| Three days before Christmas, the White House Office of Management and Budget in conjunction with the DOT’s Federal Motor Carrier Safety Admin released their final decisions on the revised Hours of Service rules. Instead of being a Christmas gift, these new rules are more like a sack of coal from Scrooge and were not merrily received by the trucking industry and shippers. Unfortunately these new HOS rules will have some adverse affects on the trucking industry and all consumers across the country. This day had been feared by the trucking industry for over a year after an out of court settlement by the FMCSA to a lawsuit brought by a Highway Safety group and the Teamster union. The FMCSA issued initial rules which were roundly opposed by shippers and the trucking industry. While these new proposed rules were supposedly developed with the intent and goal of improving highway safety, the trucking industry has maintained for over a year in public hearings, press releases and revised studies that the proposed HOS revisions would have just the opposite effect. The American Trucking Association (ATA) maintains that as a result of the new HOS rules the highways will become less safe with more trucks on the nation’s highways. The reduced average weekly driving time will require more dispatches resulting in more truck traffic congestion and fatalities. Since the HOS rules were last revised in 2003 the trucking industry’s overall safety record has improved dramatically. The ATA’s bottom line is that old saying, “If it ain’t broke, why fix it?” The FMCSA claims that their studies show that these new rules will cost carriers about $470 million but have benefits of $630 million and save lives on the nation’s highways. A counter study sponsored by the ATA found that the FHSA study was greatly flawed and in fact the opposite would occur as it estimates that the net effect would be a significant increase in operating costs to the carriers and private fleets. The carriers maintained that the initially proposed rules would result in added equipment and driver costs. It has to give you pause as to how two studies can be so diverse. To be fair the rule changes could have been much worse if the entire original proposal had been implemented, in particular the initially proposed reduction of limiting daily driver hours from the current eleven to ten hours. The change to ten hours was the one rule that the trucking industry most vehemently opposed. Changing to ten hours would have required a major re-engineering of the LTL carrier’s breakbulk and linehaul operations and resulted in a reduction in the number of points that an origin service center could provide next day and second day service. The LTL carrier’s breakbulk networks are setup to allow for multiple driver turns to end of line service centers or eleven hour runs between the breakbulk facilities. The FMCSA said that the main reason the eleven hour rule was not changed to ten was because the agency was “unable to definitively demonstrate that a 10 hour limit would have higher benefits than an 11 hour limit, therefore the current 11 hour limit is unchanged at this time.” However, one major rule change was the reduction of total driver hours for the week as a result of the restrictions on the 34 hour restart rule. The 34 hour restart can now only be used once per week and the 34 hour restart period must include at least two periods between 1:00 a.m. to 5:00 a. m. It is projected that the net effect of these changes will be an average reduction of 15% in allowable driving hours per week from 82 to 70. The 1:00 a.m. and 5:00 a.m. change is intended to allow drivers to get more sleep during the night. FMCSA contends that this will create more rested drivers as they will be getting more sleep during what is perceived as normal sleep periods. What the FMCSA fails to understand is that truck drivers who run at night become acclimated to sleeping during the day time hours and switching back and forth from daylight to night time sleep will only make it more difficult for drivers to develop regular sleeping patterns. Most LTL carriers run the majority of their linehaul operations between the breakbulks and their end of line service centers from 7:00 p.m. to 7:00 a.m. Monday through Friday with some weekend runs between breakbulk facilities. Therefore the new 34 hour restart rule with the 1:00 a.m. and 5:00 a.m. sleep period twice per week requirement will have little impact on the LTL carriers. I spoke with a safety director of a major LTL carrier and he confirmed this position. If their Monday – Friday drivers also run extra trips on the weekends then the carriers may be required to carry more drivers in their driver pool which will result in reduced driver utilization and higher labor costs. You can see that the Teamster union has achieved one of their objectives with the initial lawsuit. The estimated reduction in a driver’s maximum weekly hours from 82 to 70 will hit the full truckload carriers and private fleets the most in driver and equipment utilization. In particular, on long haul or trans-continental runs which now require over 70 driving hours to complete a round trip back to their domicile. I had a major retailer tell me at the most recent Parcel Forum that as a result of these new proposed rules their current trans- continental linehaul operation by their private fleet will require a major overhaul. Their current single drivers will now run out of service hours before returning from the west coast to their home domicile. They will be forced to establish a relay operation or convert to a more expensive sleeper tractor operation to be in compliance. The net result will be a more costly operation to support their supply chain and distribution network. In addition, there are some changes in the hours on-duty rules which take effect almost immediately on February 27, 2012 and concern has been expressed that this will not provide adequate time to educate drivers and carrier compliance personnel in the new rules. The new rules come with excessive monetary penalties for compliance failure. Summary As the trucking industry promotes, if you bought or used something in America, it most likely at one time moved by truck. Therefore if the net effect of these new HOS rules is higher cost and lower productivity by the carriers, then they will be forced to pass on these higher costs with higher freight rates. Bottom line, these higher carrier costs will eventually reach consumers in the price of goods on the store shelf. The major rule on the 34 hour restart period does not go into effect until July 1, 2013, therefore look for numerous lawsuits and legal action from both sides in coming months challenging the new rules for both stricter and less stringent consequences. |
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