Subscribe to our free, weekly email newsletter!


Are private fleets about to hit a wall?

By John D. Schulz, Contributing Editor
March 01, 2011

How to avoid the brick wall
In NPTC surveys, the overwhelming reason for operating a private fleet was service. If HOS were reduced, that would strain available for-hire capacity even more, further tipping the service equation in favor of private fleets.

“As capacity is affected and some carriers fall to the wayside, rates are going to go up,” says Peoplenet’s Angel. A recent Morgan Stanley survey showed 84 percent of shippers expect rates to go up at least 5 percent because of CSA as capacity is going to get stretched. If an hour of driving time was also eliminated, that would effectively cut capacity by 9 percent and raise carrier costs.

Private fleet advocates say this all plays to their advantage. “Companies will make the investment to go to private fleets to get their product to market,” adds Angel. “If loads are sitting on their dock for two days, somebody in C-level management is going to say, ‘Enough of this, we’re going to get our own trucks.’”

Other wild cards in the CSA equation are how the insurance companies and plaintiff lawyers will react to this flood of new safety data now available to all. If, say, a shipper is involved in an accident and knowingly used an unsafe operator, how much does that increase one’s legal liability? The limit is bound only by the fertile imagination of plaintiff lawyers, insiders say.

“Negligent hiring lawsuits are possible,” Angel says. “All these tentacles are out there. We’ve yet to see how the effects of CSA and HOS will rear their head. But on the other hand, it will make the highways safer for everyone.”

Mostly everyone agrees CSA and HOS are works in progress. “Consistent enforcement across individuals and regions is a concern, especially in the “start-up” period,” Kraft’s Willert says. “We understand CSA is something of a work in progress that we expect will be refined over time. We would like to be involved in any conversations and forums that are taking place. This will give us a chance to hear what is being experienced so far and to share our thoughts and ideas.”

There doesn’t seem to be any shortage of thoughts and ideas, but the real concern is the significant costs for everyone.

See below for related articles.

Justify your private fleet

Uproar over proposed HOS regulations not abating anytime soon

Trucking industry officials, analysts, shippers, rip FMCSA proposal to reduce driving time

Uncertainty over HOS aside, truckers see “opportunities” ahead in transport policy

CSA is off and running

About the Author

image
John D. Schulz
Contributing Editor

John D. Schulz has been a transportation journalist for more than 20 years, specializing in the trucking industry. He is known to own the fattest Rolodex in the business, and is on a first-name basis with scores of top-level trucking executives who are able to give shippers their latest insights on the industry on a regular basis. This wise Washington owl has performed and produced at some of the highest levels of journalism in his 40-year career, mostly as a Washington newsman.


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

The report, entitled “Outlook for the Domestic Transport and Logistics Market in 2H14 and Beyond,” takes the view that strong freight levels in the second quarter have left trucking companies in a good position: one in which they need to come up with new plans to handle rising demand. But even with that positive momentum afloat, the report observes that there are some familiar challenges intact, such as a lack of qualified drivers and the regulatory drag from the new hours-of-service rules that took effect in July 2013.

Flags of Convenience are a fact of life in the commercial maritime trade, but several European political action groups are worried that they will pose a threat to the Continent’s air cargo industry.

For May, which is the most recent month for which data is available, the SCI is -7.5, following April’s -7.5. FTR said this reading represents a still-tight capacity environment, as utilization rates hover between 98 percent and 99 percent.

With a 1.1 cent drop to $3.858 per gallon, this follows declines of 2.5 cents, 1.9 cents, and 0.7 cents over the previous three weeks, with the cumulative four-week decline at 6.2 cents.

Second quarter revenue for transportation and logistics titan UPS headed up 5.6 percent annually at $14.3 billion, while operating profit sank 57.1 percent to $747 million. Quarterly net income fell 57.6 percent to $454 million.

Article Topics

· Trucking · March 2011 · Transportation · HOS · CSA 2010 · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA