What is ELD Mandate?
The Electronic Logging Device (ELD) mandate is a law to help provide a safe work environment for drivers, make it easier and faster to accurately track, manage, and share RODS (Records Of Duty Status) data. It was applied on December 2017. An ELD attaches with a vehicle engine to automatically record driving time. This technology has GPS tracking and voice command to help truck drivers complete their jobs.
When & why it got established?
On December 18th, 2017, the FMCSA (Federal Motor Carrier Safety Administration) enforced a mandate, according to that all truck drivers have to use an ELD to track their working hours. ELDs are harder for a driver to manipulate compared to traditional paper logs. Because the FMCSA also regulates a driver’s legal working hours via the HOS regulations. Driver logs are checked periodically during millions of roadside inspections performed each year.
This law requires truck driver to have an ELD, placed inside their truck’s engine to record driving hours. The electronic solution records the driving time when the truck is in motion. Drivers can also login to the ELD and easily select “on-duty,” “off-duty,” or “on-duty not driving,” and quickly see their recorded driving hours in a day.
ELDs have a diverse price range, but the average cost is $500 per truck. Although it’s not cheap, but the cost savings an ELD brings, is the factor to look upon. The economic benefits that come from reductions of paperwork shows that the long-term savings of ELDs are worth of its high price. The FMCSA (Federal Motor Carrier Safety Administration) calculated that a single truck driver saves over $700 per year in just paperwork saving. But ELDs save way much more than that. They save a significant amount of time to truckers. Between completing paperwork and filing documents to carriers, truckers can waste over 20 hours of drive time a year, resulting in approximately $2,000 in lost revenue each year. ELDs helps to save this time and money loss, so that truckers can use their time as efficiently as possible.
Effects of ELD mandate law enforcement on trucking industry
Trucking companies feel that this mandate is not that much helpful to them and have raised a number of reasons why the rule is unfair.
The strongest argument is that big trucking firms aren’t going to experience nearly the same economic burden as small motor carriers to comply. As everyone knows, nearly all large companies already have on-board equipment that records hours. That equipment pays for itself by making it easier to keep track of drivers’ movements for load planning, dispatching and accounting purposes.
Other than the equipment’s high cost, the small vendors are making a point against the ELD mandate, like privacy are falling flat. Although it’s not the real thing that electronic monitoring of hours of service is the problem, it’s the HOS rules themselves.
Truckers must comply with the federal rule limiting driving to no more than 11 hours a day within a 14-hour workday. Drivers must then be off duty for 10 consecutive hours. But anyone who has driven a truck knows that HOS are violated on a daily basis by approximately all drivers in many segments of the industry.
ELDs aren’t the fail-safe recording devices that regulators and the big trucking companies claim. The systems currently used by most big companies don’t even pick up all driving time because they don’t log a driver as driving until they reach a certain speed, so yard moves may not be picked up. ELDs won’t pick up all driving time either because they won’t log the time drivers are behind the wheel with the engine running but not moving — say waiting in line or waiting to back into a dock — as driving time (as HOS require). Even the most easily monitored activity won’t be accurately recorded by ELDs.
Some of the drivers who don’t want ELDs are the few who run over hours because they have really good, long loads, that give them one or two long days of driving. The big companies can’t run these loads in just one or two days because their automatic logging systems pick up the vast majority of their drivers’ driving time and automatically record the start of their 14-hour window. Truckers who are running paper logs and “divide by 60” to calculate their driving time and start their 14-hour clock after the fact have an advantage over big companies that ELDs will eliminate.
The American Trucking Associations and big carriers are happy to point the finger at these drivers and say they only oppose the ELD mandate because they’re violating HOS rules and subsequently give the industry a bad name. Most of the big guys are thrilled to focused on inaccuracy in logging around driving time and the start of a driver’s 14-hour work window. It prevents anyone from focusing on the much bigger problem of log falsification which is, logging waiting and non-driving work time as off-duty time.
With their short average length of hauls and lots of waiting and non-driving work time relative to driving time, the big carriers must be quite happy with the ELD mandate. Their drivers wish they could run into a problem of running over 60 hours of driving in a week. But they don’t even come close. As recent analysis, they only spend about half of their time driving paid miles. That makes the current ELD solution to overworking drivers that suits the big carriers quite handy. They don’t pay their drivers for the 30 or 40 hours a week they spend waiting and doing non-driving tasks. ELDs won’t record those hours automatically. And drivers won’t manually record those hours because they will take away from the time they can drive and actually get paid.
ELDs won’t stop companies from overworking drivers. They won’t stop shippers from keeping them unpaid at docks for hours neither They won’t stop drivers from working 80 hours a week or more. ELDs will, however, end the HOS debate for the foreseeable future. But they won’t save nearly as many as paying drivers for all the work they do would.
In fact, there is an obvious solution that the big carriers have managed to keep off the table.
The systems they use are linked to GPS and many already “geo-fence” customer locations to know when a truck arrives and departs. It would be easy to automatically log drivers as on-duty when they are on a customer’s location. That would clear up the biggest area of log falsification, the dozens of hours that drivers sit unpaid at customer locations. That would hit the big carriers hard.
Many who opposed the ELD mandate, suggested that the move from paper logs to electronic logs would be crucial. Small fleet owners and owner operators were most concerned. Some said that it was a privacy concern, and potentially violated the fourth amendment. Although courts didn’t agree with that.
Many people predicted that rates would increase laterand it did, but it is unknown how much can be attributed to the ELD mandate. Other aspects which areaffecting increases could be from higher freight or a lack of skilled drivers. Some people suggested that the ELD mandate would intensify the driver shortage by pushing them out of the industry and by putting some hard limits on service hours. Others pointed to the $500 per truck cost to install the ELDs is too huge and adversely affect smaller carriers particularly.
