Jan 17, 2024

How Labor and Climate Costs are Shaping the Trucking Landscape in 2024

The trucking industry has long been a sustainability goals or vital component of the global economic landscape, responsible for the transportation of goods and materials across vast distances. However, in recent years, the landscape of the trucking industry has been rapidly evolving as a result of various factors such as labor costs and the growing concern over climate change.

As we approach the year 2024, it is becoming increasingly clear that these two factors will continue to shape the future of trucking industry and have a significant environmental impact on its business operations, regulations, and overall sustainability. With the industry facing a potential labor shortage and pressure to reduce its carbon footprint, logistics company or trucking companies are facing complex challenges that require innovative solutions.

In this article, we will explore how labor and climate costs are currently influencing the trucking landscape and what we can expect in the coming years as the industry strives to adapt and stay competitive in an ever-changing business environment.

Congress May Face Challenges

In 2024, it is anticipated that Congress may face challenges in passing significant truck-related legislation due to election-year politics. However, the possibility of a change in administrations could serve as a catalyst for finalizing two important regulations with significant cost and operational implications for the trucking industry.

The proposed regulations pertain to stricter standards for independent contractors and carbon emissions from heavy trucks. These regulations are currently undergoing final review at the White House and align closely with the administration's key policy priorities, which include labor and climate concerns.

Congress Is Likely To Be Further Slowed Down

Experts in the field of trucking regulations and legislation, such as P. Sean Garney from Scopelitis Transportation Consulting, predict that Congress is likely to be further slowed down by partisan politics, making it challenging to achieve substantial legislative victories. However, they also highlight that administrative agencies, such as the Biden administration, may have a different approach.

The administration may seek to expedite its agenda before the election in order to demonstrate to the public that it is delivering on its promises.

Randy Mullett, a transportation consultant and principal of Mullett Strategies, agrees that regulation, rather than legislation, will be the predominant driving force behind trucking policy in the coming year. He suggests that Congress will primarily focus on other urgent matters, such as emergency funding and federal budget extensions, upon their return from the holiday break.

Moreover, the upcoming presidential primary in January will likely divert attention away from legislative efforts.

The Potential Change

According to Mullett, the potential change in administration has regulatory agencies eager to push through any pending regulations before a new administration takes office. This urgency is to ensure that the final rules have enough time to take effect before any attempts are made to repeal them.

One notable proposal from the Biden administration is a new rule that aims to clarify the distinction between independent contractors and employees. This rule has the potential to significantly favor employee status, creating core challenges for trucking companies that heavily rely on independent contractors.

These companies would now have to demonstrate that their drivers are truly independent workers, which could disrupt longstanding relationships between owner-operators and larger carriers.

Has Expressed Concerns

The Owner-Operator Independent Drivers Association has expressed concerns about this proposed rule, emphasizing that the duration of a lease with one carrier should not dictate an operator's ability to work for other carriers. They argue that each case should be evaluated individually.

In addition, the shipping industry or trucking industry is expected to face increased costs due to the Environmental Protection Agency's new emission standards for heavy-duty trucks from 2027 to 2032. These standards heavily rely on a shift towards electric vehicles and are estimated to add around $15,000 to the cost of a new sleeper cab, according to the EPA.

Overall, these potential regulatory changes and emission standards are likely to have significant implications for the trucking industry, affecting the classification of workers and increasing costs for carriers.

After undergoing a comprehensive public comment period in 2023, the proposal put forth by the Environmental Protection Agency (EPA) is now on track to be finalized as a rule in March.

Truck Parking, Broker Transparency Prominent In 2023

In 2024, there are growing concerns regarding transportation costs or trucking costs, which have emerged as a prominent issue following a year where two other matters received significant attention: truck parking and broker transparency.

