How new driver hours of service regulations will impact GAWDA distributors.
Any time a federal agency like the Department of Transportation comes down with a new Final Rule, gases and welding distributors must take time to understand how the rule will affect their businesses. This is true of the recently published Final Rule regarding driver hours of service. From the first proposed rulemaking in December 2010, distributors followed as the rule progressed, threatening to reduce the daily driving limit from 11 hours to 10, with an on-duty limit of 13 hours.
When FMCSA issued the Final Rule on December 27, 2011, distributors everywhere breathed a sigh of relief. As GAWDA’s Government Affairs and Human Resources Legal Consultant Rick Schweitzer framed it in his summary of the HOS rule, “Several of the most burdensome requirements in the proposed rule have been amended or dropped in the final rule.” And for those carriers who would affected, the rule affords almost 18 months to make the adjustment before many of the provisions take effect on July 1, 2013.
To find out what kind of effect the rule will have on the industry, Welding & Gases Today asked GAWDA members how the rule would impact their businesses. Distributors large and small echoed the same sentiment: the direct impact will be minimal. “As a carrier, we’re not a 24/7 operation,” says Kelly Bladow, safety & compliance manager at Oxarc (Spokane, WA). “I don’t see the changes affecting us at all.”
In its FAQs for the rule, FMCSA says that the drivers most likely to be affected by the new rule are those who work more than 70 hours a week on a continuing basis. Because the 34-hour restart can only be used once a week, the rule reduces a driver’s maximum allowable hours of work per week from 82 hours to 70 hours. Says Oxarc’s Bladow, “Our drivers average 45 to 47 hours a week, so we’re not anywhere close to the 70 hour limit.”
For small businesses, like Winfield Iron and Metal (Winfield, KS), the impact will be negligible. With four employees sharing the driving duties, President Craig Duncan says, “I don’t have fully dedicated drivers, making deliveries all day, every day. The rule will have zero impact on our drivers.”
The Trickle-Down Effect
For distributors, there are questions as to whether price increases or scheduling delays may arise from suppliers who affected by the ruling. Maine Oxy (Auburn, ME) Operations Manager George Lyon says, “Our supplier runs a pretty tight schedule for bulk deliveries, so it could have an impact with the total number of work hours changing.” Thus far, however, Maine Oxy has received no indications from its supplier to suggest that there will be any issues.
Duncan sees service delays as a real possibility, but not one that would impact his business. “I’m within an hour’s drive of my major suppliers. If they can’t take care of me, I go to their facility to pick up.” However, price increases from suppliers, were they to occur, would impact the bottom line. “It’s very difficult to pass on price increases. I will sacrifice margins to retain business. It’s a tough business climate,” he says.
The 11th Hour
Distributors were relieved to see that FMCSA scrapped its consideration of a 10-hour daily driving limit and elected to retain the 11-hour rule. Maine Oxy’s Lyon says, “We have stores that put our drivers on the edge of the daily limit driving there and back. If there’s an accident or a storm or a DOT inspection, the driver may have to stay overnight.”
Bladow adds, “We may have had to do some re-routing had they adopted the 10-hour rule.” However, he points out that distributors lived with a 10-hour limit prior to the 2003 ruling that extended the limit to 11 hours. “When we got the extra hour, we took advantage of it. Now that we have it, we really don’t want to give it back,” he says.
Although the rule remains at 11 for now, the phrasing of the rule leaves the issue somewhat open for future discussion. The Final Rule states: “This is not to say that FMCSA is foreclosing the possibility of action on this subject; future research may provide a basis for reconsidering the daily driving limit.” Whether or not the hours will change, only time will tell.
Do you expect a trickle-down effect to impact your business? When new regulations lead to increased costs and delivery delays, how do you prepare end-users who may not be aware of the regulations?