efforts included a new reporting requirement. As of October 1, motor carriers that voluntarily operate under the terms of the declaration must report within five days after the end of each month concerning their reliance on the declaration. To report, motor carriers will access their portal account at https://portal.fmcsa.dot.gov/login, log in with their FMCSA portal credentials, and access the Emergency Declaration Reporting under the Available FMCSA Systems section of the page. For more information on the emergency declaration and other guidance and relief related to COVID, visit https://www.fmcsa.dot.gov/COVID-19.

FMCSA renews steel company’s exemptions from HOS and securement rules

FMCSA has renewed the exemption granted Cleveland-Cliffs Steel, LLC (Cliffs), formerly ArcelorMittal Indiana Harbor, LLC, from certain hours-of-service (HOS) and cargo securement rules and requests public comment by November 1 on the renewal. The exemptions apply to drivers who transport steel coils less than a mile on public roads between the company’s production and shipping locations. For more information, visit https://www.federalregister.gov/d/2021-21233.

Carrier seeks exemption on driver training instructor qualifications

Oak Harbor Freight Lines, Inc., has applied for an exemption from the qualification requirements pertaining to entry-level driver training (ELDT) theory instructors. The exemption would allow the company’s safety supervisor to conduct classroom (theory) training for entry-level drivers who intend to operate commercial motor vehicles (CMV) used in the transportation of hazardous materials (HM). The company states the exemption is warranted due to the safety supervisor’s experience and expertise related to the transportation of HM. For the Federal Register notice, visit https://www.federalregister.gov/d/2021-19440.

Keep Truckin seeks windshield exemption

FMCSA requests public comment by October 22 on an application for exemption from Keep Truckin, Inc., to allow its AI Dashcam system, which is equipped with cameras, to be mounted lower in the windshield on commercial motor vehicles than is currently permitted. For the Federal Register notice, visit https://www.federalregister.gov/d/2021-20469.

 

Legislation

Infrastructure bill remains in limbo

Congress has yet to resolve the political conflicts – mostly within the Democratic Party itself – that would be needed to move forward with an infrastructure bill (H.R. 3684) that includes several notable provisions related to motor carriers. The legislation is linked politically with a proposed $3.5 trillion budget reconciliation bill that includes numerous spending priorities of progressive Democrats. Some liberal House Democrats are refusing to support final passage of the Senate infrastructure bill until they have assurances that their priorities within the budget bill will remain intact.

Although the fate of the infrastructure bill is up in the air, if the bill passages, it probably will be the Senate version, which is significantly less controversial within the trucking industry. Rep. Peter DeFazio (D-Oregon), chairman of the House Transportation & Infrastructure Committee, in late September offered a motion that the House agree to the Senate amendment. If passed, that motion would send the Senate version of H.R. 3684 to the White House for President Biden’s signature. However, the Democratic majority in the House is razor thin and enough Democrats have objected so far to stall House passage.

The Senate-passed version of H.R. 3684 includes a number of notable provisions related to trucking, including a three-year pilot program to allow interstate operations by drivers under 21 under terms that are very similar to what is called for in the so-called DRIVE-Safe Act. (For details of the Senate-passed bill, see Regulatory Update, August 2021.)

Although several relatively non-controversial provisions of the House-passed bill also are in the Senate version, the Senate bill does not include some highly controversial measures that the House had passed. Those include increased minimum insurance coverage for trucking companies, a near-term restoration of public Compliance, Safety, Accountability metrics; a rulemaking on screening drivers for sleep apnea; and a comprehensive review of hours-of-service regulations, including last year’s final rule. (For details of the House-passed bill, see Regulatory Update, June 2021.)

Senate bill would bar vaccination mandate for interstate passenger travel

Sen. Mike Lee (R-Utah) introduced legislation (S. 2847) that would prohibit the federal government from mandating vaccination against COVID-19 for interstate passenger travel. The bill would apply to common carriers in all modes, including motor passenger carriers. For more information, visit https://www.congress.gov/bill/117th-congress/senate-bill/2847.

 

Courts

Supreme Court acts in two cases related to trucking

As it convened for a new term, the Supreme Court on October 4 issued orders in two cases related to scope of federal preemption of state action related to trucking. Regarding Cal Cartage Transportation Express vs. California, the court decided not to review a California state court’s ruling that the California Supreme Court’s interpretation that essentially bars independent contractor drivers in trucking does not run afoul of the preemption established in the Federal Aviation Administration Authorization Act of 1994 (F4A).

