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Hours of Service – What Does It Mean to the Economy?

by Todd Colin, Rockfarm CEO

The 2015 Budget bill came with news that there were some changes to drivers
Hours of Service (HOS). At a high level these changes are suspended until
Sept 30th, 2015. The DOT will be studying the safety benefits and costs of the
HOS regulations.

The suspension targets one general regulation that has two specific components,
and that has to do with the drivers’ time on the clock and when a driver has to restart
his hours each week. The requirement to restart the drivers’ hours each week is no
longer in effect under the suspension, meaning that the driver does not have to have
34 hours off each week before restarting.

The second regulation suspended the driver having to have two periods of 0100 to 0500 am
time windows in the 34 hour restart, meaning the driver needed to have two nights
off in order to restart their hours. Now as before the regulation, the driver manages
their hours to the max allowed in a 7 day period which today would stand at 70 hours.

The impact of this could be substantial; lobbyists on the carrier side are pushing to
remove the 34 hour restart rule with the two 0100-0500 am time periods. This suspension
allows for more flexibility in the carriers ability to dispatch drivers and ultimately an
opportunity for the drivers to increase their miles, which for them would translate to income.
However, the lifestyle is the greatest factor in attracting and keeping drivers. Carriers
still have to attract drivers to get behind the wheel, and the suspension or removal is
only a band aid to the issue.

Hours of Service is one of many challenges that Fleets and CDL Drivers are facing.
Couple this with Insurance Requirements, Low Wages, and Mass Disqualifications
due to Health and FMSCA, the industry finds the driver pool shrinking and very aged.
Owning a fleet myself for the past 20 years, I can reflect back to the day when a Carrier
could be very selective about the individual that was chosen to represent your company.
Today it is a free for all for Truckload carriers procuring drivers.

The American Transportation Research Institute, (ATRI), recently published an
article “Analysis of Truck Driver Age Demographics Across Two Decades”. Their study
for Driver Turnover Q2 2014 is illustrated as follows:

The Truckload Fleet to which I have interest in would fall in the Truckload – Small Category (58 Power Units).

Since 2011 the Fleet has contracted 10% while Driver Turnover has increased 32%.
At a cost of $6,500 per replacement driver the cost is steep. Is Turnover becoming
expected and accepted as an industry culture? Think of the challenges to delivering high
service on a fleet where the average driver has been there 6 months.

Average Age has continued to increase as well. The ATRI’s Distribution of Truck
Transportation Employees by Age captures it best illustrating a 9% raise over 20 years
in the 45-54 bracket with 25-34 year old bracket falling by 15%:

Following suit my fleet’s average Driver age in 2014 is 54 year old. We have
Zero Drivers under 34 years old.

How does Hours of Service Impact the Carrier’s? Being a DOT and Hour of Service
compliant carrier with in Cab EOBR (electronic onboard recorders) , our company has
seen a reduction in velocity impacting utilization and ultimately affecting retention
and profitability.

How does Hours of Service Impact the Shipper? Carriers want repetitive consistent business.
Shippers that maintain an inventory flow consistent with lean practices coupled with Driver
friendly loading and unloading practices will observe the least GRI increases. Heavy increases
will come to those with inconsistency in their inventory demands that practice live load appointments
with no driver amenities.

The need for Solutions will persist, the industry will levitate toward stronger Partnerships
between Shipper and Carrier, as opposed to the traditional Customer / Vendor relationship.

Driver Retention strategies for the fleet in 2015:

  • Entry Level Driver Training Programs
  • Create relay’s in dense lanes to improve home time
  • Increase compensation.
  • Promote the profession as a career path for our youth.

Carrier Retention strategies for Shippers in 2015:

  • Dropped Trailer loading and unloading program
  • Flexible Hours
  • Level Shipping Patterns
  • Driver amenities when long live loading evokes Out of Hours scenarios

New Year Wish List for White House Administration and Congress:

  • Green Card Incentives for Illegal Immigrants that take up the CDL Driver profession.

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