Tag Archives: ELD mandate

3 Ways the ELD Mandate Has Impacted Trucking

The ELD (electronic logging device) trucking mandate is quite possibly the biggest change seen by the trucking industry in over 50 years, and one that many people have mixed feelings about. Since its introduction in December 2017, there’s no doubt it has made a considerable impact on the trucking industry. So, in order to gain a better understanding of this ELD mandate and its effects, we will discuss the implications of the ELD trucking mandate and how it has been impacting the trucking industry since it was put into place.

There are three areas that have been most affected by the trucking mandate, which are:

  • Cost
  • Productivity
  • Safety

Cost

According to the FMCSA, ELD’s were predicted to save approximately $1.6 billion per year as a result of less paperwork. Ultimately, savings indeed have been found through reduced fuel costs, decreased truck downtime and reduced crash rates.

ELD trucking mandate

The savings are surely impressive, but do they make up for the costs of implementing the ELDs? The most common device costs carriers are about $495 per truck. For a small or medium-sized business, that’s a huge expense. One that could drastically be changing the state of their business.

Productivity

Prior to the ELD trucking mandate, industry experts estimated that ELDs would have a 3% – 5% impact on carrier productivity, especially on trips longer than 450, miles and short-haul operations of up to 300 miles that bump against the 14-hour rule. Larger fleets have additionally found a way to sustain productivity by sending out other trucks to pick up a load if a company driver is delayed or out of hours.

Safety

The driving force behind the ELD mandate has always been safety. The ELD mandate applies to over 3 million drivers on the road. Therefore, these are 3 million drivers that potentially would not cause fewer accidents due to fatigue and inaccurate HOS logging. An analysis by the FMCSA predicted that the ELD mandate would prevent approximately 20 fatalities and 434 injuries each year, due to driver fatigue. By ditching the paper and pen method and adopting the ELD method, current statistics have proven that the ELD mandate ensures that all drivers are following specific safety and compliance standards.

Trucking industry experts have predicted this kind of bumpy road following ELD implementation for a long time. If anything, the industry’s current struggles with the ELD could be a correction to the surging freight market.

 

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Minimizing the Impact of the ELD Mandate

ELD grace period is about to end

The electronic logging device (ELD) mandate is causing major changes to the industry and is making drivers want to leave the transportation industry instead of using the ELD. The regulation of the ELD rule began on April 1 after a three-month grace period allowing drivers to implement the device.

The mandate requires the use of an ELD to accurately record a driver’s hours of service. The Federal Motor Carrier Safety Administration (FMCSA) said that the hours of service restrictions were put in place because of increased risk of crashes and chronic health conditions associated with lack of sleep when driving long distances as truckers do.

ELD mandate impact on trucking

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This mandate is frustrating truck drivers and making some drivers leave the industry so that they don’t have to use the ELD. Before the mandate, truck drivers were concerned about bad weather, accidents or long detention times because of the potential to miss their next delivery. Now, with the mandate, any form of unexpected delay would put that driver over his/her hours of service mark and force them to stop for the night. This hurts the productivity and profit margins for drivers being paid by the trip.

Before the mandate, a shipper might have taken a six-hour run, made a delivery, picked up a new load and then returned home. Today, the same driver would have to stop because of going over the 11-hour driving limit and secure an overnight parking spot to stop and wait until they can get back on the road. Although this mandate is helping to create a safer environment on the road for all drivers, it is putting pressure on an industry already strapped for capacity.

As a shipper, there are things you can do to minimize the effects of the ELD mandate. You can:

  • Reduce the number of inbound deliveries entering their facilities through consolidation
  • Speed-up driver turn-around in their yards with dock scheduling and order management tools
  • Communicate effectively with promise dates, notifications and issues as they come up
  • Leverage the power of transportation technology to improve operations (a TMS)

 

These tips will help you reduce the number of trucks on the road and save money. It will be interesting to see what comes up in the industry in the coming months.

 

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The ELD Mandate Is Here: What’s Next?

The ELD mandate went into effect on December 18th, 2017, despite the attempts to delay it. The start hasn’t been smooth, many have been feeling the effects of it, but many are getting used to what is now a reality. A big topic of discussion is whether the mandate will remain in place, but it appears it is.ELD_Mandate_1.jpg

Presently, there are remaining questions about the enforcement and technical aspects of the mandate. Issues have been sprouting for fleet managers and drivers that no one expected until the mandate launched.

