What You Don’t Know About Air Miles Can Bite — 2

A recap in case you didn’t read the first part of this series … here … we are talking about what a commercial vehicle actual is, as defined by the FMCSA (Federal Motor Carrier Safety Administration) and what commercial vehicles might be exempt from the general FCMSA requirement for RODS (Record Of Duty Status), commonly known in the business as a “Logbook”.

If your vehicles fall into one of the groups that do not require the maintenance of driver logbooks, don’t jump to another subject too quickly. Many activities your vehicles are engaged in might “cross the line” into RODS territory at a moment’s notice. Work hour records are almost always required as well … and if a vehicle or driver goes into an activity that does require RODS, remember that you are going to have to be able to “reconstruct” the work hours of the driver, perhaps as far back as the preceding 10 or 11 days (7 or 8 workdays and the last time the driver can be shown to have been “free of duties” for 34 continuous hours) in order to prove he or she is “legal” to drive. These rules aren’t like criminal law, where the state has the obligation to prove guilt. The FMCSA can assert that you and/or your driver violated the rules and the burden will be upon you to prove them wrong. This is one reason I have always been surprised at the reluctance of so many businesses to maintain detailed and provable records … the cost of not doing so can be far, far greater than the cost of keeping the records.

OK, enough philosophy.

• NON-CDL Vehicles: If you have vehicles that do not require a CDL (Commercial Drivers License) to operate but that are engaged in Interstate Commerce you can still avoid keeping RODS if the vehicles do not exceed a radius of of operation (from a single location where the drivers start and end their workday) of 150 Air Miles. Take an accurate business planning software product such as Microsoft MapPoint and draw a circle with a radius of 172.6 statute miles around your business location. This is your “non-CDL 150 air mile zone”. If you can assure yourself … and perhaps an investigator … that your vehicles don’t leave this zone .. no RODS are required.
• CDL-required vehicles: If you have vehicles that do require a CDL and thus would otherwise require RODS but those vehicles do not exceed a 100 Air Mile radius of operation (115 Statute Miles) then make the appropriate circle for them and you are also “safe” to operate without logbooks for those drivers. You do get an extra hour per duty day of driving time, be sure to note that basically all rules are still 100% in effect, the only part of the requirements that are waived is that the drivers do not have to maintain RODS while operating solely “within the zone”.

So, what do these semi-obscure mileage provisions mean to your business? Well, they could mean a lot for certain operators. Are they something you should be considering? By all means, if they fit at all into your operations. But, as I have tried to point out, “the bold print giveth and the fine print taketh away”. Many folks who routinely rely on these exemptions could be in serious trouble if an accident cause3d authorities to “dig into” their operation. I suggest, as always, that businesses take advantage of inexpensive, high rate of ROI GPS Tracking systems to measure the performance of their business and, at the same time, assure that accurate,, automatic records of driver and vehicle activity are on file … just for safety’s sake. A comprehensive FAQ on these exemptions is here:

Nest section of this series I’ll cover a number of commercial vehicle activities that are exempt in other ways from the “normal” RODS rules. Until then:

What You Don’t Know About Air Miles Can Bite

I’ve used the premise many times that one of the bona fide paybacks (ROI) of using GPS tracking on your business vehicles is being able to know that you’re complying with the US FMCSA (Federal Motor Carrier Safety Administration) regulations. The ones regarding HOS (Hours Of Service) for drivers are particularly complex … and thus easy to run afoul of … and enforcement agencies, including State Police are usually well-trained in those laws and quite interested in enforcing them, both from a legal/moral and a financial standpoint. Catch an individual private driver speeding and the state earns a few bucks from the ticket, catch a trucking company in major violations and huge amounts can flow into the sate coffers.

Every one of the 50 states has their own rulers in addition to the Federal rules and you, the business owner is responsible for compliance. I can’t possibly dig them all out for you but the easy part of the task is that the state rules can’t be more lenient than the Federal regs and in most cases are very much a copy.

First you have to understand who is subject to the Motor carrier rules. It is not just the big over-the-road trucker. Those guys are the ones almost all of us think of when Hours Of Service and logbook (RODS — Records Of Duty Status) get mentioned but they are far from the only folks subject to compliance and possible penalties.

