The New Paradigm for Capacity: Buying Drivers’ Hours

Brent Primus, JD | Primus Law Office, PA

This article originally appeared in the 2019 May/June issue of PARCEL Magazine which has authorized its reprint here.

In this installment of PARCEL Counsel, we will explore how the enforcement of the Federal Motor Carrier Safety Administration’s (FMCSA) Hours of Service (HOS) regulations through the Electronic Logging Device (ELD) Mandate is also mandating how shippers and receivers need to change their approach to detention, that is, the time taken to load or unload a truck at origin and destination.

ID# 505372393_bbernard/Shutterstock.com

At this year’s Transportation Intermediaries Association’s (TIA) Annual Conference, I attended a presentation by a panel of shippers. When the subject of how the ELD Mandate was affecting them came up, a logistics director of a very large shipper said, “We are now buying driver’s hours.” While a seemingly simple statement, it struck me as very profound.

Up until now, when shippers purchased transportation services, they thought in terms of hiring a motor carrier or a broker. Now the true metric for measuring the capacity of the nation’s trucking fleet is not the number of trucks, but rather the quantity of “usable” driver hours.

Based on this observation, this company, in its contracts with its providers, voluntarily reduced the amount of free (uncompensated) detention time from three hours to two hours. She explained this self-inflicted pain as necessary so that the inefficiencies of a particular location would be on its profit and loss statement… and thus get the attention of the facility’s manager.

By way of background, FMCSA’s HOS regulations have been in effect for many years. The current rule was enacted on December 27, 2011. While there are many permutations, the basic rule, as summarized by the FMCSA on its website, is that a property-carrying driver may drive a maximum of 11 hours after 10 consecutive hours off duty.

Up until December 17, 2017, drivers could document their driving time, rest stops, and so on by using manual paper logs. However, due to the FMCSA’s concern that the drivers were not accurately reporting their hours a lengthy process was initiated leading to the required use of ELDs. This ushered in a new era whereby drivers would be strictly complying with the HOS regulations, or else they – and the companies they drove for – would face fines and other penalties.

Now the true metric for measuring the capacity of the nation’s trucking fleet is not the number of trucks, but rather the quantity of “usable” driver hours.

Various organizations in the industry have conducted surveys and collected ELD data that indicate that the current HOS driving utilization is 6.26 hours a day1. Since the time a driver is in the cab waiting to be loaded or unloaded also counts towards the 11-hour maximum, this statistic indicates that, for drivers whose compensation is based on mileage, four hours are uncompensated. For shippers, this means that a truck cannot run as far as a driver could otherwise legally drive.

It is also important to note that while some shippers may have realized the importance of minimizing detention time, other shippers will find it increasingly hard to meet their capacity needs. This is due, in part, to the fact that the drivers themselves are well aware of the financial consequences they suffer.

There are now at least two websites and an application whereby a driver or owner-operator can see how various shipping and receiving locations are rated by their peers. Such information would include both favorable and unfavorable ratings, such as, does a location routinely make drivers wait for three hours without paying for detention time, does a location routinely “double book” appointment times, and similar factors.

Brent Primus is the CEO of Primus Law Office, PA, and the Senior Editor of     transportlawtexts.com. For many years he has authored a column in PARCEL Magazine called Parcel Counsel. The genesis of the article we are reprinting in this issue of 3PL Perspective was a comment made by a panelist at the 2019 TIA Annual Conference. Your questions are welcome at brent@primuslawoffice.com.

Photo credit; bbernard/Shutterstock.com