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April 29 2019

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April 29 2019 | The Journal of Commerce 31 www.joc.com Land Lines Lawrence J. Gross AFTER EXPERIENCING THE disruption caused by the electronic logging device (ELD) mandate in 2018, US shippers and truckers could be for- given if they'relooking for a respite from regulatory changes. The trucking industry has suc- cessfully worked through the pro- ductivity 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 pending developments that could have a major impact on domestic capacity. The first of these is the implemen- tation of the National Drug and Alco- hol Driver Database, currently slated for January 2020. Nobody wants to see a drug user behind the wheel of an 80,000-pound juggernaut barreling down the road at 60 mph, of course. 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 have the inescapable side effect of reducing the eligible driver pool even further by making it more difficult for carri- ers to find and hire qualified drivers. Because insurance companies cov- ering truck carriers won't allow the hiring of drivers with a drug history, these drivers essentially will 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 chal- lenging than it is today. Given the lack of available infor- mation, however, gauging the extent to which the database might affect capacity involves more than a little guesswork. The impact likely will be less than that of the ELD implemen- tation, but by no means negligible. Broadly speaking, driver pay will rise and the industry's ability to add capacity will fall. And further changes may be in store. The only drug testing regimen currently accepted by the federal government is the conventional urine test. This procedure only measures recent drug use, making it relatively easy to game, even with- out the help of the Russian Olympic Federation. Although not yet accepted by the government, hair follicle test- ing 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 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 to meet rigid HOS regula- tions 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 recently embarked on an accelerated revamp of certain aspects of the HOS regulations. Although specifics have yet to be disclosed, US Secretary of Transportation Elaine Chao told the Mid-America Truck Show (MATS) in late March that 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 administra- tion's general regulatory stance, it appears likely that any Department of Transportation proposal provid- ing 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 ultimately shake out in terms of capacity is unknown. But it behooves all in- terested parties to keep a sharp eye on Washington for these and any additional regulatory reforms. JOC Lawrence J. Gross is president of Gross Transportation Consulting. Contact him at lgross@intermodalindepth.com and follow him on Twitter @intermodalist. Walking a capacity tightrope Hiring carriers have been unable to identify which drivers have received infractions or failed drug tests while employed by another operator.

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