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Trucking industry still grappling with impending ELD mandate

Sections of the long-haul and drayage trucking communities are still unprepared for implementation of the fast approaching federal mandate to install electronic logging devices (ELDs) on all commercial trucks and buses by Dec. 18, 2017.

   A fast approaching implementation deadline for new federal regulations requiring the installation of electronic logging devices (ELDs) on all commercial trucks and buses has many questioning just how prepared the trucking industry is, and how smoothly the implementation process will go.
   The Federal Motor Carrier Safety Administration’s (FMCSA) ELD mandate is scheduled to take effect Dec. 18, but adoption of electronic logbooks and support for the rule varies widely across the industry.
   Designed as a replacement for traditional paper logbooks, an ELD synchronizes with a vehicle engine to automatically record driving time. Federal safety regulations limit the number of hours commercial drivers can be on-duty and still drive, as well as the number of hours spent driving. These limitations—known commonly as “hours-of-service” rules—aim to prevent truck and bus drivers from becoming fatigued while driving and require that drivers take breaks and have sufficient rest before returning to work.
   The FMCSA says the ELD mandate is “intended to help create a safer work environment for drivers, and make it easier and faster to accurately track, manage, and share records of duty status (RODS) data.” The final ELD rule, which was published on Dec. 16, 2015, does not change any of the basic hours-of-service rules or exemptions.

Phased-In Approach. Although the ELD implementation deadline is quickly approaching, a phased-in approach will be used to enforce its requirements.
   The Commercial Vehicle Safety Alliance (CVSA) said it will begin enforcing the ELD mandate requirements on Dec. 18, with inspectors and roadside enforcement personnel documenting violations and, at the jurisdiction’s discretion, issuing citations to commercial motor vehicle drivers operating vehicles without a compliant ELD. Inspectors will not start placing commercial motor vehicle drivers out of service if their vehicle is not equipped with the required device until April 1, 2018.
   In addition, compliant automatic onboard recording devices installed prior to Dec. 18, 2017, can continue to be used through Dec. 16, 2019.
   The CVSA said its board of directors, in consultation with the FMCSA and the motor carrier industry, agreed that the phased-in approach will help promote a smoother transition to the ELD requirement.
   As far as who specifically must comply with the ELD rule, the FMCSA said it applies to most motor carriers and drivers who are currently required to maintain RODS per Part 395, 49 CFR 395.8(a). The FMCSA also noted that the rule applies to Canada- and Mexico-domiciled drivers.
   However, the ELD rule allows for limited exceptions, including for drivers who use paper RODS for not more than eight days out of every 30-day period; drivers who conduct drive-away-tow-away operations, in which the vehicle being driven is also the commodity being delivered; drivers of vehicles manufactured prior to the year 2000; and drivers who operate under short-haul exceptions, which may continue to use timecards. (Those drivers are not required to keep RODS, and therefore, will not be required to use ELDs).

Postponement Proponents. A diverse group of 31 organizations, including the Owner-Operator Independent Drivers Association (OOIDA), have formed a coalition to express support for a delay in the ELD mandate implementation.
   The group has rallied behind legislation introduced in the U.S. House of Representatives by Rep. Brian Babin, R-Texas, the ELD Extension Act of 2017 (H.R. 3282). Proposed in July, the bill would delay the implementation of the ELD mandate from December 2017 to 2019.
   In September, Rep. Babin also filed an amendment to an unrelated bill, the Make America Secure and Prosperous Appropriations Act of 2018 (H.R. 3354). The amendment would have delayed the ELD mandate through the 2018 fiscal year that ends Sept. 30, 2018, but was rejected by the House by a vote of 173-246.
   OOIDA has continuously expressed strong opposition to the ELD rule, arguing there are too many unanswered questions about the technical specifications and enforcement guidelines of the mandate. OOIDA said that concerns include the certification of devices (or lack thereof), connectivity problems in remote areas of the country, cybersecurity vulnerabilities, and the ability of law enforcement to access data.
   In addition, OOIDA claims that ELDs do not actually advance safety, since they are not any more reliable than paper logbooks for recording compliance with hours-of-service regulations. The association further argues that the ELD mandate will put undue cost burdens on impacted stakeholders.
   FMCSA Deputy Administrator Daphne Jefferson, on the other hand, said the administration estimates the ELD mandate will result in annual savings of $2.4 billion in paperwork reduction and efficiency costs, outweighing the estimated cost of $1.8 billion for ELD implementation.
   “The nature of the ELD mandate, and what it really is all about, number one is safety. A shipper does not want a driver doing anything that is unsafe, whether that be from an hours-of-service standpoint or from engaging with a device or a smartphone or even an old flip phone,” Craig Fiander, senior vice president of global business development at FourKites, said in an American Shipper webinar on Oct. 5.
   Chris Spear, the president and CEO of American Trucking Associations (ATA), said his group, which represents motor carriers across the United States, “has supported, and will support, this important regulation.”
   “Complying with existing laws will make all who share the roads safer, and ATA will continue to work with FMCSA, carriers, drivers, and law enforcement to ensure smooth implementation of this bipartisan effort on schedule in December,” ATA Executive Vice President of Advocacy Bill Sullivan said of the ELD mandate.

