This time last year, the trucking industry and its customers were just settling into compliance with a mandate from the Federal Motor Carrier Safety Administration (FMCSA) that required electronic logging devices (ELDs) on commercial vehicles with a gross weight of over 10,000 pounds (4,500kg).
In the months preceding the initial deadline, predictions varied widely about the impact of ELDs on truck capacity and the transport market. A few weeks ahead of the December deadline, the FMCSA, responding in part to concerns from state authorities regarding enforcement training and the variety of ELD systems in the market, opted to have an initial phase-in period, with a deadline extension throughout the first quarter of 2018 for the installation of the devices.
By the time the December 2017 implementation deadline arrived, it was not the cataclysmic event some had feared would strand trucks on the side of the road, nor did it remove significant capacity from an already constrained market struggling to meet the logistical needs of a booming American economy. Even since the April 1, 2018 hard enforcement deadline, the actual impact of ELDs has been much subtler.
“There was a lot of talk in the run-up to the December deadline. No one was really sure what was going to happen with capacity,” says Kevin Hill, president of CarrierLists, which began weekly polling of small and mid-sized fleets about their ELD plans and compliance several months ahead of the December 2017 deadline.
Some 75% of the fleets CarrierLists polled were ready with e-logging systems ahead of that deadline – up from just 50% in October. In the final ELD poll conducted by CarrierLists in the week following the full implementation in April, 97% of fleets had compliant systems.
“As soon as April 1 arrived, it was basically business as usual. There were changes with the ‘tweener’ lanes [400 to 600-mile routes], but there were no huge disruptions in the supply chain. The supply chain adjusted, and drivers are now driving with ELDs on their trucks,” comments Hill.
Measuring timeELDs have brought about some changes in terms of the way a commercial vehicle driver’s work and rest periods are measured, however.
The most immediate impact has been a heightened awareness of available driving times and duty times, both daily and cumulatively. Electronic logging has eliminated the option of ‘stretching’ time via ‘creative’ paper log entries, and its stricter limitations have generated additional costs for carriers.
“As soon as April 1 arrived, it was basically business as usual. There were changes with the ‘tweener’ lanes [400 to 600-mile routes], but there were no huge disruptions in the supply chain” - Kevin Hill, CarrierLists
Apart from the expense of installing the devices and training drivers, there has also been a loss of productivity. Some industry estimates put this at 3-5%, though CarrierLists surveys during 2018 suggest it could be more like 5-10%.
In some cases, drivers have been tempted to leave the industry rather than comply with the new mandate, given the US’s strong economy and buoyant general labour market. Discussions between carriers and customers about particular contracts, meanwhile, have had to focus more on the value of a professional driver’s time, rather than just capacity and rates.
Contesting the changeSome bodies, like the Owner-Operator Independent Driver Association (OOIDA), have argued long and hard against the introduction of the new rules (see Taking hours of service seriously below), suggesting that ELDs are unfair to smaller companies. But the impact does seem to have varied from sub-sector to sub-sector.
“When you look at the automotive supply chain related to the hours of service (HOS), we see lanes in the south-east and Midwest, going down to Mexico. Or, we see the inverse with flows coming up from Mexico to final assembly facilities in the Midwest, south-east and Canada,” observes Bob Poulos, CEO of V3 Transportation, a firm with 250 trucks that has been ELD-compliant since its launch in 2013.
“Most of the hefty lengths of hauls are serviced by teams, and that business has not been impacted over the past year,” he adds. “However, I do believe the automotive supply chain has experienced a bigger impact with the length of haul that is between 500 and 700 miles.”
Poulos says OEMs and tier suppliers can no longer put solo drivers on runs exceeding 500 miles, and that those moving perishable products have had to make some significant changes as a result.
“Drivers on paper logs would push it where they could,” says Poulos. “As a solo driver, it’s very hard to do 600 miles legally in a day. That’s where a lot of the cheating was taking place, and that’s where one of the impacts has been during the past year.”
Counting the costThe cost of compliance with the new regulations was one of the factors that made large truck capacity more expensive in the US last year, as pay rises swept across the industry to cover lost miles of earnings for drivers.
In addition to this, carriers faced competition for staff from other industries adding jobs within a strong US economy, tightening capacity further due to heightened demand across multiple industry verticals.
One of the concerns expressed by the OOIDA prior to the initial December deadline was that its members, particularly those close to retirement age, would simply park their trucks up and find work in other industries, rather than go through the time and expense of converting to an e-log system.
OOIDA president Todd Spencer says the association has seen an increase in departures from the industry during the past year. “We’ve heard from lots of drivers who have simply said: ‘I’m not going do this any more. I can do as well or better in lots of other things’,” he says. “And there certainly are those kinds of opportunities now. We have had a lot of people who have moved into the fracking business and things like that. Construction’s also pretty good.”
Customer frictionSome fleets have also had problems with their customers as a result of the introduction of ELDs.
[mpu_ad]One long-time fleet executive who asked to not be identified told Automotive Logistics about one of the big three US OEMs issuing a bid package for a full truckload service in 2018, but ultimately pulling it due to the price increases and time requirements outlined by carriers bidding on the business.
“The OEM essentially threw out the bid. They didn’t like the results and it was like, ‘Can’t we go back to what we were doing before?’,” says the fleet executive. “But here’s the reality of the situation: contract rates are up, commensurate with contract grades; and contract rates for automotive are up, commensurate with what we’re seeing across the board in all industries.”
The use of time has also become a significant consideration in itself for carriers and their customers. The just-in-time, just-in-sequence nature of the automotive supply chain gives it an advantage over other industries, where loading and unloading delays have long been an issue for truck fleets looking to keep their drivers moving.
