Are private fleets about to hit a wall?
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.
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