April 26, 2005

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Headline News

• Do Your Homework on Training Schools
• FMCSA Requests Comments on ATA Application for Preemption Determination in DC Hazmat Case
• Senator Corzine Introduces “Extremely Hazardous Materials Rail Transportation Act” Legislation
• CVSA Roadcheck 2005 Scheduled – June 7 - 9, 2005
• Commerce Committee Approves Senate Version of Highway Bill
• Final Rule on Applicability of the Hazardous Materials Regulations to Loading, Unloading and Storage
• TCA Attends DOT Regulatory Review Public Meeting

Do Your Homework on Training Schools

I'd like to take a poll to start off this month's column: Raise your hand if you feel you have too many qualified drivers? Guys sitting around the office waiting for a load. I'm guessing there aren't too many hands up right now.

We all know there's a serious driver shortage out there. In fact, a recent industry study by the Canadian Trucking Human Resources Council (CTHRC) reports that 37,000 new drivers are needed this year to satisfy demand and replace retiring drivers. And this conservative estimate is expected to continue every year for the next decade.

Now ask yourself: ‘Who's training these new drivers?' You can be sure your insurance company will ask that question when your newly minted training school graduate needs to be added to your policy.

Incredibly, more than 200 driver training schools operate across Canada today, all promising their program leads to a new career. To start a truck training school, you simply hang out your shingle and go into business. No legislated national standards exist for instructors, facilities or minimum curriculum to ensure a diploma from one school means the same as a certificate from another.

That makes it hard to know which schools and programs provide quality training to novice drivers. It's also tough on prospective students who don't know what to look for in a school and often fall back on price as the deciding factor, only to be uninsurable after they complete that $2,000 weekend course.

Let me give you a scenario to illustrate this point: Joe's out of work. He hears about the demand for truck drivers. Joe calls some carriers and, sure enough, they all tell him they're desperate for drivers. One catch: Joe doesn't have his tractor-trailer license.

Joe calls some local schools. He settles on one. Fred at “the school” tells Joe he can make a proper trucker out of him in three weeks for $6,500. But Joe doesn't have $6,500.

“No problem,” says Fred. “We'll put you into our weekend program for only $2,000.”

Fred assures Joe that his school is legitimate and even points at a framed certificate hanging on the wall. Sounds good to Joe.

Joe pulls the last $2,000 from his savings account and completes the program. After finishing the course, Joe goes to the Ministry of Transport and gets his new license.

Now Joe receives a conditional offer of employment from your trucking company. Just one more detail: Get Joe on your company's insurance policy. Unfortunately, “the school's” weekend training program doesn't meet the minimum standards of most insurers. The result? Joe's still unemployed, he's out $2,000, and you still need another driver.

If the industry had standards governing driver training, this frustrating problem could be avoided. Employers would know that potential drivers with decent records and accredited training would be insurable. Similarly, prospective drivers would know that the training program they're investing in would lead to a solid job.

Unfortunately, according to the CTHRC, more than half of the 200 trucking schools in Canada fail to complete any federal or provincial licensing, accreditation or registration processes. As an insurance company, that worries us. It worries us so much that we won't insure a graduate from most schools if training alone is what the driver is being assessed on.

But fly-by-night training should concern you too. Aside from the impact poorly trained drivers can have on the industry's public image, they can also affect your bottom line. Even if your insurance company agrees to insure a new driver who lacks the proper instruction, you'll be the one to suffer if that driver is inadequately trained. It can cost you a load, a customer, increased insurance premiums, or worse—someone's life.

Markel will insure new drivers that meet two key qualifications:

• a clean record driving an automobile for at least three years (two years for straight trucks and light commercial vehicles); and
• successful completion of the CTHRC's Earning Your Wheels Program, a Professional Truck Driver Institute of America (PTDI) certified training course, or other training that meets our eligibility requirements.

As an industry, we must become better informed about driver training. To that end, Markel has recently produced a brochure titled Let's Talk Driver Eligibility for Insurance Coverage. In it, you'll find our policies for insuring drivers. You can request a free copy by emailing us at publications@markel.ca or you can download a copy from our website at www.markel.ca.

