On April 5, Representatives Kelly (R-PA) and DeFazio (D-OR) introduced the Investing in America: Unlocking the Harbor Maintenance Trust Fund Act. The Harbor Maintenance Trust Fund is funded through a tax levied on the value of imported cargo and provides funds, appropriated annually by Congress, to the Army Corps of Engineers for harbor maintenance and dredging projects. Currently, Congress does not fully spend revenue collected by the HMTF each year, instead using the balance to offset other Federal expenditures. H.R. 1908 would take the HMTF “off budget” and would ensure the funds are used to maintain U.S. commercial harbors, instead of remaining idle in the U.S. Treasury. It also calls for the annual full expenditure of the HMTF while preserving Congress’ authority to appropriate the existing balance of around $9 billion. According to Representatives Kelly and DeFazio, the bill could provide more than $18 billion in funding over the next ten years for harbor maintenance projects and would enable the U.S. Army Corps to complete all commercial harbor dredging needs. The bipartisan bill has been referred to the House Committees on Transportation and Infrastructure, Ways and Means, and the Budget.
While fiscal year 2017 officially began October 1, 2016, Congress has not yet passed a full year’s appropriations bill to fund the federal government. After failing to come to an agreement about a full fiscal year 2017 appropriations bill, Congress moved in April to pass its third continuing resolution. The first continuing resolution was passed in September 2016 and funded the federal government through December 9, 2016. The second was passed in December 2016 and funded the federal government though April 28, 2017. Both Chambers of Congress passed the “Making further continuing appropriations for fiscal year 2017, and for other purposes” Joint Resolution on April 28, 2017. The bill was subsequently signed into law by President Trump and provides funding for the federal government through May 5, 2017, giving Congress another week to wrap up appropriations talks. The lack of a full year of funding has prevented the U.S. Department of Transportation from receiving its full obligation limitation for Highway Trust Fund Contract Authority. Therefore, USDOT has been unable to award the FY17 Nationally Significant Freight and Highway Projects grants, referred to as the FASTLANE grants under the Obama Administration. On April 30, Congressional leadership announced they had reached a deal for a full FY17 appropriations bill and expected its passage prior to the May 5 deadline.
March was a busy month for the introduction of bills focusing on funding U.S. infrastructure investments. On March 9, Congressman Blumenauer (D-OR) introduced the Raise and Index to Sustainably and Efficiently Invest in Transportation, or RAISE IT, Act. If passed, H.R. 1458 would increase the federal gas tax by 15 cents over a three year period and index it to inflation. It also calls for the replacement of the gas tax within ten years by a more sustainable funding source. The bill has 23 cosponsors, all Democrats, and has been referred to the House Committee on Ways and Means.
Also aimed at raising the gas tax, Congressman DeFazio (D-OR) introduced the Investing in America: A Penny for Progress Act on March 22. H.R. 1664 would add around a penny to the federal gas tax each year but caps any raise at 1.5 cents annually. The exact increase is indexed to the National Highway Construction Cost Index and the Corporate Average Fuel economy standard. Representative DeFazio’s bill authorizes the Treasury to issue 30-year bonds annually, until 2030, leveraged against the revenue from the tax. Money from these bond sales will be deposited in the highway trust fund and would provide an estimated $500 billion in funding for infrastructure projects. The bill has 17 cosponsors, with the only Republican cosponsor being Congressman Barletta (R-PA), and has been referred to the House Committee on Transportation and Infrastructure.
Congressman Delaney (D-MD) reintroduced two bills this month, the Partnership to Build America Act and the Infrastructure 2.0 Act, that seek to fund infrastructure projects. The Partnership to Build America Act of 2017, H.R. 1669, would create an American Infrastructure Fund to provide financing to state and local governments for new infrastructure. The AIF would be funded though one-time $50 billion bond sales to U.S. corporations seeking to repatriate a portion of their international earnings, providing up to $750 billion in loans. In line with the Trump Administration’s public-private partnership push, the bill requires that at least 35 percent of AIF supported projects have at least 10 percent private financing. H.R. 1669 has 23 cosponsors, with Representative Davis (R-IL) as the lead cosponsor, and was referred to the House Committee on Ways and Means.
The Infrastructure 2.0 Act would also create an AIF but the funds would come from a requirement that existing overseas profits made by U.S. multi-national corporations be subject to a one-time mandatory 8.75 percent tax. These profits would then be used to fund the AIF, to meet the funding gap for the HTF, and to create a pilot program establishing regional infrastructure accelerators. If passed, H.R. 1670 would also create a commission meant to address the permanent solvency of the HTF. The bill has 20 cosponsors, with Congressman Yoho (R-FL) as the lead cosponsor, and has been referred to House Rules.
The Prevent Labor Union Slowdowns, or PLUS, Act was reintroduced this month by Senator Risch (R-ID). Originally introduced in the 114th Congress, the bill would define a labor slowdown by marine workers as an unfair labor practice. A labor slowdown, as opposed to a strike, requires that an employer still payout full benefits and salaries and cannot fire an employee. Beyond defining such a slowdown as an unfair labor practice, S. 702 also gives injured parties the ability to file civil actions to seek repayment in damages resulting from slowdowns. The bill has two cosponsors, Senator Crapo (R-ID) and Senator Perdue (R-GA), and has been referred to the Senate Committee on Health, Education, Labor, and Pensions.
On February 1, 2017 Senator Deb Fischer (R-NE) introduced the Build USA Infrastructure Act. If passed, S. 271 would divert $21.4 billion annually in Customs and Border Patrol collected revenues on freight and passengers to address the Highway Trust Fund shortfall for five years after the FAST Act expires in 2020. The bill is also intended to give states more flexibility when navigating federal requirements for projects by allowing them to remit some of their federal highway dollars and in return receive control over federal approval for certain parts of regulatory process for highway projects, including design, environmental permitting and construction aspects. Any returned funds would be deposited into the HTF as well. The bill has no cosponsors and was referred to the Senate Committee on Homeland Security and Governmental Affairs.
In November 2016, then President-elect Trump nominated former Labor Secretary Elaine Chao to serve as the next Secretary of Transportation. In addition to serving as the head of the Labor Department, Chao was Deputy Administrator of the Maritime Administration. She also served as Deputy Secretary of Transportation under Secretary Sam Skinner.
Chao was recommended by members of the Senate Commerce Committee by voice vote on January 25. She was confirmed by the full Senate on Tuesday, January 31, by a vote of 93 to 6. Dissenting votes included Senate Majority Leader Chuck Schumer (D-NY) and Senators Elizabeth Warren (D-MA), Cory Booker (D-NJ), Jeff Merkley (D-OR), Kristen Gillibrand (D-NY) and Bernie Sanders (I-VT). Chao was sworn in the afternoon of January 31 and assumed USDOT responsibilities from Acting Secretary Michael Huerta.
The Trump Administration has created an infrastructure task force, housed in the White House, to help develop policy surrounding a major infrastructure investment package. President Trump emphasized his intent to invest in American infrastructure during the 2016 Presidential campaign and reemphasized investment as a priority during his January 20 inaugural address. Senior Advisor the President Jared Kushner, Chief Strategist and Senior Counselor Steve Bannon, Senior Policy Advisor Stephen Miller and Chief Economic Advisor Gary Cohn were initial appointees to the task force, according to the Washington Post.
Beyond identifying the types of infrastructure eligible for investment, the task force will be charged with coordinating stakeholder feedback and identifying potential areas where private investment could improve the state of American infrastructure.
In the closing days of the 114th Congress, legislators passed the Water Infrastructure Improvements for the Nation Act, previously titled the Water Resources Development Act of 2016. WIIN changes the maximum dredging depth from 45 to 50 feet for projects eligible for a 75 percent federal contribution, protects ports from decreases in dredging funds generated by the harbor maintenance tax by increasing the harbor maintenance funding target by three percent each year, even if HMT revenues decline, and authorizes new Army Corps of Engineers water projects for improvements. Unlike an earlier version of the legislation, WIIN does not deviate from traditional Harbor Maintenance Trust Fund workings by taking the HMTF off budget, which would have essentially firewalled the account and ensured its funds only be used for various harbor projects.
WIIN passed the House on December 8 by a vote of 360-61, passed the Senate on December 10 by a vote of 78-21, and was signed by President Obama on December 16, becoming Public Law 114-322.
A continuing resolution signed into law on December 10 provides the federal government with funding commensurate to current levels through until April 28, 2017. The legislation also contains a long-awaited fix for the house of service “glitch” caused by the fiscal year 2016 omnibus.
Language in the FY16 omnibus was meant to prevent the Federal Motor Carrier Safety Administration from using any funds to enforce the controversial two off-duty periods from 1 a.m. to 5 a.m. and the 168-hour restart, unless an ongoing review of the program found statistically significant improvements in all outcomes related to safety, operator fatigue, driver health and longevity, and work schedules of driver operating under the more restrictive HOS rules. However, in February 2016, the U.S. Department of Transportation alerted Congress to their interpretation that the FY16 omnibus voided all federal regulations governing a driver’s restart, should FMCSA’s study fail to find the statistically significant improvements.