Although the Cal Cartage case fundamentally rests on the same question – whether F4A preempts a restrictive state ABC test for worker classification in trucking – it is different in various respects from the case in which the California Trucking Association is seeking Supreme Court review of an adverse ruling from the U.S. Court of Appeals for the Ninth Circuit concerning the application of the state’s AB 5 law to motor carriers. For example, the Cal Cartage case does not directly address AB 5 and – perhaps more important – it was an appeal from a state court that was not even the highest California state court.

So while the Supreme Court’s refusal to hear the Cal Cartage case certainly is not good news for the trucking industry, it might not indicate that the CTA case also is headed for the same fate. Many observers believe the Supreme Court likely will hear the case because the Ninth Circuit decision directly contradicts the 2016 ruling from the U.S. Court of Appeals for the First Circuit in a case involving a Massachusetts ABC test that was essentially the same as the AB 5 test.

The State of California is scheduled to respond October 12 to CTA and the various transportation-related organizations that have filed in support of CTA’s appeal. A Supreme Court decision on whether to hear the case could come within weeks after that filing. If the court declines to hear the CTA case, California would be free to impose the requirements of AB 5 on motor carriers immediately. If the court agrees to hear the case, it could be next year or potentially even 2023 before it renders a decision, depending on when the court schedules arguments.

Another trucking-related case in which there was an order on October 4 was C.H. Robinson Worldwide vs. Miller. The issue in that case is somewhat similar in that it involves federal preemption of state action, but in this case the issue is whether state common law negligence claims against freight brokers are preempted by F4A. The key question is whether a lawsuit against a broker filed after a highway accident qualifies under F4A’s “safety exception,” which preserves the “safety regulatory authority of a State with respect to motor vehicles.” The Ninth Circuit had ruled that the lawsuit in question did qualify and was not preempted.

No guarantee that the Supreme Court will hear the case, the request indicates that the court is seriously considering a review.

 

Advocacy and Comment

As noted above, comments are due on October 18, 2021, in response to the President’s administrative agenda and questions outlined for discussion. Clearly, the administration is trolling for support of its progressive pro-labor union agenda. The proposals, which have been tabled on the administrative and legislative level, ignore the fact that the highway infrastructure is being held hostage yet again and that the big government idea of unionization is being touted as a panacea for the driver shortage.

The key issues facing trucking in the supply chain infrastructure as a whole are not addressed and could be exacerbated by the proposed administrative agenda. The creation of an "Infrastructure Czar" to make multi-modal policy decisions is contrary to the National Transportation Policy and the commitment to insure fair competition in a competitive marketplace.

While filing comments by the current due date will probably not change federal administrative policy, it is important to our industry that supply chain issues, the driver shortage, and the pending independent contractor issues be accurately discussed and that the pitfalls of proposed administrative and legislative changes be debated.

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Regulatory and Legislative Update - September 2021

By Dan Boaz

Contents

Regulation and Enforcement

Legislation

Courts

Advocacy and Comment

 

Legislation

FMCSA seeks feedback on Part 379 records retention requirements

FMCSA is requesting comments by September 23 on the necessity and appropriateness of records retention requirements in Part 379 of the Federal Motor Carrier Safety Regulations (FMCSRs). The agency noted that Appendix A to Part 379 provides a generalized listing of retention times for records required to be prepared or compiled by certain for-hire motor carriers and brokers subject to the commercial regulations. However, only a few of the FMCSRs refer to the record-keeping requirements in Part 379, it said. FMCSA’s Federal Register notice poses several questions related to retention times and the numbers and costs of records retention. For the Federal Register notice, visit https://www.federalregister.gov/d/2021-18169.

FMCSA extends COVID enforcement relief, seeks carrier reports on its use

FMCSA has extended through November 30 emergency regulatory enforcement relief for motor carriers directly supporting coronavirus (COVID-19) relief efforts. As modified several times since originally granted in March 2020, FMCSA’s emergency declaration applies to commercial vehicle operations providing direct assistance in support of emergency relief efforts related to COVID-19 and is limited to transportation of:

  1. livestock and livestock feed;
  2. medical supplies and equipment related to the testing, diagnosis, and treatment of COVID-19;
  3. vaccines, constituent products, and medical supplies and equipment including ancillary supplies/kits for the administration of vaccines, related to the prevention of COVID-19;
  4. supplies and equipment necessary for community safety, sanitation, and prevention of community transmission of COVID-19 such as masks, gloves, hand sanitizer, soap, and disinfectants;
  5. food, paper products and other groceries for emergency restocking of distribution centers or stores;
  6. gasoline, diesel, jet fuel, and ethyl alcohol; and
  7. supplies to assist individuals impacted by the consequences of the COVID-19 pandemic (e.g., building materials for individuals displaced or otherwise impacted as a result of the emergency).

