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American Shipper

Assessing the ATA’s agenda

Infrastructure, safety and driver reforms top trucking association’s legislative wish list.

   Officials at the nation’s largest trucking federation say they are optimistic about advancing some of their top regulatory and legislative priorities this year. Much of the focus is on safety issues, which are important to shippers as well because poorly designed regulations can add costs that are passed onto customers and create inefficiencies that slow delivery of their goods.
   But frustration is mounting at the American Trucking Associations (ATA), as well as among mayors, governors, business groups, transit supporters and others that investment in transportation infrastructure continues to languish.
   Trucks move about 70 percent of all domestic freight tonnage. Last year trucking industry revenues topped $700 billion for the first time.
   Free-flowing traffic and well-repaired roadways are important for businesses to keep costs down and get goods from point A to point B.
   Authorization to fund improvements for the nation’s highways was set to expire at the end of May, but before Memorial Day Congress voted to temporarily extend surface transportation authorization to July 31. 
   House leaders had hoped to extend surface transportation programs through the end of the year, but said they needed more time to reach agreement on offsets in order not to increase the size of the budget. The short-term extensions are being considered because there is no consensus in Congress on how to fund a long-term transportation bill.
   The insolvent Highway Trust Fund actually has sufficient resources to reimburse states for completed projects through the end of July, but will soon require stop-gap funding of about $11 billion from the general treasury to augment user fees collected at the pump and meet funding obligations to states through December. 
   Some states have already begun to hold off on starting new projects because of the funding uncertainty.
   Legislation extending the government’s authority to spend money on surface transportation programs for another eight months was enacted last summer. The measure included an $11 billion transfer from the General Fund paid for by increasing customs duties, moving money from another account and deferring tax-free contributions for corporate pension reserves so the government ends up with more tax money.
   About $40 billion a year is spent from the HTF to help states pay for highway maintenance and new construction.
   Transportation and freight advocates, as well as many lawmakers, are interested in a multiyear surface transportation bill that includes a sustainable source of funding for the HTF. 
   Bailing out the Highway Trust Fund is necessary because demand for construction projects exceeds revenues primarily coming from motor fuel taxes, which are in decline as Americans drive less and use more fuel-efficient cars. The gas and diesel tax is a fixed amount per gallon and hasn’t been raised in 22 years. Inflation has eroded nearly 40 percent of its value, which means money to fund projects doesn’t go as far as it once did. A gallon of regular gas in 1993 cost $1.12 and today costs $3.50, but the gas tax remains the same—18.4 cents. Various proposals to raise the gasoline and diesel taxes do not have enough support in an ideologically divided Congress, with some opposing the idea of increasing the size of government without appropriate offsets and others worried about the financial burden on their constituents. Meanwhile, the Obama administration’s solution for paying for infrastructure upgrades, as outlined in its GROW America Act, is for a one-time windfall of more than $150 billion associated with corporate tax reform that is expected to encourage U.S. companies to bring home untaxed foreign earnings. The Obama bill is for $478 billion over six years. There are several bills in Congress that also would use “repatriated” corporate profits to fund infrastructure, although most experts don’t believe tax reform legislation will go anywhere soon given the current political climate.
   In the last six years, Congress has voted for several short-term extensions for highway authorizations. It has become standard operating procedure on Capitol Hill to deal with transportation with short-term patches—the proverbial kicking of the can down the road—while deferring decisions on long-range legislation that would provide funding certainty to states so they can move ahead with large projects on the drawing board.
   “That can has got a lot of dents, it’s been kicked so many times,” Chris Spear, vice president of legislative affairs for the ATA, said at a press briefing in late April.
   The Senate Environment and Public Works Committee has indicated that it intends to mark up a six-year transportation bill this summer, but it isn’t likely to advance without a plan to come up with new sources of revenue to cover the gap between the HTF and ongoing needs.
   Meanwhile, the House Transportation and Infrastructure Committee is focused on Federal Aviation Administration reauthorization and has little interest in moving a bill until the funding situation is resolved, Joshua Schank, president of the Eno Center for Transportation, a Washington think tank, said.
   The fatal derailment of an Amtrak passenger train on May 12 is shining the spotlight on the state of the aging U.S. transportation infrastructure and the limited federal investment the past 20 years to keep roads, bridges, airports, rail systems, and harbors in a state of good repair, let alone upgrade them to support greater economic activity and global competitiveness.
   There are about 140,000 bridges in the United States that need repair or replacement. About 40 percent of the nation’s highways are in poor condition and need major resurfacing or replacement, according to experts.