On the other side, those in favor of the mandate supported the new rule as a way to make highways better and safer for all drivers in compare to previous time. Proponents also claimed that ELDs would improve accuracy of drive times by moving away from less-reliable, and easily influenceable written paper logs. It’s worth noting that there were more than 30k false log violations in 2017, an increase of around 20 percent over five years. The FMCSA claimed that it would save carriers $1.6 billion annually in paperwork reductions and another $395 million in crash reduction costs.
Though the mandate has taken adjusting in the long run, ELD installation is a worthy investment. The ELDs’ job is to record valuable information to streamline management operations, reduce time spent on administrative tasks, and overall decrease costs for businesses. With new technology impacting almost every industry and changing the way business is done around the globe, the trucking industry is no exception. The use of electronic logging devices is where the future of the trucking and freight industry is improving the safety and productivity of drivers across the whole country.
Price to move up by 30-50 percent
Hikes in driver pay, healthcare costs and fuel prices, plus full enforcement of the electronic logging device (ELD) order, are all poised to create more difficult “headwinds” for truckers.
As a result, trucking costs are poised to rise 8% to 10% this year, creating “inflationary times” within the industry.
The trucking industry isdriving into hard times, comprised of a driver supply shortage, rising freight demand, tougher regulations, and inflationary trucking costs. Driver recruiting, retention and hours of service [HOS] issues have formed a big problem over the last 11 years and the ELD mandate is generating it more.
Shortage of truck drivers
Perhaps the current driver shortage will continue for the next eight years, as an aging driver workforce heads for retirement, regulations push out other drivers, and the trucking lifestyle discourages younger folks from joining the industry.
According to truckers, “We’re short about 60,000 drivers now and that will increase to 160,000 by 2026 if nothing changes.” Big and small TL fleet turnover from 2016 to 2017 ranged from 64% to 90%. But at 90%, you are turning over all of your drivers on an annual basis which is not sustainable.
To change that 90%-plus turnover rate,the driver experience must change. Also, Young people are not interested in the job as exists today; sleeping in the truck, being the lowest person in the chain of command, being away from home for long periods of time, eating food in gas station.That is not appealing to a young worker.
Truckers believes by improving pay, more drivers will stay. “Right now, entry pay is about $48k a year; that translates to about $16 per hour. That makes being an Uber driver more attractive. So, we need to get closer to $100,000.” Yet the need for higher pay is going to drive trucking costs further up as well.
“Driver pay worth 38% in terms of total trucking expense and pay will still need to be increased”. “Healthcare represents 17% of total trucking costs and it is definitely going to go up as it does in every other industry. Then there is fuel, which makes up 13% of total trucking costs and fuel is up 50 cents per gallon compared to last year. That’s partly due to a spike in oil prices that is resulting in the highest [oil] prices since 2014. Those are all inflationary markers – meaning inflation is on its way compare to each year.”
Then there is the impact of the ELD mandate, a mandate that yet another incidence of where “the government trying to help” is not working outas per planning. There are multiple areas where the ELD mandate will impact businesses – delayed shipments, overtime for warehouse workers, chargebacks, and drops in productivity.
Now is the time to start thinking about how to handle all of that as full enforcement of the ELD rule plays out over next 30 to 90 days.
Late deliveries due to ELD Mandate
US shippers say their shipment transit times are getting longer, owing to the USELD mandate. An analysis of shipper data by the logistics company shows transit times creeping up on 450 to 550-mile routes, as well as in longer lanes, with costs per mile for shippers rising 4 percent as a result.
“We’ve been able to help identify the subset of lanes that will be most drastically affected, anything between 450 and 550 miles”. On those lanes, transit times on average rose from 1.05 transit days before Dec. 18, when the ELD mandate took effect, to 1.22 transit days after the mandate, an increase of 16.2 percent.
That equates to about 4 additional hours of transit time, on average, enough to turn a 7-hour lane into an 11-hour lane, pushing drivers to the limits of their daily legal driving time. Truckers would likely clock out beyond the legal limit when any delays, unexpected stops, or congestion are taken into account. That is enough to turn a same-day trip into a next-day delivery.
That’s a pretty big impact. “The cost to run the truck hasn’t changed, so these guys are just losing time,” and that is pushing up freight costs. The impact on the shorter lanes is greater than on longer runs. “On shipments between 750 and 1,000 miles, we saw a 10 percent increase in transit days,” which measure time from departure to arrival.
Few companies say, they have to face problems like; increasingly tight delivery deadlines and, in some cases, penalties for late deliveries. Unexpected changes in transit times makes it more difficult for those shippers to provide reliable service to their customers. Lanes longer than 450 miles are shifting from one- to two-day deliveries.
Conclusion
For shippers, the idea is not to go looking for a new trucking company but to align your operation with the carrier’s network so trucking is smooth. “All these networks have been optimized, but when the ELD came in everything got turned on its head.” Accurate transit-time data provides the transparency shippers need to make informed decisions.
The ELD mandate is a factor in the overall tightening of truckload capacity, along with faster US economic growth and pockets of extreme weather. It is difficult to quantify the ELD impact separately from those other factors. Counting the additional hours and minutes in transit days, as opposed to just rising freight costs, yields a clearer measure of the mandate’s effect.
It will take us few more years to exactly get the overall impact of ELD mandate and being able to justify if it could work as planned or not worthy at all. But in these 2 years we could suspect clearly that mandate needs a few changes accordingly and it could be work for more betterment.