Today’s Pickup: Waiting on the full ELD impact

Good day,

According to a survey of participants on a recent FTR webinar, only 11% of the people believe the ELD impact has been severe. A full 52% say the impact has been moderate while 34% say it is minimal. Three percent don’t believe it’s had any effect.”

FTR, which solicited the opinions of those listening on the firm’s January webinar, acknowledged the survey is not scientific, but believes it provides at least a snapshot into the impact ELDs are having.

“The general sense that the impact was moderate certainly seemed to square with hard data,” wrote Avery Vise, vice president of trucking research, for FTR in its January State of Freight bulletin.

Vise cited rising rates and freight indexes near all-time highs as evidence. “Rates were higher than during the normal peak season in June and during the wake of the hurricanes. And this was happening during the automotive industry’s seasonal shutdown, which should have depressed demand,” he wrote.

Vise also said the Polar Vortex likely played a role as well, with refrigerated loads doubling in the first week of 2018 compared to 2017 as some goods normally moved in dry vans needed to be moved in refrigerated trailers due to temperature issues.

He also believes that the biggest impact of ELDs will likely come later as out-of-service orders begin in April and current waivers are either extended or expire.

“Also, not all effects of ELDs on capacity will be felt immediately upon their adoption. Yes, there will be a reduction in miles due to strict compliance, and some drivers and carriers will exit – and surely have exited – the market. But from the perspective of many carriers, the productivity loss won’t necessary be obvious because freight rates are rising. It might take the next downturn for some carriers to feel the pain,” he wrote.

Did you know?

The average price for a used Class 8 vehicle in December was $43,192 while average mileage fell 5% to 426,000 according to ACT Research.

Quotable:

“We developed several functions for logistics processes such as purchase order, booking request, bill of lading, and freight tracking. As financial processes, we included freight insurance and settlement using open account transaction. Our proof of concept (PoC) can be classified into two – one focusing on logistics process, and the other covering end-to-end ocean shipping logistics process including financial process.”

– Seungkee Baek, principal consultant at Logistics Business Unit, Samsung SDS, on a blockchain pilot in South Korea

In other news:

Natural gas futures prices jump

The cold snap in the U.S. has pushed up natural gas prices as more demand for the fuel for heating has increased prices to the highest levels in over a year. (Wall Street Journal)

United Continental sees cargo revenue rise

United Continental said its fourth quarter cargo revenue rose 21.6% and it has plans to boost cargo capacity up to 6% this year. (Wall Street Journal)

Used Class 8 prices increase, but sales slip

Prices of used Class 8 vehicles increased 6% in December, but sales fell even as vehicle age and mileage both decreased. (Transport Topics)

Longer twin trailers could help ease capacity crunch

A leading transportation attorney says 33-foot twin trailers could help with the capacity crunch and there is still an opportunity to get legislation passed. (DC Velocity)

Drugs still an issue for drivers

The increasing legalization of marijuana and the growing opiod crisis is putting pressure on truck drivers and fleets to ensure safe, legal operation of commercial trucks. (Fleet Owner)

Final Thoughts

The average price of a used Class 8 truck increased in December as mileage decreased. For fleets nearing the end of their trade cycles, this is a development to watch as in the next two years many trucks on 3-5 year trade cycles will begin to hit the used market, which is already seeing larger-than-normal inventories. Those factors could start to push prices down further, lessening payback for fleets seeking larger residual values.

Hammer down everyone!

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