ELDs add $12 billion to truckers’ pockets

ELDs have been the most polarizing subject in the freight markets over the past few years. The large enterprise carriers have wanted them to ensure that every carrier followed the same set of rules. Smaller owner-operators and voice freight brokers felt as if ELDs were government encroachment into their lives. The fear of big-brother monitoring every move is more emotional than reality, but the economic impacts are real.

One of the things that we have been watching intently is whether or not ELDs impact behavior. First with the carriers and then with shippers and brokers. The impact on shippers and brokers will show up in two data-sets: the TRI (tender rejection index) and in rates (spot and contract). We know from our rate sources (DAT, Cass, and public carrier reports) that there has been a dramatic inflation environment in contract rates. Until the last two weeks, the spot market was stabilizing as shippers were benefiting from better capacity planning.

But one of the things that we have been curious about is how carriers are reacting to the mandate. Are we seeing a change in driver behavior? Nearly 60 days into the hard mandate, we can see that is the case. By looking at what we call the “HOS Daily Driving Utilization Index” or HOS11, we look at ELD data and determine how much of driver’s 11 hours are dedicated to actually putting miles on a truck. We gather millions of HOS data points every single day from a couple hundred thousand ELD devices, anonymize them, and publish them on our SONAR dashboard.

Last year, prior to the ELD soft-mandate, we saw that drivers were averaging around 6.52 hours per day of driving time. The ELD soft-mandate went into effect on December 16, but with it being so close to the holidays, it is hard to get an accurate read on the impact until mid-January. We saw we describe as the “Post Holiday Normalization” take place on January 14. You can see that the total driving hours went back to around 6.52 hours per day. This stayed consistent until Valentine’s day, when we started to see drivers start to modify their behavior and increase hours dedicated to driving. We believe this is a reflection of drivers starting to think about the hard mandate on April first and change on what freight they selected and how they managed their hours.

Moving forward into the hard mandate in April, we see that there is a distinct change in driver behavior. Throughout April, drivers started to push further towards 7 hours of daily driving time, at least three days a week. Every Tuesday-Thursday, drivers are exceeding 6.8 hrs of daily driving time and going tapping out at 7 hours per day. We estimate that each hour is worth approximately $112 (based on a 7 hour clock), therefore drivers are recovering approximately $54 of additional earnings per day from proper HOS management. For an industry with 860,000 for-hire trucks, this equates to $231 million dollars per week or $12 billion dollars annually of additional value generated by ELD devices to the industry as a whole.