Following news of the University of Tennessee’s Global Supply Chain Institute and its study of the economic impacts of the hours of service, in which study authors suggest that companies raising rates and passing them down the chain to consumers is ultimately not the best goal to pursue, reader Martin Anderson, commenting on Overdrive‘s Facebook page, cracked wise: “Between the shippers and receivers and the government they pretty much want you to drive the truck for free.”
Owner-operator Jeff Clark, no stranger to the blog here, pointed to the source of the study to explain its emphasis on broad needs to improve efficiency to offset added costs due to the hours rule. The UT institute’s board, he noted, is made up mostly “of shippers and industry ‘experts'” with little trucking-company representation. Follow the prior link to see a full list of advisory board members.
Study authors, in the report, diagnosed the companies (47 percent of all surveyed) who noted that increased consumer costs were coming given new regulations as being “in denial about what’s going to happen.” They went on to suggest that any increases in rates that were passed along wouldn’t get businesses all the way to offsetting new costs, thus improving efficiency is the right strategy.
“Gee,” Clark added, “I am shocked that they would recommend that we not raise ‘their’ costs. Follow the money. Supply and demand determine rates, not wishful thinking.”
Rates have “remained stagnant for so long,” wrote John Sendzimer. “Or in some cases [rates] actually go down [while] the cost of operating goes up. So HOS be damned, things are tough all over.”
A majority of owner-operators, however, recently noted they expected to fare better in 2014 than 2013 — I bet those rate increases we’ve heard so much about lately are part of what they’re banking on. What do you think?
More voices on the study:
John Lenhardt: The public wanted [new hours rules], the public should pay for it.
John Beavers: Drivers are not getting extra pay — matter of fact it is costing us 30 minutes of work and in [many] cases costing us sleeping in our own beds at home. Whoever wrote [the hours of service rule] obviously has never driven a truck and doesn’t know the importance of getting home to truckers.
Kris Boswell: Fair enough, but this study doesn’t address the other issues: 1) A 400 percent increase in fuel the last 15 years. 2) A 20 percent increase in drivers’ wages and workers comp the last 15 years. 3) A 150 percent increase on equipment the last 15 years. 4) A 200 percent increase on all maintenance costs the last 15 years. 5) A 150 percent increase in insurance rates the last 15 years. 6) A 120 percent increase in tax rates the last 15 years.
John Pillion: How about we switch to an hourly rate like construction. $100 per hour for a unit — truck, trailer and driver. Then who cares how long it takes.