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What do the proposed 2020 HOS changes mean for the trucking market?

On August 14, 2019, the Federal Motor Carrier Safety Administration (FMCSA) released the long awaited draft rule updating certain parts of the hours of service (HOS) rules. Read more to learn about the proposed changes.  

What are the proposed HOS changes?

In summary, the changes proposed include (per the American Trucking Association):

Split sleeper berth

  • 7/3 hour splits would be permissible (current requirement is one continuous 10 hour break with limited opportunities to split into 9/1 and 8/2)
  • Potential for 6/4 split

30-minute rest break

  • The break will be required after eight hours of driving time (as compared to eight hours after coming on duty)
  • The break will be allowed while on-duty, not driving (as compared to being completely off-duty)

Adverse driving conditions

  • On-Duty time can be extended to accommodate two additional hours of driving when encountering adverse conditions

Short-hauls

  • Short haul CDL drivers will be able to operate within a 150 air-mile radius and up to 14 hours (as compared to 100 air miles and 12 hours) without needing to track hours with an electronic logging device (ELD).

14-hour clock

  • A driver will be allowed to “pause” their 14-hour on-duty clock once, for up to three hours during their duty day. This would allow drivers to better plan routes that avoid rush hour traffic or accommodate longer loading times without sacrificing drive time.

When will changes go into effect?

While these changes are a top priority for the FMCSA, we will likely need to wait an additional four to nine months before they issue a final rule.

After that, there will be an implementation time in coordination with ELD providers. Realistically, this change could go in effect as early as January 2020. But the likely timeframe we can expect to see changes is April-July 2020.

Who will be most impacted by the HOS changes?

While the entire market would be impacted by these changes, the dray market could feel the greatest impact. The proposal to extend the short haul exemption by 50 miles and 2 hours per day is likely to result in meaningful per day increases in productivity for dray carriers.

How will the proposed changes affect shippers?

These proposed HOS changes are one of the most aggressive moves to add flexibility in the trucking industry in almost 15 years.

If these changes remain, we could potentially see an increase in available capacity through regulatory change.

Things to keep in mind

Everyone should be reminded this is not the final rule and the details can change. When the comment period closes, there will be lots of anticipation regarding what part of this draft proposal remains intact and which parts may get modified. There also could be court challenges following any final rule that is issued.

Regardless of when the final rule gets implemented, it is clear that the intention of the FMCSA is to provide more flexibility to a driver’s day.

If you would like more information or have questions about the impact on your freight, connect with a C.H. Robinson expert today.

- Director, Government Affairs- C.H. Robinson

Analyzing the Impact of the ELD Mandate on Truckload Shipping

ELD Mandate line of trucks in Robinson blueIt’s been nearly a year since the electronic logging device (ELDs) mandate went into effect. Some had predicted that the industry would see mass carrier bankruptcies or a flurry of acquisitions of smaller carriers by larger ones, but that hasn’t been the case. Instead, thanks to the strongest truckload shipping market since deregulation in 1980, the ELD mandate’s effect on the market is playing out in other ways.

The anticipated impact of the ELD mandate

As 2018 got underway, drivers’ hours of service (HOS) didn’t change, but the ELD mandate effectively eliminated any flexibility drivers may have taken with paper logs. With ELDs in effect, lane waste and efficiency could be documented for the first time.

The dire predictions of a year ago were based on traditional truckload shipping market fundamentals, with the usual peaks and lulls. In other words, peak shipping seasons like the holiday rush would be followed by slow shipping periods when there would be an oversupply of trucks. If this had been the market scenario when the ELD mandate went into effect, carriers would have borne the financial consequences of inefficiencies or loss of hours in the market. The result may well have been bankruptcies and acquisitions.

That wasn’t what happened. Instead, there was far more demand for truckload shipping than there were trucks available. Since demand outstripped the supply of trucks, carriers didn’t have to take on the costs of the ELD mandate. They simply passed on the costs, raising their prices to compensate for inefficiencies and loss of hours.