All commercial vehicles (meaning any vehicle being used in a trade or business) have to comply. Think the literal definition of ALL to get started and then we’ll see what vehicles might “fall out” along the way. here’s the basic commercial vehicle definition from the US Federal Code:

Commercial motor vehicle means any self-propelled or towed motor vehicle used on a highway in interstate commerce to transport passengers or property when the vehicle—

(1) Has a gross vehicle weight rating or gross combination weight rating, or gross vehicle weight or gross combination weight, of 4,536 kg (10,001 pounds) or more, whichever is greater; or

(2) Is designed or used to transport more than 8 passengers (including the driver) for compensation; or

(3) Is designed or used to transport more than 15 passengers, including the driver, and is not used to transport passengers for compensation; or

(4) Is used in transporting material found by the Secretary of Transportation to be hazardous under 49 U.S.C. 5103 and transported in a quantity requiring placarding under regulations prescribed by the Secretary under 49 CFR, subtitle B, chapter I, subchapter C.

So, we can learn a lot from this in 4 easy steps:

• Weight: If you are running passenger cars, minivans, pickup trucks, etc. you may “slide under” the minimum weight and thus “escape” the majority of the rules. But read well here and look at the data plates on your vehicles before you move to that on line poker site you’ve been dying to try out. Many pickups in today’s world sport GVWR (Gross Vehicle Weight Rating) or GCWR (Gross Combined Vehicle Weight Rating) well over 10,001 pounds. Remember these are weight ratings, set by the manufacturer, not the amount of weight you actually carry. I don’t make the rules, folks, I just follow them.
• More Than 8 Passengers: This is a section of the regulations that can really “bite” a taxi company or a limousine/air port livery service. The regulation catches a business owner both ways … design (what the manufacturer rated the vehicle to carry or actual use, what the operator is allowing the vehicle to be used for. (Of course if you are carrying 10 passengers in a vehicles designed for 8 you probably have other laws to worry about). many passenger vans are designed to carry 8 or more passengers, so it really doesn’t matter under the law that you are carrying fewer, the law specifically states it is the design capacity of the vehicle which governs.
• More Than 15 Passengers: My own interpretation is that this “extra” section allowing larger capacity vans for “not for hire” service is included to give a break to church groups, school sports activities and such. It may, in fact, be a good law … considering the number of tragic accidents with these vehicles and non-professional drivers and safety enforcement, I leave up to the reader.
• Hazardous Materials: OK, you have flown under the radar on weight and/or passenger capacity so you are home free, right? Not quite, until you clear another hurdle … or pass under another limbo bar … Hazardous materials. I can’t present this information in any easy fashion … the codes and lists are far to voluminous. You should know if you are required to placard any of your vehicles because of what they carry. if you do, your vehicle is a regulated commercial vehicle, no matter what the weight or passenger capacity.

Enough for one day? I think so. Remember, when you make the choice of GPS tracking your vehicles or not tracking your vehicles there is a lot more to consider and a lot more at stake than the simple “how much does it cost?” question.

ANALYSIS OF EXEMPTIONS FOR TRUCKS OF 10,000 TO 26,000 POUNDS

Here’s where the Federal Motor carrier Safety Agency has quantified the cost savings for using either the 100 air mile radius or 150 air mile radius (so called, "short haul") rules used in lieu of keeping a standard hours of service record (RODS) commonly known as a log book.  It’s a bit interesting, it seems that operators who can use a radius of operations rule can save money … of course you need  an air mile radius map to do this, and that is why we are here.  Reference:

The table below presents the dollar estimates of savings from the proposed rule. As the table shows, analysis of the rule, especially of the change in the log-book exemption, requires consideration of three different cases for operations under the current rule:

Case 1: driving inside the 100-mile range and choosing not to keep a log;

Case 2: driving inside the 100-mile range and choosing to keep a log; and

Case 3: driving in the 100-150 mile range, where logs now must be kept.

Safety effects of the second 16-hour day are not reported in the table or discussed further in this paper because they are expected to be very slight. On the basis of our analysis in the 2003 RIA, we estimate the increase in benefits caused by these safety effects to be well below $10 million per year.

Summary Table
(Annual Savings in millions, rounded to the nearest $10 million)

Case 1

Case 2

Case 3

Total Annual Savings (millions)

Description

Now operating within 100-mile range and not keeping logs. Duty tours £ 12 hours.

Now operating within 100-mile range and keeping logs. Duty tours up to 14 hours.

Now operating in 100-150 mile range. Must keep logs and observe 14-hour limit.

Log-book effects

No effect: Already exempt from log requirement.

Case-1 benefit: $0

Relieved from log requirement.

Case-2 benefit: $100.

Relieved from log requirement. Case-3 benefit: $40

$140

14-hour tour with log-book exemption

May use 14-hour tour now, if they keep log. Log cost is $2.00/day. Tour>12 hours of little value to this group.

Benefit: minimal

Already choosing log-book and 14-hour tour.

Benefit: zero

Already have 14-hour tour.

