How New Legislation Will Affect FTL
Federal trucking and transportation regulations have impacted transportation company operations for decades. While most professional full truckload carriers are prepared for changes in transportation regulations and proactive about addressing them; some are caught off-guard. As 2018 continues, there is some new legislation that will affect FTL in minor ways. To clarify some of the misinformation of confusion posted elsewhere, here are three new regulations that might impact full truckload service for a few carriers in the United States.
The ELD Mandate
For those not aware, the ELD Mandate refers to the use of Electronic Logging Devices for drivers who are required to track their hours of service. While the ELD Mandate is an approved law, regulation is scheduled to take effect by December 16th, 2018. However, like many transportation regulations, it’s quite possible that the ELD Mandate will be delayed. There is some confusion as to how this regulation will impact FTL carriers. Here are a few facts to consider:
• Larger FTL Carriers have used Electronic Logging Devices for several years. The ELD Mandate was intended to resolve an ongoing issue with driver’s who manually kept track of their driving hours, and in many cases, manipulated the data. This was primarily private owner/operators or those who drove for smaller transportation companies, and not large FTL companies.
• ELD systems improve transportation time. By removing the need to manually document drive-time, the driver’s on-road time is better allocated.
To sum up, the ELD Mandate will have little to no impact on the daily operation of professional full truckload operators; as they already have these systems currently in use. The only impact that the ELD Mandate appears to have is with local or less than full truckload deliveries.
MC Numbers / URS Implementation
An MC number is also known as a motor carrier number. This type of vehicle identification system permits carriers who operate across state lines to cross a state border and permits the Federal Government to track freight brokers. The Unified Registration System (URS) is another regulation that was scheduled to be implemented by January 14th earlier this year. However, it’s been delayed while some of the details are cleared up by multiple government agencies. The new system is supposed to simplify the process of full truckload and other carrier service transportation vehicles. Once the URS is active, all freight forwarders, carriers, and brokers vehicle will be identified by their DOT number, instead of an MX, FF or MC number.
So, how does this impact FTL services? Professional FTL carriers who currently identify their trucks with older numbers can rather quickly make the transition to DOT number identification. It should not have any impact on daily operations or the ability to service customers.
Overtime Payment for Transportation Employees
The US Department of Labor works closely with multiple companies, labor unions, and private carriers to fine-tune pay regulations in the transportation industry. A recent change in labor laws were new overtime rules that were supposed to take effect in 2017. However, in October 2017, a Federal lawsuit was filed by 21 US states that have placed a hold on this new regulation. The current law stipulates that any salaried employee that earns more than $23,660 per year would be exempt from receiving overtime pay. The new regulation is intended to extend the salary limit by double – reaching $47,476 per year. The new overtime regulation would also permit 10% of commissions or bonus pay would be counted toward the employee’s compensation, if paid on a quarterly basis.
There are multiple employees in the transportation industry that ensure freight is shipped across the country. Most FTL drivers are paid by the mile, and not paid hourly or salary – which makes them exempt from this new regulation. However, there are salespeople, dispatchers, distribution centers, maintenance, and mechanical employees who might be salaried that might fall into the new overtime exempt category.
Anytime there is an increase in salary regulations for any company, the costs of operation are increased. In most cases, the costs are factored into the rates that customers pay for the services. This is one of those regulations that will impact all industries – not just FTL carriers. This type of regulation is similar in many ways to increases the minimum wage, or any operational cost increases.
While most federal regulations for the transportation industry is intended to increase safety for drivers and others on the roads, the three listed above should not significantly impact the FTL industry much. In fact, most professional FTL carriers are quite proactive about upcoming regulations and plan for these changes in advance. This ensures a smooth transition and that customers are not impacted by the Federal government or state regulations.