January 19, 2017

Carriers Advocate for Data-Driven Regulations

Holland & Knight Alert
Jameson B. Rice

Freight carriers of all modes ­– rail, truck, water, air and pipeline – are all in the business of moving cargo for compensation and thus share many similar goals. Furthermore, cargo is often moved in multiple modes in its journey from origin to destination, each with its inherent advantages and disadvantages, thus fostering further cooperation among transportation modes. At the same time, each mode competes with the others for business. Railroads and trucking companies provide the most similar services, and thus are the modes that compete the most directly.

Because of this more direct competition, the trucking and railroad industries are each of the opinion that regulations imposed upon them have the potential to put them at a competitive disadvantage that could drive business to the other mode. However, with the new Trump Administration comes the possibility of a new regulatory environment, one in which the trucking and railroad industries may find common ground.

The railroad industry would like the new administration to ensure that the costs and direct benefits of regulation are properly measured, citing a new brake requirement and a proposed minimum crew rule as two examples where the safety benefits are not substantiated, yet the compliance costs are substantial. The trucking industry worked with Congress to repeal hours-of-service rules established by the Obama Administration that made it more difficult for drivers to drive during overnight hours. Thus, they argued that the rule put more trucks on the road during the day when other drivers are on the road, which is less safe and increases traffic. The industry has also long taken issue with the data collected by the Federal Motor Carrier Safety Administration (FMCSA), calling into question whether that data is a good indicator of a trucking company's safety. Congress has required that the data be removed from public view while its efficacy is studied. An administration that is more sympathetic to trucking interests may find its regulations less likely to be unwound by Congress.

The desire for less costly regulation is not unique to this change of administration. That is, debates over the scope, timing and effect of federal regulation on industry and the public are traditional government issues facing every administration. If anything, President-Elect Donald Trump's campaign rhetoric indicates that his administration might break from Republican norms. However, the nomination of Elaine Chao as Secretary of Transportation – the former Secretary of Labor and Deputy Secretary of the U.S. Department of Transportation, as well as the wife of Senate Majority Leader Mitch McConnell (R-Ky.) – may signal a traditional Republican approach to transportation regulations. It remains to be seen what regulatory environment is cultivated under the Trump Administration. The trucking and railroad industries, however, are among those seeking a more surgical approach to regulation starting in 2017.  


Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.

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