TopChallengesforTrucking

Presentedby:PrasadSharma

GeneralEconomicThemes&TruckFreight

1.Consumerspendingdrivesasignificantamountofdryvan,dedicated,andtemperaturecontrolledtruckloadfreight.2.Housingstartsareimportantforsomeflatbedfleetsanddryvan.

1.Factoryoutputisquitesoft,whichimpactsLTLfleetsandmanyTLsectors(dryvan,tanktruck,flatbed).2.Energyproduction(frackwelldrilling)hashurtmanytanktruckandflatbedcarriers.3.Currentinventorycycleisabigdragonfreightvolumes.

TheGood/OK TheBad

GeneralTruckingThemes

1. Truckfreightvolumesweakenedconsiderablythrough2015and2016YTD.Loadsfortherestofthisyearwillremainunevenbysector.

2. Combinationofmoretrucksandlacklusterdemandsoftenedcapacity.WhiletheindustryaddedsomeOTRcapacity(mainlysmallTLsandLTLs)in2015,tractorcountsremainwellbelowall-timehighs.Somesectorsareaddingtrailerstoboosttrailer-to-tractorratios.Expectcapacitytotightengoinginto2017asvolumesgraduallyimproveandtheELDmandategetscloser.

3. Combinationofpayhikesandoilfieldweaknesshelpedalittleintheshort-termwiththedrivershortage,butthisisnotthelong-termtrend.

4. Fleetscontinuetoseerisingcostsxfuel.Fleetsusedfuelsavingstopaydriversmore,replacetrucksandaddtrailers.

TractorCountChanges

-3.1%

0.7%

-1.4%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

Truckload

2014

2015

2016YTDYOY

Source:ATA’sTruckingActivityReport

Slowing

Includescompanytractorsandindependentcontractors.2016dataisJanuarythroughJune.

TruckDriverAgeDemographics

TruckDriverAgeDemographics

IC Model Under Fire

• U.S.DOLIC-StatusInterpretation(July15,2015)– AdvicememorandumfromtheWage&HourDivisionregardingIC-statusunderFLSA

– Graftedexpansiveviewof“sufferorpermittowork”(definitionofemploy)andfocusoneconomicdependence

– “Insum,mostworkersareemployeesundertheFLSA’s broaddefinitions.”

– Elevatesonefactor(whetherworkisintegralpartofemployer’sbusiness)overcontrolfactor(“the“control”factorshouldnotplayoversizedroleintheanalysis”)

IC Model Under Fire

• DOLJointEmployerStatusInterpretation(Jan.2016)– AdvicememorandumfromtheWage&HourDivisionregardingJointEmployerstatusunderFLSA.

– Identifiesthe“corequestion”injointemploymentdeterminationsas“whethertheemployeeiseconomicallydependentonthepotentialjointemployerwho,viaanarrangementwiththeintermediaryemployer,isbenefittingfromthework.”

– CandidlydescribestheDOL’sintentiontoshiftFLSAliabilityupstreamto“largerandmoreestablished[businesses],withagreaterabilitytoimplementpolicyorsystemicchangestoensurecompliance.”

IC Model Under Fire

• PresidentObama’sLaborDepartmenthasmaderootingoutallegedmisclassificationapriority

• MOUswith30states,includingIowa,toshareinformationandcoordinateenforcement(AL,AK,AR,CA,CO,CT,FL,HI,ID,IL,IA,KY,LA,MD,MA,MN,MO,MT,NH,NM,NY,OR,RI,SD,TX,UT,VT,WA,WI,WY)

• InFY2015,federalWHDinvestigationsledtorecoveryof$74millioninbackwages

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WageandHourClassActions

• ApplyingtobothemployeedriverandICdrivers(whogetreclassified)

• PrimarilyinCaliforniabutspreading;mealandrestbreakviolations,wagestatementviolations,howminimumwageiscalculated