The December 10 CR clarifies that only the enforcement of the two consecutive off-duty periods from 1 a.m. to 5 a.m. and the 168-hour restart hinge on the results of the FMCSA study. Drivers are on instruction to continue operating under hours-of-service regulations requiring an 11 hour daily driving limit with a 70 hour limit in a seven day period, with a 34 hour restart provision, and have a 14-hour maximum driving window, until results of the FMCSA study are published. Current regulations also mandate a 30-minute break during, or at the end of, an eight hour driving window before a driver can continue to operate.
While there was speculation that the CR would include language halting the enforcement of the Safety Fitness Determination rulemaking, no such provision was included. FMCSA first suggested reforms to the Safety Fitness Determination on January 21, 2016, with a notice of proposed rulemaking revising the agency’s current methodology for determining whether a motor carrier is fit to operate. FMCSA’s NPRM generated controversy over its utilization of data from the Compliance, Safety and Accountability/Safety Measurement System. FMCSA’s CSA program was subject to reform under the FAST Act, and many argue that a safety fitness determination should not be predicated on a program currently subject to overhaul. In March 2016, a group of 22 lawmakers sent a letter to Chairman Diaz-Balart (R-FL) and Ranking Member Price (D-NC) of the House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Relate Agencies, urging them to restrict FMCSA from using the funds to finalize the Safety Fitness Determination rulemaking “until all reforms related to the Compliance, Safety and Accountability/Safety Measurement Scores programs mandated by the FAST Act are completed.”
Introduced as an amendment to a bill that had previously passed the House to speed the passage process along, H.R. 2028 passed the House by a vote of 326-96 on December 8, passed the Senate by a vote of 63-36 on December 9, and was signed into law by the President on December 10, narrowly avoiding a government shutdown. It became Public Law 114-254.
The Essential Transportation Identification Credential Assessment Act was signed into law by President Obama on December 16, 2016 and became Public Law 114-278. The law directs the Transportation Security Administration to “conduct an assessment of the effectiveness of the Transportation Worker Identification Credential Program at enhancing security and reducing security risks for maritime facilities and vessels.” TSA is specifically tasked with reviewing the credentialing process, the TWIC application renewal process, and the overall security of the program. Should the agency’s assessment find a deficiency in the effectiveness of the program, the law requires that the Department of Homeland Security submit a corrective action plan to Congress, to be reviewed and reported on by the DHS Inspector General, that includes an implementation plan with benchmarks and that will be considered in any future DHS rulemakings in regards to the TWIC Program. Originally H.R. 710, the bill was introduced by Rep. Sheila Jackson Lee (D-TX) on February 4, 2015. It passed the Senate by unanimous consent on December 10 and passed the House unanimously on December 13.
In response to an April, 2015 request from Senator Deb Fischer (R-NE), the Government Accountability Office this month provided recommendations to the U.S. Department of Transportation on how to mitigate port congestion. Sen. Fischer asked GAO to study the 2014/2015 labor-related disruptions at West Coast port facilities, quantify the effects of the slowdown, and examine into how similar situations might be avoided in the future. The resulting report addresses how major U.S. West Coasts have responded to changes in global shipping, how certain shippers have reacted to port disruption, and how USDOT’s efforts to support cargo movement at ports can be improved.
The report finds that infrastructure and operations at some West Coast ports are strained. Ports are attempting to address congestion by making infrastructure improvements and operational changes to allow for the use of lager vessels. According to GAO, these efforts can be hampered by limited data and competing priorities. The agency recommends that more information on the “end-to-end process of producing and distributing a product or commodity from raw materials to the final customer” would be useful in addressing West Coast port congestion.
The report acknowledges that USDOT’s freight-related activities have become increasingly multimodal, but emphasizes further improvements must be made. The agency identifies gaps in available information about supply chains and international trade flows. GAO finds that “broadening [USDOT’s] freight strategy to include supply chain information could help USDOT to think more strategically about the specific supply chain information needed to support its freight efforts and advance national freight policy goals.”
On May 23, 2016 the U.S. Department of Labor released its final rule raising the threshold for employees who are exempt from overtime pay, from $23,660 to $47,476, effective December 1, 2016. USDOL’s final rule was controversial, with critics contending it effectively “made it mandatory for businesses to pay millions in additional salaries.” Trucking companies argued the rule forced millions of salaried professionals to be treated like hourly employees, especially dispatchers and managers who work as the need arises.
By late-November, there were pending lawsuits challenging the rule’s legality in 21 states. On November 22, U.S. District Judge for the Eastern District in Texas Amos Mazzant III halted the rule from taking effect. On December 1, the Obama Administration filed a notice of appeal with the U.S. District Court for the Eastern District of Texas, challenging Judge Mazzant’s decision to block the implementation of the rule. The appeal argues that, by stopping the rule from taking effect, businesses are able to continue taking “advantage of more than 4 million of the hardest-working Americans.” The appeals process is expected to take several months, making it significantly less likely that the USDOL overtime rule will ever take effect, as the Trump administration will most likely choose to strike it down or decline to defend it against future lawsuits.
The U.S. Department of Transportation released State Freight Plan Guidance on October 14, 2016. The Fixing America’s Surface Transportation Act requires states to develop State Freight Plans by December 4, 2017 to be eligible to receive freight formula dollars beginning in fiscal year 2018, although multimodal components of the plan may be incomplete. USDOT’s October 14 guidance outlines the minimum requirements for FAST Act-compliant State Freight Plans, makes recommendations for optional elements that States may include in their Plans, and provides a template to assist states in developing these plans. The FAST Act, like MAP-21 did before it, keeps State Freight Advisory Committees optional. USDOT’s October 14 guidance also includes advice on the makeup and responsibilities of these advisory committees, should states chose to establish them.
In June 2015, the Federal Motor Carrier Safety Administration proposed a series of changes to the Safety Measurement System methodology, including changing a number of intervention thresholds, reclassifying violations for operating while out-of-service to the Unsafe Driving Behavior Analysis and Safety Improvement Categories, and increasing the maximum vehicle miles traveled used in the Utilization Factor from 200,000 to 250,000 miles to more accurately reflect the operations of high-utilization carriers. FMCSA asked for public comment on these proposed changes.
On October 14, 2016 FMCSA responded to public comments received and proposed two additional SMS methodology changes. FMCSA suggested increasing the minimum number of crashes required for a percentile from two to three for the Crash Indicator BASIC and proposed assigning BASIC percentiles only to carriers that have had an inspection with a violation in the past year. FMCSA further clarified that none of the suggested changes from the October, 2015 or June, 2016 NPRMs will go into effect until the Fixing America’s Surface Transportation Act-mandated SMS correlation study is published by the National Academies. Public comment on the new changes is due to FMCSA by December 3, 2016.
The Federal Maritime Commission approved the OCEAN Vessel Sharing Alliance, effective October 24, 2016. COSCO, CMA, CGM, Evergreen Line and Orient Overseas Container Line filed with the U.S. maritime regulatory agency on July 21, 2016, but approval was delayed in September when FMC requested more information from the involved parties. The agency’s approval will allow OCEAN alliance members to sail on U.S. trades when operations begin on April 1, 2017. The Ocean Alliance is the latest development in the shipping industry’s global consolidation trend.
On October 6, 2016 the U.S. Department of Commerce announced a significant miscalculation in the preliminary anti-dumping tariff rates for truck tires imported from China. As a result of this miscalculation, DOC raised rates by nearly 10 points, from 20.87 percent to 30.36 percent. Anti-dumping rates are combined with countervailing duty rates to arrive at the tariff. The preliminary countervailing duty rate is 20.22 percent, so most truck and bus tires from China will be assessed at 50.58 percent tariff.
DOC made their original affirmative preliminary antidumping determination in August 2016 and an affirmative preliminary determination in their countervailing duty investigation in June 2016. The International Trade Commission, which is conducting investigations simultaneously with DOC, made affirmative preliminary determinations in both investigations in late March 2016. The miscalculation in the DOC’s preliminary anti-dumping tariff rates will not affect the final investigation timeline at either the DOC or the ITC. DOC is scheduled to make a final ruling on January 17, 2017 and the ITC will make its final determination around March 3, 2017.
The U.S. Department of Transportation issued a solicitation for its second round of its Fostering Advancements in Shipping and Transportation for the Long-term Achievement of National Efficiencies grants. Established by the Fixing America’s Surface Transportation Act, the FASTLANE grant program was funded at $4.5 billion over five years, including $850 million for fiscal year 2017. While the $850 million was authorized under the FAST Act, Congress must pass an appropriations law before the money can be distributed. The first round of FASTLANE grants was awarded earlier this year. USDOT reported received 212 applications totaling nearly $9.8 billion in requests for grants. 18 projects in 15 states and the District of Columbia were ultimately selected to receive funding in the inaugural round.
