Anyone that operates a truck in interstate commerce is required to comply with Department of Transportation regulations. Those regulations also apply to those transporting hazmat cargo.
Several branches of government regulate the transportation and logistics industry at the state, federal, and local levels. Truckers need to understand these different branches and how they work together.
Safety
DOT regulations exist to keep professional and amateur drivers safe on the roads. Even if they don’t always make sense or seem like common sense, these rules must be followed by everyone.
The Department of Transportation has many regulations covering everything from vehicle operation to driver qualifications and behavior. These rules aim to create a safe transportation system that bolsters economic opportunities and connects communities coast to coast.
To remain DOT compliant, trucking companies must ensure that all drivers are fully qualified to drive, maintain up-to-date records of their safety history, and comply with HOS and DVIR requirements. It requires thorough training during employee onboarding and regular reiteration, particularly for new or changed standards.
Trucking companies must also ensure that their cargo is secure during transportation. It includes appropriately fastening tie-downs, using chocks, and ensuring that tailgates, spare tires, and doors are not obscured from view. Additionally, it is required that drivers are aware of hazmat shipping guidelines.
While injuries and deaths are rare consequences of DOT non-compliance, the FMCSA can revoke or amend operating authority registrations if motor carriers engage in conduct showing “a disregard for applicable requirements.” Trucking companies should ensure drivers understand and follow all relevant transportation and logistics law to avoid penalties and potential fines.
Reputation
In a field that relies heavily on safety and trust, non-compliant brokers and carriers risk their reputations. They may need help booking new loads or getting passed over by clients who prefer safe and compliant carriers. Additionally, fines for DOT violations range from a few hundred dollars to nearly $200,000 for hazmat violations that lead to death or severe injury.
To avoid a loss of reputation and money, all parties involved in DOT compliance must ensure they meet all federal regulations. It means maintaining accurate inspection, maintenance, and documentation records for all vehicles in the fleet. It also includes ensuring that all drivers meet FMCSA entry-level driver training requirements, have their records queried with the national drug and alcohol clearinghouse, and pass pre-employment DOT physicals.
All trucks and trailers must be registered with the DOT and active USDOT number. It is essential for any business that hauls hazardous materials. All carriers must display their DOT registration numbers and comply with pre and post-trip inspection requirements. All DOT-regulated employers must maintain records of pre-employment drug testing and random testing drivers. Exceptions may be possible for fleets that only operate in intrastate commerce.
Revenue
As a transportation and logistics business owner, you must ensure your customer service goals are met at a reasonable cost to ensure your logistics company is profitable. It means knowing your costs, including but not limited to service level, transportation level, and inventory costs. These costs are subtracted from sales revenue to give you your net revenue. It is how you determine if it makes financial sense to keep serving this specific customer.
Effective route planning is critical to maximizing equipment utilization and generating maximum revenue for your operation. Identifying deadhead miles, inefficient slip seat driver exchange locations, and other cost-distorting factors will optimize your fleet’s potential for profit.
In addition to a dynamic pricing model, transportation and logistics companies must clearly understand their fixed and variable costs. It will help you create a more accurate model for your sales and cost of goods, allowing you to manage your business finances better.
Recently, the FASB issued updated guidance on revenue recognition standards that will affect nearly all U.S. nonpublic companies reporting financial statements. This new model aims to provide a single core principle for recording revenue across all entities—recognizing the transfer of promised goods or services to customers in an amount that reflects the entity’s expected pattern of fulfillment. It will replace the different methods currently used by U.S. GAAP, including transaction-specific guidance and industry-specific practices.
Efficiency
Injuries or death are the most severe consequences of non-compliance with DOT standards. Moreover, the FMCSA can revoke or suspend operating authority registration in cases where a motor carrier, broker, or freight forwarder engages in conduct that demonstrates a disregard for relevant requirements. Inadvertent or isolated occurrences of non-compliance are not likely to trigger such consequences but should be corrected immediately.
A DOT compliance strategy is a crucial component of any business that utilizes trucks to transport goods and services. Companies can bolster compliance by incentivizing drivers who adhere to safety and DOT regulations. They are most effective when paired with verbal recognition.
By promoting a culture of compliance, trucking companies can ensure their operations are running efficiently. With the advent of new technology and improved reporting solutions, optimizing DOT compliance’s easier than ever. For example, switching to a digital DVIR solution offers visibility to track and record mandated requirements, expedites submitting reports, and compiles inspection data in an easy-to-use dashboard. By promoting a DOT-compliant environment, companies can reduce downtime, improve fleet efficiency, and maximize profits. Learn more about DOT compliance and how to streamline your processes with the help of an expert.