Hours of service update

Bob Trebilcock, Editor-at-Large -- Modern Materials Handling, 7/15/2004

Last January, new federal hours of service, or HOS, regulations went into effect. The rules limit the number of hours a truck driver can be on the clock on a given day.

At the time, many predicted the new regulations would lead to driver and equipment shortages as well as millions in additional transportation costs for shippers. Six months later, it appears as if most transportation providers and shippers have adapted to the regulations with minimal disruption.

"At this point, I haven't heard from anyone who says HOS is too much of a problem," says Adrian Gonzalez, director, ARC Advisory Group (781-471-1000, www.arcweb.com). "Primarily, it's aggravating an overall bigger factor, which is a lack of capacity as the economy improves. Demand for transportation is outstripping supply, regardless of hours of service.'

Meanwhile, HOS regs are having an impact inside the four walls of manufacturers and distributors. They are actively streamlining processes at their facilities to avoid delays that are costing them money.

"We've had a 30% drop in delay time at our customers' facilities," says Mark Rourke, a vice president and general manager with Schneider Logistics (800-525-9358, www.schneiderlogistics.com). "They're looking at yard efficiency, drop trailer pools, and paperwork so our drivers aren't delayed at their docks."

Multi-stop shipments are declining now that every stop costs extra money. "One of our customers has reduced multi-stop loads by 19% because of hours of service," says Rich Stoltz, director of solutions management at Manugistics (301-255-5000, www.manu.com). Conversely, LTL shipments are back in favor, according to Rick Thomas, director of managed transportation services for TNT Logistics North America (904-928-1400, www.tntlogistics.com).

As a result, there is renewed interest in transportation, yard, and dock management software systems. That is especially the case since carriers appear to be more selective about what routes they're willing to bid on. "The traditional method of reducing your costs by beating up your carriers is no longer producing results," says Stoltz. "Software gives planning capabilities that you can't get manually.