Department of Transportation (DOT) regulated employers will face a new challenge starting in 2018.  The DOT will begin to test for synthetic opioids specifically hydrocodone, oxycodone, hydromorphone, and oxymorphone.  These drugs are commonly known as OxyContin, Percodan, Percocet, Vicodin, Lortab, Norco, Dialaudid, and Exalgo.  Standard testing only includes naturally occurring opiates like codeine and morphine, not synthetic and semi synthetic opiates.  Dawn Standerwick, Vice President of Strategic Growth at Employment Screening Resources stated that, “employers need to recognize that there has been a surge in prescription drug use and that often drug testing panels selected by employers may not even test for the most commonly abused substances”.  This new change in drug testing will have a sharp effect on the transportation industry because most employers assume that these drugs are already covered in the standard test.  Once the new testing begins a new level of drug abuse will be exposed as this already national public health emergency continues to grow.  Drug overdose deaths were up a minimum of 19% in 2016 vs 2015 the largest ever recorded jump in United States history.  It is believed that opiates have accounted for 45,000 of the potential 65,000 overdose deaths in 2016.  The use of Fentanyl has been the identified as the main cause of the increase.  However, it is not apart of the addition to the testing panel even though the head of the National Transportation Safety Board agrees that it should be added.

How does this affect your supply chain?

  1. The DOT drug testing effects all employees under the FAA, FMCSA and FRA.  They randomly test 25% of all employees under each agency.
  2. The driver market is already tight as more people retire and less millennials enter the job force as truck drivers.  While demand for drivers continues to grow due to eCommerce growth, this new drug testing will eliminate drivers from the work force. 
  3. This new mandate compounds the effects of the electronic log device rule that most commonly resulted in a need for more drivers as they can no longer stretch routes passed federal guidelines.  There are potential service implications depending upon the number of drivers fired in the short term.  This is especially important to monitor in the retail space as major retailers like Target and Wal-Mart tighten their delivery windows.
  4. Smaller Carriers are most likely to be affected as their driver force tends to be less reliable.  These small carriers help balance the TL/LTL markets and if they are disrupted overall rates could increase.
  5. As the over the road markets become more constrained the logical option is to shift more volume to the rail whenever possible.  However, this may not be possible as the railroads will be facing the same type of drug testing.  Rail is also facing the same shortage of employees as the driver market.  Again, any volume shifted to the rail will be subject to potential derogation in service
  6. Small Parcel is at risk because they depend upon air, truck, and rail for their network to be effective.  Air Freight is an integral piece of FedEx’s and UPS’s ability to meet Amazon Prime’s two-day window.  They could potentially lose drivers and pilots due to new testing.
  7. Consumer goods being imported into the country will be affected, as well as employees of commercial vessels will be subject to the new testing.  Any delays at the port due to employee shortages will further hamper an already constrained transportation network where it be rail, air, or over the road.

Finally, it is imperative that firms begin accounting for addiction in their labor models for future planning.  Preemployment drug tests failures per 100 applicants, as well as drug test failures per year as a percent of total employees are two data points that must be examined.  There have been multiple reports of truck drivers and airline pilots who have overdosed.  As most firms in the retail market are seeking to become faster from a supply chain perspective this new drug testing standard will impede their progress.  Replacing the workers that fail drug tests will be less likely due to unemployment operating at around 4% nationwide. 

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Daniel Sears
Daniel Sears