[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

=======================================================================

                                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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                   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

                              ----------                              
                                                                   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

                              ----------                              


                         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.]



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