Freight for Thought: ELDs WILL impact your shipping, but HOW?

Many of our manufacturing and construction partners are feeling anxious about the impending Electronic Logging Device (ELD) regulations coming into effect this December.  The information below puts the need-to-knows and widespread implications in laymen’s terms for those industries that use trucks to haul any of their goods….which is likely most of our readers.

What are the current regulations that are going away?

• The federal HOS regulations require a truck driver to maintain a daily accurate record of that day’s hours driven in their log book; DOT inspectors are allowed to examine a driver’s log book at any time for discrepancies that can result in heavy fines or CDL suspensions.
• Given this manual process it’s a long term problem that drivers have been taking advantage of this honor system.
• Once a single driver has logged on for the day, they are allowed to work for a period of 14 consecutive hours; to drive for no more than 11 hours before taking a mandatory 10–hour shutdown before driving again.
• A truck driver may not drive after 60/70 hours consecutive on duty in 7/8 consecutive days. A mandatory 34-hour off duty restart must occur before he can drive again.
• Currently, drivers can legally run 620-680 miles per day, but most OTR drivers legally average between 550-600 miles a day due to road congestion and construction delays.

What will change?

• Electronic Logging Devices (ELD’s) are used to record a truck driver’s Record of Duty Status (RODS), will replace the current paper log book.
• Federal mandate that all trucks are ELD compliant by December 18th, 2017. Auditing of the ELD’s is still being determined, but most of this will be done by the carrier themselves. (See this handy chart for clarification.)
• There is a phase II of compliance stage occurring between December 18, 2017 and December 16th, 2019, with full compliance occurring on December 16th, 2019.

What are the benefits of the ELD mandate?

• The purpose of the ELD mandate is to reduce driver-related crashes by ensuring less violations and higher safety compliance.
• Record keeping will be easier, taking place in a consistent format across all carriers.
• ELDs will provide untapped visibility to dispatchers AND shippers, using real-time data for improved tracking and tracing.
• With this real-time data, more metrics can be tracked to evaluate driver safety and efficiency (fuel usage, speed, braking, etc.)

Shipper impacts?

Good question!  Unfortunately, there will be some growing pains that will undoubtedly occur during Phase II-III compliance.  Can we prepare for it?  Absolutely.

• Immediately, the experts and large carriers alike fear a truck capacity shortage.
• It has been suggested the ELDs will add to the driver shortage in smaller to mid-size carriers.
  • The larger trucking fleets are already 88% ELD compliant and appear prepared for the federal mandate.
• ELDs will likely push some of the smaller mom-and-pop carriers out of business for lack of up front costs associated with becoming 100% compliant.
• Due to the factors listed, it is assumed that freight rates may spike until there is a majority adoption of the ELD technology.

How do shippers prepare?

This is where the rubber meets the road.  Preparedness will be a key factor in supply chain success as technology and regulations become more evolved.  Supply chains need to be proactive and strategic to keep pace, by:

• Assessing and planning ahead for raw material providers
• Advance scheduling for upcoming transportation needs to allow for unforeseen delays
• Reduce the amount of expedited or “premium” freight
• Discuss with your carriers or brokers how to leverage freight volumes, consolidate trips, and stretch truck capacity
• Evaluate where improvements can be made to your carrier providers, i.e. limiting wait times, frequent communication and longer lead time, etc.

With these tips, we hope the impacts of the ELD initiative will be a smoother transition to an inevitable future.  The early bird gets the worm, and in this case, the early adopters stand to benefit the most.

About the Author

Since joining Sunset Transportation in 1997, Mick McGrory has served Sunset Transportation in senior executive leadership positions in operations, sales, and logistics management.  His current position of Vice President of Strategic Accounts focuses on maintenance and growth of Sunset’s wide-ranging customer portfolio, including industry verticals such as construction, manufacturing, consumables, and consumer products.

Mick has been instrumental in the development, management, and financial performance across the business in his 20 years with the company.  Prior to coming to work for Sunset Transportation, Mick spent 10 years working with multiple LTL & TL carrier companies in various positions of responsibility.  He graduated from Fontbonne University with his Master’s degree in Business Administration, and minored in Finance.  Mick resides in St. Louis with his wife and three children.