Everybody is talking about electronic logging devices (ELDs) and their impact on shipping and delivery, especially when it comes to perishables. Although the wiggle room enjoyed with manual logs may seem anachronistic in our digital world, it’s fair to question whether ELDs will really make shipping any safer.
In addition to frustrating commerce and the country’s access to fresh and affordable produce, it has been suggested that ELDs could make roads less safe by limiting a driver’s ability to use his or her own judgment to determine when a break is needed. It is also no surprise that enacting new regulation in a ruggedly independent industry like interstate trucking, and a time-sensitive industry such as fresh produce, has stirred up some raw feelings and good debate.
A Brief History of ELDs
For decades, truckers have used paper logbooks to track miles, fuel, hours on the road, and plenty of other details. It worked well for the most part; sure, spilled coffee could curl pages, and a lost logbook could mean a world of hurt, but the pages, pencils, or pens did the job.
As technology began playing a greater role in transportation, an electronic logbook was introduced in the mid-1980s. Primitive by today’s standards, the devices drew little attention.
But as technology improved, organizations including government agencies, advocacy groups, and larger carriers came to believe the device’s ability to accurately track service time for commercial trucks increased efficiency, standardized industry practices, and improved road safety.
Early regulation related to electronic monitoring came in 1988, mandating the performance and parameters of automatic on-board recording devices (AOBRDs). The Federal Motor Carrier Safety Administration (FMCSA) then attempted to solidify hours of service regulations with an ELD mandate in 2000. Many challenges were mounted in court and the issue was buried until July 2012 when President Barack Obama signed the MAP-21 Act, which included the mandatory adoption of ELDs.
At first, the rules weren’t meant to be universal; they were aimed at carriers who had repeated hours of service violations. But less than four years later, the current ELD mandate was put in place and the industry had a year to move from paper logs and AOBRDs to ELDs.
Bumps in the Road
Implementation of the ELD mandate has run into problems every step of the way, particularly in the produce industry. Veteran drivers with a lifetime of pen-and-paper logging were part of a culture that viewed the devices as Big Brother, making their jobs and lives more difficult. Many threatened to quit rather than acquiesce, but there is no evidence to support that such a mass exodus took place.
Everybody is talking about electronic logging devices (ELDs) and their impact on shipping and delivery, especially when it comes to perishables. Although the wiggle room enjoyed with manual logs may seem anachronistic in our digital world, it’s fair to question whether ELDs will really make shipping any safer.
In addition to frustrating commerce and the country’s access to fresh and affordable produce, it has been suggested that ELDs could make roads less safe by limiting a driver’s ability to use his or her own judgment to determine when a break is needed. It is also no surprise that enacting new regulation in a ruggedly independent industry like interstate trucking, and a time-sensitive industry such as fresh produce, has stirred up some raw feelings and good debate.
A Brief History of ELDs
For decades, truckers have used paper logbooks to track miles, fuel, hours on the road, and plenty of other details. It worked well for the most part; sure, spilled coffee could curl pages, and a lost logbook could mean a world of hurt, but the pages, pencils, or pens did the job.
As technology began playing a greater role in transportation, an electronic logbook was introduced in the mid-1980s. Primitive by today’s standards, the devices drew little attention.
But as technology improved, organizations including government agencies, advocacy groups, and larger carriers came to believe the device’s ability to accurately track service time for commercial trucks increased efficiency, standardized industry practices, and improved road safety.
Early regulation related to electronic monitoring came in 1988, mandating the performance and parameters of automatic on-board recording devices (AOBRDs). The Federal Motor Carrier Safety Administration (FMCSA) then attempted to solidify hours of service regulations with an ELD mandate in 2000. Many challenges were mounted in court and the issue was buried until July 2012 when President Barack Obama signed the MAP-21 Act, which included the mandatory adoption of ELDs.
At first, the rules weren’t meant to be universal; they were aimed at carriers who had repeated hours of service violations. But less than four years later, the current ELD mandate was put in place and the industry had a year to move from paper logs and AOBRDs to ELDs.
Bumps in the Road
Implementation of the ELD mandate has run into problems every step of the way, particularly in the produce industry. Veteran drivers with a lifetime of pen-and-paper logging were part of a culture that viewed the devices as Big Brother, making their jobs and lives more difficult. Many threatened to quit rather than acquiesce, but there is no evidence to support that such a mass exodus took place.
