[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
DO NOT ENTER: HOW PROPOSED HOURS OF SERVICE TRUCKING RULES ARE A DEAD
END FOR SMALL BUSINESSES
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HEARING
before the
SUBCOMMITTEE ON INVESTIGATIONS, OVERSIGHT AND REGULATIONS
of the
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
HEARING HELD
JUNE 14, 2011
__________
Small Business Committee Document Number 112-020
Available via the GPO Website: http://www.fdsys.gov/house
_____
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67-722 WASHINGTON : 2011
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HOUSE COMMITTEE ON SMALL BUSINESS
SAM GRAVES, Missouri, Chairman
ROSCOE BARTLETT, Maryland
STEVE CHABOT, Ohio
STEVE KING, Iowa
MIKE COFFMAN, Colorado
MICK MULVANEY, South Carolina
SCOTT TIPTON, Colorado
JEFF LANDRY, Louisiana
JAIME HERRERA BEUTLER, Washington
ALLEN WEST, Florida
RENEE ELLMERS, North Carolina
JOE WALSH, Illinois
LOU BARLETTA, Pennsylvania
RICHARD HANNA, New York
NYDIA VELAZQUEZ, New York, Ranking Member
KURT SCHRADER, Oregon
MARK CRITZ, Pennsylvania
JASON ALTMIRE, Pennsylvania
YVETTE CLARKE, New York
JUDY CHU, California
DAVID CICILLINE, Rhode Island
CEDRIC RICHMOND, Louisiana
GARY PETERS, Michigan
BILL OWENS, New York
BILL KEATING, Massachusetts
Lori Salley, Staff Director
Paul Sass, Deputy Staff Director
Barry Pineles, Chief Counsel
Michael Day, Minority Staff Director
C O N T E N T S
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Page
OPENING STATEMENTS
Coffman, Hon. Mike............................................... 1
Altmire, Hon. Jason.............................................. 2
WITNESSES
Mr. Paul James, President, Rex Oil Company, Denver, CO........... 3
Mr. James Burg, President, James Burg Trucking Company, Warren,
MI............................................................. 5
Mr. Rusty Rader, J.J. Kennedy, Inc., Fombell, PA................. 8
Mr. J.D. Morrissette, Senior Vice President, Interstate Van Line
Operations, Springfield, VA.................................... 9
APPENDIX
Prepared Statements:
Mr. Paul James, President, Rex Oil Company, Denver, CO......... 18
Mr. James Burg, President, James Burg Trucking Company, Warren,
MI........................................................... 22
Mr. Rusty Rader, J.J. Kennedy, Inc., Fombell, PA............... 35
Mr. J.D. Morrissette, Senior Vice President, Interstate Van
Line Operations, Springfield, VA............................. 40
Tipton, Hon. Scott............................................. 49
Statements for the Record:
Walden, Hon. Greg.............................................. 50
Mr. Todd Spencer, Executive Vice President, Owner-Operator
Independent Drivers Association.............................. 53
The Expedite Alliance of North America (TEANA), The National
Association of Small Trucking Companies (NASTC) and the Air &
Expedited Motor Carriers Association (AEMCA)................. 60
DO NOT ENTER: HOW PROPOSED HOURS OF SERVICE TRUCKING RULES ARE A DEAD
END FOR SMALL BUSINESSES
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TUESDAY, JUNE 14, 2011
House of Representatives,
Committee on Small Business, Subcommittee on
Investigations, Oversight and Regulations,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:00 a.m., in
room 2360, Rayburn House Office Building. Hon. Mike Coffman
(chairman of the subcommittee) presiding.
Present: Representatives Coffman, Tipton, Hanna, West,
Altmire.
Chairman Coffman. The hearing is now called to order. Good
morning everyone, and thank you for joining us. The hearing
will now come to order.
Thank all of you for joining us today for this hearing on
the Federal Motor Carrier Safety Administration's proposed rule
on Hours of Service and whether it will harm the ability of
small business to compete.
I would like to extend special thanks to our witnesses for
making the trip to the Capitol and taking time out of their
schedules to discuss this issue with us here today, especially
my constituent, Mr. Paul James, who traveled from Colorado to
provide his views on the proposed Hours of Service rule. In
addition to Mr. James, our Subcommittee will hear directly from
other small business owners about how the proposed rule will
harm their industries and the difficulties their firms may face
to deliver goods and remain viable.
As you know, Hours of Service trucking regulations are
issued by the Federal Motor Carrier Safety Administration at
the Department of Transportation and apply to tractor-trailers
that engage in interstate commerce that exceed 10,000 pounds in
weight. These regulations place limits on the amount of time a
commercial truck driver can be on the road, which are meant to
increase safety and reduce fatigue-related accidents.
There has been a significant decline in large truck crashes
since the 2003 Hours of Service rules were implemented. Since
then, according to the Department of Transportation's own data,
there has been a reduction in fatal truck-related crashes by
over 33 percent and a decline of crashes resulting in injury by
40 percent. During this period, the distance traveled by
commercial vehicles increased by some seven billion miles.
Despite these major improvements in driver safety, the FMCSA
has now proposed complicated and cumbersome travel requirements
for drivers meant to increase truck safety by reducing the
daily maximum driving limit, decreasing the maximum on-duty
time limit, requiring mandatory breaks, and changing the
current 34-hour restart provision. The decreased instances of
crashes involving commercial trucks over recent years begs the
question: is this new rule really necessary?
I find it troubling that the Agency relied on outdated
truck-related crash figures to justify the need for such
provisions, relying on pre-2004 crash-related data to inflate
the safety benefits of their proposal rather than using current
accident figures. Even more disturbing is that it is estimated
that there will be a cost of $2.5 billion annually on the
industry if the proposed Hours of Service regulations are
finalized. How are American small businesses expected to
survive in this unstable and costly regulatory environment?