   The ATA has long supported raising the gas tax indexed to inflation as the most effective, short-term way to shore up the HTF. Trucks already contribute about half the amount collected each year.
   “Trucks were equipped with cassette players” the last time fuel taxes were increased, Spear lamented.
  The ATA is willing to compromise as long as any alternative provides sustainable, long-term funding, he said.
   Some states, unwilling to wait for greater federal aid as their highways and bridges deteriorate, are increasing their investment levels. Several state legislatures in the past two years have even voted to increase gasoline taxes. The trend has many transportation advocates worried that Congress will simply let the highway program devolve to the states to deal with on their own, rather than collect money from them and redistribute it back to state transportation departments.
   During the last session of Congress, the Transportation Empowerment Act was defeated, but is likely to be presented for a vote again. The TEA would strip away most federal funding for surface transportation projects, forcing states to cover 90 percent of the maintenance and repair.
   “Our ability to compete globally starts with good connectivity of our infrastructure, so to do it state by state” would lead to “a patchwork of highways” because some states have the revenue and administrative capacity to sustain their own infrastructure but many don’t, Spear said. “That is not good for the country. We strongly believe that this is the responsibility of the Congress to solve this problem.”
   Providing an efficient transportation network used to be a bipartisan issue, but has now been overtaken by the ideological divides about the size of government and taxes.
   Many Washington insiders point out that earmarks once helped build support for national spending blueprints because every legislator could point to projects they brought home to their district. But with Republicans having banned the practice of identifying specific appropriations for pet projects it has become more difficult to bridge the ideological divide. Spear said adding rules to make DOT spending decisions more transparent would help blunt some criticism from the right about wasteful spending.
   Congress, he added, should take a cue from states, including ones with conservative bases, that are raising new revenue through higher user fees.
   Defense and transportation, he said, are two of the fundamental responsibilities of the federal government delineated in the Constitution. “I mean, what’s next? Are we going to devolve defense to the states? Are we going to go to Virginia to fight our naval battles? I mean that’s how crazy that idea is. The responsibility lies here…. It is an expectation of voters when they sent them here to take this issue up and deal with it.”
   The ATA is part of a coalition that has been pushing for any reauthorization to include a dedicated fund for freight projects, along with a new revenue source, to help eliminate bottlenecks for goods movement.
   
Safety. The ATA is also working the halls of Congress for new regulations intended to make sure commercial drivers are safely operating on the road and that truck-related accidents continue to decline.
   According to the Federal Motor Carrier Safety Administration, the truck-involved fatality rate per 100,000 vehicle miles traveled has decreased 74 percent since 1975 and in the last decade alone, it has dropped 38 percent. “But continued improvement will require an acknowledgement of the principal causes of truck crashes and appropriate countermeasures,” Tom Kretsinger, president and chief executive officer of American Central Transport, said in written testimony April 29 before the House Transportation and Infrastructure highway and transit subcommittee.
   ATA officials contend, pointing to FMCSA data, that car drivers are at-fault in more than 70 percent of fatal car-truck crashes, including 89 percent of head-on collisions. Kretsinger said that traffic enforcement, which consists of monitoring on-road driver behavior, is four-times more effective at preventing crashes than checking a driver’s duty status paperwork, credentials and vehicle condition, but the FMCSA doesn’t apply inspection resources where they have the most good.
   He said the FMCSA would do better to apply resources where they do the most good and “place heavy emphasis on the role other motorists play” in truck-related accidents.
   The ATA supports electronic logging devices, electronic stability control, and mandatory speed limiters for large trucks to cap speeds at 65 mph, and hair follicle testing for drug use, among several proposals.
   Three years ago, Congress mandated that all trucks have an onboard recorder that automatically authenticates the driver’s identity when starting the vehicle and logs his/her hours of operation behind the wheel to ensure compliance with daily drive-time limits. The electronic logging devices are designed to eliminate the common practice of drivers, who get paid by the mile, falsifying their paper logbooks so they can drive further and make more deliveries. Many large motor carriers already use this kind of electronic timesheet and want the entire industry to use the technology so smaller companies can’t skirt federal hours-of-service rules and gain extra business at their expense. Industry officials expect, however, that truck capacity will shrink a bit if everyone is working an honest day.
   The FMCSA appears on track to publish a final rulemaking by September, according to its latest progress report on rulemakings.
