Regulatory and Legislative Update - May 2022

By Dan Boaz


FMCSA has extended its emergency declaration regarding COVID-19 through May 31, 2022. For the latest version and other guidance related to COVID-19 is available at Note that use of the declaration now requires monthly reporting by carriers.

Regulation and Enforcement


Advocacy and Comment


Regulation and Enforcement

FMCSA resurrects plan to require speed limiters on heavy trucks

As recently as December, the Federal Motor Carrier Safety Administration had labeled speed limiters for heavy commercial vehicles as a long-term priority and not imminent, but it has now indicated that it will move forward with a plan to require carriers to use such devices. In the May 4 Federal Register, the agency published an advance notice of supplemental proposed rulemaking.

Late in the Obama administration, FMCSA and the National Highway Traffic Safety Administration jointly issued a notice of proposed rulemaking (NPRM) that would have required vehicle manufacturers to program a maximum speed as determined by further rulemaking into truck engines’ electronic control units (ECUs) and would have required motor carriers to maintain the speed limiting devices for the service life of the vehicle. The proposed rule would have applied to new vehicles with gross vehicle weight ratings of more than 26,000 pounds.

Although the Trump administration withdrew several Obama-era rulemakings in 2017, it did not withdraw the proposed speed limiter rule but rather shelved it by labeling it as a “long-term action” in the unified regulatory agenda. Nearly a year into the Biden administration, the Department of Transportation still lists speed limiters as a long-term action, and NHTSA has not signaled any action.

FMCSA now plans to move forward with a supplemental notice of proposed rulemaking (SNPRM) that would require motor carriers to use available speed-limiting technology on their trucks’ ECUs, which is within its authority. The advance SNPRM seeks comments by June 3 on various technical issues involved in speed limiters, including what skills or training are needed to adjust or program ECUs to limit speed, what equipment is needed, how long it takes, etc. FMCSA also is seeking input on whether there should be a retrofit requirement for engines that were not manufactured with speed limiting capabilities built into the ECUs and whether the upcoming rule should be expanded to include Class 3 to 6 vehicles.

For the Federal Register notice, visit

FMCSA revisits state inspection programs for passenger carriers

As directed by the Infrastructure Investment and Jobs Act (IIJA), FMCSA is soliciting additional comment on an advance notice of proposed rulemaking (ANPRM) concerning potential requirements for states to establish annual inspection programs for CMVs designed or used to transport passengers. The agency had issued the ANPRM in April 2016 during the Obama administration, but it was one of several rulemakings withdrawn by FMCSA in 2017 as part of the Trump administration’s regulatory review, which determined that there was not enough data and information available to support moving forward with a rulemaking.

Comments are due June 9 on a series of questions posed in FMCSA’s May 10 Federal Register notice. For that document, visit

Final rule implements HHG working group recommendations

FMCSA has amended the federal regulations for transportation of household goods to incorporate the recommendations of the Household Goods Consumer Protection Working Group, which was established by the FAST Act in late 2015. The agency’s rule amends regulations to reflect aspects of the recommendations that require a rulemaking to implement and are within FMCSA’s authority. The rule also makes additional minor changes to the HHG and broker regulations intended to increase clarity and consistency.

The final rule is effective June 27. For the rule, visit The report of the working group is available at

Steel company receives relief for scrap metal haulers

FMCSA has granted an exemption to 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

FMCSA denies CDL exemption for driveaway carriers transporting empty vehicles

FMCSA has rejected an exemption sought by a group of affiliated driveaway motor carriers from the requirement that drivers transporting certain empty passenger vehicles hold a CDL. The exemption would have covered 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. FMCSA determined that the application provided no evidence that the exemption would ensure a level of safety equivalent to or greater than that achieved absent such exemption. For more information, visit

FMCSA rejects exemption for bus company’s Mexican-licensed drivers

FMCSA has denied an exemption from several regulations related to CDL/CLP testing that was requested by Tornado Bus Company for certain drivers who currently hold a Mexican Licencia Federal de Conductor. The exemption would have covered 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. FMCSA determined that the application does not demonstrate that the exemption would likely ensure a level of safety equivalent to or greater than would be achieved absent such exemption. For more information, visit


House bill would eliminate overtime exemption for regulated truck drivers

Rep. Andy Levin (D-Michigan) and seven co-sponsors – all but one of them Democrats – introduced legislation (H.R. 7517) that would repeal the overtime exemption in the Fair Labor Standards Act that applies to commercial drivers subject to federal hours-of-service regulations. In announcing the introduction, which is only a sentence (not including the title of the bill), Levin cited DOT’s report on potential steps to address supply chain challenges. That report, which was released in February, suggested that eliminating the exemption could help increase the number of truck drivers.

