How the ELD mandate impacts the trucking industry

 

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

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.

 

COST

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.

 

SAFETY

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.

 

Sources:

ELDFacts
FleetOwner.com
OverDriveOnline
FMCSA.gov

FSMA Rules & Regulations: Everything You Need to Know in 2017

In 2011, President Obama signed the Food Safety Modernization Act (FSMA), in an effort to improve food safety and monitor food handling regulations more closely. After years of inactivity, the FSMA rule has been made final, presenting a host of new challenges for shippers, carriers, and supply chain professionals.

The newly enacted legislation places a focus on prevention-related measures from farm to table, pertaining specifically to transportation. In order to decrease the risk of food contamination during transportation, the new rule requires shippers, loaders, carriers, and receivers involved in transporting food to use the highest standard of sanitary practices. It should be noted, that these requirements exclude transportation by ship or air.

The FSMA rule requires strict adherence to various shipper-defined requirements in order to keep the food safe and unaltered during transportation. If any specific requirements are not met by shippers, the receiving facility is unable to accept the product into their facility. Thus, if you don’t remain compliant, companies could potentially lose a lot of money.

To ensure you meet compliance, we’ve compiled a guide with everything you need to know about FSMA rules and regulations.

 

Who does FSMA affect?

The new FSMA act has few exceptions.  The rule applies to shippers, receivers, loaders and carriers who transport food in the U.S. Also effected, are any shippers who transport food into the country (from Canada or Mexico). However, the rule does not apply to shippers or exporters who ship food from the U.S. to surrounding countries by motor or rail.

 

What should 3PLs do comply?

Asset-based carriers will of course need to comply. Straight 3PLs without any of their own assets will need to reexamine their truck procurement process and approved-carrier list to make sure that the trucks you broker in to pick up food loads are in compliance. Expect food customers to begin asking, and to begin requiring new paperwork to prove that the trucks you’re sending in are in full compliance.

 

When does it take effect?

The deadline to meet compliance requirements varies. For instance, if you are a small business that employs less than 500 people and motor carriers, then you have up to two years to comply.

See the referenced compliance sheet from GMA.org for a breakdown.

Here’s a PDF with the breakdown.

 

Key Requirement Categories

Vehicle & Transportation Equipment
Vehicles must be suitable and adequately cleaned for the use of food transportation. They must be able to maintain the necessary temperatures to ensure safe transport of human or animal food.

Operations
During transportation, the measures taken throughout the operation must be in compliance with the new rule in order to ensure food safety.  Here are some of the key elements:

  • Temperature Control and Monitoring – Proper refrigeration or temperature control of all food products
  • Cross- Contamination – Correct management of transportation units and storage facilities to prevent cross-contamination. This includes meeting proper sanitation requirements and the correct segregating of foods vs. non-foods in the same area to eliminate any potential risk.
  • Food Safety Plan – A specific food safety plan must be put in place that is documented and being followed by all parties involved.

Training
Specific training of carrier personnel must be upheld and documented. Once the training in completed, the carrier is responsible for all sanitary conditions during the transport of the products.

Records
All procedures must be highly documented. This includes written procedures and processes, any legal agreements, and training documentation.  Usually, it’s necessary to file these documents for at least 12 months following transportation.
For more information and the official FSMA Rule on Sanitary Transportation, please visit FDA.gov