FMCSA RegulatoryAgendaSubject Status CommentsDue ComplianceDate

Entry-leveldrivertraining NPRM N/A(closedApril6)

3yearsfromfinalrule

ElectronicLoggingDevices(“ELDs”)

FinalRule N/A December18,2017;December16,2019(for AOBRreplacement)

CarrierSafetyFitnessDeterminations(“SFD”)

NPRM N/A(closed May23,2016(initial);June23,2016(reply))

90daysfollowingpublicationoffinalrule

DriverCoercion FinalRule N/A January29,2016

SleepApnea ANPRM N/A (closedJuly8,2016)

Unknown

Drug&AlcoholClearinghouse

ExpectedSoon

N/A N/A

FMCSA RegulatoryAgendaSubject Status CommentsDue ComplianceDate

Heavy VehicleSpeedLimiters

ExpectedSoon

N/A N/A

Sanitary FoodTransportation

FinalRule N/A April2017/April2018(forsmallbusinesses)

Greenhouse Gas(Phase2) NPRM N/A (closedOctober1,2015)

Phased instartinginMY2018(fortrailers)andMY2021(fortractors)

SafetyFitnessDeterminations• CurrentSafetyRatingProcess– Three-tierrating:Satisfactory,Conditional,Unsatisfactory

– Assignedfollowingon-site,comprehensivecompliancereview

– Basedonnumberof“acute”and“critical”violationsdiscoveredinsixbroadfactors:generalcompliance,driverfitness,hours-of-service,vehiclemaintenance,hazardousmaterials,andaccidentrate

SafetyFitnessDeterminations(cont’d)

Factor RatingsOverallRating

Unsatisfactory Conditional

0 2orfewer Satisfactory

0 More than2 Conditional

1 2orfewer Conditional

1 Morethan2 Unsatisfactory

2ormore 0ormore Unsatisfactory

SafetyFitnessDeterminations(cont’d)• CurrentSafetyRatingProcess– “Proposed”ratingfollowingreview– Administrativereview• 49C.F.R. 385.15(legalchallenges)• 49C.F.R. 385.17(upgraderequestbasedoncorrectiveactions)

• ProposedSafetyRatingProcess– One-tierrating:Unfit

SafetyFitnessDeterminations(cont’d)• ProposedSafetyRatingProcess– Assignedoneofthreeways:

• Agencyinvestigations• On-roadsafetydata(i.e.,SMS)• Combinationinvestigation/on-roadsafetydata

– FMCSA’s justificationfornewmethodology• Currently,theagencycanonlyinvestigate17,000carriersperyearoutofapprox.525,000;1,000ofwhichresultinproposedUnsatisfactoryratings

• Newmethodologywouldexpandthereachandwouldresultinadditional2,000carriersperyearreceivingproposedUnfitratings

SafetyFitnessDeterminations(cont’d)• ProposedSafetyRatingProcess– MonthlyassessmentofperformanceinthesevenBASICs– 2ormorefailedBASICs inagivenmonthresultsinproposedUnfitrating

– RoadsideBASICfailures• Only5ofthe7BASICs areevaluatedusingroadsidedata:unsafedriving,hours-of-service,driverfitness,vehiclemaintenance,andhazardousmaterials(crashindicatorandcontrolledsubstances/alcoholcomplianceisinvestigationonly)

• InordertofailaBASICusingroadsidedata,acarriermusthaveaminimumof11inspectionswithviolationsinagivenBASICina24-monthperiod

SafetyFitnessDeterminations(cont’d)• ProposedSafetyRatingProcess– RoadsideBASICfailures• FMCSA proposes“absolutefailurestandards”forthe5BASICS;carrierswhoseSMS scoresexceedthestandardsinanyBASICwillfailthatBASIC• “Absolutefailurestandards”vs.interventionthresholds

SafetyFitnessDeterminations(cont’d)• ProposedSafetyRatingProcess– RoadsideBASICfailures