Levin also announced that H.R. 7517 is endorsed by the Owner-Operator Independent Drivers Association, Teamsters, Institute for Safer Trucking, Truck Safety Coalition, Parents Against Tired Truckers, and Citizens for Reliable and Safe Highways (CRASH). For more information on H.R. 7517, visit For the February 2022 DOT report on supply chain issues related to freight and logistics, visit

Advocacy and Comment

As the above summary indicates, regulatory and legislative issues facing the trucking industry have changed from safety to economic issues. SMS methodology is still around and results in higher nuclear verdicts and insurance rates, but the FMCSA has no clear plan of action to rectify the issue.

Supply chain disruption and economic issues involving drivers and driver pay now occupy center stage. Key issues which are not the fault of carriers or drivers include supply chain disruption, escalating fuel cost, dramatic increase in both new and used trucks and trailers, and parts shortages.

The key administrative and legislative agenda of the new Administration appears to be to blame the so-called “driver shortage” on carrier abuse of both drivers and owner operators. The apparent solution is to eliminate incentive pay, whether by the mile or percentage, and endorse AB5 at the federal level to ensure that all truck drivers are treated as employees. This agenda being proposed at the Legislative and the Administrative level would eliminate independent contractor treatment of owner operators and make truck driving an hourly pay job. The argument that government protection and mandatory pay will solve the supply chain disruption and create more truck driving jobs is a government knows best answer which requires close inspection it has yet to receive.

Under the truth in leasing regulations, 49 C.F.R. 376, blue collar professional drivers have been granted small business independent contractor status for four decades. Protected by regulations that address carrier abuse, drivers and other small businesses who own or lease to own their own equipment have traditionally received independent contractor treatment and the opportunity that goes with it.

The argument is often made that owner operators are forced to accept toxic contracts when the numbers suggest otherwise. Vital segments of the trucking industry, including over-the-road truckload, intermodal dray operations and others are dependent upon independent contractors who could easily obtain regular wage and hour jobs as employees if they did not want the freedom and opportunities to accumulate wealth which the model presents. In fact, recent statistics prove that the threat of AB5 and loss of independent contractor status in California has resulted in owner operators either quitting or feeling forced to file for their own authority to keep independent contractor status otherwise intended and carved out for them in federal regulation.

The nanny state legislation which kills the model will further exacerbate the loss of skilled drivers which cannot be made up by higher taxes. What is needed is to consider how to stimulate the creation of both employees and owner operators to abate the driver shortage in light of escalating costs.

Clearly, the nature of truck driving straightjackets the use of drivers and equipment and necessitates compensation for inordinate, uncompensated delays regardless of how the driver owner operator is otherwise compensated. Action at the Federal Maritime Commission and past precedent at the ICC suggests that this is a proper area for inquiry and regulation to stem this abuse. To be sure, the day-long backups frequently photographed by the press at the California ports are not caused by the waiting truckers but by the inability of the ports and their hourly employees to address the backup.

The above summary of Administrative activity shows that interdisciplinary teams are being established to examine some of these issues including DOL and DOT. Missing, though, is any participation by SBA or the suggestion that, just maybe, stimulus in the form of SBA loans to owner operators and small carriers is obviously going to be necessary for the small business model to continue to flourish in the trucking industry with the otherwise unsustainable predicted costs.

While we are forgiving student loans to the college educated elite, maybe greater consideration should be given to encouraging the ability of small carriers and owner operators to compete in light of the tidal wave of increased costs and access to capital which otherwise will severely limit their viability contrary to the National Transportation Policy.

Clearly, the cost of trucking is going up and small carrier operators will be the most effected. Remember, over 95% of the licensed carriers have less than 10 units and there are as many as 800,000 owner operators who are endangered species if the small business opportunities resulting from independent contractor status is lost. In this context, the cost of new and used equipment is sky rocketing. Fuel now costs as much as $1.00 per mile. The threat of technology eliminating the need for drivers, higher financing charges, and balkanized state-by-state regulations effecting the independent contractor model are bipartisan issues that Congress and the current Administration should be addressing. The trucking industry brought stability to the supply chain chaos resulting from COVID and international disruptions. The new issue ahead for trucking is how to encourage and not stifle blue collar entrepreneurship in trucking.

