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Shippers fearing HOS changes will affect their costs, service

By John D. Schulz, Contributing Editor
September 27, 2010

As the trucking industry collectively holds its breath over a possible loss in productivity as a result of the long-awaited latest proposal to change truck driver hours of service, shipper interests are worried about the repercussions from such changes and other regulations coming out of Washington.
 
Shippers are fearing their rates will rise and service will suffer if the legal hours of service a truck driver has is reduced. The current rule allows 11 hours of driving within a 14-hour on-duty period, followed by a mandatory 10-hour rest break. There are concerns the government may reduce that to 10 hours of driving, or less.
 
Trucking and shipper advocates believe the recently announced news that the trucking fatalities dropped 20 percent last year to 3,380—making 2009 the safest year for trucking since the government began compiling those statistics—buoys their case for keeping the current HOS where they are.
 
That 3,380 figure favorable compares with more than 5,200 truck-related fatalities in 2004, the last year before the current HOS regulations were adopted.
 
Shipper interests say once the Federal Motor Carrier Safety Administration (FMCSA) proposes its final rulemaking on HOS and opens a comment period on its proposal, they will be making what they believe is a strong safety case for maintaining the status quo.
 
John Cutler, general counsel for the National Shippers Strategic Transportation Council (NASSTRAC) and the Health and Personal Care Distribution Conference, two prominent shipper groups, said the recent news about the drop in truck-related fatalities issued by the National Highway Traffic Safety Administration helps shippers in their HOS appeal.
 
“What’s newsworthy is we have this significant drop in truck-fatality rates,” Cutler told LM. “We’re waiting for our opportunity to make our pitch. We’ve been saying this all along: the alarmists’ claims that HOS allow excessively dangerous conditions aren’t borne out by the data. To us, this is more and strong evidence of that point. This is a more powerful argument in favor of the status quo.”
 
While productivity and on-time deliveries are shippers’ bread-and-butter, Cutler says safety advocates’ claims that shippers don’t care about highway safety is nonsense. “We all use the highways, and so do our families. It’s not that we don’t care about safety. It’s we feel the case has not been made that the rules have to be changed to increase safety on the highways.”
 
Major trucking companies and the American Trucking Associations would largely like to leave the current HOS rules in place. They say the current HOS rules have resulted in improved productivity as well as industry safety. The government’s own heavy truck vehicle crash rate data to show the industry has never been safer while per-mile truck fatality figures are at an all-time low. Transportation Secretary Ray LaHood said as much when he recently attended the National Truck Driving Championships in Columbus, Ohio.
 
ATA President Bill Graves said the greater rest opportunities afforded drivers under the 2005 HOS revisions have created a “more circadian-friendly” approach to a truck driver’s work-rest cycle and have contributed to driving down the truck fatality numbers.
 
Top trucking industry executives backed Graves up on that assessment. They worry about lost productivity and higher costs associated with planning and implementing yet another change in HOS.
 
“Obviously any modification to the drive-time or on-duty time will have an effect on the entire transportation industry and the appropriate adjustments would need to be made by shippers and carriers,” Ron Uriah, vice president of safety for Pittsburgh-based Pitt Ohio Express, told LM.  “Those adjustments most likely would only affect pick-up, delivery and transit times.”
 
Jim Germak, president and owner of Jagtrux, Marietta, Pa., echoed that sentiment and said that any proposed HOS changes increases a trucking company’s costs immediately.

“It’s a major concern,” Germak told LM. “We have to alter our operations whenever there’s a change. Nobody is going to be prepared. There were any changes in HOS for 65 years (from 1935 to 2000). Now we’ve had about five revisions in the last 10 years. They seem to want to jump around and try to make everybody happy, but that’s not going to happen.”

Shippers are fretting that if HOS are reduced, there will not be any way to offset that lost hour or so of productivity. It’s unlikely that trucking companies will be allowed further use of longer combination vehicles.
 
Also, the government is restricting trucking productivity in other areas. It is set to roll out a new safety initiative called CSA 2010, which is designed to weed out unsafe drivers. Recently, the government increased the number of illicit drugs it tests truck drivers for using. There is talk instead of urine samples, which can be easily masked, the government may go to testing hair samples, which are said to be more difficult to doctor.
 
Shippers are also concerned the Obama administration is quietly fostering the use of freight rail in some areas, at the expense of the trucking industry. They point to delays in implementing the highway reauthorization bill, which expired more than a year ago, as an example of the administration trying to downplay the importance of highway freight transport.
 
“There’s a feeling that use of rail is being promoted without regard of the importance of trucking for Just-in-Time deliveries, which our members utilize,” Cutler said. “There is a whole range of concerns in trucking. A lot of our members depend on trucking. We’re concerned about these developments. We’re not knocking rail. The concern is the government is failing to give the attention necessary to the importance of trucking to transportation in this country.”
 
Trucking’s on-time service guarantees are the lifeblood of the lean manufacturing and JIT supply chains utilized by many shippers.  Cutler recently quipped that while he often sees 98 percent on-time delivery provisions routinely written into trucking contracts, “I’ve never seen one in a rail contract.”
 
If the HOS are changed, shippers are fretting over what consequences that would have on trucking service. “It’s not just a matter of truck rates,” Cutler said. “There are also issues of service quality. If a trucking company’s terminals are 500 miles apart and due to changes in HOS, a daily drive can no longer go from Terminal A to Terminal B, that’s doesn’t just impact rates. That impacts service.”
 
If more freight is forced off truck onto rails, Cutler mused, “Are we gong to have to go back to days of inventory carrying costs that aren’t necessary when you have trucking companies willing to guarantee next-day service? Sure, it’s an issue of cost, but it’s also an issue of service quality, efficiency and carrier productivity.”
 
Carrier officials agreed with Cutler. Germak of Jagtrux said any HOS changes always have unintended consequences.

“Our drivers’ biggest complaint is the current HOS creates a much faster pace than it once was,” He said. “Say it’s a Friday afternoon, a beautiful day, and they’re a few miles away from home. They used to be able to pull over in a safe spot and get their rest in order to finish their route. Now they’re so hard-pressed, they don’t have time to do that. There’s no breaks. That’s the biggest complaint our drivers. It’s kind of counterproductive on what they intended to do, but that has been the unintended consequences.
 
At press time, the latest proposed revision to the rules governing some 3 million long-haul truck drivers was sitting at the Office of Management and Budget after being revised by FMCSA. The latest rule is expected to be issued as a notice of proposed rulemaking by November. It’s possible a final rule is issued next summer.
 
Changes in the sleeper berth provision allowing split rest periods are almost assured, industry insiders say. 

FMCSA could reduce the on-duty or drive time hours, but industry experience under the current rules has been positive with a reduction in accidents and fatalities. This history supports keeping HOS as they are, although it’s possible the government could modify a driver’s day by requiring a mandated rest period during the driver’s tour of duty.
 
Said one top industry official of the situation: “Who knows what this administration will do?”

Whatever rule is proposed, one thing is almost certain. It will once against be challenged in the courts.

That is nearly a given.

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.


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