With some fleets rushing to be compliant by the 18th, some learned that their devices were not meeting the proper requirements that have been outlined by the Federal Motor Carrier Safety Administration (FMCSA). The problem has been that fleets have opted for a fast and cheap alternative for an ELD device without understanding the requirements needed for that device.

This has left confusion among owners about whether or not their fleet is in compliance. If not in compliance, there is only an 8-day grace period to make the switch to a proper device or they face a penalty from the FMCSA. Many fleets have been complaining about the costs associated.

The Owner-Operator Independent Drivers Association (OOIDA), who opposed the mandate, has been receiving a multitude of negative feedback regarding the ELDs and the providers for them. They had once received over 50 calls in a day regarding a complaint about the ELDs. It’s assumed that the providers for the ELDs are not prepared to deal with the owner-operators yet as they are only used to dealing with large fleets.

Enforcement for the ELD mandate has been finicky to start. The FMCSA has enforcement personnel that began documenting violations during roadside inspections, and in some cases, issuing citations to those without a compliant ELD. But some drivers have not issued a citation dependent on the situation (i.e. Device not working abruptly, device notice to be switched etc.…). They will still issue citations for hour of service (HOS) violations though, so be prepared for that if it is to happen. Starting April 1st, 2018, enforcement will be allowed to place drivers out of service if they fail to present the required device.

Talking about being finicky, the technology still isn’t perfect. So, drivers who recently have been dealing with issues regarding their ELD have to find a workable solution if they are being inspected. Drivers have had to resort to the previous style of paper logging to record their hours of service because of a failed ELD solution. The fleet usually has records if the device fails but it creates an inconvenience for both the fleet and the driver. Enforcement will no doubt issue a violation if a driver cannot produce logs.

Either way, you put it, the ELD has not been running as smooth as the FMCSA has hoped. It is expected that the problems will continue to persist until the mandate is pulled back as some have hoped. Unless the technology can be perfected, there are still variables of error that can occur.

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How Shippers Can Prepare for the ELD Mandate

The Electronic Logging Device (ELD) Mandate is happening whether your company likes it or not. There are critics, and there are supporters – no matter the side you’re on, your company needs to prepare for the inevitable. To help, we’ve laid out 4 tips for you to prepare for the ELD Mandate.

ELDs are a hot topic in the transportation industry. What’s the impact on capacity? Do I need to be ELD compliant? Why are we switching?

While there’s no clear consensus on the impact on capacity, it’s important to remember one thing: the hours of service (HOS) each driver has in a day/week is not changing. The mandate is not changing HOS for drivers, rather ELD will change the method of recording the hours.

Previously, we’ve covered what the ELD Mandate means for you. Now it’s time to lay out a few steps you can take to prepare for the mandate.

Truck Driver Holding TabletPlan Ahead

You’ve heard this a thousand times: “Add lead time” –  that’s only because we truly mean it!

Short lead times can mean higher carrier rejection rates. In an ideal world, 48 hours lead time is needed for every shipment. Longer lead times increase carrier commitment and better chances of securing the capacity you need.

Be Proactive with Carriers

If you do business with a third-party logistics company (3PL), the 3PL should assess which of its contracted carriers utilize ELDs or have a game plan to begin utilizing.

If you do not use a 3PL – make sure you’re talking with your carrier(s) to get a better understanding of their timeline for implementation and what it means for you.

 Realistic Transit Time Expectations

Once the mandate is in place, shippers are likely to see an increase in the time it takes a shipment from the time it’s picked up to the time of delivery.

The reasoning? The HOS restrictions will be more successfully enforced. Drivers may be stuck with a full load pending a reset to their HOS if they don’t plan accordingly.

 Expect Price Hikes

The ELD mandate is predicted to severely shrink freight capacity due to the number of carriers who can’t (or will not) comply. When capacity shrinks, prices increase.

The percentage of increase has yet to be determined, but be prepared come December 18, 2017 for a surge in prices.

Ultimately, the decision on how to prepare, act, and recover from the ELD mandate is up to you and your business. As we approach the implementation date (December 18, 2017), PLS Logistics will continue to monitor for updates or changes to the ELD mandate.

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ELD Mandate: What you need to know

The Electronic Logging Device (ELD) Mandate has been a wildly popular topic of discussion for years. The U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) announced that motor carriers must begin using ELDs on all trucks and commercial buses. Carriers and drivers have until December 18, 2017 to comply.

What does this mean for you?

The ELD mandate is designed to increase commercial motor vehicle safety, reduce paperwork, and improve Hours of Service (HOS) compliance.

