As the logistics manager responsible for the annual movement of 10 to 12 million cartons of Kaboom, Orange Glo, OxiClean, and other household cleaning products to mass retailers, Greg Lutkauskas cringes when he hears the words "capacity restraint." He first heard the dreaded words in early January, right around the time the Federal Motor Carrier Safety Administration (FMCSA) implemented its new hours-of-service (HOS) rules for truck drivers.

"It's unusual to see capacity constraints in January, but that's exactly when we started to see them as a byproduct of the hours-of-service rules," says Lutkauskas, director of logistics for Orange Glo International in Denver. "I even noticed constraints in areas where we hadn't previously seen capacity issues, like Chicago, which is usually a very good lane."

Like many shippers, Lutkauskas is finding that new restrictions on truck drivers' work schedules are having a noticeable impact on the availability of truckload service. The rules previously allowed 10 hours of driving time within a 15-hour on-duty period after eight hours off. In an effort to improve road safety, they now permit 11 hours of driving out of a 14-hour on-duty period, following 10 consecutive hours off. Drivers are also limited to 60 hours on duty over seven consecutive days, or 70 hours over eight consecutive days, with a new cycle beginning after a driver has been off duty for at least 34 consecutive hours.

But driving time isn't the biggest issue. It's the time spent waiting for their trucks to be loaded and unloaded—time that in the past was considered to be off duty. Under the new rules, the clock doesn't stop once it's started, so every hour spent waiting around the loading dock counts against a driver's daily limit.

The new waiting time restrictions are affecting shippers, too. Truckload carriers are charging higher stop-off fees to discourage partial deliveries that could push drivers over the hours-of-service limits. Many have also begun charging detention fees for shipments that take more than a couple of hours to load or unload, because that makes it harder for drivers to complete their assignments within the new time limits.

To avoid such problems, Wal-Mart Stores Inc., of Bentonville, Ark., which uses both for-hire transportation and operates a private fleet, is now "fine-tuning its scheduling of transports," says spokesperson Sharon Weber. That means streamlining the process of loading and unloading trucks to become "more efficient, yet maintain our high safety standards," she says.

Loading times haven't been a problem so far for Orange Glo, and Lutkauskas credits his company's practice of palletizing and wrapping its cartons with keeping the greatest impact of the hours-of-service rules at bay. "Our products are heavy, so we're at full weight before we're at full cube. As a result, we haven't run into extra detention fees," he says. "Companies shipping bulky items that must be handled by hand or floor-loaded in order to get every bit of cubic space out of a trailer, however, are the ones that are struggling."

How much of a struggle will it be to comply with the revised rules? Both the FMCSA and the American Trucking Associations (ATA) say it's too soon to tell exactly. The ATA currently is surveying its members to find out how the change has affected them, says Mike Russell, spokesperson for the Alexandria, Va.-based organization, but the group has no definitive information yet.

What is already clear, though, is that truckers are willing to comply but still have plenty of questions about how to do that. Since the FMCSA established a 24-hour, toll-free help line in January, agency staffers have answered about 5,500 calls, says Public Affairs Specialist Dave Longo. Callers' primary concerns centered on the following issues: The sleeper-berth exemption (drivers can accumulate the equivalent of 10 consecutive hours of off-duty time with two periods of rest in a sleeper berth under specified conditions); the 34-hour restart provision; the definition of a 14-hour workday; and procedures for recording service hours in driver logbooks.

Longo says the FCMSA hasn't yet determined whether the rules revision is doing what it set out to do: make the nation's highways and byways safer. "Some of the calls we're receiving from stakeholders in the industry and law enforcement indicate that the transition is working out, but it's still too early to tell," he says. "The bottom line is, is it saving lives? We really won't know the answer to that for a while."

For their part, motor carriers say they're strongly in favor of the new rules' safety objectives and are working hard to comply. But the regulations are hampering their operations, with truckload carriers feeling the greatest impact. The 14-hour work day is causing the most disruption, says Mark Rourke, vice president and general manager for Schneider National Inc.'s brokerage service group in Green Bay, Wis. Longstanding concerns like respecting drivers' needs for personal time and reducing the amount of time spent on unloading and paperwork have "all been exacerbated by the rule changes, since a driver can't afford to spend extra time on such issues once the 14-hour clock starts," says Rourke.

Other carriers say they're holding their own, but it's taking a lot of extra effort to keep shipments moving while remaining in compliance. Craig Tallman, vice president of sales and marketing for Roadway Express Inc., the Akron, Ohio-based less-than-truckload (LTL) carrier, says his company's shipment volumes have been impacted by the change, but pre-planning has minimized the effect on customers.

"Frankly, we've been able to accommodate all of our customers' needs with very little problem," says Tallman. "We've done that by constantly managing our… capacity while reviewing our price and volume levels on a regular basis."

Chris Carpenter, president and chief operating officer of Priority Air Express in Sharonville, Pa., says it's not uncommon for his truck drivers to be held up at a shipper's dock for several hours—a situation that puts pressure on motor carriers to have another driver ready to take over in case the clock runs out. "If I send a driver to a location three hours away and he gets held up there for five hours, we have to kick him out of that place before he runs out of time," Carpenter explains. "To offset the problem, we've had to hire more drivers, since more are now coming back with empty trucks."

Some trucking companies, though, are actually reaping some benefits from the new mandates. Patrick L. Reed, chief executive officer of LTL carrier FedEx Freight East in Memphis, Tenn., says his company saw an increase in the average size per shipment beginning in February. He believes that may indicate that shippers are converting some truckload shipments to LTL to avoid paying higher stop-off charges.

"I'm not sure how well the shipping industry was prepared for the January deadline, and that may have driven more customers our way," says Reed. "I think the spring surge will really tell the tale of how ready the carriers are, and how ready the customers are."

The new hours-of-service rules and associated costs may well encourage shippers to make other changes in their operations. Private fleets and pooling programs, for example, will gain in popularity over the next few months, predicts Peter Stiles, vice president of strategy and business development at LeanLogistics, a transportation management company in Holland, Mich. "With the economics of stop-offs in flux, it may be more profitable to do a long-distance line haul without stops in transit, then redistribute in a metro area," he explains.

Stiles also predicts that rising stop-off charges will change the point where it becomes cheaper to use truckload rather than LTL. In the past, he observes, that point might have been 8,000 or 9,000 pounds, but it could reach as high as 12,000 pounds. That's because total truckload costs, including higher stop-off charges, will come close to LTL costs in some cases.

Schneider National's Rourke, meanwhile, expects more companies will turn to intermodal transportation as a way to circumvent the effects of the hours-of-service rules. Paul Svindland, a group director at ICG Commerce, a third-party logistics company in Philadelphia, concurs: A large client of his is exploring intermodal options specifically in response to the new rules.

With truckload capacity down by 7 to 10 percent since January by some estimates, shippers would be wise to at least consider other options. "Carriers are driving for profitability and they're not expanding their fleets. That means they can pick and choose the business that they carry," says Stiles, who expects the issue to become a real problem in the third quarter when seasonal activity increases. "The economy is picking up and overall capacity is decreasing, and that's bound to leave someone out."