4 Ways the Change in ‘Hour of Service’ Affect Freight Brokers

The Hour of Service or most commonly known as HOS is a term used in the truck industry to describe the hours of operations of freight carriers or drivers to deliver hauls from one place to another. A change in regulation in determining hours of service was implemented starting July 1, 2013. The most critical elements contained in the change are:

  1. Drivers must take a 30-minute rest break preceding eight successive hours of driving;
  2. Drivers must be on holiday for 34 successive hours, and those hours must incorporate two 1 a.m. to 5 a.m.
    portions. The change clearly impacts drivers as it involves their hours of operations.
  3. The restart provision can be used only once in a 168-hour (one week) period.

The changes were also thought to directly affect major operations of freight carriers, but deeper analyses show that even the business process of freight brokers are also affected. Additionally, it is thought that the regulation change in HOS may cause the industry to increase rates spelling out reduced profitability and so several studies were conducted.

Apart from some points affecting freight drivers, here are other potential effects of the regulation to freight brokers:

  1. The 30-minute rest requirement once drivers already reached the eight-hour driving limit may be beneficial to the driver’s quality of work and safety. However, it is important to note there are cases the regulation may cause more harm than benefits. For example, drivers nearing an 8-hour driving limit are obliged to stop and rest, but if they are not close to any truck stop or away from any sheltered and secure stop the adaptability is affected negatively. Also, the policy on two breaks between 1 a.m. to 5 p.m. means drivers will start the day as early as at 5 a.m. Drivers starting at 5 a.m. hitting the road means roadway congestion thus reduced profitability.
  2. Studies show that drivers lose efficiency in the 3-5% territory, contributing further to income loss. Cargo agents and 3PLs are thus forced to negotiate with shipper clients prompted by the increase in road rates as early as 2014.

Effects of new HOS to Brokers

When the new policy was enforced, adjustments were made in all facets of trucking industry including the business protocols and operations of agents, drivers or carriers, and brokers. It is important to understand that any regulation directly affecting the flexibility of carriers also affects brokers.

1. Increase rates

When the HOS rule took effect, a notable increase of 1.6-1.7% in rates after the seasonal adjustment or leeway. The revenue loss affects carriers big time unless they negotiate contract rates. With the increase of rate by 2014, freight brokers and even 3PLs in turn need to advise and set expectation of shippers they can offer competitive rates compared to core carrier. With Asani Global, LLC customers are guaranteed safe, cost-effective, and timely delivery as it maintains its thrusts in quality service and professionalism in the area of logistics.

2. Longer time for long hauls

The new HOS regulation directly and primarily impacts long hauls services, specifically if the length of travel reaches 500 miles one-way or roundtrip. The rules on mandatory 30-minute break plus the 34-hour reset rule decreases the maximum number of miles drivers can run in a day, affecting productivity. This entails transaction adjustments with shippers, as the time that can be covered by carriers need to be considered.

3. Driver safety and security

The face value of the new rule may be beneficial to drivers/carriers as it ensures mandatory rest and necessary breaks via reset rule. However, the main purpose of HOS to eliminate driver fatigue may have been miscalculated. Reports show that many drivers experience increased level of fatigue as they try to adjust their time to cover more miles before the break time comes. The American Transportation Research Institute (ATRI) reported that increase in fatigue may lead to unsafe driving.

4. Less Flexible scheduling

The required 30-minute break before exceeding an 8-hour long drive reduces carriers’ flexibility. There is an issue on safe and secure parking because the mandatory break obliged drivers to stop and rest, regardless whether or not they’re near any truck stop.

Repurposed Content

Entrust your shipment to Asani Global, LLC — the global leader in logistics solution. We make sure our carriers are well-rested professional to deliver your shipment safely and on time.

The change in HOS may have affected path rates and delivery time, but with Asani Global, LLC we keep our promise to deliver safely and on time what you value most.

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