Fleet owners can expect safety to emerge as a dominant theme in 1999

It's not enough that fleet owners must navigate the constantly changing economic, business, and social currents. Today, they must gird themselves for a host of regulatory and legislative challenges that will go a long way in determining their success for 1999.

From a legislative perspective, the industry will start the year pretty much as it ended -- facing a furious effort to transfer the responsibilities for motor carrier safety to a new agency. Rep. Frank Wolf (R-Va.), who chairs the House Appropriations Subcommittee on Transportation, believes that safety enforcement would be better handled by the National Highway Traffic Safety Administration (NHTSA). Currently, it is housed under the Federal Highway Administration (FHWA), a relationship Wolf deems too cozy for advancing the safety agenda.

As proof, he offers that 200 more people lost their lives in crashes involving heavy trucks in 1997 (the last year for which federal statistics are available). He also notes the number of trucks receiving failing grades during roadside inspections indicates the current enforcement program is not working.

What he doesn't say is that the same government report shows the fatal accident rate for heavy trucks fell to 2.39 per 100 million miles of travel last year -- down slightly from the 2.41 rate posted in 1996, according to the federal government. In addition, the involvement of large trucks in fatal accidents also dropped to a 2.55 rate last year from 2.60 per 100 million miles in 1996. Over the past 11 years, the fatal crash rates have dropped 31% despite a 41% increase in the number of miles driven. At the same time, the number of violations found during roadside inspections continues to plummet.

Wolf's implication that FHWA is not doing a good job of enforcing truck safety "is just plain wrong," groused one trucking leader. As is often the case when discussing truck safety, however, facts give way to emotion. That's a troubling scenario for the nation's fleet owners and any push for productivity enhancements.

Trucking has already dodged a bullet in the last congressional session -- a move by Sen. Harry Reid (D-Nev.) that would have prohibited triples from operating on the nation's highways.

In addition, several Western states are looking for flexibility to increase truck sizes and weights within their own borders. Such relief would allow them to avoid any repeat of last year's rail service failures.

Wolf's reorganization gambit fell victim to the political rush for the doors last fall. However, more important than the defeat itself was how it happened. Said one truck lobbyist, "It took heavy-handed pressure from GOP leaders to stop him. He feels like he was rolled by a concerted trucking agenda. It has all the trappings of an issue that will not go away."

Meanwhile, FHWA Administrator Kenneth Wykle has promised to create a stronger Office of Motor Carriers (OMC). He has already begun to restructure the organization. FHWA is remaking itself. Not only is the agency closing nine regional offices and establishing new resource centers in Atlanta, Baltimore, Chicago, and San Francisco, it is focusing its headquarters on five core business areas: infrastructure; planning and environment; operations; motor carrier and highway safety; and federal highways.

Regardless of that internal restructuring, Wolf already has served notice that he will ask for an investigation of OMC and truck safety by the General Accounting Office.

With the daunting specter that truck safety will emerge as a focal point, trucking was left to wish that the recently adjourned 105th Congress, consumed throughout most of its session by the preoccupation with President Clinton's extracurricular activities, had lived up to its sclerotic reputation.

The Wolf safety crusade aside, all the news coming out of Washington is not bad. This summer saw the passage of the biggest highway spending bill in history (standing eight inches tall and running more than 1,000 pages, the Transportation Efficiency Act of the 21st Century dishes out more than $216 billion in highway and other transportation funding, as well as a grab bag of initiatives that will affect trucking long term.

The new highway bill contains three pilot programs of keen interest to trucking -- the opportunity to reduce random drug-testing rates for companies with effective programs; hiring drivers under 21 years of age; and the Dept. of Labor's efforts to put displaced workers behind the wheel.

In another bit of good news, Congress clarified language contained in the highway bill that would allow trucking companies to obtain a driver's employment record using oral authorization.

