Is $150/Hour the new Ocean Container Dray Rate?

March 1, 2018

 

That’s the question we asked our Truckers Council.  In light of the new ELD requirements the focus for truckers and drivers is all about time.  So, we thought if trucking and dray conversations now are all centered on “time” then why wouldn’t the pricing for dray services be quoted in hours? 

So this is what we learned…

It’s all about time!  The regulation requires trucks and driver time to be tracked and transmitted to the DOT, and limits the driver’s time to an 11 hour driving limit after 10 consecutive hours off duty.  The time component of this regulation is not different, but the electronic monitoring and transmitting of said data to DOT is different.  And when drivers lose time due to terminal congestion, lack of chassis, chassis splits, traffic, accidents, delays at warehouses and loading facilities, and weather-related delays it has an immediate impact on their ability to execute the work order and their livelihood.

 

Why is ELD now suddenly causing all these issues?  If a driver uses his truck for personal conveyance (to go to lunch perhaps) during his ten hours of mandatory off duty, he is in violation and must reset his off-duty requirement.  If a driver is 30 minutes from the terminal and is approaching his 11 hour time limit, he must time out, and will not be able to resume driving for another 10 hours (not even moving his truck in the parking lot).  Compounding this is the simple fact that this is all through new technology, and until everyone gets used to using it, any mistake could cost the driver hours. 

 

Is your loading or unloading facility more than four hours from the terminal?   The general consensus from our Trucker Council is that any pick up or delivery that is four hours or more from the terminal will have to be processed differently.  With driving time limited to eleven hours, and then a mandatory ten hour rest period, these longer deliveries will require a stop-over.  And in markets like Chicago, Seattle, Dallas, Oakland and Memphis – especially when there is significant terminal delays and congestion – these longer haul deliveries and pick ups are common and now problematic.  Many dray carriers right now are even refusing deliveries that are more than four hours distance from the terminal.

 

How much are trucking rates increasing?  We are seeing an increase of 25%-35% since late last year, and many expect that percentage to increase even more as we continue to lose drivers and driver hours.

 

So… $150 per Hour?  It’s a very intriguing question.  With “time” being the critical component of the dray move that is being measured, and with all the challenges in the market eating away at “time” for the drivers, we thought perhaps dray service pricing will eventually migrate to an hourly rate.  The general consensus of our Trucker Council, however, was that rates will continue to be quoted by distance and difficulty/ease of move.  Despite the challenges, the current pricing model – with its increases - reflects the appropriate return and incentive to drivers and trucking companies, and converting to an hourly rate for service would negatively impact the incentive piece of the equation.

We’ll have to wait and see…!

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