HOS changes to benefit drayage, short-haul truckers

HOS changes to benefit drayage, short-haul truckers

The short-haul exemption to truck driver logging and work rules has been extended to operations within a 150-mile radius, creating opportunities for some carriers. Photo credit: Shutterstock.com.

Drayage operators, less-than-truckload pickup and delivery drivers, and regional truckers may unexpectedly benefit from a new truck driver hours-of-service (HOS) rule that will create opportunities for shorter length-of-haul trucking. The Federal Motor Carrier Safety Administration is expanding the short-haul exemption to its HOS rules, both in distance and driving time.

Paradoxically, the new rule could lead to more drivers being exempted from the rule.

Under the final HOS rule released Thursday, short-haul truckers will be able to work a maximum of 14 hours a day, the same number of hours long-haul truckers are permitted to work and an increase of two hours from the previous rule. However, short-haul truckers are exempted from HOS requirements, including the need for electronic logging devices.

The short-haul exemption’s physical limits are being extended from 100 to 150 air miles. That extends the opportunity for motor carriers to operate under the short-haul exemption in many markets. For example, the new rule will allow a trucker in Chicago to haul loads to and from Grand Rapids, Michigan; Fort Wayne, Indiana; or Peoria, Illinois, under the exemption.

Short-haul drayage truckers from the port of Savannah, Georgia, still would not reach Atlanta, but they could reach Augusta, Georgia; and Jacksonville, Florida, both beyond the 100-mile radius from the port. From the Port of New York and New Jersey, the short-haul radius would be extended to parts of Massachusetts, Delaware, and Maryland that are now out of reach.

Pandemic boosting short-haul demand

Any resulting change is likely to be incremental, said Avery Vise, vice-president of trucking at FTR Transportation Intelligence. “Adding another 50 miles to the radius isn’t going to be enough to have a carrier change its network. Some operations that find it enormously valuable, but it only applies to drivers who start and stop at the same location each day,” he said.

But as e-commerce fulfillment gets faster, demand from those short-haul truckers is growing, and that demand is being accelerated by the COVID-19 pandemic. A survey by the American Transportation Research Institute (ATRI) and Owner-Operator Independent Drivers Association (OOIDA) showed short-haul activity increased dramatically in March and April.

Respondents to the joint ATRI-OOIDA survey indicated their number of local trips under 100 miles more than doubled in March and early April, rising from 7.8 percent of their total trips before the pandemic to 18.2 percent during the pandemic. At the same time, the number of long-haul trips of more than 1,000 miles dropped 10 percentage points to 22.7 percent.

The shift noted by the survey likely reflects an increase in short-haul trips from local grocery and consumer packaged goods distribution centers to stores as demand for essential goods from toilet paper to food and medicine increased. The strong growth of e-commerce sales noted by UPS, FedEx, and XPO Logistics also may have increased short-haul truckload volumes.

Long-haul demand will eventually return, but truckers in the meantime are likely to scramble for shorter hauls. However, to use the exemption, they will have to stick to short hauls. If they begin to accept long-haul freight, they fall back under the HOS rules and logging requirements. That deters many motor carriers from operating under the short-haul exemption.

The real opportunity may be for drivers and companies dedicated to working within that short-haul exemption radius, and that opportunity is likely to grow as more business gravitates to e-commerce delivery networks that are getting progressively shorter, and faster. Amazon has forced compression of the next-to-final mile, and that is a trend unlikely to slow.

The highest-volume trucking lanes in the US are already shorter than 100 miles, starting with the lane connecting the ports of Los Angeles and Long Beach with Ontario, California and markets such as Dallas and Fort Worth. Out of the top 25 US trucking lanes by volume, 24 are less than 500 miles in length, according to JOC.com analyses.

Contact William B. Cassidy at bill.cassidy@ihsmarkit.com and follow him on Twitter: @willbcassidy