Transcript FALL 2005 MEETING WASHINGTON REPORT

HEALTH AND PERSONAL CARE LOGISTICS
CONFERENCE
WASHINGTON UPDATE
October 2010
John M. Cutler, Jr.
McCarthy, Sweeney & Harkaway, P.C.
1825 K Street, N.W., Suite 700
Washington, DC 20006
(202) 775-5560
[email protected]
1
OVERVIEW
• November elections are main focus of
discussion in Washington
• Republican gains in both Houses of
Congress are likely
• One or both Houses might shift from
Democratic to Republican majorities
• Current gridlock likely to get worse
• Slim possibility of action by “lame duck”
Congress
2
LEGISLATIVE GRIDLOCK ISN’T
ALL BAD
• Many controversial bills are dead for now
– EFCA/Card Check
– Climate Change/Cap and Trade
• However, all bills not enacted by the end of this
Congressional session will have to be
reintroduced in 2011, and start over. Some
popular bills may move forward quickly next
year, but many will be harder to pass.
3
THE LAME DUCK CONGRESS
• After the November elections, current Members of
Congress will return to Washington and may enact
legislation even if not reelected
• Members who lost their seats may be able to cast votes
on needed bills even if those votes are unpopular
• “Must-Pass” bills, like bills to fund the federal
government and extension of Bush tax cuts, will become
vehicles for amendments addressing unrelated issues
• However, real cooperation between Republicans and
Democrats is not likely during lame duck session
• Leaders of both parties admit that dysfunctional
Congress is failing to do its job, but improved
performance next year is unlikely
4
INFRASTRUCTURE INVESTMENT MAY
BE A CASUALTY OF GRIDLOCK
• The last Highway Bill, SAFETEA-LU, expired September
30, 2009
• Stopgap funding since then, but little progress on a
successor
• Chairman Oberstar of the House Transportation &
Infrastructure Committee has pushed for, and drafted, a
new bill
• The Senate and White House wanted to wait till after the
November 2010 elections
• Hopes for strong economic recovery, which might have
eased funding concerns, have not panned out
5
NO LACK OF EFFORT TO PUSH
INVESTMENT
• On September 23, U.S. Chamber of Commerce
released its Transportation Infrastructure Index
as part of its Let’s Rebuild America initiative
• Index is designed to show the importance of
transportation infrastructure to business
• Bottom Line: “Our nation's deteriorating
infrastructure is placing a major drag on our
economic growth. There can be no more
business as usual.”
• Chamber plans to follow up with indexes for
energy, broadband and water
6
NO LACK OF EFFORT TO PUSH
INVESTMENT (continued)
• On October 4, a National Transportation Policy
Conference chaired by former DOT Secretaries Norm
Mineta and Sam Skinner issued “Well Within Reach:
America's New Transportation Agenda”
• Many participants in the Conference were also involved
in producing the 2008 and 2009 Reports of the Policy &
Revenue Study Commission and the Infrastructure
Financing Commission, both set up by Congress
• Report calls for increased funding, with a Vehicle Miles
Traveled (VMT) tax the preferred long-term solution
• Collecting one penny per mile would equal current
revenues from the Highway Fuel Tax. Two cents per
mile is projected to provide the long term funding
needed.
7
INFRASTRUCTURE BANK
• The White House has proposed a $50 billion
Infrastructure Bank to support infrastructure
investment
• Idea is to provide seed money that would attract
other capital and fund needed investment
- Where would money come from?
- What would it be used for?
- Would $50 billion infrastructure bank replace
$450 billion Highway Bill?
- Will Congress support infrastructure
investment?
8
WILL CONGRESS SUPPORT
INFRASTRUCTURE INVESTMENT?
• Piling up studies and conference reports by present and
former public officials is no substitute for action on
Capitol Hill
• This is the $450 billion question
• The answer is probably No
Governor Bill Graves, President of American
Trucking Associations, and Senator Max Baucus,
Chairman of Senate Finance Committee, both
predict no action by Congress (other than stopgap
funding) between now and 2113)
Not clear whether funding will be possible in 2014
9
WHAT’S THE PROBLEM?
• Bills in Congress must pass Senate and
House
• Senate passage used to require majority
but often requires 60 votes today
• Single Senator can block action through
an anonymous “Hold”
• Both parties have fewer centrist members
willing to support other party’s initiatives
• Compromise has become a dirty word
10
WHAT’S THE PROBLEM?
(continued)
• There is too much partisanship on Capitol Hill and in
Politics
• Republicans won’t vote to raise taxes prior to the
November elections
• After the elections, Members elected with Tea Party
support will be even less willing to raise taxes, and the
goals of reducing the deficit and shrinking the federal
government will supersede other goals
• Democrats also won’t vote to raise taxes prior to the
November elections, and will almost certainly be less
effective in 2011, even if still in the majority
11
WHAT’S THE PROBLEM?