The trucking industry provides all Americans with much
needed consumer products, food, fuel, and other items on a
daily basis that are important in maintaining our national
economy. It is critical that changes to regulations pertaining
to the transportation of these goods be well thought out and
strike the proper balance between the need for safety and a
fast and effective transportation system. The failure of the
Agency to take into account the significant improvements in
driver safety over the last seven years has the potential to
not only cost small businesses billions of dollars, but also
lead to an increase of new and inexperienced drivers on the
road to fill the employment holes created by the proposed rule.
I look forward to hearing from our witnesses on the
possible implications of the new Hours of Service proposal. I
now recognize the ranking member, Congressman Altmire, for his
opening statement. Mr. Altmire.
[The information follows:]
Mr. Altmire. Thank you, Mr. Chairman. This is an example of
where most members in a bipartisan way of this Committee have
exactly the same concerns on this issue. We all recognize that
America's trucking industry has an enormous impact on our
economy.
According to the Bureau of Transportation's statistics,
trucks annually transport nine billion tons of freight valued
at more than $8 trillion. Small business operators are the
overwhelming employers in this industry. Ninety-five percent of
the 76,000 firms nationwide have 40 or fewer trucks. In late
December 2010, the Federal Motor Carrier Safety Administration
issued a proposed rule on Hours of Service for non-passenger
carrying trucks. Proposed changes include reducing maximum
driving time from 11 to 10 hours as we heard, limiting drivers
to one 34-hour restart in a seven-day period requiring periodic
30 minute breaks, and holding drivers to a strict 14-hour
operating window regardless of the nature of their work.
The Federal Motor Carrier Safety Administration has argued
these changes will have minimal impact on the transportation
industry, while increasing highway safety and reducing
casualties. That is what they say. However, to keep up with
current demand, reducing drive time limits to 10 hours will
require significantly more trucks and drivers on the road. This
will force small businesses with scarce capital resources to
hire additional drivers and buy new trucks. It is possible in
today's economy that some small firms would be forced out of
business as a result. Raising the number of trucks would also
cause traffic congestion, higher diesel emissions, and greater
wear and tear on our nation's highway infrastructure.
New on-duty rules will also impact small businesses that
rely on drivers to perform additional tasks, like loading and
unloading cargo after reaching their final designation.
Currently, drivers can perform non-driving work beyond the 14-
hour driving window. The new proposed rule will require drivers
to be released after 14 hours, potentially disrupting delivery
schedules and costing employees pay when non-driving schedules
exceed 14 hours.
In an effort to curb abuse of the 34-hour restart
requirement, the proposal will limit drivers to one restart per
week. This could impact many small firms that are beholden to
weather and other unpredictable schedule changes. These
businesses frequently use down periods for driver resets. The
proposed rule would end this practice and hinder small
businesses during periods when they need their drivers the
most.
Finally, mandating 30-minute breaks every seven hours could
be unduly burdensome for small businesses. Current rules allow
operators flexibility to drive up to 11 hours during the
driving window. The proposed rule will force drivers to stop
after seven hours, regardless of the schedules and customer
demands, eliminating the flexibility that allows many small
businesses to succeed.
Today in this hearing we will examine how proposed Hours of
Service rules will affect small businesses and hear from firms
that will be impacted by these changes. While the goal of Hours
of Service rules is to improve safety, it is imperative that
the new policies take into account economic effects on small
trucking businesses.
In closing, I want to thank Mr. Rader, who is from my
district in Western Pennsylvania, for coming to testify today.
And all of the witnesses. I look forward to hearing his
testimony and the testimonies of the entire panel who have
traveled here to offer their insights on this important topic.
Thank you all, and I look forward to the discussion.
[The information follows:]
STATEMENTS OF PAUL JAMES, PRESIDENT, REX OIL COMPANY; JAMES
BURG, PRESIDENT, JAMES BURG TRUCKING COMPANY; RUSTY RADER, J.J.
KENNEDY, INC.; J.D. MORRISSETTE, PRESIDENT, INTERSTATE VAN
LINES
Chairman Coffman. Thank you, Mr. Altmire.
It is my pleasure to introduce our first witness and my
constituent, Paul James, President of Rex Oil Company. Paul has
over 20 years of experience in the petroleum distribution
businesses and sits on the Conoco Phillips Lubricant Advisory
Council and the Colorado Wyoming Petroleum Marketers
Association Board of Trustees. We appreciate your testimony and
thank you again for coming here today.
Mr. James.
STATEMENT OF PAUL JAMES
Mr. James. Good morning, Chairman Coffman, Ranking Member
Altmire, and members of the Committee. Thank you for the
opportunity to testify before you today on the FMCSA's proposed
changes to the Hours of Service regulations.
My name is Paul James, and I am the President of Rex Oil
Company located in Denver, Colorado.
I am speaking on behalf of PMAA, the Petroleum Marketers
Association of America. I am one of approximately 8,000 small
business petroleum distributors who employ CDL drivers with
HAZMAT endorsements. We transport gasoline, diesel fuel, jet
fuel, kerosene and heating oil to both wholesale and retail
customers. Our drivers engage in short haul, local delivery
service from petroleum terminals to intermediate storage banks,
mainly gas stations and other end-users. Most stay within a
100-mile air radius or closer to home and they return home each
and every day.
I understand that the FMCSA is proposing these changes as a
result of a lawsuit filed by the truck safety advocates who
believe that the current regulations do not adequately address
driver fatigue issues. However, petroleum marketers have
concerns about the proposed changes and we appreciate the
opportunity to speak to you today.
1. PMAA opposes a reduction of the daily maximum driving
hours from 11 to 10.
