Notes from the Industry: The Feds Are Slow Again!

The Feds are slow again: The hardest thing to predict about the appearance of new regulations is the FMCSA’s ability to keep to a published timeline. We see that again in the two-year delay just announced for the start of the new, formal training requirements for CDL applicants. It turns out that the states who manage the CDL testing process do not have the means to determine if a training certificate is legitimate and will not have the same for two more years. Such a Federal, unfunded mandate is a classic example of the collision between Federal regulatory policy and the states’ ability to implement. The states grant at least 500,000 CDL’s per year. That is a lot of paperwork to keep track of.

Timing counts! This delay could have significant market implications, especially if the economy goes into recession in 2020, as I think it will. Because there are not near enough training schools to grant all the required certificates, the implementation of the training regulations will limit the supply of new drivers. It will take several years until the market adjusts, providing more training capacity. Such a tightening of the market would have worked to offset the loosening of the market from recession in 2020 and 2021. That would have been a good thing for truckers and bad for shippers. Now it looks like such shortages will occur in 2022, at a time when the market is expanding again after recession. Then the tightening effect of the new regulations will reinforce the tightening from economic expansion, just like we had in 2004, 2014, and 2018. This is something to keep our eyes on over the next two years.

Noël Perry is Principal with Transport Futures, located in Lebanon, PA. He can be reached at nperry@transportfutures.net.