Shippers, carriers scramble in wake of latest HOS ruling

John D. Schulz, Contributing Editor -- Logistics Management, 7/25/2007

WASHINGTON—For the third time in three years, portions of the government’s hours-of-service (HOS) rules governing an estimated 8 million truck drivers have been ruled illegal. As a result, shippers and carriers once again are scrambling to calculate the court ruling’s effects.

A federal court threw out the latest truck driver hours of service regulations, ruling that the Federal Motor Carrier Safety Administration violated procedural law when it crafted the rules.

Mark Rourke, president of truckload division of Schneider National, said it hasn’t caused any immediate changes but said he was “disappointed” by the ruling.

“It’s certainly unsettling,” Rourke said. “It seems more procedural than content. We’re confident the industry can get it remedied. But the uncertainly is unsettling.”

The unanimous July 24 ruling by a three-judge panel of the U.S. Court of Appeals in Washington overturned the 11-hour daily driving limit and 34-hour restart period that have been in place since the current rules took effect Oct. 1, 2005.That resets the HOS clock at 10 hours maximum driving time each day.

The American Trucking Associations (ATA), which backed the original rules, issued a sunny statement, saying “From the trucking industry’s standpoint, the good news in the decision is that the flaws that the Court found were procedural in nature and can be corrected by the agency.”

The ATA has said it will seek a stay of the ruling, which is scheduled to go into effect in mid-September. The Federal Motor Carrier Safety Administration (FMCSA) has said only it is studying the ruling and has not indicated whether it would appeal.

Satish Jindel, principal of SJ Consulting, called the ruling a “double-edged sword” for truckload carriers. On one hand, he said, it would result in reduced capacity of about 4-to-5 percent and lower productivity for TL carriers. But the ruling comes at a time when the industry currently has excess capacity due to the freight slowdown.

“The only good part is the timing, which couldn’t be better,” Jindel said. “There is softness in the market and there are drivers available.”

Nevertheless, shippers are concerned the ruling will create uncertainty in the market place.

Fred Boehler, vice president of logistics for Borders Group, a major truck shipper, was confident the truckers will adapt to whatever final rule is adopted.

“The industry will certainly adapt,” he said. “The question is how will they react?”