Company’s Original Forecast Proving True as Carriers, Shippers Deal with New Reality
GREEN BAY, Wis. – (Oct. 24, 2013) – For most transportation carriers, predicting the impact of the July 1 Hours of Service (HOS) changes required a crystal ball. But for premier truckload, logistics and intermodal provider Schneider National, the process involved more science than fiction.
Since the new HOS implementation, Schneider has realized a 3.1 percent drop in productivity on solo shipments and a 4.3 percent decline on team shipments. The results are similar to Schneider’s forecasted 3–4 percent, which was based on predictive modeling and presented as testimony to the Federal Motor Carrier Safety Administration in February 2011.
“The Hours of Service changes could not have come at a worse time,” said Dave Geyer, senior vice president/general manager of Schneider’s Van Truckload division. “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.”
While productivity has been impacted, safety has not.
“Operating safely continues to be core to how we do business,” added Geyer. “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.”
For many drivers, the lure and independence of the open road are no longer worth the pay and regulatory pressure they are now facing. Driver turnover is trending up and is back at prerecession levels.
Citing a recent research brief, John Larkin, managing director of Stifel Transportation & Logistics Research Group, stated regulations such as HOS create a challenging driver 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.”
Carriers and drivers aren’t the only ones adjusting to the changes; shippers are feeling the impact, too. Many shippers are indicating carriers across the industry – as well as their own private fleets – are already experiencing productivity and on-time service declines.
“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,” Geyer explained. “This trifecta is a cost burden that carriers cannot bear alone.”
About Schneider National, Inc.
Schneider National, Inc. is a premier provider of truckload, logistics and intermodal services. Offering the broadest portfolio of services in the industry, Schneider’s solutions include Van Truckload, Dedicated, Regional, Bulk, Intermodal, Brokerage, Supply Chain Management, Integrated Delivery and Port Logistics.
A $3.5 billion company, Schneider National has provided expert transportation and logistics solutions for over 77 years. For more information about Schneider National, visit www.schneider.com