Many truckers and industry insiders thought that a federal rule enacted late last year that requires truckers to use electronic logging devices to track driving time would disrupt freight and logistics. It hasn’t happened. This is how the device changes it all.
• Growth of Employment
Drivers threatened to leave the industry, but they aren’t leaving. Trucker employment is growing, adding almost 19,000 jobs over the past year.
There were 1.47 million U.S. truckers in February 2018, up 1.4% from the same month a year earlier, according to seasonally adjusted Bureau of Labor Statistics data.
Most truckers are adapting to the new rule, which was put in place to make sure they didn’t exceed driving limits. Truckers are limited by federal law to driving no more than 11 hours a day within a 14-hour workday. Drivers must then be off duty for 10 consecutive hours.
• Efficiency Going Down
The system is less efficient.
According to reports, approximately 67.3% of the truckers are driving fewer miles since the ELD rule started late last year. Nearly 71 percent reported earning less money in that same time because they must stop driving after 11 hours.
Some brokers are requesting more two-driver teams than before. Teams can drive double the miles in a day to ensure freight is delivered on time despite any complications they may experience on the road.
Prior to the mandate, industry experts estimated that ELDs would have a 3 percent to 5 percent impact on carrier productivity, especially on hauls longer than 450 miles and short-haul operations of up to 300 miles that bump against the 14-hour rule, according to Mark Montague, an analyst.
This isn’t the case for one-truck operations, who have no flexibility in their day once their driving hours are up.
Detention pay, which is compensation paid to drivers while waiting to load and unload freight at a destination, has become a hot-button issue since the mandate went into effect.
• A boost in Freight Demand and Rates
As truckers must reduce miles traveled per day to stay within their driving limits, there are more loads chasing after available trucks. A strong economy and increased freight demand have made the problem worse.
With less capacity to haul freight, rates have soared as much as 40 percent from a few months earlier, according to Todd Amen, chief executive of ATBS, a trucking industry accounting firm.
While truckers are adjusting to driving fewer miles with an ELD, “ultimately, it means good things for the trucking industry as rates have soared,” Amen said.
“We believe net income is going to grow significantly this year — we are in a really robust freight market,” he said.
Freight rates are now higher than at any time in 2017.
On the spot market, rates ranged from $2.14 per mile to $2.50 per mile, depending on what was being trucked. That is 20 to 30 percent higher than a year ago.
• Possible Increase in Insurance Rates
Insurance companies are looking at a driver’s safety record, which is based on their Federal Motor Carrier Safety Administration, or FMCSA, Compliance, Safety, Accountability score. A trucker’s CSA score factors in safety, collisions, roadside inspections, crash reports and data from investigations.
Violations for failing to have an ELD will negatively affect a driver’s CSA score and could drive up premiums. Insurance already can cost an owner-operator $12,000 to $14,000 annually.
“I think insurance companies will be aggressive to stop providing or writing insurance for those that are not ELD compliant,” Amen said.