   “ATA has urged FMCSA to explore ways that the agency can actively promote voluntary ELD adoption, in advance of a mandate, through the use of incentives,” Kretsinger testified. “Given the known benefits of ELD use and recognizing that a mandatory adoption deadline is still a few years away, incentives for voluntary adoption are appropriate. Moreover, providing them would help balance some of the enforcement disparities and competitive disadvantages that early adopters currently face.”
   The trucking federation’s top agenda items for making sure drivers are drug-free and sober are a national clearinghouse for drug and alcohol tests and moving to a hair follicle standard. A rulemaking on a federal database has been in the works for several years and appears on track for release later this year, according to the FMCSA. The system is designed to let employers know whether someone had a past positive test for drugs so they can’t easily move to another company if dismissed. Carriers would have to submit pre-employment, random or post-accident tests—as well as refusals to take a test.
   The Department of Transportation has mandated drug and alcohol testing of drivers for about 20 years. But trucking industry officials believe testing hair samples is much more effective than a urine-based test and should be authorized as an approved method. A number of large carriers conduct hair follicle testing, in addition to the urinalysis. ATA members want the flexibility to use hair follicle samples instead because it would reduce the cost of redundant tests. Legislation pending in the House and Senate would provide that option.
   Drivers can skirt urinalysis tests. Drugs can be detected in hair follicles up to 90 days after they are consumed.
   The tests weed out more drivers—no pun intended—and further contribute to tight driver supply, but legitimate motor carriers don’t want the liability of having impaired drivers behind the wheel. 
   Unlike previous iterations, the new legislation gives the Department of Health and Human Services the power to issue a standard certification for hair follicle testing.
   “We feel that this proposal this time around covers pretty much every concern that we’ve seen out there. I think the opportunity to move this legislation and get it done this year is very high,” either as part of a comprehensive transportation bill or as a standalone bill, Spear said. 
   The ATA continues to call on the DOT to require electronic speed limiters on all large trucks and that speeds be capped at 65 mph. The association has recommended the use of speed governors since 2006, but there has been little progress since 2011 when the National Highway Traffic Safety Administration (NHTSA) expressed interest in requiring their installation on newly manufactured vehicles and the FMCSA said it would promulgate a rule to prohibit tampering with the devices. 
   The ATA points out that driving too fast was the primary reason for 18 percent of all fatal crashes where a large truck was deemed at fault, according to federal data. The devices are also useful for controlling fuel burn. Most ATA members install governors on their trucks, although they don’t follow a uniform speed cap. Hunter Transportation, a small drayage company in Mt. Pleasant, S.C., for example, sets the engine-control mechanism at 68 mph. Such a rule would primarily level the playing field for independent truckers who many suspect run well above speed in an effort to attract shippers by moving more freight over longer distances.
   NHTSA is developing a final rule mandating electronic stability control systems on new trucks to reduce rollover and loss-of-control crashes. The systems actively reduce the throttle and apply the brakes to decelerate a vehicle if sensors detect a loss of control. The ATA endorses the rule for large trucks.
   The trucking industry remains concerned about the FMCSA’s system for scoring carriers and drivers on safety measures to identify those that need government intervention. Although the ATA and others support the objectives of the Compliance, Safety, Accountability (CSA) program, they don’t like how it is being applied.
   CSA is based on data from roadside inspections and citations from moving violations by state law enforcement officers. The scores are rolled up into a measurement system that rates carriers versus their peers on seven attributes—such as unsafe driving and hours-of-service compliance—and is supposed to help regulators analyze how well companies are adhering to basic safety standards. It’s a form of risk management to target carriers for compliance reviews because the FMCSA each year can only audit 3 percent of the 550,000 interstate motor carriers in the United States.
   The ATA is urging the FMCSA to remove data from the system on crashes trucking companies and their drivers did not cause. It first complained about the inclusion of all crashes five years ago.
   “It is illogical, and a poor use of scarce enforcement resources, to label carriers as unsafe based on crashes they did not cause,” the association said in comments filed with the agency on March 25. “Merely being struck by another motorist does not make one more likely to strike others,” ATA said, adding that the goal of CSA should be “to identify the predictive value of crashes in the same way the agency does with violations.”
   The FMSCA already removes such crashes from consideration when assigning a company’s official safety rating after an audit, but the ATA complained the data is the publicly accessible database for shippers to see and make judgments on which carriers they are comfortable hiring.
   A bill introduced in the House is designed to make CSA scores more accurate and reliable by including some type of crash accountability or crash-rating system.
