Trucking seems an unlikely candidate for technological transformation. It is, after all, literally where the rubber meets the road. But the latest changes to federal hours of service rules may be the catalyst trucking needs.
The HOS rules that took effect on July 1 are a cause for concern for those whose businesses rely on truckload transportation. Shippers, carriers and third-party logistics providers have been trying to prepare for any unknown potential effects the new rules will have on their respective operations.
Now that the rules have taken effect, the industry holds its breath and awaits the repercussions. Some will experience a larger degree of pain than others. The extent to which the new rules will play a spoiler’s role depends on how well a given organization has planned for the shift and how well it’s adjusting to new technologies to improve supply chain management.
In a confidential report, an investment advisory group projected the new HOS rules will yield a 2 to 5 percent drop in driver and fleet productivity — a number confirmed by several motor carriers that tested the new rules for months leading up to the effective date. Running select portions of their existing fleets according to the new HOS guidelines over the last 12 months, these carriers reported 5 to 6 percent increases in costs within test cases due to lost efficiencies, in line with what investment analysts had predicted.
3PLs contacted for this article were resigning themselves to the realization that costs will increase because of the reduction in equipment availability the new rules will cause. They were quick to note that the harshest effects would be felt mostly on routes more than 500 miles and for consignees engaged in a lot of night and weekend shipping.
For movements less than 500 miles that are shipped Monday through Friday during daytime shipping and receiving hours, however, the rules will have a much less pronounced impact.
Chris Noble, director of carrier relations for Ultra Logistics, reached the same conclusion. With a team of transportation industry analysts, Noble executed computerized modeling scenarios to illustrate likely outcomes of the new rules. His findings, published by the Supply Chain Collaborator blog, corroborated the 3PLs’ findings.
“On longer hauls, analysts noted a likely reduction in miles estimates ranging from 9 percent to 12 percent,” Noble wrote. “In the end, the carriers will be driving these changes as they change their routing and level of service/transit for various points across the country.”
Ultimately, the solution to all the issues the new HOS rules raise — not to mention the myriad challenges associated with modern, just-in-time, global supply chain management — will come from the application and expert manipulation of the latest transportation management and optimization technologies.
Even before the specter of HOS rule changes appeared, shippers and 3PLs were running headlong into the adoption of TMS tools, a trend accelerated by the advent of cloud-based or software-as-a-service models.
Cloud-based TMS dramatically lowered the level of capital expenditure required to implement transportation management tools on a par with what had previously been attainable only by larger, enterprise-level shippers. And not a moment too soon.
No longer can supply chain practitioners rely on the depth of their experience alone when it comes to ferreting out pockets of untapped efficiency. There are simply too many variables to be addressed without the aid of technology-supported visibility. Like so many complex business processes before it, supply chain management grows ever more reliant on technology. Harnessing the data collected by disparate logistics and supply chain management tools — TMS, warehouse management systems, scheduling systems and optimization tools — savvy organizations can exploit end-to-end visibility in ways simply not possible a scant 10 years ago.
TMS and optimizer tools today can be harnessed to produce detailed network analyses, re-examining shipping and receiving practices and reducing driver dwell times as a means of offsetting lost hours, for example. Transportation management systems with integrated dispatching and tracking technology provide better visibility into idle drivers and can increase productivity.
As integration of these tools with enterprise resource planning systems, WMS systems, scheduling and payment systems grows more comprehensive, the visibility into every link in the supply chain can be scrutinized for improvements in efficiency.
The most recent technology solutions addressing the challenges of trucking’s capacity crunch are transportation optimization tools. Using actual data from a shipper’s TMS, optimizers allow shippers to test different models for inbound and outbound shipments, to find the most efficient, effective routes, rates and movements, and measure the cost impact of emerging changes to the environment such as the current HOS rules change.
It is this kind of technology that will be crucial in helping best-in-class logistics and transportation programs minimize the pain associated with the new HOS rules and other inevitable challenges.