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The Roemer Report On-Line, February, 2004

THE IMPACT OF THE NEW HOS RULES: It's still early to know exactly how the new hours-of-service rules will affect the trucking industry, but that hasn't stopped analysts and industry executives from weighing in with predictions. Some researchers believe that driver productivity will decrease by at least 4 to 9 percent, translating into a possible 4 to 19 percent increase in the cost of over-the-road transportation . Scott Arves, president of transportation for Schneider National, notes there are four main changes in the rules that will have significant impact: (1) Allowable driving time is increased from 10 hours to 11 hours. (2) Rest time is increased from eight hours to 10 hours. (3) Total work time is reduced from 15 hours to 14 hours. (4) Time previously considered off duty will now be considered on duty. That is, the time spent on rest breaks, meals, delays at customer facilities, and maintenance will count toward the 14 consecutive hours of work. At Schneider, says Arves, drivers averaged six hours of off-duty time per day before the new rules took effect. Now, under the new rules, those hours will be considered on-duty time. The new laws will force carriers nationwide to bill shippers for “detention” time at docks because drivers will be “working” while they sit and wait for freight to be loaded or unloaded. Phillip Holt, owner of a Pennsylvania carrier, says this part of the rule may “improve the quality of life for the driver” but it will cut productivity and may force companies, small and large alike, to hire more drivers. However, Andy Beck, director of public relations for the Federal Motor Carrier Safety Administration, maintains that if companies comply fully with the new standards, 48,000 fewer drivers will be needed. “Safety is the top transportation priority for the Bush administration,” says Beck who estimates 75 lives will be spared each year due to decreased driver fatigue. The trucking industry is expected to spend an estimated $1.3 billion to implement the new regulations.

FOR NOW, EXPECT HOS WARNINGS, NOT CITATIONS: Transportation Secretary Norman Mineta urged states to issue warnings, not citations, to commercial truck drivers who do not follow new hours-of-service rules. He recommended the written warnings, coupled with education efforts, for 60 days starting January 4. “We are finding that too many truckers still have questions about these rules,” said Mineta. “It's our version of on-the-job training for drivers who aren't sure how or whether the new safety rules apply to them.” All but the most flagrant violations should be exempt from citations, said Mineta. The Federal Motor Carrier Safety Administration (FMCSA) will coordinate education and enforcement efforts from regional offices across the nation. As part of that effort, the FMCSA has established a toll-free telephone number for drivers and employers with questions. Federal officials already have answered thousands of questions about the new rules, and Mineta says he wants to educate all operators on the HOS rules as soon as possible. The FMCSA's toll-free informational line is (800) 598-5664. For additional information about the rule, visit www.fmcsa.dot.gov.

DRIVER SHORTAGE IS BACK: It's been three years since driver shortages last plagued trucking companies, but now they're back. Increasing freight volumes and changes in hours-of-service rules, which reduce by one hour a trucker's overall on-duty time, could lead to a possible trucking capacity crunch this year. The dilemma for trucking executives is how to attract and retain employees in a difficult and unglamorous industry. The American Trucking Associations recently reported that the turnover rate for truckload drivers is at an all-time high of 119 percent . That's 16 points higher than the previous record, which was set in the third quarter of 2002. Schneider National, the country's largest truckload carrier, is taking action. It announced it will boost pay in February for company drivers. Solo drivers will get an extra $1,500 to $2,500 per year and team drivers will earn an extra $3,500 to $4,500 per year. “We need to assure we pay our drivers fairly for a very difficult job,” said a Schneider spokesperson. The company says there are more people retiring from trucking than there are entering the profession and that the problem will not go away. Drivers cite the following reasons for leaving the industry: low pay, lack of respect, lengthy time away from home, difficult and draining work, increased regulations, and injuries (the government ranks trucking as the most dangerous profession in the country). While no major company has matched Schneider's salary increase, some noted privately that they need to do something or risk losing drivers to Schneider, whose turnover rate is already half of the industry average.

