Preparing for the New Hours of Service Rules
Jan. 4, 2004, marks the beginning of a huge wake-up call for the entire transportation industry. No segment of the industry is immune from some element of the change in the Department of Transportation's revised Hours-of-Service (HOS) ruling. How great an impact the change will have remains to be seen. Those who have successfully planned for its magnitude will likely see a proportionate effect on their total business.
The overall objective of the HOS revision is to permit commercial motor vehicle (CMV) drivers additional opportunities for both quality rest and restorative sleep. The goal is also to reduce the number of accidents caused by driver fatigue. The ultimate outcome: enhanced safety on our nation's roadways.
Four Major Changes
There are two sets of HOS rules as they apply before and after Jan. 4, and there are differences between the two.
Essentially, four major changes will affect our day-to-day business. First, the driving time allowable is increased from 10 to 11 hours. Second, the rest time is increased from eight to 10 hours. Third, the total work time is reduced from 15 to 14 hours and will have a negative offset to the increased driving time. The fourth change, and probably the most significant, is how time is calculated. Under the current HOS rules, off-duty time (rest breaks, meals, maintenance, delays at customer sites) would not be included in the total 15 hours of work. In the new rules, this time is included in the 14 hours of work.
The Full Impact
The total effect of the rule change on driver productivity is estimated at between four percent and 19 percent, depending on individual freight characteristics. The types of freight that are most impacted by the rule change are those with time-consuming characteristics and those likely to have unplanned delays. Freight in which the driver is required to assist in counting, loading, or unloading sub-optimizes driving time. Other impediments include multi-stop loads and "at" vs. "by" pickup and delivery appointment times.
Freight tendered late in the day, JIT freight, customer-assigned backhaul, and international freight are the kinds of loads most impacted by the new HOS ruling. Shippers can take steps to help carriers mitigate the financial impact associated with these changes by minimizing or eliminating driver participation in non-driving work.
The basic economics of supply and demand also play a big part in the HOS discussion. A reduced number of driver hours per driver will require more trucks on our highways. Our industry is already challenged with a shortage of drivers and the new HOS ruling increases the demand for drivers.
"The government's new Hours-of-Service rules "could add $611 million in increased operating costs and force motor carriers to hire 84,300 more drivers," says industry expert Bob Delaney of Cass Information Systems in his State of the Industry report. Others believe that roughly a 15 percent increase in the number of trucks on the road will be required to handle the demand. Essentially, all analysis points to a supply/demand imbalance. The question of whether our nation's highways, which are already in need of updates and repairs, can handle the required increase in drivers, will also need to be addressed.
Who is Hardest Hit?
While all segments of the transportation industry will feel the pinch of this regulation, some sectors will experience a more severe impact. Because more than 80 percent of this country's freight moves in full truckload quantities, this sector will bear the greatest burden. One-way, dedicated, specialized and bulk loads will feel the hardest hit, while parcel, LTL, expedited and intermodal will feel a lesser impact.
How does a company know if it is properly prepared for the broad-sweeping impact of the new HOS rules? Unfortunately, too many companies are ill-prepared.
Those who have updated all internal computer systems to achieve compliance with the new rules are on the right track. Companies that have implemented a communication plan and training for drivers, as well as internal employees, are headed in the right direction and are better positioned to mitigate the effects of the rule change on their organizations. An ongoing, keen attention to driver efficiencies is vital to reducing the compounding effect on the drivers' time.
As our industry works to adapt to the revised rules, which may be a trial- and-error process, we have to remind ourselves that enhanced safety is the ultimate goal of the HOS ruling.