Transportation companies have been implementing finalized rules from the Food and Drug Administration’s Food Safety Modernization Act for a little while now.
Additionally, the Federal Motor Carrier Safety Administration announced its mandate that all commercial motor vehicles be equipped with certified electronic logging devices in order to enforce accurate hours-of-service recordings by December 2017.
The implementation of these rules has started slower than what was hoped, said Cole Stoiber, operations and marketing representative with Raleigh, N.C.-based L&M Transportation Services.
“The majority of trucks are still on paper logs,” he said. “Therefore, produce customers still expect paper-log transit times. There will be some friction as this transition continues.”
Heather Martin, corporate communications manager for Total Quality Logistics, Cincinnati, said the company has been providing support to motor carriers about electronic logging requirement.
“We are in the process of modifying our carrier qualification packets to ensure 100% compliance with all our contracted carriers by December,” she said. “We are also communicating with our shippers about their processes and procedures so that they are conducive to carriers who are looking to maintain compliance with the rules and achieve greater efficiencies.”
Martin said this implementation is what she expected, but as a third-party logistics provider, the company has been less directly affected by the compliance requirement than its customers and motor carriers.
“For FSMA, we continue to implement measures to enhance customer awareness and are communicating with each customer as to any specific FSMA-related protocols for their loads,” she said. “Because our technology is all developed and maintained in-house, we can adapt our load management systems to capture these protocols and communicate them to motor carriers on a load.”
Curtis Hart, director of carrier development, transportation management for Geodis, Brentwood, Tenn., said more than 95% of the company’s carriers already comply with the electronic logs rule.
“We do, however, see a risk of secondary capacity degradation as the mandate is phased in beginning in December 2017,” he said. “We have or are in the process of completing annual (requests for quotations) to lock in capacity for the next 12-18 months and reduce our exposure to market changes.”
Hart said Geodis is monitoring areas of its business requiring electronic logs compliance, and the subsequent reduction in productivity he has heard from carriers so far has been 3% to 11%.
Marshall Kipp, president and CEO for Advanced Transportation Services, Visalia, Calif., said this federal rule has changed the way the company does business. Limiting driving time for a solo driver to 11 hours, the driver can log 500 to 650 miles per day, depending on the speed limit of the states.
“The most challenging issue that produce suppliers and retailers should be aware of is the maximum on-duty service of 14 hours,” he said. “Anyone in the produce industry that’s had a truck stuck all day at a cooler knows that tight markets, weather and holidays can tremendously affect the wait times at shipping point.”
Kipp said the implementation of electronic log books and food safety training will mean current drivers will need updated training, as will the next generation of drivers.
Frank Arnold, founder of Road Dog Logistics, Cincinnati, said the company hasn’t felt the impact of the regulations yet.
“However, as the market shifts and volume picks up, we expect to see a decline in capacity,” he said. “To this point, we’ve simply tried to make customers and shippers aware of the impending capacity crunch and anticipated rate hikes so they have time to plan.”
As for fuel this year, Kipp said it’s up an average of 40 cents per gallon compared to last year. And while the market operates on supply and demand in the transportation market, he said this will still drive rates up.
Hart said fuel hasn’t been a major domestic concern this year so far.
“We see rising fuel costs as low risk for the next 12 months unless global demand outpaces supply and domestic production is unable to offset,” he said. “Unless fuel prices soar to the extremes we saw several years ago, that shouldn’t change. It’s still used as a leverage tool whenever possible, but the truth is fuel prices have remained fairly steady for the past few years.”