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June 20, 2011 6:00 AM, EDT

Hours-of-Service Rule Change Would Raise Costs, Hurt Safety, Small Fleets Say

By Michele Fuetsch, Staff Reporter

This story appears in the June 20 print edition of Transport Topics.

WASHINGTON — Replacing the current hours-of-service rule with one that cuts driving hours would put more inexperienced truck drivers on the road and pass increased transportation costs onto consumers, four executives who run trucks told a House subcommittee.

“If the proposed rules are finalized, I will need to add more trucks and drivers — and their corresponding expenses — simply to counter the loss in productivity,” said Jim Burg, president of James Burg Trucking Co., a Warren, Mich., carrier that runs 75 trucks.

Burg testified on behalf of American Trucking Associations at the June 14 hearing here held by the House Subcommittee on Investigations, Oversight and Regulations, which is part of the Small Business Committee.

Congress is not directly involved in crafting the HOS rule. The Federal Motor Carrier Safety Administration was given that task when it was created by Congress in 1999.

After the hearing, Burg told Transport Topics he was disappointed that no one from FMCSA, the Department of Transportation or the Commercial Vehicle Safety Alliance was invited to testify.

“This is a very important topic and we should have information on all sides so we can make an educated decision on the final outcome,” Burg said.

“With all due respect to the representatives, they would have gotten more information or more value out of the hearing had they listened to all parties involved,” he said.

Rep. Mike Coffman (R-Colo.), chairman of the subcommittee, said at the start of the hearing that it was intended to gather information on whether the HOS proposal would “harm the ability of small businesses to compete.”

Coffman said he was concerned the proposal could cost the trucking industry an estimated $2.5 billion annually and that FMCSA appeared to be relying on what he called outdated crash statistics.

“How are American small businesses expected to survive in this unstable and costly regulatory environment?” Coffman asked.

FMCSA’s proposal may replace the current 11-hour limit on driving time with a 10-hour limit and reduce on-duty time to 13 hours by requiring drivers to take two 30-minute rest breaks in the current 14-hour duty time.

The new rule also would change the current 34-hour reset time by requiring drivers to take two six-hour rest periods between midnight and 6 a.m.

FMCSA is expected to issue its final rule by Oct. 28. Its proposal was part of a legal settlement in litigation that has gone on for nearly a decade. The agency has published updated HOS rules twice — in 2003 and 2008 — and both efforts have been challenged by labor and other interest groups.

Meanwhile, Burg testified that, for his firm, the proposed rule changes “would trigger the need to increase our retained earnings by between 20% and 25% just to maintain our current level of financial stability.”

“At some point, companies like mine need to pass these costs on to consumers, which — as we know — fuels inflation and reduces global competitiveness,” he said.

As it is, Burg added, the pool of qualified drivers is limited, and new HOS rules would mean hiring new drivers when he already has been forced to raise salaries “to attract and retain qualified” people.

The proposed changes would not reduce fatigue-related truck crashes, Burg testified.

“FMCSA’s own cost-benefit analysis acknowledges that the safety benefits of the proposed rules would not outweigh the economic costs,” he said.

Paul James, president of Rex Oil Co. in Denver, testified that the proposed HOS changes would reduce the standard of living for drivers hauling for independent small-business petroleum transporters who pay by the hour.

“Reducing their maximum daily drive time would also reduce their paychecks,” said James, who testified for the Petroleum Marketers Association of America.

Rusty Rader, co-owner of J.J. Kennedy Inc., a ready-mixed concrete company in Fombell, Pa., represented the National Ready Mixed Concrete Association.

He told the subcommittee members that reducing driving time would put more trucks on the road to deliver the same volume of concrete.

That would mean “more traffic congestion and increasing the use of fossil fuels in direct opposition to the current administration’s policy to reduce the nation’s carbon footprint,” Rader said.

J.D. Morrissette, senior vice president of Interstate Van Line Operations in Springfield, Va., testified that HOS changes would further burden an industry still reeling from the recession and the housing market collapse.

“We already have downsized as an industry in response to the economic troubles we have faced,” said Morrissette, who testified for the American Moving and Storage Association. 

The proposed HOS rule would force the small businesses that make up the industry “to restructure and reduce the efficiency of our business operations,” he said.

If the current HOS rule changes, every moving firm “will need to increase its staffing and fleet size to compensate for the loss of hours,” Morrissette said.

The cost would force many out of business, he added.