ATLANTA, GA – The leading Wall Street analysts that cover transportation think the new hours of service (HOS) rules that go into effect next year will have a wide ranging impact on trucking and the shippers the industry serves.
“The change to HOS is one of the most distinctive events this industry has experienced since deregulation in 1980,” said Thom Albrecht, an analyst with BB&T Capital Markets. He spoke on a panel of analysts here at a special HOS productivity summit hosted by truckload carrier Schneider National and Georgia Tech’s Logistics Institute.
HOS is going to cause an abrupt change to the trucking industry, with many different tactics being explored to help minimize the impact of the new rules, he added. “Slip-seating may be used again. Multi-stop truckload operators may move to salaried drivers to improve productivity. Fleets may develop shared trailer pools and may have to acquire more trailers as well. We may also start to see more ‘night runs’ as well.”
Daniel Moore, an analyst with Stephens Inc., added that though HOS changes will affect each carrier differently, there would most likely be a productivity loss across the board. “There will definitely be inflationary cost pressures and rates will have to go up if productivity losses are between even 3% and 5%.”
However, John Barnes, an analyst with Deutsche Bank Securities, noted that “efficiencies needed to offset HOS changes already exist – they’ve been out there and I’m frustrated that it’s taken shippers and carriers this long to look at them. But both shippers and carriers have to be more proactive and work together more to get the efficiencies to deal with HOS.”
Efficiency is the name of the game, added Gary Yablon, an analyst Credit Suisse First Boston, and he thinks improvements in this area are more than a possibility.
“Look at United Parcel Service: it’s one of the most efficient companies on the planet, yet every year they take it up a notch,” he said. “It’s amazing what you can do when pushed to the limit.”