Two trends we expect to continue to impact the industry in 2012 are interrelated and inextricably linked: shrinking availability of capacity and the continued onslaught of regulatory challenges. Because both of these factor into the cost to serve, these challenges are of utmost concern to transportation providers and shippers.
Most realize the recession took a lot of capacity out of the market. Although freight volumes haven’t reached pre-recession levels, they are rebounding, and it’s becoming increasingly difficult — and costly — to qualify and hire drivers. Although the national unemployment rate remains high, once drivers leave the industry, they rarely return. Other factors working against carriers is an aging driver work force, a lack of desire among the younger generations to enter the industry and continued regulatory changes forcing drivers out of the marketplace.
The current regulatory landscape isn’t one that promotes capacity growth. Make no mistake, Schneider National absolutely supports the Comprehensive Safety Analysis program and other regulations designed to remove unsafe drivers and carriers from our nation’s roads. We do not, however, changes are necessary to hours of service. The current rule is science-based and is working, evidenced by the sharp reduction in truck-related traffic fatalities. Rather than rewriting the rule, we believe the focus should be on compliance and mandating electronic on-board recorders to allow for an accurate assessment of the current HOS rule.
In addition to CSA and HOS, government regulations have added significant costs to tractor purchases. These increased costs come at a time when many carriers will be purchasing new equipment they couldn’t afford during the recession. Freight rates in 2012 and beyond must reflect the increasing costs and challenges carriers face. Shippers who approach their transportation resources strategically will realize this and work with their carriers to manage these costs now.