Hours of Service Regulations for Better Rested Drivers.
Truck drivers' schedules are constricted by federal hours of service regulations. The Federal Motor Carrier Safety Administration (FMCSA) requires drivers work no more than 60 hours in a seven-day period or 70 hours in an eight-day period. Drivers cannot work more than eight hours at a time without resting in the sleeper berth for at least 30 minutes. After 10 consecutive hours off-duty, drivers can drive no more than 11 hours in a day, and they cannot drive after 14 consecutive hours on duty.
The U.S. Department of Transportation estimated that the safety regulations that went into effect in 2013 would prevent about 1,400 crashes, 560 injuries, and 19 deaths each year. Chronic fatigue is a high risk factor both for crashes and for chronic health problems that plague drivers, and the FMCSA regulations battle both issues.
Electronic Logging Devices for Better Records
By December 18, 2017, carriers must have electronic logging devices (ELDs) in all trucks. Carriers using automatic onboard recording devices (AOBRDs) installed prior to the December compliance date will have an extended transition period. These carriers must switch to ELDs by December 16, 2019.
ELDs are designed to keep carriers strictly compliant with hours of service regulations. It's estimated that use of ELDs will prevent 562 injuries and 26 deaths associated with large commercial motor vehicle crashes. They will also help reduce industry paperwork and increase law enforcement efficiency. Most large carriers are already using this technology.
The biggest impact will initially be on small to medium-sized carriers. The implementation process might act as a setback for these carriers as they deal with investing in the technology, updating processes, and training drivers and other staff members to use the new equipment. These companies say the regulations will reduce productivity 5 to 8 percent. However, there are many industry benefits on the horizon as the result of these ELDs.
Market Competition from Concerned Shippers
The new requirements for ELDs are forcing all carriers to become more competitive. The largest shippers are already looking for companies that are in line with the new regulations. Clients want to work with trucking companies that are ready well before the compliance date to ensure there's no interruption of service come December 2017. Carriers can quickly increase their perceived reliability and customer appeal by updating their trucks and processes.
The regulations ultimately act as a supply side restrictor that's beneficial for the trucking industry overall. Where supply is low and demand is high, carriers have more leverage to negotiate for better cooperation between themselves and their shippers, ultimately reaching agreements that are beneficial for all.
Optimized Operations to Meet Capacity Constrictions
As capacity becomes increasingly restricted by both hours of service regulations and ELD enforcement, carriers and shippers will be forced to develop more efficient systems. While this can create some strain initially, it will ultimately force shippers to adopt more progressive methods for their operations. Travis Ryan, president and CEO of 10-4 Systems speculates that this will make shippers and carriers "work together more and optimize their operations to a certain point." This in turn will improve margins and give carriers more pricing power.
Though carriers might face a challenging adjustment period, ELD installation can ultimately give them more power over their pricing and an increased ability to negotiate for more beneficial contracts with shippers.