Everywhere you turn, the industry is talking about the “Capacity Crunch.” The effects of this trucking industry phenomenon will be felt short-term and long-term, as there are many issues that are contributing to the crunch. Below, we review the top 5 that are on the horizon for the next 12 months:

1. CARB – At the end of October, CARB issued a regulatory guidance. It notes that California can now enforce elements of its emissions regulations that require truck and trailer owners to install aerodynamic add-on devices (trailer skirts, for example) and use certain tires (low rolling resistance tires). CARB had only been enforcing the rule for 2010 and earlier model trucks and trailers; however, the EPA has now granted CARB the allowance to enforce the regulations for 2011-2013 year model trucks and 2011 and later trailers. This ruling has various implications for carrier companies and drivers. The OOIDA estimates that carriers will have to spend between $7,52 and $9,325 to comply with this regulation. This is compared to the cost given by CARB of $1,250 per trailer, as they note the fuel savings achieved by the devices will offset most of the cost of compliance. The burden will be put on small fleets who are not based in California to comply with the costly rule or face hefty fines, and/or being unable to operate in the State.

2. Liability Insurance Requirements – This FMCSA rule that aims to raise the minimum amount required for liability insurance for motor carriers has cleared the White House, meaning the Advanced Notice of Proposed Rulemaking is likely to be published in the coming weeks. The public does not yet know what the proposed hike will be, but the FMCSA has been citing a $1.62 million insurance minimum, as accounting for inflation since the $750,000 current minimum was introduced in the 1980s. If this is the ultimate figure, it would represent a more than twofold increase in the coverage amount required at a minimum; and, some groups have called for a higher amount, as much as $4 million. The implications of putting another million on top of an existing $1 million in liability coverage are another $1,000 in annual premiums for a carrier company. In percentage terms, this translates to approximately a 25% increase in the premium rate. Results of the polling on existing coverage amounts for independent owner operators showed that 80% of companies fall above the minimum-required range between $750,001 and $1.5 million. The implications are felt more for new owner-operator businesses. Premiums there are in many cases upward of $10,000 annually for liability — and have been rising. If the same 25 percent increase applied to such business, that’s a  $2,500 increase. Overall industry capacity reductions that could well result from this increase in insurance liability requirements. Many experts have suggested that carrier companies will need to demand higher rates to be in line with the increase to their operating expense.

3. Speed Limiters – This rule will require trucks to use speed governors, though what the limited speed may be isn’t known. Rulemaking is being done in conjunction with the National Highway Traffic Safety Administration and was spurred by petitions from the American Trucking Associations and Roadsafe America, who asked the agency to require speed limiters in trucks with a GVWR of more than 26,000 pounds. “We believe this rule would have a minimal cost, as all heavy trucks already have these devices installed, although some vehicles do not have the limit set,” the DOT report on the subject reads. Depending on limited speed set, the rule may have implications on the amount of miles a driver can travel per hour, and when coupled with Hours of Service Regulations, may affect delivery times. Another possible implication from the ruling is that it puts all trucks on an “even playing field”; drivers who commit to loads by driving over the speed limit in order to make tight delivery times will no longer be able to.

4. Drug and Alcohol Clearing House for ALL CDL drivers – This rule would create a database of drivers who have failed or refused to take a drug or alcohol test. Carriers would be required to both query the database when making hires and upload drug testing information. The Final Rule is expected to be sent to the White House’s Office of Management and Budget in June, and cleared and published in September 2015, according to reports. Implications for the industry include further constraining the capacity issue by reducing the pool of available drivers for hire. There may also be cost implications for carrier companies when it comes to operational time spent uploading drug testing information.

5. FMCSA Safety Fitness Scores – Safety Fitness Determinations will work in conjunction with the agency’s Compliance, Safety, Accountability program, but instead of producing rankings based on relativity, it will give carriers an “absolute” score. It will not use relative comparisons or groupings. FMCSA management asserts that the agency is shooting for a publication date of sometime within the 2015 fiscal year.

We will continue to monitor the progress of all 5 of these issues, and update our partners accordingly. In the meantime, the CCJ and OOIDA’s Landline Magazine both offer great daily updates for all industry stakeholders.

5 Hot Capacity Crunch Topics on the Horizon was last modified: by