Trucking Regulations: What Supply Chain Managers Need to Know

New over-the-road regulations are set to go into effect in 2017. Logistics leaders and supply chain managers must understand potential impacts, including an anticipated decrease in the driver pool and truck capacity, to plan for and avoid transportation disruptions. Supply chain managers should take immediate steps to avoid possible negative impact.

Decreasing hours of service (HOS) requirements and other regulations such as the required use of electronic logging devices (ELDs) and speed limiters increase safety, but also reduce driver productivity. This loss in productivity impacts driver pay, exacerbates the driver shortage, and reduce truck availability.

There is an anticipated increase in the cost of moving loads over-the-road as well as in sourcing more drivers and trucks to haul the same amount of freight.

Driver shortage to quadruple by 2024

According to the American Trucking Associations (ATA), the current shortage of 45,000 Class 8 truck drivers represents just 1.6% of the current driver pool. ATA estimates that by 2024 the trucking industry will experience a shortage of nearly 175,000 drivers.

A key factor in the rising shortage of truck drivers is their advanced age paired with the difficulty in attracting a younger generation of drivers. In addition, many potential drivers find better-paying work that requires less travel and responsibility than over-the-road trucking in industries such as construction. 

Driver pay has considerably fallen since trucking deregulation in 1980, with 62% in dropping wages making attracting and retaining drivers a top concern for the industry. 

Trucking Regulations

A CSX Transportation report (registration required) lists a timeline and explains the impact of eight industry issues and regulations for the trucking industry as well as the shipper impact noting their high, medium, and low impact. Here is an overview:

  1. Driver Shortage: In place. Low Impact
  2. Electronic Logging Devices (ELDs): Late 2017. High Impact
  3. Speed Limiters: Estimated late 2018. High Impact
  4. Compliance, Safety, Accountability (CSA). Estimated late 2018. Medium Impact
  5. Commercial Driver's License (CDL) Drug and Alcohol Database: Effective January 2020. Medium Impact
  6. Driver Training Standards: No timeline available. Low Impact
  7. Electronic Stability Control: Estimated mid 2017. Low Impact
  8. Hours of Service (HOS): In place. Low Impact

According to the report, the HOS regulation will be enforced by the mandate use of ELDs beginning late this year. ELDs will strongly impact the trucking industry by means of less capacity for moving long-haul freight by truck.

Carriers may find it difficult to move as much freight with existing fleets, and shippers may find it even harder to find reliable truck transportation when and where desire.

In order to mitigate any potential negative impacts from the driver shortage and upcoming regulations on the organization supply chain managers should consider:

  • Evaluating optimization strategies and looking for ways to insulate transportation networks
  • Analyzing modal networks and improving efficiencies by leveraging transport management system (TMS) software and other available tools
  • Diversifying transportation portfolios
  • Incorporating multi-modal solutions help shippers be far less impacted by trucking regulations

Supply chain managers must examine all the potential risk factors related to trucking regulations that may potentially affect their organization. Leveraging Optimization technologies and considering the incorporation of multi-modal transportation into their supply chain will help them reduce the impact that driver shortage and over-the-road regulations are likely to bring.

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