something’s gotta give
THE RECESSION MAY BE RECEDING INTO THE REAR VIEW
mirror, but that doesn’t mean the freight community’s worries are
behind it. In fact, for at least one segment of the business, the worst
may be yet to come. Just as the freight recovery gets under way, the
nation’s truckers find themselves facing a host of new challenges
that could put a serious crimp in their operations. And that’s a concern not just for the folks who run trucking companies, but for the
folks who use their services as well.
The source of their worries? A legislative climate that carriers say is
downright hostile to truckers. “There is a certain amount of anti-truck rhetoric in Washington today,” YRC Worldwide COO Michael
Motor Carrier Safety Administration’s upcoming Comprehensive Safety Analysis program,
proposals to further restrict truck drivers’ hours
of service, proposed “cap and trade” legislation,
efforts to fund highway improvements via
increased fuel taxes, and various initiatives
viewed as concessions to organized labor.
Trouble is, the regulations would do more
than just make truckers greener, safer, etc.; they
would also drive up their costs—and by exten-
sion, the rates shippers pay. “There are at least
five issues at play,” Mike Regan, president and
CEO of the consultancy TranzAct Technologies,
warned at the NASSTRAC conference. “If they swing the wrong way,
your rates will go up.”
And these rate increases could be substantial. According to some
of the conference speakers, any one of these initiatives alone could
result in a rate hike of 2 to 4 percent. If they were all to hit at once
in a so-called “perfect storm” scenario, freight rates could shoot up
as much as 15 to 20 percent.
If this scenario plays out, don’t expect shippers to go down with-
out a fight. Speaking on a shipper panel at the conference, Candace
Holowicki, manager of logistics for building products maker Masco
Corp., noted that while she understood the need for carriers to cover
their costs, her budget may not support double-digit rate hikes. “I
envision a lot of trouble explaining to my management why we need
all these rate increases,” she said. “I’m trying to be an advocate for
both sides of this, but I can’t give everyone a 20-percent increase, so
don’t ask—the money’s not there.”
Regan warned shippers, however, that “just
say no” won’t be one of the options. Refusing to
accept the hikes won’t make the problem go
away, he said. “Whether it’s in your budget or
not, you’re going to have to pay it. If you don’t,
your freight simply isn’t going to move.”
No one wants to see that kind of standoff. But
resolving the problem won’t be easy as long as
the anti-truck sentiment persists on Capitol Hill.
