Q&A | Jay Thompson, Transportation Business Associates - The Packer

Q&A | Jay Thompson, Transportation Business Associates

12/09/2011 09:27:00 AM
Tom Karst

11:06 a.m. Thompson: That’s exactly right. If the administration follows history, it will probably issue a ruling around Christmas, when nobody will be working. The expectation is that it will end up in litigation again, no matter what happens. Basically, the business community is saying “Let’s leave things where they are at because we are at a record-low fatalities per mile.” All the data is kind of saying is that there is no need to change anything. 

The expectation is that the industry expects the administration will cut hours of service from 11 hours a day to 10 hours a day. Using rough math, trucking profits ... could easily ... go from 5% to 4%. Regardless, it will be a hit, and the bigger implication is what it does for shippers.

11:10 a.m. Karst: Would this type of new regulation on trucking mean that railroads would suddenly become more important? What would the net effect be of a change in the hours of service regulation for truck drivers?

11:11 a.m. Thompson: The railroads will not be a big factor, simply because if you look at rail as a percentage of the total freight, it is still in the high (single digits). If you are shipping from where the trains go, say from Los Angeles to Kansas City, you may (see) some tweaking that direction. But when you are talking about time and temperature sensitive (produce), it has got to match that flow of how produce jumps around in terms of origination and destinations. If you think of rail, trains run on schedules and train lengths are hard to flex very much. So ... I would not expect to see much change around that. What I would expect to see, though, is overall capacity will tighten.

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