This year opened with a list of regulatory changes in the over-the-road trucking sector, with new policies set to impact driver capacity and productivity. The new rules were set, generally speaking, to address the perennial issue of driver and road safety in the trucking industry. In fact, many stakeholders, including trucking and shipping associations, have lauded what is perceived as a right move by the government. However, many are also apprehensive and wary of the negative impacts of certain details of the new regulations. Many industry players fear the regulatory changes will worsen the driver shortage, a trend that can translate to lesser number of available trucks and, ultimately, higher shipping costs.
New Regulations and Their Salient Features: What Do Shipping Companies Need to Know?
ELD (Electronic Logging Devices). ELDs are introduced by the government in synch with changes in the House of Service (HOS) rules, which authorities want modified to lessen fatigue-caused road accidents. ELDs monitor the operating hours of each driver, data on which will be fed to the FMCSA, and in principle will make it easier for authorities to track drivers who go beyond their HOS requirements. Although HOS rules were introduced as early as 2011, the mandated use of ELDs later this year will unleash their stricter and fuller implementation. These changes can drastically reduce productivity among truckers in an industry already facing a shortage in manpower, and may domino into higher shipping rates. The devices will spell additional costs to businesses too, although the government has allowed the use of mobile handsets, which are relatively much cheaper.
New speed limits. Aside from ELDs, another technology to be introduced in 2018 are speed-limiting devices, which intend to limit speed range among trucks from 60-68mph, based on current deliberations. Speed limiters are meant to reduce accidents in the road involving logistic vehicles, as well as to save fuel costs. Unfortunately, the reduced speed, even say a drop from 70mph to 65mph, can mean a significant loss in driver miles. This could translate to reduced productivity, which may result either in cuts in driver pay as carriers compensate for the productivity loss, or to higher costs for shippers–or even both.
Entry Level Driver Training Rules. Although this new standard is still largely contested, the FMCSA’s proposed changes to the compliance rule for new drivers can mean a new driver pool with applicants who still need on-the-road training, thereby further reducing the availability of new drivers.
Others: CSA, Greenhouse Gas Rules, CSA, Electronic Stability Controls (ESC). Though considered as medium-impact, other new policies can also drastically reduce the drive pool and further strain capacities of trucking businesses. The Compliance, Safety, Accountability (CSA) can lead to further reduction in driver capacity as regulators intensify the crackdown on unsafe drivers and carriers. The implementation of Electronic stability controls (ESC) will spell additional costs, which can eventually translate to additional expenses for shippers. Policies related to pollution and greenhouse gas emissions, which will largely translate in the form of taxes or financial charges, can further hike up costs associated with moving cargo.
What can shipping companies do to adapt to the newest trucking regulations?
Shipping companies and businesses that rely heavily on shipping can cushion themselves from the negative impacts of these new trucking regulations by going multi-modal i.e. avoiding sole reliance on trucking and adopting other modes of shipping such as air and sea freights.
Experts also advise companies to study their networks and see where technology can optimize efficiency and movement. For example, there are management software solutions designed to drive efficiency in one’s supply chain, and systematically anticipate disruptions. Mapping one’s supply chain can provide information on how to optimize the use of trucking, and when to pursue new methods of moving cargoes.
Lastly, the good old rule in business still applies: hold the changes by the horn and take advantage of them. For example, ELDs and speed limiters, according to some studies, can actually increase efficiency among drivers. Handled properly, ELDs can lead to streamlined operations, less operational costs, more profits for carriers and, eventually, lower costs for shippers.