5 Regulations That Threaten The Trucking Industry in 2020
Updated: Sep 14, 2020
Starting the end of 2019 and going into 2020, there are some new regulations that combined could potentially hit the trucking industry hard.
1. ABORD to ELD switch could lower productivity for some fleets
The deadline for all fleets, that haven't already, to switch over from ABORD to ELD quickly approaches on December 17th, 2019. The regulation was put into effect back on December 16th, 2017, but trucks that using the ABORD were given 2 extra years to switch over. Since it is hitting in the busiest time of the year for freight, the switch could decrease productivity and tighten capacity.
2. IMO 2020 to cause diesel prices to rise
Ocean vessels are required to switch to very low sulfur fuels starting January 1st, 2020. The distillate used to create these fuels is the same that is used for diesel fuel meaning that it is estimated the diesel fuel prices could spike 25 cents per gallon plus. Fuel is such a large expense for carriers that a sudden rise in price will make it a hard time for them and could put many out of business.
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3. Drug and Alcohol Clearinghouse will limit drivers with prior violations
Starting January 6th, 2020, all trucking companies are required to add their carriers information to the FMCSA's Drug and Alcohol Clearinghouse, an online database that employers can access for driver drug and alcohol violations. The clearinghouse is intended to prevent drivers who have been fired for drug use from getting a job in a different state with a new carrier.
4. Higher labor costs due to new overtime laws
The U.S. Department of Labor is implementing new overtime laws, taking effect January 1st, 2020, that make an additional 1.3 million Americans eligible for overtime pay.This won't necessarily effect truck drivers themselves, as they are paid by the amount they drive, it may effect trucking companies and brokerages that have back-office employees.
More information: Prepare now for new overtime rules
5. New California law prevents use of independent contractors
Starting January 1st, 2020, California is implementing a new law requiring that in order to be an independent contractor, you must meet these 3 criteria:
The worker must be free from control and direction of the hiring entity
The work must be outside of the usual scope of the hiring entity's business
The worker must be engaged in an independently established trade, occupation or business
It's common in the trucking industry for carriers and brokers to hire independent contractors, and this new law will prevent that from happening in California. California-based leased-on drivers have to become a company driver, get their own authority, or move out of state.
For more information about these 5 new regulations and their effects, click here.