Besides the heady task of keeping truck fleets moving so product can get delivered on time, beverage distribution fleet managers also have the challenging responsibility of staying abreast of ongoing regulatory changes to transportation rules and policies. According to Earl Eisenhart, principal of Government Relations Services, an independent consulting firm specializing in transportation and commerce policies, increased regulations have been making it more challenging, and more costly, for fleet and compliance managers to efficiently run their operations while also complying with changing transportation policies. According to Eisenhart, here is a break-down of recent regulatory changes or changes coming down the pipeline and how it could affect fleet managers:
New Driver Hours-of-Service Rule – In an effort to reduce truck driver fatigue, the Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) issued new rules that limits the max average work week for truck drivers to 70 hours (down from 82 hours) and truck drivers have to take a 30-minute break during the first eight hours of a shift. For fleet managers, these rules complicate the process of scheduling routes. In August, the D.C. Circuit Court of Appeals threw out the 30-minute break requirement for “short haul” truck drivers. “The Court said there wasn’t any data or evidence from the DOT that could establish that the fatigue issue was a problem in the short haul segment,” Eisenhart says. “I think the ruling is significant beyond the 30-minute rule as the Court is telling the DOT ‘You can’t just apply a broad brush to the trucking industry. If you issue regulations, you have to have data that backs it up.’” While the other hours-of-service rules stand for now, the Court ruling does open up the possibility of challenging the application of the broader hours-of-service rules to short haul trucking through litigation or through Congress.
Driver Sleep Apnea Screening – For years, policymakers have been trying to address the issue of fatigued drivers as a major cause of truck crashes and have been looking at the issue of sleep apnea. Last year, the DOT’s FMCSA proposed tougher standards for how the industry would evaluate truck drivers for sleep apnea and, if drivers test positive for the sleep disorder, then treatment would be required. The tougher standards would have required drivers with a body mass index of 35 to be evaluated and it’s believed that would affect about 30 percent of truck drivers. The testing and treatment would be expensive for the trucking industry with an estimated cost of $1 billion a year. In October, Congress passed a law requiring the FMCSA to address the issue through the formal rulemaking process, rather than issuing a guidance, which now gives the trucking industry an opportunity to have a voice in the rulemaking process. So, the issue has been delayed for now, but the FMCSA says it will issue a rule soon.
New Driver Training Requirements – There is pressure from safety groups to beef up federally mandated training and safety requirements for entry-level truck drivers. As part of the highway bill passed in 2012, the FMCSA was tasked with coming up with new driving training rules by October 1, 2013. “The problem that the FMCSA has is that in order to issue rules, you have to have data and evidence to support it, so you can justify the costs that required training will incur. And, the cost of training can be high. The DOT is having a difficult time finding data that draws a straight line between training and an actual reduction in truck crashes,” Eisenhart says. The FMCSA missed the deadline and is going back to the drawing board, Eisenhart says, but pressure from safety groups means the DOT will have to come up with a new standard for driver training in the near future.
THE HIT LIST
Turning the Key to Sustainability
Leasing alternative fuel vehicles became an increasingly viable option for beverage fleets in 2013. Leading the way was Ryder System, Inc., which has built a comprehensive leasing solution for beverage companies looking to go that route. In fact, just as this issue was going to press, Saddle Creek Logistics Services selected Ryder for a natural gas vehicle solution in two markets. With the agreement, Saddle Creek will lease 31 heavy duty compressed natural gas (CNG) vehicles from Ryder. Thirty of the CNG vehicles will run in the Dallas/Fort Worth, Texas region and be maintained by Ryder at its Fort Worth service facility, which is being upgraded to meet the unique compliance requirements for natural gas. One vehicle will operate in Saddle Creek’s Shreveport, Louisiana delivery fleet and be maintained at Ryder’s existing natural gas vehicle maintenance facility in that city.
With natural gas vehicles already available for lease and rent in California, Arizona, Michigan, New York, and Louisiana, Ryder now adds Texas as its newest market with a natural gas vehicle maintenance capability.
According to Scott Perry, vice president of supply management, Ryder System, there are several key advantages to leasing an alternative fuel vehicle or fleet:
* The lower upfront capital cost
* The higher residual value
* An outside company taking care of the maintenance infrastructure
* Demonstrating good corporate citizenship by the environmental commitment to clean fuels, and
* A way to move up to higher technology levels faster than if owning the vehicles. This is particularly important in the advancing alternative fuels area.
Right on Track
Few technologies are proving as versatile for fleet operations than telematics/fleet tracking systems. Operators are using such systems not only for their GPS capabilities—enabling drivers to find their way via the most efficient routes and fleet managers to keep track of where their delivery pros are at any given time—but also as key sources of business intelligence. Some systems—which now are enabled for smartphones and tablets—send emails or texts to the team back at the home base, alerting fleet managers of activities such as excessive speed or engine idling. Having this information at one’s finger tips enables managers to make immediate improvements to their operations, ultimately saving fuel and money. It’s also a safety enhancer: Managers get real-time alerts about speeding, which ultimately gets drivers to ease up on the pedal and experience fewer incidents. Others act as digital coaches, providing drivers feedback as they drive, enhancing their skills and, ultimately, the distributor’s bottom line.
According to CALSTART, in states like California and New York that offer incentives for such fleet technology, the payback period can be as short as five years. And if the price of the trucks batteries continues to fall as expected, that ROI period is expected to improve substantially over the next few years. One company that recently gave a significant vote of confidence in the viability of electric delivery vehicles was none other than the operator of the largest beverage fleet in the world, Coca-Cola. Coke announced that it’s deploying 16 refrigerated plug-in electric vehicles in California to transported chilled Odwalla beverages. PepsiCo already has the largest electric delivery fleet in the nation, although it’s for its Frito Lay snack business. Despite their relative limited penetration in the beverage space thus far, expect all-electric vehicles to become an increasingly attractive and cost-effective option for a number of beverage delivery environments.
Clearing the Air
While a lot of people talk about the need to do something to help the environment, some beverage distributors are taking matters into their own hands and moving full-speed ahead with conversions to cleaner-running Compressed Natural Gas (CNG). For example, New York City-based Manhattan Beer Distributors (MBD) on Nov. 4 added an additional 12 trucks to its growing fleet of CNG delivery vehicles. MBD is a pioneer in using CNG trucks in the New York metro area having first introduced 15 trucks in 2002 out of its headquarters in Bronx, N.Y. The addition of the 12 CNG trucks to the Long Island fleet brings the total number of CNG trucks to 75, out of 300 delivery trucks overall.
Also this year, Monarch Beverage continued to roll out CNG trucks to its fleet. The company expects to save 60 percent in its overall fuel costs each year. “We’ve made a long-term commitment toward CNG,” says Fred Dufour senior vice president for Monarch Beverage . “We have placed additional orders for Kenworth T440s, and by 2015, 90 of our 105 trucks will be CNG-powered.”
And beer distributor J.J. Taylor Companies, Inc. announced in September it is replacing its 95-unit Tampa-based fleet with CNG tractors as part of an ongoing commitment to sustainability.