To address the truck parking shortage, the government has allocated record amounts of federal funding, acknowledging the severity of the crisis. The Transportation Secretary, Pete Buttigieg, recognized the efforts of the Owner-Operator Independent Drivers Association (OOIDA) and the American Trucking Associations for bringing attention to this issue in a joint letter received back in 2022.

As a result, the U.S. Department of Transportation has intensified its work on the Truck Parking Coalition and actively encouraged states and decision-makers to utilize infrastructure funds for expanding parking facilities.

Additionally, there is pending legislation in the U.S. House and Senate that aims to earmark $755 million in grants specifically for truck parking. This legislative measure further emphasizes the government's commitment to addressing the truck parking shortage and providing support to the trucking industry.

Overall, these developments highlight the significance of truck parking and its impact on trucking cost savings. It demonstrates a proactive approach from the government in collaboration with industry organizations to tackle this problem, ensuring a reliable and efficient transportation network for the future.

Consistently Been Recognized

The issue of insufficient truck parking has consistently been recognized as a significant concern by the American Transportation Research Institute (ATRI) since 2015. This year, it has reached its highest ranking as the second most pressing issue in the industry, surpassed only by concerns regarding the economy.

In 2023, small business truckers were particularly frustrated by the Federal Motor Carrier Safety Administration's (FMCSA) decision to delay action on broker transparency. In May 2020, the Owner-Operator Independent Drivers Association (OOIDA) and the Small Business in Trucking Coalition filed petitions urging FMCSA to address alleged price gouging by dishonest brokers.

According to Lewie Pugh, Vice President of OOIDA, FMCSA is well aware of the fraudulent practices occurring in the industry. However, despite assurances earlier in the year that there would be a rulemaking by June, FMCSA's regulatory agenda postponed it until October 2024.

Pugh expressed disappointment with the continuous postponement, stating that their petition has been in FMCSA's possession for over three years, while they continue to suffer from exploitation.

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Action On Safety-Specific Initiatives In 2024

According to Garney, the trucking industry's main safety concern is not likely to be tied to a specific rulemaking. Instead, the industry is eagerly awaiting the final decision from the FMCSA on how the CSA Safety Measurement System will be improved.

This decision is expected to have significant positive impacts on motor carriers and is part of a broader strategy to enhance law enforcement targeting and data quality.

Garney also mentioned that FMCSA and its state partners will soon begin testing Level 8 commercial vehicle inspections, which will be conducted electronically while autonomous vehicles are traveling at highway speeds. This new approach to safety inspections could potentially revolutionize how roadside enforcement is conducted in the future.

In addition to these developments, there are other safety-related rulemakings that are scheduled to be implemented in 2024. These include the introduction of speed limiters for heavy trucks, the implementation of automatic emergency braking systems, and increased oversight of automated driving systems.

Furthermore, guidelines on the use of hair for drug testing, which have been under review at the White House throughout 2023, are expected to be published by the U.S. Department of Health and Human Services in 2024. However, even if the guidelines are finalized in 2024, it may take another year for the Department of Transportation to incorporate them into the drug testing rules, allowing the industry to use hair as an alternative sample to urine or oral fluids, as stated by Garney.

In Conclusion

As we enter 2024, it is clear that the trucking industry is facing significant challenges due to rising labor and climate costs. However, with these current challenges come opportunities for innovation and adaptation.

Companies that are able to navigate these changes and find sustainable solutions will have a competitive advantage in the industry. It is crucial for trucking companies to stay informed and proactive in order to thrive in this ever-changing landscape.

By acknowledging and addressing these issues, we can work towards a more efficient customer experience, customer satisfaction and environmentally-conscious trucking industry for the future.

If you want to stay updated with a wide range of trends, actionable insights, and innovative solutions in the trucking, freight, and logistics industry, stay connected to us.

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Our DOT Consortium's friendly team will be more than happy to discuss any concerns you may have and work with you to ensure you are always fully compliant, especially with random DOT drug and alcohol testing. Moreover, if you need help with FMCSA Clearinghouse registration, we can further support you.