Impact on Capacity

The estimated 3 million drivers who are currently using paper logs, are likely to experience decreased capacity when switching to electronic logs. The drivers that will be most affected by the mandate are the ones that have not been compliant with the HOS regulations. These drivers are estimated to see as much as a double-digit reduction in productivity.

Long-term Benefits

While this new regulation will see negative short-term impacts, the long-term benefits outweigh the costs.

In the immediate future, trucking companies will pay around $500 per truck for the ELD device. The FMCSA estimates the mandate will save the industry around $3 billion annually through reduced paperwork and fewer accidents.

The ELD mandate will also make it more difficult for drivers to misrepresent their driving time, consequently reducing HOS violations. By enforcing this policy driver fatigue will be reduced and prevent fatalities and injuries.

The mandate will also reduce liability to shippers due to fewer accidents by non-compliant drivers.

iStock-831064408.jpgDo I need to be ELD compliant?

Drivers who are currently using automatic onboard recording devices (AOBRDs) or install those before the December deadline will be grandfathered in – giving them an additional 2 years to update the technology.

Additionally, drivers who operate under the short haul exemption don’t have to comply with the mandate. A short haul driver “operates within a 100 air-mile radius of the normal work reporting location,” according to FMCSA. This exemption is only if the driver’s duties are less than 8 days in a 30-day period.

 

Questions about the ELD mandate? Contact one of our truckload specialists today.

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The Interrelated Issues Facing the Trucking Industry

The American Trucking Association projects that the trucking industry is poised for serious growth by 2022. The forecast suggests that overall revenue for the industry will rise almost 66% and tonnage will increase 24% by 2022.

However, 2016’s economy saw slow growth, shipping rates and volumes. Due to low demand, excess inventory and infrastructure bottlenecks, revenue YOY only rose 0.2%. But 2017’s trucking outlook improves: demand, spending and manufacturing are expected to pick up.

The driver shortage still overshadows the industry, and is expected to get worse. There aren’t enough qualified drivers filling open positions, and the aging workforce is retiring.

Adding to the enduring driver shortage, the ELD mandate has caused some drivers and small carriers to exit the industry completely. 51% of carriers indicated that they’ve lost drivers who did not want to operate under ELDs. ELDs are mandated for use by all commercial drivers who track HOS begins December 2017. 81% of large fleets (more than 250 trucks) reported that they have already achieved full ELD implementation, while small fleets (less than 250 trucks) are much slower to ELD integration; only 33% have fully integrated ELDs into their fleet.

Shippers have little interest in using carriers that are non-compliant. Some shippers are stepping up and asking carriers to begin installing ELDs now. According to John Larkin of Stifel Financial Corp., shippers have decided it’s too risky to wait until December to see if their core carriers have sufficiently implemented the technology.

“Based purely on regulatory issues, we’re predicting we’re going to hit 100% capacity utilization sometime in the middle of the year,” says Larry Gross, FTR.

The other regulatory issue facing the trucking industry? Hours-of-Service and the outcome of the FMCSA’s studies. The association’s results will greatly affect the rules on driver rest periods. With stricter operation rules, drivers’ productivity will take a hit, which in turn will tighten capacity. Plus, carriers will find additional pressure to increase pay to keep drivers and have technology available so that drivers can be on schedule.

Experts expect a capacity crunch to hit the industry in late 2017. “A 1-2% shift in capacity could be an earthquake. That shift and a little spark to demand will give you that ‘2014’ feel,” says Brian Fielkon, Jetco Delivery.

The trucking industry is constantly changing; oil prices fluctuate, regulations are authorized and/or challenged, technological advances streamline processes, and environmental responsibility continues to move up the priority list. Carriers and shippers can work with a 3PL to enhance their businesses, connect to a larger network and focus on core competencies.

Learn More: Expectations in Freight Transportation (2017 Edition)

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Shipper Strategy: What to Do as ELD Mandate Threatens Capacity

The trucking industry is adjusting as fuel prices fluctuate, the driver shortage continues, and new regulations are authorized.

The ELD mandate is causing waves of concern among shippers and carriers. The rule could drastically change the trucking landscape.

Electronic logging devices (ELDs) are predicted to bring safety and proficiency to the industry. The DOT estimates the devices will save $1.7 billion and reduce the number of truck accidents by more than 1,800 a year.

Fleets that have already installed ELDs say they’re able to monitor drivers’ hours more closely and make strategic planning decisions to maximize productivity. The availability of data will increase exponentially because ELDs transmit information to and from trucks and operators.

About half of the trucking industry has installed ELDs – the half that has not is made up almost entirely of small carriers who don’t want to or can’t make the monetary, technological investment.