   ATA officials said they hope the legislation can be included in a long-term highway bill or through standalone legislation, but if those vehicles aren’t available they will push to attach it to the DOT appropriations bill
   The ATA is also battling to keep the FMCSA from reinstating the 34-hour restart provision under the hours-of-service regulations. The revised regulations that went into effect two years ago included language requiring drivers to take at least 34 consecutive hours off duty—with two nights rest—after reaching their 70-hour weekly driving limit before getting behind the wheel again. The trucking industry argues that there is no scientific data that supports the conclusion that nighttime rest is better. Carriers are hurt because drivers often have to take more than 34 hours off to meet the two-night limit and then return to work on Monday mornings when rush-hour congestion in many areas is at its worst. That means for shuttle runs in the range of 200 to 300 miles, a shipper won’t receive its cargo until Monday afternoon or Tuesday. If the carrier needs to get the shipment there Monday morning it can send the driver on Saturday and book a hotel room, port truckers say.
   The omnibus federal appropriations bill last year suspended the 34-hour restart until the FMCSA completes a study and reports the findings to Congress because the agency failed to do so prior to issuing the rule. ATA officials said they don’t expect the study to be completed until the end of the year at the earliest because the study has to run for five months to collect the data, and then undergo analysis, writing and a review by the DOT inspector general.
   Meanwhile, the Government Accountability Office is evaluating the projections the FMCSA made in its cost-benefit analysis about the potential impact of the restart provision. And the American Transportation Research Institute (ATRI), the ATA’s research arm, is also conducting its own examination about whether the rule improves safety.
   In April, the ATRI issued an analysis of the safety and operational impacts from the 34-hour restart provisions based on GPS tracking of truck movements after July 1, 2013, as well as pre- and post-July 1 federal truck crash data.
   The report identified a shift of truck traffic from nighttime to daytime and a shift of truck traffic away from weekends to more congested weekdays. The crash data analysis showed a statistically significant increase in truck crashes after the July 1, 2013 rule change, which it tied to the increased exposure of trucks to heavy traffic.
   Former FMCSA Administrator Anne Ferro last year admitted the agency didn’t study the implications of putting more trucks on the road during the morning rush hour.
   On May 12, the ATA and other organizations asked the House Appropriations Committee to support a stronger version of the hours-of-service restart study Congress required in December. The letter expressed concern that FMCSA might skew the results of the study to fit its own conclusions. The ATA said Congress should make sure the study is representative of all drivers who use the restart provision and it considers the full impact of putting more trucks on the road during daytime traffic. “Moreover, the provision would prevent insignificant results from being used to justify wide-reaching regulations,” the letter said.
   “We’re optimistic,” Spear said. “I think if they can get the study right, and it’s fair, it’s not rigged in any way, or jaded, that it’s a fair sampling of the industry participants—and we see some progress there, they are moving that sample in the right direction—we feel pretty confident that it’s going to show the results that the restrictions are unwarranted.”
   The ATA is also urging Congress to pass legislation providing incentives to carriers that adopt emerging safety technologies such as in-cab video event records, blind spot warning systems, and lane departure warning systems. It also wants the government to fund further research into such devices to see if they justify mandatory adoption. 
   Kretsinger said another way to bring about safety improvements is for the FMCSA to reward companies that go the extra mile on safety.   
   “The FMCSA could recognize and reward fleets that exceed minimum compliance requirements. The agency could publicly acknowledge those that have invested in voluntary safety technologies. Further, FMCSA could provide some mathematical ‘credit’ in its safety scoring system for these motor carriers. In short, the agency, working in partnership with the industry, could establish criteria for meeting a ‘Gold Standard’ within the industry (e.g., adoption of a minimum number of specific technologies and/or safety initiatives) and reward fleets that meet these criteria,” he said.
   The FMCSA recently solicited comments for a “Beyond Compliance,” or trusted carrier initiative. The idea is similar to Customs and Border Protection’s voluntary trusted trader programs. Under the Customs-Trade Partnership Against Terrorism and the Importer Self-Assessment program, companies that demonstrate they meet minimum security guidelines and have strong internal controls to monitor compliance receive benefits in terms of expedited border clearance and compliance audits.
   
Driver Shortage. The “graying” of the truck driver population continues to pose a threat to the trucking industry. More drivers are retiring (average age in the industry is 56 years) or don’t meet higher qualification standards, but there are fewer people coming into the pipeline. Younger generations aren’t attracted to the difficult lifestyle of over-the-road driving. 
   The motor carrier industry needs to find 96,000 new drivers each year to fill available seats, but only about 66,000 are coming out of driver training schools. 