FMCSA continues to stress that direct assistance does not include non-emergency transportation of qualifying commodities or routine commercial deliveries, including mixed loads with a nominal quantity of qualifying emergency relief added to obtain the benefits of this emergency declaration. To be eligible for the exemption, the transportation must be both of qualifying commodities and incident to the immediate restoration of those essential supplies. For full details of the emergency declaration, visit https://www.fmcsa.dot.gov/COVID-19.

Meanwhile, FMCSA last month submitted for immediate Office of Management and Budget approval a proposed information collection under related to the emergency COVID-19 declaration. The agency noted that neither the emergency declaration nor regulations covering emergency declaration require that carriers or drivers operating under it report their operation to FMCSA.

"Given the unprecedented period that the expanded modified Emergency Declaration No. 2020-0022 has now been in place, FMCSA has determined that it is necessary to seek information on the number of motor carriers and drivers relying upon Emergency Declaration No. 2020-002, and any subsequent extension currently in effect, to evaluate the need for future extensions or modifications if that Agency determines that additional extensions are needed,"" the agency said in its Federal Register notice. For FMCSA’s notice of the proposed information collection, visit https://www.federalregister.gov/d/2021-18442.

CVSA policy adopted as certification standards for driver/vehicle inspections

As required by the Fixing America's Surface Transportation Act (FAST Act), which was enacted nearly six years ago, FMCSA has incorporated by reference into its regulations the Commercial Vehicle Safety Alliance's (CVSA) “Operational Policy 4: Inspector Training and Certification.” The CVSA policy provides the current policy and practices for FMCSA employees, State or local government employees, and contractors to obtain and maintain certification for conducting driver or vehicle inspections. Previously, it was Attachment A to FMCSA's “Certification Policy for Employees Who Perform Inspections, Investigations, and Safety Audits.” For the Federal Register notice, visit https://www.federalregister.gov/d/2021-18474.

Comments due September 23 on MRB report regarding alternative vision standard

FMCSA is requesting comments by September 23 on a report from the agency’s Medical Review Board (MRB) that recommends changes in the alternative vision standard that was proposed in January. The proposed rule, which was issued in the final days of the Trump administration, would allow individuals who cannot meet either the current distant visual acuity or field of vision standard, or both, in one eye to be physically qualified to operate a commercial motor vehicle (CMV) in interstate commerce.

In May, FMCSA asked MRB to review and analyze comments from medical and professionals and associations on the proposal and to make recommendations to FMCSA. The MRB Task 21-1 report is available at https://www.regulations.gov/document/FMCSA-2019-0049-0117. For the Federal Register notice seeking comment on the report, visit https://www.federalregister.gov/d/2021-17850.

FMCSA plans to renew consumer complaint database

FMCSA is seeking comments by November 2 on a plan to submit the National Consumer Complaint Database (NCCDB) to the Office of Management and Budget for renewal of its approval. The NCCDB allows consumers, drivers, and others to file complaints against “unsafe and unscrupulous companies” and/or their employees, including shippers, receivers, and transportation intermediaries, depending on the type of complaint. Complaints may cover a wide range of activities, such as driver harassment, coercion, movement of household goods, financial responsibility instruments for brokers and freight forwarders, Americans with Disability Act, electronic log devices, medical review officers, and Substance Abuse Practitioners. For the Federal Register notice, visit https://www.federalregister.gov/d/2021-19079.

FMCSA seeks approval for information collection related to waivers and exemptions

FMCSA has determined that it now receives enough waiver and exemption requests per year to require OMB approval for recordkeeping and reporting requirements associated with them. The agency is requesting comments by October 15 on the agency’s proposed information collection related to waivers and exemptions. For the Federal Register notice, visit https://www.federalregister.gov/d/2021-17418.

Werner seeks exemption for drivers who have passed the CDL skills test

FMCSA is requesting comments by September 17 on an application from Werner Enterprises, Inc. for an exemption that would allow commercial learner's permit (CLP) holders who have successfully passed the commercial driver's license (CDL) skills test but who have not received the CDL document to drive a commercial motor vehicle (CMV) without having a CDL holder seated beside them in the CMV. Under the exemption, the CDL would have to be present in the truck, but not necessarily in the passenger seat. For the Federal Register notice, visit https://www.federalregister.gov/d/2021-17690.

