The Logistics Road Less Certain

Once again this year there is uncertainty in the motor carrier industry and for the country’s truck shippers. The new hours of service rules (HOS) are scheduled to become effective on July 1, and it is still unclear as to how they will impact motor carrier costs and capacity. The American Trucking Associations (ATA) has asked the Court of Appeals in Washington, DC to overturn the changes the Federal Motor Carrier Safety Administration (FMCSA) has suggested, but the court has not yet made a decision.

The ATA and other organizations asked the FMCSA to delay enforcement at least until the court reached a decision, but they’ve refused to do so. It’s estimated that if the court ultimately rules in their (ATA’s) favor, $320 million will have been wasted. In the meantime, unless something happens in the next three weeks, the rules will take effect.

One thing is certain, however. The price of trucking is going up. ABC, YRC, and UPS Freight have announced general rate increases of 5.9%, and other carriers are expected to follow suit. YRC cited new technologies and processes necessary to manage new HOS rules as one of the reasons for their increase. (This may be true, but we see similar increases almost every year). Notwithstanding this, 3PL industry thought leaders and researchers predict the new rules will result in productivity reductions – the amount of which remains to be seen.

Bottom-line, we will see higher costs; and depending on the economy, we could experience capacity issues, as well.