Saturday, April 27, 2013
Freight models, what will happen now?
From what I can tell, the few that responded seem to be focused on just one or two issues, and not looking at the whole scope and picture of what will possibly happen when these new rules will kick in.
I've been driving off and on since 1993, so I remember the older HOS rules that we had, along with how the freight model worked back then.
Back then, you had more warehouses storing goods to be shipped on a reasonable schedule. More goods were stored at the end of the warehousing model with the receiver since trucks took more time with load transit.
That all changed in 2003 when we went to the current HOS rules we run on now with the 34 hour restart. Shippers and receivers quickly figured out that they could operate on more of a JIT (just in time) basis and not hold as much inventory in their warehouses. It was a win-win situation for them as it lowered their costs on storage, inventory etc. This is the freight model we are currently running on.
So it begs to question, what is going to happen with the new HOS rules when they go into effect in July? How will this effect the current freight model. When you have a drop of available trucks, the JIT model will not work as well. I'm not completely sure if the industry has studied this as I am looking for articles on it, but I don't think its going to be a good thing. There is going to be some disruptions as they try to reorganize things. When I can get definitive answers, I'll definitely put them on here.