The trucking industry faces a number of regulatory and operational changes, but advances in information technology are helping motor carriers keep a lid on the costs these challenges bring.
“Technology allows us to hold the line on costs. These are exciting times,” Timothy Kohl, president of Marten Transport, told the annual meeting of the Agricultural Transportation Coalition in San Francisco in June.
Whether the increased costs come from changes in the chassis regime, regulations at the state and federal levels, hours-of-service limitations or looming driver shortages, motor carriers have access to information technology that allows them to integrate solutions into their operating and billing systems, Kohl said.
His advice to truckers that aren’t particularly tech-savvy is to hire specialists or at least seek consultation in this area.
Ocean carriers are exiting the chassis business after providing virtually free use of chassis for 50 years. Jason Wakefield, operations manager at agricultural hauler Central Cal Transportation, said drayage and chassis agreements are signed between ocean carriers and beneficial cargo owners, so truckers are caught in the middle and must respond to new chassis regimes over which they have no control.
For motor carriers, the result is billing challenges, scheduling conflicts, long wait times for drivers while chassis are being prepared and overall added administrative costs, Wakefield said.
The problems are exacerbated by the absence of a national model for ocean carriers. Some carriers plan to exit the chassis business fully, others are phasing in programs that will result in a partial exit, while some plan to continue providing chassis to their customers.
Jeffrey Lawrence, executive director of the Ocean Carrier Equipment Management Association, predicted there would be a “flexible evolution” into a new chassis regime as each ocean carrier decides on a program based on the company’s commercial needs.
Modern software also can help motor carriers to calculate administrative costs involved in billing for chassis.
Truckers nationwide face increased costs because of regulatory requirements at the state and federal levels. This is especially true in California, where the ports of Los Angeles, Long Beach and Oakland have implemented clean-trucks programs. Also, the California Air Resources Board has established standards for drayage and over-the-road truckers that ultimately will require the replacement of older trucks with new, low-polluting vehicles.
Federal hours-of-service limitations for drivers also are taking a toll on motor carriers. Kohl estimated the limitations are reducing capacity in the industry by 10 percent.
And the Federal Motor Carrier Safety Administration’s CSA regulations are resulting in increased inspections that also place an administrative burden on truckers and cut into capacity.
Technology allows motor carriers to address these and other operational issues. Software programs can calculate the cost of downtime at loading docks and figure the cost into the billing system. Motor carriers can work with warehouse operators on strategies to reduce loading times and possibly develop a benefits-sharing arrangement for both parties.
Technology can be used to address all kinds of operational costs. Marten Transport, Kohl explained, was able to reduce its fuel consumption by increasing the temperature in its refrigerated trailers to minus-1 degree from minus-10 degrees.
Motor carriers for at least five years have warned about driver shortages and high driver turnover. Driver turnover dropped to 40 percent during the recession, but is more than 90 percent this year. “Think of trying to run a business with a 90 percent turnover,” he said. Equipment costs also are increasing. The price of tires has gone up 50 percent.
Truckers persistently cite delays at marine terminals and loading docks as a major problem affecting driver productivity.
Kohl said Marten Transport pays its drivers for downtime. This helps drivers balance out their paychecks and reduces turnover rates by fostering driver loyalty to the company.