Adoption seems to have been two-sided: larger companies jumping in and smaller operators waiting and weighing their options. In the months since the rollout in December, many companies self-reported high levels of compliance, but others continued to wait, hoping for a last-minute reprieve. Partly because of protests from industry advocates, agriculture haulers did receive two extensions.
Sonny Perdue, U.S. Secretary of Agriculture, applauded the measure, noting the extensions were “critical to give the Department of Transportation additional time to issue guidance on hours of service and other ELD exemptions that are troubling for agriculture haulers. This is a classic example of one-size-fits-all federal regulation that ignores common sense to the detriment of sectors like agriculture.”
Before the second exemption expired, regulators came through with two clarifications in June: ag haulers are exempt from hours of service within 150 air-miles of a perishables pickup or delivery point; and any driver who runs out of hours can invoke personal conveyance to drive to the closest safe parking area without penalty.
Size matters
And while most would call this a win, it was not what many were hoping for—an all-out ban on ELDs. According to a survey by CarrierLists, larger carriers (those with fleets of 71 trucks or more) reported universal adoption in their vehicles with little complaint from drivers.
Smaller fleets of up to 25 trucks, representing the vast majority of those surveyed, reported an adoption rate of around 40 percent in the early months. This reflects the basic divide in ELD opinion: larger carriers favor the devices as a way to ensure compliance and keep drivers in line, while smaller carriers view ELDs as intrusive, limiting their ability to compete, and slowing down shipping and delivery.
Because of the inherent challenges of hauling perishables, time constraints have always been a major factor in shipping. A maximum of 14 hours of service per day (with 11 hours of driving) may seem like ample time—but loading delays, traffic jams, and inclement weather can eat up time and jeopardize business in a way that doesn’t apply to dry goods, electronics, construction materials, and other forms of cargo.
Even with the exemption, many were already experiencing higher shipping costs with a corresponding surge in wholesale and retail pricing. More flexible and permissive rules for fresh produce hauls would seem to go a long way in compliance without disrupting the supply chain and increasing the price consumers pay for fresh produce.
“The biggest ELD issue we’ve faced is a spike in freight costs,” confirms James DeMatteis, CEO and president of Des Moines Truck Brokers, Inc. Like many, DeMatteis believes adjusting hours of service rules are key to successfully managing compliance with ELDs.
Who’s on First?
Opinions of ELD compliance are a dime a dozen, with advocates and opponents on every facet of the issue. Carriers, distributors, lobbying groups, and brokers are far from united over whether the mandate should have been implemented at all, let alone how, since no sole group benefits entirely from the way the legislation is currently written.
Most drivers, though, have been universally opposed. Terry Keister, carrier manager of Cool Runnings, headquartered in Kenosha, WI, found there was “pushback from day one” from drivers, along with “a reluctance to take on long-haul jobs and a real fear insurance costs will go up.” It also wasn’t great for productivity, as many drivers struggled with using the technology.
This attitude is understandable given the penalties drivers suffer for noncompliance. While initial inspections focused on issuing citations to give drivers a cushion as they began using the equipment, the regulation has teeth. Repeated violations can lead to federal investigations of companies and individuals, and while drivers will bear the brunt of compliance inspections, there’s plenty of pain to be spread around: the total cost of ELD implementation is predicted to reach more than $2 billion.
This cost is added to an industry already reeling from a lack of qualified drivers and capacity crunch. A study in the Journal of Commerce in 2017 predicted that the shipping industry might realize losses of between 3 and 5 percent due to ELD-related costs, exacerbating existing problems.
A driver’s view
One of Keister’s Cool Runnings’ drivers, owner-operator Jimmy Christensen, is among the staunch opponents to the use of ELDs. He complies with the mandate by using a tablet with a logging app. “There’s nothing in e-logging that’s about safety; it’s all about control.”
He is not alone in this thinking; 62 percent of owner-operators surveyed for a special Randall-Reilly/Commercial Carrier Journal report in 2017 believed new technology (i.e., ELDs) would “make it easier for fleets to monitor and control drivers.”
And when drivers were asked “What is the one thing you dislike most about your job today?” for the Randall-Reilly/CCJ report, 60 percent of owner-operators cited regulations as making it harder to work and earn a living.
Further, 51 percent of owner-operators admitted they wanted to get out of trucking when asked about the future of their trucking career.
“As trucking becomes more and more regulated, my feeling is that capacity will continue to shrink,” observes Jacqueline McKenzie, vice president of corporate communications for Triple Star Logistics, Inc. “While trucking isn’t the most glamorous of professions, one of the benefits of being a trucker was the autonomy. But with every new regulation, autonomy is eroded. It’s another hurdle in attracting new people to the profession.”
