The Federal Motor Carrier Safety Administration’s (FMCSA) Electronic Logging Device (ELD) mandate, created to improve safety within the transportation industry, is currently the hot topic on everyone’s mind. ELDs synchronize with a vehicle’s engine to automatically record driving time for easier, more accurate hours of service (HOS) logging, which translates to greater safety on the road.

Carriers and drivers who are subject to the rule must install and use ELDs by the appropriate deadline – those using paper logs or logging software must transition to ELDs no later than December 18, 2017, and those using AOBRDS prior to the compliance date must transition to ELDs no later than December 16, 2019.

This mandate has left both shippers and carriers with many questions about how the industry is going to react to the full transition to these devices, such as:

• How will this impact driver productivity?
• Will drivers leave the industry as a result of ELD implementation?
• Will smaller carriers close up and leave the industry?
• How will this impact industry capacity moving forward?

The Electronic Logging Device Survey
Recently, Transplace surveyed over 2,000 carriers in order to gain insight into the implementation preparedness of transportation carriers and the expected industry impact of the widespread use of these devices. The survey included responses from more than 500 carriers and allowed Transplace to hear directly from our carrier partners and gain first-hand insight into how they are responding to the mandate and their expectations for how the use of ELDs will impact their businesses.

One of the key takeaways from the survey shed light on how ELDs are being implemented across the transportation industry. Most importantly, we learned that ELD device implementation varies by fleet size, with large fleets leading the implementation charge. The study revealed a significant difference in the amount of implemented ELD devices between large and small fleets:

• 81% of large fleets with more than 250 trucks reported that they had achieved full ELD implementation, with the remaining 19% currently working towards implementation.
• However, small fleets of less than 250 trucks have been much slower to integrate ELDs, with only 33% having fully integrated ELD devices into their fleet.
• Another 29% have begun the implementation process, while the remaining 38% stated that they have no immediate plans to begin implementation.
• One response noted, “I am a very small fleet with only two trucks. I have just begun doing my homework on the program and will implement it by December 1, 2016.”

ELD Impact on Small Carrier Fleets
The implementation of ELD devices has been significantly slower for carriers with smaller fleets, and while some carriers are still researching the different technologies and creating implementation plans, others indicated that they are holding out in hopes that the mandate will be overturned in court. For example, one carrier responded to the survey by saying, “I will sell out first” and another remarked: “Hoping this is overturned in court. Will comply when all efforts have been exhausted.”

This slow rate of EDL adoption by small carriers, a significant part of the nation’s truckload capacity, is a real concern for shippers and a threat to continued access to capacity to meet shipper volumes. And while a lot can happen between now and when the mandate takes full effect on December 16, 2017, most carriers – large and small – anticipate a noticeable impact to utilization and capacity.

Capacity and the Driver Shortage Cause Concerns…
According to the results of the survey, while most carriers expect their capacity or utilization to be affected as a result of ELDs, the level of change varies.

• 56% of large fleets expect their utilization to decrease, while 32% expect to see no impact from the implementation of ELDs.
• Smaller fleets are even more cautious about how their utilization will be affected, with 64% expecting a decrease and 25% expecting to see no change.
• One response said: “Rate increases will be forthcoming to shippers that take excessive time to load or unload.”

Additionally, as expected, the ELD shift has caused some truck drivers to exit the industry altogether, and some carriers reported losing truck drivers after implementing ELDs. In fact, 51% of carriers indicated that they have lost drivers who did not want to operate under ELDs. And while most indicated that they only lost a couple of drivers, one carrier reported losing 50% of its drivers.

One response to the survey said, “We have 110 trucks and lost 29 drivers when we switched them over to e-logs.” Another noted that, “Many drivers feel that the waiting times incurred at shippers that are currently unlogged will now be logged – and that this will negatively affect their pay.” One respondent also had a comment about driver pay in light of these changes: “We only lost a few [drivers], but we did give a raise to our drivers so we would not lose as many because we anticipated a learning curve and knew they would lose money.”

…But There Are Benefits to ELDs
Although there are certainly concerns from many regarding their widespread implementation, ELDs will have several positive business benefits within the industry. According to the survey, carriers do foresee some benefits as a result of ELD utilization within their companies, including:

• Improved monitoring (33%)
• Better utilization of drivers and equipment (21%)
• Driver convenience (10%)
• Reduction in operating costs (2%)
• Fuel savings (2%)
• Other (32%)

In fact, once ELDs have been implemented, 84% of respondents report a reduction in the HOS and logging violations. One response noted, “Mandatory ELDs will create a level playing field and position us to better control our customers’ (often unrealistic) expectations.”

While a lot can happen between now and when the mandate takes full effect on December 16, 2017, most carriers – large and small – anticipate a noticeable impact to utilization and capacity. The challenge will be to find the right balance of good safety practices without causing a significant disruption to the transportation industry.

Shippers will continue to follow this ELD initiative closely and many are beginning to document their carriers ELD implementation status. These shippers are surveying their carriers to confirm ELD adoption status and also press carriers who have not implemented ELD’s on their plans to move to full ELD compliance.

Ben Cubitt is Senior Vice President, Consulting & Engineering, at Transplace. With more than 20 years of industry and consulting experience in freight optimization, Mr. Cubitt has a deep familiarity with the freight procurement field working for consulting firms and multiple Fortune 500 companies in the consumer products, paper and automotive industries. Mr. Cubitt joined Transplace in July 2010 after four years as Vice President, Supply Chain for RockTenn Corporation. At Transplace he leads the engineering and consulting teams.