Steel company seeks HOS relief for scrap metal haulers

FMCSA requests comments by September 27 on an application for exemption submitted by Cleveland-Cliffs Steel, LLC (Cliffs) that would allow its employee-drivers with CDLs who transport scrap metal on two trucks between their production and shipping locations on public roads to work up to 16 hours per day and to return to work with less than the mandatory 10 consecutive hours off duty. The exemption is similar to the hours-of-service (HOS) exemption that applies to Cliffs’ drivers transporting steel coils. However, unlike the steel coil exemption, the scrap metal trucks would comply with the heavy hauler trailer definition, height of rear side marker lights restrictions, tire loading restrictions, and the coil securement requirements in the FMCSRs. For the Federal Register notice, visit https://www.federalregister.gov/d/2021-18330.

 

Legislation

House bill seeks to tighten regulations on ocean shipping

Reps. John Garamendi (D-California) and Dusty Johnson Sen. Todd Young (R-Indiana) have introduced legislation (H.R. 4996) that would represent the first major update of federal regulations concerning the ocean shipping industry in more than 20 years. The bill, which is supported by several organizations related to trucking, would require ocean carriers or marine terminal operators to certify that any detention or demurrage charges comply with federal regulations and would shift the burden of proof regarding reasonableness from the invoiced party to the ocean carrier or marine terminal operator. The bill would also authorize the Federal Maritime Commission to investigate on its own initiative ocean carriers’ business practices and apply enforcement measures as appropriate. For more information on H.R. 4996, visit https://www.congress.gov/bill/117th-congress/house-bill/4996.

A little over a year ago, the American Trucking Associations filed a complaint with FMC alleging that the Ocean Carrier Equipment Management Association and 11 ocean carriers have overcharged motor carriers and their customers for intermodal container chassis at ports and inland terminals throughout the U.S. Adjudication of that complaint is slowly working its way through the FMC process. For the ATA complaint and other documents related to the proceeding, visit at https://www2.fmc.gov/readingroom/proceeding/20-14.

 

Courts

California to respond to CTA’s Supreme Court petition next month

The date for a key U.S. Supreme Court decision regarding whether to review California’s AB 5 as it applies to motor carriers will be pushed off a bit as the court has granted California’s request delay its response by a month. In August, the California Trucking Association (CTA) asked the U.S. Supreme Court to review the ruling of the U.S. Court of Appeals for the Ninth Circuit that California’s restrictive ABC test for worker classification contained in the law known as AB is not preempted by federal law. (For details, see Regulatory Update, August 2021.) The original deadline had been September 10.

In a letter to the Supreme Court, the state said an extension “would allow for adequate time for internal review and would better enable preparation of a response that respondent believes would be most helpful to the Court.” California also noted that it had consented to the filing of multiple amicus briefs, so the extension would allow time to review and respond to those briefs. So far, three organizations – the Washington Legal Foundation and the National Motor Freight Traffic Association, Inc., and the Minnesota Trucking Association – have filed amicus briefs, both in support of CTA. For CTA’s petition and subsequent filings in the docket, visit https://bit.ly/CTAvBonta.

The Supreme Court already has at least two other petitions seeking review of decisions related to the scope of Federal Aviation Administration Authorization Act (F4A) preemption. The Supreme Court already has at least two other petitions seeking review of decisions related to the scope of F4A preemption. One also involves preemption against California’s worker classification regulations. See https://bit.ly/Cal-Cartage. The other case involves whether the “safety exception” to federal preemption under F4A includes common law damage claims against brokers. See https://bit.ly/CHRvMiller.

 

Advocacy and Comment

Several topics mentioned above require highlighting:

  1. Efforts by the FMCSA to roll back record retention requirements are misplaced. The recordkeeping burden is not significant. By retaining existing recordkeeping requirements, parties seeking self-help and enforcing causes of action for fraud and misfeasance can avoid the “dog ate our homework” defense when put to their burden to provide incriminating documents.
  2. The Federal COVID relief declaration which as noted has been modified several times is somewhat restrictive in scope and inconsistent with some state emergency orders . The extent of the pandemic in interrupting the supply chain causing plant shutdowns, food shortages and port congestion justifies broader emergency relief from hours of service compliance, particularly with respect to the logging of loading and unloading times.
  3. The bipartisan legislations to address ocean shipping detention and demurrage abuse should be supported by all industry segments. The Federal Maritime Commission has jurisdiction over steamship line practices. Port congestion and delays are systemic problems faced by draymen which have been exploited by steamship lines by establishing limited free time and exorbitant daily late fees. Placing the burden on ocean carriers and marine terminal operators to certify detention and demurrage charges is an excellent way to curb these abuses.

