you believe the proposed changes are politically motivated,
or are there legitimate safety concerns that would justify a
rewrite of the HOS rule?
AThis proceeding is entirely of political origin. At the behest of the Teamsters and far-left, anti-business
[consumer advocacy organization]
Public Citizen, and prior court decisions
involving those two parties, the [Federal
Motor Carrier Safety Administration]
has been bending over backward to
accommodate ridiculous and inefficient
rules on drivers’ hours of service. This
has nothing to do with streamlining the
regulatory apparatus to foster socially
beneficial outcomes or to improve highway safety. It has everything to do with
appeasing left-wing ideologues and an
increasingly irrelevant union faced with
declining membership and a dangerously underfunded pension fund.
will change any time soon, or should they be preparing now
to make changes in their supply chains just in case?
AThis is always the trouble with shifting regulation: uncertainty. I will not try to make broad recommendations for an entire industry with a diverse composition of
firms, but I would imagine that more
risk-averse firms that currently find
themselves on shakier financial footing
should take very seriously the impact this
rule will cause if it is promulgated and
perhaps immediately begin investigating
what adjustments to their supply chains
will be needed.
QThere has been talk that any mean- ingful change in the current HOS rule will be litigated almost immediately, effectively tying up the process for
years. Should carriers and shippers feel secure that nothing
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QHave you or anyone at CEI come up with numbers to quantify the
cost to the industry of the proposed
changes?
AWe have not conducted an inde- pendent econometric analysis.
However, using the FMCSA’s own cost-benefit estimates, minus the extremely
dubious “health benefits” contained in the proposed rule’s
regulatory impact analysis, the economic cost ranges from
$30 million to $640 million annually, depending on the
percentage of crashes that one assumes to be fatigue-caused. Of course, the burden would be disproportionately borne by small firms and owner-operators, and some
have claimed the agency has grossly underestimated the
costs. The discredited methodology of calculating supposed health benefits was used by the agency’s analysts primarily for the purpose of forcing a non-negative net benefits finding. They did not want to admit that this would
be a costly rule for the industry.
QIs there a middle ground that would satisfy the industry andtheregulators?
AI would prefer a rule that was far less stringent than the current one and am quite skeptical of the
FMCSA’s stated core mission in the first place. The current
rule, I believe, was forged on middle ground that should
more than satisfy regulators, unions, and Naderites.
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QTurning to the railroads, it appears that any rail reform to satisfy the concerns of captive shippers will
come from the Surface Transportation Board, not
Congress. What are the chances the STB will act, what’s the
likely time frame, and what form will “reform” take?
AAny “reform” from the STB will not be of a deregula- tory nature, but I am confident that the board will
again resist the attempts of a minority of shippers to drive
the railroad industry back into its pre-Staggers [Act] Dark
Ages. In late 2011, we should have some idea as to the odds
of action with respect to the reciprocal switching issue.
Retiring Sen. [Herbert] Kohl’s absurd legislation [S. 49]
