Carriers tweak language to find common ground with shippers

| Friday, January 16, 2004

Trucking lingo has gotten a bit touchy-feely in recent weeks as carriers seek diplomatic ways to let shippers know how new hours-of-service rules are affecting their bottom-line operations.

A case in point: At the 83rd annual meeting of the Transportation Research Board in Washington, DC, J.B. Hunt said it’s developing “behavior-based” pricing to encourage shippers to limit driver waiting time to one hour.

During a session titled “Opportunity in a Changing Marketplace,” Gary Whicker, Hunt’s vice president of safety services said, “Our formula is that good behavior equals a lower price for our customers. We are adding extra charges for wait time, driver loading/unloading, etc., as a way to show our customers where the real cost is … That way, if they modify their practices to better fit our needs, they get a lower price.”

Meanwhile, other companies are taking the direct approach.

On Jan. 4, 2004, the first day of new hours-of-service rules, Navajo Shippers Inc., Commerce City, CO, charged customers a $100-an-hour penalty for trucks waiting at the loading dock for more than one hour, according to press reports.

The company assessed penalties of $66,000, said Vice President Don Digby Jr. Navajo operates in the lower 48 states but mainly Colorado and the West Coast.

"We're going to bill for everything that we do,” Digby said. “Every time our drivers and trucks are sitting there, someone's going to pay."

However, Digby didn’t discuss the shippers’ reaction to the fines.

‘Friendly freight’

John Siebert, research project leader at the OOIDA Foundation, attended the TRB meeting.

He said it was clear from conference discussions that carriers are looking at customer freight characteristics as a way to determine the monetary impact of the HOS rules. The long and short of it – carriers probably will begin to haul only what they call “friendly freight.”

For example, Schneider officials discussed a model of the new HOS rules they applied to grocery warehouses.

“The model fell apart – they couldn’t sustain a whole week, so they had to find a new rate that would work,” Siebert said. “But the rates were so high they just quit. Shippers offer freight at 82 cents a mile, but using the model, Schneider would have had to double or triple that amount to earn a profit, so they just aren’t going to haul that kind of freight.”

Carriers say dock delays directly reduce a trucker’s driving time. Metro-area driving, delays in loading or unloading, multiple stop-offs and border crossings are among the topics carriers are talking about with shippers as significant contributors to increased operational costs.

“It’s become clear to carriers they can’t keep doing business as usual because the 14-hour rule can’t be fudged,” Siebert said. “You’ve got to be off 10 hours before you can start driving again – and that’s a functional change that carriers say will result in 4 to 9 percent less efficiency. After a driver starts working he can drive for 11 of the next 14 hours, but `off-duty, not driving’ activities no longer stop that 14-hour clock.”

--by Dick Larsen, senior editor

Dick Larsen can be reached at dick_larsen@landlinemag.com.

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