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Feds say speed limiter rule could adversely impact small trucking companies
WASHINGTON — The National Highway Traffic Safety Administration and the Federal Motor Carrier Safety Administration admit in their Notice of Proposed Rulemaking for speed limiters on heavy trucks that the devices could adversely impact small trucking companies because of increased delivery time.
That's based in part on the assumption that many trucks driven by independent owner-operators are not already speed limited as are those operated by large fleets, and many independent owner-operators drive the speed limit, which is 70 mph or higher in 35 states.
The agencies said because they do not have direct revenue figures for all carriers, power units serve as a proxy to determine the carrier size that would qualify as a small business given the Small Business Administration's revenue threshold.
According to the SBA, motor carriers of property with annual revenue of $25.5 million or less are considered small business.
"The impact on small carriers could be significant from a competitive perspective," the NPRM reads. "Regarding small trucking companies, the agencies predict that a speed limiting device might take away certain competitive advantages that small carriers might have over large trucking firms that already utilize speed limiting devices, but we have very limited knowledge of knowing whether that impact is 10 percent of their business, or more or less.
"We estimated that independent owner-operators of combination trucks and single unit trucks would drive 33,675 million miles annually out of 112,249 million miles traveled by these vehicles on rural and urban interstate highways. With the estimated average wage of $0.32/mile, the total annual revenue would be $10,776 million. Unlike large trucking companies, small carriers with limited resources may not be able to increase the number of drivers to overcome the delay in delivery time. However, the competitive impacts are difficult to estimate. For example, with 65 mph speed limiting devices, we estimated that owner-operators would lose $50 million annually.
"Accordingly, owner-operators would lose not more than 1 percent of their labor revenue. However, we note that the estimates were made based on very limited data. The agencies request comment on how large the economic impact might be on owner-operators."
With regard to truck power units, the FMCSA determined in the Electronic On-Board Recorders and Hours-of-Service Supporting Documents Rulemaking Regulatory Impact Analysis that a power unit produces about $172,000 in revenue annually.
The threshold of $25.5 million set by the SBA equates to 148 power units (148.26 = 25,500,000 / 172,000, according to the NPRM).
Thus, FMCSA considers motor carriers of property with 148 power units or fewer to be small businesses for purposes of the analysis.
FMCSA said it then looked at the number and percentage of property carriers with recent activity that would fall under that definition and results show that over 99 percent of all interstate property carriers with recent activity have 148 power units or fewer, which amounts to about 493,000 carriers.
"Therefore, the overwhelming majority of interstate carriers of property would be considered small entities," the NPRM noted.
In opposing speed limiters, the Owner-Operator Independent Drivers Association said the proponents were attempting to force all trucks to be speed-limited so that the major trucking companies could compete for drivers with independent trucking operations that don't have set speed limiters.
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