I think I can safely say that we are all tired of hearing about the “supply chain” and the many challenges that disruptions in the established channels for getting raw materials and finished products to end users in the marketplace have caused. It is long overdue for the federal government to start moving on policy solutions that will help fix the parts of the supply chain that are now broken and prevent these disruptions from happening again.
Thankfully, there have been some recent enactments of legislation at the federal level as well as some bills in the queue that hopefully will make a difference. There is no “silver bullet” for addressing what ails our current system. However, a collection of policy actions promises to deliver needed relief for congestion at the ports, poor service from the freight rail sector, and a lack of truck drivers to move goods and raw materials over the roads.
The first to become law is a pilot program enacted as part of the Infrastructure Investment and Jobs Act that was signed last year, allowing young drivers (between 18 and 21 years old) to operate trucks interstate after completing rigorous operational and safety training. Currently, young drivers may drive all day every day within a state’s borders but may not cross state lines. For the last few years, the provision, known as the DRIVE Safe Act, has been a priority of truck-dependent industries as a way of attracting younger drivers to the profession. With the median age of truck drivers currently estimated to be 52, an infusion of younger truckers is critical. This three-year pilot program is now up and running and is administered by the Federal Motor Carrier Safety Administration. While enactment of this program was significant, there are ongoing efforts on Capitol Hill to pass the DRIVE Safe Act so that this young driver apprenticeship program will have permanence.
A bill that was introduced this spring to try to help get more drivers on the road is the Strengthening Supply Chains Through Truck Driver Incentives Act (H.R. 7348). This bipartisan, innovative legislation would establish a refundable income tax credit for qualified commercial truck drivers. Specifically, the measure would create a two-year refundable tax credit of up to $7,500 for truck drivers holding a valid Class A commercial driver’s license who drive at least 1,900 hours in a year. Additionally, it would establish a new refundable tax credit of up to $10,000 for new truck drivers or individuals enrolled in a registered trucking apprenticeship. This tax credit would also last for two years. So, if it were to be enacted this year, the credit would apply to 2022 and 2023.
On the port front, legislation known as the Ocean Shipping Reform Act, or OSRA, is in conference committee. Among the key components of OSRA are provisions that:
• Require ocean carriers to certify that late fees—known in maritime parlance as “detention and demurrage” charges— comply with federal regulations or face penalties.
• Shift burden of proof regarding the reasonableness of “detention or demurrage” charges from the invoiced party to the ocean carrier.
• Prohibit ocean carriers from unreasonably declining shipping opportunities for U.S. exports.
We expect the final enactment of this legislation later this year. And finally, on the freight rail front, the Surface Transportation Board (STB)—which, among other things, maintains regulatory oversight of the freight rail sector—has held hearings this spring to explore deficient service being provided by the Class 1 railroads. Numerous sectors testified before the board in late April about declining service levels that are threatening their businesses. Agriculture, energy, retail, and manufacturing representatives painted a dire picture at these hearings. The STB chairman had this to say about the current situation:
“Railroads’ longstanding practice of reducing operating ratios by cutting employment levels, mothballing locomotives, and eliminating other essential resources is the central reason why farmers have been hours away from depopulating herds, manufacturing facilities have reduced operating hours, and shippers cannot get their products to market on time or receive essential raw materials for their companies.” These failures are harming the nation’s economy and, in my view, are contributing to the inflationary forces affecting food and fuel in particular.
The STB appears poised to require railroads to submit service recovery plans as well as provide additional data and progress reports on rail service, operations, and employment. The American Building Materials Alliance (ABMA) has been monitoring the situation with the expectation that the board will take meaningful action to improve rail service across the board. We will keep you apprised of developments.
For more information on ABMA’s support of federal advocacy issues that affect you, visit ABMAlliance.org.