Any reduction in the maximum daily driving hours would
drive costs up for many small business petroleum transporters.
With fewer hours to drive each day, many companies would be
forced to hire additional, less experienced drivers, or delay
deliveries to the following day. In the petroleum marketing
industry, product prices change daily. Often it is advantageous
from a price point perspective to purchase, pick up, and
deliver petroleum products the very same day. It is not
uncommon for drivers to experience unexpected delays at
petroleum terminals, especially when there is a steep increase
in prices for the following day. As a result, drivers often
need every hour available under the current Hours of Service
regulations to complete their daily runs. The daily reduction
in driving hours would thus decrease overall safety by putting
less experienced drivers on the road. If we are forced to hire
new, additional people, buy more trucks to deliver the exact
same amount of product.
2. PMAA opposes changes to the 34-hour restart period.
The FMCSA proposal would place limits on the 34-hour
restart period required at the end of the driver's work week
before a return to duty is allowed. Specifically, the 34-hour
restart provision would introduce two nightly periods between
the hours of 12 a.m. and 6 a.m. This change would be extremely
detrimental to petroleum transporters. For instance, in my case
we have a small window of operating hours to make certain
deliveries in order to meet local government restrictions like
in Boulder, Colorado. They grant us access within the city
limits only during the proposed time. Rex Oil also schedules
several of our drivers during the specific hours of 12 a.m. and
6 a.m. to meet the demand for deliveries, as well as minimizing
the daily traffic congestion present in most of our cities. We
believe this to be the safest drive time and try to utilize it
the best we can.
Lastly, this provision would affect those who supply
residential heating oil found mainly here on the East Coast.
Many times during the winter heating season, drivers are
required to respond to emergency calls after their shift is
over and often in the middle of the night in order to restart
residential furnaces and deliver additional product. Therefore,
we would request that no specific timeframe be used when
calculating the 34-hour restart period found currently in the
regulations.
3. PMAA opposes the proposed 30-minute driver rest break.
Requiring a 30-minute driver break within the first seven
hours of driving time does not result in any noticeable
reduction of fatigue among short-haul petroleum drivers. Our
drivers are making short, local runs between gas stations,
farms, and other commercial operations to deliver product in
the communities where we live. Which brings me to my last and
final point.
4. PMAA requests that the FMCSA adopt a provision that
would allow time spent by a driver in a parked commercial motor
vehicle to count as off-duty time.
PMAA makes this request because private short-haul drivers
often spend significant periods of time parked in line at
terminals as they wait to load product. When fuel is in high
demand, a driver wait time may last up to three hours. During
these extended times, the commercial motor vehicle is parked
and the driver remains in the cab. The current rules require
drivers to count no driving wait time as on-duty. We
respectfully request that the FMCSA allow up to three hours
waiting in a parked commercial motor vehicle to be counted as
off-duty time when a driver stays within the 100-mile air
radius. The three-hour allowance would be similar to that that
the FMCSA already allows under the oil field exemption. PMAA
believes that this change can be made without reducing fatigue.
In closing, it is essential that the FMCSA take into
consideration the differences between short-haul and long-haul
drivers. Our drivers return home to home base every single
night and fatigue is thus a less significant factor among
short-haul drivers as opposed to the long-haul drivers.
We appreciate the opportunity to submit these written
comments, and I thank you for your time.
[The statement of Mr. James follows on page 18.]
Chairman Coffman. Thank you, Mr. James.
Our next witness is Mr. James Burg, owner of James Burg
Trucking. Mr. Burg grew his business from a one-truck operation
he began at the age of 19 to a fleet of over 75 trucks and
operating primarily throughout the Midwest. We look forward to
hearing your testimony, Mr. Burg.
STATEMENT OF JAMES BURG
Mr. Burg. Thank you, Chairman Coffman, Ranking Member
Altmire, members of the Subcommittee. Thank you for holding
today's hearing.
My name is Jim Burg, and I am the president of James Burg
Trucking Company, a small business located near Detroit. I
started my company in 1984 with one truck at the age of 19. We
now employ 75 trucks and employ over 85 people. I personally
hold a commercial driver's license and have driven over 1.3
million miles.
I am testifying today on behalf of the American Trucking
Associations. The proposed Hours of Service changes, if
finalized, would have a profoundly negative impact on small
businesses, would restrict productivity, and would result in
greater congestion and increased emissions. These impacts are
significant since there are more than 500,000 trucking
companies in the United States, and according to FMCSA, 99
percent of these companies are small businesses.
The proposed changes come at a time when the pool of
qualified drivers has shrunk. Last year, I increased driver
compensation by six percent just to attract and retain
qualified drivers. If the proposed rules are finalized, I will
need to add more trucks and drivers and their corresponding
expenses simply to counter the loss in productivity. By my
calculations, the Hours of Service changes would trigger the
need to increase our retained earnings by between 20 and 25
percent just to maintain our current level of financial
stability.
At some point, companies like mine will need to pass these
costs onto consumers which, as we all know, fuels inflation and
reduces global competitiveness. Ironically, increased costs and
reduced productivity prohibit me from investing in promising
onboard safety-based technologies. Regrettably, my current
business strategy must be to hoard cash and delay expansion
until the economic and regulatory uncertainties are diminished.
With respect to the proposed hours of service regulations,
my strong belief is that the Agency should abandon its proposal
and retain the current HOS regulations. This belief is founded
upon the following points:
1. The safety record of the trucking industry has been
improved dramatically while operating under the current rules.
Since 2003 when the basic framework for the current Hours of
Service regulations was published, the numbers of truck-related
injuries and fatalities have both dropped by more than 30
percent to their lowest levels in recorded history.
2. The proposed changes would cause enormous productivity
losses. FMCSA previously estimated that changes like the ones
proposed would cost society over $2 billion annually. These
losses would disproportionately impact small businesses.
