Truck Drivers And Dispatchers Can Make Use Of Real Time Traffic Information Systems To Help Minimize Delay

ops.fhwa.dot.gov, Jun 21, 2005

According to the motor carrier industry experts interviewed for this study, the issues that pose the greatest threat to trucking productivity1 and service quality are: rising insurance costs, changes to the hours of service rule, and fuel price volatility. Nearly all interviewees placed these three issues near the top of the list in terms of importance. Interviewees identified three other issues as being somewhat less pressing but potentially having significant negative effects: urban congestion, new emissions and fuel standards, and driver waiting and loading times. Two other issues assessed in this study, security concerns and delays at port terminals, were not considered important by most interviewees, the former because major new security regulations have yet to be implemented, and the latter because the issue affects only a small segment of the motor carrier industry. A summary of the findings for each major issue studied is provided below. Rising Insurance Costs – Rising insurance premiums are caused by two factors: poor performance of insurance company investments and an increase in expected pay-outs due to rising damage awards and the effects of 9/11. Many carriers feel the problem can only be solved though tort reform to limit damage awards. Carriers have responded to rising insurance premiums by relying more on self-insurance and forming risk retention groups. Many have also sought to bring down insurance rates by reducing their accident risk though driver safety programs. There may be a government role in promoting the expansion of existing industry safety programs to share information and voluntarily achieve higher safety standards.  Hours of Service Rule Changes – The nature of the expected HOS rule changes is not publicly known at this time. While HOS rule changes would likely increase highway safety, more restrictive rules could make vehicle and driver scheduling less flexible, and possibly raise the cost or lower the quality of service that trucking firms can provide. The greatest effect of a changed HOS rule would fall on the regional and long-haul for-hire truckload firms. Alternative approaches to regulating HOS have been proposed. Some policy-makers have suggested that the Fair Labor Standards Act should be applied to the motor carrier industry to require overtime pay. Another alternative, possibly to complement HOS regulations, is a voluntary program that encourages the use of best practices. Such a program could encourage information sharing and adoption of safety performance management practices through a branding program that would recognize firms that achieve a superior level of safety performance.

Notes on Technology  While we do not explicitly address the effects of technological change in our discussion of productivity, it is important to note the following:New technologies, such as advanced materials and alternative fuels, will likely increase the efficiency and productivity of the motor carrier industry over time. In many cases, new technologies employed to make the motor carrier industry more efficient will also improve safety, reduce vehicle emissions, or result in other socially desirable outcomes. Fuel Price Variability  Many motor carriers have little ability to absorb rapid changes in fuel costs. Historically, trucking firm bankruptcies have been closely correlated with fuel price increases. Larger motor carries employ a number of strategies to hedge against changes in fuel price, including the use of swaps and options, or purchasing fuel on the spot market or at the wholesale level. While many view public sector intervention in the issue of fuel prices as inappropriate, several bills have been introduced recently in Congress that attempt to mitigate the effect of fuel price changes (particularly on smaller carriers) by requiring carriers to apply a fuel price surcharge on shippers. Urban Congestion and Travel Time Reliability – Urban congestion causes an increase in travel times for motor carriers, and worse, a reduction in travel time reliability. If possible, carriers respond to congestion by selecting alternative routes, shifting to off-peak periods, or scheduling trips with a greater travel time buffer. A variety of strategies can reduce the extent of congestion or at least make it more tolerable. For example, truck drivers and dispatchers can make use of real time traffic information systems to help minimize delay. Greater benefits could be realized if carrier route planning systems were integrated with measures of travel time reliability. There has been recent interest in truck-only lanes or truck freeways as a way to serve goods movement, reduce congestion, and improve highway safety. Toll-financed truck facilities are being considered in Southern California and Virginia. New Emissions and Fuel Standards – There is widespread concern that the new emissions standards for heavy-duty engines, which began October 1, 2002, will cause lower fuel economy, lower horsepower, and the possible need for more frequent engine maintenance. Because of these side effects, particularly uncertainty over engine reliability, motor carriers have been reluctant to purchase the newly certified engines. Instead, fleets have been purchasing larger numbers of older engines, and also holding on to their current trucks longer than they normally do. It is too soon to determine how the new emissions standards have affected fuel economy. However, it appears that the industry’s fears about fuel costs and maintenance problems with the new engines have been exaggerated. The emissions standards that will take effect in 2007 pose a far greater challenge for engine makers, and may generate more concern about reliability and performance. Driver Waiting and Loading Times – Long waiting and loading times for truck drivers impose substantial costs on the motor carrier industry. For the most part, this problem affects for-hire truckload carriers only, and according to a Truckload Carriers Association study, is worst in the grocery sector2. At its core, the problem results because shippers do not directly bear the cost of the driver and equipment delay they cause. One possible solution is to change shipper/carrier contracts so they address wait times and allow for detention charges if necessary. Other strategies involve changes to loading dock practices, such as allowing 24-hour delivery or providing a mechanism for the delivery of freight that arrives early. Some have argued that cooperative industry efforts or voluntary programs could help reduce wait times, such as an industry International Standard Organization (ISO) standard addressing loading and unloading practices in detail.