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Regulatory and Legislative Update - April 2022

By Dan Boaz


FMCSA has extended its emergency declaration regarding COVID-19 through May 31, 2022. For the latest version and other guidance related to COVID-19 is available at Note that use of the declaration now requires monthly reporting by carriers.

Regulation and Enforcement


Advocacy and Comment


Regulation and Enforcement

Biden administration suffers setbacks on independent contractor policies

The Department of Labor (DOL) in March lost battles in both the courts and Congress in its efforts to reverse Trump administration policies regarding use of independent contractors. On March 14, a federal judge in Texas ruled that DOL had violated the Administrative Procedure Act (APA) when it rescinded a January 2021 rule that sought to clarify the definition of “independent contractor” under the Fair Labor Standards Act (FLSA).

The rule was to take effect March 8, 2021, but after President Biden took office, the DOL rule was one of many regulations that were held in abeyance pending a review. DOL then proposed first to delay the rule 60 days under a 19-day comment period and later proposed and then finalized a rule to withdraw the Trump administration rule after a 31-day comment period.

In her opinion, Judge Marcia Crone of the Eastern District of Texas, ruled that by refusing to consider alternatives to the total withdrawal of the rule, DOL failed to consider important aspects of the problem before it, which was the lack of clarity of the economic realities test and the need for regulatory certainty.

“As a practical matter, in the absence of a uniform regulation that is consistent throughout the nation, a worker’s classification as an independent contractor or an employee is dependent on the happenstance of geography, i.e., the judicial circuit in which the worker resides or works,” Judge Crone ruled. “This outcome falls short of providing clarity to the workforce of the United States or to those who compensate them.”

The Biden administration’s second defeat came on March 30 when the U.S. Senate failed to stop a filibuster of the nomination of David Weil to be administrator of DOL’s Wage and Hour Division. Although cloture on filibusters of nominations require only a majority vote (as opposed to the 60 votes needed to invoke cloture on legislation), the motion to end debate failed to garner the support of even all Democrats. The motion failed 43 to 57, and President Biden formally withdrew the nomination on April 7.

The failure of Weil’s nomination is significant because Weil had held the same post for three years under the Obama administration and had pursued a policy hostile toward use of independent contractors. For example, in July 2015, Weil issued an interpretation concluding that most workers were employees under FSLA. One of the goals of the Trump administration’s January 2021 was to thwart use of such interpretations to undermine use of independent contractors.

FMCSA seeks applications for task force on lease agreements

FMCSA is accepting applications until May 6 for membership in the agency’s Truck Leasing Task Force (TLTF), which was mandated by last year’s infrastructure act. The TLTF will evaluate the impacts of commercial motor vehicle (CMV) lease agreements and discuss best practices for future agreements. As established by the legislation, the TLTF will cover many areas related to truck leasing arrangements, including:

  • Exploring predatory truck leasing arrangements in coordination with DOL and the Consumer Financial Protection Bureau;
  • Evaluating common truck lease agreements and their terms, identifying and reviewing those that are potentially inequitable in the motor carrier industry;
  • Reviewing agreements available to drayage drivers at ports;
  • Studying the impact of truck leasing agreements on the net compensation of CMV drivers;
  • Examining truck leasing arrangements and financing arrangements among motor carriers, entry-level drivers, driver training providers, and others involved in the industry; and
  • Assessing resources that assist CMV drivers in reviewing the financial impacts of leasing agreements.

The TLTF will include a maximum of 10 members representing labor organizations, motor carriers, consumer protection groups, legal professionals, owner-operators, and other relevant businesses. The task force, which is chartered through February 11, 2024, will examine those issues and submit a report to FMCSA and DOL. In announcing the TLTF, FMCSA said it encourages “diverse, non-traditional representatives, especially women and people of color” to apply. For more information, visit

Hutcheson nominated to serve as FMCSA administrator

President Biden has nominated Robin Hutcheson as FMCSA administrator. DOT Secretary Pete Buttigieg named Hutcheson deputy FMCSA in January, replacing Meera Joshi, who had departed the agency to become a deputy mayor of New York City. As deputy administrator, Hutcheson, who previously served as DOT deputy assistant secretary for safety policy, also serves as acting administrator. Prior to joining DOT in January 2021, Hutcheson was director of public works for the City of Minneapolis. Before that post, she had served as transportation director for Salt Lake City.