THE BORDER BUREAUCRACY: The Free and Secure Trade (FAST) program between the United States and Canada and the United States and Mexico is intended to promote security and safety along the borders and bolster economic prosperity for the three countries. FAST lanes at borders are open to registered drivers hauling goods from pre-approved companies. The approved trucks are cleared to enter any of the three countries with greater speed and certainty at a reduced cost of compliance, according to the federal government. Already many FAST lanes are open across both borders and more lanes are planned to open this year. But U.S. trucking executives say the lanes are anything but fast and the required paperwork is time consuming. That's just one of many complaints U.S. truckers have regarding border crossings. Gary Nichols, director of business development for a Missouri carrier, predicts “a state of turmoil” among North American truckers because of economic trade imbalances, government-mandated security, rising insurance costs, and new environmental regulations . Then there's the Trade Act of 2002,which mandates electronic submission of cargo information for crossborder traffic. The proposed rule requires U.S. Customs officials to have specific information at the border one hour before the truck arrives. Nichols believes that rule will profoundly affect trucking—probably as much as deregulation did 23 years ago. As for Mexico, there is less concern about the extra bureaucracy at the border. The president of a major Mexican carrier said Mexicans are accustomed to regulatory red tape associated with NAFTA. “Mexicans are going to be able to fill out forms,” he said. “We're used to that.”

TRUCKERS: LOWER THAN AVERAGE DRUG USE: The rate of drug use in the general U.S. workforce climbed during the first half of last year, but remained the same for truckers. For the first six months of 2003, drug use among federally mandated, safety-sensitive employees, which includes truckers, showed overall drug positivity at 2.5 percent, the lowest rate since 1998. Positive test results for drug use among the general workforce, however, increased to
5 percent between January and June of 2003; this group's previous year's positivity rate was 4.8 percent. “Half the increase in drug positivity among general U.S. workforce employees was driven by their growing use of amphetamines,” said a researcher at Quest Diagnostics' Drug Testing Index, the group that tested U.S. employees. According to published Congressional testimony, illegal methamphetamine use and trafficking, which began a decade ago, is now an epidemic sweeping the nation.

TEACH ME: With many employees having lost money in retirement investments over the last few years, many are looking for help. In particular, they want their employers to offer more financial education and retirement planning advice . While employers acknowledge the need to help their workers manage retirement portfolios, they're hesitant to expand financial advice due to legal liabilities. Yet industry experts say more financial education in the workplace is imperative if employers want to retain workers. In a survey, over half of the 401(k) participants said they plan to make major investment changes to their accounts. About 17 percent of the 401(k) participants said they would turn to more conservative assets, while 15 percent said they would start saving more of their salaries. Five percent said they would stop contributing to the plans. While employees are hungry for guidance in these issues, over 47 percent of HR managers said they feel unprepared and uncomfortable offering retirement advice. To help alleviate the problem, experts say employers should work with their retirement plan providers to enhance educational programs, increase participation, and provide more customized programs to meet the individual needs of employees.

WINNING THEM OVER: Steven Spielberg, the Oscar-winning movie director, wasn't always as successful and popular as he is now. A skinny, nonathletic 13-year-old, Spielberg was an easy target for bigger classmates, who took great pleasure in teasing and harassing him. One bully in particular tried to make young Spielberg's life miserable, taking every chance he got to humiliate the boy in front of other students. One day, Spielberg approached the bully, “Listen,” he said, “I'm thinking of making a movie about fighting the Nazis, and I want you to play this war hero.” First, the bully laughed at the idea, but soon he showed interest, especially when Spielberg told him he looked like John Wayne and cast him as a heroic squad leader. From then on, the bully was Spielberg's best friend. Steven Spielberg's story exemplifies an uncommon but effective approach to fostering teamwork. Instead of meeting opposition with opposition, Spielberg looked for a way to bring the bully to his side. He knew that the best technique to get people to work with you is to acknowledge and praise their individual strengths and cultivate their talents . Letting people know that they are valued will encourage a solid working relationship and feelings of camaraderie.

It takes just as much energy to wish as it does to plan. —Eleanor Roosevelt