Labour, climate costs loom large for U.S.trucking in 2024

In News7 MinutesBy NZ Trucking magazineJanuary 18, 2024

While election-year politics may gridlock Congress from passing meaningful truck-related legislation in 2024, the potential for a change in administrations could be a catalyst for finalising two regulations that have major cost and operational implications for the industry, reports FreightWaves.

Proposed rules to tighten standards for independent contractors and on carbon emissions from heavy trucks — both of which are undergoing final review at the White House — also fit squarely within the administration’s biggest policy priorities: labour and climate.

“We’re likely to see an already slow and increasingly paralyzed Congress slow further as both parties try to prevent the other from notching significant wins,” P. Sean Garney, co-director at Scopelitis Transportation Consulting, which specialises in trucking regulations and legislation, told FreightWaves.

“Outside of a few must-pass pieces of legislation, I don’t expect much to get done unless an unexpected crisis emerges.

“Of course, the calculus for the administrative agencies tends to be a bit different. Here, the Biden administration will be looking to accelerate its agenda ahead of the election to show constituents it’s delivering on its promises.”

Randy Mullett, a transportation consultant and principal of Mullett Strategies, concurs that regulation — not legislation — will be the driving force behind trucking policy next year.

“I’m not too worried about legislation, because when Congress comes back from their holiday break they’re going to be focused on things like emergency funding for wars and federal budget extensions,” Mullett told FreightWaves. “And remember, the first presidential primary comes at the end of January.

“But the regulatory agencies are going to be smelling blood in the water, because we may have a change in administration, and if so, they’ll need to get any regulations out sooner rather than later,” Mullett said, to give final rules time to take effect before a new administration can attempt to repeal them.

One of the Biden administration’s agenda items, a new proposed rule addressing the distinction between independent contractors and employees, will “make waves when it’s delivered,” Garney said, given that analysis of the proposal shows it would likely tilt the playing field heavily toward employee status.

The policy change would place a heavier burden on trucking companies that rely on independent contractors to show that their drivers are in fact independent workers and not employees, potentially disrupting relationships that have been mutually beneficial to owner-operators and large carriers.

“Just because an owner-operator has a lease with one carrier for an extended period of time does not mean that they can only work for that carrier, or that they are dependent on that carrier for work,” according to the Owner-Operator Independent Drivers Association, in comments filed on the proposed rule. “Each individual case must be examined in its totality.”

It would also boost employment costs for carriers that choose to convert contractors to employee drivers.

Also anticipated to boost trucking costs is the Environmental Protection Agency’s new emission standards for heavy-duty trucks beginning in model year 2027 and extending to 2032. The new standards, which would rely heavily on a switch to electric vehicles, add roughly $15,000 to the cost of a new sleeper cab, according to EPA estimates.

EPA’s proposal went through a public comment period in 2023 and is scheduled for a final rule in March.

FreightWaves says concerns over trucking costs in 2024 follow a year in which two other issues — truck parking and broker transparency — received a significant amount of attention.

Record amounts of federal funding were allocated to address a truck parking shortage that most government officials now consider to be at crisis levels.

Legislation that would set aside $755 million in grants specifically for truck parking is currently pending in the U.S. House and Senate.

While the lack of available truck parking has been a top five “critical issue” identified by the American Transportation Research Institute since 2015, it reached ATRI’s highest ranking this year as the No. 2 concern by the industry, behind the economy.

For small business truckers, the decision by the Federal Motor Carrier Safety Administration to delay action on broker transparency may have been their biggest frustration in 2023. Petitions were filed in May 2020 by OOIDA and the Small Business in Trucking Coalition pushing FMCSA to crack down on alleged price gouging by fraudulent brokers.

From a safety perspective, FreightWaves says the biggest issue affecting trucking likely will not be tied to a specific rulemaking.

“Specifically, the industry is awaiting FMCSA’s final decision on how the CSA [Compliance, Safety, Accountability] Safety Measurement System will be improved,” Garney told FreightWaves.

“As a part of that, expected updates to FMCSA’s DataQ’s system and the Crash Preventability Determination program will have big positive impacts on motor carriers and is part of a wider strategy to improve law enforcement targeting and data quality.”

Other safety-related rulemakings scheduled to roll out in 2024 include speed limiters for heavy trucks, automatic emergency braking and oversight of automated driving systems.

In addition, guidelines on the use of hair to test for drugs, which has been under review at the White House for much of 2023, could finally be published by the U.S. Department of Health and Human Services in 2024.