3. The proposed changes would have virtually no benefit in
terms of reducing fatigue-related truck crashes. Only a small
percentage of truck crashes are caused by driver fatigue and
only a very small number of truck crashes occur in the latter
hours of drivers' shifts. FMCSA's own cost benefit analysis
acknowledges that the safety benefits of the proposed rules
would not outweigh the economic costs. Only by adding creative,
questionable health-related benefits does the Agency's proposal
pass the cost benefit test. However, as explained in my written
testimony, the Agency has misrepresented and misapplied the
sleep duration and mortality risk studies it relied on in its
analysis. Hence, there is simply no scientific support for the
health benefits claimed by the Agency.
4. Ironically, the proposed rules would trigger unintended
safety consequences. Drivers feeling pressure to meet tighter
restrictions would be more prone to rushing or poor decision-
making. The reduction in productivity would drive a need to
increase the number of trucks on the road, especially during
peak hours of congestion.
And finally, the resulting productivity losses would raise
demand for inexperienced, more crash-prone drivers.
Certain elements of the FMCSA's proposal are particularly
troubling. The Agency has proposed that drivers utilizing the
restart provision be required to ensure that each restart
include two nighttime periods between midnight and 6 a.m. As a
result, drivers using this provision would enter the traffic
flow at approximately the same time, further exasperating rush
hour congestion and the corresponding consequences.
FMCSA's proposal to eliminate the 11th hour of driving
simply reflects a lack of understanding of how the 11th hour is
used. Even though the 11th hour is not used extensively,
eliminated it would not only impact the trips where it is used
but those trips where it might be used. In short, eliminating
the 11th hour would only serve to render certain routes
impractical or repress drivers to make runs in tighter time
constraints.
In summary, FMCSA's proposed changes to the Hours of
Service rules are necessary, unjustified, and would have a
profound negative impact on the economy, particularly on small
businesses.
I speak on behalf of the American Trucking Associations,
companies just like mine, and the 99 percent of the trucking
industries' over 500,000 motor carriers which are classified as
small businesses. In our review, the only rational and
reasonable course of action for the FMCSA is to abandon this
proposal, retain the current Hours of Service regulations, and
spend its resources better enforcing the current rules.
Before closing I want to thank Chairman Graves and
Congressman Bill Shuster for their leadership on this critical
issue. I want to thank all of you who joined them in writing
Transportation Secretary LaHood to urge him to keep the current
Hours of Service rules in place.
Thank you again for your time. And I am pleased to answer
your questions. I owe you 24 seconds.
[The statement of Mr. Burg follows on page 22.]
Chairman Coffman. Thank you, Mr. Burg.
I will now yield to the Ranking Member Altmire, Congressman
Altmire, who will introduce his constituent.
Mr. Altmire. Thank you, Mr. Chairman. And it is my pleasure
to introduce Rusty Rader, the CFO and part-owner of J.J.
Kennedy, Inc., a family-owned ready mixed concrete business
headquartered in Fombell, Pennsylvania.
Rusty is a graduate of Penn State University and has a
Master's degree in civil engineering. Prior to joining the
family business in 1994, he was employed as a transportation
engineer in Chicago. Since his return to J.J. Kennedy, Inc.,
Rusty has worked to expand the business from a two-plant local
operation to six plants located throughout Western
Pennsylvania. And most relevant to this hearing today, Rusty
was integral in implementing technology that has allowed J.J.
Kennedy to become a more productive ready mixed concrete
supplier. The technology that he has applied has given J.J.
Kennedy the ability to accurately track the amount of time an
employee spends driving versus pouring a load of concrete. This
has allowed the company to provide more accurate scheduling of
their mixer fleet, ultimately providing their customers with
more consistent service.
We look forward to hearing your testimony. Welcome, Mr.
Rader.
STATEMENT OF RUSTY RADER
Mr. Rader. Thank you, Congressman Altmire, Chairman
Coffman, and other members of the Committee. Thanks for this
opportunity to share my views on the proposed Hours of Service
regulations currently being promulgated by the FMCSA.
My name is Rusty Rader and I am a co-owner of J.J. Kennedy,
Inc., a family-owned ready mixed concrete company based out of
Fombell, Pennsylvania. J.J. Kennedy was founded in 1905 and
currently employs 65 people. We operate six ready mixed
concrete plants with 32----
Mr. Altmire. Mr. Rader, could you pull your mic a little
bit closer to yourself? Sorry about that.
Mr. Burg. In his defense, it does say ``do not touch
microphone.'' Rule follower.
Mr. Rader. We operate six ready mixed concrete plants with
32 concrete mixers and deliver nearly 100,000 cubic yards of
concrete annually.
The current Hours of Service regulations are not perfect;
however, they are manageable and much more flexible for
operations, such as the ready mixed concrete industry, than the
new Hours of Service rule being proposed by the FMCSA.
J.J. Kennedy, Inc., as well as the ready mixed concrete
industry, takes issue with a number of the proposed changes,
specifically the following six points.
1. Requiring off-duty time immediately following the end of
the driving window.
Never before has the FMCSA limited the on-duty time in
which a driver is allowed to perform his or her work. It has
only regulated the amount of time a driver can safely drive. By
forcing companies to release drivers at the end of the driving
window and not allowing them to continue on-duty work will hurt
any company's competitiveness. Plus, many ready mixed concrete
companies use a driver to help with additional duties at the
plant. By limiting their on-duty time, FMCSA has overstepped
its boundaries and responsibilities.