(continued)
• Too many Democrats support high speed rail,
transit, bike lanes and other elements of the
transportation infrastructure that do not move
freight
• Too many Democrats care more about health,
safety, the environment and security than about
the efficient movement of goods and people
• Infrastructure investment and Highway Bills used
to enjoy bipartisan support, but the rules have
changed
12
WHAT WE CAN DO TO HELP
• Infrastructure investment is supported by Carriers and
Shippers, Business (which needs goods moved) and
Labor (which needs the jobs infrastructure investment
offers)
• Senator Baucus said that constituents of Members of
Congress need to press for action. Carriers, Shippers,
Business and Labor are constituents.
• The Chamber of Commerce, NAM, H&PCLC,
NASSTRAC, NITL, American Trucking Associations,
Association of American Railroads, NRF, RILA, etc.,
need to keep pushing for action
13
INACTION MEANS MORE WASTE
• The deteriorating U.S. infrastructure leads to waste
Shippers may need to add unnecessary inventory –
just-in-case supply chains replacing just-in-time supply
chains.
Carriers need additional equipment and personnel
due to congestion
Commuters waste time in traffic due to congestion
Government wastes time and money because
construction approvals involve too much red tape
and delay
• Fortunately, politicians, whether they are Democrats or
Republicans, love to run on a platform of eliminating
waste
14
ANTITRUST BILLS AND NEWS
• Shipping Act of 2010, H.R. 6167, introduced by
Chairman Oberstar of House Transportation &
Infrastructure Committee, eliminates antitrust
immunity for ocean shipping lines, provides for
arbitration of disputes, prohibits unreasonable
surcharges and allows FMC to impose civil
penalties. Supported by shippers; opposed by
carriers.
• Railroad Antitrust Enforcement Act, S. 146,
introduced by Senator Herb Kohl (D-WI), would
eliminate antitrust immunity for railroads.
Supported by shippers; opposed by carriers.
15
ANTITRUST BILLS AND NEWS
(continued)
• Senator Kohl has also called on the Department
of Justice to investigate LTL pricing, and
particularly, rate increases based on changes in
commodity classifications by the Commodity
Classification Standards Board
• Major forwarders agreed to pay $50 million in
fines for air cargo price fixing
• Class action status for rail fuel surcharge price
fixing cases to be decided soon
16
OTHER LEGISLATION RELATED
TO TRANSPORTATION
• FAA Reauthorization Act, H.R. 915, introduced by Rep.
James Oberstar (D-MN), would modernize FAA. Held up
in Senate, due in part to dispute over whether FedEx
should be subject to Railway Labor Act, which requires
labor organizing at the national level, or the National
Labor Relations Act, which permits labor organizing at
the local level.
• Surface Transportation Board Reauthorization Act, S.
2889, introduced by Senator Jay Rockefeller (D-WV).
Supported by rail shippers and opposed by major
railroads. Would increase rail competition and the
effectiveness of regulatory remedies for captive rail
shippers at the STB.
17
OTHER LEGISLATION RELATED TO
TRANSPORTATION
• Freight Rail Infrastructure Capacity Expansion Act, S.
3749, introduced by Sen. Kent Conrad (D-ND) would
provide 25% investment tax credit for railroads.
Railroads support but bill not moving.
• Focusing Resources, Economic Investment and
Guidance to Help Transportation (FREIGHT) Act, S.
3629, introduced by Senator Frank Lautenberg (D-NJ).
Supported by railroad industry and opposed by trucking.
• Freight is the Future of Commerce in the United States
(Freight FOCUS) Act, H.R. 6291, introduced by Rep.
Laura Richardson (D-CA). Calls for 12 cent increase in
diesel tax, $3 billion transfer to trust fund, and creation of
National Freight Advisory Committee. Supported by
trucking industry.
18
OTHER LEGISLATION RELATED TO
TRANSPORTATION
• Drug Safety and Accountability Act, S. 3690, introduced
by Senator Michael Bennet (D-CO). Bill would require
each drug producer to report on each producer,
manufacturer, distributor and shipper involved in drug
production or transport. Allows Secretary of HHS to
order immediate cessation of distribution, or order a
recall. Supported by AARP, Consumers Union,
American College of Physicians and others. PhRMA
“studying”.