Even though the rule has positive implications, it affects about 3 million truck drivers. When the mandate is official law in December 2017, more drivers and carriers, particularly owner-operators and small carriers, are expected to leave the industry.

Most drivers or carriers will leave the industry because:

  • They’ve failed to adopt or understand the technology
  • Small- and mid-sized carriers can’t afford the initial investment and upkeep
  • They’ve ignored HOS rules in the past and are operating illegally
  • Drivers fear that time at loading docks, traffic congestion, and poor scheduling will chip away at earning time, leaving them with less than they had going into the mandate

ELDs Threaten Capacity

If more drivers and carriers leave the industry, it would result in a serious capacity issue. Capacity could be cut between 3-5% once ELDs are mandatory, and, considerable hikes in freight volumes are projected in the coming years. In 2015, trucks moved 64% of freight tonnage, and by 2045, tonnage is expected to increase to 69 million tons per day.

More freight and less capacity creates competition for trailer space, which leads to higher shipping rates.

With the threat of tight capacity, shippers should create a transportation management plan, accommodate drivers’ needs and schedules, invest in a TMS, and collaborate to create backhauls or other shipping options. Shippers have to consider rates, driver coercion, and pickup and delivery times.

Broader Effects of ELDs

For carriers who don’t leave the industry, once the initial challenges of ELD adoption are overcome, ELDs will offer carriers two serious benefits: 1) more effective asset utilization and 2) innovative routing solutions for freight moves. Then, shippers will benefit from these new carrier capabilities.

As the economy evolves and businesses grow, shipper-3PL relationships will broaden. Expand your relationship with a 3PL to identify solutions to ongoing pain points like capacity shortages and rate increases. 3PLs provide valuable expertise and enable more productivity, better customer experiences and transportation cost reductions.

A 3PL has long-standing agreements with carriers and shipping companies to help increase efficiency of all parties. As smaller carriers are adjusting to the implementation of ELDs, a 3PL will be a valuable partner to help keep shipping costs down.

In the long-run, ELDs will improve asset utilization for drivers and carriers, but in the meantime, it could create headaches for shippers by taking away needed capacity and increasing rates.

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Will Shippers Benefit from the ELD Mandate?

All interstate commercial trucks must install and update electronic logging devices (ELDs) by November 30, 2017. An ELD allows truck drivers and commercial carriers to efficiently record and track their hours of service. 

ELDs are a welcomed gain for safety and efficiency in the transportation industry. Fleets and drivers have the opportunity to maximize drive times and reduce manual paperwork. Shippers will see advantages, too; ELDs can increase shippers revenue and provide ways to streamline transportation processes.

The FMCSA’s mandate will affect more than 3.5 million truck drivers and was created to optimize driver performance, reduce carrier’s fuel costs, eliminate downtime and create safer roads.

  • ELDs will save each truck driver about 20 hours of time, according to the FMCSA, previously used to fill out paper driver logs.
  • ELDs will reduce fuel costs by observing truck idle times. Companies can encourage drivers to boost fuel efficiency with incentives.
  • ELDs will decrease vehicle downtime by 15% and improve vehicle utilization by 13%.
  • Drivers using ELDs have a lower total crash rate and preventable crash rate compared to fleets without ELD technology.

Shippers realize the advantages of working with carriers/drivers who use ELDs.

Once ELDs are set up, there is more visibility of fleets and drivers. An ELD automatically records drive time, monitors when the truck is in motion, records duty status, miles driven, and location information. It’s easy to tell when a driver is moving or waiting, and how many hours are left on a particular route. This real-time visibility helps shippers and carriers schedule accurate pick up times and sufficient dock door labor.

As a shipper, you have to be mindful of the driver’s time, especially while capacity is tight and carriers choose to work with those on their preferred shipper list. With ELDs, it’s easy to track the time a shipper clocked into a shipper’s facility and how long they were there. If the driver is stuck at a location for a prolonged amount of time, it could hurt the shipper’s status.

ELDs allow shippers to proactively improve driver efficiency by being flexible with pickup and delivery times, having labor ready to unload or load freight, and by being a driver-friendly facility. This improves their ability to secure capacity on a regular basis and helps keep shipping costs low from fewer upcharges and accessorial fees.

ELDs are powerful tools that will help reduce truck driver fatigue, decrease downtime and improve highway safety. With paper logs, there wasn’t this kind of real-time driver visibility. As more carriers implement ELDs in their fleets, the benefits for shippers will grow.

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