Compromise on Trucking Rules Leaves Nobody Happy

DOT's new trucking regulations could hike the cost of transportation for manufacturers.

After more than two years of often contentious debate, the U.S. Department of Transportation's Federal Motor Carrier Safety Administration (FMCSA) chose the Christmas holidays to quietly announce new hours of service (HOS) rules for commercial truck drivers. The agency reduced the maximum number of hours a truck driver can work from 82 hours within a seven-day period to 70 hours.

By shortening the work week, the FMCSA threw a bone to the various safety groups that have challenged the HOS rules in the past, claiming that too many tired drivers were on the road, endangering lives of fellow travelers. However, the FMCSA left intact the current 11-hour daily driving limit, which trucking companies and private fleet operators adamantly insisted on.

The frequent complaint among truckers and their customers (manufacturers and retailers) is that a reduction in the hours of service will result in the need to hire more truck drivers to make up the difference. President Obama himself conceded that if all the proposed HOS changes had gone through (safety groups were hoping to see the 11-hour daily limit dropped to 10 hours), it could have cost businesses as much as $1 billion a year.

Playing the Waiting Game
The only positive takeaway from the new rules is that it will take at least 18 months before it is implemented, says Bill Graves, during which time the ATA will consider its legal options.

The new rules don't take effect until July 1, 2013, but based on early reactions, nobody on either side of the political spectrum seems to think much of the FMCSA's compromise. "Both the trucking industry and consumers will suffer the impact of reduced productivity and higher costs," says Dan England, chairman of the American Trucking Associations (ATA) as well as trucking company C.R. England. "Also, groups that have historically been critical of the current HOS rules won't be happy since they will have once again failed to obtain an unjustified reduction in allowable daily driving time. Further, it is entirely possible these changes may actually increase truck-involved crashes by forcing trucks to have more interaction with passenger vehicles and increasing the risk to all drivers."

"From the beginning of this process in October 2009, the agency set itself on a course to fix a rule that's not only not broken, but by all objective accounts is working to improve highway safety," adds Bill Graves, president and CEO of the ATA. "Unfortunately, along the way, FMCSA twisted [safety] data and, as part of this final rule, is using unjustified causal estimates to justify unnecessary changes."

Not that the safety groups are happy with the new rules, either. Daphne Izer, co-founder of Parents Against Tired Truckers, complains, "Once again industry profits were put before the safety of the motoring public and truck drivers. I don't know what it is going to take for the government to get real about protecting us on our roads."

So what does it all mean for manufacturers? According to Larry Gross, senior consultant with transportation analyst firm FTR Associates, "The 2012 environment is coming into better focus now that it is certain that no changes in HOS regulations will occur before 2013 at the earliest. The conditions for the trucking industry will now turn on the fundamentals of supply and demand."

As Gross sees it, trucking capacity will remain modestly tight over the course of the year, which means manufacturers should expect to see trucking companies press for higher rates.

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