Another regulation could put more truckers out of business – Pacific Research Institute

Another regulation could put more truckers out of business

The clock is ticking for trucking companies in the U.S. to comply with a federal mandate requiring drivers to stop logging their hours on the road with paper logs and switch to electronic logging devices (ELD) – and not everyone is happy about the change.
Starting December 18, drivers who are already required to record their time behind the wheel will need to comply with the Federal Motor Carrier Safety Administration (FMCSA) rule, which requires the use of an ELD that records the time, date, location of the vehicle, engine hours, and miles driven. An ELD also records the driver’s unique identification number at certain intervals.
More than 3.5 million commercial truck drivers at more than 500,000 companies across the nation will be affected by the mandate, according to estimates from the FMCSA. Proponents of the rule say the switch to ELDs will make it easier to maintain driver logs, cut paperwork costs, and allow drivers to better manage fatigue, thereby reducing crashes.
While the FMCSA claims that the regulation will save the industry over $1.6 billion annually, many smaller firms are concerned about the compliance costs associated with switching to ELDs. With just weeks remaining before the transition deadline, nearly one million truck drivers have yet to purchase an ELD, according to the consulting firm C.J. Driscoll & Associates.
Reaction to the mandate has been mixed in California, where the trucking industry in 2015 provided 682,560 jobs or 1 out of 20 in the state, according to the California Trucking Association. While many larger and established firms already use ELDs, a number of smaller companies and independent operators argue that the rule will actually increase their compliance costs.
Fernando Santos, fleet manager at Yandell Truckaway in Benicia, told the North Bay Business Journal that for some independent contractors who have been struggling with California’s regulations related to diesel emissions, the mandate might be the final nail in the coffin. He said none of the company’s 55 independent contractors are interested in switching.
“There’s a very good possibility we could lose some. We lost some when the (state) emissions regulations kicked in, and this is not as expensive, but it is another expense,” he told the newspaper. “This might be the last straw.”
According to a survey of trucking companies for Stifel Transportation and Logistics Research Group, 51.4 percent of respondents reported that they lost drivers who did not want to operate under ELDs after switching. 48.6 percent said none of their drivers left. One company with a fleet of 100 trucks reported that they lost 29 drivers after switching to ELDs. “They either quit the day we put it in their truck or within two weeks,” the company said.
Earlier this month, hundreds of truckers participated in a “rolling protest” over the regulation that disrupted traffic on Highway 99 from Sacramento to Fresno. Separate protests were also organized in Sacramento and Washington, D.C. In Bakersfield, where the trucking industry is a major employer, members of the local Punjabi Sikh community participated in a protest on October 3.
Manpreet Kaur, a Kern County-based organizer in the Jakara Movement, a Sikh volunteer organization, believes the mandate will disproportionately affect low-income and minority drivers in California’s Central Valley.
“All additional costs fall on the smallest of drivers and here in Bakersfield that will disproportionately affect communities of color,” Kaur wrote in an op-ed for the Bakersfield Californian. “In Bakersfield, father-son driving companies are especially common amongst Mexican-American and African-American communities and the burgeoning Punjabi Sikh community has entered trucking in a major way on the west side of town. These small businesses have much to lose if the laws are implanted as currently planned.”
Some trucking groups, including the Owner-Operator Independent Drivers Association, are urging the Trump administration to delay the rule. U.S. Representative Brian Babin (R-TX) introduced a bill in July that would delay the mandate by two years.  
“While technology like ELDs have great promise, I didn’t come to Washington to force those ideas on small businesses – and neither did President Trump” Rep. Babin said in a statement following the introduction of the bill. “If trucking companies want to continue implementing and using ELDs, they should go right ahead. But for those who don’t want the burden, expense and uncertainty of putting one of these devices into every truck they own by the end of the year, we can and should offer relief.”
With the December 18 implementation deadline fast approaching, the chances of the mandate being delayed appear to be pretty slim. And even though regulators have established a grace period until April 1, 2018, drivers who don’t comply starting in December could still face fines. The cost for non-compliance? Up to $10,000 for each offense.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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