In all the talk over driver harassment and level playing fields, the trucking industry is largely overlooking the costs of the Federal Motor Carrier Safety Administration’s proposed rule to mandate electronic logging devices (ELDs). The agency’s preliminary regulatory evaluation estimates the annualized cost of its proposal at $1.58 billion and benefits at more than $2 billion a year for annualized net benefits of more than $450 million.
The trucking industry normally would be up in arms about a $1.58 billion cost that it presumed to be underestimated and would strongly question FMCSA’s analysis of benefits. But because the American Trucking Assns. supports mandatory ELDs, we haven’t heard much about costs.
You could argue that the cost-benefit analysis is basically moot given Congress has mandated ELDs. But Congress did not waive the requirement for a regulatory impact analysis; in any case, Congress should have to face the impact of regulations it mandates.
The biggest tickets in FMCSA’s cost estimates are more than $955 million a year to purchase the ELDs and more than $600 million in what the agency calls “compliance costs”—the additional drivers and vehicles needed to ensure hours-of-service limits are not exceeded. FMCSA based its ELD cost estimates on what it regards as a middle-of-the-road cost option, the Omnitracs MCP50. Given that most carriers now using fleet management systems can add ELD capability for a modest fee, FMCSA’s cost analysis seems at least plausible.
The real weakness in FMCSA’s analysis is on the benefits side of the ledger. Some might question the safety benefits, but we will assume that they are valid. The real funny money is the estimated $1.64 billion in paperwork savings. About $375 million of that comes from eliminating paper logs and carriers’ management of them, but we will assume this is valid, too.
What’s truly hard to accept is the $1.26 billion annual benefit in reducing drivers’ times to complete logs. FMCSA estimates that ELDs will save drivers 4.5 minutes per work day plus 5 minutes every two weeks to transmit completed logs to carriers for a total of 18 hours saved per year per driver.
The math sounds right, but the analysis falls apart when FMCSA monetizes this time at a rate of $28 per hour. For starters, a savings of 4.5 minutes a day isn’t particularly meaningful to either the driver or the carrier. True, this is done all the time in regulatory analysis, but that doesn’t make it reasonable.
The bigger flaw is the fact that time-saved logging isn’t productive time. If a driver’s available on-duty time did not exceed his available driving time, then you could argue that the savings are meaningful. But since completing a log does not have to take away from driving time, the time savings have no economic value. The savings still could have value to carriers if they paid drivers for on-duty, non-driving time, but aside for detention or layovers, very few carriers do so.
The simple truth is that unless FMCSA monetized drivers’ time savings, the agency cannot show net benefits from ELDs. When the agency that proposes a rule is also the agency that conducts the cost-benefit studies—or even pays a contractor to do them—there’s a clear conflict of interest. An independent entity should conduct regulatory impact analyses.
Beltway Briefs
- The National Transportation Safety Board recommended changes in tractor-trailer design standards to increase truck drivers’ visibility of other vehicles and pedestrians and improve side and rear underride protection.
- FMCSA said it plans to begin a study by year-end on whether expanding use of split rest in sleeper berths can improve both safety and productivity.
- The Owner-Operator Independent Drivers Assn. asked FMCSA to delay the May 21, 2014, implementation date for requiring that drivers’ medical certifications be conducted by professionals on the National Registry of Certified Medical Examiners.
- Sen. Richard Durbin (D-Ill.) asked the Dept. of Transportation inspector general to investigate FMCSA’s oversight of motor carriers with a history of violations.