In August 2016, the Surface Transportation Board proposed a rulemaking to allow a party to obtain a reciprocal switching prescription if it is reasonable and in the public interest or is necessary for competitive rail service. The proposal was a response to a petition filed by the National Industrial Transportation League in July 2011. Current law requires shippers to demonstrate reciprocal switching is necessary to prevent an anti-competitive act, a high burden of proof.
Since STB’s proposal was published in August, the freight rail industry has come out against the rulemaking. On September 29, a group of stakeholders sent a letter to Congress saying that the rulemaking would “upend longstanding precedent” and that it would “force railroads to switch traffic to competitors without any suggestion that the incumbent railroad failed to offer competitive services.” The group, which included NRC and GORAIL, also expressed worry that the rulemaking would “greatly cut into capital spending by the railroads.”
Separately, the American Association of Railroads filed a comment with the STB in which they called the proposal “unlawful” and “contrary to established law dating back well before the Staggers Act.” UPS, SMART-TD and others submitted similar comments.
On September 15, 2016 the Water Resources Development Act of 2016 passed the Senate by a vote of 95 to 3. S. 2848, which was introduced by Senators Inhofe (R-OK) and Boxer (D-CA) on April 25, 2016, authorizes new Army Corps of Engineers water projects for improvements to rivers and harbors in the United States, clarifies Harbor Maintenance Trust Fund funding targets, and extends prioritization for donor and energy transfer ports. It also expands the Corps’ authority to accept non-Federal funds, expedites permits for rail transportation projects, promotes new technologies, and streamlines the process for cooperation from local sponsors on federal projects, among other things.
The House, meanwhile, passed their version of WRDA on September 28, 2016 by a vote of 399-25. H.R. 5303 was originally introduced on May 23, 2016 and included significant reforms to the Harbor Maintenance Trust Fund. As introduced, the bill would have taken the HMTF off-budget in the year 2027, meaning projects authorized for funding from the HMTF would no longer be subject to the annual appropriations process and the Federal government would no longer be able to use surplus funds to offset other budget needs. This provision was stripped from the final version of the bill passed by the House on September 28. The House and the Senate plan to appoint conferees to reconcile the differences between the two bills when they return from recess the week of November 14. If a final bill is not signed before the adjournment of the 114th Congress at end of 2016, the process must start over with the advent of a new Congress in 2017.
Congress was not able to pass all necessary appropriations bills prior to the end of fiscal year 2016 on September 30, prompting the need for a continuing resolution to keep the Federal government open and operating normally. On September 22, 2016 Senate Majority Leader Mitch McConnell (R-KY) proposed the CR as an amendment in the form of a substitute to H.R. 5325, an appropriations bill that passed the House earlier this year. The bill funds the Federal government through December 9, 2016 by providing approximately $204 billion for most federal agencies. The CR passed the Senate by a vote of 72 to 26 on September 28. The House then passed the bill by a vote of 342 to 85 on the same day. President Obama signed the bill in to law on September 29.
Prior to introduction of the text of the CR, there was speculation that it would include a fix to the Hours of Service “glitch” caused by last year’s omnibus. Congress stipulated that, in order to reinstate the 34-hour restart and consecutive “off-duty” period, the Federal Motor Carrier Administration must demonstrate in a study “statistically significant improvement in all outcomes related to safety, operator fatigue, driver health and longevity, and work schedules.” However, due to a drafting error, the law will instead void all federal regulations governing a driver’s restart, instead of just the 34-hour restart and consecutive “off-duty” periods, if the study does not produce statistically significant findings.
As the issue was not resolved by the CR, many are now speculating that a fix will be included in a presumed FY17 omnibus during Congress’ lame-duck session later this year. In the meantime, the industry has been instructed to continue operating as usual.
On September 27, Congressman Adam Smith (D-WA) introduced the Freight Infrastructure Reinvestment Act. H.R. 6193 is meant to build on the progress of the Fixing America’s Surface Transportation Act, passed in December 2015, by creating a new grant specifically for freight infrastructure projects, called the National Freight Mobility Infrastructure Improvement Program. The new program would work along the FASTLANE grant program, created by the FAST Act, to provide competitive grants to designated entities for projects meant to improve rail and roadway capacity. Eligible projects include, among others, grade separations, rail and highway tunnel expansions, and the construction of marine terminal facilities used for freight. The bill establishes a National Freight Mobility Infrastructure Fund to pay for the new program through the collection of a one percent fee on the shipment of freight cargo. H.R. 6193 has no cosponsors and has been referred to the House Committee on Ways and Means.
As the 2016 Presidential race nears its finish, infrastructure investment is an often-mentioned priority by both the Democrat and Republican candidates for office. According to Hillary Clinton’s website, the Democratic nominee is proposing a $275 billion dollar, five-year infrastructure plan. Funds would go to rebuilding roads, bridges, dams and levees, modernizing airports, and expanding transit opportunities. Under Clinton’s plan, $25 billion would be allocated to a national infrastructure bank, dedicated to supporting loans, guarantees and other forms of credit. According to the campaign, the Secretary Clinton aims to pass her infrastructure plan within her first 100 days in office, “as part of a comprehensive agenda to create the next generation of good-paying jobs.” The legislation would be paid for with proceeds from corporate tax reform, although so far, the Clinton campaign has not provided details on how tax reform would be structured.
Republican nominee Donald Trump’s economic vision platform promises to “provide the growth to boost our infrastructure.” Trump has repeatedly pledged substantial investment in the transportation network, noting on his website that “28 percent of our roads are in substandard condition and 24 percent of bridges are structurally deficient or worse.” While Trump hasn’t provided an exact investment figure, he stated in an interview with Fox Business Network on August 2 that he would “at least double” the amount that Clinton proposed in her plan, to nearly $500 billion. In the same interview, Trump suggested paying for his plan by selling infrastructure bonds to create an infrastructure fund.
On July 14, Representative Schrader (D-OR) introduced the Overtime Reform and Enhancement Act. If enacted, the bill would create a compliance transition period for the Department of Labor’s overtime pay final rule. The final rule, issued May 23, 2016, raises the threshold for employees who are exempt from overtime pay from $23,660 to $47,476. DOL’s final rule is set to go into effect on December 1, 2016.
Instead of immediately increasing the overtime threshold, H.R. 5813 would require that the DOL rule be implemented in phases over the next three years, increasing 50 percent to $35,984 in December 2016 followed by an increase of $74 per week until December 1, 2019 when the $47,476 threshold will be reached. Schrader’s bill is meant to ease the transition to the higher threshold and allow businesses to sufficiently plan for the increase. It has four co-sponsors, Representatives Cooper (D-TN), Peterson (D-MN), Cuellar (D-TX) and Graham (D-FL), and has been referred to the House Committee on Education and the Workforce.
The Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2017 was introduced by Representative Tom Cole (R-OK) on July 22 and also seeks to address the controversial DOL overtime rule. Beyond providing appropriations for the Departments of Labor, Health and Human Services, and Education, H.R. 5926 includes language prohibiting the use of any funds for the enforcement of the DOL overtime pay final rule. This restriction was not included in the Senate’s FY17 LHHS bill and, as implementing the overtime rule is one of DOL’s top priorities, it is very unlikely that the President would sign a final version of a LHHS bill that includes the House language.
On June 9, Representative Reichert (R-WA) introduced the Harbor Maintenance Trust Fund Reform Act of 2016, aimed at reforming the process by which ports receive federal funding to operate and maintain their harbors. H.R. 5417 would require funds collected through the Harbor Maintenance Tax be spent in full each year, a departure from the current practice of allowing surplus HMTF dollars to be used to offset costs in other areas of the federal budget. Reichert’s legislation also requires that at least 20 percent of the amounts made available each fiscal year from the HMTF be allocated to donor ports and energy transfer ports.
This bipartisan bill is the House companion to S. 2729, introduced in March 2016 by Senators Murray (D-WA) and Cantwell (D-WA). H.R. 5417 is cosponsored by Representatives DelBene (D-WA), Hahn (D-CA), Heck (D-WA), Kilmer (D-WA), Larsen (D-WA), Lowenthal (D-CA), McDermott (D-WA), and Smith (D-WA). It has been referred to the House Transportation and Infrastructure committee.
On May 23, Representative Shuster (R-PA) introduced the Water Resources Development Act of 2016. H.R. 5303 makes significant reforms to the process by which Army Corps of Engineering projects are authorized and dollars are appropriated. Shuster’s WRDA differs from the 2016 Senate WRDA, which was introduced and approved out of the Senate Environment and Public Works Committee on April 28. The House bill takes the Harbor Maintenance Trust Fund off-budget in the year 2027, meaning projects authorized for funding from HMTF would no longer be subject to the annual appropriations process. This provision is the result of over 20 years of attempts to stop proceeds from the HMTF being used to offset spending in other areas of the government. However, Shuster’s budgetary move is seen as controversial and unlikely to pass the House Budget and Appropriations Committees.
