Thursday, October 24, 2013

US Trucking and Intermodal Logistics Giant Speaks Out on HOS Regulations

Drivers Hours of Service Changes Have Impacted Productivity say Road Haulage Groups
Shipping News Feature

US – When US trucking company Schneider National presented its testimony to the Federal Motor Carrier Safety Administration in February 2011 over the Hours of Service (HOS) changes which were subsequently introduced in July this year, it was very precise as to its methodology. The intermodal and logistics provider stated that production would drop between 3-4% as a result of the proposed changes and is now saying its calculations were based on science, not fiction.

Schneider claims that, having seen a 3.1% drop in productivity on solo shipments and a 4.3% decline on team shipments since the new HOS rules were brought in, it feels an ‘I told you so’ is in order and says that road haulage carriers and drivers aren’t the only ones adjusting to the changes; shippers are feeling the impact, too. Many shippers are indicating carriers across the industry, as well as their own private fleets, are already experiencing productivity and on-time service declines. Dave Geyer, Senior Vice President/General Manager of Schneider’s Van Truckload division, explained, whilst stressing that safety would not be compromised, saying:

“The Hours of Service changes could not have come at a worse time. We now need more drivers to do the same amount of work, but regulations, economic conditions and demographics are working against us in terms of recruiting new drivers. Those who do answer the call deserve an attractive wage and good benefits, but we’re being restricted in the number of miles we can give them and the ongoing challenges that come with sharply rising operating costs.

“Operating safely continues to be core to how we do business. Safety performance dramatically improved under the previous Hours of Service rules and there is no evidence to support that changing the rules has improved safety. Ongoing feedback from our drivers is consistent: they do not feel better rested as a result of the rules change; just less productive. To put it in the simplest of terms, capacity continues to tighten, productivity has been reduced and it’s harder – and more costly – than ever to acquire and retain drivers. This trifecta is a cost burden that carriers cannot bear alone.”

Schneider comments that for many drivers, the lure and independence of the open road are no longer worth the pay and regulatory pressure they are now facing. It claims driver turnover is trending up and is back at prerecession levels. The company cites a recent research brief with John Larkin, managing director of Stifel Transportation & Logistics Research Group, in whose opinion regulations such as HOS create a challenging driver market, commenting:

“Virtually all of the proposed federal rules and regulations either reduce the size of the driver pool or reduce the productivity of the drivers remaining in the pool. As a result, drivers remain a scarce input.”

Schneider’s is not a lone voice in pointing out the effect of the new HOS changes. There are of course other factors, not least stagnant prices in certain commodities (and the recent Government shut down won’t have helped the next set of figures) but carriers such as Werner Enterprises and Knight Transportation have also spoken out recently and noted the identical effects on performance as reported by Schneider.