Regulations

Most Americans know the American Rescue Plan as the $1.9 trillion government act that brought with it an additional $1,400 stimulus check for those who qualified. While the payments were an important part of the act, the American Rescue Plan also included funding for numerous projects and programs aimed to stimulate the economy, including billions of dollars for the transportation industry.

A Huge Payment for Public Transportation

The American Rescue Plan will provide $30.5 billion to the nation’s public transit system. This includes money to support rural transit agencies, transportation services for the elderly and those with disabilities, and transportation on Tribal lands. This money will be dispersed to public transportation operators to assist with operating costs, including payroll and personal protective equipment for essential employees working during the pandemic.

The goal of these payments is for public transportation organizations to improve operations to welcome back riders once the pandemic ends, as opposed to making drastic cuts due to the prolonged lack of travelers. Public transportation ridership dropped up to 65% (July 2019 numbers compared to July 2020), forcing many systems to furlough workers and reduce service. While ridership has increased as stay-at-home and other orders have been lifted, they are still below pre-pandemic levels.

Helping the Airline Industry Recover Job Losses

Air travel dropped around 70% during the first six months of the pandemic, forcing many air carriers to furlough thousands of employees. The Air Transport Action Group believes the pandemic has put up to 46 million jobs in the aviation and tourism sector at risk, about half of the total global workforce in this sector. While this number may be a worst-case scenario, airlines have and continue to be hit hard during the pandemic.

The American Rescue Plan contains $15 billion to provide payroll support for airlines to avoid furloughs and other staff cuts. To ensure airports can continue to function, the plan also outlined $8 billion to cover costs of operations, personnel, and cleaning. This includes set-aside rent relief and other costs for airport workers and businesses. The plan also includes $3 billion to establish an Aviation Manufacturing Payroll Support Program to protect aviation manufacturing jobs.

Amtrak Gets a Needed Boost

Just like public transportation and airlines, Amtrak was also hit hard. It was reported in November 2020 that the rail service had seen ridership drop 80 percent from year to year. The American Recovery Plan includes $1.7 billion for Amtrak to recall employees furloughed during COVID and restore daily long-distance service. The money will also help states cover revenue lost in state-supported routes.

Amtrak, which typically runs at a deficit, forced major budget shortfalls this year and discussed making significant cuts to its workforce several times.

Only the Starting Point?

While these investments will surely help the transportation industry, President Joe Biden continues to work with lawmakers on an infrastructure package that could spend another $2 trillion that will impact the transportation industry in many ways.

Some key provisions of the plan, which would either need congressional support or be included in the next budget reconciliation process, calls for $174 billion for electronic vehicles, $115 billion for roads and bridges, $20 billion to improve road safety, $85 billion for public transit, $80 billion for railways, and $25 billion for airports.

While the plan is still in the early stages and much could still change, the Biden administration has made infrastructure spending a top priority. Transportation Secretary Pete Buttigieg says the goal of this program would be to create jobs in these sectors, along with improving daily life.

“President Biden’s plan is the most visionary proposal for the nation’s transportation network since the dawn of the Interstate Highway System,” said Janette Sadik-Khan, chair of the National Association of City Transportation Officials.

A lot can still change before the infrastructure proposal becomes real. If approved, it would disperse spending over the next eight years to boost transportation-related industries. The American Rescue Plan and the Biden administration’s infrastructure proposal aim to help the nation’s transportation industry recover from the pandemic and set itself up for a lucrative future.

In early February, Democrats in both the House and Senate reintroduced the Protecting the Right to Organize (PRO) Act, an ambitious pro-employee and pro-union bill that could dramatically impact the trucking industry.

In what has been called the most “significant [piece of] labor reform” in the United States since the end of World War II, the PRO Act would, among other provisions, increase the number and size of fines against organizations that violate workers’ rights, give employees more power to strike, weaken right-to-work laws, and offer independent contractors increased protections.

The PRO Act passed the House in 2020 but did not receive a vote in the Senate. While this year’s version is expected to again find success in the House, it is unlikely to get the 60 votes needed to acquire a vote in the Senate. Even though it may not immediately become law in its current form, the PRO Act illustrates the Democratic Party’s renewed emphasis on labor issues.

What Impact Would the PRO Act Have on Truckers?

The Owner-Operator Independent Drivers Association has come out strongly against the PRO Act, arguing that it would force trucking companies to abandon the traditional owner/operator model. The bill, if passed, would implement what is known as the ABC test, which was expanded and codified in California under state law AB5.

The test requires all workers be considered employees of a company unless three factors are established:

1. That the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact.
2. That the worker performs work that is outside the usual course of the hiring entity’s business.
3. That the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

At odds for owner/operators is section B as they perform the same service as the companies hiring them. OOIDA argues that this broad classification has been created to determine if independent contractors should be classified as employees for the sake of unionization. This law could make it so trucking companies could not hire owner/operators at all.