The Insurance Crisis Revisited

As discussed in the July update Congress considering more than doubling the BMC 91X minimum insurance requirements. Although this is lost in the regulatory fog because of recent nuclear verdicts and market changes, this topic remains a top issue.

An astronomical $100 million verdict in Florida and the bankrupting of an Arkansas carrier who attempted to hire a third party carrier for power only service have frightening implications and toxic potential consequences. Clearly the courts and the jury system do not understand the traditional transportation law – that the FMCSA is the policing agency which decides which carriers are fit to operate on the nation’s roadways.

In the absence of direct negligence or coercion the customer should not be liable as a defendant for the acts or omissions of the licensed, authorized and regulated carrier which it hires. These cases will only further alarm the fragile insurance market resulting in higher, if not totally prohibitive, costs especially for small and new entrants.

As previously noted, the number of new applicants for authority is off the charts. This is largely attributable to the rush of owner operators to the power only model in response to AB5 and similar legislation aimed at destroying the independent contractor model.

The marketplace discrepancies as reflected in the cost per unit for large and small carriers is already a high hill for a new entrant to climb. With new entrant premiums of approximately $25,000 per year, a new entrant can easily pay four or five times the coverage amount paid by large carriers. If the federal minimum is raised to $2 million, a new entrant could easily pay 40% more or $35,000 per unit per year. In this context, large Wall Street backed carriers enjoy distinct advantages by being able to post higher self-insured retention reserves and gain easier access to insurance markets based on volume.

A recent study of insurers posting BMC-91Xs for for-hire carriers is telling. Although there are 481 insurers writing for-hire liability policies, one company (Progressive) writes over 50% the carriers. The next largest insurer underwrites only 2.7% of the policies. These statistics make clear that the vast majority of truck underwriters simply have little or no appetite for writing small carriers. This indicates that the insurance market is in precarious shape and is ill equipped to handle an influx of experienced new drivers seeking to change their status from owner operators to small carriers.

When interstate trucking was deregulated starting in 1980, it was with the intent to encourage competition and small business entrepreneurship. Approximately 95% of the for-hire carriers subject to Federal Regulation are small businessmen whose future is in real jeopardy as a consequence of the nuclear verdict scare and the resulting insurance crisis.

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Regulatory and Legislative Update - August 2021

By Dan Boaz

Contents

FMCSA has extended its emergency declaration regarding COVID-19 through August 31. For the latest version and other guidance related to COVID-19 is available at www.fmcsa.dot.gov/COVID-19.

Legislation

Courts

Regulation and Enforcement

Advocacy and Comment

 

Legislation

Senate passes bipartisan infrastructure bill with motor carrier provisions

The U.S. Senate on August 10 passed by a 69-30 vote the bipartisan compromise legislation (H.R. 3684) known as the INVEST in America Act. The bill is significantly different from the House-passed version of H.R. 3684 and does not include some of the more controversial motor carrier provisions that are in the House version. For example, the Senate-passed bill does not increase minimum insurance coverage for trucking companies to $2 million. Nor does it mandate a near-term restoration of public Compliance, Safety, Accountability metrics; require a rulemaking on screening drivers for sleep apnea; or order a comprehensive review of hours-of-service regulations, including last year’s final rule.

Some of the motor carrier provisions in the Senate bill were included in legislation (S. 2016) approved in June by the Senate Commerce Committee. Because the committee’s membership – like the membership of the Senate itself – is equally split between Democrats and Republicans, few controversial provisions could make it into the Senate bill. Some of the more significant or broadly relevant trucking-related provisions in the Senate-passed bill would:

