For many in trucking, the past few years have been mostly a matter of survival, of living through a period of rapidly increasing insurance rates, plunging used truck values, and shrinking freight demand. As a result, the industry has fewer players; yet those players have had the strength to work through the challenges. However, capacity in trucking now matches demand closer than it has in years.
Now a new challenge rises, as everyone in transportation must learn to deal with new rules governing drivers and their hours of service. To cope with these new rules, truckload carriers are focusing on a reduction in the time required for loading and unloading. This is particularly true for those carriers that handle large volumes of multi-stop loads. Most motor carriers see a requirement to track the time that equipment spends waiting at origin and destination and charge detention when that time exceeds a predetermined level. Carriers say that charging for detention has the dual effect of compensating drivers for waiting time and of giving shippers and receivers an incentive to load and unload more quickly.
The new rules are in place and unlikely to change; even though, several public interest groups have filed suit to have the entire rulemaking thrown out and the whole process repeated. Industry and political observers give that little chance of happening. “These rules seem to upset a lot of people on both sides of the issue, which in many ways is an indication that the Department of Transportation has written a pretty good set of regulations,” says a former federal safety administrator.
Strict enforcement coming
The learning phase — the period of soft enforcement — has just come to an end. Carriers and drivers are just beginning to learn how the rules will be enforced from now into the future. Advice from transportation associations such as ATA and others suggests that the first level of enforcement will be roadside inspections. Only after officials have developed a useful level of information about the effects of the new rules will they move to the next phase of enforcement, which will be compliance reviews and audits of carrier record keeping.
Compliance reviews are a serious matter. Several carriers report using consultants to help prepare for them. One carrier says that it has already had a consultant perform audits on its first two months of logs and other record keeping.
As carriers and food distributors begin to feel the full effects of the new hours of service rules, a number of issues arise. Motor carriers want shippers and receivers to cooperate in reducing loading and unloading times. In addition, nearly everyone that handles freight is seeking ways to cope with the impact of the new rules on delivery of multi-stop loads. This may require the adjustment of many standing routes where drivers now could run out of duty hours before all the freight is delivered.
Carriers have discussed excessive waiting times for years. The new hours of service rules place a premium on reducing these waits as all this time is considered a part of the 14-hour on-duty period. To ensure that drivers have enough hours available to meet delivery commitments, carriers are seeking ways to track how long drivers and equipment are detained at origin and destination; and they are attempting to control that detention by charging for waiting time beyond an agreed upon period.
Contractors must be paid
Charging for detention has a special impact on carriers that depend on independent contractors for power equipment. In many instances, carriers say that they are charging for detention simply to make a point with receivers, that they foresee little likelihood of actually collecting the bills. However, one argument holds that the rules governing independent contractors require carriers to pay their owner-operators a certain percentage of the freight bill whether or not the carrier is paid by its customer. As a result, some carriers may hesitate to bill for detention when they know that it will result in a cost that they are unlikely to recover.
Getting paid for waiting may help drivers and independent contractors recover income lost by not being on the highway, but it does not ease the dislike of sitting still. In the first place, detention pay does not equal driving pay. But most importantly, drivers want to be on the road doing the job they were hired for, not waiting in a parking lot for a place at a dock, pay or not, carriers say.
Billing for detention seems like a great incentive for shippers and receivers to help keep equipment rolling. However, they dislike increased costs as much if not more than carriers like them. Freight customers typically refuse to pay for detention in the absence of good evidence to support the bills.
More shipper education
Carriers say that a good education program offers the best opportunity to gain the cooperation of shippers and receivers. Not only do the shippers and receivers need to understand the impact of the new hours of service rules, they say, but carriers also must work to educate their customers to control their service expectations. Some of the extra services customers are used to receiving simply are no longer possible under the new rules, carriers say.
The new rules have effectively reduced trucking capacity by limiting driver utilization. Many carriers see this as the best chance for increased rates they have seen for several years.
At a recent roundtable discussion sponsored by the Truckload Carriers Association, several carriers said that they continue to dispatch loads in the same way and leave the details of operating hours to their drivers. One problem with this approach is that the fleet management software used by many carriers for dispatching equipment has not caught up completely with the details of the new rules. Software developers are solving the problems, but presently, fleet managers cannot always rely on the hours available to a driver as reported by the driver to the dispatch software.
Automatic detention notification
However, upgrades for dispatch software are becoming available. One new product tracks waiting time based on reports from the onboard communication systems used by most carriers. The software notifies a receiver of potential detention by email or fax one hour before charges are scheduled to begin. If the equipment is not unloaded and released promptly, the program sends a bill for detention by the same method before the truck ever leaves the receiving dock. This timely warning that detention charges are about to begin seems to help get a trailer empty and moving, one carrier says.
Almost without fail, carriers say that limited receiving hours must come to an end. The one thing that no regulation can change is the simple 24-hour day. Most receivers have personnel on site for most of those 24 hours. For that reason, the days of receiving only from 6 am to 2 pm are past, one carrier says. Shippers and receivers need to use the entire day if they want trucking service to remain at its current level, he says.
The new rules could create an entirely new outlook for carriers and their customers, some carriers say. In the past, it has been possible to overlook a few troublesome receivers as long as the majority of locations a given shipper needed to serve provided profitable traffic, carriers say. With the tighter hours of service rules, carriers may no longer have that luxury. Every truck must generate a certain level of revenue every hour, they say. If certain receivers do not cooperate by helping with carrier productivity goals, carriers may have to change the service level. These changes could range from charging by the hour for every service provided all the way to declining service to those receivers.
One carrier reports rating every customer by weekly profitability. This information is made available to dispatchers on a one-to-ten scale. When a dispatcher has a choice of loads for drivers, they know to select the highest rated customer. This load selection process gives shippers a reason to change to ensure a continuing level of service availability, the carrier says.
As in any changing environment, participants will likely find both positive and negative experiences. However, almost no carrier says that adapting to the new hours of service rules will be positive for drivers. The best that can be done is to pay them for waiting so that the new rules make as little economic impact on drivers as possible.
However, at least one carrier says that drivers may find the new 10-hour rest requirement to their liking once they get used to it. True, he says, the rule may limit the number of miles a driver can run in a day, but drivers may find that they are more rested while driving. Under the old eight-hour rule, drivers got little real rest, he says. With 10 hours off, drivers will have time to shower, eat, and still get adequate sleep as well as finding a little leisure time to wind down from the tensions of dealing with a constant flow of traffic, the carrier says.
