The Fair Labor Standards Act (FLSA) was enacted in 1938 at 29 USC §203. The Motor Carrier Exemption, which exempts motor carriers from overtime pay, came in a 1966 amendment.
Perhaps, once upon a time, there was a place where the exemption was justified but during the ensuing 55 years, technology has made the exemption outmoded, the disproportionate labor market inequity is outdated, and the perpetual driver turnover at large fleets is out-of-touch with small and private fleets. That blatant disparity (94% vs 14% turnover) should clearly demonstrate that it’s the business model that has a shortage: It’s a failed model.
When a driver is paid by the mile yet regulated by hour, there will be a natural disconnect as the financial incentives are constrained by the clock. Truckers in the U.S. are regulated by a set of hours of service rules that limit driving to 11 hours per day with up to 70 working hours in an 8- day period. This inherent regulatory disconnect breeds unnecessary driver risks, instills driver abuse of their no-driving hours, undermines driver recruitment and retention and poses a public safety road hazard.
For example, because “when the wheels ain’t turnin’, the driver ain’t earnin’,” when a driver confronts inclement weather, he/she must park the truck. There’s a financial incentive for the driver to push on, even when conditions might otherwise suggest prudence.
When a truck breaks down, blows a tire, overheats, or anything else as often happens, the wheels stop and the driver doesn’t get paid. The driver goes “off-duty” to preserve their available hours.
When the truck shows up for an appointment to pick up a load at a shipper or arrives at the consignee for delivery, the driver similarly goes unpaid while being detained – sometimes for hours. Again, the driver goes “off-duty” to preserve his available hours. Without a financial cost associated with detention at the dock, the carriers have no incentive to contact the shipper or consignee to ascertain the reason for the hold-up. If the carriers were required to pay the driver for all “off-duty” and “on-duty, not driving time,” then one can rest assured that the carriers would soon figure out that detention costs them money and would add a freight ticket surcharge for detention. Detention problems would be cured virtually overnight.
And while we’re at it, let’s put a proper value on that detention time. The equivalent 60 mph truck at today’s $3 per mile freight rate yields a $180/hour cost. If carriers charged shippers and receivers for all time that a truck is on-site, that truck would get loaded or unloaded right away. The inefficient notion of “first-come, first served” is predicated on sufficient warehouse staff, but that cost of inefficiency is borne entirely by the driver.
