Truck Stop: Retailers Could Feel the Pinch of New Regulation Constraints

Powell Slaughter - Furniture Today, November 28, 2017 - HIGH POINT - Service constraints from hours-of-service regulation and fierce competition for drivers are making timely service ever harder for less-than-truckload carriers delivering goods to furniture retailers’ docks.

And while a lot of vendors are doing their part in working with carriers to accommodate “new normal” restraints on the outbound end, many retailers fail to realize their receiving policies and hours are no longer realistic if they expect specialized furniture carriers to maintain service levels for their stores.

The bottom line: Retailers  who consistently create delays in off-loading goods will likely find their deliveries moved to the back of the line. In some cases, the specialized carriers that understand the complexity of furniture delivery to stores, which involves multiple stops for varying amounts of products, could decline a retailer’s business altogether.

That would leave stores with general-commodity carriers, many of whom dislike hauling furniture as it slows down their breakbulk and cross-dock efficiencies, which can lead to more damage and higher claims ratios that cost furniture retailers both time and money. 

Several specialized carriers came to Hickory, N.C., this month to outline their situation for board members and guests of the Furniture Shippers Assn. While hours-of-service regulations for truck drivers have been on the books for years, a deadline next month to implement electronic logging devices (ELDs) leaves no room for hedging if traffic jams or holdups at the point of delivery occur.
With multiple stops to drop cargo vs. the drag-a-trailer-and-drop prospect for long-haul drivers, delays at even one store can disrupt scheduled services. The tighter adherence to hour restrictions alone has reduced effective service capacities as much as 17%, according to specialized carriers.

Not only that, necessary investments in ELD equipment, increased driver pay to spur recruitment and retention,  and fleet upgrades for more fuel efficiency and attracting drivers are squeezing margins for carriers.

Wiseway installed ELD equipment a decade ago. “We’re fully compliant, and we’re ready for anything coming our way — except for the effect on capacity,” said Marcus Cary, vice president of sales and marketing.

And that effect is considerable for all carriers, wherever they are in the implementation process.

With business up 22% net of its acquisition last year of Northwest Furniture Xpress and a shortage of 29 drivers, Sunbelt Xpress already feels the pinch to maintain service levels. Its decision to bring on ELDs a year ahead of this December’s compliance deadline exacerbated that need at least for the short term as SunBelt lost a number of contracted owner-operators who didn’t like the new technology.

The mix of a driver shortage and ELDs’ stringent impact on hours of service has reduced productivity and limits growth, according to Sunbelt General Manager Stan Froneberger.

“It’s the new normal,” he said. “We’re predicting just 5% growth this year, and that’s due to the driver shortage and tighter hours.”

Froneberger estimates an 11% initial negative impact on Sunbelt’s productivity from introduction of ELDs. And with strictly enforced hours of service, drivers going out of state are gone longer.

“That driver who used to get back on Friday now gets back on Saturday, so it takes a toll on their family life,” Froneberger said. “If they used to take two LTL loads from North Carolina to Texas, they can only go out once.”

Shelba D. Johnson Trucking, which has committed to serving the Eastern Seaboard after turning Florida and Georgia runs over to Brooks-DeHart Trucking, was fully ELD-compliant by Oct. 1. National Sales Manager Richard Tucker said in addition to outfitting trucks with the equipment, the company is spending an additional $15,000 to $20,000 a month in mounting fees. He also noted the effect on drivers’ personal lives of stricter hours of service.

“We’re encouraging our drivers to get out early on day of departure — 9 a.m. vs. 5 p.m. — so they’re leaving their families earlier,” he said. “Where a guy was spending 70 hours a week on the road, now it can be 120.”

In addition, Tucker estimated that ELDs have added two days to service times. For example, where deliveries to New York once took five days to complete, that’s up to seven on average.

“In some parts of New York, it could be 10 days,” he added. “That driver works 12 hours a day, and he’s done. That’s about 660 miles. The George Washington Bridge is 600 miles north of Greensboro, N.C.”

A run to Texas that took a day and a half before ELDs now takes two full days or two and a half days.

“There’s a reason you see so many trucks pulled over on exit ramps for the driver to sleep,” Tucker said. “When that ELD says your day is done, you’re really done.”

Brooks-DeHart Furniture Xpress serves retailers with LTL service to Georgia and Florida. In July, it picked up Shelba D. Johnson Trucking’s business in those states so the latter could concentrate on serving its core Northeast business.

