Re: Trucking advised to audit all drivers to limit CDL liability

Leroy N. Soetoro <[email protected]> wrote:
> https://www.freightwaves.com/news/trucking-advised-to-audit-all-drivers-
> to-limit-cdl-liability
> 
> Trucking and logistics companies should be taking immediate steps to 
> mitigate increased exposure to drivers with non-domiciled commercial 
> driver’s licenses – including an audit of all existing employee or 
> contract drivers, a regulations expert advises.
> 
> That advice, included in a legal alert by Greg Reed, a partner at Hanson 
> Bridgett LLP, comes in the wake of an emergency rule issued in September 
> by the Federal Motor Carrier Safety Administration overhauling who is 
> eligible for a non-domiciled CDL.
> 
> “Both the regulatory language in FMCSA’s interim final rule, as well as 
> Secretary Duffy’s remarks at the press conference announcing it, cast 
> doubt on the legitimacy of all non-domiciled CDLs,” Reed told FreightWaves 
> in an interview.
> 
> “If that holds true, the liability and risk has already increased 
> dramatically for any carrier using these drivers or a brokerage that works 
> with those carriers.”
> 
> In the alert, Reed points out that if an accident were to occur, 
> plaintiffs’ attorneys would likely argue that logistics and trucking 
> companies are on notice that non-domiciled CDLs may be operating 
> unlawfully and are insufficiently qualified.
> 
> “And non-domiciled CDL holders may find their licenses revoked in real 
> time as the DOT and SDLAs conduct audits of current non-domiciled CDLs, 
> which could result in a driver behind the wheel who lacks a commercial 
> license.”
> 
> Steps that both trucking and logistics companies should be taking now, 
> according to Reed, include:
> 
> Audit all existing employee or contract drivers to determine whether any 
> are holding non-domiciled CDLs. Logistics and brokerage companies should 
> engage with frequently used carriers to determine the scope of their 
> exposure to non-domiciled CDLs.
> 
> Work with legal counsel to determine how to assess whether identified 
> employee or contract drivers have the sufficient records to demonstrate 
> that their CDLs will not be revoked based on ongoing and forthcoming 
> audits.
> 
> Begin a process to limit utilization of these drivers until they have 
> their non-domiciled CDLs confirmed or renewed.
> 
> Incorporate new or reinforce existing contractual language making clear 
> that drivers must be properly licensed, have a lawful employment status, 
> and qualified to operate a commercial motor vehicle.
> 
> Looming capacity shakeout
> The heightened restrictions now governing eligibility for a non-domiciled 
> CDL prompted FMCSA to estimate that 194,000 of approximately 200,000 
> drivers holding those licenses will exit the market over two years as 
> their CDLs become ineligible, representing roughly 5% of 3.9 million 
> commercial drivers.
> 
> “Even though the regulatory language suggests that there will be a 5% 
> reduction in capacity over two years, which it asserts will allow markets 
> and fleets time to adjust, I potentially foresee capacity tightening to a 
> greater degree over a shorter amount of time,” Reed told FreightWaves.
> 
> “While carriers are not necessarily going to let their non-domiciled CDL 
> drivers go today, there will be pressure to immediately start phasing them 
> out of the workforce. A carrier or broker is not going to want to expose 
> themselves to the increased liability that comes with not knowing if these 
> non-domiciled CDLs were validly issued in the first place.”
> 
> Some on Wall Street see the capacity attrition – and subsequent effect on 
> rates – resulting from the CDL rule as “likely far more impactful” than 
> the agency’s recent crackdown on English language proficiency violations.
> 
> “Capacity action, while meaningful, is mainly a late ‘26/early ‘27 
> tailwind for the trucking group in our view,” wrote TD Cowen 
> transportation analyst Jason Seidl in a research note following the 
> emergency rule announcement.
> 
> “Enforcement is unlikely to be a material help for ‘26 bid season 
> (upcoming imminently in late ‘25/early ‘26) but could begin to firm up 
> spot rates in time for the following ‘27 bid cycle barring a deep economic 
> slowdown. That said, upcoming capacity attrition should be on shippers’ 
> minds this bid season, which could lead to attempts to pull forward some 
> bids.”
> 
> 

What craziness

I think Duffy should stick to  fashion advice