The Economics of Trucking Regulations

Trucking companies of all sizes have been preparing — and often protesting — a wave of new trucking regulations aimed at increasing safety and reducing emissions. There’s no doubt that additional equipment means additional costs, at least at first, and many industry insiders anticipate additional losses in time and capacity. Now, the American Transportation Research Institute (ATRI) has revealed their top priorities for study in 2017, and one of them is the Cumulative Economic Impact of Trucking Regulations.

ATRI plans to examine “the potential for developing a standardized methodology for conducting regulatory impact analyses (RIA) of trucking industry regulations which can then be applied across agencies and regulations to identify industry costs.” Right now, rules are made and everyone has to scramble to figure out what it will cost them.

So, until a standardized methodology for determining costs is found and implemented, carriers and drivers are looking at experts’ sometimes dueling estimates and early adopters’ reported costs/benefits analyses.

Current thoughts on some of the upcoming changes:

Greenhouse Gas Emissions Phase 2 (2018-2027)

The goal: cleaner, more fuel efficient trucks will dramatically lower CO2 emissions, resulting in cleaner air, less damage to the climate, and improved health of the general population.

Overall, fleets can expect to spend $11,000 more per tractor, $1,200 per trailer according to EPA estimates, but that will be spread out over the course of nine years. And while that’s a pretty powerful hit, the EPA says that savings on fuel are expected to be greater than the initial expense, projecting $25 billion in cost to the transportation industry, and $170 billion savings in fuel over the vehicle lifetime.

Undetermined: Will new technology lead to higher maintenance costs? At least one carrier says that was their experience in Phase I. Will the regulation change under the current administration? There’s no indication yet that it will for tractors, but some speculation that the trailer requirements will change.

Electronic Logging Devices (ELDs)

Electronic Logging Devices themselves cost $495 per truck per year on average, according to the FMCSA, with prices ranging from $165 to $832. But the number that concerns fleets lies elsewhere. The move could affect productivity, and some fleets using the devices already report an 8-10 percent decrease at implementation, with about a year’s adjustment time to return to normal, as drivers and dispatchers get used to the device and carriers rethink lanes to ensure compliance.

Supporters of the ELD mandate say they will increase safety and even the playing field by eliminating carriers that push past allowable hours. Opponents say the safety claims are unproven and the devices are an unnecessary financial burden.

Undetermined: Will the mandate to ELDs add to the driver shortage? Many older truckers say they will leave the industry rather than put an ELD in their truck.

Looking Ahead

There is some hope that the current administration will dial back the number of trucking regulations — the speed limiter rule already appears to be dead. And, the industry continues to makes its voice heard on all regulations that apply, so the actual economic impact of these regulations – good or bad – is yet to be determined.

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