• Absolutefailurestandardswillbesetbyrule(proposalistousestandardthatisequivalenttothe96th (UnsafeDrivingandHOSBASICS)and99th percentile(DriverFitness,VehicleMaintenance,andHMComplianceBASICS)

• BASICmeasure=sumoftime- andseverity-weightedviolationsdividedbytotaltimeweightofvehicleinspections

• SafetyEventGroups(numberofinspectionswithviolations)– FMCSA investigationfailures

• On-siteoroff-siteinvestigations• Asingle“acute”or“critical”violationinanyBASIC=failureofthatBASIC

SafetyFitnessDeterminations(cont’d)• ProposedSafetyRatingProcess– AdministrativeReview• 49C.F.R. 385.15(mustbefiledwithin15daysofproposedUnfitrating)• 49C.F.R. 385.17(newComplianceAgreementrequirements)• Unconsideredinspectiondata

CSAandCarrierSelection

• WhatisCSA?– Aprogramtomeasureandcarrieranddriversafetyperformancebasedoninspectionsandcrashesinorder(theSafetyMeasurementSystemorSMS)inordertoidentifythosemostlikelytogetintocrashes

– Carriersmeasuredin7BASICs (UnsafeDriving,HOS,DriverFitness,ControlledSubstances/Alcohol,VehicleMaintenance,Hazmat,CrashIndicator)withinpeergroups

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CSAandCarrierSelection

• Problemsinclude:– Lackofdata,particularlyonsmallcarrierswhoarethebulkoftheindustry

– Regionalenforcementdisparities– Questionableassignmentofseverityweights– Underreportingofcrashesbystates– Inclusionofnon-preventablecrashes– Increasedexposuretocrashesforcarriersinurbanenvironments

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CSAReform• “Wedidnotfindanymeaningfulstatisticalcorrelation

betweenBASICscoresandactualaccidentincidenceonthebasisofmilesdrivenornumberofpowerunitsinour4,600carrierdataset.”-- WellsFargoreportJul.2012

• ThoughATRI foundapositivestatisticalcorrelationbetweenBASICscoresandcrashesin3ofthepubliclyavailablemeasurementcategories,thisonlyestablishedatrendbasedonhundredsofthousandsofcarriers;tensofthousandshadscorescontrarytothetrend

• Notreliableformakingsafetyjudgmentsonindividualcarriers

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CoercionProhibitedConduct

• Theruleprohibitscoercingadriver tooperateacommercialmotorvehicle(“CMV”)wherethedriverhasobjectedthatsuchoperationwouldrequirethedrivertoviolateregulationsoftheFMCSA,includingtheFederalMotorCarrierSafetyRegulations(“FMCSR”).– Theruleappliestodirectcoercionofthedriver.– Adecisiontowithholdbusinessfromamotorcarrierisnotcoveredbytherule(butcouldbeaviolationifthe“driveristhecarrier”).

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Coercion(cont’d)

• Amongtheregulationsthatthedrivercannotbecoercedintoviolatingare:– Hoursofserviceregulations;– Equipmentinspection,repairandmaintenanceregulations;

– Intermodalroadability regulations;and– Regulationsregardingloadsecurement.

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Coercion(cont’d)

• Broadly.Thedefinitionincludes:– withholdingofbusiness;– withholdingemploymentorworkopportunities;or

– takingorpermittinganyadverseemploymentactionagainstthedriver.

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Coercion(cont’d)

• Thereisnodutytoaskthedriverwhetherornotheorshecancompletetherequestedserviceswithoutrunningafoulofregulations.

• However,forcarriers,thereisadutytoensurecompliancebydriversemployedorleasedtothecarrierwiththeregulations

• Aclaimofcoercionrequiresthedrivertoobjectandtoatleastgenerallyidentifytheregulationthatwouldbeviolated.

