Happy New Year! In case you missed it, the US Department of Transportation announced its final rule on Hours-of-Service (HOS) on December 22. You can read the press release for all the details, and the table below summarizes the changes.
The American Trucking Associations (ATA) and the Owner Operator Independent Drivers Association (OOIDA) immediately issued press releases (here and here) expressing their frustration and disappointment with the ruling. ATA President and CEO Bill Graves said the following:
“Today’s announcement of a new rule on the hours-of-service is completely unsurprising. What is surprising and new to us is that for the first time in the agency’s history, FMCSA has chosen to eschew a stream of positive safety data and cave in to a vocal anti-truck minority and issue a rule that will have no positive impact on safety. From the beginning of this process in October 2009, the agency set itself on a course to fix a rule that’s not only not broken, but by all objective accounts is working to improve highway safety. Unfortunately, along the way, FMCSA twisted data and, as part of this final rule, is using unjustified causal estimates to justify unnecessary changes.”
The National Retail Federation (NRF) also expressed concern. In a press release, NRF Senior Vice President for Government Relations David French said, “These new regulations will still drive up costs for businesses and consumers while making our highways and city streets more dangerous rather than safer. This is a case where something that might sound good on paper doesn’t work in the real world.”
On their company blogs, Tom Sanderson at Transplace (click here) and Jason Craig at CH Robinson (click here) also shared their perspectives on the ruling (Transplace and CH Robinson are Logistics Viewpoints sponsors).
Here are my three takeaways:
It could have been worse. Shippers and carriers were very concerned that the FMCSA would reduce daily driving hours from 11 to 10 hours, which would have greatly impacted productivity, but this part of the rule was not changed…at least not yet. FMCSA is keeping the door open on this point, saying that it “will continue to conduct data analysis and research to further examine any risks associated with the 11 hours of driving time.” The other good news is that carriers have until July 1, 2013 to comply with the new rules, which gives carriers and shippers plenty of time to adjust their operations…and to launch a legal challenge.
It’s not over yet. The ATA and others will likely pursue legal options to further delay, change, or reverse the proposed changes. Will Hours-of-Service become an election year issue? Would anything change with HOS if Obama loses the election or big changes occur in Congress? Hard to know, but in the meantime, I think many carriers will start operating under the new rules on a limited basis to get some hard data on how the changes will impact their operations—and how to spin it into rate increases for shippers.
The big picture in trucking remains the same. What should shippers do in response to the changes in Hours-of-Service? What they should have been doing all along for the past several years if they have been reading the transportation tea leaves. As I wrote about in April 2009, many shippers have been moving away from one-way truck freight and shifting more volume to intermodal and dedicated fleets as a way to “take freight off the truckload grid,” as one of our shipper clients put it. For many shippers, this mode shift and other actions they are taking is in anticipation of trucking capacity getting very tight again when the economy recovers. Driver shortages, rising oil prices, road congestion, outdated infrastructure…regardless of what happens with Hours-of-Service, these big picture issues remain.
And it’s these “big picture” issues that are bringing shippers and carriers together to Washington, DC on February 1 for an industry-wide event called “Stand Up For Trucking.” This event is being organized by the National Shippers Strategic Transportation Council (NASSTRAC) and the American Trucking Associations (ATA), along with the support of nine other industry associations. According to the press release, “This orchestrated effort is historic because both shippers and carriers are working collectively to let their voices be heard so that their Congressional and Senate representatives understand that trucking is a vital national asset that contributes to the well-being of this country.”
So, if you didn’t participate in the Hours-of-Service rulemaking process, here’s another opportunity to educate lawmakers about the important role transportation plays in the success of your company, industry, and the economy as a whole, and what actions they should take to address the various challenges facing the industry.