Looking for a Safe Middle Ground

The trucking industry has fought back against California’s bill, similar state bills in places like New Jersey, New York, Washington State, as well as federal action. Advocacy groups argue that the ABC test unfairly classifies owner/operators who exist in a more nebulous middle ground. While these laws primarily focus on gig economy workers, looking to provide additional workplace rights for independent contractors at companies like Uber and Lyft, they would also impact truckers who operate under a completely different business model.

The California Trucking Association has brought temporary relief, winning an injunction in U.S. District Court in January of 2020—just days after AB5 was enacted—to momentarily stop enforcement of the new California law. The CTA argues that the Federal Aviation Administration Authorization Act prohibits states from passing laws “related to price, route, or service of any motor carrier” and would preempt all state laws.

The organization also argues that the California test would impose a significant burden on interstate commerce as an owner/operator theoretically would not be able to drive through California under this ruling, or any other states that pass similar legislation. This would be in addition to other challenges recently put on truckers and the trucking industry.

What is the Current State of Things?

The injunction has put a momentary hold on the law’s enforcement and is awaiting an appeal in the federal 9th Circuit Court of Appeals. While federal passage of the PRO Act still appears a long shot, these state laws, and in particular the CTA’s appeal, will provide insight into how the legal system views the owner/operator system and how it fits into larger labor disputes.

Numerous groups, including the U.S. Chamber of Commerce, the International Foodservice Distributors Association, and Teamsters General have voiced opposition as well. While not mentioning truckers specifically, these organizations argue the PRO Act could hurt job growth, limit self-employment, and serves and overly empowers unions that do not work in the best interest of workers.

It’s looking like 2021 could be a year of significant change for the trucking industry. New presidential leadership, advancements in technology, and a shortage of drivers create a unique landscape conducive to exciting industry updates. The start of these changes began in early January, when the Federal Motor Carrier Safety Administration launched a pilot program to study the impact of new updates to long-haul driver resting hour requirements. Not sure what this means for you as an owner/operator? Find out below.

What is a Sleeper Berth?

For drivers who are new to the industry, “sleeper berth” refers to the amount of time a driver must be off-duty or not driving within a specific work period. Simply put, sleeper berths are the mandatory daily rest periods for long-haul drivers. Currently, truckers can drive for 11 consecutive hours during a 14-hour working period. Once drivers have reached their 14-hour working limit, they are required to take a mandatory 10-hour break. To increase flexibility, the Federal Motor Carrier Safety Administration (FMCSA) allows drivers to break up their sleeper berths into two parts, providing drivers with various options for scheduling their required rest breaks:

• 10-Hour Sleeper Berth: Following 14 consecutive hours working, drivers must have a 10-hour rest period.
• 8/2 Sleeper Berth Split: Drivers can rest for eight hours during a 14-hour working shift and two additional hours at the end of the shift for a cumulative total of 10 resting hours. 
• 7/3 Sleeper Berth Split: Drivers can rest for seven hours during a 14-hour working shift and three additional hours at the end of the shift for a cumulative total of 10 resting hours. 

The added flexibility gives drivers the ability to better plan and schedule their time on the road to meet their individual needs. 

Proposed Changes to Rest Requirements

The FMCSA recently proposed a pilot program to study the impact of new sleeper berth scheduling. The proposal will allow drivers to split their resting periods up, requiring both rest periods to be a minimum of four hours long. This means drivers will have the ability to break their resting hours up into either 6/4 or 5/5 split segments. Former Deputy Administrator of the FMCSA Wiley Deck stated the proposed pilot program is designed “to explore ways to provide flexibility for drivers while maintaining safety on our roadways.” 

Not everyone is on board with the proposed changes, though. The Advocates for Highway and Auto Safety expressed concern that reducing the mandatory number of consecutive rest hours would lead to increased driver fatigue. Cathy Chase, president of the advocacy group, asserted the pilot program is a “continuous effort to cripple minimal safety measures [and] is antithetical to FMCSA’s mission of implementing countermeasures that will reduce truck crashes and fatalities.” The FMCSA disputes this idea, citing research that suggests “the total amount of sleep in a 24-hour period is more important than accumulating sleep in just one period for mitigating fatigue.”

Benefits of Breaking Up Rest Periods

While the industry may be divided on split sleeper berths, the ability for long-haul truckers to break up their mandatory resting period provides many benefits. Drivers can avoid wasting valuable driving time and paid working hours by using a sleeper berth break during long delays at shipping and receiving locations. During inclement weather, long-haul drivers can pull into a safe location and use part of their rest period to wait for safer driving conditions. Drivers can also use the split to circumvent peak traffic hours, avoiding sitting in traffic or creating traffic in already congested areas. 