   There are about 3 million people with commercial drivers’ licenses for interstate transport, according to the FMCSA.
   The ATA estimates that the driver shortage, most acute in the truckload sector, is between 35,000 to 40,000 drivers and getting worse as freight demand and regulatory scrutiny increase. Turnover at large truckload carriers was down one percentage point to 95 percent last year, but driver churn at small fleets was 90 percent—up 11 points from 2013, according to ATA data. The five-point gap between the two turnover rates is the smallest since 1990 and appears to be the result of larger fleets raising pay, offering bonuses and attracting more drivers from smaller fleets to fill seats. 
   Superior Transportation, a Charleston, S.C.-based motor carrier specializing in heavy, oversize and high-value cargo, began advertising on the radio for the first time and was able to hire many good drivers, but they were all veterans from other companies rather than entry-level newcomers, CEO Patrick Barber said last September at the South Carolina International Trade Conference. 
   Bill Carver, vice president of sales at J.B. Hunt Transport, added the company’s truckload division has to manage 153 percent driver turnover every year. The cost to hire a driver is just shy of $4,000, he said, and the company will spend $63 million over a 12-month period to hire 11,000 just to keep pace with demand and drivers who quit. The carrier, which has had to lower its standards for the amount of previous driving experience from 12 to three months, has more than 330 people who spend each day on the phone trying to recruit drivers. The driver churn has made the nation’s third largest for-hire carrier focus more on driver retention by ordering trucks with comfortable, high-tech cabs, raising pay and trying to get drivers home on weekends.
   Meanwhile, the trucking industry is handicapped by the 21-year-old age limit to drive a commercial vehicle, which often turns into a de facto age limit of 25 years because of insurance rules. Trucking executives say high school graduates get a foothold in other industries before they are eligible to drive a truck, which makes it more difficult to recruit them later.
   One solution proposed by the ATA and others is graduated licensing, which would ease young adults into the industry and give them experience to safely operate a big rig in a controlled environment. FMCSA should establish a pilot program to determine how well the tiered approach works, the ATA said.
   Younger people have higher crash rates, but society has deemed it appropriate for 16 and 17 year olds to drive cars and go through a graduated licensing process. ATA officials say the same approach can be applied to trucking with appropriate safeguards.
   “For those who might immediately have a visceral and negative reaction to the idea of younger drivers in a large truck they probably need to understand that every state in this country allows younger drivers to get a CDL to operate in intrastate commerce, with the exception of one,” ATA Executive Vice President David Osiecki said at the press briefing. “So we have 18-year-old and 19-year-old people driving large trucks within large states every day of the week. They can drive across the state of Texas for hundreds of miles, but they can’t go across the border into Oklahoma. Why does that make sense?”
   Spear said the trucking industry needs to do a better job working the Defense Department to raise training standards so those who drive large vehicles in the military services can more easily transfer their credentials to private sector fleets.
   “We have a lot of people exiting the military with skills that are almost equivalent to a CDL, but there is no federal recognition of that,” he said. 
   At the direction of Congress, the FMCSA is moving toward issuing a rule next year that would grant military veterans an exemption from the domicile requirement, allowing states they are stationed in to issue them a CDL.
   In December, the ATA committed the industry to hire 100,000 veterans during the next two years as part of the Hiring Our Heroes campaign, led by the White House and the U.S. Chamber of Commerce. The campaign helps direct veterans to a mentoring program that provides mentors, information about getting started in the trucking industry and a job board. Penske Logistics followed up in mid-May by announcing plans to hire several hundred U.S. military veterans as truck drivers and diesel engine technicians over the next several years. 
   Barber said some insurance companies now realize that if they want to continue insuring trucking companies they are going to have to ease back on their restrictions, or some motor carriers will eventually go under.
   “The underwriters are willing to look at it, but the actuaries are saying absolutely not” to drivers below 25 years of age, he said. “But a lot of that is absolute speculation because there is no pool out there of 21-year-old CDL, over-the-road truck drivers, so how can you tell me that they’re going to be more accident prone if they don’t exist right now? We can look at their numbers in an automobile, work off that and make some basic assumptions, but I maintain that we aren’t going to actually know until we go out there and try it.
   “It’s a big risk. I understand that. But it’s a gamble I’m willing to make because that’s what we’re going to have to do. We have got to get these guys and girls before they go find another job or career and we’re not able to do that if we can’t capture them until they are 25. They’ve gone to cosmetology school, or into plumbing, or heating and air, and they can make good money doing these things,” he said.

This article was published in the July 2015 issue of American Shipper.

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