The reality of the ELD mandate

So, what has been the actual impact of the ELD mandate on truckload shipping? It had been expected that with all carriers using ELDs, there would be a way to measure the loss of market hours, but the documentation won’t be accurate until ELDs are in widespread use. As of March and April of 2018, a survey of ELD readiness by MiX Telematics and Bobit Research Services revealed that 29% of fleets that needed to comply with the ELD mandate still had not done so.

In the meantime, a few analysts and others have ventured that the loss of market hours is about 3%. Yet, with demand outstripping truck supply, it’s hard to say for sure what percent of price increases should be attributed to the ELD mandate vs. other freight factors vs. simply “demand is greater than supply.”

It does appear that the ELD mandate could be behind price increases for (formerly) one-day routes of 400-700 miles. Drivers are on the clock for 10 hours per day. But once you’ve accounted for waiting times to load and unload, only 7-8 hours are actually spent driving. Shipments that previously had one-day transit times are now two-day. Carriers have changed rates accordingly to earn the revenue per day they need to be at healthy financial levels.

The same principle applies to dray carriers who work out of the intermodal (rail) terminals. It has always been true of intermodal service that the closer you are to ramps (at both pickup and destination), the better the price will be. That is still true today. But the ELD mandate is causing some of the longer dray destinations to be out of reach with hours of service being managed more critically. The longer dray points may need to be destined to closer ramps that have shorter dray. The trade-off may be in total transit days for the shipment. Intermodal can probably still serve these points, but logistics planners need to consider transit and cost trade-offs.

Final thoughts

As we move into 2019 and more carriers follow the rigors of documentation that come with the ELD mandate, the true impact on the market will become clearer. What seems likely in this economic environment is that we will continue to see higher rates and tight capacity in the near term. Some of the impact of higher rates can be mitigated by working closely with transportation providers, and doing what you can to make your freight more attractive to carriers. Being a favored shipper will continue to pay off. If you need more ideas for working with carriers that fit your unique supply chain, connect with one of our experts.

FMCSA Releases Guidance: Personal Conveyance by Commercial Truck Drivers

On May 31, 2018, FMCSA issued updated guidance on use of personal conveyance by commercial truck drivers. Previously, guidance had restricted the use of personal conveyance to “unladen” vehicles, which many interpreted as bobtail or power only moves. This final guidance makes clear that drivers can use personal conveyance for laden vehicles in certain circumstances.

One of the biggest impacts this guidance will have is to finally provide clear guidance on what to do when a driver runs out of hours on private shipper property due to unexpectedly long loading or unloading delays. Previously there was no clear answer to this as we outlined in this blog from December 2014.

Specific information about the guidance
C.H. Robinson submitted comments specifically asking FMCSA to address this question and they responded as follows:

The following are examples of appropriate uses of a CMV while off-duty for personal conveyance that include, but are not limited to:
Time spent traveling to a nearby, reasonable, safe location to obtain required rest after loading or unloading. The time driving under personal conveyance must allow the driver adequate time to obtain the required rest in accordance with minimum off-duty periods under 49 CFR 395.3(a)(1) (property-carrying vehicles) or 395.5(a) (passenger-carrying vehicles) before returning to on-duty driving, and the resting location must be the first such location reasonably available.

New guidance adds flexibility
All ELDs have the ability to currently log personal conveyance time. This new guidance by FMCSA will allow drivers significantly more flexibility in the use of safe and appropriate personal conveyance than they were previously able to use.

- Director, Government Affairs- C.H. Robinson

How Our Transportation Club Gives Back During the Holidays

Sometimes it doesn’t take much at all to brighten someone’s day just a little, especially if that person is battling a serious injury or illness. I’ve seen so many families struggle to find their holiday cheer when they or a loved one is in the hospital. Which is why the Transportation Club of Minneapolis & St. Paul is proud to support the University of MN Masonic Children’s Hospital.
Read More…

- Transportation Club Board of Directors Member and Director of Strategic Account Sales at SBS Group of Companies