Just before it adjourned, Congress cleared its fiscal-year 1999 transportation spending bill. That measure includes a study on a uniform national inspection sticker, funding to improve state data collection on trucking, and an increase in hazardous-materials fees.

Left uncompleted was an effort to expedite the tax deduction for meals to 80%. Currently, there is a phase-in of the deduction that increases 5% a year before it reaches the 80% threshold.

Looking ahead, Congress seems intent on shedding its do-nothing image. Mega-issues such as education, social security, and taxation likely will move to center stage as both parties seek to define themselves in advance of the 2000 Presidential election. For trucking, an increased policy focus means we can expect renewed attention in the areas of safety, productivity, taxes, and emissions.

One area trucking is expected to push for is reform of the alternative minimum tax to reduce penalties for investing in new equipment and reduce compliance costs. The industry is also expected to lobby for relief of federal estate taxes for family-run trucking companies.

Many truck-related initiatives will stem from the so-called alphabet-soup agencies that exercise authority over trucking, including DOT, OSHA, EPA, FCC, and IRS. For a complete update of those initiatives, see the sidebar on pages 35-36.

Heading that list is the long-awaited hours-of-service reform. FHWA has tipped its hand over what reforms could look like. These include:

*.Allowing commercial drivers a total of 14 hours on-duty time, with no distinction between driving and non-driving. The current limit is 10 hours of driving and 15 hours on-duty, followed by at least 8 hours of rest.

*.A limit on driving time between the hours of midnight and 6 a.m. Drivers could be limited to no more than 18 hours per week during these hours.

*.Longer required rest times following weekly work cycles.

A formal notice of proposed rulemaking on changes to hours-of-service rules has been expected "any day" -- for more than a year now.

On the safety front, there are several major initiatives:

*.Safety fitness. FHWA has issued a proposal to develop a new system for rating truck safety. The agency wants to base its ratings more on a carrier's actual performance. Plus, it is exploring whether such ratings could be done by a third party.

*.Out of service. FHWA is exploring the possibility of writing a rule to standardize the roadside inspection criteria.

n Medical exam. FHWA is looking at updating and simplifying the medical examination form used in connection with driver physicals.

Another issue likely to repeat on trucking's radar screen is the effort by OSHA to develop a national ergonomics standard. Congress has twice blocked funding for the development of such rules. But that legislative restriction has been removed, and OSHA has already targeted a September release. Watch this one because the agency has always deemed trucking one of the nation's more hazardous occupations.

The $1-billion settlement reached with the diesel engine industry has Washington and industry pundits looking for the nuances and political meaning in the nation's largest Clean Air Act enforcement action in history. Phrases such as "the Exxon Valdez of the trucking industry" are already offering clues as to how observers are labeling this landmark event.

The dispute revolves around the six largest diesel engine manufacturers -- Caterpillar Inc., Cummins Engine Co., Detroit Diesel Corp., Mack Trucks, Navistar International Transportation Corp., and Volvo Trucks North America.

The EPA claimed that the engine makers used "deceit devices" to allow the engines to pass emissions standards during low-speed tests but bypass them during highway driving. The manufacturers denied any wrongdoing, claiming that the EPA's standards were always focused on performance in stop-and-go traffic, and that there was tacit approval of these testing procedures by EPA because the government agency didn't question them until 1997.

The engine manufacturers have agreed to pay $83 million in civil fines, spend $110 million on related environmental projects, and $850 million to produce cleaner engines. While this is high compared to past air pollution adjudications, the engine manufacturers won a victory by not having to recall one-million trucks immediately for improvements. Instead, the settlement calls for the engines to be upgraded during their regular 36-month overhaul cycle.

The settlement will undergo a judicial review this month with input from the public. After that, it may face further legal challenges; any changes that may result must be agreed upon by the EPA and the engine makers. Publicly, officials of the engine companies expressed anger and outrage when the agreement was reached but have since toned down their rhetoric.

