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Regulations (Preambles to Final Rules) - Table of Contents
• Record Type: Powered Industrial Truck Operator Training
• Section: 10
• Title: Section 10 - X. Summary of the Final Economic Analysis, including the Regulatory Flexibility Analysis

X. Summary of the Final Economic Analysis, including the Regulatory Flexibility Analysis


The OSH Act requires OSHA to demonstrate the technical and economic feasibility of its rules. Executive Order 12866 and the Regulatory Flexibility Act require Federal agencies to analyze the costs, benefits, and other consequences and impacts, including small business impacts, of their rules. Consistent with these requirements, OSHA has prepared a Final Economic Analysis (FEA) to accompany the final standard being published today. The final powered industrial truck operator training requirements will supplement and expand on the minimal training requirements previously found in OSHA's general industry standard (29 CFR 1910.178(l)) and will also apply to powered industrial truck operators in the marine cargo handling and construction industries.

It has been determined that this is an economically significant regulatory action under E.O. 12866, and a major rule under the Congressional Review provisions of the Small Business Regulatory Enforcement Fairness Act. Accordingly, OSHA has provided OIRA with an assessment of the costs, benefits and alternatives, as required by section 6(a)(3)(C) of E.O. 12866, which is summarized below.

This economic analysis includes a description of the industries affected by the standard, an assessment of the benefits attributable to adoption of the final standard, a determination of the technological feasibility of the standard's provisions, an estimate of the costs of compliance, a determination of the economic feasibility of compliance with the final provisions, and an analysis of the economic and other impacts of the final rule on establishments, including small establishments, in the affected industries. For a full discussion of the data, analysis, and results presented in this summary, see the Final Economic Analysis in this rulemaking docket [Ex. 38].

Affected Industries

Using powered industrial truck sales data provided by the Industrial Truck Association (ITA), OSHA estimates that there are 998,671 industrial trucks in use in industries covered by the final standard. These industries include the agricultural services segment (SIC 07) of the agricultural industry, the oil and gas extraction segment of the mining industry (which are covered by OSHA's general industry standards), the construction sector (SICs 15-17), manufacturing (SICs 20-39), the transportation and utilities sectors (SICs 41-49), the wholesale and retail sectors (SICs 50-59), the finance, insurance, and real estate sectors (SICs 60-67), and the services sectors (SICs 70-89). Industries with the largest number of powered industrial trucks include wholesale trade-non-durable goods (SIC 51), with an estimated 127,259 powered industrial trucks, and food and kindred products (SIC 20), with an estimated 82,144 such trucks. The construction and marine cargo handling (SIC 4491) sectors are estimated to have about 46,456 and 3,243 powered industrial trucks, respectively.

This final OSHA standard covers workers who operate powered industrial trucks. This includes operators using these vehicles in the general industry, construction, and maritime sectors (including shipyards, marine terminals, and longshoring operations). The population-at-risk in powered industrial truck accidents consists primarily of the operators of these trucks. Operators of powered industrial trucks include workers employed as designated truck operators as well as those who might operate powered industrial trucks as part of another job. These alternate users of powered industrial trucks include shipping and receiving clerks, order pickers, maintenance personnel, and general temporary workers. Non-driving workers such as warehouse personnel, material handlers, laborers, and pedestrians who work on or are present in the vicinity of powered industrial trucks are also injured and killed in powered industrial truck accidents.

OSHA estimates that approximately 1.5 million workers are employed as industrial truck operators in the industries covered by this rule. Industries with the largest number of operators include wholesale trade (SIC 51), with 190,889 operators, and food and kindred products (SIC 20), with 123,215 operators. OSHA estimates that there are 69,684 and 12,973 powered industrial truck operators in the construction and marine cargo handling sectors, respectively.

Technological Feasibility

OSHA could not identify any requirement in the final standard that raises technological feasibility problems for establishments that use industrial trucks. On the contrary, there is substantial evidence that establishments can achieve compliance with all of the final rule's requirements using existing methods and equipment. In addition, the standard introduces no technological requirements of any type. Therefore, OSHA has concluded that the standard is technologically feasible for firms in all affected sectors.

Costs of Compliance

This final industrial truck operator training standard expands the training of truck operators already required by OSHA's existing standards (29 CFR 1910.178(l), 1917.27(a), 1918.98(a), and 1926.602(c)) to include information on operating trucks safely and on warnings appropriate to the type of truck used, the specific hazards found in the workplace where the truck will be operated, and the requirements of this standard. Additionally, the final standard requires employers to monitor the performance of industrial truck operators through a triennial evaluation and to provide refresher training when this evaluation, or other events, suggest that such training is needed.

