Freight tonnage falls, 4 regulations could have positive impact on trucking industry

Freight tonnage fell in February, but four regulations facing the trucking industry should have a positive impact and improve safety.

Trade organization American Trucking Associations’ (ATA) advanced seasonally adjusted For-Hire Truck Tonnage Index fell 0.2% in February after rising 2.5% in January. The index fell to 117.4, from 117.6 in January. However, the index rose 5.4% in February, from the same month in 2018.

“After a strong January, I’m pleasantly surprised that the index didn’t fall much last month,” said ATA Chief Economist Bob Costello. “I continue to expect tonnage to moderate like other indicators, including retail sales, manufacturing activity and housing starts. Additionally, the level of inventories throughout the supply chain has increased, which is a drag on truck freight.”

The most significant regulations that are expected to impact the industry relate to electronic logging devices, hours-of-service reform, a drug and alcohol clearinghouse and hair follicle drug testing, and they are all expected to have a positive impact on the industry and improve safety, analysts said.

In a recent report on a truckload conference, analyst Brad Delco and senior associate Scott Schoenhaus, both of Little Rock-based Stephens Inc., expect three of the regulatory items to remove capacity from existing levels, and the hours-of-service reform is expected to allow for more flexibility of existing capacity.

With regard to electronic logging devices (ELDs), trucks that were allowed to continue to use automatic on-board recording devices after the ELD mandate when into effect Dec. 18, 2017, must convert to an approved ELD by Dec. 16, 2019. Delco and Schoenhaus expect an “incremental impact to capacity,” but the amount is difficult to quantify. The move to ELDs also will make hours-of-service regulations easier to enforce. About 1% of roadside inspections lead to a carrier being placed out of service as a result of not having an ELD or an automatic on-board recording device.

The Federal Motor Carrier Safety Administration looks to use to the data that ELDs record to better adjust existing hours-of-service regulations in order to improve flexibility and safety in the industry, according to Delco and Schoenhaus. Changes that could impact the industry include eliminating the 30-minute rest break after eight consecutive hours of driving and allow drivers to split off-duty time in their sleeper berth instead of having to go off duty in one period. Delco and Schoenhaus expect “a lot of industry push back on the adverse driving condition proposal, given the likely challenges of enforcing an ambiguous regulation similar to a personal conveyance.”

The drug and alcohol clearinghouse might impact capacity similar to how ELDs affected it. “If that’s the case, why aren’t people talking about it more?” Delco and Schoenhaus asked. “Well, we are.” The clearinghouse will be a national database that will include the names of all drivers who operate a commercial vehicle and have failed a drug test, which will restrict drivers from operating a commercial vehicle until they complete remedial steps or rehabilitation.

Existing federal law requires drivers to pass a drug test before operating a commercial vehicle, but some say the test can be “easily manipulated” and only a few carriers use hair follicle testing, Delco and Schoenhaus said. Lowell-based carrier J.B. Hunt Transport Services is one such carrier that uses hair testing along with the traditional urine test. Over the past 10 years that J.B. Hunt has tested hair and urine, more than 4,700 prospective drivers have passed the urine test but not the hair test, according to a recent report by American Transportation Research Institute. The research organization of American Trucking Associations completed the report on the safety impacts of marijuana-impaired driving and noted that the drivers who failed the hair test likely applied to work for other carriers who don’t require such a test.

Hair testing isn’t recognized as an accepted test by the U.S. Department of Transportation because a standard has yet to be set to determine the outcome of the test, accordin tog Delco and Schoenhaus. A timeline has yet to be set for when hair testing will be an accepted test under federal law, but when it becomes effective, it should remove capacity from the industry, especially when combined with the clearinghouse regulation.