The bipartisan WRDA legislation is cosponsored by Representatives DeFazio (D-OR), Gibbs (R-OH), and Napolitano (D-CA) and was reported out of the House Transportation and Infrastructure committee on May 25. The bill now awaits action on the House floor. Meanwhile, the Senate bill, which Senate leaders were hopeful would be taken up prior to the summer recess beginning on July 15, has not made an appearance on the Senate calendar.
The House Appropriations Committee easily approved its Transportation, Housing and Urban Development funding bill for fiscal year 217 by voice vote on May 24. The bill includes $19.2 billion in discretionary funding for the Department of Transportation for FY17, $2.3 billion more than allocated by the Senate’s version. The House bill removes the once-a-week and two consecutive 1 a.m. to 5 a.m. hours of service restart rules and halts the Federal Motor Carrier Safety Administration’s Safety Fitness Determination rule until reforms required by the Fixing America’s Surface Transportation Act are implemented.
Meanwhile, the Senate FY17 THUD funding bill passed on May 19 by a vote of 89-8. Senate THUD includes a provision fixing the Hours of Service “glitch” caused by the FY16 omnibus by clarifying which restart rules would be revoked if the FMCSA’s ongoing study fails to produce statistically significant findings in all safety areas. The bill also limits commercial truckers to a 73-hour work period over a seven-day stretch and includes an amendment, introduced by Senator Johnny Isakson (R-GA), that requires the FMCSA issue the final speed limiter ruling within six months of the Act’s passage.
The Senate bill was originally packaged together with military appropriations and Zika funding. However, because the House already passed versions of military appropriations and Zika funding, but has yet to pass its THUD bill, Speaker Paul Ryan (R-WI) dropped the THUD portion of the legislation when he appointed bill conferees. While Senate Majority Leader McConnell (R-KY) could theoretically still choose to appoint conferees from Senate Appropriations and try to negotiate a THUD title, it’s more likely that a THUD conference will wait until the House passes its version of the legislation, either before August recess or by the end of the September 30 fiscal year.
Both the House and the Senate considered FY17 Energy and Water Development appropriation this month. Each year, the Energy and Water Development appropriations bill, among other things, appropriates funds from the Harbor Maintenance Trust Fund to the Army Corps of Engineers to complete projects authorized by water resources bills. On May 12, the Senate Energy and Water Development and Related Agencies Appropriations Act, 2017, which spends about $1.3 billion out of the HMTF, passed by a vote of 90 to 8.
The House version of the FY17 bill was not as successful. Introduced in April, H.R. 5055 failed to pass the House by a vote of 112 to 305 on May 26. Members in both parties voted against the bill and, while a motion to reconsider the bill has been agreed to in the House without objection, it seems unlikely the legislation will pass. However, the text of the bill, which appropriates $1.26 billion from the HMTF, is not dead - it will most likely serve as the basis for the FY17 consolidated appropriations act, commonly referred to as an omnibus, at the end of this fiscal or calendar year.
The Owner Operator Independent Drivers Association filed a petition with the U.S. Supreme Court opposing the Federal Motor Carrier Safety Administration’s electronic logging device mandate. This is the latest in OOIDA’s efforts to block the rule; they originally sued shortly after the rule’s introduction in February 2011. FMCSA issued its ELD final rule on December 16, 2015. The final rule requires that all commercial motor vehicle drivers have an ELD that synchronizes with a vehicle’s engine to record driving time as well as other records of duty status data. In March 2016, OODIA sued FMCSA to prevent the implementation of the ELD ruling, arguing that the monitoring devices do not advance safety but do violate the Fourth Amendment rights of a driver against unreasonable searches and seizures. In October 2016, the U.S. Court of Appeals for the Seventh Circuit denied OOIDA’s petition. In this month’s appeal to the Supreme Court of the United States, OOIDA argues that the Seventh Circuit was wrong and maintains that the ELD rule violates Fourth Amendment protections, calling the devices the “equivalent of warrantless surveillance of truckers.” The trade press and industry stakeholders are speculating that the ELD mandate will survive this latest appeal because it was Congressionally mandated, through the Moving Ahead for Progress in the 21st Century Act, and will most likely have benefits to truck safety over the long term.
On April 7, the Federal Maritime Commission voted to approve the East Coast Port Gateway Terminal Agreement, effective April 10. The Agreement is between the Georgia Ports Authority and the Virginia Port Authority and was originally fined on February 24, 2017. It allows the two port authorities to engage in discussions about marketing and commercial opportunities as well as operating systems and equipment, cargo handling practices, and optimizing service for ocean carriers. According to participants, the East Coast Port Gateway Terminal Agreement is a response to a changing shipping environment with an increase in both shipping alliances and in the use of mega-ships, altering cargo volumes at ports. These types of discussion agreements, as well as the shipping alliances, have raised industry concern over market competition. However, in the East Coast Port Gateway Terminal Agreement’s case, the FMC emphasized it does not allow the two authorities to jointly negotiate, set, and approve terminal rates or charges. Both port authority heads also made it clear they will not discuss pricing and also argued the two do not compete for the same cargo or customers and therefore the Agreement will not have an effect on competition. Instead, FMC Acting Chairman Khouri said the Agreement will provide a way “to improve service and operations which will ultimately benefit the American shipper and consumer.”
The Federal Motor Carrier Safety Administration held a public listening session on Highly Automated Commercial Vehicles on April 24. The session solicited information on the design, development, testing, and deployment of highly automated commercial vehicles. In September 2016, the U.S. Department of Transportation and the National Highway Transportation Safety Administration released the “Federal Automated Vehicles Policy: Accelerating the Next Revolution in Roadway Safety.” While the policy indicated that it applied to all vehicles that use public roadways and intend to incorporate highly automated vehicle technology, including light-, medium-, and heavy-duty vehicles, it focused mainly on passenger cars. Therefore, the FMCSA has begun working on guidelines for automated commercial vehicles, which are currently in the beginning stages.
Stakeholders at the April 24 session had many questions for the FMCSA about how automated vehicles would affect various aspects of the industry, including driver hours of service, what happens in the case of an equipment emergency, or who is accountable if there is a crash. Attendees also wondered if automated commercial vehicles would require a different type of commercial driver license, how the driver shortage could be affected, and if the technology could be hacked. Acting FMCSA administrator, Daphne Jefferson, told the attendees that the FMCSA did not have answers to all the questions but that they’re working to develop them. She indicated that the ultimate focus of the listening session was to ensure that regulations provide appropriate safety standards while not impeding progress.
Another indicator of the unknowns surrounding the development of a Federal policy for automated commercial motor vehicles, on April 25 Senators Collins (R-ME) and Reed (D-RI) sent the Government Accountability Office a letter asking them to examine the impact self-driving trucks will have on current truck drivers as well as the speed at which the technology may be adopted. The chairman and ranking member of the Transportation, Housing and Urban Development subcommittee also asked the GAO to address any changes in the skills and training of those operating an automated vehicle and if federal training and employment programs are preparing to assist professional drivers whose jobs may be eliminated because of the technology.
On March 23, the Federal Motor Carrier Safety Administration withdrew their Carrier Safety Fitness Determination Notice of Proposed Rulemaking. Originally published in January 2016, the NPRM sought to replace the current three-tier motor carrier safety rating system of “satisfactory,” “conditional,” and “unsatisfactory” with a single determination of “unfit.” A carrier would be determined to be “unfit” by three possible ways: 1) it fails two or more Behavior Analysis and Safety Improvement Categories based exclusively on on-road safety data; 2) it fails two or more BASICs by violating the Revised Critical and Acute Regulations identified through investigation; or 3) it fails two or more BASICs through a combination of on-road safety data and investigation results. After the publication of the NPRM, industry stakeholders came out against it because of its reliance on BASIC data, and therefore the Compliance, Safety, Accountability and Safety Measurement System.
The CSA program has four major elements, measurement, safety evaluation, intervention and information technology, that use data grouped by the SMS and based on the seven BASICs: 1) Unsafe Driving; 2) Fatigued Driving; 3) Driver Fitness; 4) Controlled Substances/Alcohol; 5) Vehicle Maintenance; 6) Cargo Related; and 7) Crash Indicator. Various papers by both industry stakeholder and the federal government have found the SMS methodology to be unreliable and that BASICs are not violated enough to be strongly associated with crash risk. There have also been criticisms regarding lack of sufficient data for peer comparison. The Fixing America’s Surface Transportation Act, passed in December 2015, worked to reform the SMS by hiding BASIC scores from public view until the National Academies conducts a review of CSA in its entirety and FMCSA implements any necessary changes.
Industry stakeholders as well as Members of Congress wrote repeatedly to the Administration asking for the delay of the Safety Fitness Determination NPRM until the FAST Act required review and reforms were completed. Both industry and Congressional pressure continued to mount causing the FMCSA to withdraw the rulemaking until additional analysis is conducted on CSA/SMS and any corrective actions are completed.