2. Possibly reducing driving time from 11 to 10 hours.
Safety-related incidents for truck traffic has been
declining since the rule to allow 11 hours of driving time per
day was adopted. J.J. Kennedy and the NRMCA (National Ready
Mixed Concrete Association) see no justifiable reason to reduce
that number. A reduction in driving time would only cause more
trucks to be on the road to deliver the same volume of
concrete.
3. Mandating a break of 30 minutes every seven hours.
Ready mixed concrete drivers spend less than 50 percent of
their on-duty time actually driving. The other 50 percent is
spent at the plant waiting to be dispatched, at the jobsite
waiting to unload, unloading the concrete, and performing other
duties. Companies need to have the flexibility to give breaks
as the schedules dictate throughout the day. For example, a
concrete delivery often takes more than two and a half hours to
complete. Concrete is a perishable product, and once a delivery
is started it must be completed or the concrete may harden in
the truck causing thousands of dollars worth of damage and
potentially violating a delivery contract. Every day is
different in the construction field, thus companies need the
flexibility to deliver concrete when the customer needs it.
Often customers order concrete on an as soon as possible basis.
4. Limiting restarts of the 60/70 hour clock to once in
seven days.
Most ready mixed concrete truck drivers use the
``Construction Materials Exemption'' of 24 hours to restart
their weekly clocks. A rainy day will often stop deliveries for
an entire day more than once a week. Many ready mixed concrete
drivers use this 24-hour off-duty period to reset their weekly
clock more than once in a seven or eight day period allowing
construction schedules to continue when the weather improves.
The proposed changes would eliminate this much needed and used
practice. Drivers should have the flexibility to restart their
weekly clock as they see fit instead of once per week.
Construction schedules fluctuate and companies need the ability
to stay complaint with the regulations and still service their
customers.
5. Including at least two periods between midnight and 6
a.m.
Many ready mixed concrete products work exclusively at
night during the hot summer months. The reduced nighttime
traffic congestion and cooler temperatures are more conducive
to concrete placement. By mandating a driver's off-duty time to
include at least two consecutive periods of midnight to 6 a.m.
reduces the number of hours available to meet construction and
delivery schedules to an unacceptable level. Not every work day
takes place during daylight hours, making this proposed change
overly restrictive.
6. Limiting on-duty time to 13 hours in a driving window.
NRMCA sees no justification to limit on-duty time. FMCSA
should restrict its regulations to ``driving time'' as I
previously mentioned. During the 16-hour-window-days, this
would require a mandatory minimum of three hours of
nonproductive, nonpaid time. This provision makes no sense for
the short-haul driving industry like ready mixed concrete.
Thank you for the opportunity to comment on how FMCSA's
proposed Hours of Service regulations will affect J.J. Kennedy
and the ready mixed concrete industry.
[The statement of Mr. Rader follows on page 35.]
Chairman Coffman. Thank you, Mr. Rader, for your testimony.
I would like to introduce our final witness for the
hearing, Mr. J.D. Morrissette, president of Interstate Van
Lines.
Mr. Morrissette has more than 25 years of experience in the
transportation industry, working his way up the ranks at
Interstate, including Vice President of Domestic Services, Vice
President of Van Lines, and Manager of Van Lines Operations.
The Subcommittee appreciates you taking the time to speak with
us today.
Mr. Morrissette.
STATEMENT OF J.D. MORRISSETTE
Mr. Morrissette. Good morning, Chairman Coffman and
distinguished members of the Subcommittee. I am John
Morrissette, president of Interstate Van Lines, a third-
generation family business located in Springfield, Virginia.
Thank you for the opportunity, on behalf of the 3,000 members
of the American Moving and Storage Association, to share our
views on the proposed Hours of Service rules.
Our industry is comprised primarily of small businesses
that have been hard hit by the depressed economy and housing
market collapse. Household goods movers are unique and the
proposed Hours of Services changes will have a devastating
impact on our ability to service our customers.
The household goods industry differs from the general
trucking industry, not only in the type of cargo we carry but
also in the type of service we provide. We spend more time on
residential streets than at loading docks on established
freight lanes. We are an industry that prides itself on
customer service, particularly our ability to take care of the
customers' often changing needs.
Our drivers typically spend a large part of their available
on-duty time packing, loading, unloading, rather than driving.
In addition to on-duty driving hours, our drivers enter private
residences; sort, wrap, and pack shipments of personal items;
load and unload their vehicles, which is a skill set that is
unique to our industry; reassemble and sometimes even arrange
the customer's furniture; move personal possessions and
memories with the utmost care in the customer's presence;
inventory each customer's items while at residence; and
complete the contract (bill of lading) directly with our
customer.
Our drivers must satisfy the frequent changing schedules of
our customers. The proposed Hours of Service changes are
complicated for drivers and difficult for customers to
appreciate how they can affect the timing of their move.
Customers' plans change. They add items, they decide to move
into a unit on a higher floor, their mortgage closing gets
postponed, the landlord delays the move-in date, their flight
was canceled, and so on. All of these issues can force last
minute pick-up and delivery changes. Also, our vehicles often
transport several households in one trip, and any schedule
change for one shipment affects all the others.
The proposed hours of service changes will severely limit
our flexibility to meet customers' scheduling needs. Moves that
are delayed and run over the duty-time day will require
additional trucks and drivers to finish the move, at
substantial additional cost. Fewer hours to service individual
shipments will mean fewer loads and reduce revenue for drivers.
The Hours of Service rules will require multiple days to be
added to complete moves at additional cost. Every business will
need to increase its staffing and fleet size to compensate for
the loss of hours in order to maintain service levels and
customers' expectations. The capital required to add drivers
and trucks would be difficult for many businesses and likely
prohibitive for small businesses. Small businesses that cannot
afford necessary trucks and drivers may be driven out of the
industry.
The health and well-being of our industry's drivers are of
the utmost importance to us. Our industry fully supports the
efforts of FMCSA to promote safety and protect driver health.
