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Wednesday, July 31, 2013

An Early Take on the Impact of the Hours of Service Changes

truckinginfo.com
July 11, 2013  Story thanks to Oliver Patton and truckinginfo.com Link provided below:

It is too soon to measure the full impact of the changes in the hours of service rule, but the carriers that will be most affected are high-output truckload fleets that have drivers out on the road for weeks at a time, said Noel Perry, an economist with FTR Associates.
These are the carriers most likely to lose productive hours under changes in the 34-hour restart provision, said Perry in a Thursday webinar sponsored by FTR.
The changes that went into effect July 1 require the 34-hour restart to include two periods between 1 a.m. and 5 a.m., and limit use of the restart to once a week. They also require drivers to take a 30-minute break in an 8-hour period.
The nominal effect of both changes in the restart provision is to reduce productivity by 14%, but since relatively few carriers will be affected the net effect is more like 2.5%, Perry said.
“It’s those long-haul drivers who are out two to three weeks at a time who will be most affected by this change,” he said.
The 30-minute break requirement is likely to have little impact, he added. Drivers take breaks as a matter of course throughout their shifts. “Instead of stopping for 15 minutes they must take 30. This is a relatively small change.”
The important thing is to look at the HOS changes in the context of other recent or pending federal safety and health regulations, Perry said.
The hours revision will require these carriers to either change their level of service or hire on new drivers. Perry estimates the driver demand at about 60,000 over the next year or so.
But when he adds in estimated driver requirements to comply with a long list of pending and possible regulations, he gets to a total of 1.2 million new recruits required over the next three to four years.
His list includes the CSA safety enforcement program, and pending rules such as electronic logging and its prohibition of driver coercion, the drug and alcohol database. Also possible are a mandatory speed limiter requirement, driver training standards and electronic stability controls.
On the other hand, Perry does not foresee a huge increase in demand for freight movement from the economy.
“For the next couple of years the economy will put only modest pressure on (trucking) capacity,” he said.  
Meanwhile, carriers and shippers can make some moves to mitigate the impact of the hours of service changes, he said.
Carriers should ramp up recruiting and take care of their drivers.
“If you’re thinking about an increase in pay, this is probably the time.”
Shippers should make sure they have budget flexibility if freight rates go up, and should be flexible in their relations with carriers, he counseled.
“This is not the time to send truckers away and ask them to come back in four hours because they missed their appointment.”
And think about cooperative programs with core carriers to match shipments with equipment.
Perry does not believe that the ongoing litigation over the hours rule will lead to a reversal of the changes.
The rule has been challenged in a federal appeals court on different grounds by American Trucking Associations and Public Citizen. A ruling could be handed down any day.
If the judges had intended to intervene they would have done so before the rule went into effect, so it is likely that the rule will be upheld, he said.


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