Fleet Management

Tightening of Capacity Coming from New HOS

June 27, 2013

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An expectation of capacity tightening comes as carriers report how they will respond to new HOS regulations taking effect on July 1. The way their shippers work to minimize the impact of these changes will also affect this lowering utilization.

A new Business Expectation Survey from the consulting firm, Transport Capital Partners, shows almost 40% of carriers expect utilization to lower more than 5%, just over 38% expect under a 5% change, only 3% expect no impact and almost 19% have still not determined the full impact of these new regulations.

“This potential reduction in truck capacity is hitting at the same time as spot rates are climbing, reflecting a stronger demand in June. Rates will likely increase further in the months ahead,” says Richard Mikes, TCP partner.

Potential Solutions Vary

Carriers report a variety of potential solutions to mitigating the new rules. Half say they will have to rework routing and load assignments, three-fourths expect new scheduling and detention charges and half want to seek rate increases on impacted lanes.

“Despite the loss of utilization and productivity, many shippers have yet to recognize that they also must be part of the solution. Sixty percent of the carriers report that shippers are still not working with them to minimize impacts,” says Steven Dutro, TCP partner.

Drivers may be squeezed if their miles are reduced because of new hours of service regulations. Few carriers, only 13% plan to raise driver wages to compensate for fewer miles. In the same survey, over 80% of carriers said they would need to see rates increase before they could raise wages.

“The confluence of these HOS rules and rising freight volumes, will inevitably lead to higher rates sooner than later as the industry cannot afford to potentially see drivers leave,” says Richard Mikes.

 

Comments

  1. 1. Dick Gaib [ June 29, 2013 @ 02:19PM ]

    No new wage increases would be needed, if the truckload drivers would be paid actual miles, and routes for trucks. Further all shippers and receiver would help them selves if the offered free parking at their locations. The problem we have too many trucks that are trying to park in the limited locations, and at the same time the states are cutting back on rest areas.

  2. 2. Rich Kruml [ June 30, 2013 @ 10:06AM ]

    A driver only makes money when the truck is moving.
    If you are not in the truck for that and no other reason then get out.
    A sad day when all the snitch electronics stopped you from running 3 logbooks and driving at least 3000 miles a week PAID.
    The drivers today are starving and untill they start shutting down and doing nothing they do not log and are PAID for it will just get worse.
    You could legally shut this country down in 10 days if you did it right.
    Glad I am retired...screw the D O T, let the large cars roll again.

 

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