Over the next ten years, Canada will need 370,000 new drivers to move your customers' loads to their destinations. Now's the time for carriers, insurers and government to establish the training standards we'll all need to ensure those loads arrive safely.

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FMCSA Requests Comments on ATA Application for Preemption Determination in DC Hazmat Case

The Federal Motor Carrier Safety Administration (FMCSA) published in the April 20, 2005, Federal Register , a public notice and request for comments on an application by the American Trucking Associations (ATA) for an administrative determination as to whether Federal hazardous materials (HM) transportation law preempts highway routing requirements of the District of Columbia (DC) in restricting transportation of certain HM. This ATA request stems from their opposition to DC's quest (the DC Act) to stop HM shipments within two miles of the Capitol Building . The “DC Act” applies to transportation of certain HM within a 2.2-mile zone of the U.S. Capitol Building.

In their application for the preemption determination, ATA challenges the following two sections of the “DC Act.”

• Section 4, titled the “Prohibition on shipments of HM,” Section 4 makes it illegal, except in cases of emergency, to transport in the Capitol Exclusion Zone without a permit for a variety of HM's including Class 1 explosives, Class 2 flammable and poisonous gasses, and Class 6 poisonous materials. Section 4 also makes it illegal in the Capitol Exclusion Zone, without a permit, to operate a vehicle that is capable of containing, and has exterior placarding or other markings indicating it contains the aforementioned classes of HMs.

• Section 5 of the Act, titled “Permits.” Section 5 of the DC Act enables the DC DOT to issue a permit authorizing transport of the materials listed in Section 4, if there is no “practical alternative route” – defined in Section 3 of the Act, as a route which lies entirely outside the Capitol Exclusion Zone and whose use would not make shipment of the HM cost-prohibitive.

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Senator Corzine Introduces “Extremely Hazardous Materials Rail Transportation Act” Legislation

On April 13, 2005, Senator Jon Corzine (D-NJ) introduced his long-promised “Extremely Hazardous Materials Rail Transportation Act of 2005” (S.773). This bill is the companion to the legislation that was introduced on the House side by Representative Edward Markey (D-MA) on March 17 entitled the “Extremely Hazardous Materials Transportation Security Act of 2005” (H.R.1414). The Corzine bill is similar to the Markey one in many respects, however the Corzine bill is more harmful. It expressly states that his bill will have no preemptive effect (and for the regulations it will promulgate). Furthermore, it specifically includes radioactive waste, which the Markey bill didn't, and in addition the language in the bill “wants to know whether individuals who transport, load, unload, etc., are adequately trained or prepared to respond to incidents involving terrorism.”

As for the Markey bill, if enacted it would require the Department of Homeland Security (DHS) to issue regulations imposing additional security requirements for shipments of extremely HM. The language in the bill defines extremely HM as materials that are “toxic by inhalation,” “extremely flammable,” “highly explosive,” and any other materials designated by the Secretary of DHS as extremely hazardous. The bill has also re-introduced calls on the Secretary of DHS to promulgate regulations which would require:

•  Pre-notification of federal, state and local law enforcement when an extremely HM is transported near an area of concern (i.e., an area that is designated by the Secretary as posing a particular interest to terrorists);

•  A determination by the Secretary of DHS as to whether transportation could be made by alternate route at a lower security risk, except where the origination or destination is located within the area of concern;

•  Use of currently available technologies and systems to ensure immediate communication between transporters and all entities charged with responding to acts of terrorism;

•  Physical security measures (e.g., passive secondary containment of tanker valves, additional security personnel, surveillance technologies and barriers);

•  Creation of terrorism response plans for shipments of extremely HM;

•  Additional comprehensive training for individuals that transport extremely HM;

•  Civil penalties of up to $100,000 and administrative penalties of up to $1,000,000 for violation of a regulation issued under this act; and

•  The enactment of whistleblower protections for personnel who report security or safety problems.

