It has been about two months since the ELD mandate, and there has been a flurry of activity around, with a lot of press and media coverage around the situations that have followed it. FreightWaves has also been at the helm of things, covering different aspects around the mandate, the fluctuation in compliance rates, the struggles faced by fleets while implementing it, and the utility of the technology itself.
Recently, we covered how ELD compliance is positively nudging towards complete compliance across the industry by the hard deadline of April 1. But then it needs to be understood that the conclusions were based on data gained from fleets that ran more than 5 trucks, thereby giving us truncated inferences and necessarily not presenting the whole picture. The data did not take into account the fleets that run fewer than 5 trucks at a time, which as we know, form the major chunk of the U.S. freight industry.
FreightWaves caught up with Ken Evans, the CEO of Konexial, a company that provides ELD solutions. “On the side of the smaller fleets, I think a lot of them basically delayed their decision process due to fear and also based on the coverage of the mandate in the press and the politics behind it,” says Evans. “So we saw a large wave of activity leading to the December 18 deadline. Things then quieted down during the holidays, and now we see that activity is happening again.”
Though the mandate is technically in effect, Evans during the course of Konexial’s sales process heard from a lot of small fleets who still believe that they have time until April 1 to implement ELD. “So, the kind of thought process that the mandate is already in effect and thus compliance would be high among the small carriers is just not true. Our viewpoint is that less than half of the carriers who have say, 20 trucks and below, have implemented ELDs.”
With regard to compliance, Evans says there are different grades of customers in the mix. “You’ve got customers who are very diligent - the rule followers - they are the ones that actually put it in place and implemented it. Then you’ve got people who bought something and don’t plan to use it until the deadline,” he notes. “This is something that we are trying to teach our customers that regardless of which solution you pick, there always is an implementation and learning curve to it. There also are a whole other set of people, who because of the press coverage around codes and soft enforcement, believe they don’t have to do it until April 1 and are putting off purchases.”
This is not a scenario that is only prevalent among smaller fleets. Some larger fleets are technically compliant with the rule through the use of an Automatic Onboard Recording Device (AOBRD), which has been grandfathered until December 2019. This gives fleets with AOBRDs more time to adapt to the new law, but a similar scenario of waiting could play out again as the December 2019 deadline approaches.
There also is the issue of how the fleets perceive ELD technology. “The smaller the trucking company, the more uncomfortable they are with the technology. There obviously has been a lot of press coverage and vocal opposition to the rule of ELD. It was covered as an invasion of privacy and thus generated a lot of resistance,” notes Evans. “But there are a lot of positives to actually come out of it, beyond the reasons of safety that FMCSA implemented it for. The reason for the smaller fleets not implementing ELD it is not due to the cost incurred, but rather because some people still think the decision might get overturned.”
The market also plays a part in the indecisiveness of smaller fleets - the ELD market is flush with over 200 different companies selling ELD solutions. Evans believes that a year from now, most of the companies will have consolidated and there would only be a handful left with significant market share. “We have heard from multiple ELD companies who have discussed exit strategies with us so that we could take over and support their customers,” he adds.
The fleets also need to be educated on the usage of the technology, insists Evans. “There’s a lot of misinformation that people are dealing with. We get questions from people asking whether our ELD would behave in a certain way, to which we reply by-the-book and per the mandate,” he explains. “We need to educate them on what is legal and what isn’t. If you want something that allows you to alter records, that is something that is not allowable. People are also concerned with reliability and durability of the solution, which is something that not all two hundred companies in the market can offer.”
On the longer stretch, there would be many waves to the ELD compliance process. The initial wave we are now dealing with is the fragmented tail of the industry, working its way to keep up with the technological revamp. The larger fleets utilizing AOBRDs will take longer to change over to ELDs ahead of the December 2019.
The final wave would perhaps be with the consolidation of the hundreds of ELD solution providers to coalesce into a few distinct ones, which would probably take a couple of years. And as always, there also is the constant iteration of the technology itself that needs to be taken into account as we look towards the future.
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