  • Establish a three-year pilot program to allow interstate operations by drivers under 21 under terms that are essentially the same as what is included in the DRIVE-Safe Act (S. 659, H.R. 1745);
  • Direct DOT to issue guidance to clarify the definitions and roles of brokers and bona fide agents and require DOT to consider the impact of technology and the role of dispatch services in the freight transportation industry;
  • Mandate a motor vehicle safety standard and accompanying performance requirements for newly manufactured heavy-duty commercial motor vehicles to be equipped with an automatic emergency braking system and require that systems installed in such vehicles be in use during operation;
  • Require the strengthening of rear underride guard standards within a year, periodic inspections of rear impact guards, and additional research on both rear and side underride guards;
  • Require DOT, in consultation with the Department of Labor, to establish a Truck Leasing Task Force to examine common truck leasing agreements available to truck drivers, including port drayage drivers specifically. The Task Force would examine the impact of leasing agreements on the net compensation of drivers and the resources available to assist drivers in assessing the impacts of leasing agreements;
  • Mandate a study of large commercial vehicle crash causation;
  • Establish a grant program to help states with the immobilization or impoundment of passenger-carrying vehicles that are determined to be unsafe or fail inspection;
  • Require a final rule on state inspection of passenger-carrying commercial vehicles;
  • Mandate a report analyzing the cost and effectiveness of electronic logging devices and detailing the processes used by FMCSA to review logs; protect proprietary and personally identifiable information; and to provide the opportunity for a challenge or appeal to a violation notice related to an ELD;
  • Order a review of FMCSA’s National Consumer Complaint Database; and
  • Extend the authorization for the Motor Carrier Safety Advisory Committee through fiscal 2026 and add small carriers among those required to be represented on the committee.

Although the Senate version passed by a strongly bipartisan vote that even included Senate Minority Leader Mitch McConnell, that coalition might not hold if the final version changes much. House Speaker Nancy Pelosi’s responded to the Senate bill’s passage positively, but she hardly endorsed it as a final product. Pelosi said the bipartisan package “helps rebuild the middle class as it rebuilds our infrastructure,” but she also said that the House “will continue to work with the Senate to ensure that our priorities For the People are included in the final infrastructure and reconciliation packages in a way that is resilient and will Build Back Better.”

Rep. Peter DeFazio (D-Oregon), who chairs the House Transportation & Infrastructure Committee, praised the progress but complained that “this package falls short when it comes to addressing climate change like the existential threat it is.”

Aside from some subsequent amendments unrelated to trucking, the motor carrier provisions of the Senate bill are contained in Senate Amendment 2137, which is the bipartisan Senate substitute legislation for the bill. SA 2137 is available at https://bit.ly/SA2137-HR3684. For more information on the INVEST in America Act, visit https://www.congress.gov/bill/117th-congress/house-bill/3684.

House passes fiscal 2022 funding for DOT

The U.S. House of Representatives on July 29 passed legislation (H.R. 4502) to fund various U.S. departments and agencies, including DOT, through September 2022. Unlike recent funding bills under the Democratic-controlled House, the fiscal 2022 does not include any controversial legislative provisions related to trucking The bill includes only three legislative measures related to FMCSA, and all three were included in the funding measure that expires at the end of next month. Those measures exempt livestock haulers from ELDs, require FMCSA to update annual inspection regulations related to truck underride guards, and requires FMCSA to notify carriers subject to expedited enforcement action to notify carriers using a manner that records receipt of the notice by the persons responsible for the violation. For the text of H.R. 4502, visit https://www.congress.gov/bill/117th-congress/house-bill/4502.

Senate bill would repeal excise tax on trucks and trailers

Sen. Todd Young (R-Indiana) has introduced a bill (S. 2435) that would repeal the 12% federal excise tax on new heavy trucks and trailers. Similar bills have been offered in several recent Congresses without success. The findings section of the bill states that the tax discourages truck owners from replacing older, less fuel-efficient equipment with newer, more efficient trucks and trailers. It also discourages electric and alternative-fueled trucks, which have a higher upfront cost, the bill states. For more information on S. 2435, visit https://www.congress.gov/bill/117th-congress/senate-bill/2435.

 

Courts

California Trucking Association asks Supreme Court to review AB 5 ruling

As expected, the California Trucking Association has asked the U.S. Supreme Court to review the ruling of the U.S. Court of Appeals for the Ninth Circuit that California’s restrictive ABC test for worker classification contained in the law known as AB is not preempted by federal law. A split three-judge panel in late April overturned a lower court’s preliminary injunction of AB 5 as it applies to motor carriers, but the court ultimately granted CTA’s request for a stay in that ruling pending action by the U.S. Supreme Court.

