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Big stick, baby carrots

The spin from Washington that the proposed rule on electronic onboard recorders (EOBRs) would improve safety by targeting the worst offenders and encouraging voluntary adoption of EOBRs is, at best, half true. Focusing on carriers that have proven themselves unreliable in managing their hours-of-service compliance is a great step toward performance-based regulation and enforcement – provided that the Federal Motor Carrier Safety Administration succeeds in its ongoing efforts to become much more efficient in monitoring and auditing safety and compliance.

FMCSA’s plan falls far short, however, in encouraging voluntary adoption of recording devices. The agency offers concessions through performance standards that could allow for cheaper devices, more favorable procedures for establishing safety ratings following compliance reviews and partial relief on supporting documents.

These are welcome measures, but they aren’t quite as attractive as they sound. For example, FMCSA would pull logs randomly in compliance reviews for the purpose of establishing safety ratings. But that would happen only after inspectors conducted their initial assessments the usual way, which involves pulling the logs of problem drivers first. Motor carriers still could face civil penalties and other enforcement for any violations discovered. And relief on supporting documents is limited to items normally required to verify time on-duty and driving. Carriers still would have to maintain supporting documents to verify off-duty and on-duty nondriving activities.

These nitpicks, however, are nothing compared with the proverbial elephant in the room: The productivity hit facing carriers that currently don’t comply with the hours rules. The regulatory impact analysis (RIA) conducted for FMCSA indirectly addresses this issue in the context of discussing a possible mandate on all long-haul carriers. Relying mostly on an analysis conducted for the hours rules adopted in 2003, the RIA estimates the operational costs to long-haul carriers at $477 million a year, mostly from having to hire more drivers. And that’s assuming that EOBRs are effective only in cutting hours violations by 50 percent. If EOBRs forced long-haul carriers to comply fully with the rules, the operational costs would surge to about $882 million, the RIA states.

Whether it’s sound public policy to count as a cost to motor carriers steps they take just to comply with existing laws is a debate for another day. Regardless, motor carriers that mostly don’t comply with hours-of-service regulations aren’t likely to voluntarily make it easier for the feds to catch their violations. And they aren’t likely to improve compliance substantially if they face severe productivity penalties for doing so.

The RIA’s estimates of operational costs, while sizeable, probably understate the true costs. For example, the RIA suggests that the costs incurred in hiring more drivers would be greatly offset by reduced wages for drivers whose incomes dropped due to strict hours compliance.

Really? When a driver’s pay drops, surely he at least thinks about finding other work. So if strict adherence to hours-of-service regulations means fewer miles for drivers, carriers either must raise pay or suffer the consequences of higher turnover and tougher recruiting. The RIA’s notion that carriers would save real money because drivers would earn less and still continue working for them is hogwash.

FMCSA has opened the door to truly meaningful incentives. It has asked for evidence on productivity incentives – such as more driving time, extension of the 14-hour driving window or more flexible sleeper berth regulations – that would not harm safety. The agency apparently is open to an exchange of increased operational flexibility for greater assurance of compliance. Otherwise, few carriers will adopt electronic logs until they are forced to do so.

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