HOS changes could hurt LTL, dedicated the most
TORONTO — The dust is settling from the lump of coal that thudded at the foot of truckers just before Christmas in the form of new hours-of-service rules.
Although the proposed changes appear to be mild compared to what the industry was bracing for, there’s now a flowing stream of information showing just how consequential the changes could be; and, as is becoming more apparent, just how shaky this house of cards is that the new proposal is built on.
In a nutshell, the FMCSA declined to sign off on a maximum number of driving hours — although it clearly wants to trim it to 10 hours; it will require two overnight, off-duty periods during the 34-hour restart; and there will be a mandatory one-hour break during the workday, which will now end at 14 hours.
As we’re discovering, things can get quite complicated. For one thing, the two mandatory six-hour breaks during the restart can effectively turn a 34-hour reset into 54 off-duty hours in some cases.
According to Noel Perry of FTR Associates, quitting all activities at 14 hours (previously drivers could keep working, but not driving) is a big deal for operations where there’s significant terminal work at the end of the day like local delivery or tightly engineered carriers with significant non-driving work such as LTL, parcel, dedicated and certain vocational sectors.
"The 14-hour change really affects distribution costs more than trucking costs,” he tells Today’s Trucking. "It will mostly show up in the cost of terminal work … which results in companies having to hire more people on the dock."
In an analysis of the economic impact of HOS, Perry figured that the lost non-driving hour will result in a seven-percent reduction in overall hours, although "good fleets will certainly offset much of that leaving a net effect of about half."
The flip side is that capacity will remain very tight over the next few years.
"There’s no question truck activity growth is slow and that costs are going up on the trucking side more than any other place in the supply chain. For the last 30 years it was the other way around where supply chains always asked more of trucking and used it to reduce costs elsewhere," he says. "For the next few years, at least, the loading dock will adapt to the truck."
Perry anticipates that after years of using JIT trucking to cut inventory, the supply chain will have to change its ways if it wants guaranteed capacity.
"If we have spot shortages at the peak of the upturn, what’s a JIT manager to do? Well, he’s going to pay the truckers [more], for sure, but if he doesn’t have capacity, he’s going to start holding inventory."
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