September 26, 2017

Panelists Agree That Late ELD Adopters Will Experience Challenges Ahead

Panelists Agree That Late ELD Adopters Will Experience Challenges Ahead

In a recent panel discussion, experts said that carriers which still haven’t transitioned their fleets to comply with the upcoming ELD (Electronic Logging Device) mandate are bound to face challenges in the near future.

Some of those difficulties and challenges would include ELD supply shortage, loss of productivity, a high driver turnover rate, and customer expectations not being met. These problems can go as far as ELD units not performing as advertised and, even worse, not being compliant with the regulatory requirements mentioned in the ELD mandate.

This panel discussion took place during the 13th Annual FTR Transportation Conference held in Indianapolis, Indiana, from September 12 to 14, 2017.

The panelists included prominent trucking industry experts, such as Ron Guzzi (Home Depot’s senior manager of carrier relations) and Steve Wutke (Prime Inc.’s vice president of sales).

The panel was also joined by Annette Sandberg (expert consultant on carrier safety and former FMCSA administrator) and Meredith Neizer (Armada’s vice president of transportation operations).

Late ELD Adoption

After surviving multiple legislative attempts that were made by some trucking groups to either repeal or delay the ELD mandate, the ELD rule’s December 18 implementation date is now pretty much final.

Carriers who have been holding off their fleet’s compliance with the ELD mandate would now have to hasten their transition process to keep up with the fast-approaching implementation deadline.

Annette Sandberg noted that those who haven’t transitioned yet include “quite a few” fleets whose compliance relies on the decision of owner-operators.

According to Sandberg:

We’re going to start to see a lot of activity in this area. I’m getting a lot of questions from carriers about how to implement quickly, what vendors to pick; but my biggest concern, as a former regulator, is the number of ELD vendors that are currently on the FMCSA ELD list that probably shouldn’t be.”

Sandberg asserted that the self-certification process that the FMCSA imposed on ELD providers allowed non-compliant electronic logs to enter the market — raising problems for fleets who are unable to determine if the device is compliant or not.

She recounted the events of being called to assist a motor carrier with a fleet size of about 3000 trucks.

Upon hearing the carrier’s concern that “something wasn’t quite right” with the ELDs that were installed in the vehicles, she took a closer look at the devices that were used.

It was apparent at the end of the first day that this device should never have been self-certified. It wasn’t even minimally compliant with the automatic onboard recording device (AOBRD) regulation that’s been in effect for 20 years.”

Sandberg also added that there is no certainty on whether the amount of ELDs that are currently available in the market could meet the demand of late ELD adopters over the coming weeks.

She assures carriers, however, that they don’t have to worry about experiencing any hauling-operation disruptions that are caused by compliance issues with the ELD mandate.

She notes that this is because of the recent announcement of the CVSA (Commercial Vehicle Safety Alliance) to delay the enforcement of the ELD mandate’s out-of-service criteria to a later date instead.

This delay means that motor vehicles cannot be placed out-of-service for not being compliant with the ELD mandate up until April 2018 — allowing carriers to have some leeway in transitioning their fleets to complying with the ELD mandate’s requirements.

In her own words, she said:

And if you read the fine print of the rule, even if a trucking company doesn’t have an ELD on their trucks, it’s going to take FMCSA a while to go in and do a compliance review before they can take strict enforcement action — either downgrading their safety rating or shutting that carrier down. So I think it’s going to be at least a year before we start seeing some carriers slough out of the market for not having complied.”

Panelist Reactions and Forecasts

Though implementation delay to the mandate’s out-of-service criteria would give late adopters some breathing space to comply with the FMCSA, some carriers who are already compliant with the ELD mandate find this decision troubling.

Panelist Steve Wutke, for example, shared his view by saying:

It’s disappointing that they’re not going to be enforcing it immediately. People have had all kinds of time to get e-logged up. It’s the right thing to do. As an asset carrier running 6,000 trucks, we think it’s a safer world that we’re in, but these guys have chosen to drag their feet and ride it out.”

Wutke predicts that some of the challenges that late ELD adopters might have to face would include “the reality of the shortfall of revenue” and “an education process” for their drivers that would take up a lot of time and money.

