From SCDigest's On-Target E-Magazine

Feb. 28, 2011

Logistics News: Schneider National Exec Tells FMSCA that New Hours of Service Rules will Drop Productivity 5%, have no Impact on Safety

Osterberg Says Better Idea is to Mandate EOBRs Now, and Focus on Issues with Drivers..... Snoring?

SCDigest Editorial Staff

The debate continues over proposed changes to the current hours of service (HOS) rules, first released in late December, with the comment period over March 4. (See Proposed New Hours of Service Rules a Lump of Coal in Trucking Industry Stocking, ATA Says)

On Feb. 17, the FMSCA conducted a "listening" session, hearing hours of input from a variety of sources.

Our blogger David Schneider was there in Washington DC, and he says that "By far the loudest and most emotional voices in the listening session comments come from the safety advocates. Some of these organizations are founded and led by parents whose adult children were killed in truck related accidents. Other advocates come from traditional Washington DC based lobbying organizations.".

SCDigest Says: Schneider's own modeling tools estimate that it will incur a productivity hit of nearly 5% from the changes, and that it would have to pay drivers and extra $3000.00 per year to keep them whole from the changes. . What Do You Say? Click Here to Send Us Your Comments Click Here to See Reader Feedback

He adds that "The most numerous comments came from the trucking industry, both executives and drivers. While the executives were careful not to lay blame at the feet of the shippers, the drivers were quick to blame delays at shipper loading docks as justification for relaxed rulemaking."

One presenter was Don Osterberg, Sr. VP of Safety and Security at carrier Schneider National. In a detailed and effective presentation, Osterberg says that although he and Schneider are strong safety advocates, he does not believe that the proposed HOS changes will do much of anything to improve safety, based on quite a bit of data on the subject. Schneider's own modeling tools estimate that it will incur a productivity hit of nearly 5% from the changes, and that it would have to pay drivers and extra $3000.00 per year to keep them whole from the changes.

David Schneider notes the impact would likely be higher on carriers that don't have the highly sophisticated network optimization tools that Schneider employs.

The full commentary from Osterberg can be found on the video replay, with his comments starting at about the 22:45 mark: FMSCA HOS Listening Session.

Below is an only modestly abridged transcript of his comments from that listening session.

"I will be providing a truncated version of far more comprehensive comments that will provide [later], We just recently completed the modeling they we've done and are refining it to provide I think specifically what you [the committtee] has asked for in terms of the data that will support our recommendations. and we are going through understand the impact of the new rules.

I think Schneider National has long embraced safety as a core value. I think I could be described as quintessentially an advocate for public safety.

I certainly appreciate the focus on fatigue related crashes. I have said many times I think fatigue is a more significant cause of crashes than is perhaps reported in some of the databases, for the reasons that your proposed rule called out very effectively related to crashes.

I am also excited for the focus on driver health and wellness. Let's face it, commercial drivers generally speaking are unhealthy. We have an over-representation of obesity and tobacco and other things.

Now, if I believed that the current proposal as it stands could improve public safety, I would have the courage to stand up and say that I endorse the proposal. There are many things in the proposal that I like, and I think there is some good in that. However, there are some problematic components, not in terms of the specifics, but in the lack of data to understand what effects they would have.

I can't say today that the proposal as I read it would improve public safety. It certainly won't make it worse. I don't think you can say that it will improve safety either.

I am going to talk briefly about some modeling that we did, and I will provide a detailed report on this. We co-developed a model back nearly 10 years ago with Princeton University. It has an embedded dispatch optimization component to it. We use it to design our networks. It is a very credible model. We actually received in 2009 the Wagner Prize from the Institute for Operations Research and Management Science (INFORUMS) for this model.

I will provide the details of the model to your data modelers and engineers so that you can have confidence in the outputs.

Let me talk to you about the high-level outputs. We looked at our network of freight, and we have a mix of dedicated over the road, random route, irregular drivers as well as liquid bulk and intermodal drivers. We calculated that the productivity impact of the proposed rule would be a negative 4.72%.

That is a number I can provide you the details on.

We can also model driver time at home and frequency that they can be at home under the current proposal - and this is a learning model under several iterations - and we found that we would get drivers home 25% less than they do today.

Interesting, as we looked at the productivity impact, we operate essentially with our baseline of 501.7 miles [we assume per driver per day]. Under the proposed rule, that would reduce to 478.

If you look at the loss of 24 miles per day, and you embrace the need to keep the commercial driver whole from a W-2 perspective, we will need to increase driver pay by about $3000 a year just to offset the negative productivity impact.

(Transportation Management Article Continued Below)