The Federal Motor Carrier Safety Administration had a busy year. When they weren’t enacting new regulations, they were busy defending these new regulations in courtrooms and hearings. But after all the discussion, practically everything the FMCSA wanted to pass is now legally in effect. What are these new laws? More importantly, how do these laws affect your business?This article is for Premium Members only. Please login below to read the rest of this article.
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FMCSA Regulations Effects on Truck Drivers
The new hours of service regulations dictate that truckers have to take rest breaks during certain times of the day, as well as a weekly restart that comprises the primary sleeping hours of one to five a.m. The law is supposed to cut down on fatal traffic accidents caused by fatigued truck drivers, but may be having the opposite effect. Sixty-six percent of operating truck drivers are reporting more problems with fatigue under the new hours of service regulations. Sixty-seven percent report receiving smaller paychecks.
The FMCSA may have been trying to stop a problem that didn’t exist. Only about 1.4 percent of all fatal accidents involving big trucks were caused by driver fatigue before the law was enacted. Truckers also report a poorer quality of life as a result of the regulations.
FMCSA Regulations Effects on Trucking Companies
The effects of the new hours of service regulations on trucking companies was apparent as soon as the first earnings reports were released following the law going into effect. So far, 80 percent of all trucking companies report decreased productivity, with about half saying they can no longer manage their workloads and maintain profit levels without hiring new drivers.
Trucking companies are already struggling to keep enough qualified drivers on payroll. Stricter insurance regulations combined with tougher medical requirements, a large number of truck drivers reaching retirement age, and a number of other rules and regulations are parking more drivers than truck driving schools and trucking companies can train and put in trucks.
FMCSA Regulations Effects on Freight Brokerage Firms
Aside from the new hours of service regulations, the FMCSA has enacted new regulations governing freight brokerage firms. Unlike the HOS regulations, there is significant evidence that these rules are soundly based on reason and reality. For the past 30 years, brokerage firms have only been required to carry $10,000 in surety bonds, a type of insurance that protects trucking companies from insolvent or disreputable brokers. This has now been increased to a minimum of $75,000 in surety bonds, which costs the brokers about $5,000 to $6,000 per year.
When the regulations took effect on Dec. 1, two months late due to courtroom battles waged by the brokers, the FMCSA immediately revoked 6,500 broker licenses of those which were unable or unwilling to comply. This dropped the number of licensed freight brokers from 21,656 to just over 15,000 overnight. Thousands more are likely to leave the market in the next few months. Trucking companies say this is unlikely to have a significant impact on the industry, as most depend on larger brokerage firms, anyway, which were able to pay.
FMCSA Regulations Effects on Shippers, Businesses
The bottom line of the new regulations will soon hit businesses, as the costs of putting more trucks and truckers on the road to meet demands rise. Trucking companies will be forced to pass on the additional costs associated with reduced productivity to their customers. If the economy continues to recover, driving up demand for freight capacity, this will make the trucker crunch even more evident to the shippers. Businesses can expect to start paying more for shipping as soon as the first quarter of next year.
Do you think the new FMCSA regulations are spot on or way off? Share your thoughts in the comments below. [/show_to]
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