In his own words, he said:

We’ve been on e-logs for five years now, and I can tell you they’re going to lose 4-7% in productivity. Paper-log folks, they do not log properly — they cheat. I know, because when we were on paper, we did. You could create a lot of extra time on your logbook. That gap in productivity is going to be huge.”

He continues by saying:

I don’t really think people are focused on that yet. It’s not the cost of getting e-logged up: There’s going to be a change in their network, a shortfall of revenue that the trucks are going to miss on a weekly basis, and then there’s the driver turnover that’s going to follow. There’s going to be a huge learning curve. It just won’t happen overnight.

Because of these foreseen difficulties, panelist Ron Guzzi explained why his company decided to transition to ELDs ahead of time:

“We’re also wise enough to know that when the industry is forced to have ELDs, it’s going to have an impact on utilization and lead to increased rates over the next six months. But our carriers are already there, and I think we’re already paying for their adjusted utilization from when they made the changes.

Guzzi noted that shippers and brokers in the trucking industry have just recently increased their demand in working with carriers who have ELD compliant fleets.

Guzzi said that his asset-based company does not feel pressured by these demands because its fleets are already compliant “in 97- 98% range.”

He further added:

We consider ourselves to be an asset-based shipper, so we do very little with brokerage. This is part of the reason. We don’t feel there’s a direct impact to us because we deal with the right carriers.”

Even panelist Meredith Neizer mentioned that their company was “proactive” in transitioning their operations to being compliant with the ELD mandate — by requiring all their fleets to be equipped with ELDs by the end of 2016.

She said:

We have a very small part of our network that is brokered, but we now also have a requirement with our partner-brokers that had to be able to identify which of their owner-operators were ELD compliant, and ensure that our loads were tendered only to ELD-compliant owner-operators.

Neizer continues by saying:

We and our clients are big believers in the ELD mandate from a safety standpoint and from a competitive standpoint. So we’re well ahead of it, and we’re in good shape by the time the date rolls around.”

Because of the many disadvantages that carriers could face in delaying their compliance to the ELD mandate’s requirements up until the last minute, Wutke recommends that business owners should start transitioning their fleets as early as today:

We’ve had a lot of feedback from insurance carriers that tell us if a carrier isn’t e-logged up, he likely will have a hard time buying insurance — and if it does, it’s going to be a nosebleed rate. That alone will create some washout of smaller guys. I’m not belittling the smaller guys, and we need that capacity, so we need to find solutions to get through this next crunch, for sure.

Reasons Not to Delay ELD Implementation

There are only less than three months left before the ELD mandate’s compliance date would take effect.

Despite this, however, trucking industry experts have been claiming that there is still a considerable portion of the industry’s population who have not yet installed electronic logging devices.

Although there are a lot of disadvantages that are associated with waiting for the last minute, here are the top five reasons why carriers should not delay the ELD implementation process:

  1. Not being able to select the best ELD provider for your fleets;
  2. Risk experiencing a possible ELD supply shortage;
  3. Risk experiencing higher ELD prices near the mandate deadline;
  4. Not enough time to give your ELDs a proper technical evaluation; and,
  5. Not enough time to properly train your drivers and fleet administrators how to operate in a post-ELD world.

We recently wrote an article that discusses why fleets should not wait for ELD implementation and instead install electronic logging devices right now.

To learn more, read 5 Reasons You Should Not Wait for ELD Implementation

What’s Next?

Because there are no advantages whatsoever in delaying your fleets from complying with the mandate’s requirements, we strongly recommend that you start equipping your vehicles with ELDs as early as today.

If your drivers are still using paper logs to record Hours of Service, allow us to help you with your transition towards ELD mandate compliance.

Our KeepTruckin ELDs are powered by the #1 rated logbook app and fleet management system. Moreover, KeepTruckin ELDs are FMCSA-certified, 100% compliant, and start from just $20 per month with no additional charges.

For more information, call us at 855-434-ELOG or email us at support@keeptruckin.com.

Also, don’t forget to request a free demo of the KeepTruckin ELD solution by clicking the following blue button.

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