EconomicsNews

ELDs and the insurance impact

 Most trucks will be required to have electronic logging devices installed by December. The devices automatically record driver's hours of service. 
Most trucks will be required to have electronic logging devices installed by December. The devices automatically record driver’s hours of service. 

With the upcoming ELD rule rapidly approaching, many carriers may be surprised what the impact of these devices will have on their insurance rates

Unless you are a large motor carrier, the chances are you have some reservations about the upcoming electronic logging device (ELD) mandate.

As of Dec. 18, 2017, ELDs will be required for the majority of drivers. The ELD rule applies to most motor carriers and drivers who are currently required to maintain records of duty status (RODS) per Part 395, 49 CFR 395.8(a). The ELD rule allows limited exceptions to the ELD mandate, including:


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  • Drivers who operate under the short-haul exceptions may continue using timecards.
  • Drivers who use paper RODS for not more than 8 days out of every 30-day period.
  • Drivers who conduct drive-away-tow-away operations, in which the vehicle being driven is the commodity being delivered.
  • Drivers of vehicles manufactured before 2000.

Many larger carriers already require their drivers to use ELDs, but for smaller carriers that make up the majority of the industry – by many estimates as many as 97% of all trucking companies have fewer than 20 trucks, and 90% have 6 or fewer – the implementation of ELDs and their associated cost could be a game-changer. The Federal Motor Carrier Safety Administration estimates the cost to install an ELD to be at least $166 per truck for a basic model with an average cost of $419 per unit, depending  on features and functionality.

There is some speculation that their may be more mergers and acquisitions due to this rule. But that is only one part of the ELD fallout that could affect the finances of carriers. Another issue that doesn’t receive much attention but could potentially become a larger concern – especially for smaller carriers – is the insurance impact.

“If you’re doing everything right, controlling your [safety] scores, you will be okay,” Andrew Ladebauche, CEO of commercial insurance provider Reliance Partners, told FreightWaves. “We have a lot of carriers who get just as favorable rates who run paper logs as those who run electronic logs.”

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Brian Straight

Brian Straight covers general transportation news and leads the editorial team as Managing Editor. A journalism graduate of the University of Rhode Island, he has covered everything from a presidential election, to professional sports and Little League baseball, and for more than 10 years has covered trucking and logistics. Before joining FreightWaves, he was previously responsible for the editorial quality and production of Fleet Owner magazine and fleetowner.com. Brian lives in Connecticut with his wife and two kids and spends his time coaching his son’s baseball team, golfing with his daughter, and pursuing his never-ending quest to become a professional bowler.
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