ELD mandate drives up spot rates

When the electronic logging device (ELD) mandate took effect in mid-December, rate levels at online freight marketplace Truckstop.com and data on spot rate market tightness rose sharply, and have remained high ever since.    When the electronic logging device (ELD) mandate kicked into gear back in mid-December, requiring the majority of the trucking industry to use ELDs, rate levels at online freight marketplace Truckstop.com and data on spot rate market tightness rose sharply, and have remained high ever since.
   ELDs, which are designed as a replacement for traditional paper logbooks to record hours of service, synchronize with a vehicle engine to automatically record driving time. The ELD mandate was finalized in December 2015 by the U.S. Department of Transportation’s Federal Motor Carrier Safety Administration and took effect Dec. 18, 2017.
   Truckstop.com said that for most of the second half of 2017, the market hovered around 10 points higher than the 5-year average, excluding the problems caused by hurricanes Harvey, Irma and Maria during weeks 35-40. After that, the gap swelled to 25 points, before receding to previous levels once the hurricane effects subsided. During the last two weeks of the year and throughout all of January 2018, the gap jumped back to 25 points, statistics show.
   “Since that period corresponds exactly to the ELD mandate, one can conclude that people posting on Truckstop.com care about ELDs,” Truckstop.com Chief Economist Noel Perry said. “Nothing else has changed during that time to cause such a response.”
   The rate data tells the same story, he said.
   “We see the second half 2017 increase in rates, the hurricane jump in weeks 35-40, and another large jump in week 51 that has continued into 2018,” he said. “As always, rates fall in January, but the 30 percent increase in rates, year-over-year, remains.
   “After more than a month, we have strong evidence of specific market effects since the mandate took effect,” Perry added. “It is possible that the mechanism is more emotionally based than diligent enforcement of, or compliance with, hours of service laws. We will know if that is true after April, once the novelty wears off and full enforcement begins.”
   American Shipper provided in-depth coverage on the ELD mandate in its November 2017 feature story, “Down to the wire.”