Supply chain optimization is the bread and butter of America’s most successful retailers. Their ability to move goods efficiently has changed the retail landscape and benefited consumers by reducing prices and increasing product assortments. But the efficiency has benefited the broader public in other ways too. By reducing packaging, engineering reverse logistics, and minimizing empty miles, retailers have dramatically increased the efficiency with which they move products via trucks, which reduces emissions and traffic congestion.
According to a U.S. Department of Transportation study, traffic congestion costs the U.S. economy $87.2 billion each year, with 4.2 billion hours and 2.8 billion gallons of fuel spent sitting in traffic. Yet rather than encouraging greater efficiency, new regulations from the DOT’s Federal Motor Carrier Safety Administration on trucking hours of service could upend advances and force retailers to do something completely unnatural to their mission: surrender efficiencies.
Since 2003, the industry has relied on the current regulations to optimize just-in-time supply chains required in today’s growing global economy. The ability to transport products to stores and distribution centers in a timely manner is essential to the continued health of the retail sector. The anticipated changes to the HOS regulations would not only increase the amount of drivers needed, but because of the suggested restart provisions, trucks would be funneled onto the road at peak driving times. Simply stated, the additional capacity needed to transport the same amount of products would place more trucks on the road at the highest volume traveling periods.
Although legislative and legal appeals will certainly emerge in 2012, retailers will have no choice but to develop plans and make the necessary investments in order to comply.