Now that we are over a month into the new Hours of Service (HOS) provisions, you may be asking yourself the same burning question that I am: How can technology help measure the impact of the new laws?
There is no simple answer to this question because of the many influencing factors in the marketplace. If you’re a shipper that experienced some capacity tightness in the beginning of July, can you determine if that tightness was truly due to the HOS changes or was it the usual cyclical spike in demand that is caused by the produce season? Perhaps the Fourth of July holiday weekend played a role because many truck drivers plan vacations and family time that take them off the roads. It’s possible you did not see any effects within your network, and carriers’ commitments during this period were unchanged.
While all of these factors might be relevant, are you truly able to determine the impacts of the new HOS legislation on your business?
Industry analysts and experts can certainly provide such an evaluation, but their information is often aggregated at the macro level. With over 700,000 Interstate Motor Carriers operating in the U.S., it’s hard to extrapolate the impact of their analyses on your tiny piece of the puzzle.
The next question you should ask yourself, therefore, is whether you have a transportation management system (TMS) equipped with the proper reporting capabilities to assist in finding the answers.
A robust TMS has the capabilities to report on key capacity metrics such as Tender Depth and Carrier Acceptance Percentage. Taking it one step further, such a TMS enables you to take that data and analyze rate curves and variable range benchmarks to determine the financial implications of these changes by lane. Have your tall and skinny rate curves now become short and wide? Did the average cost per file increase from June to July? These are the types of questions you must evaluate when analyzing the data.
And while carrier capacity metrics are a key factor in the HOS equation, it’s also important not to overlook the impact of service and on time performance metrics. One of the rule changes requires a mandatory 30-minute break within the first 8 hours of driving time. That additional 30 minutes could be the difference between an on time driver and a late driver.
At an average speed of 45 mph, the new break requirements would include any lanes between 380 and 495 miles. Within the Business Intelligence (BI) tools of a TMS you can quickly carry out analytics for lanes within that mileage and calculate on time delivery performance pre- and post-HOS rule changes.
Some people do not think that 30 minutes is of sufficient duration to severely impact on time metrics, but you may be surprised. Rest areas and pull offs for large 48’ and 53’ trucks are not always convenient, and may require-out-of-route miles to find a safe place to stop. If you factor in 15 minutes out-of-route miles in each direction, your 30-minute break has now turned into 60 minutes.
While it is clear that a TMS can provide all of the information you need to identify specific carriers and lanes that may be impacted by HOS, what you do with that information is the key.
A strong communication strategy must be created to approach the carriers with a drop in acceptance percentage or on time delivery. Your carrier partners can identify the root causes of the deterioration in service levels, and once you understand how HOS is impacting them, you can create plans to mitigate those risks and start saving money again.
Here are some other strategies to consider:
- Discuss creating late reason codes for “HOS” to measure how many lates are due to the new laws.
- Generate rate curve diagrams to explain the difference between tall and thin vs. short and wide curves.
- Assess lead time as it relates to acceptance percentages. This type of analysis becomes more important when there is less capacity in the market.
In all likelihood, the HOS provisions will affect your freight operations in some way, and a TMS solution can help you evaluate these outcomes and prepare for them.