A Shipper’s Perspective: The Impact of Electronic Logging Devices

In December 2017, electronic logging devices (ELD’s) will become mandatory for all truck carriers, both public and private, who currently require logbooks to document the Record of Duty Status for each driver. This has been legislated in the USA, and is expected to be mirrored in Canada. Many shippers dismiss this mandate, considering it irrelevant to their business – it’s the carrier’s problem. True, but the ramifications could be extensive.

ELD’s effectively automate the drivers’ process of documenting his/her hours of service – on duty, off duty, driving, etc. Information is pulled from the truck’s Engine Control Module along with GPS location information. The electronic logbook application on the driver’s smartphone or tablet records the truck status and location. The driver simply adds notes as required.

This is truly disruptive technology. With current paper logbooks, drivers manually enter their duty status. Here’s the rub – many drivers are ‘less-than-accurate’ in recording their hours. Self-reporting compliance is fraught with problems, and temptations. Some simple adjustments can add hours on to their day, enabling them to meet delivery times, get back to their base without taking a break, or simply to make more money. ELD’s eliminate the ability to make ‘adjustments’.

What does this mean for shippers?

Industry capacity turmoil:

  • Drivers may make less money. Today, their payroll timesheet doesn’t necessarily match their official logbook. If they’re paid by miles/kms, they’ll make less if they’ve been running over the allowed hours. Potential reduced pay will add another disincentive to the growing driver shortage problem.
  • The trucking industry capacity has been overstated for years. No one knows just by how much, but a conservative estimate is that hours-of-service logbooks are regularly ‘adjusted’ by 10%. There are carriers, and drivers, who always run in full compliance, but we’ve all heard examples of drivers running 2, or even 3, logbooks simultaneously
  • Capacity will probably cycle from an initial reduction, to a gradual increase. Companies will have to use the drivers’ hours much more efficiently. A BB&T survey* of 5,000 trucks showed that drivers used less than 60% of available hours actually driving. Most of their on-duty time is spent waiting – waiting to be loaded, waiting to be unloaded.

Your loads:

  • If drivers are delayed for any reason, they may not make the delivery time. For example, they could be just 1 hour away from the customer, but may run out of hours and have to pull over for the mandatory break (8-10 hours). Currently, they could make the delivery, and tweak their logbook.
  • Dispatchers will have full real-time visibility of each driver’s duty status and truck location. No more vague, or not so vague, coercion of drivers to make deadlines. The drivers’ hours of service details automatically become a matter of corporate record. Carriers can no longer bury infractions or plead ignorance. Anticipate lots of delivery expectation failures.

Become a Preferred Shipper:

It’s simply good business to keep your transportation suppliers fiscally healthy, operating legally, and eager to move your next load.

  • Pay compensatory rates. Build a costing model for your company to acquire and run trucks, drivers, mechanics, etc. An honest assessment of those costs will help you determine what fair rates are required to keep a carrier healthy. Expect transportation rate corrections, probably all as increases.
  • Rebuild your load and unload processes. Sure, you may be paying for the extra wait time, but the inefficiency is death to predictive dispatching. Have the loads checked and staged, ready to be loaded. Use load seals – they eliminate the unloading checking process, and the driver can get back on the road ASAP.
  • Give loading/unloading priorities to longer hauls. They are more susceptible to timed delivery failures.
  • Provide parking, so drivers can take their breaks in a controlled environment, not some backstreet of an industrial park.
  • Use the technology to ensure that your load is being transported legally. You will be able to request a driver’s electronic Hours of Service download before you hand him the load. This is especially important for the transportation of dangerous goods. ‘Joint and Several Legal Liability’ precedents expose damage costs to all parties involved in a transportation incident.

There are many carriers today operating a version of the Electronic Logging Devices, (which may or may not be in compliance with the new regulations). Talk to them. And there are shippers that currently insist on carriers using ELD’s. Talk to them too.

There will be a few chaotic years ahead of us. Hopefully, we will come out the other end with a safer, more stable, and better managed transportation industry.

*Albrecht, Thomas. ‘2015: More of the same? Or is a lull out there?’

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