As the editor of one of the nation’s longest-running logistics magazines, I get a lot of phonecalls and e-mails from readers wanting to know, basically, what the heck is going on? Sometimes they’re asking about capacity (or lack thereof), sometimes about the regulatory environment, sometimes about all the new technologies that are certainly disruptive but aren’t necessarily productive. To say there’s a lot of confusion about the current shipping environment would be quite an understatement.
For instance, why exactly has the Federal Motor Carrier Safety Administration (FMCSA) decided to take another look at the Hours-of-Service regulations for truck drivers? It took well over a decade for them to finally settle on a set of rules that shippers, truckers and the general public could generally agree were acceptable. As contributing editor David Sparkman remarked in his report about the FMCSA reopening this can of worms, you can almost picture the logistics community shuddering at this development.
“The time it took to adopt the most recent rules is one reason why they need a fresh look” is how Ray Martinez, administrator of the FMCSA, explained the need to rethink the HOS rules. I suppose that makes sense, if part of the thinking is that it could take another 10 years of studies and debates before any new rules ever actually go into effect. If any new rules don’t end up being finalized until 2030 or thereabouts, then getting started now might be the right call. That’s the kind of logic, though, that only works in Washington.
One of the reasons some lobbyists are urging on a reboot of the HOS rules is the impact of the electronic logging device (ELD) mandate, which some claim has led to a reduction in driver productivity. Shippers and trucking companies with small fleets in particular view the mandate as a burden, explains Craig Marris, executive VP of mixed fleets at Coretex, a compliance solutions company that recently polled trucker on how the ELD regulations had affected their operations.
According to the Coretex survey, fleet operators aren’t necessarily convinced as to whether the ELD mandate has been good for the transportation industry: 47% say it has been good, 38% say it hasn’t, and 15% aren’t sure. Also, nearly seven out of 10 respondents (69%) believe ELDs do not improve driver satisfaction, and 33% say the ELDs make it more difficult to retain drivers due to strict HOS compliance.
Some truckers also say that common problems with the ELDs include inaccurate data, connectivity issues and poor technical support. So the jury is still out on the overall effectiveness of the ELDs.
The situation may slowly be correcting itself, though, according to Donald Broughton, founder of equity research firm Broughton Capital and author of the monthly Cass Freight Index. “We are seeing more signs that ELDs initially hurt the capacity/utilization of truckers, particularly small truckers, but many of the truckers most adversely affected are now beginning to get some of the loss in utilization back, especially in the dray van and reefer (temperature control) marketplaces,” he says. “The flatbed segment of trucking, however, is continuing to struggle with productivity after the adoption of ELDs.”
Meanwhile, the Shippers Conditions Index, a monthly measurement of the industry’s health compiled by freight transportation forecasting firm FTR, continues to wallow in the negative zone, with the current score of -9.9 indicating a bad, pessimistic environment for shippers. That means capacity is extremely tight, and pricing for transportation carriers is high when you can find a carrier willing to take on the freight. “As shippers head toward peak season and a potential end-of-year rush before new tariffs take effect on January 1, things remain far from ideal for shippers,” notes Todd Tranausky, VP for rail and intermodal at FTR.
In any event, there seems to be a groundswell of support that prompted 30 U.S. Senators to pledge their support for an update to the HOS rules, and the American Trucking Associations says it’s willing and able to help the FMCSA in whatever way necessary “to improve the safety of our highways and the efficiency of our industry.” So, shudder if you must at the prospect of another round of HOS rulemaking, but it looks like it’s going to happen, so adjust your transportation strategies accordingly.