Bracing for a new bug

Someone recently suggested to me that the revised hours-of-service rules could be the trucking industry’s millennium bug. The Y2K bug kicked in at midnight on a weekend day in early January and so will the hours rules. But there is more than this superficial connection. The dawn of the new hours rules could be an economy-shaping crisis, as Y2K was predicted to be. Or implementation of the revised regulations could be an overhyped non-event as Y2K turned out to be.

Either fate is plausible. One scenario is that capacity in trucking is so tight after nearly four years of widespread business failures that carriers already are stronger in relationships with their customers. Toss in the lost capacity due to the extra off-duty time and the 14-hour window for driving, and suddenly carriers that can withstand the initial productivity shock have the leverage to demand higher rates, greater efficiency at docks or both.

Cynics are drawn to the other view, which is that it is much ado about nothing. Under this scenario, the revisions to the rules look tough on paper but will crumble in the face of real-world application and the need to deliver freight efficiently. With all the current exemptions, the continued sleeper berth exception and the new 34-hour restart on accumulated on-duty time, the Federal Motor Carrier Safety Administration has granted plenty of flexibility. And then there’s the famed creativity and resourcefulness of the American truck driver to make the rules work both in practice and on paper.

The truth, as it usually does, lies somewhere between these extremes. Even if the sleeper berth exception takes some bite out of the 14-hour window for driving, reduced productivity seems inevitable. The rules add two more hours of mandatory off-duty time. Any breaks other than qualifying sleeper berth periods of at least two hours count against the 14-hour clock. And the driver can use the sleeper berth exception only if the truck has a sleeper berth.

On the other hand, the calendar works against the notion that the new rules will give carriers considerably more leverage, at least initially. For most of the trucking industry, January represents the trough of demand. Carriers that in October or November can’t cover all their loads likely won’t be so busy when the rules kick in. Unless capacity has tightened severely, it may take months before the true impact is known. That’s time carriers and their customers and drivers will have to adjust to the new regime.

Even in a slow month, however, the transition will be challenging. At this writing, carriers still do not know how the sleeper berth exception will be enforced in certain important respects. In addition, training drivers and dispatchers under new rules while operating under the old ones is difficult, especially for over-the-road carriers that have never used the split-rest option routinely. Expect significant confusion and disruption.

If productivity suffers in the early days, drivers and owner-operators may see sharply reduced paychecks and settlements. Whether they blame their carriers or the rules, drivers may consider jumping ship. Savvy carriers might take advantage of this opportunity to woo some excellent drivers and owner-operators.

When carriers faced the impending Y2K bug four years ago, I recommended that they try to build some cash reserves to bolster them in the event that computer glitches disrupted commerce significantly. In preparing for a Jan. 4 “bug,” consider setting aside funds to offset the potential impact on drivers, whether it’s a one-time bonus, advance or some other temporary measure. But if you can’t meet the productivity challenge in the long run, prepare to live with higher turnover, lower profits or both. Hope that the new rules are no more dangerous than the millennium bug.