The Federal Aviation Administration (FAA) reauthorization bill that passed in the House in late April 2018 could have serious implications for the trucking industry if it passes the Senate as well.
The so-called “Denham” bill, named after it’s sponsor Representative Jeff Denham, has had mixed reactions from the trucking industry. Some organizations, such as the American Trucking Association (ATA) believes the amendment will help streamline interstate commerce by providing a federal standard for hour-of-service (HOS) rules. But other industry groups believe the amendment will rob truck drivers of needed rest and rightful compensation.
The amendment was originally a part of the FAST ACT passed by congress in December, but this amendment didn’t make the cut, so that’s why it’s been tacked on to the FAA bill.
Here is a breakdown of how the amendment could impact the industry.
The amendment seeks to pre-empt state laws related to rest breaks. It would require all truck drivers to abide by the Department of Transportation (DOT) hours-of-service regulations first.
- The amendment would allow drivers to follow the federal guidelines for taking breaks, which are not as stringent as some states, such as California. California requires a 10-minute rest break for every two-hours worked and a 30-minute meal break every five hours worked. The federal guidelines require drivers to take a 30-minute break every 8 hours, which is now enforced by electronic logging devices (ELDs).
- The amendment also prevents drivers from being paid for the breaks they take (California pays drivers for their breaks).
- Drivers can still take breaks, but they would lose money by doing so.
The ATA wants a unified system that is seamless in order to facilitate interstate commerce. However, drivers’ rights and general wellbeing may be impacted if the amendment passes.
- The amendment would permit drivers to disregard state HOS regulations, which might speed up shipment times.
- However, the amendment could deter drivers from taking needed breaks in the interest of a reduction in compensation, which could lead to an increase in accidents, injuries, property damage and even death due to driver-fatigue.
- The amendment would impact drivers’ wages because trucking companies would no longer be required to meet state wage requirements; they would only have to meet the federal minimum wage of $7.25 per hour.
This amendment could have a serious impact on the trucking industry.
- Drivers may struggle to get better pay, which is especially critical as the truck driver turnover rate is approaching 100 percent.
- Interstate commerce would be streamlined, but drivers may experience ELD implementation issues or become dissatisfied and leave the industry.
- Drivers may not get the rest they need, which could exacerbate the sleep apnea problem in the industry as well as contribute to the high rate of commercial truck crashes.
Shippers may also be impacted. On one hand, the amendment would allow a more streamlined system for interstate commerce, which could allow shippers to get shipments out faster. On the other hand, if the amendment creates more issues for drivers and further increases the turnover rate, it could cause rates to increase. The Denham amendment has yet to pass the Senate, so the impact of the potential bill remains to be seen.
To learn more transportation industry news, trucking coverage and risk management, contact us here.
This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change.transportation news, trucking legislation, trucking regulatory compliance