HOS Changes Hurt Carriers, Lower Driver Pay, ATRI Says

This story appears in the Nov. 25 print edition of Transport Topics.

Just four months into the federal hours-of-service rules on rest breaks, carriers said they have had to hire more drivers, pay higher wages, buy more rigs, juggle work schedules and lower customer expectations of service.

The findings emerged in a survey published Nov. 18 by the American Transportation Research Institute.

Drivers reported greater fatigue, more hours spent driving in peak traffic on congested roads and losses in pay, according to the survey.

“The impacts on driver wages for all over-the-road drivers total $1.6 billion to $3.9 billion in annualized loss,” the ATRI survey showed. ATRI is a subsidiary of American Trucking Associations.

Similar findings were revealed in a Nov. 20 study by the Owner-Operator Independent Drivers Association’s Foundation.

Under the HOS rule, which began July 1, a 34-hour off-duty restart period must include two periods from 1 a.m. to 5 a.m. on two consecutive days, and such restarts are limited to one per week.

Drivers must also take a 30-minute rest break if they have been behind the wheel for eight hours.

Subsequently, shippers have been affected. Some expressed mixed experiences with the new 34-hour restart and mandatory 30-minute break last week during a joint meeting in Houston of the trade groups National Industrial Transportation League, Intermodal Association of North America and Transportation Intermediaries Association.

Brad Parkhurst, transportation sourcing leader for building products supplier Owens Corning, said the HOS change has dealt a blow to the quality of service.

“The utilization levels that motor carriers are trying to hit is so high that if anything happens inside the system, there are problems,” he said.

If a carrier is held up for four hours on a particular day due to slow unloading of freight, Parkhurst said, the impact also shows up the next day because the rest periods are affected by the delay.

“We are trying to add more flexibility,” he said, to satisfy contractors who are customers of the building products manufacturer.

The combined effect of the new HOS rules and the Compliance, Safety, Accountability program has reduced on-time deliveries by fleets by 4 or 5 percentage points, Parkhurst said.

Kate Scott, director of logistics for Wendy’s Quality Supply Chain Co-op Inc., which supplies the fast-food chain, said, “We watch hours of service very closely. We haven’t seen the impact that we thought we would.”

Scott said she anticipated an immediate 8% rate increase but instead has seen prices rise only 2%.

“The big thing we are watching for is what the impact will be on [carriers’] financials,” Scott said, noting that she anticipates the full effect will appear next spring when long-term price and service contracts are negotiated.

She also said that the mandatory 30-minute rest break has been a major contributor in squeezing capacity on freight lanes where it was a challenge to find trucks before.

Kevin Santori, manager of truckload and intermodal operations for Shaw Industries, also spoke at the Houston event, saying the HOS changes caused the floor products manufacturer to switch some single driver runs to team operations.

More than 80% of the carriers ATRI surveyed said they’ve suffered a loss in productivity because of the new rules. Half the carriers said they’ve had to hire more drivers to haul the same amount of freight.

Eighty-two percent of the drivers ATRI surveyed said the rules have a “negative impact on their quality of life, with more than 66% indicating increased levels of fatigue.” Sixty-seven percent said their pay has decreased.

ATRI said its findings are based on 2,370 driver responses, 446 carrier responses and an analysis of logbook data representing more than 40,000 drivers.

Leaders of ATA said FMCSA, the Obama administration and Congress should swiftly address the mounting problems caused by the HOS changes.

“By now, it should be clear that these rules were a mistake — everyone can see it,” said Philip Byrd Sr., president of Bulldog Hiway Express and chairman of ATA. “FMCSA should listen to the facts and roll back this ill-advised rule.”

ATA President Bill Graves called on Congress to pass a bill introduced by Reps. Richard Hanna (R-N.Y.), Tom Rice (R-S.C.) and Michael Michaud (D-Maine) to suspend the rules until an independent review is completed.

“We’re confident that once they are independently and objectively reviewed, FMCSA will have no choice but to undo what it has done,” Graves said.

OOIDA said its member survey drew responses from some 4,000 drivers, and that 46% reported feeling more fatigued since the HOS changes while 65% said they receive less income. Also, the 34-hour restart has caused 56% to lose mileage and loads hauled per week.

“The rules need to reflect the fact that drivers have to accommodate numerous factors they have no control over, such as weather and traffic,” said Todd Spencer, the group’s executive vice president, “in addition to the schedules of shippers and receivers who don’t have to comply with any regulations at all.”