$ 0

Second 16-hour day

Case-1 trucks would not use the 16-hour day because they already choose not to use the 14-hour tour. Savings: $0

Analysis is an extension of analysis of second 16-hour day that was done for the 2003 RIA. This approach did not distinguish between Cases 2 and 3.

Productivity Benefit: $140

$140

Total

$280

Overview of analysis

In the 2003 RIA, ICF estimated the savings from a second 16-hour day. We have used that figure as the basis for our current estimate, adjusting for inflation and number of affected drivers. Both for the second 16-hour day and the log-book exemption, we had to estimate the number of truck-days that would be affected.

A truck-day is the relevant unit, because the magnitude of effects of both the log-book exemption and the 16-hour day depends on the number of days on which they are used. In effect, a truck-day is the same thing as a driver-day. This is based on the premise that, on any given day, each truck in use has one driver. This is virtually always the case in over-the-road trucking (except for teams); it is also the case for short-haul operations. One could imagine cases in which two different construction workers drive the same truck on the same day or one worker uses two different trucks, but we expect such cases to be rare and likely to cancel each other out.

Details of analysis

VIUS data:

For estimating truck-days, the starting point is the Vehicle Inventory and Use Survey (VIUS) from the 2002 Economic Census. Table 4 from the 2002 VIUS is the basis for the table in the upper left of the spreadsheet. The column headed "Trucks" gives number of 10,000 to 26,000-pound trucks (10-26 trucks) in each of the reported operating ranges. (The two columns to the left are for, respectively, medium and light-heavy trucks, the two VIUS classes that comprise 10-26 trucks.) Each truck in the survey is assigned to an operating range on the basis of respondents’ statements about the range in which the truck runs the most miles. The table shows that 2,238,000 million 10-26 trucks are assigned to all operating ranges. This number is converted to truck-days for our purpose in a series of steps below the heading, "Log-book Savings." (The VIUS data may underestimate to some degree the trucks in the 101-200 range. See note at end of this paper.)

Trucks in 101-150 mile range:

We have to estimate the percentage of trucks in the 101-200 range that operate inside 150 miles. We see from the VIUS-based table that number of trucks in each range falls rapidly with each successive increment in operating range. This is clear if we consider trucks inside 100 miles and then trucks in the 101-200 range. In the first group are almost 2,000,000 trucks; in the second, 98,000. It would be unreasonable to assume that half of those 98,000 trucks are inside 150 miles and half outside, given the strong tendency towards smaller numbers at greater distances. As the spreadsheet shows, we assume that 75.0 percent of the trucks in the 101-200 range are in the 101-150 range. This leads to an estimate of 2,036,000 trucks in the 0-150 range.

Remaining steps:

Next, this number is adjusted for non-reported trucks. These are trucks included in the survey for which operating ranges were not reported. Since we need to estimate the total number of trucks in the 0-150 range, we have to add a number for non-reported trucks. We assume that non-reported trucks have the same distribution over the operating ranges as reported trucks. Therefore, we increase the 0-150 estimate by the ratio of non-reported trucks to reported trucks (373/2,238). This gives us an adjusted total of 2,375,000 trucks.

This figure must be further adjusted by subtracting trucks engaged in agriculture. For all practical purposes, these trucks can be regarded as exempt from HOS rules. VIUS reports 404,000 10-26 trucks in agricultural use. As shown, subtracting these leads to 1,971,000 trucks operating inside the 150-mile range.

One further step-adjustment for extent of use in a year-is required. Not all the trucks in VIUS are used for 12 months in a year. On the right side of the spreadsheet is a table which gives the basis for calculating truck-years according to months used. The column headed "Trucks" is for all 10-26 trucks reported in VIUS except for those with one month of use or reported as not used at all. (This column is the sum of the two columns to the left which reflect medium and light-heavy trucks, respectively.) For trucks used 7 to 11 months, we assume the average is in the middle of the range-9 months, or 75 percent of a year. This number is, thus, adjusted down by multiplying by 0.75. We do the same for 2 to 6 months of use; we assume an average of 4 months’ use and multiply by one-third. This leads to an adjusted total of 2,165,000 truck-years. We use the ratio of this number to total trucks in this table (2,165/2,534) to convert our estimate of trucks on the left side of the spreadsheet to truck-years on the basis of use. The result is 1,684,000 truck-years on the basis of actual use. This figure is the basis of our benefit estimates for both the log-book exemption and the second 16-hour day.

