More Regulation Means Less Productivity for Trucking Industry

By July 24, 2014 June 16th, 2015 Fleet Management, Industry News, NationaLease, Regulations

Because of new rules, including HOS, drivers will be spending less time on the road, even though the amount of freight stays the same level as last year.

Government regulations in the trucking industry will be forcing many drivers off the road, while fleets – and ultimately the consumer – will end up paying the price. That was one of the key messages communicated in a recent FleetOwner Webinar hosted by the research and forecasting firm FTR.

There was a time before the early 1990s when government rules regulating trucking did not hamper trucking companies, but instead helped make them profitable. But as the political environment began to evolve and the Hours of Service rules were amended in 2004, these regulations started to have a negative impact on fleets, according to Noël Perry, senior FTR consultant.

And as regulations continue to proliferate, some industry experts are predicting a productivity loss of 2-10%. Fleets are now moving at least the same amount of freight as they did last year, yet drivers are spending less time on the road.

This means, of course, that fleets have to add drivers, with FTR’s Perry predicting that when the HOS rules are settled once and for all, the industry will need to double the number of truck drivers. It’s also probable that fleets will have to add more vehicles to handle the changing demands.

Small business shippers will feel the inevitable showdown the most. Unlike bigger players which may be able to anticipate the slowdown and stock up on supplies and raw materials and maintain an inventory, these smaller businesses – with less warehouse space – must rely on just-in-time deliveries.

Perry said “the cumulative effect of these regulations will be massive.” He categorized the 20-plus regulations that fleet owners are now forced to comply with into four overarching categories, based on their impact on the driver pool and productivity:

  • Reduction of the potential driver pool, including drug/alcohol database and tighter training standards
  • Decrease of actual driver pool, including CSA scores and entry-proficiency rules
  • Increase of driver turnover or effect on drivers’ productivity, including healthcare rules and the Motor Carrier Protection Act that will “cause more brokers to fail”
  • Decrease of operating productivity, including HOS, and electronic driver logs.

There’s no arguing that these regulatory changes have seriously impacted carriers and private fleets. The question is: what can fleets do to continue to operate and thrive in this transportation environment? It’s a question with no easy answer.

Let us know what you think.

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The original post can be found on the AmeriQuest blog Website.

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Kate Freer

About Kate Freer

Kate Freer is Vice President, Marketing for NationaLease, and is responsible for go-to-market strategy, demand generation, branding, positioning, and communications. She has spent most of her 15 year career in the digital marketing space fostering brands in high-growth companies.

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