As of April 1, the Congressionally mandated electronic logging device (ELD) rule is in effect, described by the Federal Motor Carrier Safety Administration (FMCSA) as “intended to help create a safer work environment for drivers, and make it easier and faster to accurately track, manage, and share records of duty status (RODS) data. An ELD synchronizes with a vehicle engine to automatically record driving time, for easier, more accurate hours of service (HOS) recording.”
Even in an industry as heavily regulated as transportation and logistics, the ELD mandate has been a loaded topic almost from the moment it was proposed. In the lead-up to implementation, virtually everyone who expected to be affected has been wringing their hands and spreading rumors of dire consequences.
Now that the rule is in place and the grace period is over, here are some perspectives on the mandate’s immediate effects and potential areas of concern:
- Costs: While the electronic logging systems of two decades ago cost roughly $2,500 per device, today’s ELDs generally cost less than $500 per truck, plus any monthly service or contract fees, because of the introduction of FMCSA-compliant smartphone and tablet options. At the same time, ELD efficiencies and insights have the potential to reduce the time and cost of paperwork, decrease fuel consumption and prevent driver accidents stemming from fatigue, all of which can help balance the technology costs. Avoiding enforcement penalties also helps control costs.
- Compliance: Contrary to popular opinion, the hours of service rules have not changed. The difference is that ELD technology monitors and records data, so that compliance is now enforced across the board. For carriers that have always followed the rules, this levels the playing field. Those who try to go beyond mandated allowances are subject to fines and out-of-service penalties. And ELDs allow drivers to make notes about problems or extenuating circumstances just like they did in paper logbooks. Fines for not being equipped with a compliant ELD are roughly equivalent to those for not being in possession of a paper log. As of April 16, CarrierLists survey reports ELD compliance at 97%.
- Capacity: The April 12 Trucks.com headline screamed, “ELD Mandate Enforcement Spurs Soaring Freight Rates,” noting a 2.7% drop in truck capacity for the first week in April as compared with the last week in March (although it also credited the robust economy and the shortage of trucks and drivers as contributing factors). But not everyone agrees with this dire assessment despite “widespread speculation that the trucking industry would be rocked with driver shortages as shippers plow through carrier lists attempting to cover their loads,” as reported by FreightWaves. According to its Tender Rejection Index (TRI), “That has not been the case. If anything, the index is indicating the counter-argument, as loads are being turned down with less frequency. The reason for this is simply that the information has already been digested by the market and priced in.” In its April 20 safety article, Fleet Owner seems to agree: “There was even an 11% increase during the second week of the ELD enforcement, April 8-14.”
From our perspective, the ELD topic has been a divisive one for the carriers connected to our Ticontract platform. When carriers were asked whether they generally support the ELD mandate via our annual North American over-the-road transportation survey Q1 2018 Capacity & Pricing Update, there was a divide between responses largely based on the size of the carrier. Though one small asset-based carrier stated, “ELD has added high expenses to our business and the technical malfunctions cause us distress and down time for our drivers,” about 78% of the carriers surveyed support the mandate for a variety of reasons.
Prior to implementation, drivers and owner-operators were especially resistant to ELD, considering it invasive and unnecessary surveillance, and many threatened to leave the industry rather than comply. Have they? Will they? Will ELD help or hinder the industry? Maybe it’s just too soon to tell. It’s probably best to wait and watch for long-term effects.
Transporeon Group’s robust shipment execution platform helps businesses better manage their transportation operations to overcome capacity issues and other effects of the ELD Mandate. Transporeon customers gain visibility from end-to-end across their operations, tracking and tracing shipments, speeding transport and lowering costs.