Who Needs a Level Playing Field?

By Sandy Long

In article after article, large carriers and their associations are quoted as saying EOBRs and speed limiters are necessary to create a ‘level playing field’ for them to be competive in the trucking industry.  They cite competition from companies who’s trucks go faster than theirs do and who may not be as tight in HOS monitoring.  Looking at this logically, there are holes in their theory big enough to drive a semi through easily.

The large carriers have, thru competition, cut rates and promised everything under the sun to retain their customer base.  Many are training companies for new entry-level truck drivers, causing their accident rates to go up.  These two factors caused the carriers to lower their truck’s governed speed for both fuel cost savings and for safety for those new drivers.

Furthermore, as reported in TruckingInfo.com, Rep. Peter DeFazio, D-Ore., introduced legislation to address the detention time, HR 756 that would limit the number of hours a driver can be detained and the FMCSA was looking at doing the same.

“In a letter to FMCSA administrator Anne Ferro, David Parker, chairman of the MCSAC, said the agency should seek legal authority over entities that contribute to FMCSA safety violations.  According to Parker, an undue detainment can cause drivers to violate hours of service rules.”

The move towards detention regulation is also supported by OOIDA who has always contended that detention time was the most common cause of loss of revenue and violation of HOS regulations by drivers.

Descent from the ATA was strong; the ATA board of directors voted not to support the measures.  “ATA and its members value the time of our drivers,” ATA President and CEO Bill Graves said following the board’s decision. “However, federal intervention into this area would have significant impacts on the contractual agreements between carriers and shippers.”

“No carrier wants to see our drivers’ time wasted,” ATA first vice chairman Dan England, chairman and president of C.R. England said. “However, this is not an issue that can be handled with a ‘one-size, fits all’ regulation and as a result is best addressed in contractual agreements between carriers and shippers.”

“The ability of carriers to negotiate rates, routes and service with our shippers is very important to us,” said ATA Chairman Barbara Windsor, president and CEO of Hahn Transportation. “Federal regulation in this area would directly affect shipping rates and would significantly change the playing field for carriers and shippers.”

Wait!  ATA vice Chairman England says that “this is not an issue that can be handled with a ‘one-size, fits all’ regulation” and Chairman Windsor says that it would “significantly change the playing field for carriers and shippers.”  Uh, folks, isn’t that exactly what you are wanting to do in your support of EOBRs and speed limiters, develop one-size, fits all regulations; change the playing field for those carriers who do not have access to your discounts and shipper base to your levels of operation?  There is nothing ‘level’ about them and further regulation will ‘level’ them all right, in the large carriers direction.

In the trucking industry, it is always wise to look for the money trail in any sort of proposed regulation supported by the mega carriers.  In an article dated April 2012 on the ATA website it states, “After a year of quarterly increases, the turnover rate for truck drivers at large truckload fleets unexpectedly dipped one percentage point to an annualized rate of 88% American Trucking Associations Chief Economist Bob Costello…”

The article continues, “Turnover among large truckload fleets had risen to 89% in the third quarter of 2011 after bottoming out at 39% in the first quarter of 2010. For all of 2011, the large truckload turnover rate averaged 83% – the highest average since 2007 when churn averaged 117%.  At small truckload firms, with less than $30 million in annual revenue, the turnover rate dipped to 55% from 57% in the previous quarter.  The fourth quarter turnover rate for less-than-truckload fleets fell to just 7% from 10% in the third quarter.”

An all time average of 117% and a today’s rate of 88% for large fleets perhaps provide one money trail found.  The Intermodel Insurance Company reports  that Noel Perry, managing director at consultant FTR Associates, Nashville, Ind., whose latest driver supply report gauged the shortage at 125,000 in the third quarter said, “We are almost certainly going to see an increase (in driver shortage).”

Furthermore, in the same article, USA Truck noted the scarcity of drivers.  They reported a “$4.3 million loss; said 10% of its fleet of more than 2,200 trucks don’t have drivers.”  Other carriers that have driver-related issues are Heartland Express and Knight Transportation among others.

Driver retention is a large factor at any company as shown, as is a ‘driver shortage’ is at larger carriers, though driver shortage may be another way of saying driver retention in this case.  It is a well-known fact that many entry-level drivers, who have little choice outside of the large carrier training companies, leave after their initial year.  They tire of the micromanagement, the governed slower speeds found at the larger carriers, the impersonality of communication and the lack of adequate hometime.

This fact is supported by Tim Brady’s article at Trucker.com.  Brady states, “Driver turnover usually occurs within the first year of employment.  A company may have an overall turnover rate of 60%, but the ‘newbie flight’ (those first-year hires) can far exceed that—as much as 180% to 240% plus.  We’ll define this as driver “churning,” i.e., drivers leaving one carrier and being hired by another.  As with most problems, the cause is fairly easy to find; believe it or not, it’s not just about the money.  Although several factors contribute to driver churning, its root cause is a lack of communication from the very beginning.  It’s making sure both trucker and carrier understand each other’s needs and wants, and how this is going to be accomplished within the business relationship.”

If the large carriers can get EOBRs and speed limiter regulations through, they think that this will stop drivers leaving for greener pastures.  Billy Woolsey, President of Midwest Compliance Inc., states in a letter to the editor to Transport Topics about EOBRs, “But all that information carries a price because drivers are likely to favor carriers without e-logging devices.  That creates additional problems for small fleets competing for drivers in a marketplace now being reshaped by the government’s new Compliance, Safety, Accountability safety-management program(CSA)… it is glaringly obvious that this is really about politics, not safety…not to mention fueling an incorrect but widely held belief that the agency (DOT) wants to put smaller carriers out of business.”

Marge Bailey, founder of DriverFinder.net states, “Depending on what resources a company engages to advertise, i.e.; the size of their budget, what their orientation costs are and cost to get a driver to orientation, a new ‘experienced’ hire can range from $3500.00 to over $5,000.00 each.”

Add in the costs of schooling for entry-level drivers that the company may pay for or reimburse plus additional costs of the training time after school, and you end up with a seriously significant amount of money that replacing drivers costs a carrier.  While creating a level playing field using EOBRs or speed limiters due to HOS compliance or safety does not make a lot of sense, creating a level playing field to retain drivers does, at least to the larger carriers who support it.  CSA takes care of both HOS compliance and safety issues adequately; there is no need for the rest of us to suffer for the wants of large carriers to save money by retaining drivers.

 

 

 

 

 

 

 

 

 

 

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