Carriers would be unwise to raise rates in light of hours changes, study says

A study from the University of Tennessee in Knoxville concludes that carriers shouldn’t pass on the extra costs of complying with the July 1 hours-of-service rules to shippers or customers, lest they want to potentially “fatigue” their relationship they have with them, the study says.

Carriers should instead seek ways of making their operation more efficient, such as extend lead time for some customers, increase customer delivery windows, improve shipment consolidation and increase the use of drop and hook freight.

The UT study, done by its Global Supply Chain Institute, surveyed 417 carriers, and nearly 60 percent of them said they viewed increasing rates as a way to pass on the costs of HOS compliance as the most viable option. Moreover, nearly 50 percent said they anticipated a rate increase coming.

Related: Hours rule restricting productivity, hurting driver quality of life, study says

The researchers, however, were more keen on the prospects of a rate increase: “It is our belief that the latter group is in denial about what’s going to happen. Rate increases will be coming,” the study reads. “It’s just a matter of how much.”

UT researchers said in the study they plan to follow up on the October survey with another study in June of this year.

The study, like other studies done by the American Transportation Research Institute and the Owner-Operator Independent Drivers Association, concludes that carriers and drivers have lost productivity due to the rule change, and hence have lost revenue, miles and income.

Also like other analysis of the hours rule change, the study says it could worsen the industry’s driver shortage, especially when it compounds problems like an aging driver workforce and the squeeze of the Federal Motor Carrier Safety Administration’s Compliance, Safety, Accountability act.

Unwinding the hours-of-service rule was a hot topic to close 2013, as the American Trucking Associations named it as a top priority for 2014 and the House and Senate introduced bills to at least temporarily halt the rule.

In a hearing before Congress in November, FMCSA Administrator Anne Ferro said the agency would “absolutely not” overturn the July 1 rule.