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By Mark Montague, Sr. Analyst, DAT Solutions
A new year brings new rules for trucking and logistics businesses, and 2020 is no exception. In fact, a combination of regulations on electronic logging devices, drug and alcohol testing compliance, and independent contractors that take effect in January could turn the trucking environment from one of excess capacity to a situation where trucks are much harder to find. Let's take a look at each one.
AOBRD to ELD Switchover
As of Dec. 17, 2017, trucking operations that are subject to federal hours-of-service rules are required to use electronic logging devices that automatically monitor the movement of the vehicle and record the duty status of the driver.
At the time, many vehicles equipped with Automatic Onboard Recording Devices (AOBRDs) were given until Dec. 16, 2019, to switch to compliant ELDs. AOBRDs perform many of the same tasks as ELDs but they're not legally the same thing.
Large carriers are the ones most likely to be using AOBRDs, so that's a lot of trucks to switch over. While few expect the change to be as disruptive as the ELD mandate in 2017, it could be enough to decrease productivity and tighten capacity, especially because the deadline hits at one of the busiest times of the year for freight. If you ship freight on trucks, now is a good time to make sure your carriers are using compliant ELDs.
Drug and Alcohol Clearinghouse
Registration is now open for the Drug and Alcohol Clearinghouse, an online database run by the federal government that will give employers, licensing agencies, and law enforcement officials access to the latest information about truck drivers' drug and alcohol program violations. The clearinghouse will contain records of violations of drug and alcohol prohibitions in 49 CFR Part 382, Subpart B. Starting on Jan. 6, 2020, employers are required to conduct electronic queries and traditional manual inquiries with previous employers to meet the three-year timeframe for checking CDL driver violation histories.
The clearinghouse could weed out even more drivers if the U.S. Federal Motor Carrier Safety Administration decides to permit hair follicle testing as an alternative to urine testing. Urine samples can detect drug use in the past few days, but hair follicle testing can detect drugs for up to three months.
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AB5
California's Assembly Bill 5, known as AB5 or the "gig economy bill," starts Jan. 1, 2020. It codifies, clarifies, and grants exemptions to a 2018 California Supreme Court decision involving Dynamex Operations West, a parcel-delivery company that reclassified its employees as independent contractors. The court determined that independent contract workers must be treated as employees if their jobs are central to a company's core business or if the bosses direct the way the work is done.
AB5 states that workers must meet three criteria to be classified as independent contractors:
• The worker must be free from control and direction of the hiring entity.
• The work performed must be outside the usual course of the hiring entity's business.
• The worker must be engaged in an independently established trade, occupation or business.
The second requirement is virtually impossible for a trucking company to meet because driving trucks is part of its core business.
Dozens of professions have won exemptions from AB5, usually on the grounds that they set or negotiate their own rates, among other factors. They include doctors, psychologists, dentists, hairstylists, and accountants.
So far, trucking companies and owner-operator have no such exemption. Trucking officials say taking on independent drivers as full-time employees would likely prove costly and make operations less nimble. The alternative is to move them out of California.
Mark Montague is industry rate analyst for DAT Solutions, which operates the DAT® network of load boards and RateView rate-analysis tool. He has applied his expertise to logistics, rates, and routing for more than 30 years. Mark is based in Portland, Ore. For information, visit www.dat.com.
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