THERE’S A NEW SHERIFF IN TOWN

Much to the surprise of political pundits and the country’s media, Donald J. Trump is the President – Elect. Ordinarily, we would be writing about what we might expect from the new administration; but right now it is anyone’s guess. The campaign didn’t tell us much. It was entertaining in a reality – TV kind of way, but short on intellectual content and positions on important issues. Most of the time, personal attacks were the order of the day.

Both candidates were opposed to the Trans-Pacific Partnership being advanced by President Obama. I happen to think it would be good for the country, but if it cannot get through the lame–duck Congress, it probably won’t happen. If not, global thought leaders believe China will assume economic leadership in Asia. If so, U.S. firms could lose important competitive positions.

On a more positive note, both Clinton and Trump were in favor of taking steps to improve the country’s infrastructure. Clinton proposed spending $250 billion over the next five years, financed by changes in the tax laws that would encourage U. S. firms to bring their offshore profits home. Trump’s proposal was much more ambitious – $1 trillion over ten years – financed by tax credits and bonds. Details are still very sketchy, but industry leaders are already encouraged. Even so, this will be a long, hard road.

It would appear that the Federal Motor Carrier Safety Administration (FMCSA) has proposed or imposed an inordinate number of rules and regulations on motor carriers and their drivers. Hours of service rules, electronic logging devices, proposed governors on tractors, CSA 2010 and other rulings and implementations are making truck driving an increasingly unpopular occupation. The ELD requirement was challenged by the Owner – Operator Independent Drivers Association (OOIDA), but on October 31, the petition was denied by the U.S. Court of Appeals for the 7th Circuit. It appears now that the requirement will be implemented as planned. Looking ahead, we will have a Republican president, Congress, and presumably Secretary of Transportation, but what changes that might generate, if any, are difficult to project. Like everyone else, I am all in favor of highway safety, but the regulations seem to be too frequent and somewhat disorganized. Hopefully, this new cast of characters will bring some order to the driver regulatory process.

While most eyes will be on the potential nominees to the Supreme Court by President Trump, there is another drama that might play out on a lesser stage. The Surface Transportation Board recently initiated a rule making proceeding that would allow so called “captive rail shippers” to seek reciprocal switching privileges under certain conditions. The rail carriers are strongly opposed, citing increased capital costs and a probable negative impact on both costs and service. The proposal was a spin-off of a recommendation made several years ago by the National Industrial Transportation League, and signed by 700 shippers. UPS, the industry’s largest single intermodal customer, however, has weighed in, supporting the rail position and threatening to move intermodal shipments back to the highway if there is a deterioration in service. The important footnote to this controversy is that the STB is currently controlled by Democrats, but is short two members – vacancies that will be filled by nominees of the new administration. Add to that the fact that UPS ships freight valued at 6% of the nation’s GDP, and you have an interesting scenario waiting to be played out.

I suspect most people will take some time to absorb what has just happened; but when the dust settles, we can look forward to exciting times ahead.

Written By: Clifford F. Lynch