Further Regulatory Rollback: Outlook for 3PLs

Chris Burroughs | Transportation Intermediaries Association

On Jan. 30, 2017, President Donald Trump signed Executive Order 13771, “Reducing Regulations and Controlling Regulatory Costs.” As stated in the Executive Order, the purpose is to reconfirm that:

It is the policy of the executive branch to be prudent and financially responsible in the expenditure of funds, from both public and private sources. In addition to the management of the direct expenditure of taxpayer dollars through the budgeting process, it is essential to manage the costs associated with the governmental imposition of private expenditures required to comply with Federal regulations. Toward that end, it is important that for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost be planned allowing regulations be prudently managed and controlled through a budgeting process.

Rocky89/iStock

President Trump’s Executive Order 13771 historically should be compared to other presidential initiatives that have attempted to reform the federal regulatory process, such as President Ronald Reagan’s Executive Order 12291, Federal Regulation, and President Clinton’s EO 12866. Given the party affiliation of White House occupant, the pendulum has swung between concentrating regulatory power within Office of Management and Budget (OMB) and Office of Information and Regulatory Affairs (OIRA), and allowing greater discretion for rulemaking at the federal agencies. What is unique about President Trump’s addition to this tradition is the use of a strict offset rulemaking formula, the layering of new political and bureaucratic controls and the employment of ungarnished rhetoric.

According to the OMB, in 2017, the Trump Administration withdrew 469 proposed regulations. This total is 288 more than President George W. Bush in his first year and 313 more than President Barack Obama in his first year. Several of those proposed rules withdrawn were under the Department of Transportation (DOT). Worth noting, the Trump Administration withdrew proposed rules on amending the Motor Carrier Safety Fitness Determination (SFD) process, implementing a commercial motor vehicle speed limiter, and an advanced notice of proposed rulemaking (ANPRM) to establish criteria and processes for instituting sleep apnea screening requirements for truck operators. TIA fully supported the proposed SFD rulemaking because of the clarity it brought to the 3PL industry by eliminating the current four-tiered safety rating process and replacing with a single “unfit” designation. This was an unfortunate withdrawal, as TIA fought hard and successfully thwarted attempts to delay this rulemaking through the congressional appropriations process.

Federal agencies are taking additional steps to seek public comments on regulations that are burdensome and unnecessary. In October 2017, DOT released a notice that it is in the midst of reviewing its existing regulations and other agency actions to a) evaluate their continued necessity and determine whether they are crafted effectively to solve current problems and b) evaluate whether they burden the development or use of domestically-produced energy resources. Improvement of regulations is a continuous focus of the Department. According to the DOT, “There should be no more regulations than necessary, and those regulations should be straightforward, clear and designed to minimize burdens. Further, DOT regulations and other agency actions should not unnecessarily obstruct, delay, curtail, or otherwise impose significant costs on the sitting, permitting, production, utilization, transmission or delivery of energy resources.”

Generally, each month DOT published a monthly significant rulemaking document, which outlines all the current rulemakings designated as “significant” and provides the general public an overview of the current status of the rulemaking and estimated timeline for completion. Since Executive Order 13771 was signed, these DOT reports are few and far between because of the uncertainty with the process. In order to plan a regulatory process outlook, you have to examine closely the spring and fall regulatory outlook documents published by OMB.

Within the latest 2017 Fall report, there are 19 rulemakings in a variety of stages that are pending action. Here are a few rulemakings of note to 3PLs that are worth flagging:

Broker and Freight Forwarder Financial Responsibility – FMCSA initiates rulemaking action at the request of TIA, pertaining to the implementation of section 32918 of the Moving Ahead for Progress in the 21st Century Act (MAP-21). The Agency is considering eight separate areas:

  1. group surety bonds/trust funds
  2. assets readily available
  3. immediate suspension of broker/freight forwarder operating authority
  4. surety or trust responsibilities in cases of broker/freight forwarder financial failure or insolvency
  5. enforcement authority
  6. entities eligible to provide trust funds for form BMC-85 trust fund filings
  7. form BMC-84 and BMC-85 trust fund revisions, and
  8. household goods (HHG) consumer protection.

