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VOL. 10 | NO. 49 | Saturday, December 2, 2017

Trucking Firms Prepare for Electronic Logging Device Mandate

By Michael Waddell

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The trucking industry’s controversial electronic logging device mandate goes into effect Dec. 18, and local trucking companies and drivers have been preparing for most of the year. The ELD helps measure and monitor that drivers are not on the road too many hours each day, that they take mandatory breaks at the appropriate times, and that they are not driving too many hours during a consecutive seven-day period.

Kolos Varga, a truck driver with Intermodal Cartage Co., sits in the cab of one the company’s trucks equipped with the newest electronic logging device technology. (Memphis News/Houston Cofield)

Earlier this year, some truckers participated in “ELD or Me” protests in Washington, D.C., while others took to the streets in Fresno, California, to protest the implementation of the rule, which has proved controversial among small owner-operators.

“We’ve had drivers quit over it because it will have the tendency to reduce the number of hours they can work,” said Ozark Motor Lines safety compliance manager Larry Phillips. “Once everyone is on [ELDs], it will restrict what they can do because the drivers who were on paper logs before could fudge their numbers.”

Ozark manages a fleet of more than 700 trucks, all of which are ELD-compliant at this point. The company owns most of its trucks but also deals with some smaller owner-operators.

The logging devices are expected to result in an annual net benefit of more than $1 billion by reducing the amount of required industry paperwork, and it’s also estimated they will save 26 lives and prevent 562 injuries resulting from crashes involving large commercial motor vehicles on an annual basis, according to the Federal Motor Carrier Safety Administration.

Intermodal Cartage Co. has been in ELD compliance for the past eight years and has watched as the technology has evolved, become more sensitive, and now involves the use of cellphone and tablet apps.

“It’s just much cleaner,” said IMC president Joel Henry. “We’re looking at good, clean, factual data versus the paper logs.”

The industry estimates a 7 to 12 percent negative impact on productivity for each truck.

“I see it as much more than that in our specific industry, the dray industry, because it’s an industry that’s so fragmented,” Henry said. “The majority of the companies have less than 20 trucks. Drivers were able to get 3,000 to 4,000 miles per week before, versus 2,500 now.”

He expects a significant crunch for capacity to get cargo moved.

Without a doubt, some owners-operators are not happy. Smaller companies with few trucks are looking at an expense to implement, buy and manage the devices.

CarrierLists.com surveyed 2,300 customers since Sept. 8, the majority of them with 20 trucks or fewer, and only 41 percent of the carriers had installed ELDs. Among fleets with 21 or more trucks, only 55 percent had installed them.

“So there’s still a lot of LTL (less-than-truckload) carriers that have all the equipment, but they’re still not done with the installation or the training of the drivers,” said Brandon Musso, director of business development for transportation, distribution & logistics at Vaco, a talent search and placement firm. “Some smaller truck fleets will not be able to afford it, and they’ll go out of business.”

Musso sees losing 10 percent to 15 percent of his network who are not ready for the ELD mandate by Dec. 18.

“It’s the perfect storm of capacity and driver shortage,” he said. “I think the driver is shortage is going to be even higher than anticipated because there are just no trucks available to move the freight. [The mandate] will weigh heavily on the driver force getting into the industry. They’re not going to be able to make the money they once did. That’s why some are choosing other industries to go into.”

Musso is proposing legislation next year to cut down on wasted time during loading and unloading at stops. He wants to see it reduced from three hours to two hours, which would give the drivers more productive time on the road each day.

“It helps the carrier make more money, it helps the driver turn more freight – because generally if the truck’s not moving, it’s not making money,” Musso said. “The shippers hold all the cards. They’re controlling the freight turns. So it’s always a problem with drivers sitting and waiting.”

Henry also is seeing a change in the market with some smaller companies shutting down and getting out of the market.

“Some smaller companies aren’t going to want to spend the money on it or deal with the lost revenue that the new ELDs are going to have on their company,” said Henry. “We needed to help level the playing field from a competitive standpoint because we have been in compliance for so long. The companies that were or are running illegal can price their movements cheaper because they can get more revenue and productivity out of those trucks.”

IMC Cos. manages a fleet of 1,750 trucks, including owner-operators, lease-to-owns and company fleet trucks, and all are in 100 percent compliance with the mandate.

Roughly 25 companies have jumped into the ELD data management space, and Henry thinks maybe 10 of those will make it long-term.

“What it has done is bring down the cost of the ELD itself,” Henry said, adding that eight years ago, a device with much less technology would have cost $1,500, plus $60 a month in service costs.

“Today the units cost roughly $750 each, with about $50 per month from the service provider, Choice,” Henry said,

IMC Cos. also uses the devices to communicate with drivers, transfer arrival and departure information, and scan documents, among other things.

Drivers have until April before penalties will be enforced on hours of service.

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