Editor’s Note: The Eld mandate has arrived but the changes to the industry are still up in the air. Vic Lance of Lance Surety Bond Associates shows us what the industry expects to see regarding ELD adoption.
Electronic Logging Devices (ELDs) were introduced by the Federal Motor Carrier Safety Administration in 2017. The purpose of the move is to ensure accurate recording of hours of service for drivers with a safer work environment in mind.
ELDs should be used by motor carriers as of December 18, 2017, but there is a transitional period. Until December 18, 2019 drivers and fleet owners can still use AOBRDs (Automatic On Board Recording Devices) installed prior to the ELD rule. After this date, they have make sure they meet the new requirements for self-certified ELDs registered with the FMCSA. Additionally, as of April 1, 2018, drivers will be penalized if found working without an ELD.
The new devices monitor trucks’ movement via GPS signal, records engine time and speed, and logs hours of service. By making this an automatic process, the FMCSA wants to reduce accidents on the road due to fatigue, as well as manipulation of logged hours and similar practices.
The opinions about ELD adoption in the freight community are heavily divided. For many truckers and fleet owners, this decreases flexibility and efficiency, potentially bringing down volume of work and income. Others see it as a useful measure that promotes safety.
Besides carriers, ELD adoption will also affect freight brokers in a number of ways. Here is what the industry expects.
ELD Adoption Could Results With A Possible Capacity Reduction
In essence, the limitation on hours of service for carriers stays the same. The only thing that is changing is how the time is recorded and monitored. Paper logging previously allowed flexibility for drivers and fleet owners, as they could redistribute hours to match federal requirements and still meet pick up and delivery deadlines. This option is now removed, as logging happens automatically and cannot be altered.
As a result, experts say there will likely be a reduction in the actual hours driven. Some carriers may also not be able, or willing, to comply with the ELD mandate. This is projected to cause a 5%-10% capacity crunch. For brokers, it means restricted access to transportation services at a time when demand from drivers is growing. While the pressure in the industry grows, it may be also a good opportunity to strengthen relationships with carriers and shippers and improve the communication style based on loyalty and trust.
With better adaption of your strategies, you may still be able to handle the workload. Most of all, as a broker you will have to better manage your customers’ expectations. This will require additional negotiation with shippers to allow flexible pickup and delivery times. It may also involve finding overnight parking options for drivers who now cannot complete load transportation within a day.
Higher demand for brokering services
Together with the growing demand for drivers, the role of the broker is also likely to be emphasized. The need for brokering services is expected to grow, as handling the communication and coordination between shippers and carriers can get more complicated as a result of the ELD mandate. The number of licensed and bonded freight brokers may thus increase as well.
As carriers’ capacity shrinks, shippers will more often turn to brokers for assistance in finding transportation options. If you work now on developing strong partnerships with trusted truckers and fleet owners, you may end up on the winning side. In a tense demand market, shippers will value brokers who can ensure a load gets picked up and delivered on time. They will also choose to work with brokers who have access to ELD-compliant carriers.
Ensuring carrier’s ELD compliance
In order to guarantee smooth delivery, brokers may have to seek extra measures to ensure that the carriers they work with commit to ELD compliance. On one hand, some shippers may demand written proof for that prior to conducting business with you. This is a safety measure for them, as they want to be sure their loads will not get delayed because of ELD violations.
What’s more, though, is that it’s in your best interest to have extra security from the truckers and fleet owners. A good option is to improve the language of your agreements with carriers by including precise statements. You can, for example, include a clause that a carrier will use ELD-compliant vehicles to transport the agreed loads. Besides legal measures, you can also assist your partners with the choice of ELDs and their adoption.
What are your thoughts about ELD adoption and how do you see it affecting freight brokers? Please share in the comments.