HOW TO MANAGE THE “REGULATORY TSUNAMI” A Logistics Management Webcast with John Cutler, NASSTRAC General Counsel, Candace Holowicki, Director of Global Transportation & Logistics, TriMas Corporation, and Chair of NASSTRAC’S Education Committee

Current Regulatory Environment Since 1980, economic regulation has largely been replaced by health, safety, environmental and safety regulation FMCSA is principal regulator of trucking, though PHMSA, OSHA, EPA, law enforcement, CBP, etc., can play roles FMCSA regulation under laws enacted by Congress can be more vigorous or less vigorous, but regulation should never do more harm than good Economic impacts on carriers and shippers seem to carry less weight with regulators than in past years

This Webcast Will Focus on HOS and CSA Other regulatory issues are pending, including driver health issues, independent contractor issues, port drayage, carrier and broker registration, driver pay, and hazmat issues, not to mention regulation of rail, air and water carriers Truck speed limiter and CSA Safety Management System proceedings are due out of FMCSA this year

HOS – Truck Driver Hours of Service Rules Current rules result from 15 years of regulatory and court proceedings, during which safety advocates pushed for more burdensome restrictions Driving time is 11 hours per shift out of 14 hours maximum on- duty time, with a mandatory break, and a 34 hour “restart” between work weeks Restart rules are most problematic. Rules specify two 1am-5am “sleep” periods during the 34 hours. Depending on timing, the 34 hour restart can exceed 50 hours, and force drivers into Monday morning rush hour traffic.

HOS – Truck Driver Hours of Service Rules Trucking industry calculates 3% to 8% productivity loss just from HOS Restricted driving time affected by two other FMCSA initiatives: ELDs, required by Congress, and speed limiters, which FMCSA will call for

Hours of Service Developments Because of adverse impacts, Congress suspended restart rules temporarily for completion of a study of pros and cons FMCSA restart analysis has been criticized as flawed and Congress is being asked to extend relief FMCSA also proposing rules with stiff penalties for shippers and brokers who “coerce” drivers to violate HOS rules Consider contract provisions clarifying that shippers require carrier and driver compliance with safety regulations

CSA – Compliance, Safety & Accountability FMCSA’s goals deserve our support The intent is to reduce truck and bus crashes by using data to identify high-risk carriers Making substandard carriers and drivers shape up or shut down serves the public interest. All of us benefit from safer highways. BASICs scores on DOT website (safer.fmcsa.dot.gov) and “golden triangles” should indicate whether carriers operate safely or have one or more red flags However, FMCSA’s systems for achieving CSA’s worthwhile goals need significant improvement, and cause adverse impacts as currently set up

CSA Shortcomings ATA, GAO, NTSB, DOT’s own Inspector General, and others have identified CSA flaws and called for fixes with little result GAO looked at 750 regulations (which may be part of the problem) and found that FMCSA data do not correlate well with crash risk Carriers are blamed for crashes they could not prevent, and FMCSA seems unable to remedy this obvious unfairness Carriers in lax enforcement regions may appear safer than competing carriers elsewhere which are actually more safe

CSA Issues for Shippers Flawed data may lead shippers to choose less safe carriers when looking to choose safer carriers Flawed data may penalize carriers in other ways CSA data being used in “negligent hiring” lawsuits against brokers and shippers arising out of truck crashes HR 1120, pending in Congress, would reduce exposure to lawsuits if carriers involved in crashes have DOT registration, federally mandated insurance, a safety rating above “Unsatisfactory” and there is no gross negligence

What Can Shippers do to Help? Engage in advocacy on your own, with a group or both. NASSTRAC members recently met with FMCSA and visited Congressional offices Keep in touch on key issues with corporate management, co- workers, representatives in Congress and regulators. Follow news of regulatory developments in the trade press or with associations like NASSTRAC ( Support a new Highway Bill. We need more highway infrastructure investment, and it’s our best hope for other fixes, like HR Monitor carriers and contracts. Compliance is important when contracts are signed or renewed and at other times. Discuss issues with good carriers that serve you well. Corrective action may be under way.