Penalty clauses for such delays have been around for years but have often lacked bite, not least as creative paper logging could cover any time lost. With ELDs, however, that has all changed, leading some carriers to put detention criteria into place that are sufficiently strong to change customers’ loading and unloading patterns.
“When looking at some of the more significant changes beyond rates, there’s been a big move in the automotive segment this year, led by a lot of the larger fleets, to go back down to one hour of detention, with charges starting after the first hour,” confirms Poulos. “It had universally become the norm to go out to two hours, sometimes three hours before detention charges began. But after the ELD mandate, one hour has really become the norm again.”
Data released in November from a survey of drivers by fleets using the services of CarrierLists revealed that nearly 72% of responding drivers had seen a decrease in their driving hours; while 42% felt they had experienced a decrease in privacy, due to the use of ELDs.
“The biggest dilemma that drivers have always had is not the time they spend driving – it’s the time that’s simply wasted in the loading and unloading environments,” says Spencer. “Now, in some instances, [the change to ELDs] has translated into a little bit of better treatment at shippers and receivers in terms of getting trucks in and out. But that’s not necessarily been across the board. We’re also in a situation where we have no flexibility with the hours of service and now you’ve got this thing that you’re absolutely locked into with the machine and e-logs.”
Enforcement challengesEnforcement of the HOS rules under the new ELD regime has also been far from simple.
From a distance, the new electronic platform has greatly simplified the process. Highway patrol or local law enforcement officials can simply connect to the driver’s ELD and review the data entries made by the system. But with more than 400 ELD systems on the market in the run-up to the implementation deadline in December, law enforcement bodies have had a steep learning curve, with a requirement for training among their staff at least as big as that facing drivers and fleet operators.
The Commercial Vehicle Safety Alliance (CVSA) – a non-profit association comprising local, state, provincial, territorial and federal commercial motor vehicle safety officials and industry representatives – has been watching the implementation with interest over the past year, and points out that, in addition to the multitude of new ELD systems on the market, the FMCSA e-log mandate allows carriers using legacy Automatic On-Board Recording Devices (AOBRDs) a grace period until December 2019 before their trucks are required to have an ELD.
“Everybody’s in kind of an education mode right now – whether it’s an inspector talking to a driver or working through the challenges with electronic hours of service. That’s why when you look at the stats online, those being reported from FMCSA and others, we are seeing historic lows for hours of service violations right now,” explains Collin Mooney, CVSAs’ executive director.
In some cases, notes Mooney, drivers believe they have an ELD and it is actually an AOBRD. But enforcement officers cannot always connect to an AOBRD, because the data collection technology is different.
Inspectors have also encountered data transfer issues, frustrating both enforcement officials and drivers. The FMCSA allowed ELD manufacturers to self-certify their devices rather than using third-party verification, and this has led to some platforms being a bit hit-or-miss – resulting in some drivers failing to comply with HOS rules through no fault of their own, and inspectors deciding not to pursue a hard enforcement line where they believe drivers have been making a reasonable effort to comply.
“I think we have one member who actually is now on his third unit,” says Spencer of OOIDA. “And with the other two units he had, those companies have both ceased doing business. There are lots of problems with the technology not performing as well as you would hope, Generally, enforcement has been kind of tepid.”
Mooney also concedes that some enforcement officials “are taking a leap of faith that the ELD is keeping people more honest than they were in the past. So, they’re not digging as deep into the electronic record of the ELD.”
Another concern for law enforcement has been ELD exemptions that have allowed some segments of the industry to continue using paper logs. All law enforcers can really do about this, says Mooney, is take the long view that the transition from paper to e-logs will move past what has been an extended period of adjustment.
“We’re in this ebb and flow period right now. Some of the things have smoothed out and some of the things are still frustrating until we get them resolved,” he says. “We’ve done the best we can under the circumstances.”
The road aheadGiven the inflexibility, ELDs have prompted further discussion about the hours of service regulations themselves. The FMCSA, for example, has been holding public listening sessions as part of a consultation period on an Advanced Notice of Proposed Rulemaking related to the hours of service.
Mooney anticipates some “big changes” as a result of this process, and Spencer is hopeful that the FMCSA will address some of the rigidness that currently exists within the HOS regulations. The OOIDA has submitted comments and hosted one of the FMCSA listening sessions.
“Compliance with the (current HOS) regulations too often means drivers are driving in the middle of rush-hour traffic. Compliance with the regulations oftentimes means that drivers are driving faster than they would prefer to drive on certain roads and in certain traffic and weather conditions – simply because the goal is compliance with the hours of service regulations,” notes Spencer.
“Our proposal for more flexibility… [would] allow a driver to take a three-hour break, if they need to for whatever reason. It doesn’t give them more hours to drive, but it extends the time that they’re able to drive within their normal hours. Now, having said all of that, flexibility would be nice in a whole lot of situations.”
ELD implementation over the past year has not changed the OOIDA’s views and the association will continue to be vocal about the matter, promises Spencer. “We remain concerned about the constitutional aspects of monitoring and surveillance. And I think far more people ought to be concerned about those things because the government and its efforts in this area are pretty damn scary,” he observes.
“We also remain concerned that while the US Supreme Court may not have given that issue the consideration that they should have, each of these regulations all have to pass muster with state constitutions as well. And we are advised that not all state constitutions are likely to be as permissive about surveillance as some in DC would like them to be.”
One year on, it seems the road ahead for electronic logging devices in the US still has a number of dangerous potholes in it that will need to be circumnavigated with care.
“Compliance with the regulations oftentimes means that drivers are driving faster than they would prefer to drive on certain roads and in certain traffic and weather conditions – simply because the goal is compliance” - Todd Spencer, OOIDA
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- Federal Motor Carrier Safety Administration
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- Owner-Operator Independent Driver Association
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