As the transportation industry gears up for what it hopes will be a successful 2021 holiday season amidst a global driver shortage, overloaded ports, and the lingering effects of a global pandemic, President Joe Biden signed a $1.2 trillion infrastructure bill, known as the Infrastructure Investment and Jobs Act of 2021 (“the Act”) into law on November 15, 2021. The Act, which passed in the Senate in August and the House of Representatives earlier this month, is the single largest piece of legislation investing new money into infrastructure since the Great Depression.
In its final form, the Act allocates $110 billion to rebuild bridges and roads, $11 billion for transportation safety, $39 billion to modernize public transit, and approximately $50 billion for cyberattack defense and long-term natural disaster preparation.
In addition to the $110 billion dedicated to repairing, renovating, and installing new bridges and roads, the Act establishes several new programs and studies that have the potential to significantly overhaul the commercial trucking industry over the next three to five years, including the following:
- Owner-Operator Lease Agreements: The Act calls for the establishment of a “Truck Leasing Task Force” to investigate the lease agreements between motor carriers and owner-operators and to evaluate how such agreements impact roadway safety, carbon gas emissions, vehicle maintenance, and driver compensation.
- Underride Protection Standards: The Act recommends the creation of an Advisory Committee on Underride Protection to strengthen standards for rear trailer underride guards. This Advisory Committee comes in the wake of the “Stop Underrides Act,” which was introduced in March of 2021. The bill sought to require underride guards on the sides and in the front of all new trucks.
- Emergency Braking: The Act directs the Department of Transportation to conduct a study into the feasibility of mandating automatic emergency brakes on all new commercial motor vehicles.
- Commercial Automobile Crashes: The Act directs the Department of Transportation to conduct a thorough study on the causes of commercial vehicle collisions.
- Young Driver Apprentice Pilot Program: The Act establishes an apprenticeship pilot program for commercial driver’s license holders under the age of 21. The pilot program would allow drivers under the age of 21 to operate a commercial vehicle in interstate commerce as long as the vehicles are equipped with automatic transmission, forward facing video, active braking collision mitigation system, and a governed speed of 65 miles per hour. Additionally, specific probationary periods are required where an experienced driver rides in the passenger seat with the apprentice driver.
- Women of Trucking Advisory Board: The Act requires the Federal Motor Carrier Safety Administration to establish a Women of Trucking Advisory Board since women make up 47% of the workforce in the United States, but account for only 6.6% of truck drivers and 8% of freight firm owners.
As part of the “Truck Leasing Task Force’s” investigation into roadway safety, carriers may face added exposure in the event of a crash. Under the current framework, carriers may be entitled to indemnification from the owner-operator in the event of a collision while the owner-operator uses the carrier’s tractors or trailers. However, as part of the Task Force’s investigation into roadway safety, and in an attempt to make the roads safer, the Task Force may recommend that the Federal Motor Carrier Safety Administration impose additional duties on carriers to vet owner-operators prior to leasing their equipment.
The Advisory Committee on Underride Protection will likely be a short-term headache but a long-term blessing for industry leaders including carriers, owner operators, and insurers. Over the coming years, carriers will likely need to retrofit old trailers and purchase new trailers to comply with the new underride guard requirements. While the short-term costs will increase, the long-term benefits may potentially outweigh those costs. Safety underride guards should lower the frequency of catastrophic accidents, which will likely reduce insurance premiums, exposure, and litigation.
The same holds true with the study into the feasibility of mandating automatic emergency brakes on all new commercial motor vehicles. While automatic brakes will likely increase the cost of a new commercial vehicle, motor carriers, insurers, and owner-operators may see a decline in rear-end collisions as a result of the automatic brakes.
While the Act establishes several ground-breaking programs and studies, several highly controversial and negotiated topics were left out of the final version, such as:
- Trucking Parking Funding: The Act does not allocate any money specifically for truck parking.
- Minimum Insurance Requirement for Motor Carriers: The Act does not increase in the minimum insurance requirement for motor carriers from $750,000 to $2 million. The minimum insurance requirement for motor carriers remains at $750,000 for commercial trucks weighing at least 10,001 lbs.
The effects of Congress’ decision to maintain the minimum insurance requirement for motor carriers will likely be felt immediately. If Congress had implemented such a change, the spike in commercial trucking litigation seen over the past three to five years could grow exponentially in light of the fact that motor carriers will have significantly greater minimum limits of insurance potentially available to a prospective claimant. Further, insurance premiums may have increased, which could put additional strain on an industry hampered by a driver shortage.
Now that both the Senate and House have passed the Act, lawmakers will likely refocus their attention on the supply-chain crisis to attempt to fast-track implementation of certain aspects of the Act with Black Friday just over a week away.
For example, trucking lobbyists and lawmakers on both sides of the aisle are pushing Secretary of Transportation, Pete Buttigieg, to implement the Youth Driver Apprentice Pilot Program immediately to allow drivers under the age of 21 to drive across state lines. Proponents of this measure hope that the influx of new drivers will ease pressure on the supply-chain and ease congestion at the ports. As recently as November 10, 2021, over 110 cargo ships remain anchored outside the port of Los Angeles waiting to offload their cargo. With the House’s approval of the Act, proponents will no-doubt seek to have Secretary Buttigieg implement the program immediately to attempt to clear the ports and move product in time for the holidays.
Additionally, and with the driver shortage eclipsing 80,000, the Federal Motor Carrier Safety Association is working with the Biden Administration to expedite the issuance of Commercial Driver’s Licenses to get drivers on the road.
However, these emergency measures come with liability concerns. Less experienced drivers on the road may lead to more accidents and more violations of the Federal Motor Carrier Safety Act; both of which can expose carriers to additional liability in terms of increased litigation and fines. Motor carriers and insurers should also pay special attention to drivers who obtain their commercial driver’s licenses on an expedited basis. It remains unclear at this point what training, education, or examinations, if any, will be expedited, modified, or eliminated as part of this emergency program. Motor carriers may need to supplement or increase their onboard training, including additional skills tests, teaching seminars, and supervised driving to attempt to overcome these new obstacles.
While the proposed emergency measures and new programs stemming from the Act may not be long-term solutions to the supply chain crisis that continues to evolve with the ever-changing Covid-19 related restrictions and programs, these programs have the potential to meet the high demand associated with the 2021 holiday season before the long-term impacts of the Act can be felt.