By Brian Kenney, VP of TCL
There are several major pieces of legislation that will have
a major impact on transportation that you should be aware of.
CSA 2010- CSA
went into effect in December of 2010 and was designed to make the roads safer
by measuring the performance of trucking companies and the individual drivers
that they work with. It is still unclear how much of an impact
CSA will actually have on the industry, but industry analysts believe as many as
200,000 drivers could lose their jobs as a result of the new regulations. Some of these drivers should probably be
taken off of the road, but many of them are just going to be victims of circumstance. The more you drive the more likely you are
going to be to get into an accident or get a speeding ticket. There are going to be many experienced
professional truck drivers that are no longer going to be able to make a living
driving a truck. These are drivers that
have experience handling your freight and driving trucks in bad weather. Many of these experienced drivers are going
to be replaced by drivers with no experience.
When someone is driving 80,000 lbs on a highway at 65 mph you want that
person to have as much experience as possible.
As a result of CSA, experienced drivers with good scores will be in high
demand and will be able to act as “free agents”. Good drivers will be able to demand higher
wages, which will eventually be passed on to shippers. You can check out the FMCSA website for more
information about CSA http://csa.fmcsa.dot.gov/default.aspx.
Hours of Service
(HOS)- There will be a final ruling
in October of 2011, but it is believed that the biggest change will be to
reduce the number of driving hours per day from 11 to 10. This does not sound like a lot, but many
shippers operate on regional distribution models and reduction of just one hour
per day could devastate many of these models.
Over the course of a week a driver may drive over 300 miles less which
would have a big impact on that driver’s pay.
Drivers will want to be compensated for the lost wages. In addition this will require more trucks on
the road to move the same amount of freight that is being moved today. Additional trucks on the road would cause
even more congestion to the nation’s roadways causing additional traffic which
could result in lost hours for drivers. In a market that is already in the midst of
a severe driver shortage, a reduction in driver’s hours would be devastating
and extremely expensive for shippers, carriers, and consumers.
Electronic on board
recorders (EOBR)- There is a
potential legislation that would require all carriers to install EOBR in their
trucks to replace their paper log books.
Currently, log books are utilized by drivers to record their on/off duty
times. It is widely believed that drivers
take certain liberties with their paper log books that allow them to drive a
few extra miles. However if EOBR
legislation is passed when a driver reaches his allotted hours he will lose his
ability to drive. If the driver
continues to drive without hours then this will have a negative impact on the
driver’s CSA score. There has also been
talk of the EOBR being connected to law enforcement. The FMSCA currently is requiring carriers/drivers
in certain cases to install an EOBR as part of their corrective action required
and many carriers are also proactively installing EOBR devices to regulate
their drivers. In my opinion EOBR would
be the biggest game changer to the transportation industry since the trucking
industry was deregulated in 1979. Every minute that a driver has to drive
will become more valuable and the penalty for holding a driver up will also
become more substantial. Detention
charges will most likely go up and will be charged after a short window. Stop off charges on multi-stop loads will
also go up.
The bottom line is that transportation costs are going up
and will continue to do so for the foreseeable future. Carriers are in control of the market and
chances are you need them more than they need you. The good news is there are things that you
can do to offset the cost increases you are seeing on your freight spend. A good place to start is to review your
transportation personnel, process and technology. If the people handling your transportation do
not know what CSA is then you have room for improvement. If your processes for handling transportation
have not been reviewed or updated recently then you should probably take a look
at them since the transportation market has gone through several major shifts
in the last four years. If you are using
spreadsheets, faxes, emails, and phones to manage your freight you may want to
look at some transportation specific technology. Your ability to quickly load and unload
carriers will become extremely important going forward. The bottom line is that you need carriers as
much if not more than they need you right now.
The shippers that treat their
carriers as a valued partner will be able to overcome the challenges of the
transportation market.