In its petition for a writ of certiorari, CTA said the question presented is whether the Federal Aviation Administration Authorization Act of 1994 (F4A) preempts the application to motor carriers of a state worker-classification law that effectively precludes motor carriers from using independent owner-operators to provide trucking services. CTA argued that the Ninth Circuit’s view that F4A preempts only laws that “bind, compel, or otherwise freeze into place a particularly price, route, or service” conflicts with the Supreme Court’s prior decisions. The Ninth Circuit ruling also conflicts with a First Circuit ruling regarding a Massachusetts ABC test that is essentially the same as California’s test.

CTA’s petition was docketed on August 11, and the state’s response is due September 10. For the petition and subsequent filings in the docket, visit https://bit.ly/CTAvBonta.

The Supreme Court already has at least two other petitions seeking review of decisions related to the scope of F4A preemption. One involves a decision out of the California Court of Appeal that is largely the same issue as that in play in the CTA case except that its litigation predates enactment of AB 5 and is based instead on California Supreme Court precedent. See https://bit.ly/Cal-Cartage. The other case involves whether the “safety exception” to federal preemption under F4A includes common law damage claims against brokers. See http://bit.ly/CHRvMiller. Cert petitions for both considered by justices in a September 27 conference. Given that briefs in the CTA case could be completed before September 27, it is possible that justices would consider that petition then as well.

 

Regulation and Enforcement

EPA eyes further regulation on NOx and greenhouse gases

The Environmental Protection Agency has outlined steps it was taking regarding vehicle emissions for heavy trucks as well as for passenger cars and light trucks. Regarding heavy trucks, the agency said it is working on a series of major rulemakings over the next three years. The first rulemaking, which EPA said would be finalized next year, would apply to heavy-duty vehicles starting with model year 2027 and would set new standards for NOx emissions well as upgrades to current Phase 2 greenhouse gas emissions standards for that year. A second rule would set more aggressive greenhouse gas standards for heavy-duty vehicles as early as model year 2030 and beyond.

In a fact sheet about the strategy, EPA did say that one of its focuses in NOx emissions will be on what is known as “low loads” – i.e., not at highway speeds. That would include situations like idling or stop-and-go traffic where EPA says current NOx controls are not effective. Regarding its plans for changes in the greenhouse gas rules for heavy trucks, EPA was less specific. It said that in recent years zero-emissions heavy duty trucks have begun entering the market in numbers not foreseen when the agency established Phase 2 greenhouse gas standards. EPA said it would assess the impact of zero-emissions technologies and whether “targeted adjustments” to the 2027 greenhouse gas standards are warranted.

For the next phase, EPA said that heavy truck manufacturers already are signaling a “large scale migration” away from gasoline and diesel engines to zero-emissions technologies. EPA suggested that as soon as model year 2030 its standards would reflect this migration. For more on the plan, visit https://www.epa.gov/regulations-emissions-vehicles-and-engines/clean-trucks-plan

FMCSA deletes ‘on-site’ from definition of a compliance review

FMCSA in July issued a final rule making various technical corrections and minor revisions that it said mostly correct inadvertent errors and omissions, remove or update obsolete references and improve the clarity and consistency of certain regulatory provisions. Among those changes was removing the word “on-site” from the definition of a compliance review in Part 385.3.

“This amendment recognizes the technological advances that allow FMCSA to perform the compliance review remotely in some cases,” FMCSA said, adding that the amendment does not alter the Safety Fitness Rating Methodology (SFRM) in part 385, appendix B or eliminate FMCSA’s ability to conduct onsite examinations. “From the point of view of the regulated entity, the same safety performance metrics are being evaluated, so there is no change,” the agency said. However, the change clarifies that a safety investigator may – in some cases – perform all the investigative functions of the compliance review remotely when the motor carrier uploads its business records for review to FMCSA’s online system.

The final rule makes about two dozen revisions int the Federal Motor Carrier Safety Regulations (FMCSRs). In addition to corrections and clarifications, the rule makes some nondiscretionary changes that are statutorily mandated and other changes that align regulatory requirements with the underlying statutory authority, FMCSA said. For more information, visit https://www.federalregister.gov/d/2021-13888.

FMCSA codifies statutory mandate for electronic exchange of CDL driver info

FMCSA has issued a final rule to require that states implement a system and practices for the exclusively electronic exchange of driver history record (DHR) information through the Commercial Driver’s License Information System (CDLIS). The change was mandated by the 2012 authorization act known as MAP-21. States must achieve “substantial compliance” with this requirement “as soon as practicable,” FMCSA said, but certainly not later than three years after the August 23, 2021, effective date of the rule. Because all States currently have the technical capability to send DHR information – including convictions, withdrawals, and disqualifications – electronically through CDLIS, the rule should not result in incremental costs or benefits to the states, FMCSA said. For more information, visit https://www.federalregister.gov/d/2021-15693.

