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Restart Suspension Could Boost Industry Productivity

Now that the Federal Motor Carrier Safety Administration (FMCSA) has reverted back to its original reset by suspending the controversial 34-hour restart provision of the hours of service rule, industry productivity could improve as much as 0.8% overnight, based on analysis from transportation research firm FTR.

A productivity increase will be driven by an uptick of truckload capacity and should continue through 2017, based on FTR’s estimate of how long the review period will be.

“It may not sound like much in itself, but when you apply it to a $600 billion industry, it has a significant impact,” said Noel Perry, senior consultant and managing director of FTR.

However, FTR anticipates productivity to once again drop as truckload capacity drops going forward. In the meantime the industry is expected to have a reserve of surge capacity to handle seasonal peaks and other issues in through 2015.

While this signals upside in the immediate term, FTR cautions that the problem is not going to disappear. It is only being moved out a few years.

“It is important to note that this change does not reduce the impending wave of regulatory drag still scheduled for late 2016 and beyond,” said Perry. “Indeed, it makes it worse because the revised regs will hit when a bunch of other regulatory changes appear as well.”

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