Impact of HOS Still Unclear

Impact of HOS Still Unclear

by Cliff Lynch
22. August 2013 10:52

Impact of Hours of Service Still Unclear

The long awaited revisions to the trucker hours of service rules became effective July 1, and the industry is watching closely to see what impact they will have on drivers, carriers, and shippers. FTR Associates has predicted that the changes will result in a shortage of 60,000 drivers, or 3% of capacity. If this comes to pass, carrier rates are almost certain to increase.

After only one month it is difficult to gauge the impact, but both ATA and FTR reported slight decreases in volume. Both indices fell slightly which no doubt negated any effect of the new rules. Class 8 truck orders also declined 7% from June. But looking ahead, it seems clear that any significant improvement in the economy or truck volume will cause problems. Keep in mind also; there is more to the driver shortage than HOS. CSA 2010 has also taken a toll on drivers and carriers, plus when the economy improves, drivers jump ship for higher paying, more "family friendly" jobs.

Already, driver turnover for the first quarter of 2013 was 97%; and as the economy improves, it will be necessary to pay more for competent, trained drivers.

For shippers, alternatives to truck transportation are few and far between. Some are able to switch to intermodal (which continues to be the fastest growing mode) but trucks are still the mainstay of the transportation industry, hauling almost 69% of total tonnage. ATA predicts this will rise to almost 71% by 2024 when truckers will also capture 81% of revenues. Most carriers are making significant efforts to improve the quality of life for drivers; but in the final analysis, it will be primarily about salary – increased salary to be precise.

In the final analysis, one thing is very clear. There will be no way to escape higher capacity related truck rates.

CFL
8/21/13

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