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for Advocates, said following the rule’s will last longer. Last time, we had one The “immediate issue” for the
publication. change: hours-of-service. After about a trucking industry remains the lag
Similarly, Road Safe America (RSA) year, the industry had largely adjusted. between rising demand for drivers
questioned why the limits for airline This time, we figure the adjustments and carriers’ ability to get them hired,
pilots, announced the day prior to the will last two to three years.” trained and rolling.
trucking rules, would differ for truck Long-haul truckers are clearly “It takes time to adjust, and that’s
drivers. the industry segment that will feel what causes the shortage,” Perry said.
“It seems to us that fatigue is the changes, particularly those with “It’s not as if we’re going to be short
fatigue is fatigue,” said RSA President dedicated, “highly-engineered” routes, 500,000 drivers forever, but it takes a
Steve Owings. “The new limits for pilots which tend to push the driving limits. long time for everybody to adjust.”
are 8 or 9 daily hours of flying. By com- Just as important, though not In anticipating another round of
parison, truck drivers don’t have co- so obvious, is that most of the HOS legal challenges to the HOS rule, Perry
pilots, don’t have auto-pilot and must limitations “apply by exception,” Perry noted that the previous change was
stay especially alert whenever driving explained. In other words, the rule much more significant, yet did not have
since they share the public thorough- actually comes into play only “once in the “huge input” from stakeholders and
fares with the motoring public.” a while”: peak season, when a load is the public that the latest rulemaking did.
Owings said the failure to cut the late or when the driver just wants to get “My crystal ball view is that
length of a trucker’s daily driving time home. FMCSA’s backing off of some of its
limit leaves “a gaping hole” in highway “There aren’t too many people who more dramatic changes has reduced the
safety regulations. drive 70 hours per week, every week,” resistance,” he said.
“It’s vital that the FMCSA ‘cross he said. “But from a logistical stand- More practically, truckers—“if
the goal line’ by reducing the daily drive point, hours-of-service gets pushed by they’re smart”—will use the changes to
time to 10 hours from 11,” Owings said. ‘hot’ shipments or extra deals of all demand higher rates.
sorts. This change clearly affects these “Since the rules apply to everybody,
a SIlvEr lININg irregular moves. If you’ve really got to there’s absolutely no evidence that says
Economist and pricing expert Noël get it there, it used to be you didn’t have decreasing hours-of-service hurts the
Perry has run the numbers and says the to worry about how much time the trucking industry,” Perry said. “If you
impact of the changes in the HOS rule driver had—now you do.” don’t know how to manage your costs,
are “easy to sum up.” As to the impact on productivity and you don’t take your prices up, then
“First, the impact is halved from and rates, Perry quickly pointed out it hurts you. But we know from last
what we thought was going to happen,” that freight has made a nicer recovery time the industry used the change as a
Perry said, citing the retention of the from the recession than has the broader major cover to get price increases.”
11th hour of driving time. “Instead of a economy. To support his case, Perry pulled up
5 to 6 percent reduction in productivity, Otherwise, in working with the pricing data from 2005: excluding fuel
it’ll be 2 to 3 percent.” market analysts at FTR Associates, cots, trucking got an 11.9 percent rate
Second, the significant changes Perry has developed a “rule of thumb”, increase “after everybody had a chance
don’t take effect until next year. based on the driver numbers: A short- to scream and moan about hours-of-
The third and not so obvious age of 100,000 drivers means the service.”
impact is the way several other FMCSA market is healthy, “just tight enough” “From a trucking industry stand-
initiatives (CSA’s further development, for carriers to see some rate increases; point, I don’t worry about it,” Perry
tighter controls on driver qualifications) 200,000 means the market is “pretty said. “As a lifetime pricing strategist, a
will come home to roost in 2013. tight” but capacity shortages are big change like HOS legitimizes price
This means the crest of Perry’s still the exception; but a shortage of increases. It’s the shippers who should
“regulatory drag”/driver shortage graph 300,000 drivers marks the point at be worried.”
has rolled into 2013, rather than peak- which there will be “supply chain fail- Indeed, the notion that the FMCSA
ing in 2012. ure,” or no trucks to be found during is “out to get the industry” is misplaced,
And, even with the reduction of the peak demand. Perry concluded.
impact of HOS, the 2013 peak driver “We’re running about 200,000 “The single most important aspect
shortage will be just as high—if not right now, and next year we’ll get up to of trucking is that the public is will-
higher—than originally predicted for 300,000 when hours-of-service hits,” ing to share these wonderful highways
this year, Perry noted. Perry said. “Shippers are really going with us,” Perry said. “If we need to bend
“There’s a lot more going on to have to work hard to find capacity. I over backwards to make them feel good
this time than the last time [HOS expect margins to go up and labor costs about our safety, then it’s worth the
changed],” Perry said. “So the effects to go up.” investment.”

arkansas truCking rePort | issue 1 2012 39