The antidumping and countervailing duty investigations into truck and bus tires from China concluded this month. In late February, the International Trade Commission determine by a vote of 3-2 that U.S. industry is “not materially injured or threated with material injury” by imports of truck and bus tires from China. Therefore, on March 17, the ITC published a federal register notice announcing it made negative final determinations in both the antidumping and countervailing duty investigations.
Antidumping and countervailing duty investigations are conducted simultaneously by the ITC and the Department of Commerce. DOC determines if dumping or subsidizing exists while the ITC determines if it causes material injury or threat of industry to domestic industry. The investigation into truck and bus tires from China began in February 2016, initiated by the ITC, followed quickly by the DOC later that month. In March 2016, the ITC made affirmative determinations in the preliminary phase of the investigations while DOC made affirmative determinations in their preliminary phases later that year. In January 2017, DOC announced that they made a final affirmative determination in both the antidumping and countervailing investigations.
While an affirmative determination was made in every previous round, the ITC’s final negative determinations supersede them and as a result the DOC will not issue antidumping and countervailing duty orders on imports of truck and bus tires from China.
On March 9, the Federal Motor Carrier Safety Administration notified Congress of the results of their Commercial Motor Vehicle Driver Restart Study. FMCSA was tasked with determining if the once-a-week 34-hour restart with two consecutive 1 – 5 a.m. “off duty” periods, effective July 1, 2013, provided greater net safety benefits than the rule in effect on June 30, 2013. Soon after the implementation of these two restart provisions in 2013, the industry began challenging its safety benefits, leading Congress to require a field study of the provisions in the Moving Ahead for Progress in the 21st Century Act. That original study supported the restart but Congressmen Shuster (R-PA0 and Petri (R-WI) challenged the results, citing concerns with the agency’s methodology. In 2014, the Government Accountability Office released their analysis of the study, which found it did not meet certain research standards.
Concern continued to mount over the two provisions causing Congress to include language in the fiscal year 2015 appropriations law that defunded enforcement and directed the FMCSA to conduct further study. While the two provisions were suspended, the industry was instructed to operate under the HOS requirements effective on June 30, 2013, meaning a driver’s week could be restarted more than once during a seven day period and drivers were no longer required to take two consecutive 1 – 5 a.m. “off duty” periods. The FY15 appropriations law also required that the Office of the Inspector General review FMCSA’s study to avoid any accuracy or research issues that occurred during the first study. Subsequently, the fiscal year 2016 appropriations law stipulated that the two restart provisions could not be reinstated unless the FMCSA’s study found significant improvements in all outcomes related to safety, operator fatigue, driver health and longevity, and work schedules.
In January 2017, the FMCSA sent its final report on the restart study to OIG for review. In early March 2017, OIG reported to Secretary Chao that they concurred with FMCSA’s conclusion and that their study properly completed all Congressional requirements. With OIG’s approval secured, the FMCSA notified Congress on March 9 that their study did not find net safety benefits resulting from the two suspended provisions. As a result, the two “off-duty” periods of 1 – 5 a.m. and the once-a-week 34-hour restart provisions will not be reinstated.
The Surface Transportation Board tentatively adopted 1.020, or 2.0 percent per year, as the average change in railroad productivity for the 2011-2015 averaging period. This is a 0.6 percent increase from the previous reporting period, 2010-2014. STB calculates this figure every year to determine the change in industry productivity by comparing the average cost of producing a unit of railroad output. However, in a change from past years, the 2011-2015 figure was calculated using actual location data derived from electronic signals. In the past, a mathematical model was used to predict the most likely route. This change made the distances reported more precise but also skewed the final productivity adjustment number, as the precise distances were found to be generally shorter than the calculated mileages assigned in previous years. This led the STB to develop a linking factor to account for the general change in distances and to come up with this year’s number. Because of the changes in calculations, STB hosted a technical conference on February 28 for interested parties to learn more about the process and weigh in. Comments on the figure, particularly on the data or any computation errors in the calculations, are due March 16, 2017. After the Board reviews any comments received, it will either determine the tentative productivity adjustment is final or will take the necessary actions to modify it.
This month, the Surface Transportation Board adopted its roster of arbitrators who will help resolve rail rate and practice complaints subject to the Board’s jurisdiction. The Surface Transportation Board Reauthorization Act of 2015, signed into law by President Obama on December 18, 2015, required STB to establish an arbitration process to resolve rail rate and practice complaints. The Act also required the creation and maintenance of a roster of arbitrators from which the STB can pull to help resolve the disputes.
On October 6, 2016 the Board published their final rule for revisions to the arbitration procedures. The rule added rate disputes to the list of matters eligible for voluntary arbitration, modified the process for initiating arbitration procedures and laid out guidelines for establishing the roster as well as qualification standards for becoming an arbitrator. It required that arbitrations have rail transportation, economic regulation, professional or business experience in the private sector to be added to the roster. In December 2016, STB announced that it was seeking applications for persons interested in being included on the list and on February 23, 2017 adopted its first roster. The roster is subject to edits at any time and will updated every year.
President Trump issued an executive order on January 30, 2017 requiring that federal agencies repeal two existing regulations for each new one enacted. This month Public Citizen, the Natural Resources Defense Council, and the Communications Workers of America, AFL-CIO sued the President as well as other key officials in the Administration to block the EO on the grounds that it both exceeds Trump’s Constitutional authority and would have a negative impact on safety. Among other examples, the parties site the speed limiter rulemaking as evidence, arguing the rule would have net safety benefits to society but would be postponed until two other regulations are repealed, delaying those benefits. It is unclear how effective this particular example will be because, according to the trade press, the speed limiter rulemaking could potentially be dead in the water.
Originally published on September 7, 2016 in response to a petition by the American Trucking Association, the speed limiter proposed rule would mandate that all newly-manufactured trucks weighing over 26,000 lbs be equipped with speed limiting devices. The proposed rule did not include an exact speed to which the vehicles would be limited but requested discussion on the benefits of setting the maximum at 60-, 65- and 68-miles per hour. An extension on the comment period was granted after industry stakeholders, including the original petitioner ATA, requested it over concerns about the lack of specificity on the maximum speed limits. Stakeholders also spoke out against the rule because it did not address the speed differential between trucks and cars that would occur as a result of the limiting devices. The pushback from the industry and a memorandum by President Trump ordering a freeze on all regulatory processes have led many to believe the administration will not choose to continue with the rulemaking.
The Carrier Safety Fitness Determination notice of proposed rulemaking again made headlines in the month of February. A group of industry stakeholders, including the American Trucking Association and the Owner Operator Independent Drivers Association, wrote to Secretary Chao to voice their concern about the NPRM, arguing the rulemaking relies on flawed Compliance, Safety and Accountability program data and should be rescinded until the FMCSA fully revamps the CSA program, as required by the Fixing America’s Surface Transportation Act.
Published on January 21, 2016 the NPRM would replace the three-tier motor carrier safety rating system of “satisfactory,” “conditional” and “unsatisfactory” with a single determination of “unfit.” The Federal Motor Carrier Safety Administration argued that this method would allow the agency to assess the safety fitness of approximately 75,000 companies a month — up from 15,000 motor carrier investigations conducted annually using the current system. Carriers would be identified as “unfit” should they: 1) fail two or more Behavior Analysis and Safety Improvement Categories based exclusively on on-road safety (Method 1); 2) fail two or more BASICs by violating the Revised Critical and Acute Regulations identified through investigation (Method 2); or 3) fail two or more BASICs through a combination of on-road safety data and investigation results (Method 3).
This month’s letter to Secretary Chao is not the first criticism of the NPRM for its reliance on CSA data, stakeholders have sent a similar letters in the past to other Department of Transportation leadership. Last year, lawmakers attempted to include a provision in multiple bills that would restrict FMCSA from using any funds to finalize the safety fitness determination rulemaking until after the FAST Act reforms were completed. Ultimately, lawmakers failed to pass it into law.
On February 24, the Georgia Ports Authority and the Virginia Port Authority filed a discussion agreement with the Federal Maritime Commission to engage in discussion about marketing and commercial opportunities. The agreement, titled the East Coast Gateway Terminal Agreement, would allow the parties to jointly create agreements with carriers, terminal operators and shippers; to acquire operating systems and cargo handling equipment together; and to attract joint services, alliances and network agreements through the use of joint marketing materials. According to a joint statement, the ports authorities hope the agreement will help them work together to become more efficient and effective in handling the changing industry, including mega-ships and new alliances.
On January 18, the Bureau of Transportation Statistics released the first Congressionally-mandated Port Performance Freight Statistics Program Annual Report, titled Port Performance Freight Statistics Program: Annual Report to Congress 2016. As required by the Fixing America’s Surface Transportation Act, the Annual Report contains statistics on capacity and throughput at the top 25 ports by tonnage, twenty-foot equivalent unit and dry bulk tonnage. BTS includes profiles of top ports in each category and incorporates publically available data, such as channel depth, total length of berths, numbers and types of cranes and availability of on-dock rail to assess capacity and throughput.