Carrier Compliance. According to LeAnne Coulter, vice president of supply chain and procurement for Schneider National, the level of commitment to and compliance with the electronic logbook rule is often dependent on the size of the motor carrier.
   “Large carriers have been ELD compliant for many years, the mid-size carriers are quickly following suit, and the smaller carriers are the ones we see waiting until the end of the grace period,” Coulter said in the Oct. 5 American Shipper webinar.
   Schneider Senior Vice President and General Manager of Intermodal Services Jim Filter said the Green Bay, Wis.-based trucking and intermodal carrier became ELD compliant in 2010.
   “We did that because today, we have almost 11,000 tractors, and if you want to make sure that all of your drivers are compliant, there’s no way to do that realistically looking through paper logs,” Filter said in an interview back in September at the Intermodal Association of North America’s (IANA) annual conference in Long Beach, Calif.
   “Schneider for a long time has been supportive of implementing ELDs,” he said. “Our position was you don’t need to change the hours of service, just get everybody to follow the hours of service.”
   Prior to implementing ELDs, he said the company spent a lot of time making sure it was compliant with hours-of-service regulations.
   “We thought we would have almost no impact when we did the implementation, and we lost 3 to 5 percent productivity, depending on the configuration the driver was in,” he said. “But permanently, we lost about 1 to 2 percent.”
   Filter said Schneider has heard from some companies who said they are waiting and hoping the ELD mandate goes away, and some have even questioned if they want to stay in business given the increased scrutiny on hours-of-service compliance.
   “We had heard from carriers through our brokerage division—carriers that weren’t following the rules and were running more than 11 hours a day—they lost as much as 25 percent of their productivity,” said Filter.
   Schneider Chief Operating Officer Mark Rourke told American Shipper in a phone interview that as far as the ELD integration goes, the easiest part of the change is the technology piece. For carriers that are already compliant in the paper log world, the integration will be relatively easy, but it will be more dramatic for those that are not, he explained.
   Schneider has both company drivers and owner operators—80 percent company drivers and 20 percent owner operators—and all have transitioned to ELDs in advance of implementation, Rourke said.
   Derek Leathers, president and CEO of Werner Enterprises, told American Shipper in an emailed statement that his company supports the upcoming ELD mandate, saying e-logs enhance safety, reduce paperwork, and more accurately record hours of service.
   The Omaha, Neb.-based trucking company implemented ELDs in 1998, and was granted an exemption from paper logbooks in 2004 by the FMCSA, Leathers said.
   As of June 30, Werner had 700 independent contractor trucks and 6,615 company trucks for a total of 7,315 total trucks, all of which are ELD compliant, according to a company spokesperson.

