Trucking

One Year Away: How Will the ELD Mandate Affect Your Business?

Now is the time to start preparing your fleet for electronic logging.

On Dec. 18, 2017, a federal rule will take effect that requires most commercial trucks to be equipped with electronic logging devices (ELD).

The ELD mandate could change how some trucking companies, particularly smaller fleets, operate. Many trucking groups oppose the new rule. In 2016, the Owner-Operator Independent Drivers Association filed a legal challenge against the ELD mandate, but a U.S. Court of Appeals ruled in favor of the regulation. Like it or not, most trucking companies will have to use ELDs by the end of 2017.

In a recent survey of RTS Carrier Services customers, 57% of respondents said they expect ELDs to significantly impact their trucking companies. More than 20% of those who answered the survey said they fear the ELD mandate will put them out of business. Several industry studies have found that the ELD rule is currently the biggest worry for fleet owners and drivers alike.

“We will go broke with this law,” wrote one owner-operator who responded to RTS Carrier Services’ survey.

Hopefully, being required to log your drivers’ hours-of-service electronically will not have tremendous consequences for your trucking company. Over the next 12 months, here are some ways to minimize the impact of the ELD mandate:

Start Preparing Now

Even though the OOIDA may appeal the court decision on the ELD rule, the clock is still ticking on when the mandate will take effect. Now is the time to start anticipating how ELDs will impact your fleet and your customers’ shipping operations. How much should you budget to purchase the technology and what FMCSA-approved ELD devices should you acquire? Will you need to add drivers and trucks to meet customer demands as enforcement of electronic logging tightens? Should you consider factoring or other forms of financing to improve cash flow during your ELD transition?

Electronic logs may have a short-term impact on your business, but careful planning and a timeline for adoption can help your fleet adjust to the new requirements.

Communicate with Your Customers

Shippers are also concerned about ELDs and how the new regulation will affect their transportation options. Communicate to your customers about how and when your fleet will comply with the ELD mandate. Ask for their help in making sure that detention time at pick-up or delivery has a minimal impact on your drivers’ hours. Being proactive about the ELD rule will assure shippers that you have a plan in place and that your operations will continue uninterrupted.

Drive Older Trucks

Not every trucking company will have to use ELDs. The mandate does not apply to any commercial trucks that are older than the model year 2000. Other exemptions include regional and local carriers that operate within 100 miles of their terminals and tow-away businesses that transport trucks from factories to dealerships. For more information on what the ELD rule includes, read our article “Some Facts You May Not Know About the E-Log Mandate.”

Expect a Dip in Productivity

Carriers that have already installed ELDs or use old-school electronic onboard recorders often report a decline in fleet productivity as they adopt the new systems and train drivers. Once a trucking company adapts to the new technology, productivity often bounces back. During that learning period, do what you can to expedite shipping and receiving, and work with your shippers to keep driver detention time to a minimum.

If your company can successfully adapt to electronic logging, the ELD regulations may eventually work to your benefit. Industry experts predict the mandate will run some fleets out of business, which will lead to lower trucking capacity and an increase in load rates. By 2018, your fleet might see a significant boost in revenue, due in part to the ELD mandate.

Sources: Journal of Commerce, Overdrive, Heavy Duty Trucking, FMCSA.dot.gov