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The ELD mandate is having an impact, but a panel says it’s not necessarily as predicted

There may not be the calamity in the markets that some foresaw as a result of the implementation of the ELD mandate. But a panel of FreightWaves executives at Transparency18 in Atlanta Wednesday discussed their views on their data-backed findings on just how it has affected market and driver behavior.

Dean Croke, FreightWaves’ chief analytics officer–who has 2 million miles under his belt as a driver in Australia–continued the criticism that he has written before on these pages about the disconnect between the rules and the human sleep cycle. “I don’t think the safety outcomes will be what people think,” Croke said. “There is no direct safety relationship between safety and hours of service compliance. And the reality is you could be 100% in compliance and sound asleep at the wheel several times a night.”

Croke said his review of FreightWaves data in its Sonar data product, as well as from other sources, has led him to believe that drivers may be making decisions on the road that are “based on the fact that their next trip may be more hours than they have available to them.” So a driver that knows there aren’t enough service hours to do, for example, an 11 or 12 hour trip on a particular day will change the freight he or she chooses to haul. Additionally, companies are now assigning teams to “tweener” routes of approximately 750 miles when such a route in the past might have been done by one driver, Croke said. As a result of all these changes, Croke said, his analysis is that many fleets are running 10% fewer miles than before the ELD mandate kicked in “soft” in December and “hard” on April 1.

Any cheating on paper logs that went on prior to the soft and hard mandates was not done to give the drivers more hours on the road, Croke said. Rather, he said, it was a reaction to spending an excessive amount of time waiting at the docks for a load. Drivers bending the numbers on their paper logs wanted to preserve the three hours between the 11 hours continuous service limit and the 14 hour total hours limit under the Hours of Service rule “because that is when they sit on docks,” he said.

“Do I record my time or do I go off duty?” is the question that Croke said drivers needed to constantly ask themselves. There was flexibility to answer that question in the paper log period; it’s gone under ELDs, he said.

Those soft and hard mandate dates are difficult to discern in the data on freight turndowns, according to Freightwaves chief data scientist Daniel Pickett. The data on turndowns comes from the Tender Rejection Index, which is a measurement of how many loads were rejected by carriers as a percent of total loads on offer.

Pickett said the number in Chicago–a key benchmark region–did spike around the time of the soft launch on December 18. But he said it coincided with the Christmas rush, “and that’s what Christmas looks like.” And before the April 1 hard deadline for ELD enforcement, “a lot of people expected this sudden capacity crunch.” But it never materialized, Pickett said, and recent increases in the TRI could be simply a reaction to better weather.

Craig Fuller, CEO, founder and managing director of FreightWaves, said the trends in the Chicago market in the months between the soft and hard mandates, without the projected spikes, could have been a sign that the driver community adjusted to the ELD mandate far better than a lot of people had projected “They got a lot more comfortable over the four months” he said. “They changed how they operated with their devices.”

Fuller echoed Pickett’s view of the Chicago market at the time of the hard mandate kickoff. Rejections were expected to “go through the roof, but we didn’t see that at all,” Fuller said. “In fact, we saw a tapering of rejections.”

 Outbound chicago tender rejections from freightwaves
Outbound chicago tender rejections from freightwaves’ sonar platform

But although the session could be seen as a criticism of the ELD mandate, Fuller said the “great thing” about the devices is “you get a version of the truth.” Previously, data from telematics would stay in private fleets, but ELDs provide a far greater amount of data and pull in the activities of the larger independent owner/operator community. That greater data can reveal such things as where shipper facilities are highly inefficient and are wasting precious driver time. As Pickett said: “Shippers with bad detentions are going to pay for it.”

Another revelation from the data provided so far is that rejections have not fallen sequentially in terms of length. Rejections within cities are at about 8%, Fuller said, and long haul rejections are at about 18%. But distances in between, the so-called tweener routes, are being rejected at a rate not in between those two, but higher, at 30-40%. The greater efficiency of the long haul routes could be a key reason for that, Fuller said.

Croke’s criticism of the hours of service rule–as opposed to the ELD mandate–echoed what he wrote on Freightwaves back in February. “The bottom line is we’re regulating the wrong thing … we should be regulating sleep and not hours worked since sleep drives human performance far more than skills, experience and training,” he wrote then. “The idea that by regulating hours worked we somehow magically ensure drivers are well-rested for the next shift is completely flawed.”

Fuller said something similar on the panel. The HOS rules “take away the way they feel at the moment and is instead is forcing compliance,” he said. “It is not the technology itself but how we implement that technology.”

As far as the strength of the market in the coming months, Freightwaves chief economist Ibrahim Baayan sees mostly smooth sailing. “Capacity is still going to be tight going forward, and the freight market will be sensitive to surges in demand,” he said.

John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.