A very good article by Greg Fulton in Overdrive Online that is relevant to the CVSA conference I am attending in Denver this week. Lawmakers and enforcement officials should take advice from Greg and his observations that recent statistics reflect that more than 90 percent of the trucking companies in the country are made up of businesses that have 20 or fewer employees. Very few of these companies have a staff attorney, regulatory director, or tax specialist. Yet because of the increasing complex web of laws and regulations in our country, almost all of these companies at one time during the year will need to retain the services of one of these specialists.
An owner of one small trucking company once mentioned to me that he woke up every morning worried that he was unwittingly violating at least one regulation or law each day. Because of the volume of laws and regulations and their changing nature, he could never be certain what exactly had changed day to day and where he failed to comply, but it was a constant concern.
The point is that every year, our state legislatures and the U.S. Congress, as well as officials with federal, state, and local governments, pass hundreds of new laws, regulations, ordinances, and rules that affect trucking in one way or another. In most cases these laws and regulations are approved by well-meaning elected officials or government agencies who are seeking to address particular issues that have been brought to their attention. Unfortunately, though, no one tallies the overall number, the cost and time to implement, or most importantly the cumulative impact that these measures may have on small businesses, the primary generator of jobs in our country. While there may be some analysis of the impact of a particular regulation, it generally is done in a void without consideration of other rules. Add to this the fact that there is little consistency among many of the state laws and one can see the problems this dynamic poses for small trucking companies and owner-operators.
For a number of years much has been said by elected officials about streamlining the regulatory process and reducing the burden on small businesses. While there has been some progress, the regulatory onus continues to grow. This is occurring at a time when the country is still trying to recover from the recession and our nation faces even more competition on an international basis. To remain competitive in this environment our trucking companies are being pressed to be more productive and efficient. One way to do this would be to reduce the “regulatory drag” that saps critical time and money from our trucking companies, hitting small trucking operators especially hard.
Rather than investing in new trucks and trailers, creating additional jobs, and improving their facilities, our trucking companies find themselves spending more and more money on attorneys, tax consultants, and regulatory experts. Companies have little choice, because the cost of failing to comply with even one of these regulations, along with defending themselves against a perceived violation that may or may not even have existed, could mean the loss of their business or serious financial implications.
Even in cases where a company successfully defends itself, the legal bills may run into thousands of dollars along with countless staff hours spent working on the problem.
As we consider the future, we must recognize that our world is evolving with new technologies and ideas, our understanding of the environment is growing, and we are moving toward an international marketplace — some new regulations will be needed.
But rather than continuing down the existing road and adding to the problem of regulatory complexity, we need to rethink how we craft regulations. We need to think in terms of “smart regulation.” Such an approach would seek to make new regulations simpler, more understandable, less costly, and easier to deal with from a compliance viewpoint. The language in any new regulation and what’s required should be clear and concise and not require a small trucking company or owner-operator to retain an attorney to understand it.
Recently, we had an example of this form of “smart regulation” in Colorado with the modification of the state’s diesel emissions-testing program. Rather than having all fleets conduct an outdated and time-consuming opacity test on all vehicles, the State passed a law that allows an option whereby a fleet can demonstrate compliance with emissions standards through electronic transmittal of their computerized maintenance records showing that they meet or exceed manufacturers’ maintenance specis. Rather than have companies focus on a test that provides little value, it allows them to cut out this step and place greater attention on engine maintenance. It was a clear win-win for both state and industry.
Government agencies should also do a better job on outreach and training for the industry on any new regulations or laws. From an efficiency standpoint, regulations should be constructed in a manner that enables cost-effective enaction and enforcement as well as easy compliance for businesses. Any new regulations should be designed as building upon existing systems and information rather than forcing companies to re-input data. At the same time, we need to look at new technologies and systems in our mobile and hi-tech world that will allow convenience and ease for trucking operators in complying with regulations as well as better understanding them.
Finally, agencies should actively and creatively seek input from the affected sector of the trucking industry before adopting new regulations. Focus groups, electronic town hall meetings, and webinars should all be considered to gain greater input and understanding of proposed regulations and ensure that they are crafted in a user-friendly manner that may lessen time and cost.
While looking forward, we must also look back. It is important that we look to eliminate any unnecessary or outdated regulations. At the same time, we need to streamline the existing ones. Both of those processes along with the crafting of “smart regulations” could help us create a regulatory environment that is simpler, more understandable, and less onerous.