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Regulatory and Legislative Update - September 2021

TEANA

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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Automotive

The automotive supply chain already has significant challenges. Don’t let malfunctioning equipment stop the production line. Step on the gas with HotShotTrucking.com’s suite of services that will get you back in the fast lane. With HotShotTrucking.com, companies are devising shipping strategies to swiftly deliver critical parts and equipment — whether it's ground expedite service with sprinter vans, box trucks and 53-foot tractor trailers or air freight and air cargo.

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Every moment a commercial airliner sits on the ground, it costs an airline money. Expedited freight services by HotShotTrucking.com can get you back in the air with prompt delivery of parts and equipment throughout North America. We are equipped with the expertise to navigate the complexities of shipping jet engines and other types of loads, and our network of hot shot drivers has extensive experience transporting aviation assets.

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Construction

One shipping delay can snowball and cause delays throughout your entire project. You need an experienced 3PL provider who understands the construction industry and has the logistical reach to deliver your freight on time, anywhere. That 3PL partner is HotShotTrucking.com. Whether in the air or on the ground via truck and trailer, we can connect companies to expedited freight services for the prompt delivery of parts and equipment throughout North America.

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Mining & Metals

From cranes to chemicals to excavators to conveyor belts, HotShotTrucking.com has the experience and industry know-how required for shipping sensitive, oversized, and hazardous equipment. Third-party hot shot trucking and logistics providers such as HotShotTrucking.com specialize in devising and implementing innovative shipping solutions, ensuring mines can swiftly return to operation. We’ll pick up your shipment, deliver it to the airport and receive it at the other end – providing hand-carried service as necessary or required.

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Every moment a manufacturing facility or factory sits idle costs a company money because of the high costs involved. With many manufacturers building to only just-in-time production rates, any disruption threatens parts and vehicle inventories. This is where the speed and expertise of freight services from HotShotTrucking.com can make a difference throughout the entire manufacturing supply chain. We do all the logistical legwork to find the optimal solution for your job, whether it's an exclusive air charter or expedited ground shipping.

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