5 Regulations That Threaten The Trucking Industry in 2020
Updated: Mar 16
There are some new regulations that were introduced into the trucking industry at the end of 2019 and beginning of 2020, that combined could hit the trucking industry hard.
1. ABORD to ELD switch could lower productivity for some fleets
The first regulation to hit was the switch from ABORD to ELD. This regulation was put into effect December 17, 2019. All trucks that were previously using ABORD had to switch over to using ELD.
2. IMO 2020 to cause diesel prices to rise
This next regulation started January 1st, 2020. All ocean vessels were required to switch to very low sulfur fuels. 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, potentially putting many out of business.
3. Drug and Alcohol Clearinghouse will limit drivers with prior violations
All trucking companies are now required to add their carriers information to the FMCSA's Drug and Alcohol Clearinghouse, and online database that employers can access for driver and alcohol violations. This was implemented January 6th of this year and is intended to prevent drivers who have lost their job due to failed drug tests to get another job in a different state with a new carrier.
4. Higher labor costs due to new overtime laws
The U.S. Department of Labor implemented new overtime laws on January 1st, 2020, that made an additional 1.3 million Americans eligible for overtime pay. This will mainly effect trucking companies and brokerages that have back-office employees, and not necessarily truck drivers themselves.
5. New California law prevents use of independent contractors
California implemented a new law on January 1st, 2020 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
This law will prevent carriers and brokers to hire independent contractors. California-based leased-one drivers have had to become a company driver, get their own authority, or move out of state.