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How the ELD Mandate Will (and Won’t) Change the Marketplace

ELD-Qs

The recent electronic logging device (ELD) mandate has brought up a lot of questions. A few weeks ago, we looked at providing some of the basic information about the mandate. Today I want to answer some of the more specific questions about how the mandate will influence the market—and how it won’t.

How much capacity will this remove from the market between now and December 2017?
A common view is that 30-40% of commercial drivers already use ELDs or automatic on-board recording devices (AOBRDs), which leaves up to 70% of drivers who will have to comply within two years. There seems to be two distinct and different discussions that stem from this question. The first depends on your assumptions about how many drivers consistently violate hours of service (HOS) rules to run more miles per day than they are legally able to.

Drivers can legally drive up to 55 hours per week. If you think paper log drivers average 60 hours per week now, that could indeed cause a potential reduction of hours. If, on the other hand, you think drivers currently have a difficult time driving all 55 hours allowed because of scheduling, loading, and unloading issues, then there would be no noticeable change in available productivity.

The second answer to this question involves some deeper knowledge about recording hours. On paper logs, 15-minute increments are used to record hours, while ELDs record to the minute. If a driver changes status three or four times per day, he or she could legally lose 20-30 minutes of on the road time if he or she switched from paper logs to ELDs.

How much does an ELD cost?
The Federal Motor Carrier Safety Administration (FMCSA) was sensitive to the issue of costs and eliminated a couple of proposed requirements to reduce costs to carriers. The FMCSA estimates that it will cost an average of $584 per truck to purchase and install an ELD, with an estimated ongoing monthly service fee of $20 per truck.

The FMCSA will allow ELD applications for smartphones to comply. This may bring down the cost of ELD compliance significantly.

Do ELDs make carriers less efficient?
The FMCSA specifically outlines paperwork and record keeping requirements that are eliminated by ELDs. In addition, a number of studies have concluded that after the learning curve of adopting an ELD, carriers actually experience increased efficiency through better visibility, predictability, and planning tools through the ELDs. This is one major reason that up to 40% of all drivers voluntarily use ELDs today.

Will shippers have to monitor drivers’ HOS?
No. Nothing in the ELD final rule or the Coercion final rule requires shippers or brokers to actively monitor and manage individual drivers’ HOS compliance.

How will the mandate affect drivers who cross U.S. borders into Canada and Mexico?
Drivers who regularly haul cross-border freight will be required to use ELDs if they are within the United States. However, drivers who keep RODS (Record of Duty Status) no more than 8 days during any 30-day period, or do not travel outside of a 100-mile radius of the border, will qualify for an exemption from the ELD rule. It should be noted that some ELDs on the market allow for multiple HOS protocols.

What happens if a driver does not meet the required implementation deadline?
A driver who is required to use ELDs and does not could be placed out of service, similar to if the driver was driving on a suspended commercial driver’s license (CDL).

Are ELDs also GPS systems? Does this mean all drivers will be satellite tracked and traced within two years?
The FMCSA does require time and location stamps for certain events (such as transitions into or out of driving time and every hour of driving time); however, they are very careful to say that the ELD rule is not intended in any way to require location monitoring of any sort. ELDs are specific to a driver and not a load or truck. There is no standard transmission data or service required by the FMCSA for location data, so this would need to be established though the driver’s employer or a third party service or application, just like it is today.

While we looked at the mandate in further detail today, you may still have lingering questions. Be sure to check out the FMCSA website and talk to your logistics provider—especially if you have specific concerns about how the mandate will affect your business.

Comments

Mark Montague

Jason, I was looking for some discussion about the ELD preventing delivery when the driver is say, 35 minutes away and runs out of hours. Are there any exceptions for traffic or accident delays? How could this potentially impact the rest of the driver's week? My thesis is that it will have a significant impact on scheduling and will reduce capacity.

4.19.16

Reply

    Jason Craig

    Thanks for the question, Mark. Each driver’s situation is unique and it is difficult to extrapolate market wide impacts based on the example you provided. The ELD mandate does not change the Hours of Service rule at all, just the method of compliance. So an unexpected traffic delay under paper logs will have the same impact as an unexpected traffic delay under ELD’s. I would refer you to the FMCSA Driver Guide for HOS for more specifics https://www.fmcsa.dot.gov/sites/fmcsa.dot.gov/files/docs/Drivers%20Guide%20to%20HOS%202015_508.pdf

    4.20.16

Dispatch

" However, if the driver enters the United States fewer than eight times per month, or does not travel outside of a 100-mile radius of the border, he or she will qualify for an exemption from the ELD rule" - this is incorrect. The rule is "Drivers who keep RODS no more than 8 days during any 30-day period" - That is not the same as drivers entering the USA less that 8 times per month. Please correct this.

Please see the FMCSA Guide
https://www.fmcsa.dot.gov/faq/what-exceptions-are-allowed-electronic-logging-device-rule

5.10.16

Reply

    Jason Craig

    Thank you for pointing this out. It has been updated.

    5.10.16

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