However, we submit, in recognition of the unique aspects of the
customer-service model of our industry, the proposed Hours of
Services changes should not be applied to the interstate
household goods industry and the current rules should continue
to apply.
Thank you for the opportunity to testify. I look forward to
answering any questions that you may have.
[The statement of Mr. Morrissette follows on page 40.]
Chairman Coffman. Thank you, Mr. Morrissette.
My first question, and I am going to ask the whole panel,
and let us start with Mr. James and then work our way down.
What provision or provisions in the proposed rule do you
believe would be most difficult for your business to comply
with? Why don't we just say which is the toughest one out of
all the provisions that you think would affect your business in
terms of compliance?
Mr. James. Thank you. I would say that the production in
hours from 11 to 10 would probably impact us the greatest.
Obviously, in my statement I mention that every hour is
critical in the commodities that we trade. Depending on what
the market is doing, we are left with, you know, what market
conditions dictate as far as deliveries go. And by reducing
that by even one hour would be critical to our scheduling.
Chairman Coffman. Mr. Burg.
Mr. Burg. Mr. Chairman, they are all critically important.
I would lean more towards my operation and the 34-hour restart
provisions of requiring the two rest breaks between midnight
and 6 a.m. It could dramatically impact how we are getting to
our customers in timely deliveries. Let us say we load over the
weekend and we need to be onsite at, say, noon. But if we could
not leave our place until 6 a.m., we might not get there until
after the receiver's hours that day or possibly even the next
day. Our restraints are just as equally compounded by our
shippers' and receivers' schedules as they are ours. Receivers
and small businesses all over the country that receive the
products that we haul, they have set hours of their operations
and they cannot adjust their businesses to receive our goods
without impacting their costs.
Chairman Coffman. Mr. Rader.
Mr. Rader. I agree there are a few of them that would be
difficult to work with, but I think for our industry the 30-
minute break every seven hours would be very cumbersome in
order to try to juggle drivers' schedules and delivery
schedules and that sort of thing.
Chairman Coffman. Mr. Morrissette.
Mr. Morrissette. We are also of the opinion the 34-hour
reset rule would not give us the ability to service our
customers without increasing fleet size, and that the two
consecutive midnight to 6 a.m. off duty will reduce our ability
to properly service the customers.
Chairman Coffman. Thank you.
Mr. James, specific to you, in what ways do you believe the
FMCSA would take into account the differences between short-
haul truckers and their long-haul counterparts?
Mr. James. Thank you, Chairman.
Specific to our industry, our drivers are in and out of the
truck continuously throughout the day. We are not driving long,
monotonous stretches of highway where fatigue really does
become an issue. They may drive for an hour, get out of the
truck for an hour, 45 minutes, as they are dropping products.
There is plenty of wait time when they are sitting at a
terminal, and so consequently the physical drive time might be
half of their actual on-duty time. So I really believe that
that would impact us.
Chairman Coffman. And Mr. Burg, given the limited pool of
qualified drivers how will your company be able to meet
transportation demands safely should the proposed rule go into
effect?
Mr. Burg. Ideally, we would have to change the driver
lifestyle significantly and that would increase the amount of
home time. The issue that I have with my company is not getting
qualified drivers to perform the task; it is qualified drivers
that will sign up for the lifestyle of trucking. So that would
need to change so I could go outside of the typical trucking
ideal candidate and move to more acceptable home-every-night
operations. So that would dramatically increase our costs to do
so because we would have to shape runs. We would have to have
increased possibly trailer pools. We would have regional
locations and trailers would be dropped and interchanged,
possibly with other carriers. You know, anything can be done
with the right financial incentives, but I think that is the
challenge that we have with this regulation. It does not take
into account the full value of the proposed rules and it does
not increase the safety element like the rules are supposed to.
Chairman Coffman. Thank you, Mr. Burg.
Mr. Rader, you stated that the current HOS regulations are
not perfect, the proposed rule notwithstanding. How do you
believe the current regulations could be improved?
Mr. Rader. Well, the ability to--lumping us in with a long-
haul trucking fleet as we have all discussed, the short-haul
truckers, it is a different animal. It is a different type of
vehicle. The drivers are home every day. Fatigue is really not
an issue. I would say that the--I am sorry. I lost my train of
thought there. Could you ask the question again one more time?
Chairman Coffman. Sure. We talked about current
regulations, current HOS regulations. If you were going to come
up with a proposal to better reform current regulations without
the new regulations, what would that reform be?
Mr. Rader. I would say leave things as they are. To make
the changes, they are not necessary at this point.
Chairman Coffman. Great. Thank you very much, Mr. Rader.
Mr. Morrissette, since your industry does not generally
deliver to and from the same addresses, would the proposed
rules make it more difficult for movers to operate?
Mr. Morrissette. Significantly. You know, our drivers do
not spend as much on-duty driving time as other drivers because
they are in the house supervising an entire crew that is in
there. So the household industry is uniquely different in that
respect. And so in some ways we do not feel that the Hours of
Service as proposed really should apply to the household goods
industry.
Chairman Coffman. Thank you, Mr. Morrissette.
Mr. Altmire, ranking member.
Mr. Altmire. Mr. Rader, you spoke in your testimony about
the shift from the current rules and the proposal that would
then prohibit drivers from performing non-driving work beyond
the 14-hour driving window. And I wonder if you could expand a
little bit on how this would affect a business like yours that
usually requires drivers to perform extra duties, such as
loading and unloading after reaching their final destination.
Mr. Rader. Yes, the drivers tend to do different, a lot of
other things around the plant. There are things that need to be
cleaned up. We have some drivers that wear different hats. They
will haul--we have a fuel business in addition to our ready
mix, so we might have a guy go pump some fuel, filling our
trucks, block truck drivers who pick up some extra deliveries,
something. We try to keep the drivers productive and keep the
business moving.
