Special thanks to Source One Management Services for this guest post
Since late 2015, the trucking community has been permeated with discussions of the impact of the ELD mandate. Now that the mandate compliance is in the “phase-in” phase, trucking companies are faced with some critical questions: How will this regulation impact my business? What rate increases, capacity decreases, and haul time increases will the market accept? The impact to business appears to be dependent on the size and technological savvy of the trucking company. Capacity is predicted to remain tight through at least the next year and rates are expected to continue increasing, but because these increases are largely due to other market conditions, the ELD mandate’s impact is difficult to determine. Just in case you missed the conversation, I have pulled together some nice-to-know information about ELDs.
According to the Federal Motor Carrier Safety Administration, an Electronic Logging Device (ELD) is a technology that tracks and records driver’s driving time. These devices can be portable or permanently mounted in commercial vehicles. As of 12/18/2017, it is mandatory for companies operating commercial vehicles to be in compliance with the federal regulation. The ELD mandate applies to commercial motor vehicles used on highways in interstate commerce that either:
- Have a Department of Transportation Class of 3 or greater; or
- Carry more than 8 passengers in exchange for a fee; or
- Carry more than 15 passengers with no exchange of fees; or
- Transports hazardous material.
The stated purpose of the ELD regulation is to increase safety, reduce the paperwork burden on drivers, increase road time, and make it quicker and simpler to manage records of duty status (RODS). The safety argument is essentially that ELDs warn drivers when they are nearing a violation of Hours of Service (HOS) regulations. The HOS rules set limits on drive time depending on the cargo (property or passenger) with the goal of decreasing the number of sleep-impaired drivers on the road. The other touted benefits are largely related to the reduction of paperwork; the less paperwork, the more drive time in a shift. And further, easy access to records should speed inspections and assist in roadside emergencies by providing accurate locational data to responders.
While the ELD mandate is not new news, as voluntary compliance was initiated when the rule was announced in December 2015, the impact will start to be felt this year. Anecdotal evidence reveals added cost to trucking companies, driver frustration with HOS compliance requirements, lack of support and training from ELD providers, and confusion among enforcement entities as to the exact rules for the AOBRD temporary exemption. While it will take time for the trucking market as a whole to absorb the ELD mandate-initiated changes, some companies have begun changing their business models in order to accommodate unanticipated consequences. Where there is change, there is opportunity.
Government regulations, driver shortages, and rising oil prices are having an impact to on road shipping in the US. The ELD mandate could perhaps have come at a better, less volatile, less congested time, but it is here and the market is reacting. Ultimately, technology will continue to be integrated into more industries in more applications. Time will tell who will come out “winners,” but my bet is on the big telecoms and ELD provider firms.