DOT inspector general reviews FMCSA grants of authority to Mexican carriers

As directed by the United States-Mexico-Canada Agreement (USMCA) Statement of Administrative Action, the DOT Office of Inspector General is conducting a review of FMCSA grants of operating authorities to carriers for conducting operations beyond border commercial zones.

Pursuant to the USMCA Implementation Act, in August 2021, FMCSA submitted a report to Congress on all existing grants of operating authority to, and pending applications for operating authority from, all Mexico-domiciled and Mexican-owned or -controlled motor property carriers with authority to operate beyond border commercial zones. The objectives for this review will be to determine whether FMCSA (1) met requirements in authorizing Mexico-domiciled and Mexican-owned or ‑controlled motor carriers to conduct long-haul trucking operations beyond border commercial zones and (2) monitored those carriers to ensure they are operating safely. For more information, visit

Soaring inflation means bigger civil penalties from DOT agencies

The Department of Transportation in March published its mandatory annual update of civil penalties for the department and its modal agencies to reflect inflation, and the surge in pricing during the pandemic means that the adjustment is much larger than typical. The rule, which was effective March 21, reflects an increase of 6.222%, which was the 12-month change in the Consumer Price Index between October 2020 and October 2021. In recent years, the adjustment frequently has been less than 2%. For the revised schedule of civil penalties, visit

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

FMCSA has granted an application from Werner Enterprises, Inc. for an exemption allowing 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 CMV without having a CDL holder seated beside them in the CMV. Under the exemption, the CDL must be present in the truck, but not necessarily in the passenger seat. For the Federal Register notice, visit


Senate passes Ocean Shipping Reform Act, sends measure to House

The U.S. Senate on March 31 passed legislation (S. 3580) that would increase the authority of the Federal Maritime Commission (FMC) to intervene in order to promotive the competitiveness of the ocean transportation system. The requires the FMC to investigate complaints about detention and demurrage charges charged by common ocean carriers and to determine whether those charges are reasonable. If charges are found to be unreasonable, FMC would order refunds. S. 3580 also prohibits common ocean carriers, marine terminal operators, or ocean transportation intermediaries from unreasonably refusing cargo space when available or resorting to other unfair or unjustly discriminatory methods. For more information, visit

Senate passage sends H.R. 3580 to the House, which in December passed its own version (H.R. 4996) of ocean shipping reform. The next steps for the legislation are unclear. For more information on the House version of the bill, visit

Sen. Lee, Rep. Fischbach introduce revised port relief bills

Sen. Mike Lee (R-Utah) and Rep. Michelle Fischbach (R-Minnesota) have introduced legislation (S. 3807, H.R. 7456) aimed at relieving the port congestion that has contributed to supply chain challenges. The bills, which are mostly the same as those (S. 3252, H.R. 6028) Lee and Fischbach introduced in November, would grant several temporary regulatory waivers and actions to help alleviate some of the stress in freight networks.

Several provisions of the bills are specific to trucking. One would require FMCSA to temporarily waive hours-of-service requirements for truck drivers and motor carriers who are transporting cargo directly to or from a U.S. port. Another would require the agency to temporarily allow 18-year-old drivers to receive a temporary commercial driver’s license for (1) the transportation of cargo to or from a U.S. port or (2) to assume the commercial operations of a truck driver who has been re-routed to a U.S. port. Other provisions would make Department of Defense intermodal equipment available to trucking companies and would expedite applications for Transportation Worker Identification Credentials (TWIC) for workers needed to provide direct assistance to a U.S. port. For more information, visit and

Advocacy and Comment

In addition to the Truck Leasing Task Force discussed above, another administration created group will consider driver compensation and detention issues. See

To understand the politics surrounding these driver related initiatives, you may wish to watch the following YouTube video entitled, “John Oliver Explains How Truck Drivers Get Paid, How Often They Don’t, And How Companies Exploit Them To Increase Profits.” This video has almost 4 million views, 113,000 likes, and no negative comments -

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Regulatory and Legislative Update - March 2022

By Dan Boaz


FMCSA has extended its emergency declaration regarding COVID-19 through February 28. For the latest version and other guidance related to COVID-19 is available at Note that use of the declaration now requires monthly reporting by carriers.

