ELD Mandate 2018 • What you need to know • ELD Facts

What’s on the Horizon?

As you should already be aware, the new Electronic Logging Device (ELD) mandate is scheduled to take effect on December 18, 2017.  The ELD mandate will have a significant impact on carrier capacity, which will lead to longer transit times and reduced efficiency.

With that being said, there are a few other issues at hand that currently intimidate trucking industry participants, and there are more concerns on the horizon.  Some of those include the ELD mandate but according to a recent study, that is not what is alarming shippers.  The nation is already impacted by a shortage of drivers, and the lack of qualified drivers continues to decrease every day.  Experienced and qualified drivers are retiring, moving on, or in the next stage of their life.  In the meantime, they have not been replaced.

According to Trucks.com the top four issues of concern for the industry are:

1. Driver Shortage

2. ELD Mandate

3. Hours-of-Service-Regulation

4. Lack of Available Truck Parking

“The driver shortfall could reach 50,000 positions by the end of this year and if trends hold, will grow to more than 174,000 by 2026.” – American Trucking Association

The American Transportation Research Institute (ATRI) recommends that the trucking industry works with state and federal authorities to attract younger drivers through some sort of graduated commercial driver’s license program, or to partner with the Department of Labor to develop a driver recruitment program.  In fact, the United States isn’t the only region with this problem.  The problem exists throughout Europe and especially in Germany at the moment, as well.  So, if you’re currently importing or exporting, you could be facing this problem on both ends of the supply chain.

Good news for current and near future drivers. Wages will most likely go up just by pure demand. Capacity is already tight nationwide. Trucking rates continue to rise as domestic demand increases. Drivers can thank online shopping, e-commerce and a growing U.S. economy for that.  In fact, the ATA projects freight volumes to continue to grow 3.4 percent annually through 2023.

Shippers should definitely take this into consideration.  Once the ELD Mandate goes into effect, not only will the shortage of drivers come into play when trying to find a truck, but the fact that drivers’ allowed driving time will be limited. The ELD mandate requires that truckers use electronic logging devices to monitor driving hours to adhere to current driving time regulations, also known as the hours-of-service regulation.

The number of hours drivers can operate a truck, also known as the hours-of-service regulation, is the industry’s third rank concern as motor carriers and drivers look for increased flexibility in the rules.

Hours of Service Rules

What does it all mean for the shipper or receiver?

For starters, capacity is already tight.  Rates per mile are increasing weekly and they are at an all time high since 2014. With the ELD Mandate in place, a driver won’t be able to push that last hour to destination, for example. A driver will be mandated to pull over and rest.  That could easily delay freight another day, unfortunately even if it means the shipment is only an hour away. It’s good to point out that shippers and receivers must be forgiving and understand what this mandate will mean.

The mandate will force drivers to operate compliantly.  Carriers that are operating compliantly already will see little changes in regards to operating hours, transit times, etc.  They will still be impacted by the cost of the device implementations if this is a new operation for them.  The cost could be burdensome enough for some smaller carriers to go out of business.  Some carriers may push the cost on to their customers, so another reason rates may increase for shippers.  Obviously, the ELD mandate will not help capacity.  This, combined with retiring drivers and the fact that few new drivers are entering the market, will likely keep the market tight. Hurricane rebuilding efforts, retail season, and other seasonality type surges will have their normal impact, as well.

Scarbrough Domestic Supply Chain Specialist, Kim Dulle, states, “Shippers and receivers will need to work efficiently.  Keeping wait times to a minimum will be very important.  For example, most drivers allow for 2 free hours. I don’t expect this amount of time to change.  I do expect that time outside of this grace period will be billed consistently by carriers.  In the past, the billable hours have not always been billed.  For instance, 30 minutes over the 2 free hours would have been forgiven.  I think we can forecast that extra time will be charged as a premium now.  The carriers now have an excuse to do so and will look to offset the ELD costs this way.

When there are more loads than trucks available as in our industry’s current state, carriers can be more selective, while also charging more per mile.

Shippers should give their carriers and brokers lead time to ensure they reserve a truck.  They should not expect drivers to wait to get loaded and they should not expect carriers to haul extensively heavy loads.  Appointment times, especially when limited, will make the freight less attractive, as well. Flexibility is a must. Proactively adjusting operations for picking up orders and adjusting due dates, as well as delivery schedules based off of sensible drive times is also a must.”

If you have specific questions, please email Kim Dulle at kdulle@scarbrough-intl.com.

For more information, visit trucks.com