Coercion(cont’d)

• Examples(foranintermediary):– Directthreatsagainstthedriver,including:• Refusaltoworkwiththedriverinthefuture;or• threateningtomakeanegativereportaboutthedrivertothedriver’scarrier.

Coercion(cont’d)• Examples(foracarrier):

– firingorlayingoffadriverthathasvoicedanobjection;– decreasingdispatchopportunities,reducingpay,orreducing

hours;– reassigningthedriverinsuchamannerastoimpactpromotion

prospects;– reassignmenttolessfavorableshiftsorroutes;– movingthedrivertothe“bottom”ofthedispatchlistafter

rejectingdispatch(ifthedriverwouldnothaveotherwisemovedtothebottomhadtheloadbeenaccepted);or

– reportingnegativeinformationinanemploymenthistory(thoughFMCSAhasrecognizedthattherewillbesignificantevidentiaryobstaclestomakingacoercioncasetyingthereporttothedriver’srefusaltobecoerced).

Entry-LevelDriverTraining• CurrentRequirements– CDLdriverswithlessthan1yearexperiencemustreceivetraininginfourareas:driverqualification,hours-of-service,driverwellness,whistleblowerprotection

– EvidenceoftrainingmustbekeptinDQ file• ProposedRequirements– ApplicabletothoseapplyingforaCDL,thosereapplyingfollowingdisqualification,andthoseseekingtoupgradetheirCDLoraddendorsements(e.g.,hazmatendorsement,tanktruckendorsement)

– Exceptionsformilitary,farmers,andfirefighters– CoreCurriculum(theory&behind-the-wheel)

Entry-LevelDriverTraining(cont’d)• ProposedRequirements– CoreCurriculum(theory&behind-the-wheel)

• ClassA– minimum30hoursBTW(atleast10onrangeandatleast10onpublicroads)

• ClassB– minimum15hoursBTW(atleast7onpublicroads)

– Rulesfortrainingproviders(i.e.,curriculum,administration,trainerqualifications,assessments,trainingcertificates)

– TrainingprovidersmustbelistedonFMCSA’s TrainingProviderRegistry

ElectronicLoggingDevices• CurrentRules(permissiveuseofAOBR)• RevisedRules(effectiveDec.18,2017)–MandatedELD useforalldriversrequiredtofilloutRODS

– Exemptions• DriverswhocompleteRODSfewerthan8daysinany30-dayperiod• Driveaway-towaway operations• Vehiclesmanufacturedbefore2000

ElectronicLoggingDevices(cont’d)• RevisedRules(cont.)–MinimumELD capabilities• Integralsynchronization• Recordinglocation• Graphgriddisplay• Clocktimedrift• Communicationsmethods• Tamperingresistance• Sensorfailureandediteddata

ElectronicLoggingDevices(cont’d)• RevisedRules(cont.)– SupportingDocuments

• Mustretainupto8supportingdocumentsforevery24-hourperiod

• Docsshouldlistdriver’snameorIDnumber,date,time,andlocation(e.g.,fuelrecords,tollreceipts,GPS,tripsheets,dispatchrecords,payroll)

– Privacy/DriverHarrassment• ELD musthave“mute”function• GPSlocationcapturedduringpersonalconveyancemustbelargerarea

• Driversmustcertifycarrieredits• Driversmusthaveaccesstologsforsix-monthperiod

SleepApnea

• ANPRM inwhichagencyisseekinginformationonprevalenceofthecondition,diagnosticandtreatmentoptions,andcostsandbenefitsthereof

• ScreeningrecommendedbyNTSBandhadbeenrecommendedbyFMCSA’sMedicalReviewBoard

Drug&AlcoholClearinghouse

• ProposalpushedbyCongresstoensureacentraldatabasetoreportresultsofdrugandalcoholtestsforCDLdrivers

• Wouldrequirecarriers,MedicalReviewOfficers,SubstanceAbuseProfessionals,andlabstoreportfailedtests,refusals,andsuccessfulreturn-to-dutytests

Questions?