Regulation and Enforcement


Advocacy and Comment


Regulation and Enforcement

FMCSA removes x-ray exam from definition of ‘medical treatment’

The Federal Motor Carrier Safety Administration (FMCSA) has revised its regulatory guidance concerning the use of the term “medical treatment” for the purpose of accident reporting. The revised guidance explains that an x-ray examination is a diagnostic procedure and should no longer be considered “medical treatment” in determining whether a crash should be included on a motor carrier's accident register. For the Federal Register notice containing the revised guidance, visit

FMCSA drops mandate that drivers disclose traffic violations to employers

FMCSA has eliminated the requirement that drivers operating commercial motor vehicles (CMVs) in interstate commerce prepare and submit a list of their convictions for traffic violations to their employers annually. The agency said the requirement largely duplicates a separate rule requiring each motor carrier to make an annual inquiry to obtain the motor vehicle record (MVR) for each driver it employs from every state in which the driver holds or has held a CMV operator’s license or permit in the past year. To ensure motor carriers are aware of traffic convictions for a driver who is licensed by a foreign authority rather than by a state, FMCSA amended the rule to provide that motor carriers must make an annual inquiry to each driver’s licensing authority where a driver holds or has held a CMV operator's license or permit.

The final rule is effective May 9, 2022. For the Federal Register notice, visit

FMCSA withdraws proposals related to CDL testing flexibility

FMCSA has withdrawn two notices of proposed rulemaking (NPRMs) published during the Trump administration that would have allowed flexibility in the testing of commercial driver’s license (CDL) applicants for knowledge and skills. One NPRM would have allowed states to permit third-party skills test examiners to administer the skills test to applicants to whom the examiners had also provided skills training. FMCSA said that it was persuaded by numerous comments that the NPRM had the potential to undermine the integrity of the CDL testing process. For the Federal Register notice withdrawing the third-party CDL testing NPRM, visit

The other NPRM would have allowed driver applicants to take the CDL general and specialized knowledge tests in a state other than the applicant's State of domicile. It also would have required the applicant’s state of domicile to accept knowledge test results from the testing state. In this case, the issue was not one of regulatory policy but rather one of process and technology. States had told the agency that security and operational concerns over out-of-state knowledge testing would have required significant changes that they were not feasible in the near term. For the Federal Register notice withdrawing the NPRM related to out-of-state knowledge tests, visit

EPA proposes tighter NOx, GHG standards for heavy trucks

The Biden administration announced a long-expected proposal to cut emissions of oxides of nitrogen (NOx) and greenhouse gases (GHGs) from commercial vehicles. The Environmental Protection Agency had announced in August that it planned to change NOx and GHG requirements, and even the Trump administration’s EPA in January 2020 had signaled further NOx reductions.

Under EPA’s proposed rule, changes in the heavy-duty emission control program would reduce NOx by at least 47% by 2045. The agency floated a more aggressive option that would reduce NOx by more than 60% by 2045. The proposal would change standards, test procedures, useful life, warranty, and other requirements.

The GHG portion of the proposal would accelerate for certain classes of commercial vehicles the existing standards set to be phased in beginning with model year 2027. Those standards had been set at the end of the Obama administration in 2016 when emerging technologies like electric propulsion for commercial vehicles were still only in the development or early adoption phase. EPA now looks to leverage the more rapid development of electric vehicles by revising fleet GHG standards for several vehicle categories, including short-haul tractors and delivery trucks as well as electric school buses and transit buses.

The agency has yet to formally published the notice of proposed rulemaking for comment. The draft document is available at

CVSA schedules International Roadcheck for May 17-19

The Commercial Vehicle Safety Alliance (CVSA) has announced this year’s International Roadcheck dates as May 17-19 with a focus on wheel ends. Commercial motor vehicle inspectors in Canada, Mexico and the U.S. will conduct North American Standard Inspections of commercial motor vehicles and drivers at weigh and inspection stations, on roving patrols, and at temporary inspection sites. CVSA said that violations involving wheel end components historically account for about one quarter of the vehicle out-of-service violations discovered during International Roadcheck.

