5 Trucking Industry Regulations to Begin in the New Year
Estimated reading time: 3 minutes
The new year is right around the corner, and so are several new regulations that will impact truck drivers. The final compliance deadline for the Electronic Logging Mandate (ELD) has already come and gone. As of December 16, all trucks must comply with regulations. No more grandfathering. No exceptions. While many carriers and drivers are probably glad to see ELD compliance in their rearview mirrors, new rules and regulations are already on the horizon for the industry.
Here are five new regulations that will affect trucking companies and capacity in early 2020:
- Drug and Alcohol Clearinghouse
The FMCSA’s new online database identifies commercial truck drivers with drug and alcohol violations in every state, keeping violators from crossing state lines for work to avoid detection. All trucking companies must populate the Drug and Alcohol Clearinghouse database with employee Department of Transportation (DOT) drug and alcohol violations and verify that these drivers completed return-to-duty requirements. Compliance is mandatory by January 6, 2020.
Currently, the FMCSA tracks violations through urine testing, which detects near-term drug and alcohol use, but could allow hair follicle testing to reveal past drug use for three months. Experts believe that the new database and testing requirements could reduce the pool of qualified CDL drivers by as many as 300,000 (FMCSA).
- IMO 2020
Beginning January 1, 2020, the International Maritime Organization (IMO) will reduce allowable sulfur emissions from 3.5 weight percent to 0.5 weight percent, with a goal of reducing overall emissions by 80 percent. The marine sector currently consumes half the world’s oil-based fuels, which means the switch to low-sulfur fuels such as diesel will increase diesel prices around the world.
Fuel is already among the highest operating costs for carriers at a time when total operating costs are the steepest on record. The American Transportation Research Institute calculated that for-hire trucks paid $1.82 per mile in operating costs in 2018. That’s a year-over-year increase of 7.7 percent. An increase in diesel prices will compound this issue for truckload carriers in 2020 (Wood Mackenzie).
- Updated Entry-Level Driver Training Rules
The FMCSA will institute new higher standards for aspiring professional truck drivers starting February 7, 2020. To qualify for a Class A or Class B Commercial Driver’s License, drivers must complete a comprehensive training program comprising 31 course topics and 19 behind-the-wheel skills.
Set at the federal level, these new Entry-Level Driver Training (ELDT) regulations also require training providers to report their behind-the-wheel hours to the Department of Transportation, and to register and self-certify students. To qualify as an instructor, candidates must have at least two years of diving experience, a clean motor vehicle record, and medical certification (Trek Freight).
- New Overtime Rules
The US Department of Labor’s new rule lowers the threshold for workers to qualify for overtime pay by increasing the salary floor, or “standard salary level,” for full-time workers to $35,568 per year. Effective January 1, 2020, anyone who earns less than the new threshold is non-exempt and entitled to overtime pay.
The new rule accommodates for growth in pay rates since 2004 when the last threshold was established. The change could raise costs for carriers with back-office staff, who were previously exempted at $23,660 (U.S. Department of Labor).
- California Assembly Bill No. 5
The new Employees and Independent Contractors bill, or AB5, is intended to protect contract workers from the being exploited and denied employee benefits. Under the new law, which goes into effect January 1, 2020, carriers must use the ABC test to qualify drivers as a contractor and non-employee:
- The hiring entity does not control or direct the worker in performing the work in fact or under the terms of a contract.
- The work performed is outside the usual course of the hiring entity’s business.
- The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
Because most owner-operators can’t satisfy part B, they can no longer work as independent contractors for trucking companies in California, creating a quandary for drivers. Acquiring their own operating authority is typically unrealistic due to cost and risks. Large carriers are hiring more company drivers, but pay rates are unattractive to independent contractors accustomed to high net incomes. And although some trucking companies are offering up to $5,000 for drivers to move to another state, relocating means leaving homes, communities, and family behind (FreightWaves).
Stay Informed with Capstone
Every new year brings new challenges, rules and regulations to the ever-evolving transportation industry. Capstone keeps up with the latest requirements and trends—so you can stay informed, confident and ready to act when the changes come.