With Soft ELD Enforcement Period Over, Shippers Brace for What Comes Next
Although the ELD mandate’s implementation date has come and passed, many fleets are still playing catch up to ensure compliance. This article takes a look at the capacity-related challenges of shippers and carriers; for a deeper dive into solutions, this webinar features Panasonic in discussion with fleet leaders who successfully drove driver adoption while reducing costs.
As of April 2018, there’s been full enforcement of the electronic logging devices mandate (ELD) for commercial motor carriers.
The objective of the rule, according to the Federal Motor Carrier Safety Administration (FMCSA), is to strengthen commercial truck and bus drivers’ compliance with hours-ofservice (HOS) regulations that combat fatigue. ELDs automatically record driving time and monitor engine hours, vehicle movement, miles driven and location information.
Since the ELD mandate formally took effect in December 2017, the subsequent impact on the truckload shippers and carriers, as was expected, has been fairly bumpy on various fronts, according to a recent Logistics Management reader survey.
Some of the capacity-related challenges cited in the survey included familiar obstacles such as the ongoing driver shortage and related tight capacity; confirming tendered offers; carriers not accepting loads if they’re afraid to time out before pick up; and increasing rate pressures brought on by the mandate, with shippers saying they’re having issues getting carriers to accept loads at contracted pricing levels.
What’s more, these concerns were being echoed more than a month before the full enforcement for ELD took effect on April 1. That’s not insignificant, especially when considering that inspectors will now begin pulling commercial motor vehicle drivers off the road based on the out of service criteria (OOSC) if vehicles are not equipped with an ELD. However, motor carriers will be permitted to use a grandfathered automatic onboard recording device until December 16, 2019, according to the Commercial Vehicle Safety Alliance (CVSA).
The challenges coming with adhering to and complying with the ELD mandate are also occurring at a time when various economic fundamentals are showing strong signs of improvement. And with this, freight demand is high, which has led to challenging market conditions for shippers as it relates to securing capacity.
According to Jeff Tucker, CEO of Tucker Co. Worldwide, the nation’s oldest freight brokerage, the December ELD mandate radically changed freight lane pricing and volume patterns during December, January and February.
“Those months were as busy for us as the fall peak months, and it hasn’t let up,” said Tucker. “Volumes are rising, and trucks are harder to find. With that, I expect the end of soft enforcement to be a significant moment in this freight economy and this business cycle. I also expect produce season to make this situation far worse than we’ve seen.”
Tucker added that in the weeks leading up to the end of soft ELD enforcement, carriers were busy actively pursuing relationships with freight brokers that made good sense for them. If a carrier can’t seat more drivers in tractors and is getting paid top dollar for myriad lanes, Tucker said that situation puts them in a position where they’ll need to figure out what the next move is.
“You sort through all the options and refine your lanes to maximize driver happiness, carrier profitability and ROI,” Tucker said. “Well-run carriers are there right now. It may reset many carriers’ clocks on the refining of lanes as well.”
Noel Perry, principal at Transport Futures and chief economist at Truckstop.com, had a different take than Tucker’s, observing that the end of soft ELD compliance would end up being a fairly minor occurrence.
“I expected the ELD enforcement in December to be a non-event,” said Perry. “But based on what the spot market data for December indicated, it was actually a really big event, and is still pretty big now. It’s at record levels and stayed high. I think there’s been a surprising amount of selfenforcement; or, put differently, what we know for sure is that shippers are behaving as if there is self-enforcement, coupled with around 90% of carriers using ELD now. There are not going to be a lot of carriers put aside for not having it in early April.”
There are only a couple of instances in which things on the ELD front could change, according to Perry. One would be in the event that the economy would bloom in the second quarter, which would take things to the next level in terms of capacity utilization. The second would be heavy-handed ELD enforcement that could convince some people that there’s an issue.
“ELDs were designed to allow a trooper to inspect it roadside, analyze it, and determine if a carrier has been running legally,” said Perry. “But it turns out that we lack the technology to download it to the trooper to analyze it properly. The main enforcement that will happen now is to see if an ELD is in a truck and if it’s working, but I don’t think the system is going to have the operable ability to do real-time enforcement for several years. If a carrier has ELD, it’s fine. And if it doesn’t, then they’ll likely get a break, at least at first.”
Copyright Peerless Media May 2018
This article was written by Jeff Berman from Logistics Management (2002) and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to firstname.lastname@example.org.
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