On the three-month anniversary of the federal government’s electronic logging device (ELD) mandate taking effect, we at ELITE decided to take a look at what we’ve learned from the legislation to-date.
Spot market pricing will be affected for the foreseeable future
ELD’s have done far more than create new rules for carriers; they are changing the fundamental economics of the freight management marketplace. At ELITE we’ve seen rates increase by 20-30%, fluctuating each week. It’s simple economics: demand for carriers is high (+121%), the supply of carriers is low (-8.5%), so the price is bound to increase. The result is Load-to-Truck ratios ballooning by 200% or more in every freight category.
With the next phase of the mandate kicking in on April 1st, right in time for produce season, there is no reason to expect that rates will normalize in the near future.
ELD’s signal need for all parties to make long-needed changes
ELD’s may impact carriers most directly – requiring investment in technology and tools to meet the minimum requirements of the FMCSA mandate – but carriers and 3PL’s need to adapt as well (and not just by accounting for higher rates). Driver detention is one metric that demonstrates the need for industry-wide change. When drivers are held up for pick-up or delivery, there is a snowball effect that can occur:
- The driver runs out of legal driving hours and cannot transport the goods from origin to destination in a timely manner.
- The driver may not be able to reach the destination due to the hours of service (HOS) rules.
- The driver may miss his next pick up and lose his next load if he is not unloaded promptly as the next shipper may use another carrier to move the load.
Those and other effects impact everyone in the supply chain.
Shippers and 3PL’s, like ELITE, must work together to minimize detention by improving areas in the supply chain to:
- Confirm freight is prepared for loading prior to booking the carrier
- Communicate with the warehouse the need for the truck to be loaded within a specified timeframe
- Add additional lumpers/warehouse staff to load/unload trucks more promptly (it is likely cheaper than detention fees)
- … and more.
ELD devices are a headache for many drivers and hurting carriers
The Owner Operator Independent Drivers Association (OOIDA) reports that “truckers have routinely communicated substantial troubles they’ve experienced related to devices, including several vendor-wide systems failures, faulty GPS tracking, inaccurate recording of duty statuses, engine disablements, speed irregularities, and abysmal customer service from manufacturers.”
So, if you are a trucker and you’re having problems with your ELD function, you’re not alone.
Technology is never perfect, but the struggles that truckers are having seem to be amplified by cheap-and-easy ELD solutions on the market that only meet the minimum requirements. In the end, those cheaper solutions may create enormous costs for the carrier if their ELD doesn’t function properly or breaks.
Those carriers that have adopted the ELD technology have enjoyed savings in administrative time/paperwork and improved communication with dispatchers. Possibly the most important impact of the legislation, once it is fully implemented, will be improved safety on American roadways; it is estimated improved safety will save nearly $600 million/year in crash reductions. Shippers and 3PL’s are being affected as well.
But given the numerous waivers, exemptions, and changes to the legislation being discussed, the future impact of ELD’s is confusing at best. How will rates be impacted in the long-term? Can the industry adapt to embrace the change in a way that will create a net-positive impact? Will truckers leave the business altogether because of the challenges… or simply because this isn’t what they got into the trucking for in the first place (some already have)?
And the biggest question of all – how will this mandate affect consumers pocketbooks in years to come? – is one that nobody seems to have a good answer to.
Truckers have routinely communicated substantial troubles they’ve experienced related to devices, including several vendor-wide systems failures, faulty GPS tracking, inaccurate recording of duty statuses, engine disablements, speed irregularities, and abysmal customer service from manufacturers.” – Owner Operator Independent Drivers Association (OOIDA)