State weight exemptions targeted by OOIDA in wide-ranging letter to congressional leaders

The Owner-Operator Independent Drivers Association (OOIDA) has sent a five-page letter to Congressional leaders, asking for a laundry list of  changes to boost the current market for drivers, including one that is likely to be an issue in the short term – state weight exemptions.

The letter, sent May 13 to the majority and minority leaders of both the Senate and the House, include issues that in many cases have been on the table for months if not years. But the easing of the weight restrictions is one that is recent as a result of COVID-19 but also one in which the federal government has a limited role, if any.

The American Trucking Associations has a list of the states that have eased weight restrictions. In some cases, weight restrictions were lifted entirely for haulers of certain goods considered essential. In other cases, the limit was set at 90,000 pounds per truck. Previous limits in some cases were as low as 80,000 pounds or in excess of 100,000 pounds. 

Those exemptions were handed down in rapid response to the mid-March beginning of the pandemic and the concurrent need to restock essential supplies, a period that saw trucking rates spike and capacity tighten. “However now that emergency and panic buying has slowed and most other economic activity has ground to a halt, there is no longer a need for these exemptions,” OOIDA President Todd Spencer said in the letter. “In fact, there is currently an excess of trucking capacity, and motor carriers are more than capable of meeting the nation’s ongoing transportation needs.”

The weight exemption effectively increases capacity, Spencer writes, citing the drop in freight rates as evidence of the weakness. 

The letter goes on to say that the Federal Highway Administration should “work with states to ensure that their emergency weight exemptions expire as soon as possible and are not extended,” Spencer wrote. Without that, more capacity will continue to pressure freight rates, he added.

“We hope FHWA will encourage states to let these exemptions expire as soon as possible,” OOIDA spokeswoman Norita Taylor said in an email to FreightWaves. “We know FHWA worked with the states to keep rest areas open and permit food trucks at them, so we have confidence the agency can also ensure these exemptions do not extend any longer than need be.” 

There are other short-term moves that Spencer urges the government to undertake. One of them is to suspend the Heavy Vehicle Use Tax. The other is to suspend Unified Carrier Registration fees for 2020.  

OOIDA spokeswoman Taylor said such an action would take an act of Congress. “Treasury may have more leverage to waive HVUT, but we anticipate this would need to be done by legislation,” she wrote in an email.

Some of the recommendations are familiar. The letter again asks Congress to mandate automatic sharing of broker deal information with drivers, a request Spencer first made in a letter to Congress just a bit more than a week ago. 

The letter also asks for unspecified changes in required broker bonds. The minimum level of the bond, $75,000, was set several years ago. But that “has not stopped brokers from stealing transportation services in excess of the minimum amount,” Spencer writes. “Absent sufficient regulatory and legislative action, brokers will continue to take advantage of drivers.” However, no specific policy prescriptions are laid out in the letter. 

But Taylor said the mandate to provide records of transactions automatically to brokers would slow what OOIDA believes is broker abuse that the broker bond system is not providing. “ Audit brokers who have been the focus on complaints,” she said. “Fine or suspend or revoke the authority of brokers with a pattern of non-compliance.” 

Several of the other requests in the letter are long-standing issues; for example, that drivers should be eligible for overtime pay under the Fair Labor Standard Act. Others are more recent, such as the call for Congress to pass the Truck Parking Safety Improvement Act, introduced just two months ago.  

The letter also has a familiar litany of laments about the Paycheck Protection Program (PPP), a critique that could be found in many industries in the U.S. populated by small businesses. 

But specific to trucking, Spencer’s letter asks that some of the costs eligible to be included under PPP be extended in ways that would benefit small trucking companies. The PPP requires that 75% of any funds disbursed be used to cover payroll costs and keep people employed, with the balance to be used for a variety of other costs, such as rent.

The OOIDA letter asks that the PPP program allow the inclusion of truck payments, insurance payments and depreciation in the Small Business Administration’s calculation of the maximum loan amount it will disburse to an individual applicant. The problem, Spencer wrote, is the PPP calculation of net profits. 

“Small businesses take numerous business deductions, and therefore net profit often does not accurately reflect their earnings or the cost of doing business,” the letter says. “For example, if an owner-operator replaces both truck and trailer, bonus or accelerated depreciation may totally offset their income.”

The letter also stated that OOIDA members who have applied for PPP “have encountered continued delays in submitting applications, and many are being turned away by multiple banks who say they are no longer accepting applications,” a criticism that is widespread.

The letter also called for new funding under the Economic Injury Disaster Loan, an existing program that generally is seen as having not produced significant assistance to the economy during the pandemic.