After experiencing the disruption caused by the electronic logging device (ELD) mandate in 2018, US shippers and truckers could be forgiven if they are looking for a respite from regulatory changes.
The trucking industry has successfully worked through the productivity challenge posed by stricter enforcement of federal hours-of-service (HOS) rules under the ELD mandate, and supply has generally caught up with demand, but there are a handful of other still-pending developments that could have a major impact on domestic capacity.
The first of these developments is the implementation of the National Drug and Alcohol Driver Database, currently slated for January 2020. Of course, nobody wants to see a drug user behind the wheel of an 80,000-pound juggernaut barreling down the road at 60 miles per hour. But under current conditions, carriers can only ascertain via testing whether a driver is currently “clean,” making it difficult to prevent chronic users — especially of drugs that don’t remain in the system for long — from gaining and retaining employment, even after a positive test.
Without a national repository for such information, hiring carriers have been unable to identify which drivers have received infractions or failed drug tests while employed by another operator. But once the National Drug and Alcohol Database is established, this information will become part of a driver’s permanent record, accessible to any prospective employer.
In addition to the obvious safety benefits, the database will also have the inescapable side effect of reducing the eligible driver pool even further by making it more difficult for carriers to find and hire qualified drivers. Because insurance companies covering truck carriers will not allow the hiring of drivers with a drug history, these drivers will essentially become unemployable overnight, which in turn, will have a restrictive effect on fleet capacity. Unlike the ELD mandate, the database won’t affect driver productivity, but existing drivers may be forced out of their trucks, and finding drug-free drivers to replace them will be more challenging than it is today.
Given the lack of available information at present, however, gauging the extent to which the database might affect capacity involves more than a little guesswork. The impact will most likely be less than that of the ELD implementation, but by no means negligible. Broadly speaking, driver pay will go up and the ability of the industry to add capacity will go down.
And further changes may be in store. Currently, the only drug testing regimen accepted by the federal government is the conventional urine test. This procedure only measures recent drug use, making it relatively easy to game, even without the help of the Russian Olympic Federation. Although not yet accepted by the government, hair follicle testing is used by many truckers as a supplement to urine-based drug tests. The hair follicle test measures drug usage over a much longer timeline, making it much more difficult to evade, but concerns remain around the high degree of variability among individuals and across ethnic groups. Once these issues are resolved and federal standards are established, recruitment challenges will be amplified.
It’s not all bad news on the capacity horizon, however. In eliminating paper logs and the associated “fudge factors” drivers needed in order to meet rigid HOS regulations under real-world conditions, the ELD mandate has put a bright spotlight on the HOS regulations themselves. As a result, the Federal Motor Carrier Safety Administration (FMCSA) recently embarked on an accelerated revamp of certain aspects of the HOS regulations.
Although the specifics have yet to be disclosed, US Secretary of Transportation Elaine Chao told the Mid-America Truck Show (MATS) in late March her department has sent a notice of proposed rulemaking on HOS changes to the White House Office of Management and Budget (OMB) for review. “At last year’s [MATS] show, you told the department you wanted flexibility in [HOS] regulations. And we listened,” she said. Among the industry’s top priorities is a so-called “split sleeper” amendment, which would permit drivers to take the required rest break in two separate periods, rather than in a single, uninterrupted stretch as is currently required.
Given the Trump administration’s general regulatory stance, it appears quite likely that any Department of Transportation (DOT) proposal providing the industry with additional flexibility and efficiency will be well received by the OMB. If and when such changes are enacted, the net effect will be to restore at least a portion of the productivity that was lost as a result of the ELD mandate. This would create truck capacity at the stroke of a pen, thereby keeping downward pressure on rates.
How these changes will ultimately shake out in terms of capacity is still an unknown. But it behooves all interested parties to keep a sharp eye on Washington for these and any additional regulatory reforms.
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