ILMA Compoundings - May 2020 - 24

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that would reclassify contract workers. "This could have a
ripple effect in transportation since it's common for small
owner-operator businesses to 'lease on' with big carriers,
and many third-party logistics businesses employ contract
agents," she said. "The rule has been challenged in court,
but if it's implemented, it would drive labor costs up for
transportation companies and create capacity shortages for
all the freight that comes from California."
New overtime laws will also increase labor costs. "Most
salaried workers who make less than $35,500 per year will
be eligible for time-and-a-half overtime, up from the previous $23,700 threshold. An estimated 1.3 million workers
were newly eligible for overtime in 2019," Hart said.

REGULATORY CHANGES
Several regulatory changes could alter the transportation
and logistics sector in 2020 and beyond. In response to
COVID-19, the federal government issued a 50-state waiver
to hours-of-service (HOS) rules for truck drivers transporting essential goods related to the outbreak. "Any financial
relief for carriers will affect capacity as well," Hart said.
The FMCSA sent a final rule on changes to HOS regulations to the Office of Management and Budget for review
on March 2.
"The FMCSA said last summer they were going to come
up with new changes, allowing drivers to extend on-duty time
based on adverse conditions, making changes to make it easier, but there are still issues with hours-of-service," Leiter said.

24

MAY 2020

| COMPOUNDINGS | ILMA.ORG

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The final HOS changes are expected later this year, Osiecki
said. He added that the final rule is based on a proposed
rulemaking announced last year that would give drivers more
flexibility with their 30-minute rest break and with dividing
their time in the sleeper berth. It also would extend by two
hours the duty time for drivers encountering adverse weather
and extend the short-haul exemption by lengthening the
drivers' maximum on-duty period to 14 hours from 12 hours
and increasing the distance limit in which drivers can operate
to 150 air miles from 100 air miles.
"When HOS rules are changed, FMCSA and DOT have
to give ELD providers time to update their software, betatest it and roll it out to customers' trucks. It appears that the
window will be about six months or longer," Osiecki said.
In addition, the Surface Transportation Board is formally
adopting a final rule that clarifies the regulation of demurrage, which will take effect on April 3. Demurrage charges
compensate rail carriers when railroad-leased or -owned cars
are detained by shippers. The rule is expected to be beneficial to ILMA members, Leiter said.
Congress is starting to discuss a new highway reauthorization bill, which will outline priorities for funding
levels, such as building out the system, repairing bridges or
maintaining the highway system, Osiecki said. "Don't expect
that to pass Congress and be signed into law this year, but it
is something that will start this year," he said.
Long is a freelance writer and journalist. She can be reached at
480-306-7177 or mindy@mindylong.com.


http://www.RenkertOil.com http://www.ILMA.ORG

ILMA Compoundings - May 2020

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