If signed into law, the bill negotiated this week to suspend the controversial 34-hour restart provision of the hours of service while the issue is studied could improve industry productivity by as much as 0.8% immediately, based on analysis from transportation research firm FTR.
The appropriations bill negotiated by the Senate and House will cut off funding for enforcement of the restart while the Federal Motor Carrier Safety Administration studies its impact.
A productivity increase will be driven by an uptick of truckload capacity and should continue through 2017, based on FTR’s estimate of how long the review period will be.
“It may not sound like much in itself, but when you apply it to a $600 billion industry, it has a significant impact,” said Noel Perry, senior consultant and managing director of FTR.
Hoever, FTR anticipates productivity to once again drop as truckload capacity drops once the 34-hour restart regulations are completely re-instated. In the meantime the industry is expected to have a reserve of surge capacity to handle seasonal peaks and other issues in through 2015.
While this signals upside in the immediate term, FTR cautions that the problem is not going to disappear. It is only being moved out a few years.
“It is important to note that this change does not reduce the impending wave of regulatory drag still scheduled for late 2016 and beyond,” said Perry. “Indeed, it makes it worse because the revised regs will hit when a bunch of other regulatory changes appear as well.”
In the coming years, new regulations related to electronic logs, speed limits, increases to minimum insurance and the others could cause additional limitations on the availability of truckload capacity. These combined with the return of a modified 34-hour restart may erase any gains we see in the short term.
If anything, the suspension of the 34-hour restart highlights concerts over the timely adoption of other safety regulations like ELDs.
“The real message here is the demonstration of Congressional support for safety regulations since the ELDs will have a much larger initial impact than the 34-hour restart rules,” said Perry.