Transcript FALL 2005 MEETING WASHINGTON REPORT

HEALTH AND PERSONAL CARE LOGISTICS
CONFERENCE
WASHINGTON UPDATE
OCTOBER 2012
John M. Cutler, Jr.
McCarthy, Sweeney & Harkaway, P.C.
1825 K Street, N.W., Suite 700
Washington, DC 20006
(202) 775-2505
[email protected]
1
CONGRESS ABOUT TO FACE
PERFORMANCE REVIEW
• All members of the House of
Representatives and one-third of Senators
are up for election in a month
• Unlike normal people, members of
Congress have decided to postpone
worthwhile efforts until after the
performance review is over
• The White House is also in play
2
THE “GOOD” NEWS
• Congress (mainly the Senate) managed to pass a new
Highway Bill, “Moving Ahead for Progress in the 21st
Century”, or “MAP-21”
• The amount provided for is $104 billion for two years,
roughly maintaining current spending levels
• Funding comes from highway fuel tax revenues, but the
tax rates are still not increased or indexed for inflation
• Some money to come from general fund, i.e., other
government revenues
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BUT
• Congress failed to enact any of the bills needed
to fund federal government operations
• Congress did approve a Continuing Resolution
to maintain current funding through March 27,
2013
• The CR reduces MAP-21 funding for the first half
of FY 2013 by $278 million
• Since one half of one fiscal year is 25% of the
MAP-21 total time frame, we are not off to a
good start
4
“FISCAL CLIFF” MAKES THINGS
WORSE
• Ends Bush tax cuts and payroll tax reductions
• “Sequestration” forces $1.2 trillion in deficit
reduction by end of 2021
• Roughly $55 billion in defense cuts in 2013
• Roughly $55 billion in non-defense cuts
(entitlements and other non-defense programs)
in 2013
5
“FISCAL CLIFF” MAKES THINGS
WORSE (Continued)
• MAP-21 funding from highway fuel taxes should
not be subject to Sequestration but general fund
money would be
• Projected impact would be an 8% cut
• Chances of Congress coming up with remedies
to avoid or ameliorate Sequestration are high
• However, the point of Sequestration was to
produce compromise and rational alternatives
before now
6
INFRASTRUCTURE FUNDING IS A
MESS
• MAP-21 funding is inadequate without these reductions
• Two year time frame for MAP-21 is also inadequate
• Infrastructure funding is one of the most basic
responsibilities of government, and is foundational,
supporting jobs and economic activity
• Failure to fund additional infrastructure investment likely
to impair the economic growth we need
• World Economic Forum ranks U.S. infrastructure 24th in
the world, down from 5th in 2002
7
INFRASTRUCTURE FUNDING IS A
MESS (Continued)
• Inability of federal government to face infrastructure
challenge prompts many to look to State governments
• Most States face deficits and are reducing spending, and
State action means no comprehensive national approach
to infrastructure
• For many States, infrastructure funding means raising
existing tolls and imposing new tolls
• ATA testified to Congress that PANYNJ is proposing
163% increase by 2015 for its interstate bridges and
tunnels – to $105 per crossing
8
INFRASTRUCTURE FUNDING ASIDE,
MAP-21 HAS IMPORTANT PROVISIONS
• As to tolls at State borders, MAP-21 provides for
DOT review of reasonableness (but there is no
similar provision for non-border tolls)
• Calls for creation of a national strategic freight
transportation plan, which is likely to support more
intermodalism
• Faster environmental reviews, possibly cutting 15year average for large highway projects in half
• Consolidation of programs, simplifying management
• Installation of truck EOBRs
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INFRASTRUCTURE FUNDING ASIDE, MAP-21
HAS IMPORTANT PROVISIONS (Continued)
• Requires an inventory of bridges and tunnels and
standardized measures for evaluating safety and utility
• Increases penalties for hazardous materials violations.
Non-payment of penalties means no further HM
operations.
• Reform of broker registration and financial responsibility.
Required bond to go from $10,000 to $75,000, which
should help address problem of shippers paying brokers
who go under without paying carriers.
• Civil penalties are increased, and can be levied against
individual officers and directors, not just corporations
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INFRASTRUCTURE FUNDING ASIDE, MAP-21
HAS IMPORTANT PROVISIONS (Continued)
• Truck size and weight issues, including 97,000 lb. GVWs
and longer combination vehicles, will be studied for 2
years by DOT
• Unfortunately, focus of study not limited to productivity,
safety, capacity and efficiency
• Study must also consider whether heavier/longer trucks
would divert freight from railroads to motor carriers
• DOT supports increasing rail and rail intermodal market
share, raising questions about its objectivity in the study
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PROSPECTS FOR FUTURE ACTION
• MAP-21 is better than no new Highway Bill, but it expires
September 30, 2014. Next Congress will need to decide
about infrastructure funding thereafter.
• If Senate keeps Democratic majority, Barbara Boxer
likely to chair Senate Environment & Public Works
Committee and Jay Rockefeller likely to chair Senate
Commerce
• If Senate has Republican majority, James Inhofe is
ranking Republican on EPW and Jim DeMint may chair
Senate Commerce. These are two of the most
conservative Members of the Senate.
12
PROSPECTS FOR FUTURE ACTION
(Continued)
• If House stays Republican-controlled, John Mica
should remain Chairman of House Transportation &
Infrastructure Committee.