Indeed, if the settlement unravels and a lengthy court battle ensues, the engine makers will have to go to court each year to re-certify their engines. This is a condition that the engine makers want to avoid. Stephen Homcha, vp-engineering and product planning for Mack Trucks, said at the time of the settlement: "They held a gun to our head by threatening to withhold certification for 1999."

Beyond this, however, the larger political issue of how companies deal with government regulatory agencies still looms. One of the immediate political ramifications of the settlement is that it may have empowered states, especially New York and California, to pursue their own agendas with greater vigor. New York's attorney general said he might sue the EPA to force an engine recall. California's attorney general echoed that statement.

In fact, only a few weeks after the settlement was announced, the California Air Resources Board ruled that light trucks, including pickups, minivans, and sports utility vehicles, must comply with the same emissions regulations as passenger cars starting in 2004. In a last minute addendum, diesel-powered trucks were included in the mandate. Frank O'Donnell, executive director of the Clean Air Trust, said at the time: "They've essentially outlawed the diesel engine in California."

The EPA/engine maker settlement and events in California have also emboldened environmental groups such as the National Resources Defense Council and the Sierra Club, which may file suit against the settlement as well. The Sierra Club believes that the settlement is too lenient and that the Clean Air Act may require an engine recall.

Another implication of the national settlement is that heavy diesel engine manufacturers are being forced to bring in the 2004 lower emissions standards 15 months earlier than they had planned. That has industry people asking if this is a harbinger of their regulatory future. "Are regulatory time frames going to be compressed every time we have an incidence of noncompliance?" asked an engine maker official. "Is this the way we'll be punished?"

Last month's election left the political balance of power pretty much unchanged. With fewer than a dozen incumbent governors, senators, and members of the House going down, there was no mandate for change. In normal times, the election would have been viewed as an endorsement -- however weak -- of more of the same.

But these were not normal times, so pundits of all political stripes are reading more into the results. The reason? Democrats picked up five House seats, the first time since 1934 that the party not in control of the White House failed to pick up seats in an off-year election. That underwhelming GOP performance sent shock waves through the leaders of both parties, culminating in the resignation of House Speaker Newt Gingrich (R-Ga.) The likely outcome is a stronger focus on getting things done.

Look for big policy initiatives such as Social Security, tax cuts, education, agriculture, and trade to move to center stage. And be aware that all players that have oversight and jurisdiction over trucking's congressional agenda won re-election.

Sen. John McCain (R-Ariz.), chairman of the Senate Commerce, Science and Transportation Committee, and Sen. Fritz Hollings (D-S.C.), the ranking minority member, were both re-elected. On the House side, Rep. Bud Shuster (R-Pa.), chairman of the House Transportation and Infrastructure Committee, and Rep. James Oberstar (D-Minn.), the ranking minority member, will be back.

Not all issues confronting trucking fall neatly into the realm of policy advocacy, according to Lana Batts, president of the Truckload Carriers Assn. She sees her role shifting to issues concerning education, training, and operations.

Batts' 1999 plate is filled with finding a solution to the loading and unloading problem. "If we can solve the problem of drivers sitting around waiting to be loaded and unloaded, we can put a dent in the driver retention problem," she says. "Plus, by looking through the right end of the telescope, we can help our members reduce the number of trucks."

Next up is teaming with truck-stop operators to find ways to increase the number of parking spaces to ensure truckers get better rest -- especially in light of the shortage of rest areas.

Under the mantle of the Professional Truck Driver Institute of America (PTDIA), Batts has also taken up the crusade for more effective -- but private -- driver training. PTDIA has led a comprehensive review of the existing curriculum, strengthened and harmonized it, and has begun certifying truck driver schools. Part of the effort is to head off any federal training programs.

Trucking will also continue to seek relief from the Federal Communications Commission's effort to assess operators of toll-free numbers 28.2 cents for each phone call.

[Ed. Note: See pages 35-36 of FLEET OWNER's December 1998 issue to view regulations chart.]