House T&I Committee Discusses Overcoming Supply Chain Challenges
On Wednesday, May 10, the House Committee on Transportation and Infrastructure met to discuss overcoming supply chain challenges faced within the freight industry. Highways and Transit Subcommittee chairman Rick Crawford (R-AR) led the hearing. He started by first addressing the labor shortage in the trucking industry and what changes should be made to address the aging workforce and worker retention issues within the driving industry. Electrification was also briefly touched on by Crawford. Infrastructure inadequacy and safety was discussed at length, with mentions of multiple bills, sponsored by different representatives sitting on the committee, that would address some of these stakeholder concerns.
The four witnesses that testified at the hearing were:
- Mr. William “Lewie” Pugh, Executive Vice President, Owner-Operator Independent Drivers Association
- Ms. Anne Reinke, President and Chief Executive Officer, Transportation Intermediaries Association
- Mr. David Fialkov, Executive Vice President, Government Affairs, NATSO, Representing America’s Travel Plazas and Truck Stops (NATSO) and SIGMA: America’s Leading Fuel Marketers (SIGMA)
- Mr. Cole Scandaglia, Senior Legislative Representative and Policy Advisor, International Brotherhood of Teamsters
Labor Market in Trucking Industry
The topics of labor shortages and worker retention were brought up repeatedly during the hearing. The industry says there is a record deficit of 80,000 truck drivers in the United States as of 2021, with the median age of drivers about 46 years old, according to the American Trucking Association. This aging workforce is not being adequately replaced, as young people are less likely to pursue a career in trucking due to many inadequacies within the industry.
Cole Scandaglia, the witness representing the International Brotherhood of Teamsters, naturally spoke about the issue through a different lens. Scandaglia pointed out problems in the industry, including the quick turnaround of workers within the trucking industry, the problem of misclassification of drivers, and outdated and inadequate safety training for new drivers. Lewie Pugh, the Executive VP of the Owner-Operator Independent Drivers Association, pointed to compensation as a ‘top concern’ for drivers today. Trucker pay has not kept up with inflation since the 1970s, he said, even with sign-on bonuses being offered by large companies. The median salary of a truck transportation drivers as of May 2022 is $54,840 per year, according to the U.S. Bureau of Labor Statistics.
Rep. Derrick Van Orden (R-WI) pointed out that a way to address the labor shortage would be to lower age restrictions on commercial driver’s licenses, while Rep. Val Hoyle (D-OR) rejected that argument, noting that drivers aged 16-19 are involved in three times more collisions that drivers aged 20 and above. Other witnesses on the panel echoed both sides of this dispute. (Ed. Note: the 2012 bipartisan infrastructure law requires USDOT to carry out a pilot program for 18-, 19-, and 20-year old CMV drivers, called the Safe Driver Apprenticeship Pilot Program. Although FMCSA rolled out the program in January 2022, trucking companies say the program is too complicated and restrictive for them to participate.)
Lack of Proper Infrastructure
A bi-partisan issue that appeared to have support across party lines was the idea that parking availability for truckers was a pressing issue. Rep. Greg Stanton (R-AZ) noted that the average truck driver spends 30 minutes looking for a parking spot in Arizona, a state which had 285 million tons of freight carried through it in 2019. Continuing to use Arizona as an example for a national problem, 67 percent of truck drivers in Arizona report difficulty finding parking at least once a week. These issues could be exacerbated by Electronic Logging Devices, or ELD’s, which automatically keep track of hours spent behind the wheel. This will create a new issue of trucks stopping earlier to secure a parking spot, and result in longer shipping times, as most truckers are not eligible for overtime pay and therefore have strict working hours.
David Fialkov, the head of Government Affairs at NATSO, an organization which represents travel plaza’s and truck stops across the United States which own roughly 90 percent of truck parking spots, pointed out several recurring problems stakeholders face when trying to expand parking for trucks. He pointed out that it has become increasingly difficult for private companies to garner public support for expanding or building new truck stops to address the issue of parking. Not to mention that building parking lots in areas where shortages are rampant is very capitol intensive.
There have been efforts within the federal government to address this issue head on, most recently, the Department of Transportation awarded almost $40 million in grants to Florida and Tennessee to expand their truck parking capacities.
Misclassification and Exemptions/FLSA
Another issue, which adds to the labor shortage in the trucking industry, is the misclassification of drivers as ‘independent contractors’ and the driver exemptions in the Fair Labor Standards Act (a.k.a. FLSA) of 1938. The exemption in question, Section 13 (b)(1), also known as the Motor Carrier Exemption (MCE) eliminated overtime pay requirement for greater than forty hours worked.
In order to avoid paying overtime to drivers, larger fleets started employing drivers as ‘independent contractors’, meaning they were not entitled to benefits other full-time employees would be under the FLSA. Mr. Scandaglia pointed out that as independent contractors, drivers are not given collective bargaining rights or allowed to join a union, making it more difficult for them to request higher wages or increased benefits.
The Federal Motor Carrier Safety Administration was also criticized during the hearing for having an outdated safety auditing system. The FMCSA requires all audits to be done in person, making it an extremely labor intensive task for the administration to perform in a timely manner. Ms. Reinke, the President and CEO of TIA, said that 92 percent of carriers are currently unrated, and that there are upwards of 80,000 complaints in the freight fraud database that have not been investigated.
Due to current regulations larger fleets are given safety rating priority over smaller mom and pop or owner operated companies. Reinke suggested the current system is inefficient and that data should be collected from police and weigh stations to give safety ratings, in addition to in person audits.
Electrification and alternative fuels were also briefly touched on but were in no way one of the main topics of discussion. The hearing focused on issues that are negatively affecting stakeholders in the trucking industry, while still highlighting advancements in technology and what they could mean for the future of the trucking industry.
Suggestions to improve the supply chain in the freight industry were outlined during this committee hearing, and included:
- Improve wages of truckers and remove exemptions in the Fair Labors Act to make the trucking industry more appealing to new workers.
- Expand and improve infrastructure by increasing the amount of parking spots available, especially in urban areas.
- Improve the FMCSA safety auditing system to make it more effective and create a safer environment for all drivers.