The Annual Report was developed in concert with the Port Performance Freight Statistics Working Group, which submitted their own recommendations on port performance metrics to BTS in December. While BTS was under no obligation to use the Working Group’s recommendations, and warned participants in November 2016 that it would be extremely difficult to incorporate them into the first Annual Report, it’s possible that some of the issues raised by the Working Group will be addressed in future Annual Reports.
On January 23, the Department of Commerce announced it made an affirmative final determination in both the antidumping duty and countervailing duty investigations of imports of truck and bus tires from China. DOC originally initiated these investigations almost a year ago, on February 25, 2016.
In July 2015, DOC made an affirmative preliminary determination in the CVD investigations and, after delaying its AD determination in June, made an affirmative preliminary determination in that investigation in September. The final affirmative determinations resulted in DOC establishing a dumping margin of 22.57 percent for almost all producers/exporters in China. This is down from the 30.36 percent that was estimated in the preliminary decision. As exceptions to the 22.57 rate, Prinx Chengshan Tire Co and non-selected respondents are eligible for a separate rate of 9.00 percent. This month, DOC also established final subsidy rates of 52.04 percent for all producers/exporters in China, other than mandatory respondents Double Coin Holdings (38.61 percent) and Guizhou Tyre Co. Ltd — 65.46 percent. This is an increase from the 17.06-23.38 percent range estimated by DOC during preliminary CVD investigations.
Antidumping and countervailing duty investigations are conducted simultaneously by both DOC and the International Trade Commission. While DOC determines whether the dumping or subsidizing exists, as well as the margin of the dumping or subsidizing, ITC determines whether there exists a material industry or threat of material injury to the domestic market. ITC made affirmative preliminary determinations in both investigations last year and is scheduled to makes its final determinations on March 6, 2017.
ITC›s determinations are the final step in the ongoing investigation into truck and bus tires from China. Should the ITC make affirmative final determinations, DOC will issue AD and CVD orders no later than March 13. If the ITC makes negative determinations, the investigations will be terminated.
On January 20, President Trump issued a memorandum ordering a freeze on the regulatory process, including a postponement of regulations that have been finalized and published in the federal register, but are not yet in effect. In response, the Federal Motor Carrier Safety Administration announced the Entry-Level Driver final rulemaking’s effective date is pushed back from February 6, 2017 to March 21, 2017. The final rule requires that applicants seeking a commercial driver’s license demonstrate proficiency in knowledge and behind-the-wheel training on a driving range and on a public road. FMCSA’s final rule left out the minimum hours-behind-the-wheel training requirement that was originally included in the agency’s notice of proposed rulemaking.
President Trump’s regulatory freeze is also likely to impact the pending speed limiter rule. FMCSA, along with the National Highway Traffic Safety Administration, released a NPRM regarding speed limiters on August 26, 2016. The NPRM proposed to equip newly manufactured heavy-duty trucks with a gross vehicle weight rating of more than 26,000 pounds with a speed limiting device, but did not include an exact speed to which the vehicles will be limited. In November of last year, FMCSA and NHTSA announced that they were extending the public comment period for the NPRM after controversy erupted over the lack of a specific speed. The Trump Administration, which already has a record of skepticism towards new regulations, may decline to proceed on the speed limiter rulemaking, given the industry opposition toward FMCSA and NHTSA’s proposed regulation.
The Federal Maritime Commission released an interim status report on its Supply Chain Innovation Teams on December 6, 2016. The Supply Chain Innovation Teams were announced by Commissioner Rebecca Dye in February 2016, and envisioned as mechanisms to “engage leaders from commercial sectors of the U.S. international supply chain in discussions to identify commercial solutions to U.S. supply chain operational challenges.”- The Teams were directed to focus on the largest U.S. ports: Los Angeles, Long Beach, and New York/New Jersey. The Initiative officially launched on May 3, 2016 with three Teams composed of approximately 12 members, each representing various sectors of the supply chain. During their May meeting, the Teams decided to focus on improving supply chain visibility and to develop a plan to implement that improvement.
The interim status summary provided by the FMC reports that the members of the Teams have “produced detailed lists of the high-priority information needs of key supply chain actors — mainly dealing with port/marine terminal operations, such as container availability, chassis availability, and more efficient drayage trucking operations.” According to the report, the Teams determined that access to this information through a national portal is essential to achieving enhanced visibility of supply chain efficiency, as the availability of the information would allow supply chain actors to act in harmony with each other.
Phase Two of the Supply Chain Innovation Teams initiative is expected to begin early this year with the organization of three export Teams. The FMC will continue the efforts of the original Teams by pursuing options for the development of a national portal for key supply chain information, as well as potentially develop a maritime international supply chain internship program at the FMC.
The Federal Motor Carrier Safety Administration released its final entry-level driver training standards this month. The rule requires that all applicants seeking a commercial driver’s license demonstrate proficiency in knowledge training and behind-the-wheel training on a driving range and on a public road, with training obtained from a FMCSA-approved instructional program. Notably, the rule leaves out the 30 hour minimum of behind-the-wheel training requirement originally included in the March 7, 2016 notice of proposed rulemaking. The final rule is effective February 6, 2017, with a compliance date of February 7, 2020.
After publication, the American Trucking Association expressed its approval of the final rule. However, on December 21, the Advocates for Highway and Auto Safety, the Owner-Operator Independent Drivers Association, the Truck Safety Coalition and Citizens for Reliable and Safe Highways groups petitioned the FMCSA to reconsider the rule, requesting that 30 hours of behind-the-wheel training for new drivers be included. Petitioners say that the Rule “is not in the public interest because it does not advance safety beyond current practice.” Petitioners included a request for a stay of the effective date of the Rule until the FMCSA Administrator can render a decision on this petition.
On December 7, 2016 the Coalition for Fair Port Practices submitted a petition to the Federal Maritime Commission requesting a rulemaking preventing maritime terminals and container lines from charging demurrage and detention fees when port conditions prevent timely pick up of cargo or return of equipment. Specifically, the petition requests that FMC “clarify what constitutes ‘just and reasonable rules and practices’ with respect to the assessment of demurrage, detention, and per diem charges by ocean common carries and marine terminal operators when ports are congested or otherwise inaccessible.” FMC provided notice in the federal register of this petition on December 28, 2016 and gave interested parties until February 28, 2017 to submit comments.
The November 8 general election resulted in a Republican White House and Congress, with businessman Donald Trump as the new U.S. President-elect. As a candidate, Trump proposed a $1 trillion program to invest in U.S. infrastructure, a stimulus that members on both sides of the aisle have said they would be willing to work on with the Trump Administration. The details of the plan are still being worked out, with private financing, repatriation, and an infrastructure bank all proposed as potential funding sources. Meanwhile, the President-elect has nominated former Labor Secretary Elaine Chao to be the next Transportation Secretary.
On the Congressional side, the general election resulted in House T&I members John Mica (R-FL), Cresent Hardy (R-NV) and Corrine Brown (D-FL) falling to challengers in their bids for reelection. Candice Miller (R-MI), Richard Hanna (R-NY), Reid Ribble (R-WI), Donna Edwards (D-MD), Janice Hahn (D-CA), and Ann Kirkpatrick (D-AZ), also members of House T&I, all declined to seek re-election. This leaves a total of nine open seats to be filled on the House T&I Committee in the 115th Congress. Representative Shuster (R-PA) was again chosen to chair the committee on December 2.
Only one member of the Senate Commerce Committee, Senator Kelly Ayotte (R-NH), lost reelection while two members of the Senate Environment and Public Works Committee, David Vitter (R-LA) and Barbara Boxer (D-CA), decided not to seek reelection. Senator Boxer was the ranking member on Senate EPW and was replaced by Senator Tom Carper (D-DE).
The 114th Congress left several transportation-related bills on the table prior to adjourning to campaign this fall, including the 2016 Water Resources and Development Act and appropriations bills for fiscal year 2017.
The Senate passed its version of WRDA on September 15, 2016 by a vote of 95 to 3. S. 2848 was introduced on April 25, 2016 and authorized new Army Corps of Engineers water projects for improvements to rivers and harbors in the United States, clarified Harbor Maintenance Trust Fund funding targets, and extended prioritization for donor and energy transfer ports. The House of Representatives’ WRDA was passed on September 28, 2016 by a vote of 399-35. H.R. 5303 was introduced on May 23, 2016 and offered reforms to the HMTF, including a provision that would have taken the HMTF off-budget in the year 2027. This was a significant deviation from traditional HMTF workings and would have made projects authorized for funding from the HMTF exempt from the annual appropriations process and would bar the Federal government from using surplus funds to offset other budget needs. The language taking the HMTF off-budget was eventually dropped from the final version of the bill. The House and Senate have been working on resolving the differences between the two versions in recent weeks. The Senate Environment and Public Works
Committee is signaling that the House and Senate have been able to make a deal, the text of which should be made available soon.
