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A final truck driver hours-of-service (HOS) rule released Thursday will give drivers and motor carriers much-wanted flexibility in how they manage driver hours, but may limit their ability to raise prices in the future by giving shippers an extra helping of truck capacity. More flexibility and efficiency in truck utilization creates capacity that supports shipper pricing power.

The new rule, available on the Federal Motor Carrier Safety Administration (FMCSA) website, will take effect 120 days after publication in the Federal Register. FMCSA officials on Thursday said the flexibility gained from the changes to the HOS rules will create $274 million in annual savings for the US economy and the trucking industry. Much of that would come from break-time flexibility, an FMCSA official said.

The 11-hour maximum daily driving limit and 14-hour maximum daily on-duty limit remain in place, along with the required 10 hours of rest between work days. However, truck drivers who rest in tractors with sleeper berths gain flexibility in how they can split those 10 hours, effectively giving them the opportunity to take longer off-duty breaks during their next daily on-duty cycle. That means a trucker could theoretically go off-duty for seven hours, start a new day, drive for five hours, take a break for three hours, and then drive another six hours. The driver still works a 14-hour day, but spreads it over 17 hours.

Drivers also get more flexibility when it comes to choosing when to take a mandatory 30-minute break. Instead of taking that break after eight straight hours on-duty, they must take it after eight consecutive hours of driving time. That is a big difference to a truck driver who starts his daily clock at a customer dock and is delayed five hours while waiting to load or unload. Under the current rule, that driver must take that break three hours after getting on the road, rather than when and where the driver expected to take the break. That compounds the damage done by excessive detention time.

Short-Haul Truckers also gain flexibility, shippers gain capacity

The new rule will also give short-haul truckers more flexibility and an opportunity to expand their business by extending the short-haul exemption to the HOS rules. The FMCSA stretched the short-haul exemption’s operating radius to 150 miles and gave short-haul drivers two additional working hours a day, raising their daily limit to 14 hours to match long-haul hours. That could help accelerate a trend toward more short-haul trucking and benefit drayage and delivery companies. These companies have seen increases in short-haul needs due to the COVID-19 pandemic.

Time is money, and also capacity, and the incremental benefits truckers receive from flexibility in how they use their hours will create more capacity for shippers. “It’s a double-edged sword” for trucking companies, the analyst said. “There will be more capacity and the consequence of more capacity is lower utilization, and to some measure less pressure on rates.”

That is not a major issue for carriers now, but it could be more important as freight demand gradually returns toward more normal, pre-pandemic levels, perhaps by mid- to late 2021, he said.

Sources: JOCJOC