Inside Logistics

Shippers affected by US Hours of Service limits: Schneider National

Productivity down between three and four percent


Schneider National says HoS rules are hurting businesses (Photo: Schneider)

October 25, 2013
by MM&D staff

GREEN BAY, Wisconsin—Even though it’s only a few months old, the US regulation that limits how many hours truckers can spend behind the wheel is already changing how businesses operate.

According to a report issued by Green Bay, Wisconsin-based trucking company Schneider National Inc, the Hours of Service (HoS) restrictions are causing a drop in productivity for both shippers and carriers.

“Many shippers are indicating carriers across the industry—as well as their own private fleets—are already experiencing productivity and on-time service declines.”

Dave Geyer, senior vice president and general manager of Schneider’s Van Truckload division, elaborated on why that’s happening.

“To put it in the simplest of terms, capacity continues to tighten, productivity has been reduced and it’s harder—and more costly—than ever to acquire and retain drivers. This trifecta is a cost burden that carriers cannot bear alone.”

Schneider’s own internal figures show a 3.1 percent drop in productivity on solo shipments and a 4.3 percent decline on team shipments. (A team pairs up two drivers in one truck. Solo means just one driver. According to the US Department of Transportation, “A solo tractor moves, at most, 10 to 11 hours per day. A team tractor moves 20 hours per day.”) The data back up the company’s forecasts that were delivered in testimony to the Federal Motor Carrier Safety Administration in 2011. At that point, Schneider said it expected to experience a decrease of between three and four percent.

“The Hours of Service changes could not have come at a worse time,” said Geyer. “We now need more drivers to do the same amount of work, but regulations, economic conditions and demographics are working against us in terms of recruiting new drivers. Those who do answer the call deserve an attractive wage and good benefits, but we’re being restricted in the number of miles we can give them and the ongoing challenges that come with sharply rising operating costs.”

The report includes mention of the growing problem of recruiting and retaining drivers. It refers to outside research, conducted by John Larkin, managing director of Stifel Transportation & Logistics Research Group about how regulations like HoS change the market.

“Virtually all of the proposed federal rules and regulations either reduce the size of the driver pool or reduce the productivity of the drivers remaining in the pool,” he noted. “As a result, drivers remain a scarce input.”

While Schneider admits that historically regulations have improved overall safety, it rejects the idea HoS will create a similar outcome.

“Safety performance dramatically improved under the previous Hours of Service rules and there is no evidence to support that changing the rules has improved safety. Ongoing feedback from our drivers is consistent: they do not feel better rested as a result of the rules change; just less productive,” said Geyer.