Stage: Advanced Notice of Proposed Rulemaking (ANPRM)
 Publication Date: March 2018

Definition of Tank Vehicle Used for Determining the Commercial Driver’s License (CDL) Endorsement Requirement – FMCSA revises its definition of a “tank vehicle” under the CDL standards to clarify which commercial driver’s license (CDL) holders who operate such vehicles are required to obtain a tank vehicle endorsement. The revised definition of a “tank vehicle” includes any commercial motor vehicle that is designed to transport any liquid or gaseous materials within a tank or tanks having an individual rated capacity of more than 119 gallons and an aggregate rated capacity of 1,000 gallons or more that is either permanently or temporarily attached to the vehicle or the chassis. Additionally, tanks manifested as empty or as residue as part of the load does not make the vehicle a “tank vehicle” provided the tanks are actually empty or contain only residue.

Stage: Final Rule

Publication Date: November 2017 (delayed)

Military Licensing and State CDL Reciprocity – This rule would allow certain military drivers to apply for State CDLs without taking and passing the general knowledge test, if they have successfully completed an approved military training program, which would reduce regulatory burdens on these eligible veterans. This rulemaking implements part of section 5401 of the FAST Act.

Stage: Final Rule

Publication Date: March 2018

Entry Level Driver Training – As part of its ongoing regulatory reform efforts, FMCSA proposes to revise its Dec. 8, 2016 final rule establishing minimum entry-level driver training (ELDT) requirements by reducing the Class A theory training requirements for Class B commercial driver’s license (CDL) holders upgrading to a Class A CDL. Consistent with the ELDT final rule, this proposed theory training upgrade curriculum for Class B CDL holders would not have a required minimum number of instruction hours, but the training provider must cover all topics in the curriculum, and driver-trainees must receive an overall minimum score of 80 percent on the theory assessment. This NPRM does not propose any changes to behind-the-wheel training requirements set forth in the ELDT final rule.

Stage: Notice of Proposed Rulemaking (NPRM)

Publication Date: March 2018

Regulations are not the only things currently on the chopping block. Recently DOT has quietly sunset 15 advisory committees that have either “finished their work or had gone dormant.” Two of the boards and commissions that have been sunset, the National Highway Safety Advisory Committee last met in 1985 and the Transit Industry Technology Development Advisory Committee last met in 1991. Other committees shut down included the Advisory Committee on Transportation Equity, the Commercial Driver’s License Task Force, the Commercial Motor Vehicle Safety Regulatory Review Panel, the National Freight Advisory Committee, the Post-Accident Report Working Group, the Safe Routes to School Taskforce, the Advisory Council on Transportation Statistics and the Intelligent Transportation Systems Program Advisory Committee.

Billion Photos/ShutterstockFrom a TIA perspective, the Association is a strong proponent of common-sense regulations that have a positive impact on the 3PL industry and the transportation supply-chain. As previously mentioned, TIA was a strong opponent of the Safety Fitness Determination (SFD) rulemaking and petitioned the Agency to initiate a rulemaking on BMC-85 trust fund providers and their business practices that were outlined in MAP-21 (P.L. 112-141) because five years later, they were never enforced or implemented.

Like other trade associations, TIA is a strong opponent of burdensome regulations that adversely affect the 3PL industry and overextend the authority of the federal government on business practices that should be decided between the parties involved. A further rollback of regulation could have a positive or a negative impact on the 3PL industry depending on the specific regulation and who is necessarily pushing for the regulation and the intended purpose.

The author, Chris Burroughs, is Senior Director of Government Affairs with Transportation Intermediaries Association. He may be reached at burroughs@tianet.org or (703) 299-5705.