For the log-book savings, truck-years are converted to truck-days (driver-days) with two factors. We assume the average driver works 48 weeks a year, allowing for vacations, holidays, and sick days. On the basis of an analysis of survey data on daily and weekly hours of work for a sample of short-haul drivers, we use 5.5 days worked per week for the average short-haul driver. The next steps in the benefit calculation for the log-book exemption are in the two columns headed "Case 2" and "Case 3." Under Case 2, the first number is 1,962,000 trucks, all the trucks in the 0-100 range from the VIUS table. This number is adjusted for non-reported trucks by the same method used for all 0-150 trucks in the column to the left-by the ratio of all non-reported trucks to the total in the VIUS table. The next step is subtraction of the agricultural trucks. We assume that all agricultural trucks are used within the 100-mile range; it would not be often that a farm truck would go 100 miles from home. This brings us to 1,885,000 trucks. This is adjusted for actual use with the factor calculated before, and we have 1,610,000 truck-years inside 100 miles.

For Case 1 drivers, who currently do not keep logs and stay within the 12-hour limit, there is a chance that some would choose to keep logs in order to be able to extend their tours beyond 12 hours. We have found, however, that any driver with a need to extend a tour even a fraction of an hour beyond the 12-hour limit would find it worthwhile to keep a log to secure that increase in productivity. We based this conclusion on the fact that keeping a log for a day imposes a cost of only about $2, whereas the increased productivity of a driver able to work another 15 minutes has a value of that same small magnitude. Cases in which drivers would choose to extend their tours of duty once the rules eliminate the log book requirement, then, would be limited to those few cases in which very short extensions were desired. Furthermore, the added savings from these cases can be shown to be quite small. Thus, we concluded that the savings from drivers in Case 1 would be minimal, and have left these savings out of the analysis.

For Case 2, we have to estimate the number of trucks operating inside 100 miles and choosing to keep logs. For this purpose, we rely on the FMCSA field survey. In the survey, 10.7 percent of short-haul trucks reported tours of duty longer than 12 hours. We assume these trucks were keeping logs; thus, we estimate that 10.7 percent of 0-100-mile trucks are using log books. With this factor, and our assumptions of 48 weeks per year and 5.5 days per week, we arrive at 44,215,000 truck-days for which a log-book would not have to be filled out under the proposed rule. We convert this to dollars with estimates from the 2003 RIA (9.5 minutes to do the log and $12.62/hour for the driver’s wage) and an inflation adjustment. The result is a stream of annual savings of $95,593,000, which we have rounded to $100 million.

For Case 3, the same procedure is followed with two exceptions. First, agricultural trucks are not subtracted since they were all assigned to Case 2. Second, all Case-3 trucks are now keeping logs, so there is no need to adjust for non-log-keepers. The result is an annual stream of savings of $41,935,000, or about $40 million. The Case-2 and Case-3 benefits are summed in the column to the right for a total of about $140 million.

Benefits from the first 16-hour day were estimated in the 2003 RIA, and found to equal approximately $470 million annually. A calculation using the same methodology showed that the savings from a second 16-hour day in each week would be about ¼ as great. Thus, for 1.5 million short-haul drivers, annual savings are estimated at $118 million. This number was adjusted upwards on the basis of our truck-year estimate (1,684/1,500) and for inflation. The result is an annual savings stream of $143,307,000, which we have rounded to $140 million.

Total annual savings, including both the log book and second 16-hour days, is estimated to be about $280 million.

Note on VIUS data on trucks in 101-200 range

Census assigns trucks in VIUS to "primary" operating ranges according to the range in which a truck runs for most of its miles. If, for example, a respondent reports 55.0 percent of a truck’s miles in the 101-200 range, that is the truck’s primary operating range, and that is where the truck appears in VIUS Table 4. Obviously, that truck operates in other ranges as well. But the same would be true for a truck assigned to the 51-100 range on the basis of 50 percent of its miles. So, we would expect errors from this source to be largely self-canceling, but we cannot be sure that this is entirely so.

Some idea of the possibility for error may be found in VIUS Table 8. In this table are data on truck-miles by operating range according to what respondents actually answered. But these data are reported only for all trucks and for all except light trucks. We can, however, compare the actual reported distribution of mileage across operating ranges for this latter group to the same distribution of mileage according to primary operating range in Table 6 of VIUS. To the extent that the mileage distribution as reported comports with mileage distributed according to primary range, we can have some confidence that the distribution from Table 4 accurately represents the distribution of truck-days over the operating ranges of interest to us.

Mileage percentages for all except light trucks

Primary
Actual

0-100
51.5
51.6

101-200
10.3
12.2

This suggests that our estimates based on distribution by primary range could slightly underestimate the number of truck days in the 101-150 range. On the other hand, our estimate of truck-days could be high because we have made no allowance for truck operations that may be exempted from HOS rules by State laws. Accordingly, we believe our estimate is sufficiently reliable.

If you want to know more about how to realize these savings for your business, just visit our orders page and get yourself an air mile radios map.

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