“The trouble with government regulation of the market is that it prevents capitalist acts between consenting adults.” Robert Nozick
The new HOS rules published recently by the FMCSA, and now in litigation, oddly tinker with the existing rules. This officious meddling changes the HOS rules to require a nap (a 30 minute break, which in reality will take an hour, prior to the completion of 8 hours of driving) concludes that more than one resting reset per week is bad for you (thus restricting the 34 hour restart to one use per week) and ends the night shift for many (by extending the restart to require two consecutive nights of rest). The result is negligible gains for safety and large costs in productivity. Why?
Agencies such as the DOT, FMCSA, EPA, DOL, NLRB, and rules including CSA, EOBR, and HOS, to name a few, are having a dramatic impact on the trucking industry and those whose careers or businesses depend on it. We might wonder, “Why us?” There are a host of competing interest groups who seem to think the trucking industry is not regulated enough. Their banner is “safety” and “saving the planet,” tasks that are never really quite finished, are they?
The liberal political interest groups, led by their beneficiary, President Obama, seem professorial in believing that we must be told what to do or that we will be irresponsible. Although, they do believe they have the answers to every problem on the face of the earth, they are far from classic academics who teach students to be open minded and explore other points of view. These politicians are not open to other points of view. Any way why should they be? If you believe you can “save the planet” you are pretty close to omnipotent anyway…why listen to mere mortals? These politicians are also collecting lots of money from groups who oppose the trucking industry. They work hard to reward their supporters. Since the Democrats lost control of Congress, an alphabet soup of agencies and new regulations has become the battle ground.
Interest groups include unions, environmentalists, railroads, and trial lawyers. Why do these folks want to bother us?
Unions are in the dues collection business. They are interested in increasing dues paying membership, not productivity. Prior to deregulation in 1980 the trucking industry was predominantly union. Carefully circumscribed certificates of “public convenience and necessity” combined with immunity from the antitrust laws, gave trucking companies little leeway or incentive to become more productive. The predominant model of “regular route” authority insured that drivers would often be in one place, enhancing the union’s organizational efforts. Since carriers could get more money by easily raising rates through rate bureaus, it was better business to placate unions and avoid strikes. There was little incentive to engage in a labor dispute.
Since deregulation, trucking evolved from an oligopoly to an uber competitive and fragmented industry. Rates, in real dollars, have fallen each year since 1980. Union membership has fallen to the point they are on the “endangered species” list. We are witnessing the dying gasp of dinosaurs. Unions seek to erode productivity through restrictive Hours of Service regulations, so that drivers are in one place again so they can intimidate them into joining a union and paying dues. In tandem, rules rushing out of the NLRB are rapidly taking away an employee’s right to be free from union harassment and make a free choice in union elections.
An 18 wheeler is an environmentalist’s nightmare. In their “Care Bears” dream world they really don’t like the fossil fuel, the energy source of the trucking industry. They dream of a utopia where everyone is riding bicycles and trains haul all the freight. In their utopia, food is grown organically in everyone’s back yard by vegetarians who shun methane producing livestock. They are very determined and close minded because they are “saving the planet.” They don’t understand that trucks haul 70 per cent of this nation’s freight and rails less than 2 percent. They don’t notice that most retail establishments don’t have train tracks leading to their facilities. The combined revenues of the two largest parcel companies alone exceed the combined revenue of the entire rail industry. The greenies don’t care if the economy collapses from high fuel costs. They think higher truck costs, mandated by the EPA, and skyrocketing fuel costs, caused by a lock down on oil production, are a good thing. And they certainly don’t want to build or repair any more highways. Bicycle paths are so much better for the planet. When saving the earth there is little room for compromise.
Railroads have historically viewed trucking as a competitor and pour over $40 million dollars per year into lobbying efforts to oppose the interests of the trucking industry. They fund the pseudo safety groups who litigate and oppose reasonable Hours of Service and other safety regulations. Rails oppose reasonable hours of service and more liberal size and weight laws that would increase trucking’s productivity. In a knee jerk manner, they battle just about anything else that would benefit trucking.
Why? About half of what is transported by rail is bulk commodities trucking couldn’t haul anyway. The other half is intermodal, which necessarily involves trucks. The answer is found in history. The feud between trucking and rail is a long one. Prior to the invention of the internal combustion engine, rails had a monopoly on the transportation business. The Grainger movement of the 19th century resulted in passage of the Interstate Commerce Act of 1887 to reign in the oppressive railroad monopolies. When trucking entered the business in the 1930’s, the railroad industry pushed hard to have trucking regulated as well. The result was 55 years of stifling economic regulations. Railroads still view trucking companies as competitors. Although, the federal government abandoned economic regulation of trucking in 1980, in recent years, it has enacted more regulation under a safety mantra than the pre 1980 era.
Why are the trial lawyers so interested in what we do? The answer is money. Truck accidents are very lucrative for attorneys. They collect a contingency fee of 35 to 40% of a verdict or settlement. For this reason, ads, billboards and commercials soliciting truck accident cases have proliferated.
There are three things a plaintiff’s lawyer needs for a good lawsuit: (1) negligence, (2) damages, and (3) someone to collect from. A case against a trucking company often lacks the first element but contains the last two. The old saying amongst lawyers is, “If you have the facts, argue the facts, if you don’t have the facts, argue the law.” Plaintiff’s attorneys have become very learned in FCMSA regulations and adept in talking about these, instead of what caused the accident. A new theory of recovery, “negligent hire,” has become recognized in lawsuits against trucking companies and is being rapidly expanded to brokers and shippers. The deep pockets are becoming deeper. “Negligent hire” completely sidesteps the facts of a bad accident to focus on violations of the myriad of increasingly complex regulations. For the plaintiff’s bar, the more regulations, the more red herrings to waive around.
True to its fragmented and competitive nature, efforts to oppose these forces through the American Trucking Association, the Truckload Carrier’s Association and the affiliated state associations are borne by a few in the industry. The majority in the industry complain about the onslaught of laws and regulations, but cheaply ride the coattails of those who fight the fight. It is amazing to me that the railroads can come up with $40 million dollars to oppose trucking while the ATA’s TruckPac, struggles to raise $800,000. Trucking has much more revenue and is much larger than any of the group working against its interests. Whether you are in the trucking business or rely on trucking in your supply chain, you are being affected by what is going on. You can even help without joining as a member. Perhaps you should consider doing your part.
“In war you can only be killed once, but in politics, many times.” Winston Churchill