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CVSA Roadcheck 2005 Scheduled – June 7 - 9, 2005

Roadcheck 2005, the 18^th annual edition of the 72-hour vehicle/driver inspection program, will take place on June 7-9, 2005 throughout the U.S. , Canada , and Mexico . The Commercial Vehicle Safety Alliance (CVSA) sponsors this event, with participation by the Federal Motor Carrier Safety Administration (FMCSA), Canadian Council of Motor Transport Administrators, Transport Canada , Transportation Security Administration (TSA), National Highway Traffic Safety Administration (NHTSA), and the Secretariat of Communications and Transportation ( Mexico ). More than 3 million roadside safety inspections, including the annual Roadchecks are conducted each year by CVSA-trained and certified inspectors.

Roadcheck 2004 involved more than 10,000 truck and bus safety inspectors across North America inspecting commercial motor vehicles (CMVs) at inspection sites and in roving patrols along the highways. At Roadcheck 2004, state and provincial personnel performed 57,785 inspections, representing 2,001 more inspections than the prior year, and nearly 49% more than was completed in 1999. Of these inspections conducted, a CVSA decal was placed on 27,749 (48.0%) of CMVs showing that no safety violations were found during the vehicle inspection -- which was the highest number of vehicles with no violations discovered in the history of the prior Roadchecks.

Other Roadcheck 2004 results showed fewer HOS violations. Inspectors found out-of-service (OOS) violations in 3.44% of the inspections; in 2003, the corresponding percentage was 3.69%. In addition, the HM OOS rate dropped slightly for vehicles – from 20.0% to 19.1%, and was equal to the prior year's number for drivers – 2.3%. In addition, only 1.3% of all drivers inspected during Roadcheck 2004 were not wearing a safety belt. Vehicle OOS rates increased from 22.7% in 2003 to 23.9% in 2004, and the driver OOS rate remained constant at 5%.

To launch Roadcheck 2005, CVSA will host a media kick-off event on June 7 th , for more information on Roadcheck 2005 go to CVSA's website at www.cvsa.org.

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Commerce Committee Approves Senate Version of Highway Bill

On April 14, the U.S. Senate Committee on Commerce, Science and Transportation approved by unanimous consent the “Surface Transportation Safety Improvement Act of 2005,” offered by Surface Transportation and Merchant Marine Subcommittee Chairman Trent Lott (R-MS) and Full Committee Co-Chairman Senator Daniel Inouye (D-HI). This legislation includes the following titles:

•  Title I: Motor Carrier Safety;

•  Title II: Highway and Vehicular Safety;

•  Title III: Hazardous Materials Transportation Safety;

•  Title IV: Household Goods; and

•  Title V: Sportfishing and Recreational Boating Safety.

This Senate version of the bill reauthorizes the truck safety programs administered by the Federal Motor Carrier Safety Administration (FMCSA) and more than doubles the amount of safety funding available to the states through the Motor Carrier Safety Assistance Program (MCSAP) to around $200 million. Furthermore, the bill also provides improvements to the CDL program and establishes a medical review board to recommend standards for the physical examinations of CMV drivers and a registry of qualified medical examiners. The bill will also require Mexican and Canadian CMV drivers transporting hazardous materials (HM) in the U.S. to undergo a background check similar to that given to a driver in the States.

On March 10 of this year, the House version of the six-year $284 billion highway bill – H.R. 3 – “The Transportation Equity Act: A Legacy For Users” (TEA-LU) – was overwhelmingly approved by a vote of 417-9. After the Senate ratifies its own version of the Highway Bill, both Senate and House Committees will negotiate the final legislation. Congress is still looking to reauthorize the Highway Bill before the current one expires on May 31, 2005. Senator Lott said he hopes the Congress will finalize a conference report on the legislation by the end of May. Lott became chairman of the Surface Transportation Subcommittee at the beginning of the 109 th Congress, and this bill is the first major legislation to be reported out of that jurisdiction this year.