Congress was unable to pass multiple individual appropriations bills to fund the various federal departments earlier this year, instead choosing to pass a Continuing Resolution in September to keep the doors of the government open in the new fiscal year, which began on October 1. The CR’s deadline of December 9 is again looking unlikely to be met by Congress. Instead, Congressional Republicans have said that they are looking to introduce and pass another CR, funding the federal government through April, 2017, to lawmakers enough time to finish confirming President-elect Trump’s nominations for secretary positions.
There were no new developments in regulatory issues this month.
Hanjin Shipping filed for bankruptcy on August 31, 2016, prompting the Federal Maritime Commission to release initial guidance notifying industry stakeholders that the Commission intends to be “vigilant in watching for, and quickly to act on, any improper behavior by other carriers and regulated parties that would constitute violations of the Shipping Act.” While the FMC has no jurisdiction in resolving bankruptcy claims, it is monitoring the operations and competitive impacts of the bankruptcy on the shipping industry as a whole. On September 20, during a closed session meeting, the Commission discussed the “numerous inquiries related to fees being charged by marine terminal operators to beneficial cargo owners to secure the release of their shipments.”
The Surface Transportation Board released a report on stand-alone cost rate reasonableness methodology, as required by the STB Reauthorization Act of 2015, in mid-September. The Board commissioned the study from InterVISTAS Consulting and tasked them with assessing SAC rate reasonableness methodology including developing alternative methodologies to SAC to reduce time, complexity, and expense. They were also instructed to determine if SAC is sufficient for large rate cases and if the simplified methodologies, introduced in a Notice of Proposed Rulemaking on June 21, 2016, were appropriate alternatives to SAC.
The report found that the SAC “has stood the test of time as a maximum rate reasonableness methodology and is justifiable in some cases” but that less expensive, simplified versions of the full SAC should be available as options for shippers, as shippers can receive similar results in them. In response to this report, STB will hold an economic roundtable, consisting of participants from InterVISTAS, the Transportation Research Board, Georgetown University, and the STB. Participants will discuss the findings of the report. The Board also plans to hold a public hearing for all stakeholders to comment.
On August 17, the Federal Railroad Administration released a report titled Status Update on Positive Train Control Implementation. The report found that one third of freight railroads had completed installation of PTC by June 30, 2016 but that the technology is only operational along nine percent of route miles. The report also contained updates on the implementation of the Positive Train Control Enforcement and Implementation Act of 2015, which required both annual and quarterly reports on railroad’s progress towards PTC implementation. The first annual report was due to the FRA by March 31, 2016, with subsequent reports due annually until PTC implementation is complete. Railroad-by-railroad quarterly data as of June 30, 2016 is included in the report.
Emphasizing the potentially lifesaving benefits of PTC, FRA released this report not only to provide updates on progress towards complete PTC implementation but also to encourage railroads to install the technology as soon as possible. FRA Administrator Sarah F. Feinberg noted that “every day that passes without PTC, we risk adding another preventable accident to a list that is already too long.” FRA also meant this report to underscore the need for funding assistance in PTC implementation.
The Federal Motor Carrier Safety Administration and the National Highway Transportation Safety Administration announced on August 26 a proposal to equip newly manufactured heavy-duty trucks with a gross vehicle weight rating of more than 26,000 pounds with a speed limiting device. The proposal does not include an exact speed to which the vehicles will be limited; instead it discusses the benefits of setting the maximum at 60, 65 and 68 miles per hour. Other speeds will be considered based on public input, with the actual limit specified in the final rule. FMCSA is also seeking comment on the real-world impact of requiring older vehicles to be retrofitted with speed limiters.
This proposed rule is a response to a 2014 petition by the American Trucking Associations, which requested that USDOT implement a 65 mile-per-hour speed limit on trucks weighing more than 26,000 pounds. USDOT began this rulemaking in March 2014, but delay in its publication caused much frustration in Congress. This spring, the Senate included a provision in their FY17 Transportation, Housing and Urban Development appropriations bill requiring FMCSA to issue the final speed limiter ruling within six months of the bill’s passage. The House and Senate did not go to conference on a FY17 THUD bill prior to their August recess and it seems unlikely that a standalone THUD appropriations bill will be passed in the amount of time Congress has left before the fiscal year ends. A continuing resolution is more likely and it is not yet clear if the speed limiter mandate will be included.
The speed limiter notice of proposed rulemaking has not yet been published in the federal register but comments will be due not later than 60 days after its publication.
On August 29, the Department of Commerce published an affirmative preliminary antidumping determination in the investigation of imported truck and bus tires from China. As a result of the preliminary affirmative determination, DOC will instruct U.S. Customs and Border Protection to collect cash deposits based on preliminary rates between 20.87 and 22.57 percent. These cash deposits will be placed in escrow and are collected to cover potential duties that may be assessed later. Antidumping duty law expressly forbids the refunding or rebating of the antidumping duties, whether directly or indirectly, until a final decision is made.
In June, DOC made an affirmative preliminary determination in the countervailing duty investigation of the same products. Antidumping investigations consider whether imports are being sold at less than fair value; CVD investigations determine whether imports are being subsided. Antidumping and CVD duty investigations are conducted simultaneously by DOC and the International Trade Commission. DOC determines whether the dumping or subsidizing exists and the margin of the dumping or subsidizing, while ITC determines whether there is “material injury or threat of material injury to the domestic industry.” ITC made its affirmative preliminary determination in both investigations in late March.
As part of DoC’s affirmative preliminary determination notice, they announced that they are postponing the final determination from November 10, 2016 to January 17, 2017, in response to requests from stakeholders. As a result of the delay, a final International Trade Commission determination is now expected on or around March 3, 2017. If both DOC and ITC made affirmative final determinations that imports of truck and bus tires from China materially injure, or threaten material injury to, the domestic industry, DOC will issue an antidumping order. If either DOC’s or ITC’s final determination is negative, no antidumping order will be issued.
On August 22, the Surface Transportation Board announced they were discontinuing their annual letter requesting end-of-year outlooks for traffic volumes and operations from Class I and other railroads. STB began sending this letter in 2004, in response to concern over capacity constraints and service disruptions. Responses were meant to serve as assurances that the railroad industry was prepared to handle seasonal spikes in traffic volumes. However, changes in railroad shipping patterns are contributing to a less highly-conspicuous peak rail season. Additionally, in 2014 STB began collecting weekly performance reports from Class I railroads, allowing the board to gauge the industry’s status in almost real-time. These industry changes diminished the need for the annual letter, leading the STB to discontinue the practice. However, STB Chairman Elliott still “expects the railroad industry to be forthcoming to the agency in the event of unanticipated service disruptions.”
On July 6, of the U.S. Department of Transportation notified Congress of the projects it had selected for funding for the first round of the Fostering Advancements in Shipping and Transportation for the Long-term Achievement of National Efficiencies awards. USDOT received 212 applications for the $800 million available this fiscal year, ultimately selecting 18 projects to receive funding. The new grant program, which was established under the Fixing America’s Surface Transportation Act in December 2015, was created to fund “critical freight and highway projects across the country” and includes a $500 million cap, over five years, on multimodal projects. In this first round of funding, USDOT is proposing to spend $173.5 million, or 34.7 percent, of that five-year cap.
The FAST Act requires that USDOT notify Congress of the proposed grants at least 60 days prior to awarding them, during which time Congress can pass a “resolution of disapproval” for any grant that does not meet the requirements of the program. The resolution must be signed by the President or else passed by two thirds of the chamber to override a veto to prevent the project from receiving funds. Because Congress has already adjourned for summer recess, it’s unlikely a joint resolution disapproving of any of this year’s projects will be issued.
The fiscal year 2016 Transportation Investment Generating Economic Recovery grants were also released this month. In comparison to past years, in which as much as 53 percent of funding went to freight-related projects, this year freight received only $129 million, or 26 percent of the total $500 million that was available. TIGER grants were first authorized for appropriations in the American Recovery and Reinvestment Act and have been funding capital investments in surface transportation infrastructure since 2009.
The Surface Transportation Board announced on July 27 that it was proposing revised reciprocal switching regulations in response to a petition filed by the National Industrial Transportation League in 2011. Under the existing standard, established by the Interstate Commerce Commission in 1985, a shipper looking to benefit from a reciprocal switching agreement must prove the railroad in question is acting in a non-competitive manner. According to STB, almost no requests for such a determination have been filed since the adoption of this standard in 1985 and none have been granted.
STB’s proposed rule would require shippers to demonstrate a reciprocal switching agreement is either “practicable and in the public interest” or else is “necessary to provide competitive rail service.” In other words, STB’s proposed rule creates a broader path for shippers to receive reciprocal switching access. Unlike NIT League’s original petition, which proposed a number of specific requirements that would automatically trigger reciprocal switching, STB’s proposed rule would consider each request on a case-by-case basis.
Comments on the proposed rulemaking are due by September 26, 2016; reply comments are due by October 25, 2016. Concerned parties can request an ex parte meeting with Board members to be conducted between October 25 and November 14, 2016.