OSHA estimates the annual cost of compliance with the final standard to be about $16.9 million for all affected establishments in all covered industries. Table 11 outlines the annual costs by each sector affected by the final standard. Industry sectors with the highest estimated annualized compliance costs are manufacturing, with annual costs of $8.3 million, and wholesale and retail trade, with annual costs of $4.5 million. The annual costs of compliance for the construction and marine cargo handling sectors are estimated to be $1.0 and $0.2 million, respectively. Existing industry practice was taken into consideration when calculating costs, i.e., where employers have already voluntarily implemented practices that would be required by the final standard, no cost for these practices is attributed to the standard.

These estimates of the costs of compliance are lower than was the case for the proposed standard. The lower costs principally result from a change to the final rule that permits evaluations of operators to be performed once every three years rather than once every year, as proposed. Other minor changes to the standard also will result in lower costs and improved compliance, such as simplified certification, and these are discussed above in this Preamble as well as in the full FEA.


Many commenters (see, e.g., Exs. 11-3, 11-21, 7-60) to the record stated that the Agency had underestimated the costs of the standard. In most cases, these commenters failed to note that about 75 percent of affected establishments currently provide training that is equivalent, or nearly equivalent, to that required by the final standard. The Agency's estimate of 5.5 hours for initial training was within ranges provided by several commenters (4 hours, Bell Atlantic, Ex. 11-3; 8 hours, Tennessee Valley Authority, Ex. 11-21 and Monaco Group, Inc., Ex. 7-60).

Many commenters also questioned the utility of the annual evaluations proposed by OSHA, and several suggested that triennial evaluations of operator competence would be sufficient (see, e.g., American Society of Safety Engineers, Ex. 11-5; U.S. Small Business Administration, Ex. 7-41; and International Brotherhood of Teamsters, Ex. 11-18). The Agency has required triennial evaluations in the final standard. Similarly, many commenters stated that the proposed certification requirements were unduly burdensome (see, e.g., National Association for Home Builders, Ex. 11-14; Storax, Ex. 7-9; and Air Transport Association, Ex. 7-40). Several commenters objected to the requirement for a signature on the certification, noting that requiring a signature would mean that the form could not be handled electronically (Union Electric, Ex. 11-18; Edison Electric Institute, Ex. 7-44, for example). In response to these comments, the final standard does not require a signature for training certification and contains a much simpler certification than the one proposed, including only the operator's name, date of evaluation or training, and name of trainer.


An estimated 101 fatalities and 94,570 injuries are caused annually by industrial truck-related accidents. As presented in Table 12, OSHA estimates that compliance with the final standard by establishments in all covered industries will avert 11 of these fatalities and 9,422 injuries per year. These fatalities and injuries are in addition to the lives saved and injuries prevented by OSHA's existing powered industrial truck operator training requirements, i.e., they represent only the incremental benefits of the new requirements. Estimates of benefits from the Final Economic Analysis are based on both general industry (including shipyards) and construction data, which were analyzed separately in the respective published proposals. In addition, the data sources for the Final Economic Analysis were expanded to include far more data than were available for the preliminary regulatory analysis published with the proposed standard. For example, estimates of the injuries potentially avoided as a result of the final rule are based on a national source (Bureau of Labor Statistics' "Survey of Occupational Injuries and Illnesses") rather than on data from only one state (California).


OSHA has also adopted a more conservative methodology for estimating the number of fatalities and injuries that could be prevented by the final standard. This approach explains why the estimates of lives saved and injuries averted are lower than those projected in the Preliminary Regulatory Impact Analysis. Based on published reports, the Agency had estimated in the proposal that 44 to 77 percent of accidents could be avoided by compliance with the Agency's proposed rule. OSHA has since decided that a more conservative estimate of 25 percent of accidents more accurately reflects the percentage of accidents that will be averted by compliance with the final standard. This 25 percent reduction in fatalities applies to the Agency's estimated 42 fatalities each year that are potentially preventable, which results in an estimated 11 fatalities avoided each year under the final standard.

The Agency has also included estimates of the direct cost savings, or economic benefits, that occur when accidents are avoided. These economic benefits include the savings in medical costs, value of lost output, savings in administrative costs of workers' compensation claims, and indirect costs to employers associated with injuries to employees. OSHA estimates that the value of the direct cost savings associated with these final rules is $83 million per year. This estimate of cost savings considers only those powered industrial truck- related injuries that involve lost workdays, and thus is a substantial underestimate of the standard's true benefits.