FMCSA adopts rule on mounting of safety devices on windshields

Having granted numerous exemptions to current regulations to suppliers of safety systems, FMCSA has adopted a final rule that increases the area of on the interior of a CMV where certain vehicle safety technology devices may be mounted. The rule also adds examples of vehicle safety technology that had not been included in the prior version of the regulation in Part 393.5. The rule is effective May 6. For the Federal Register notice, visit

Three states win exemption to continue revised CDL testing process

FMCSA has granted the exemption request of the American Association of Motor Vehicle Administrators (AAMVA) to allow state drivers licensing agencies in Maryland, New Hampshire, and Virginia to continue using revised CDL pre-trip vehicle inspection and revised control skills test procedures following the completion of field tests conducted under an FMCSA waiver. For the Federal Register notice, visit

FMCSA rejects HOS relief or helicopter firm’s ground support operators

FMCSA has denied an application from Mountain Blade Runner Helicopters, LLC’s (MBR Helicopters) for an exemption from two provisions of the hours-of-service (HOS) regulations for its ground support equipment operators. The requested exemption would have allowed MBR Helicopters’ ground support equipment operators a 16-hour window within which to complete all driving and allow them to use an eight-consecutive hour off-duty break, combined with at least two other off-duty hours during the 16-hour window within which driving would be completed, in lieu of taking 10 consecutive hours off duty. FMCSA said the application lacked evidence that the exemption would ensure a level of safety equivalent or greater than the that absent the exemption. For the Federal Register notice, visit



Congress passes final fiscal 2022 appropriations bill

After several short-term extensions to keep the federal government open, the House and Senate have passed the final fiscal 2022 consolidations appropriations act (H.R. 2471), which funds the government through September. The legislation includes nothing controversial related to trucking and merely continues three administrative provisions related to FMCSA that have been part of previous appropriations acts. For more information on H.R. 2471, visit

Bills would exempt foreign drivers from COVID vaccination mandate

Sen. Rick Scott (R-Florida) and Rep. Carlos Gimenez (R-Florida) have introduced identical bills (S. 3701, H.R. 6809) that would exempt commercial truck drivers from Canada or Mexico who are seeking to temporarily enter the United States for business through a land port of entry from any COVID–19 vaccination requirement. The Department of Homeland Security in January imposed such a requirement. For more information, visit and


Advocacy and Comment

The Administration’s regulatory and legislative agenda is becoming clearer. Issues affecting the motor carrier industry and the customers they serve have been identified. The two most important issues are the reintroduction of SMS methodology and the future of the owner-operator independent contractor model.

1. SMS methodology and its systemic flaws have been clearly identified and rejected as fit for use in the FAST Act and subsequent decisions by the National Academies of Science and by the DOT itself. Yet it still has its supporters. The systemic flaws have not been rectified nor has the unmodified methodology been shown to be fair to the hundreds of thousands of small carriers who lack sufficient data to even be measured.

As opponents of SMS we must reboot our combined efforts to challenge the Agency's effort to revive the use of this flawed safety measurement system in a soon to be filed notice of new rulemaking. A fairer and more effective auditing procedure patterned after the successful new carrier audit should be proposed. Stakeholders must ensure any proposed use of SMS does not further exacerbate nuclear judgments and higher insurance costs for small carriers. This is particularly important in view of the increasingly large numbers of skilled owner operators seeking their own authority as refugees from the prospects of AB5 and efforts to kill the independent contractor model.

2. Competing with the reintroduction of SMS as the most lethal initiative affecting trucking is the concerted effort to reclassify owner operators who have traditionally enjoyed independent contractor status as employees. The California legislation known as AB5 is pending a U.S. Supreme Court decision on whether to consider a pending appeal. Secondly, the Democratic majority in the House supports the PRO Act which would eliminate the independent contractor model at the federal level. Finally, the administrative agenda of the Biden Department of Labor suggests that the owner operator model must be vigorously defended as an important carve-out to any wholesale pro labor reclassification efforts at the Administrative Agency level.

With respect to the defense of the independent contractor model, our ad hoc group of diverse carrier associations, shippers, brokers, and forwarders has presented a united industry front on behalf of retention of the owner operator model based upon past precedent and the importance of the model. The driver shortage only further exacerbates the need for retaining the model.

Two other issues are of increasing importance. First, there is a need for more active federal enforcement of rules of commerce and policing the industry against fraud, double broker scams, identity theft and cargo losses.

Secondly, the number of new entrants has reached over 100,000 per year largely in response to AB5 and threats to the independent contractor model. Yet shipper and broker procurement contracts typically require that small and new carriers assume uninsurable cargo risk, unilateral offset, delayed payments and waiver of all carrier rights and remedies under applicable law. In light of the acute driver shortage there is palpable need for a return to standard terms and conditions which permit maximum competition by all properly licensed, authorized, and insured carriers.

Readers of this newsletter are urged to reply to their organization expressing their views and interest in these issues.

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