Mr. Altmire. Thank you. I wanted to ask the full panel a
question. We will start with Mr. James and then work to your
right.
Due to the reduction in allowed driving time under the
proposed rule, companies are going to have to put more trucks
on the road to meet demand as we have discussed. And we, in
this Committee, and certainly you understand, that access to
capital is still difficult for small firms to obtain across the
country. So I was wondering if you have a concern that your
company might not have the ability to purchase more trucks or
hire more drivers to remain competitive under these rules.
Mr. James. Yes. Obviously, credit is extremely difficult to
obtain in today's marketplace. I am not sure that the issue of
actually buying more trucks is what we are talking about here
or mainly having to hire additional drivers to fill the trucks.
I guess that may be what you are referring to. We do a pretty
good job of trying to maximize the rolling assets that we
currently have. By bringing on additional trucks to move the
exact same amount of product does not seem very efficient in my
world. Just because we add another truck does not mean we are
necessarily going to have more business. So I think I would
defer more to trying to maximize and be as efficient with the
staff and the equipment that we do have in order to run our
business as best we can.
Mr. Altmire. Mr. Burg.
Mr. Burg. Prior to the recession, and I want to speak to
the local owner-operator, 85 percent of the carriers that
operate five trucks or less. They could walk into a dealership,
get 95 percent financing, get a seven-year term at six percent
interest to finance that capital. That five percent down is now
30 percent down. That seven-year term is now 48 months. The six
percent interest is now eight or nine percent interest. And
that is the same qualified individual. And those are real life
scenarios that are going on now.
Currently, I find myself in a situation where we are a
financially viable company and we are still having challenges.
Now, granted, that is overlapping how we got into the
recession, financial issues, and the like. But for the next
three to five years I would expect that that is going to
continue, that there will be larger amounts of capital
requirements because banks will have to hold that back and
therefore, it will feed downstream to the small operators. So I
see that being a big challenge for us. And I think available
capital is going to be equal to finding the drivers that are
willing to do the jobs that we need done.
Mr. Altmire. Thank you. Mr. Rader.
Mr. Rader. I would agree that credit is very tight right
now. It is difficult as far as, to Mr. James's point about
buying more trucks. In our industry with the downturn, we have
had to park some vehicles and there are probably some trucks
out there that could be put back on the road at minimal cost
but the issue does come with putting qualified drivers into the
seats to make that happen.
Mr. Altmire. Mr. Morrissette.
Mr. Morrissette. The household industry is somewhat unique
and utilizes subcontractors. So we are small businesses that
employ small businesses. The economic situation has probably
hurt them worse than the companies themselves and their ability
to get financing. And then having the downpayment on the trucks
has been very difficult. So they are into an aging fleet. So we
definitely see the challenges from an economic standpoint, for
both companies and our individual subcontractors, to get
equipment.
Mr. Altmire. Thank you. Thank you, Mr. Chairman.
Chairman Coffman. Thank you, Mr. Altmire.
Mr. West.
Mr. West. Thank you, Mr. Chairman. Happy Flag Day and Happy
Army Birthday to each and every one of you.
First question is I think starting at the beginning.
Obviously, it seems that the FMCSA did not do any type of
consultation with any of you that are out there in industry. So
what do you think drove this unilateral decision that they
made? And that is a question for all the panel.
Mr. James. Representative West, that is a good question.
Sometimes it seems that people look at rules and regulations
and see how they can tweak them in order to attempt to make
things safer without having all the facts. Sometimes numbers
can be put in a position to justify their own agenda and I
think the facts that have been presented do not necessarily
tell the entire truth.
Mr. Burg. Representative West, with all due respect to the
FMCSA who I hold in the highest esteem, Anne Ferro is a great
person, I cannot see a common rationale that would fit into
what FMCSA's historic message has been to, and that is to
improve safety. Excuse me. With all due respect to the panel,
outside the beltway we call this politics because that is what
it seems to be. There seems to be other motives for why these
rules would be restrictive to the small businesses and trucking
companies that would be affected by these rules. That would be
my personal conclusion.
Mr. West. What then would you think? To you what would the
motive be then?
Mr. Burg. Who would benefit from having a more restrictive
workforce? You could say that there would be more trucks on the
road, therefore, there could be more manufacturing needed to
have them. You could have an increase in people, so therefore
driver or employment base would have to increase to accomplish
that. You could look through, and I have done that personally,
to try to understand what the reasons are.
You know, trucking is the most overregulated, yet under
enforced industry that I am aware of. Their current rules
suggest that companies that operate within those rules have
less crash statistics. So I suggest that the administration
focus more on improving the current rules or enforcement of the
rules than to modify out from those.
Mr. West. So political gamesmanship.
Mr. Burg. Yes, sir.
Mr. Rader. I would agree with their points. The issues of
safety is what this all--I think is what it is based on. The
statistics are showing the number of incidents are declining,
not increasing. So, you know, I do not understand why they need
to make the change either.
Mr. Morrissette. We agree with Mr. Burg that there are
plenty of regulations that are currently not being enforced,
and there is lack of adequate enforcement of other regulations
that goes on out there. I think in general the trucking
industry has made great strides in safety as the data will
support, and especially in the household goods industry. I
think that we have a phenomenal safety rating. You know, we
concentrate on that, we focus on that, and we focus on customer
service. So we do not understand the reasons for the additional
regulatory.
Mr. West. And follow up. Mr. Morrissette, you know, having
spent 22 years in the Army, your industry was very integral in
my moving back and forth all over the country. So I would like
to ask, you know, when you look at this new rule, how would
that affect, you know, such a thing as military PCS moving?
