14 2 LINKEDINCOMMENTMORE

(USATODAY.com) - Trucking companies say new rules that limit drivers' hours are hobbling productivity, shaving wages and delaying deliveries.

The crunch is pushing up freight rates, costs that are likely to be passed on to consumers in higher retail prices.

Last month, trucking industry employment hit a six-year high of 1.4 million as carriers added 6,800 workers, the most since April 2013. The economy is picking up and businesses may still have been catching up after bad weather delayed deliveries early this year. But the job gains are at least partly fueled by the need for more drivers to offset the reduced hours, industry officials say.

"The government has forced drivers into basically a five-day work week," says David Osiecki, head of legislative affairs for the American Trucking Associations.

The rules are the latest blow to trucking productivity. Manufacturers and retailers are also building more distribution centers closer to customers. That has shortened the average truck haul and required more drivers to handle more frequent but less profitable deliveries, says ATA Chief Economist Bob Costello.

Rules that took effect last July reduced drivers' maximum work week to 70 hours from 82 hours and mandated a 30-minute break in the first eight hours of a shift. The changes also toughened a required 34-hour break between work weeks, stating that the hiatus must include two consecutive 1 a.m. to 5 a.m. periods.

It's the latter rule that's wreaking the most havoc, Osiecki says. The many drivers who work Monday through Saturday can no longer begin their Monday shifts before 5 a.m. — a virtual necessity for early-morning deliveries.

Jet Express of Dayton, Ohio, must meet a rigid schedule of auto part shipments to General Motors plants throughout the day and night. But company President Kevin Burch says he can't make many Monday deliveries because of the new restrictions.

Burch says his trucks sit idle and GM had to turn to the more expensive spot market to deliver goods. GM declined comment.

Burch says his revenue has been cut by about $2 million a year. And he has lost about 10% of his drivers because they're working fewer hours for less pay. Industry officials say many drivers are leaving the industry, worsening a driver shortage.

Companies that operate in the spot market are thriving. One such carrier, Landstar, has seen double digit increases in freight volumes this year, a trend that the company partly attributes to a flurry of last-minute business as drivers at more traditional carriers exhaust their hours.

"We're perhaps a little bit of a beneficiary of that," says Joe Beacom, Landstar's chief safety and operations officer. The firm, he says, has brought on more drivers to handle the additional loads.

The traditional carriers are also hiring. Werner Enterprises of Omaha, Neb., has added about 300 drivers to offset the reduced hours, says company President Derek Leathers. And he has raised wages 3% to partly compensate drivers for their weekly pay cut. The changes, he says, are costing the company millions of dollars a year.

Shipments also have been delayed. Sometimes, drivers for trucking giant Con-way run out of hours mid-delivery, prompting them to take a 34-hour break and causing shipments to be late, says Randy Mullet, company head of government relations.

All told, Osiecki estimates the rules have cut industry productivity by 3% to 5%. Companies, in turn, are raising rates. Contract freight rates have risen 3% to 4% this year, up from a 1% to 2% increase in 2013, estimates analyst Benjamin Hartford of research firm Robert W. Baird & Co.

The Federal Motor Carrier Safety Administration says a study it sponsored shows the changes have reduced driver fatigue and the benefits outweigh any costs. The rules "ensure that drivers get the rest they need to be alert, safe and awake when operating 80,000-pound vehicles on roads they share with the traveling public," says agency Administrator Anne Ferro.

But the American Transportation Research Institute, a trucking industry group, says the benefits cited in the study are insignificant.

14 2 LINKEDINCOMMENTMORE
Read or Share this story: http://on.wtsp.com/1ndm6ZP