With soft ELD enforcement period over, shippers and carriers brace for whatever comes next

With the calendar officially having shifted into April, one thing that comes with it, along with springtime, is the full enforcement of the electronic logging devices mandate (ELD) for commercial motor carriers.

The ELD mandate formally took effect in December 2017. The objective of the rule, according to the Federal Motor Carrier Safety Administration (FMCSA), is to strengthen commercial truck and bus drivers’ compliance with hours-of-service (HOS) regulations that combat fatigue. ELDs automatically record driving time and monitor engine hours, vehicle movement, miles driven, and location information.

As previously reported, many trucking observers maintain that the need for ELDs is obvious, with most explaining that the industry has been reliant on paper logs for far too long. And there could likely be economic benefits through ELD usage, as observers say it could likely reduce the effective number of miles a driver could log, further tightening trucking capacity at a time of ongoing limited truck driver supply, rising pay, and higher overall fleet costs.

Since the ELD mandate went into effect near the end of 2017, the subsequent impact on the truckload shippers and carriers, as was expected, has been fairly bumpy on various fronts, according to a recent Logistics Management reader survey.

One of the key themes of the survey was that since ELD went into effect, securing truckload capacity has become more difficult. Some of the challenges related to securing capacity, cited in the survey, included familiar obstacles like: the ongoing driver shortage and tight capacity, confirming tendered offers, and carriers not accepting loads if they are afraid to time out before pick up, as well as other things like increasing rate pressures brought on by the ELD mandate, with shippers saying getting carriers to accept loads at contracted pricing levels.

What’s more, these concerns were being echoed more than a month before the “soft enforcement” for ELD took effect on April 1. That is not insignificant, especially when considering that inspectors will begin placing commercial motor vehicle drivers out of service based on its out of service criteria (OOSC) if their vehicles are not equipped with an ELD, but motor carriers will be permitted to use a grandfathered automatic onboard recording device until December 16, 2019, according to the Commercial Vehicle Safety Alliance (CVSA).

The challenges coming with adhering to and complying with the ELD mandate are also occurring at a time when various economic fundamentals are pointing in the right direction, and freight demand is high, which has led to hectic, and challenging market conditions, especially for shippers, as it relates to securing capacity and rate pressure, too.

Jeff Tucker, CEO of Tucker Co. Worldwide, the nation’s oldest freight brokerage, explained that the December ELD mandate radically changed freight lane pricing and volume patterns of late December, January, and February.

“Those months were as busy for us as the fall peak months, and it hasn’t let up,” he told LM. “Quite the contrary. Volumes are rising. Trucks harder to find. I expect the end of soft enforcement to be a significant moment in this freight economy and this business cycle. I expect produce season to make this situation far worse than we have seen. I don’t use the word ‘historic’ anymore, because 2014 was a speed bump and even the protracted and awful 2003-2005 time period of tough capacity is now downgraded to a tropical storm compared to today’s hurricane. This fall’s peak season is likely to be a Category 5+.”

Tucker also noted that in the weeks leading up to the end of soft ELD enforcement, carriers were busy actively pursuing relationships with freight brokers that made good sense for them.

If a carrier cannot seat more drivers in tractors and is getting offered or paid top dollar for myriad lanes, Tucker said that situation puts them in a position where they need to figure out what the next move is.

“You sort through all the options, and refine your lanes, to maximize driver happiness (pay, time home, etc.) and carrier profitability and ROI,” he said. “Well-run carriers are there right now. The April 1 enforcement date will add a category or two to our hurricane. It may reset many carriers’ clocks on the refining of lanes, too.”

Noel Perry, Principal at Transport Futures and Chief Economist at Truckstop.com had a different take than Tucker, observing that the end of soft ELD compliance will be a fairly minor occurrence.

“I expected the ELD enforcement in December to be a non-event,” he said. “But based on what the spot market data for December indicated, it was actually a really big event, and is still pretty big now. It is at record levels and stayed high. I think there has been a surprising amount of self-enforcement, or, put differently, what we know for sure is that shippers are behaving as if there is self-enforcement…coupled with around 90% of carriers using ELD now. There are not going to be a lot of [carriers] put aside for not having it in early April.”

There are only a couple of instances in which things on the ELD front could change, according to Perry.

One would be in the event of the economy would bloom in the second quarter, which would take things to the next level in terms of capacity utilization, and another being that heavy-handed ELD enforcement could convince some people that there is an issue.  

“These [ELD] were designed to allow a trooper to inspect it roadside, analyze it, and determine if a carrier has been running legally,” he said. “But it turns out we lack the technology to download it properly to the trooper to analyze it properly. The main enforcement that will happen now is to see if an ELD is in a truck and if it is working. But I don’t think the system is going to have the operable ability to to real-time enforcement for several years. If a carrier has ELD, it is fine, and if it does not, they will likely get a break, at least at first.”