Brooks-DeHart has operated with ELDs since May of last year, which gave it a chance to work through the learning curve well ahead of the December compliance deadline. Co-owner Anthony Brooks said his company’s concentration in two states, especially Florida, has been a benefit in light of LTL service capacity issues. A leased facility in Jacksonville, Fla., has played a growing role in the business.

Despite an 11% increase in business and running on ELDs for a full year, average service times have increased only slightly, running 6.47 calendar days in 2017 through October, compared with 6.2 days in 2016.  The new restrictions still limit growth.

“We’re having to turn down business every day,” Brooks said. “In the old days, if you were an hour off on the schedule, you could run that hour — no more.”

Greg Skoog, president of Mississippi Furniture Xpress, estimates that early results from its ELD implementation indicate a 13% drop in capacity assuming current driver and fleet levels.

“We run the whole state of Texas, and I’ve had to hand off some freight, which I’ve never done before,” he said. “A 10- to 15-stop run out there is a 10-day trip now vs. five to seven days. I’m looking at cutting on some of my territories and concentrating on areas we can better serve.”

Dealing with it
Carriers are fine-tuning their scheduling for routing and drivers in reaction to time and personnel constraints. Keeping LTL drivers in the field is vital, and several specialized truckers are sending fresh loads to them to avoid lengthy return trips.

The Jacksonville facility Brooks-DeHart leased two years ago has been a key in that regard, for example.

“We have been shuttling loads from our North Carolina terminal to drivers who stay in Florida all week,” Brooks said, noting that Jacksonville provides a place to store loads for big customers such as Baers, Hudson’s, Norris, Clive Daniel, Matter Bros. and Robb & Stucky. “It also gives us a secure place to turn our LTL drivers around that stay in Florida all week. We currently have five secure lots (where) we drop trailers in Florida. That helps us keep drivers working and not wasting hours of service.”

Sunbelt is utilizing older drivers to take a newly loaded LTL trailer to meet a delivery driver who’d just carried a load to Texas vs. bringing the driver back.

“How do we load the driver so we get the most turns possible? We’re taking it to him,” Froneberger said. “We’re doing more meets — you have to keep that driver in the field. … We’re flying guys to Seattle to stay out there for three weeks.”

For the long haul between North Carolina and California, Sunbelt runs driver teams so the truck can keep moving.

“We’re looking at using more intermodal to move loads from terminal to terminal, but in that case you lose control of the product, and we don’t like to do that,” Froneberger added.

Shelba D. Johnson cut back on service areas in order to focus on its core business in the Northeast in light of the constraints it faces.

“The only way we could do that was to work with Brooks-DeHart to make sure they could cover Georgia and Florida at the same rates we had for a year,” Tucker said. “We were able to transfer 13 drivers to the North-east.”

The company now serves South Carolina to Maine, plus Ohio and Texas (Shelba utilizes independent owner operators in Texas). The demand for services is such that Shelba has recovered the business lost when it dropped Florida in six weeks.

“We’ve reduced our stop count (per LTL load) from 18 down to 12 on average,” Tucker said. “We’re meeting drivers in the field with loads in our Bath, Pa., facility, and that allows that driver to make a second delivery trip. We have 12 guys running loads to Bath, and that will probably go up.”

The institution of online tracking of loads has helped, but Tucker added that creates expectations on the receiving end that aren’t always met: “You need to understand it’s an estimation.”

Shelba also is considering bar-coding its transportation warehouse to increase efficiency.
“We’re pushing about 50,000 pieces of furniture a week through there,” Tucker said. “I have a staff of 11 people who do nothing but hunt freight.”

Looking ahead, Brooks-De-Hart will begin training drivers on using scan guns at delivery to cut down on delivery mistakes.

“Our goal is to have this implemented by the end of 2018 for all deliveries,” Brooks said. “If all goes well, the drivers will upload their information to our server via hot spots and WiFi connections. This will give us real-time pod information and who actually signed for the furniture. We are even looking at sending notifications to our (vendor) customers at time of delivery.”

Wiseway converted to hourly vs. per-mile pay for drivers, largely in light of hours-of-service constraints in order to retain drivers.

“If a guy is out there making deliveries and he’s paid per mile and per stop, he spends a lot of time calculating what he makes,” Cary said. “They can get un-nerved if there’s a delay at a stop. Hourly costs a heck of a lot more, but you can’t go back. You have to look for more efficiency elsewhere.”

That includes fleet upgrades with particular attention to fuel costs. Wiseway has tracked that figure, watching idle times, and improved fuel usage 2.4% this year on top of a 4.1% improvement in 2016.