On January 23, 2015 the Federal Motor Carrier Safety Administration published the results of a study that found the difficulty and cost of including crash fault in a carrier’s Compliance, Safety, Accountability score outweigh the benefits. In response to stakeholder criticism regarding the study’s findings, FMCSA announced this month that it plans to develop a demonstration program to determine the preventability of certain less complex crashes. This Crash Preventability Progra would allow FMCSA to “accept requests for data review that seek to establish the non-preventability of certain crashes through its national data correction system known as DataQs.”
Through this program, commercial motor vehicle carriers will submit an RDR along with evidence of a conviction in the crash, including all available law enforcement and insurance reports, in an attempt to prove that the crash was not preventable by the driver. FMCSA’s notice announcing the demonstration program defines a crash as “not preventable” if the CMV was hit by a motorist that was convicted of driving under the influence, driving the wrong direction, striking the CMV in the rear, or striking the CMV while it was legally stopped.
For purposes of the demonstration program, the RDR will result in a determination of: 1) not preventable, in which the crash would be removed from SMS; 2) preventable, in which the crash would not be removed from SMS and would be listed on the FMCSA website with a noted reading “FMCSA reviewed this crash and determined that it was preventable,” or 3) undecided, in which there was not enough evidence to conclusively decide one way or the other, the crash is not removed from SMS and would be listed on the FMCSA website with a note reading “FMCSA reviewed this crash and could not make a preventability determination based on the evidence provided.”
The proposed demonstration program will take place over a 24 month period and resulting analysis will be used to help shape future policy decisions by FMCSA. Comments are due by September 12, 2016.
The Department of Transportation’s Office of the Secretary released the Fixing America’s Surface Transportation Act-required Interim National Multimodal Freight Network on June 6, 2016. The NMFN is meant to assist states in strategically directing resources towards improving system performance, prioritizing Federal investment, informing freight transportation planning, and assessing and supporting Federal investments to achieve national multimodal freight policy goals. The NMFN is made up of the National Highway Freight Network, also established in the FAST Act; Class 1 railroad networks; public ports with annual foreign and domestic trade of at least 2 million short tons; the inland and intracostal waterways of the U.S.; the Great Lakes, the St. Lawrence Seaway, and coastal and ocean routes along which domestic freight is transported; the 50 airports located in the U.S. with the highest annual landed weight; and other strategic freight assets, including strategic intermodal facilities and freight rail lines of Class II and Class III railroads, designated by the Under Secretary as critical to interstate commerce.
USDOT is seeking public comment on the Interim NMFN, including recommendations for intermodal connectors that should be added or removed from the current map. The Department is also looking for specific comments on intermodal facilities not currently included in the Interim NMFN, supported with data that demonstrates the facilities’ importance to the network. Comments are due by September 6, 2016.
The International Maritime Organization’s Safety of Life at Sea Verified Gross Mass rule went into effect on July 1, 2016. After months of industry concern about real-world implications of complying with the VGM requirement, the U.S. Coast Guard issued a declaration of equivalency in April stating a terminal operator could weigh the container and verify the VGM on behalf of the shipper.
On June 16, Federal Maritime Commission Chairman Mario Cordero also signaled support for the Terminal Weighing Method, asserting that “the weight of export containers, as determined by terminal operators, can and should be classified as the VGM of the container.” While shippers generally applaud this approach, the Terminal Weighing Method received backlash from marine terminal operators, who argued that such a method would hold them, instead of the shipper, liable for incorrectly declared container VGM.
Meanwhile, the World Shipping Council developed a list of facts and questions in response to issues raised relating to the revised SOLAS regulation. The list, which expands upon a previous list of FAQs the Council published last year, helps to clarify the new ruling and answer any questions stakeholders have.
While the Department of Commerce announced on June 2 it was delaying a preliminary determination in its antidumping duty investigation of truck and bus tires from China, it continued to move along with countervailing duty investigation of the same products. CVD investigations determine whether imports are subsidized; antidumping investigations consider whether imports are being sold at less than fair value. Subsequently, on June 28, the Department announced an affirmative preliminary determination in its CVD investigation and instructed Customs and Border Protection to begin collecting cash deposits on truck and bus tires from China.
As the International Trade Commission did in its primary determination, DOC did not define 10x20 bias ply tube tires to be a separate, domestic like product. Should DOC chose to issue a “scope of clarification” at any point in the future, 10x20 bias ply tube tires could be determined exempt from this investigation and resulting cash deposits.
Antidumping and countervailing duty investigations are conducted simultaneously by both by DOC and the ITC. While DOC determines whether the dumping or subsidizing exists and the margin of the dumping or subsidizing, ITC determines whether there is “material injury or threat of material injury to the domestic industry.” Had ITC found a negative preliminary determination, the investigation would have been terminated. However, ITC reported affirmative preliminary determinations in both the antidumping and countervailing duty investigations in late March and began the final phase of its investigations. This allowed DOC to continue with its investigations and make this affirmative preliminary CVD determination. Meanwhile, DOC is scheduled to make a preliminary determination in its antidumping investigations by August 26. Given this timeline, a final DOC determination in both investigations is expected on November 10. ITC then has approximately 45 days to make its final determination, making it due by December 24, 2016.
The Surface Transportation Board moved this month to implement reforms required by S. 808, the Surface Transportation Board Reauthorization Act of 2015, signed into law on December 18, 2015. On May 16, STB announced it is revising its arbitration procedures to comply with S. 808, which requires the agency to “promulgate regulations to establish a voluntary and bind arbitration process to resolve rail rate and practice complains.” STB proposed adding rate disputes to the list of matters eligible for arbitration, modifying the process for initiating arbitration procedures, establishing a process for creating and maintaining a roster of arbitrators, procedures for selecting arbitrators, and set qualifications standards for becoming an arbitrator. Comments regarding this proposed rule are due by June 13, 2016.
S.808 also authorizes STB to “investigate, on its own initiative, issues that are of national or regional significance and are subject to the Board’s jurisdiction.” While the law provides a basic framework for conducting such investigations, STB clarified the steps it intends to take through a May 17 proposed rulemaking. The Board proposed three stages: 1) Preliminary Fact-Finding; 2) Board-Initiated Investigation; 3) Formal Board Proceeding. Comments regarding this are due June 15, 2016.
On May 23, the International Maritime Organization issued a circular that seeks to address concerns over the implementation phase of the new Safety of Life at Sea Verified Gross Mass rule. Beginning July 1, 2016, a shipper must provide the VGM of a container in order for that container to be loaded onto a ship for export.
The IMO circular acknowledges the concerns regarding implementation of the new requirement, including logistics regarding transmitting VGM for use in vessel stow plans. The circular stipulates that governments and the industry should “adopt a practical and pragmatic approach when verifying compliance with the requirements…for a period of three months after 1 July 2016.&rdquo While there will not be a delay in the implementation of the new SOLAS regulations, the IMO emphasized that Member States should provide leeway to address problems that will most likely result from software updates and other adjustments.
Industry stakeholders are also working to ensure smooth implementation of the new VGM rule. On May 19, the Ocean Carrier Equipment Management Association (OCEMA), as well as multiple East and Gulf Coast ports, filed a Port Operations and Safety Discussion Agreement with the Federal Maritime Commission. The Agreement, if approved, will allow the parties “to exchange information, discuss, and reach voluntary, non-binding agreement on matters relation to rules, procedures, programs, practices, terms and conditions with respect to the organization, development, calculation, availability, transmission or use of Verified Gross Mass data.” The agreement will allow the ports and shippers to work together to provide a “Terminal Weighing Approach” to VGM, meaning that the marine terminals would weigh a container on certified terminal scales to fulfill the VGM requirement.
Opposition to the Federal Motor Carrier Safety Administration’s Safety Fitness Determination Notice of Proposed Rulemaking is mounting. The agency’s NPRM, first published on January 21, was the subject of a May 4th letter in which 36 lawmakers wrote to FMCSA Acting Administrator Scott Darling to express their concerns over the rulemaking. The lawmakers called it “inconceivable” that FMCSA would implement the Safety Fitness Determination rulemaking prior to the completion of the Compliance, Safety and Accountability/Safety Measurement System reforms that were mandated in the Fixing America’s Surface Transportation Act. Members of Congress emphasized their approval of an effective safety fitness standard but expressed doubts over the proposed methodology, calling the data and analysis to be used in the program “misleading.” The lawmakers concluded their letter by calling on FMCSA to allow CSA reform to be completed prior to finalizing a safety fitness rulemaking.
Industry stakeholders also expressed concerns with the Safety Fitness Determination rulemaking through public comment on the NPRM. A survey of NPRM responses found that the comments received were mostly negative, with stakeholders expressing almost universal dislike of the proposed rule. Many of the stakeholders’ requests corresponded with those from Congress — that FMCSA halt further progress on the Safety Fitness Determination rulemaking until the FAST Act-required CSA study is completed.