How Will the ELD Mandate Affect Shippers?

Amanda CallahanFreight Trucking, GeneralLeave a Comment

Warehousing and Distribution

The introduction of the electronic logging device (ELD) is showing every sign of changing the shipping business in the foreseeable future. It is going to affect carriers and shippers alike. Truckers have already felt the pinch. There is every chance that the same kind of disruption will be felt within the shipping sector. Indeed, this was one of the topics of discussion at the JOC Inland Distribution Conference that was recently held in Atlanta, Georgia.

John Seidl of Integrated Risk Solutions has noted the problem of false logs. It can lead to cost increases and other losses. The Federal Motor Carrier Safety Administration (FMCSA) announced ELD as a safety measure. But, it seems they do not do enough trial runs or the necessary consultation to test whether the devices are right for the industry.

The Purpose of ELD Mandates

ELD is designed to synchronize with the engine of a given vehicle so that the time driven is recorded. It is considered to be a more accurate and efficient record of work hours for those that are paid in that way. Thus, it is easy to find out whether a particular driver is over or under-performing in their driving schedules. This can help to improve road safety in the long run.

A mandate set a deadline by which all trucks must have a fully installed and operational ELD. Shippers and carriers who used the old paper logs had to replace them by December 18th 2017, the cutoff date. The enforcement protocols will make new demands on shipping companies as well as the scheduling of deliveries.

What are the costs of these mandates?

ELD, by its nature, reduces daily driving time. Even if the false logs are increasing in the era of ELD, the fact is that those that are using manual logs have even more opportunities to falsify the records. The workers themselves are concerned about the resultant impact on their flexibility and working hours. Others are concerned about privacy issues. These have emerged as the key concerns:

  • ELDs are inflexible. The FMCSA requirement of a maximum of 55 hours a week can dent into the wages of those that are paid on a piecemeal basis.
  • Higher costs: The initial installation is about $584 with an additional monthly fee of $20. Some efforts have been made to add competition to the mix and to make use of smartphones as a cheaper alternative.

Nevertheless, the industry specialists have been enthusiastic about the possibilities of ELD. Seidl argues, “Why is this law in place? Because people die when some truck drivers work too hard…They work too hard because they don’t make a lot of money, and shippers hold them up, and they have to make up for lost time. In my view, the ELD is a godsend for the drivers.”

Mark Willis of Road Dog Trucking, a radio program on Sirius XM Radio, highlighted the fact that drivers now have to be warier of their accumulated driving time and distance to ensure they are not harming themselves in the process of working hard.

Chris Spear of the American Trucking Association sees it as an opportunity for drivers to work even more efficiently than before by making the most of the weekly hours available to them. However, that is based on an assumption that the workers will be willing to put in the effort to achieve high performance on reduced hours. It is also notable that the maximum of 55 hours is quite high anyway when compared to other occupations in the USA.  

Eric Lien of Arrive Logistics sees it more as a collaborative effort between carriers, brokers, shippers, and receivers in order to make things work. That means new lines of communication and collaboration that were not previously in existence.

How is it affecting workflow?

Todd Spencer of the Owner-Operator Independent Drivers Association has talked about the cost increments as a result of the ELD mandate. He also talked about the bureaucratic burden of filling out different forms and reporting to the authorities.

It is estimated by a JOC survey that up to 20% of shippers and other players within the industry did not prepare for the changes. That may mean making avoidable but costly mistakes. For example, rate hikes went up by up to 10% in the period following the announcement. Next year, they are expected to go as high as 20% in terms of the increments.

FMCSA hoped that ELD will force drivers to comply with the maximum driving hours’ rules that are designed to ensure safety. ELD tells the controller about mileage as well as location, including any vehicle movements.

Nevertheless, there are still false logs, which rose by 11.5% in 2017 when compared to 2016. However, those false logs had already been rising even without ELD. For example, in 2016, the rise was 9.6%. The number of drivers put out of service as a consequence of falsifying logs has jumped by 14.6% in 2017, and they now number nearly 3,300.

What is the expected outcome of the mandate?

[a] There will be less temptation and incentive to go over the maximum 55 hours.
[b] Drivers and their employers will try to get around the rules.
[c] The possibility of aggressive and speedy driving may increase accidents.

However, there are also some good points that should not be forgotten during the debate as follows.

[i] ELD is a great monitoring tool.
[ii] We all get safer roads even with truckers en-route to their business destinations.
[iii] There is convenience in terms of less paperwork for recording work done.

All in all, it seems that the ELDs will bring more benefits than demerits. Of course, there are teething problems. Some might use these as an excuse not to do all the work that is required in order to make the system operational. The key is doing the early preparation and making sure that there are systems in place for the ELD regime.

Amanda Callahan

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