One of the most beneficial aspects of the proposed sleeper berth split is drivers can use the splits to plan out safer routes. For example, if a driver’s receiving destination is 10 hours away but a preferred rest stop is six hours into their route, they can plan their journey using one of their sleeper berths to stop at their preferred location. Under existing regulations, the driver would have to either stop eight hours into their route in an unfamiliar location or push through the fatigue for two more hours to reach their destination. 

Changes in sleeper berth schedules are certain to have an impact on the trucking industry. Although the long-term effects of splitting mandatory rest periods have yet to be fully studied, proponents of the FMCSA pilot program believe the increased flexibility and control over driving schedules can be incredibly beneficial for long-haul drivers. Make sure to check back here for updates on the results of the pilot program and the future expectations of sleeper berth regulations.

The start of 2021 comes with a new presidential administration in the United States as President-elect Joe Biden takes over as commander-in-chief on January 20. A change in national leadership is certain to have an impact on businesses and industries across the country; many wait with bated breath to see what changes the new administration ushers in. 

The trucking industry is no different. After a year of pandemic-induced economic recession, some owners/operators are hopeful new leadership will return the economy back to pre-pandemic levels while others are wary of how their day-to-day lives will differ with a new president. At the moment, there are three significant issues in the trucking industry that could be affected by a new administration: America’s infrastructure, clean energy, and labor laws.

Rebuilding America’s Infrastructure

The president-elect has made it clear his administration plans to work toward rebuilding America’s infrastructure countrywide, including the roads and bridges that support the economy. According to trucking.org, when the House of Representatives met in 2020 to discuss the Invest in America Act, Bill Sullivan, the Executive Vice President of Advocacy for the American Trucking Associations (ATA) argued that “an injection of real capital into our degraded infrastructure will jumpstart the economy—creating hundreds of thousands of good-paying, private-sector jobs in blue-collar trades—and strengthen its commercial arteries to support long-term growth.” 

Biden and the Democrats’ Senate majority (due to Vice President-elect Kamala Harris’ tie-breaking vote) could push legislation through that would invest billions of dollars into rebuilding our country’s infrastructure. The improved roads would benefit the trucking industry in the long-term, possibly saving billions of dollars; the American Transportation Institute estimates critical bottlenecks caused by poor infrastructure cost the transportation industry more than $74 billion annually. While improving the infrastructure is a great idea, the amount of construction required for the process would inevitably lead to more critical bottlenecks on driving routes—likely for a number of years. 

Pushing Clean Energy

Clean energy has always been a point of contention within the trucking industry. Many drivers want to protect the environment, but legislative proposals to do so typically come at a great financial expense to owner/operators who would have to purchase new “green” trucks. Biden has already stated he plans to “put the United States on an irreversible path to achieve net-zero emissions, economy-wide, by no later than 2050,” which could mean electric vehicles for the transportation industry. 

Going to net-zero emissions could have repercussions for the trucking industry. A major benefit is that electric trucks cost about 20% less in operating expenses compared to diesel trucks. The glaring downside, however, is the upfront costs for an electric truck are sizable. There are currently almost two million semi-trucks on the road today, which means an investment of over $300 billion just to purchase new electric trucks for the entire industry. The transportation industry will want to keep a keen eye on the future of Biden’s clean energy plan. 

Changing Labor Laws

Another major difference to expect with the transition of power from Republicans to Democrats is a change in federal labor laws. The Biden administration is likely to put a pause on a recent Department of Labor rule that clarifies who is classified as an independent contractor and who is classified as an employee. Biden has also voiced plans to raise the minimum wage to $15 an hour. While this may not directly impact the salaries of drivers, it may increase the salary of non-driving employees in the industry, and carriers may reflect the increased expenses on drivers’ rates. 

The Biden administration also strongly supports the adoption of the Protecting the Right to Organize (PRO) Act, which “provisions instituting financial penalties on companies that interfere with workers’ organizing efforts, including firing or otherwise retaliating against workers.” The PRO Act would make it easier for truckers to unionize and bargain collectively. A final labor-related proposal from the Biden administration gives every employee 12 weeks of paid family medical leave mandated by the United States. Providing 12 weeks of paid family medical leave could impact the trucking industries if we see the expenses passed down from carrier companies. 

As the new year begins with a shift in leadership, the United States continues to battle a pandemic and economic uncertainty, both of which have impacted the trucking industry. With President-elect Biden entering the White House, the next four years will likely bring about several notable changes across industries. The trucking industry, specifically, needs to be prepared for how these changes—in infrastructure, clean energy, and labor laws—will reshape the landscape of the transportation industry in both short-term and long-term ways.