The final standard will also reduce accident-related property damage and litigation costs. OSHA finds that the improved training required by the final standard will reduce property damage by an estimated $52 million annually.

No economic benefits or savings are calculated either for avoiding loss of life or for the pain and suffering of injured workers. This means that the benefits presented here substantially underestimate the benefits of this rule.

Economic Impacts and Regulatory Flexibility Analysis

OSHA has assessed the potential economic impacts of compliance with the final standard and has determined that the standard is economically feasible for firms in all covered industry groups. On average, the annualized compliance costs of the standard amount only to 0.0001 percent of the sales and less than 0.01 percent of estimated pre-tax income for affected firms (Table 13).


These figures suggest that even under the worst-case assumption of no cost pass-through, prices would be little affected by the standard. The two-digit industry sectors with the highest costs of compliance, trucking and warehousing (SIC 42) and water transportation (SIC 44), have costs of compliance that are 0.0013 and 0.0012 percent of revenues respectively. The industry with the greatest reduction in profits, nondurable goods (SIC 51), has a reduction in profits of 0.02 percent. Clearly, such potential small increases in prices and reductions in profits are economically feasible, and the Agency therefore concludes that the final standard is economically feasible for all affected industries.

These potential economic impacts overestimate the likely economic impact of the standard because they do not include any consideration of the economic benefits of the standard that may accrue to employers, such as reduced worker compensation costs and reduced property damage. OSHA estimates that reduced property damage alone would be sufficient to more than offset the total costs of the standard. In the Preliminary Regulatory Impact Analysis developed in support of OSHA's 1995 proposal [Ex. 2], the Agency examined the impact of the proposed standard on different sizes of establishments. Based on that analysis, the Agency certified that the proposed standard would not have a significant economic impact on a substantial number of small entities. Upon review of comments and other data submitted to the record of this rulemaking, the Agency has analyzed the final rule's impact on small entities, as defined by the Small Business Administration (SBA) and in accordance with the Regulatory Flexibility Act. In addition, in order to ensure that the smallest entities are not significantly impacted, the Agency also performed an analysis of impacts on the smallest establishments, i.e., those with fewer than 20 employees.

The impacts of the standard on sales and profits did not exceed 1 percent for small firms in any covered industry, whether the analysis used the SBA's definitions or the fewer-than-20-employee size class definition. In fact, the largest reduction in profit in any sector was 0.024% for small businesses in trucking and warehouses (SIC 42). Because the incremental costs of the final rule are primarily related to the number of powered industrial truck operators per establishment, the standard does not have a differential impact on small entities. If the costs of compliance were influenced by economies of scale, such effects would have been demonstrated by OSHA's analysis of the smallest firms, i.e., those with fewer than 20 employees. However, no such effects were seen, even among firms in this smallest size-class. Therefore, the Agency has no reason to conclude that establishments or firms in intermediate size groupings, i.e., those in the range between 20 employees and the employment size cutoff for the applicable SIC-specific SBA definition, would experience larger impacts.

Based on this finding, the Agency certifies that the final Powered Industrial Truck Operator Training standard will not have a significant adverse economic impact on a substantial number of small entities. The results of OSHA's analysis of small business impacts on firms within the SBA's size classifications are shown in Table 14.

Unfunded Mandates

The final Powered Industrial Truck Operator Training standard has been reviewed in accordance with the Unfunded Mandates Reform Act of 1995 (UMRA) (U.S.C. 1501 et seq.) and Executive Order 12875. For purposes of the UMRA as well as the Executive Order, the Agency certifies that the final standard does not include any Federal mandate that may result in increased expenditures by State, local, or tribal governments, or increased expenditures by the private sector of more than $100 million in any year.


OSHA standards do not apply to State and local governments, except in States that have voluntarily elected to adopt an OSHA State Plan. Consequently, the Powered Industrial Truck Operators Training rule does not meet the definition of a "Federal intergovernmental mandate" (Section 421(5) of the UMRA (2 U.S.C. 658(5)). In addition, the Agency has concluded, based on review of the rulemaking record, that few, if any, of the affected employers are State, local, and tribal governments.

[63 FR 66237, Dec. 1, 1998]

Regulations (Preambles to Final Rules) - Table of Contents

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