Proposes rule would implement HHG working group recommendations

FMCSA is requesting comments by October 12 on a notice of proposed rulemaking (NPRM) to incorporate into regulations recommendations from the Household Goods Consumer Protection Working Group, which was established by the FAST Act in late 2015. One proposed change would be to remove the ability of the motor carrier or individual shipper to revise a binding or non-binding estimate. Instead, FMCSA would require the preparation of a new binding or non-binding estimate when the shipper tenders additional items or requests additional services. The NPRM would allow for virtual surveys of household goods and would replace the requirement for a freight bill with an invoice. For all changes proposed in the NPRM, visit https://www.federalregister.gov/d/2021-13889.

FMCSA seeks medical records missing due to registry outage

FMCSA has requested that medical examiners submit by September 30 results of physical qualification examinations that were conducted between December 1, 2017, and August 13, 2018 – a period during which the National Registry of Certified Medical Examiners was offline. During the outage, FMCSA encouraged MEs to continue conducting exams and to upload results when the registry’s upload functionality was restored, which occurred on August 13, 2018. However, a significant number of healthcare professionals have not uploaded those results, FMCSA said. For more information, visit https://www.federalregister.gov/d/2021-16955.

ATA seeks exemption to allow TMC training to establish inspector qualification

The American Trucking Associations is seeking an exemption from the FMCSRs that would allow an individual who completes a training program consistent with a set of Recommended Practices (RPs) developed by ATA’s Technology and Maintenance Council (TMC) to be considered a qualified inspector for purposes of the periodic inspection rule, or a qualified brake inspector, for purposes of the brake system inspection, repair, and maintenance requirements. For more information, visit https://www.federalregister.gov/d/2021-14979.

Bus company seeks exemption for Mexican-licensed drivers

Tornado Bus Company has requested an exemption for its drivers who currently hold a Mexican Licencia Federal de Conductor from the following provisions of the FMCSRs: General entry-level driver training, CDL knowledge test required to obtain a commercial learner’s permit (CLP); the skills test required for CLP holders to obtain a CDL; and the knowledge and skills test requirements for a CDL passenger endorsement. Tornado specifically requests the exemption for its drivers who have been granted permanent resident status from the Department of Homeland Security (DHS) and have more than two years’ experience driving in the U.S. and Mexico. For more information, visit https://www.federalregister.gov/d/2021-14981.

Driveaway carriers seek CDL relief in transporting certain empty vehicles

A group of affiliated driveaway motor carriers have applied for an exemption from the requirement that drivers transporting certain empty passenger vehicles hold a CDL. The exemption would cover drivers delivering commercial motor vehicles (CMVs) with seating capacities of 16 or more, including the driver, but with a gross vehicle weight rating (GVWR) of less than 26,001 pounds. The application was submitted by Dealers’ Choice Truckaway System, Inc. dba Truckmovers; Irontiger Logistics, Inc.; TM Canada, Inc.; and Victory Driveaway, Inc. The applicants transport minibuses from points of manufacture or distribution to school districts around the country. They argue that the current shortage of CDL drivers threatens to leave bus manufacturers without sufficient means to move their minibuses to customers. For more information, visit https://www.federalregister.gov/d/2021-14982.

 

Advocacy and Comment

This month’s update involved a delayed release. Nothing significant happened during the month and release was held pending the Senate treatment of the infrastructure bill discussed above. Fortunately, the skinny Senate bill did not include any major troubling provisions. It did allow Congress to go home for recess indicating some ability to push through a bipartisan bill in the Senate. Hopefully, the Senate version of the infrastructure bill will pass unscathed and the appropriations to fix the highways can finally be addressed.

Yet, the major issues remain. Remember, the new Administration rolled back the “Economic Reality Test” at the Department of Labor and removed the Department of Transportation’s administrative due process rules promulgated by the Trump administration.

The economic realities of the driver shortage, climate change, and the effect of technology and use of fossil fuels in transportation all are unresolved issues which must be addressed. As indicated above, these issues will be rolled out not only in Congress but also in pending judicial decisions and administrative actions in the months ahead

Stay tuned.

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