• Motor Carrier Protection Act, S. 3483, introduced by
Senators Snowe (R-ME) and Klobuchar (D-MN),
increases registration fees for brokers and forwarders,
and prohibits trucking companies from brokering unless
they register as brokers or forwarders, furnish a
$100,000 bond, and specify in writing the form of service
provided
19
HOURS OF SERVICE UPDATE
• Since 2003, FMCSA has had HOS rules based on 11
hours max time on duty and at least 34 hours off duty
between work weeks
• H&PCLC and other shipper groups have supported ATA
and the trucking industry and FMCSA because the
current rules work
• Safety advocates have continued to push for shorter
hours, even as highway fatality rates have fallen to the
lowest level in 60 years
• FMCSA will announce new rules in the next month or
two. H&PCLC will continue to support efficient truck
operations and reasonable HOS rules.
20
PORT DRAYAGE UPDATE
• For several years, efforts to improve air quality at ports
have been affected by unionization issues
• Port of LA wants to require owner-operators driving port
drayage trucks to become employees of trucking
companies. Port of Long Beach has seen dramatic
improvement without forcing owner-operators to lose
their independence.
• LA approach facilitates organizing efforts by Teamsters
• Pro-union forces are trying to change law through the
Clean Ports Act of 2010, H.R. 5967, introduced by Rep.
Jerrold Nadler (D-NY)
• ATA has been successful in resisting change in court, but
most recent trial court decision favored Port of LA. ATA
will appeal and seek stay. H&PCLC supports ATA.
21
TRUCK SIZE AND WEIGHT
• Greater Gross Vehicle Weights would increase trucking
productivity, as would longer combination vehicles
• Change to federal “freeze” to allow more LCVs unlikely
• Safe Highways and Infrastructure Preservation Act
(SHIPA), H.R. 1618 (Rep. McGovern, D-MA) and S. 779
(Sen. Lautenberg, D-NJ) would expand freeze to all
national highways, not just interstates
• Some progress on raising 80,000 lb. GVW limit to 97,000
lb. GVW with another axle and set of wheels.
• Safe & Efficient Transportation Act, H.R. 1799 (Rep.
Michaud, D-ME) and S. 3705 (Sen. Crapo, D-ID) is
gaining support
• Obama Administration wants Congress to make Maine
and Vermont pilot programs for 100,000 lb. trucks on
interstate highways permanent. Railroads oppose.
22
DOT AND FMCSA
• After trying and failing to support increased fuel
taxes, DOT Secretary Ray LaHood has spent
time promoting high speed rail, and arranging for
TIGER grant funds to go to railroads. DOT
needs support of Class I railroads for high speed
rail initiative.
• Comments about trucking provide less comfort,
though LaHood is not talking so much about
getting gas-guzzling trucks off the roads
• Adverse impact on trucking from FMCSA Hours
of Service rules likely to be compounded by CSA
2010 initiative. Driver shortage will get worse.
23
DOT AND FMCSA
(continued)
• Satisfactory ratings required by many shipper
contracts may become Marginal or Unfit under
CSA 2010. Motor carrier and broker/forwarder
contracts need to be modified to call for trucking
companies to maintain Safety Measurement
System (SMS) ratings exceeding Marginal.
• SMS ratings to become available in December
2010. Notice of Proposed Rulemaking on CSA
2010 due in early 2011. H&PCLC will file
comments
24
CSA 2010 BASICS
Behavior Analysis and Safety Improvements Categories
(BASICs) Elements:
• Unsafe Driving – speeding, reckless driving
• Fatigued Driving – exceeding hours of service
• Driver fitness – lack of CDL, medical disqualification
• Controlled Substance/Alcohol
• Vehicle Maintenance – defective brakes, lights, etc.
• Cargo-Related – overloading, improper securement
• Crash Indicator – high crash involvement
25
PUERTO RICO PORT SECURITY
• Puerto Rico has announced plans to implement
port cargo screening using Rapiscan X-ray
technology
• Said to apply to inbound shipments, and to
comply with Puerto Rico law
• Concern for Pharma shippers with goods
moving through Port of San Juan is that X-ray
screening might damage goods or packaging, or
might lead to rejection of screened cargo as
potentially compromised or contaminated
• Efforts are under way to address the problem
26
SUPREME COURT ON CARGO CLAIMS
• At H&PCLC Spring Meeting, K-Line v. Regal Beloit
discussed, in which Supreme Court considered whether
international bill of lading or Carmack amendment
governs cargo claim resulting from UP derailment
• Normally, federal laws trump shipping papers
• However, Court majority held that BOL was controlling,
forcing shipper to go to Tokyo to resolve cargo claim
• Decision simplifies life for forwarders, ocean lines and
connecting ground carriers, and suggests that Rotterdam
Rules, like COGSA, will supersede Carmack for most
ocean/surface shipments
• Shippers can still arrange for Carmack coverage for U.S.
surface leg of ocean shipments from Asia or Europe, but
contracts with forwarders and shipping lines will need
appropriate language
27