NHTSA phoning trailer manufacturers to evaluate TREAD Act problems, costs

The National Highway Traffic Safety Administration is in the process of calling selected trailer manufacturers to learn what problems manufacturers are encountering in trying to comply with the Early Warning Reporting (“EWR”) requirements of the TREAD Act, according to the National Association of Trailer Manufacturers (NATM).

The phone calls also are intended to evaluate the costs manufacturers have incurred or will incur in complying with the regulation. These costs include one-time start-up expenses and on-going costs.

By NHTSA’s own revised cost estimate, start-up costs for the average trailer manufacturer will be $203,000. According to two NATM members, the NHTSA estimate is accurate. Vic Cook and Jim Callaway estimate the start-up costs for their respective trailer companies, Sundowner Trailer and Big Tex Trailer World, were approximately $204,000 per company. This includes software costs, the addition of at least one new person to their payrolls, and employee training.

Unresolved questions about the TREAD Act have led many NATM members to delay initial investment in computers, software, and additional personnel, according to Pam O’Toole, NATM executive director. Members are waiting, “to learn how NHTSA intends to answer NATM’s petition and how NHTSA intends to revise its definition of “large manufacturer” before making any such huge capital commitment. This wait-and-see policy, under these circumstances, is a perfectly legitimate business philosophy, a prudent decision given the extreme cost of compliance and the likelihood that manufacturers of less than 2,500 trailers annually will end up re-classified as small manufacturers.”

Cook estimates that Sundowner’s cost of continuing to comply with EWR on an annual basis will run approximately $145,000. He bases his estimate upon the logical assumption that at least one person will have to be added to the Sundowner payroll and other employees will have to devote a portion of their time collecting required documents and coding the data as NHTSA has demanded of large manufacturers.

“Obviously, most NATM members have not as yet had to incur these kind of maintenance costs because the first reporting period has just started and most manufacturers are waiting to see how NHTSA handles the NATM petition,” O’Toole says. NATM is requesting that NHTSA reclassify hope NHTSA will reclassify all manufacturers of trailers under 26,000 lbs. GVWR as small manufacturers for EWR purposes.

TAGS: Trailers
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