• Jimmy Duncan would remain Chairman of Highways
and Transit Subcommittee.
• If Republicans lose House majority, Nick Rahall, a
strong supporter of trucking, is ranking Democrat on
House T&I
• Peter DeFazio is ranking Democrat on Highways
and Transit Subcommittee
13
RAIL ISSUES
• MAP-21 came out of Senate with important rail
provisions
A deadline extension for Positive Train
Control
Funding for PTC implementation
Captive rail shipper provisions
• As enacted, MAP-21 did not include these provisions.
The railroads apparently were willing to give up on their
PTC provisions rather than see Congress help shippers
• Railroads will continue to pursue action on PTC
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RAIL ISSUES (Continued)
• STB has proposed significant changes as to rail regulation
- In Ex Parte 715, the Board is proposing to raise or
eliminate relief caps on its simpler, cheaper
unreasonable rate challenge procedures
- In Ex Parte 711, comments are due on the pros and cons
of access remedies to increase rail-to-rail competition
- The Board has also proposed a new approach to
defining when railroads have market dominance. Since
1980, the law has allow rate challenges only where
shippers are captive.
- New mediation and arbitration procedures for disputes
between shippers and railroads are also being considered
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RAIL ISSUES (Continued)
• Railroads are doing very well, with revenues up
despite flat volumes
• Economic revival will help even more
• Cloud on horizon is court decision certifying fuel
surcharge antitrust case as a class action
• Railroads have appealed class certification
decision
16
PORT ISSUES
• Possible strike by ILA closing East Coast and
Gulf Coast ports was a top concern last month
• ILA and USMX agreed to resume negotiations
with Federal Mediation and Conciliation Service
until the end of this year. Port of NYNJ local pay
and rules are also being negotiated.
• Elections may have contributed to continuation
of talks
• H&PCLC was one of many industry groups
monitoring developments
17
PORT ISSUES (Continued)
• DOT officials met with shipper groups to hear
our concerns. DOT was asked to urge continued
negotiations, to be backed up by prompt
invocation of Taft-Hartley if necessary.
• Many H&PCLC members contacted DOT and
Members of Congress, and we have an
H&PCLC letter ready to go if a strike looks likely
in early 2013
• Surcharges likely if a strike occurs. FMC filing
required.
18
TRUCK DRIVER HOURS OF
SERVICE NEWS
• H&PCLC has fought for years for Hours of
Service rules that promote safety without
harming supply chains
• Under the rules adopted in 2003, large truck
crash and fatality rates dropped to record lows
• Public Citizen and other interest groups have
argued for a decade for shorter hours, the
shorter the better
• In 2011, FMCSA issued latest rules, which take
effect July 1, 2013
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TRUCK DRIVER HOURS OF
SERVICE NEWS (Continued)
• Truckers’ and shippers’ efforts before FMCSA paid
off, in that 11th hour of driving time was kept
• FMCSA also kept 34 hour “restart” between
workweeks, but mandated two 1am-5am rest
periods, which can mean 34 hours becomes 50-60
hours
• The fight is now in the court of appeals, where
truckers and shippers, including H&PCLC, are
defending 11th hour and challenging restart
revisions. MAP-21 requires 2 year study of effects
of revised restart rules.
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TRUCK DRIVER HOURS OF
SERVICE NEWS (Continued)
• Public Citizen wants at least one hour less per
day and an even longer restart. FMCSA is
defending all aspects of its decision.
• I have read all the briefs to date and have
worked on several. There is reason for optimism
that at worst, current rules will be upheld.
• Oral argument in the case is likely before end of
this year, with court decision prior to July 2013
effective date of new rules
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CSA DEVELOPMENTS
• FMCSA’s Compliance, Safety, Accountability
(“CSA”) program continues to generate
controversy
• FMCSA head Anne Ferro defended the
program at a hearing before the House
Transportation & Infrastructure Committee on
September 13, 2012
• Carriers and shippers, including H&PCLC,
support goals of CSA – getting bad carriers and
drivers to shape up or find other work
22
CSA DEVELOPMENTS
(Continued)
• ATA’s witness, VP of Safety for FedEx Ground,
testified that CSA makes his company look
questionable due to Driver Fitness BASIC score
• There are also data problems. Trucking
companies are blamed for unpreventable
accidents, States vary in how well they report
data, and safer carriers serving congested areas
can look less safe than worse carriers serving
rural areas
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CSA DEVELOPMENTS
(Continued)
• The witness for Transportation Intermediaries
Association was from CH Robinson
• CH Robinson expressed concern about exposure to
tort liability resulting from use of carriers with high
BASIC scores
• CH Robinson has reportedly paid tens of millions of
dollars to settle truck crash cases involving motor
carriers it selected
• CH Robinson and other intermediaries want to be
able to rely on DOT Safety Ratings under 49 C.F.R.
Part 385
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CSA DEVELOPMENTS
(Continued)
• There was a recent decision in Connecticut, Cloutier v.
Four Seasons, 2012 WL 233435 (Conn. Super. 2012),
granting broker’s motion to dismiss and finding that
trucker was an independent contractor
• Brokers also want Congress and/or FMCSA to help
rein in lawsuits claiming “negligent hiring” liability or
that carriers are agents of broker
• Shippers could also benefit from such measures
• FMCSA has not yet issued its Notice of Proposed
Rulemaking on CSA. This is expected in 2013.
H&PCLC will file comments.
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