So What Are My New Liabilities With The Hours of Service Regulation?

Legal Defense and Other Hot Button Issues for the Trucking Industry

Well, by now we are pretty much well versed on the long battle over the new Hours of Service regulation and the fact that it has been implemented and binds us going forward. So what are we going to do about it and what can we expect? Much has been said about the reg lately and, frankly, I don’t think the conflict has ended. But until then…I wanted to provide my own take and throw some thoughts out there to be considered.

How Did We Get Here?

FMCSA proposed a Final Rule changing the Hours of Service regulation on December 27, 2011. After much fighting, the reg became effective on July 1, 2013. Initially, FMCSA pushed to cut the maximum driving time from 11 to 10 hours, but eventually backed off when it couldn’t come up with the data to support a benefit. However, FMCSA did continue to push for a modified 34 hour restart (to be used only once every 168 hours and include 2 periods of 1 a.m. and 5 a.m.), and for a 30 minute break to be taken within an 8 hour driving time.

As early as December 2011, before the Final Rule was published, the industry has been warning everyone that will listen of the costly effects that the new reg could have on companies and the economy. One trucking company told Congress back then that the reg would cut revenues by 17%, while a shipper stated that it would end up paying 3% more for shipping, which ultimately would be passed on to customers (i.e. Joe Public). However, FMCSA continued to tout that the new reg would cut fatigue-related crashes by requiring drivers to get more rest than they did under the previous reg.

Fast forward slightly to June of 2013 when Steve Williams, CEO of Maverick USA, told Congress that the motivation of FMCSA to change the reg was not based on sound evidence. Or as one Congressional representative put it, “it’s a solution in search of a problem.” Williams pointed out that the reg could result in a 1.5-4% reduction in productivity, or in dollars, between $500 million to $1.4 billion lost.

Williams’ testimony before Congress was not just a talking head either. Just before the testimony, ATRI released a study showing FMCSA “greatly overestimates the benefits…[while] ignoring the productivity losses that all driver-types will experience under the new HOS rules.” While FMCSA has projected a benefit of $133 million from the restart provision, ATRI estimates a loss between $95-376 million. ATRI attributed the difference to the fact that FMCSA ignores costs related to increased congestion on the roadways and increased restart times for a larger percentage of the driver population (FMCSA data only focuses on the 15% of drivers with the most intense driving schedule as having fatigue-related issues, leaving of course 85% of the drivers without issues to be penalized under the reg). Finally, ATRI predicted that the reg could affect shipper costs, scheduling issues and a driver shortage (there’s those words again!).

And as we all know, on August 2, 2013, a federal appeals court upheld the 34 hour restart and 30 minute break provision. While the FMCSA hailed the victory as recognizing “the sensible data-driven approach that was taken in crafting this important regulation to increase safety and reduce driver fatigue”, I would contend that the Court viewed the win a little differently than FMCSA when it stated “though the FMCSA won the day not on the strengths of its rulemaking prowess but through an artless war of attrition, the controversies of this round are ended.”

So Is That It?

Following the Court of Appeals decision upholding most of the new reg, many felt the “decision has put the issue to bed for now.” But…

As part of MAP-21, Congress directed FMCSA to conduct a field study on the 34 hour restart to back up its supposed lab data on the benefits for fatigue. However, FMCSA is woefully behind schedule on providing that field study and now certain members of Congress are introducing legislation to pull funding for enforcement of the reg without the study. Let’s stay tuned to this.

So What Are We Seeing?

One company recently stated that the new HOS reg. has cut productivity by 2-3% overall, and 6% for its drivers. Drivers are working longer hours in order to make the same money, but more importantly, drivers are more frustrated and stressed trying to abide by the new reg. And as a result, some experienced drivers are just calling it quits.

Other companies are experiencing scheduling difficulties. If a driver runs out of hours on a Wednesday, the truck sits on Thursday and Friday, and most customers don’t ship on Saturday or Sunday. Now companies and drivers are working in a 3 day work week.

And ATRI has backed this up as well. On November 18, 2013, ATRI released a comprehensive survey on the effect of the HOS reg since July finding that 80% of carriers suffered a loss in productivity. Most importantly, for my purposes on liability at least, ATRI found that drivers were actually experiencing HIGHER FATIGUE LEVELS! 82% of drivers surveyed stated that the new reg has had “negative impact on their quality of life, with more than 66% indicating increased levels of fatigue.” (I’m not the sharpest knife in the drawer, but it doesn’t seem to me that the FMCSA got this one right!)

So What’s My Take?

In addition to the lost productivity and cuts to revenues that the new HOS reg creates, I also see some increased liabilities on the roadway. I believe they look something like this:

1. Attacks on driver training. A savvy plaintiff’s attorney will likely go straight to the driver training that was given on the new HOS reg, particularly when a HOS violation exists for that driver, however irrelevant to an accident. Companies need to begin providing detailed training, and testing to determine comprehension, on the new reg. This includes training for dispatchers as well. The last thing you want is a dispatcher sending a driver out mistakenly believing he had remaining hours to drive.

2. Policies and procedures. A favorite of plaintiff’s attorneys is to depose a corporate representative and ask if a driver has adhered to all the company policy and procedures. Plaintiff’s attorneys use this information, and any policy violations, to establish an unsafe company. It is imperative that all company policies reflect the new HOS requirements; otherwise you risk being painted as a rule-breaking company.

3. Fatigue is actually increased. As stated above, one of the biggest repercussions that ATRI identified is increased fatigue since the new reg went into effect. And this is easy to understand when you know what fatigue is and why it happens. Because of difficulty complying with the regs, meeting increased demands and worrying about a loss of pay, drivers are experiencing increased stress. And what is the symptom of long-term stress? You guessed it…fatigue. When you are fatigued, you experience a dulling of your senses, which then increases your inattention to detail. While adequate sleep may have a nominal effect on fatigue, if you don’t address the core problem causing fatigue (i.e. increased stress from horrible regulations), it will never resolve but instead result in chronic fatigue. Rip Van Winkle doesn’t stand a chance in this environment. So it’s a catch 22. You abide by the rules, you risk having the new research like ATRI’s used against you for increased fatigue. Yet you break the rules and, well, you know what happens.

4. Inexperienced drivers. Without opening up the driver shortage debate, to the extent that the new reg is causing some experienced drivers to choose a different profession, or retire, new drivers will have to be found. And the best training program in the world can’t replace miles traveled. I am fearful that the more inexperienced drivers that have to be hired, without the benefit of experienced mentors, could lead to more accidents. I made mistakes as a young attorney, and only time taught me how to avoid some of them. Biggest difference…my mistakes weren’t behind the wheel of 80,000-pound missile!

5. 5 A.M. start times. Because of the restart provision, it naturally lends itself to more trucks being placed on the road around 5 a.m., the start of the most congested time of the day. Drivers may experience increased stress being forced onto the highways at heavily congested times, possibly becoming more accident-prone. Statistics exist for a reason…the more times you do something, the more likely over time that you will begin to see a pattern. Our drivers are very safe in their trucks, but accidents happen. The more trucks and more passenger cars that are forced onto the road during morning hours because of the reg, the more accidents are going to occur. Its just statistics!

6. Increased cargo claims. Shippers have reported that the combination of the new HOS reg and CSA has reduced on-time deliveries by 4-5%. With on-time deliveries negatively effected, its logical to expect that time-sensitive cargo and business delays may increase, resulting in more claims between carriers and shippers.