Mr. Morrissette. It is interesting because June is our peak
season.
Mr. West. Absolutely.
Mr. Morrissette. Movement of personal property follows
school calendars, and so there is an excessive demand for a
limited supply especially during the summer months. Additional
rules that limit our ability to service the customers, and we
are challenged currently to handle the volume load of the DOD.
We are primarily a DOD transportation provider and very proud
to do that. So that only presents additional challenges for us
that we have.
Mr. West. Thank you, gentlemen. I yield back.
Chairman Coffman. Thank you.
Mr. Tipton.
Mr. Tipton. Thank you, Mr. Chairman, and thank you panel
for joining us here today.
I would like to go back a little bit, Mr. Morrissette, and
I think Mr. James, as well. You talked about if these rules go
into effect, the possibility of increasing your fleet size.
This is going to be a cost that is going to have to be passed
on to the consumer, is it not?
Mr. Morrissette. Yes, absolutely. I just purchased a truck
this past year and it was $140,000 for a 2011 Kenworth.
Obviously, I have to pay for that and just by buying another
truck does not necessarily mean that I am going to have
additional business. I obviously try to have the safest trucks
on the road and so we continually upgrade our fleet as time and
equipment are needed.
Mr. Tipton. And Mr. James, you know, this just seems to me
to reek of taxation by regulation.
Mr. James. I would agree with that.
Mr. Tipton. You know, we are consistently seeing new
regulations come into play. The consumer ultimately now is
carrying the burden of this, and these are at times when we
have people that are just struggling to be able to pay the
mortgage, let alone just respond to bureaucratic mandates that
are coming down. Tell me a little bit about the truck safety
that we are seeing. Have we seen an increase in accidents?
Mr. James. No, sir. We have not since the last regulations
were put into place in 2003. I think through several of the
other testimonies it was mentioned that driver fatalities and
accidents have actually decreased over time.
Mr. Tipton. So we have got a safe industry and we are
trying to regulate it more?
Mr. James. That sounds pretty accurate to me.
Mr. Tipton. That sounds pretty accurate. Tell me, does--Mr.
James, in your testimony you stated that it is not uncommon for
drivers to experience unexpected delays at petroleum terminal
facilities. Does that count towards their time--driving time?
Mr. James. Absolutely it does. Time sitting----
Mr. Tipton. Does that make sense to you?
Mr. James. As far as sitting in the cab?
Mr. Tipton. Yeah, in terms of we are going to go ahead and
give a break when they are already sitting there waiting at the
terminal.
Mr. James. That is correct. And that is actually in my
fourth point.
Mr. Tipton. Right.
Mr. James. I suggested that for petroleum transporters we
be allowed to count up to three hours additional waiting time
as off-duty time that would allow our drivers to count the time
that they are sitting and basically just resting, if you will,
to count as off-duty so that we can maximize those deliveries
so that we do not have to put on unneeded equipment and/or
people unnecessarily.
Mr. Tipton. Absolutely.
Gentlemen, this might be for the whole panel. You know, we
have heard a lot of regulations coming through, particularly in
this Congress, and we are trying to do some good oversight.
Public opinion comments are always taken before regulations are
coming out. Do you hear your voice being heard? Are the
regulators really listening?
Mr. James. I would say in my case you have given us ample
opportunity to express our concerns and we certainly appreciate
that. So we thank you.
Mr. Tipton. Gentlemen?
Mr. Burg. Likewise. Having the opportunity is the first
step. How we act or, I am sorry, how this body acts on our
requests. I guess if you have an ailment you could ask your
surgeon or your health care provider for the best resolve, and
I appreciate the offer of being here today to give us the
opportunity to say what is really happening, what our true life
experiences are because this is over and unnecessary regulation
that we feel is upon us.
Mr. Tipton. Thank you. Mr. Rader.
Mr. Rader. I would agree. With the opportunity here today
and we have made requests to our congressman and he has been
obliging, and I think we are being heard. I think it is
starting to change.
Mr. Tipton. Great.
Mr. Morrissette. We definitely appreciate the opportunity
to speak before the Subcommittee. In addition, FMCSA has given
us good access to provide information to them. I think the end
result of what we see, as far as regulation, will determine
whether they heard us or not.
Mr. Tipton. Well, gentlemen, I appreciate you taking the
time to be here. You know, it just seems to me that you are
facing a lot of challenges. Credit is a challenge for you to
get out and do it. The services that you provide, that quality
is at a premium and you are doing your very best to be able to
deliver a quality service at the lowest available price. I
applaud your efforts and your willingness to be able to come in
because this is part of the role. When we are talking about
creating jobs in America and keeping people employed in America
right now, this is absolutely fundamental, and I appreciate
your insights. Thank you.
Chairman Coffman. Mr. Hanna.
Mr. Hanna. No, sir. Thank you.
Chairman Coffman. Very well. I would like to thank all of
our witnesses once again for testifying before our
Subcommittee. You have given our members a better perspective
on how the proposed rule on Hours of Service for trucks has the
potential to damage a significant number of American small
businesses. It is disturbing to me that under the guise of
public safety, the Federal Motor Carrier Safety Administration
has used outdated data to support their Hours of Service
proposal, discounting the fact that we are currently
experiencing the safest record on truck-related fatalities and
injuries in recorded history. Regulating for the sake of
regulating will create unintended economic consequences,
especially in the case of Hours of Service. I encourage FMCSA
to take into consideration the implications of their proposed
rule before solidifying their position in the coming months.
I ask unanimous consent that members have five legislative
days to submit statements and support materials for the record.
Without objection, so ordered.
This hearing is now adjourned. Thank you again for coming
and testifying.
[Whereupon, at 11:02 a.m., the Subcommittee hearing was
adjourned.]