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Will the ELD Mandate trigger a move to Precision Trucking and Increased Profitability?

 

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The implementation of the FMCSA’s ELD mandate in the United States on December 18 was one of the most anticipated milestones in the history of trucking. The introduction of electronic logging devices is the latest attempt by the FMCSA to improve road safety and minimize road accidents in the United States. Driver fatigue is believed to be the biggest cause of road accidents. The FMCSA had previously specified Hours of Service (HOS) rules and regulations that limit how many hours a driver can drive in a day.

However, the problem is that Hours of Service were recorded with paper logs and, therefore, could be easily manipulated and falsified. ELDs are designed to eliminate paper logs and record driver duty statuses and HOS information automatically. Moreover, they are supposed to be tamper-resistant, so the recorded information cannot be altered by anyone.

Late last year, pre-mandate, the smaller fleets were wary of the decrease in miles per day and thereby the reduction in their profit margins. The word on the street was that there would be an exodus of smaller trucking companies when the regulations came into force.

Six weeks into the mandate, the apprehension has gradually died down, and the utilization rate has increased. Kevin Hill, founder of CarrierLists (https://www.carrierlists.com/eld-survey), conducts a weekly survey on ELD acceptance levels. The compliance rates have been going up steadily since the mandate. Hill’s survey this week across hundreds of carriers, has spiked seventeen points from last week to 94%. Over the past three weeks fleets running below 15 tractors have 80% compliance rates, while fleets operating over 15 trucks are at 91%.

As truckers gain expertise in managing their ELD equipped fleets, they are coming to an important realization. In addition to the benefits of the ELD mandate on safety, they are learning about the opportunities to improve their bottom lines. These opportunities lie within the massive amounts of data that is being gathered. Whether you're a driver, an owner-operator, a fleet owner, a carrier, a shipper, a 3PL, or an insurance provider, there are emerging ways to use ELD data to manage their businesses more effectively.

ELD data can be a powerful planning tool whether the clock is running or not. The devices provide insightful and fact-based information on a company’s customers. They highlight shippers where there are delays at loading and unloading points. The data can capture the lowest and highest places of detention. For truckload carriers that move a lot of multi-stop loads, ELDs provide a fact-based focus as to which shippers and receivers are penalizing driver effectiveness, service levels and bottom lines. They can help truckers improve the utilization of their fleets and optimize their routes.

Drivers experience an average of 7 detentions per month. Driver detention has been a cause for hand-wringing and complaints whenever capacity tightened in the past. Now it's time to recognize it as an opportunity. ELDs can provide truckers with quality data that can be shared with customers to negotiate freight rates more effectively. Everyone gains if the driver’s day becomes more efficient. ELDs can identify a company’s most and least efficient lanes. They display which lanes have the highest dwell times between deliveries and which drivers, trucks, and trailers are most productive. Shipments in the 500-700 range that would normally be run in one day, with minor adjustments, may have to be done in two days. Freight rates may need to be adjusted depending on whether a load falls within a one day or two-day delivery interval.

Summary

Although we are only six weeks into the ELD mandated era, truckers are learning that the data generated by these devices, if used effectively, can help them manage their fleets and operations with greater precision than in the past. They can identify shippers with poor freight practices and show them, with hard data, the impact that they are having on the productivity and financial success of their supply chains. While this may come as unpleasant medicine to some companies, knowledge is power. This valuable data may make change the perceptions of ELDs as profitability improvement rather than productivity killing devices.

 

To stay up to date on Best Practices in Freight Management, follow me on Twitter @DanGoodwill, join the Freight Management Best Practices group on LinkedIn and subscribe to Dan’s Transportation Newspaper (http://paper.li/DanGoodwill/1342211466).

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