Over the past few years, the trucking industry has seen a lot of changes. Following the Food Safety Modernization Act (FSMA), signed in 2011- shippers, carriers, and supply chain professionals have been forced to adhere to a new set of strict requirements. In an effort to prevent food-borne illnesses, carriers must comply with a variety of food safety precautions including temperature monitoring, cleanliness, training, and data retention. (You can read more about that here).
The biggest hurdle, however, came in December 2015 when the FMCSA announced the ELD mandate. The new rule requires all commercial motor vehicles to be equipped with certified Electronic Logging Devices (ELDs) in order to enforce accurate hours-of-service (HOS) recordings. The FMCSA reasoning for the new ruling is as follows … “to improve roadway safety by employing technology to strengthen commercial truck and bus drivers’ compliance with hours-of-service regulations that prevent fatigue.”
The ELD mandate is perhaps the biggest change seen by the trucking industry in over 50 years and one that many people are unhappy with. There’s no doubt it will have a dramatic impact on the industry. What’s not as clear, is exactly how. In an effort to gain more clarity on the topic, we will discuss the implications of the ELD mandate and how it impacts the trucking industry.
Productivity is one area that no one seems to agree on. The initial thought was that ELDs would help to increase productivity for drivers by acting as a personal time-management tool. Matter of fact, the FMCSA estimates that the ELD mandate will result in a $2.44 billion savings. Most of which will be attributed to the amount of time drivers will save by not having to complete and submit time logs.
There has been a lot of skeptics, to say the least. Numerous reports have emerged that claim quite the opposite. John Larkin, managing director of transportation capital markets research, estimates the trucking industry will actually lose between 3% and 5% of its overall productivity once the federal regulations for ELDs go into full effect. He adds that small carriers will be most negatively affected, losing an estimated 6% to 10% of overall productivity.
The FMCSA projects the ELDs to save over $1.6 billion annually from paperwork savings alone. They also suggest carriers will save in additional ways, with decreased fuel costs, reduced truck downtime and lowered total crash rates, to name a few. Even still, $1.6 billion in paperwork savings in slightly hard to believe.
Here’s a breakdown of the findings from a Regulatory Impact Analysis by FMCSA.
Estimated paperwork savings per driver per year:
- Driver Filling RODS: $487
- Driver Submitting RODS: $56
- Clerk Filling Rods: $120
- Elimination of paper driver log books: 42
- Total: $705 per year in paperwork savings
Let’s face it, the savings are impressive, but do they make up for the costs of implementing the ELDs? The most common device will cost carriers about $495, per truck. For a small or medium-sized business, that’s a huge expense. One that could drastically change the state of their business.
The driving force behind the ELD mandate is first and foremost, safety. The ELD mandate applies to over 3 million drivers on the road. That’s 3 million drivers that could cause fewer accidents due to fatigue and inaccurate HOS logging. An analysis by the FMCSA, predicts that the ELD mandate will prevent approximately 20 fatalities and 434 injuries each year, due to driver fatigue. By ditching the paper and pen method and adopting the ELD method, it will ensure all drivers are following the specific safety and compliance standards.