Gauging The Impact of the Upcoming ELD Mandate

With the electronic logging devices (ELD) mandate taking effect on December 18th of this year, the impact of the ELDs may unfold more gradually than some shippers and carriers expect, and could depend on how the federal requirement is enforced from state to state. But the impact of the rule is hard to predict, and the mandate is expected to hit productivity in some sectors of trucking, such as truckload and drayage, harder than others. Loss in productivity reflects an expected drop in truck and driver utilization, as more precise measurement of driver hours of service requires more precise planning and routing. In other words, there's less "flexibility" for motor carriers and drivers in recording on-duty time, as they will no longer be able to keep two sets of logbooks because duty status records will be kept current within the electronic device and will be much harder for carriers to falsify. Large trucking companies already using ELDs say they suffered initial productivity losses. "Our experience was a 4 percent drag on productivity when we implemented e-logs back in 1998," Craig Callahan, senior vice president of sales at Werner Enterprises, said April 11 at the NASSTRAC Shipper Conference in Orlando, Florida. "That's the experience of a big company with enough scale to be able to transform things," Callahan said. "Some of the small companies are going to struggle with that. It's not the front-line expense, but the ongoing implementation and training that are going to cause trouble." What's not clear at this time is how many companies and drivers will not have electronic logs installed in truck cabs by the deadline and how federal regulators and state officials will deal with them. Surveys have shown smaller carriers are still largely using paper logs. "It seems there are lot of small guys who are going to wait until the last minute," Ben Schuchart, vice president of brokerage at Schneider National told the 2017 Transportation Intermediaries Association (TIA) conference on April 6th. "Some guys may opt out. But guys with over 50 trucks, they have an ELD plan and they're preparing to make the change." The majority of trucking companies operate from one to six trucks, and many of them are owner-operators opposed to the ELD mandate. The Owner-Operator Independent Drivers Association (OOIDA) last week took its challenge to the regulation to the US Supreme Court. The association appealed a ruling from the US Court of Appeals for the Seventh Circuit, which rejected its claims the ELD mandate violates the 4th Amendment of the Constitution in a three-judge panel decision last December. In January, the full court declined an appeal to revisit that panel ruling. Barring intervention by the high court, it's likely the rule, which was mandated by Congress in the 2012 transportation spending law and not singled out for revision by the executive branch, will take effect as scheduled. Its impact then will depend on enforcement. The final rule did not set specific penalties or set an out-of-service threshold for ELD violators. Instead, it relies on the existing schedule of civil penalties currently used for logbook violations, including failure to keep a log. The ELD mandate "will be enforced by roadside inspections, followed up by compliance reviews," Jack Van Steenburg, assistant administrator and chief safety officer at the Federal Motor Carrier Safety Administration (FMCSA), told the TIA event. "Our penalties are set by Congress." That means front-line enforcement will be handled, as it is now, by state police. A police officer will decide what type of penalty to issue to truck drivers still using paper logs past the December deadline. Under those penalties, a person or entity that "fails to prepare or maintain a record" is subject to a maximum civil penalty of $1,194 for each day the violation continues, up to $11,940. That provides an idea of the scope of penalties that could be applied for not having an ELD. However, as the FMCSA notes in its rule, "numerous factors, including culpability and history of prior offenses, are taken into account." The agency will use its Uniform Fine Assessment software "to assure civil penalties are assessed in individual cases in a fair manner." By law, "we have to look at the gravity [of the violation], the finances of the company, the likelihood of it [the violation] causing an accident," Van Steenberg said. Stay tuned as we get more information as the deadline approaches.

Click here to visit the FMCSA's web page detailing the ELD mandate including a timeline.

Source: JOC