THE COST OF TRAFFIC CONGESTION
Congestion on today’s highways is costing the trucking industry $9.2 billion in operational costs according to the American Transportation Research Institute (ATRI). The delays totaled over 141 million hours of lost production, which amounts to 51,000 truckers sitting idle for an entire year. The research found that California was the state leader in congestion costs with a total of more than $1.7 billion, followed by Texas with over $1 billion. The city of Los Angeles was first in cost at nearly $1.1 billion, while New York was second at $984 million. In addition to the overall costs of congestion to trucking, ATRI also calculated the effects per truck. A truck driven for 12,000 miles in 2013 saw an average congestion cost of $408, while a truck driven for 150,000 miles had an average cost of $5,094. Now we know for sure that traffic costs you a lot more than just precious time!
FMCSA CRASH-FAULT STUDY COMPLETE
A long-awaited study looking at how the regulators can assess fault for truck crashes on motor carriers’ CSA records has been completed and is expected to be released soon. The FMCSA analyzed over 100,000 crash reports and still believes crash involvement itself is a strong predictor of future crashes. One of the primary objectives was centered on whether police reports were sufficient, consistent, and a reliable source of information on which to base a weighted crash system. Stay tuned.
INSURANCE MINIMUMS MAY SKYROCKET
Once again, in attempt to do away with small businesses and sole proprietors, the democrats are attacking the trucking industry. On one hand, the democrats recently amended the infamous New York bill which would have reclassified most independent contractors (IC) as company employees, requiring ICs to carry Workers’ Compensation coverage. Now, in a new attempt, they want to raise the minimum insurance requirement by nearly 600%!
Rep. Matt Cartwright (D-PA) introduced a bill that would raise the required insurance minimum for motor carriers, dubbed the Safe and Fair Environment on Highways Achieved through Underwriting Levels Act (H.R. 2730), otherwise known as “SAFE HAUL”. The bill would increase the required insurance minimum for motor carriers from the present amount of $750,000 to $4.422 million! The bill would also tie the future insurance minimum requirement to the cost of medical care inflation.
Our US Congress established the current insurance minimum in 1980 at $750,000 and it has not been raised ever since. According to a statement from Rep. Cartwright’s office, in present dollars and adjusted for the increase in the cost of medical care, it takes more than $4.4 million to provide for the equivalent of the $750,000 in the original law set in 1980.
“This is a matter of public safety,” he said. “Tragically, more than 100,000 people have been killed in commercial vehicle collisions since 1980. This legislation is essential to protecting our nation’s highways and ensuring that victims receive the proper amount of compensation for their losses.” Cartwright also contends that the current minimum of $750,000 fails to perform the basic functions that Congress intended – to promote safe carrier operations by holding insurers responsible for inspecting trucking operations prior to underwriting policies and to protect the public.
The congressman’s office sites a recent study conducted by the Trucking Alliance that it says shows 42% of the dollar settlements paid by trucking companies between 2005 and 2011 for motor vehicle accidents exceeded the minimum insurance requirement. The Federal Motor Carrier Safety Administration is working on its own analysis of the insurance standard, as required by the highway law Congress passed last year. The legislation has seven democratic co-sponsors – Reps Bruce Braley (IA); Chaka Fattah (PA); John Lewis (GA); Grace Napolitano (CA); Albio Sires (NJ); Robert Scott (VA); and Filemon Vela (TX) – and has been referred to the House Committee on Transportation and Infrastructure where it is awaiting action.
The Trucking Alliance was created in 2010 by five large US trucking companies – J.B. Hunt Transport, Schneider National Corp, US Xpress Inc, Knight Transportation and Maverick USA. These companies were later joined by Fikes Truck Line, Boyle Transportation and Dupre Logistics. Now that you know who all of the “players” are, one can start to see that this probably isn’t just a simple coincidence but a concentrated effort to reduce competition in the transportation industry.
In addition to raising the minimum amount of insurance required by motor carriers, now the Obama administration’s transportation plan, the Grow America Act, contains a provision that would eliminate self-insurance among motor carriers. Section 5503 of the proposal reads “self-insurance for motor carriers repealed.” It goes on to say the FMCSA “has determined that the self-insurance program does not add significantly, if at all, to the safety of motor carrier transportation.” It also states that the administration of this program is burdensome, invites litigation, and is an inefficient use of the agency’s resources.
It appears that the FMCSA wants to get rid of this program, which will certainly drive up costs for carriers and then get passed on to shippers. This could be very shortsighted on the part of the FMCSA and could have many unintended consequences. Federal regulations now say that trucking companies must have liability insurance to cover accidents. They must have at least $750,000 in coverage for general freight and $5 million for hazardous materials, but those figures may rise. If motor carriers are forced to buy their coverage through insurance carriers, it will raise costs for all truckers, as insurers build profits into their rates that are not present in the self-insurance model.
NEW TAX CREDITS IN COLORADO
Colorado lawmakers have passed a bill that allows tax credits of up to $20,000 per vehicle for fleets buying new trucks powered by natural gas. Now that marijuana is available in vending machines there, I wonder what kind of mileage they would get if their trucks were all powered by pot? At least they wouldn’t mind sitting in traffic as much! Until next month, “Drive Safe – Drive Smart!”