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Final Rule on Applicability of the Hazardous Materials Regulations to Loading, Unloading and Storage

The Pipeline and Hazardous Materials Safety Administration (PHMSA), formerly the Research and Special Programs Administration (RSPA) issued a final rule in the April 15, 2005 Federal Register which clarifies the applicability of the hazardous materials regulations (HMR) to functions and activities related to the safe and secure transportation of HM commerce, including loading, unloading, and storage operations. The effective date of this rule is June 1, 2005, which has been delayed a couple of times prior as the agency has had to address a number of appeals submitted by persons affected by the original final rule (issued on 10/30/03). In the April 15 final rule, the PHMSA amends certain regulations and makes some editorial corrections as well. The final rule amends HMR to incorporate the following new definitions and provisions in §171.8 of the HMR:

• “Pre-transportation function” means a function performed by any person that is required to assure the safe transportation of a HM in commerce;
• “Transportation” is defined to mean the movement of property and loading, unloading, or storage incidental to the movement;
• “Movement” is defined to mean the physical transfer of a HM from one geographic location to another by rail car, aircraft, motor vehicle or vessel;
• “Loading incidental to movement” means the loading by carrier personnel or in the presence of carrier personnel of packaged or containerized HM onto a transport vehicle, aircraft, or vessel for the purpose of transporting it;
• “Unloading incidental to movement” means the removal of a packaged or containerized HM from a transport vehicle, aircraft, or vessel or the emptying of a HM from a bulk packaging after a HM has been delivered to a consignee and prior to the delivering carrier's departure from the consignee facility or premises; and
• “Storage incidental to movement” means storage by any person of a transport vehicle, freight container, or package containing a HM between the time that a carrier takes physical possession of the HM for the purpose of transporting it until the package containing the HM is physically delivered to the destination indicated on a shipping document.

In addition, the agency amended §171.1 of the HMR to list regulated and non-regulated functions. Regulated functions include:

1. activities related to the design, manufacture, and qualification of packagings represented as qualified for use in the transportation of HM;
2. pre-transportation functions; and
3. transportation functions (movement of a HM and loading, unloading, and storage incidental to the movement).

Non-regulated functions include:

1. rail and motor vehicle movements of a HM solely within a contiguous facility where public access is restricted;
2. transportation of a HM in a transport vehicle or conveyance operated by a Federal, state, or local government employee solely for government purposes;
3. transportation of a HM by an individual for non-commercial purposes in a private motor vehicle; and
4. any matter subject to U.S. postal laws and regulations.

They also amended §171.1 of HMR to indicate that facilities at which functions are performed in accordance with the HMR may be subject to applicable standards and regulations of other Federal agencies or to applicable state or local government laws and regulations (except to the extent that such non-Federal requirements may be preempted under Federal hazmat law).

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TCA Attends DOT Regulatory Review Public Meeting

TCA staff attended the Department of Transportation (DOT), Office of the Secretary's (OST's) April 12 regulatory review meeting of its current regulatory agenda. The DOT had published a notice of this regulatory review in the January 26, 2005 Federal Register , and invited public comment on how the agency could:

1. improve their rules to be more effective and less costly or burdensome;
2. identify rules no longer needed and/or new rules that may be needed, and
3. help prioritize their current rulemaking activities as set forth in their semi-annual regulatory agenda (published on December 13, 2004).

The April 12 public meeting agenda was broken up into a number of individual topics, most notably as it relates to the trucking industry were the following breakout sessions:

1. hours of service (HOS);
2. controlled substances testing requirements;
3. commercial motor vehicle (CMV) lighting requirements;
4. safety requirements for intermodal equipment providers; and
5. dangerous goods/hazardous materials (HM) and safety.

The DOT has stated that they will consider all comments made at the public meeting and those written comments submitted to the docket before publishing a report providing at least a brief response to the comments received, including a description of any further action they intend to take. The comment period for the regulatory review closes on April 29, 2005, and the comments filed to this docket, include those from the April 12 public meeting can be accessed at http://dms.dot.gov -- Docket Number is OST-2005-20112.   

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