The Real Cost of Regulations for Small Carriers
This Opinion piece appears in the Oct. 24 print edition of Transport Topics.
By Barb Delles (CEO – Colorado Motor Express)
Economists often speak of a “regulatory drag” on our economy related to the costs associated with the many regulations passed over the years. Recent estimates of this regulatory burden on the U.S. economy range upward of $2 trillion per year, or more than 10% of our gross domestic product, or GDP. Few of these economists, though, have actually experienced the effects of this onslaught of regulations firsthand, as many of us who operate small businesses have.
For me and other small businesses the effects of this blitz of regulations are more than increased costs of doing business. They also create great anxiety and concern. While I am trying to run a profitable trucking company, at the same time, I must seek to interpret all of the various new regulations and then determine how to comply with them. A slight mix-up with even one can lead to a major fine, penalty or even lawsuit. In some cases, an inadvertent lapse or misunderstanding can result in the demise of a business.
Being that there are so many federal and state agencies, all of whom could be passing a regulation that is unbeknownst to me but could affect my company and its employees, it makes for many a sleepless night. Like other small businesses, I do my best to stay on top of these changes, but the pace and sheer magnitude of new regulations or interpretations of old ones makes it impossible.
The concept and concern of excessive regulation is not one that is unknown to our elected officials. Every new state and federal administration promises when they take office to “streamline and cut regulations” — but none deliver. While these elected officials may be sincere in seeking such change, in almost all cases the regulatory burden on businesses is greater than when they assumed office.
In the trucking industry in the upcoming year, the federal government, alone, is looking at three major new regulations that will affect all trucking companies. One involves a requirement for electronic logging devices, or ELDs, to more accurately track the driving hours and rest periods for truck drivers.
A second is a measure that will require speed limiter devices on heavy-duty trucks, which will restrict their maximum speed to 60, 65 or 68 mph.
The third is a proposal that targets sleep apnea, which would provide guidelines and rules for identification and treatment.
While all of these rules may have some merit, they all require some review — and if approved, there will be additional costs for equipment, restructuring operations and training personnel.
In addition, these new regulations may have the effect of creating an even greater shortage of truck drivers than exists today.
For me and my staff, there is also the hidden costs associated with trying to understand the new rules, determine how we will implement them and then training our staff.
Like most companies in the trucking industry our family-owned business is small. We do not possess a staff attorney, certified public accountant or regulatory specialist in our company who may be charged with interpreting and helping us comply with these new regulations. This job falls on me and my small management team. In this respect, we are no different than the vast majority of small businesses.
I understand the importance for certain regulations related to safety, the environment, security and fair business practices. Many of these regulations and laws have been important in ensuring that our highways are safe, our environment is clean and that there is an equitable business environment.
The question is: How much is too much? The point is that we can only absorb so much without other problems occurring in our operations. The current environment forces small carriers, in some cases, to choose which regulation may be more important at this given time and merits greater attention. In some instances, I am concerned that our focus on the newest safety regulation may inadvertently distract our attention and resources from other more important safety considerations.
Maybe the time has come when we should have a moratorium on any new regulations so we can digest, understand and have time to implement and enforce the many existing regulations that are already on the books. Such a pause would allow us and regulatory agencies to evaluate the success or impact of our existing regulations and whether additional rules are necessary. At the same time, this might allow us all to focus on our core business rather than spending precious time on determining how to comply with the newest regulation.
Colorado Motor Express is a family-owned trucking company based in Denver that has operated since 1986. Delles also is the chairwoman of the Colorado Motor Carriers Association, an organization that represents 650 companies either directly or affiliated with trucking in Colorado.
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