New legislation on driver safety coming into effect towards the end of this year on US highways could change the shape of existing logistics networks in the country, and could exacerbate a growing shortage of drivers, according to trucking and logistics companies. Such a shortage would mean less capacity to accommodate freight, inevitably driving up freight prices for freight.
The Comprehensive Safety Analysis 2010 ruling (CSA), drawn up by the Federal Motor Carrier Safety Administration (FMCSA) to replace the current SafeStat system, includes several measures to reduce commercial vehicle crashes. It will cut, for example, the amount of hours that a driver can work from ten to eight; it will also introduce a driver safety assessment tool that includes a two-year history of performance to help enforcement staff evaluate drivers’ safety records.
But the new safety rules could hurt supply chain efficiency, according to logistics providers. “CSA and all the rule changes for 2011 are not only going to drive capacity out but the productivity is going to go down if it all goes through and that is going to affect all of us,” warned Scott Grady, senior vice president for corporate sales solutions at Landstar Systems, a US-based transport and supply chain systems provider and one of the company’s selected for initial testing of the new procedure.
These concerns were seconded by Ryder System’s vice president of sales for automotive, Jim Moore, who said that the reduction in the hours of service threatens to destroy 40% of the milkruns that support plant activity. Moore said costs in that area will increase significantly.
“The CSA and hours of service legislation will mean that we have to redesign all of our milkruns, and the costs will increase by anything between 25-30%,” said Moore, Speaking at the Automotive Logistics Global conference last week in Dearborn, Michigan. “It is not a ‘maybe’ that this will happen.”
Besides reducing driving hours, the regulations will involve the use of a new safety measurement system. While the FMCSA will continue to hold motor carriers responsible for their staff and any infringements they make on rules–such as speeding–it will also transfer the carrier’s safety ratings to the driver so that he or she cannot move from company to company and continue with unsafe driving practices.
The increase in driver safety and compliance accountability that CSA 2010 brings in means many carriers will be forced to adjust minimum hiring requirements. While this will benefit the standard of driving, the stringent demands are being questioned by a trucking sector that is facing an immediate shortage of drivers despite an unemployment rate of 10% across the country. As Moore put it last week, “there is a perfect storm coming regarding the availability of drivers for the entire industry”.
“Ryder has more drivers that are older than 65 than it does drivers that are younger than 30,” Moore said. “We’ve known that but last year we didn’t have any turnover; nobody did. This year we are 300 drivers short.”
Moore’s colleague Tom Jones, senior vice president and general manager, US Supply Chain Solutions at Ryder System, said that the new rules would likely deplete an already declining driving pool. However, talking to Automotive Logistics News, he suggested that the negative impact would in large part be the result of misperceptions about the new rules to prospective drivers.
“The CSA 2010 programme is impacting the pool of available drivers due to misunderstanding on the part of drivers or misinformation circulating around truck stops that these are somehow new regulations and that the Federal Department of Transportation is now in the business of rating drivers and disqualifying those who don't meet ‘the new standards.’”
Jones said that this wasn’t the case but that some drivers were exiting the industry or not returning to it after layoffs during the recession. “In reality, the new system, which allows employers to view a detailed background of prospective drivers, will make some marginal drivers much less desirable candidates,” said Jones.
For GM’s director of North American inbound logistics, Michelle Braun, the CSA legislation has necessitated dialogue with the company’s core carriers as it strives to understand how proactive they are preparing for the new rules and what GM’s own role will be in meeting the challenges.
It is up to all of us,” she said. “It’s not just the OEMs, it is the tier ones, it is the carrier base, they are critical to us as they understand [and] are closest to the drivers.”
This was acknowledged by Landstar’s Grady who said that communication with the customer on the different things it takes to retain its drivers is going to be important. “The partnership between the shipper and us as a logistics provider is going to be part of the success story,” he said.