As most of you know, the Electronic Logging Device (ELD) mandate is soon upon us as it becomes effective December 18 2017.
For many shippers, this mandate will be significant game changer in how they are doing business now, and how they will need to do it in the future.
Industry analysts project that we can expect the expedited segment of our industry and more specifically trucks less than 10,000 lbs (exempt from ELD mandate) with benefit greatly for obvious reasons (one being that they are EXEMPT from ELD). Additionally, local cartage business will see increased business opportunities as well because there will be a spike in final mile requirements when truckload carriers run out of hours just prior to delivery.
For trucks over 10,000 GVW (CDL trucks) ELDs will cause a lack of flexibility in driver Hours of Service, so trucks can’t always move as far in any given day. That means less capacity will be available when we need it.
Longer hauls will be less desirable, and hauls of 500 or more miles will likely not be able to make next-day delivery commitments.
Two of the main reasons are parking and detention.
• Parking: Drivers won’t be able to fudge their logs, so they’ll be more likely to shut down early to find parking before they run out of hours.
• Detention: Any delay at the loading dock will jeopardize the next pick up or delivery appointment. This costs the carrier even more when drivers’ hours can’t be extended.
• I think we will soon see the end of 1-2 hours free time at the dock loading and unloading, and an increase in the hourly detention rate — time will become an even more valuable commodity.
It is no secret that Drivers and owner-operators do manipulate paper logs now, usually to gain a little extra flexibility. They want to pick up and deliver on time, and they also want to make more money. They’re not dishonest, but if they’re in danger of missing a truck payment, they are tempted to cut a few corners on the log book and run more miles per day.
Once the ELDs are installed, there will be no more secrets. Electronic logs can’t be altered. Those same drivers will not be able to make up the time, so they have no choice but to raise their rates. It’s the only way for them to make more money in a given day.
On the customer side, brokers and forwarders can expect to get a lot more power-only and team loads from shippers.
• Power-Only: The largest fleets have been placing trailers at customer sites for the past few years. Big shippers have been buying and positioning trailers, too. Pretty soon, they’ll be asking you to find trucks for power-only moves. This is great work for owner-operators, because it’s so time-efficient. If you have customers who can set up drop-and-hook operations, we should be able to get them trucks at competitive rates.
• Team Drivers: Today we think of a 500-mile haul as a one-day trip. Starting December 18, it will become increasingly difficult to guarantee next-day delivery on a 500-mile run unless we hire team drivers. Actually, “guarantee” is already too strong, and this applies to almost any load with strict appointment times.
Prax Worldwide continues to work with our technology partners to find innovative ways to not only find additional capacity, but to ensure that drivers have the hours available to make an on time delivery. Shippers will play a huge part in the fate of their freight delivering on time, without drivers having to shut down due to lack of available hours.
We recommend that you have “the Talk” with your customers today!