Capacity Consequences. Commenting on the trucking industry as a whole, Leathers said it is estimated that a large number of carriers still use paper logs, and that ongoing implementation and training may be a challenge for carriers that have not yet adopted ELDs.
   “The industry can expect declines in productivity as ELDs are adopted,” Leathers said. “We expect the industry’s total freight hauling capacity will be reduced by 2.5 percent to 5 percent when the mandate goes into effect.”
   Jacksonville, Fla.-based trucking and third-party logistics provider Landstar is also in support of the ELD mandate. Landstar, whose drivers are all owner operators, started implementing ELDs back in 2012, Landstar Vice President of Safety and Compliance Mike Cobb said in a phone interview.
   Landstar decided that any new operator had to have an ELD and that the company would pay for it, while existing operators had the option to get an ELD, also at the company’s expense. If existing operators did not get an ELD and received a roadside violation, however, they would have to get an ELD and pay for it themselves, Cobb explained. The company continued to pay for those who volunteered for ELDs up until Aug. 1, and paid 50 percent from Aug. 1-Sept. 30.
   As of late September, Cobb estimated that Landstar’s owner operators were about 90 percent compliant, with between 800 and 900 drivers still to go out of roughly 9,500 owner operators. Landstar’s owner operators will be 100 percent compliant by Dec. 4, he said.
   Cobb said one impediment to implementation is that a lot of shippers simply do not understand the federal hours-of-service rules. He said he would encourage shippers to educate themselves, since the mandate is not changing those rules, just making sure those rules are being followed.
   But looking ahead, Cobb believes there could initially be some tightening of capacity, due to those who leave the industry rather than comply with the ELD mandate.

Driving Up Drayage Rates. While long-haul carriers largely appear to be prepared for ELD mandate, the drayage market may take a hit from its implementation, leading to potential increases in costs and delays at U.S. ports.
   Portsmouth, Va.-based third-party logistics and port trucking provider U.S. Port Services, which already has ELD capabilities in place, said that although ELDs offer efficiencies, they could potentially drive up drayage costs, at least temporarily, as drivers become acquainted with the new technology.
   “We’ve been around drayage and transloading logistics for a long time. Though it is going to be hard on some drivers, in the long run this appears to be a positive move,” said David Poole, president of U.S. Port Services.
   Red Arrow Logistics CEO Liz Lasater said in an April blog post that many drivers have candidly admitted that the true costs of ELDs will be the inability to continue falsifying their hours-of-service logs.
   “Drayage drivers may be the most unfair victims of this consequence, in that they have to contend with hours of wait time as they pick up containers, which they will no longer be able to list as ‘off-duty,’” she said.
   According to Kendall Kellaway III, vice president of commercial strategy and development for RoadOne IntermodaLogistics, the ELD rules might push some drayage drivers out of the industry, which would result in a loss of drayage capacity and, in turn, an increase in rates.
   The ELD mandate “adds to existing challenges in the drayage sector, including port congestion, an aging driver population, and drivers leaving to work in other industries,” Kellaway III wrote in a February AJOT blog post.
   However, some drayage operators will continue to work under what’s known as the “short-haul exemption,” which will allow them to avoid having to use ELDs altogether. Most commercial drivers operating within a 100-air-mile radius of their normal work reporting location and not working more than 12 consecutive hours are exempt from federal hours-of-service regulations, thus negating the need for any logs, paper or electronic.
   With only about 60 days left until implementation, it continues to appear increasingly unlikely that a delay will actually occur. It is clear, however, that many prominent trucking companies are not only in support of the mandate, but are already prepared for the Dec. 18 deadline.
   Freight-matching marketplace is also gearing up for the fast approaching deadline.
   On Oct. 9, unveiled an initial partnership with five ELD providers that were becoming a part of its new ELD marketplace, and said it was in discussions with several other vendors to add to the list. The ELD marketplace is a “one-stop-shop designed to connect drivers, carriers and fleets with the right ELD provider to suit their needs,” explained in a statement.
   Despite repeated anti-ELD attempts by OOIDA, such as asking the Supreme Court back in April to review its case determining whether the ELD rule violates the Fourth Amendment, a request that was denied in June, and Rep. Babin’s amendment and bill seeking to delay the mandate’s implementation, it seems more likely than ever that the new rules will go into effect on schedule, leaving some carriers with little time to ensure compliance.