Conjecture vs. Reality
As a result of these and other factors, the ELD compliance deadline was seen by many as a sort of doomsday scenario: if not the end of hauling as we know it, at least a tectonic shift of the kind not seen since the requirement of commercial driver licenses in 1986. Since the industry survived that hurdle and those that came after, it will overcome this too, right? Will this be seen as a true watershed moment, or as a situation where the fear of change outpaced the reality of compliance?
“We don’t use ELDs, but we do interface with them for our transportation management system,” explains Dan Vaché, who recently retired as director of sales for software provider FreightFlow. “There are both good and bad sides to enforcing the use of ELDs: the good news is that with stricter hours of service regulation, drivers will see a decrease in wasted standby time [at shipping docks]; the bad news is with drivers unable to exceed regulated hours of service, produce will see an increase in transit time.”
Exploring other options
Climbing transport time has already been seen in perishables with delays and late arrivals, prompting some shippers to consider intermodal solutions as a way around the full burden of compliance. This, however, has its own complications.
“Intermodal, although more cost effective, has delivery times on par with those brought on by the ELD mandate, and in some instances even longer,” notes Joe Rubini, president of Rally Logistics, Inc., headquartered near Toronto, Ontario. “Shippers are aware that trucks can no longer spend hours waiting on loads, so many have been arranging loads of trucks with more accurate appointments.”
DeMatteis, too, notes intermodal may be a solution for some, but not others. It can be inefficient when multiple pickups and dropoffs are required, and does not pair well with time-sensitive or perishable freight like fresh produce.
A growing response to the mandate is one that reaches back to the old days of long-haul trucking: pairs of drivers working as a team. While the rates for team service are higher, sometimes as much as $500 to $1,500 per truckload, this pales in comparison to the cost of noncompliance, missing a delivery due to running out of service hours, or losing the load to spoilage.
Demand for team service has increased, but it is not a particularly popular panacea. “Due to the restrictions, more and more clients are requesting teams,” McKenzie says, “but the problem is you can’t get a team to sit around in California or Arizona for a day and a half waiting to load. They just won’t do it; they want to load quickly and get back on the road.”
Other solutions are more regional and include short hauls with strategically placed distribution hubs. For local deliveries and trucks driving less than 100 miles, ELDs are not required. And if it seems ELDs favor large shippers over smaller outfits, that’s not a coincidence, and there is reasonable speculation throughout the industry that it will bolster the already-growing trend towards consolidation.
“These rules will absolutely impact consolidation,” asserts Rubini. “The only way to get service hours back to the drivers is to put it on the shippers or the consignee through consolidation or quicker loading. This will give drivers more driving hours, therefore getting goods to their destinations sooner.”
A Race Against Time
Regardless of what the future benefits may be, the dawn of the ELD era represents a huge investment of time, effort, and expense across the board, for both big and small carriers.
“There’s so much to get a handle on,” admits Tim Cohran, operations manager for Gregory Family Express, Inc., an asset-based trucking firm in Atlanta.
After selecting an ELD model, there were costs of adoption, implementation, and training, Cohran relates. This also included hardware, software, training, and “pages and pages of new regulations to review,” he adds, as well as for companies “to be aware of all the exceptions and exemptions in case a truck gets inspected.”
A familiar refrain: hours of service
“On top of all that,” Cohran emphasizes, “you have this 14-hour clock staring you in the face, so it turns into a real race against time—particularly with what we’re hauling most of the time.
“Produce haulers are already under significantly more pressure to deliver on time because of the nature of the product,” he notes, and “hours of service restrictions are making an existing problem even bigger.”
With hours of service at the heart of most ELD discussions, the impact of FMCSA’s recent clarifications on pickup or delivery points and driving allowances for safe parking remain to be seen as the industry adjusts to full compliance. Nevertheless, as DeMatteis points out, there are still plenty of complications for anyone involved in transporting and delivering perishables. “Delays at shippers and receivers, personal conveyance rules, traffic, road closures, just to name a few. These were already big problems before the ELD rules went into effect, and they haven’t made them any easier.”
Robert Voltmann, chief executive of the Transportation Intermediaries Association, believes many in the industry, including drivers themselves, have suffered under misapprehensions about what ELD compliance really means. “ELDs did not change one letter of the hours of service regulations,” he insists. “If you were 100 percent compliant with hours of service in your paper logs, you’ll be compliant with ELDs.” While recognizing the various issues that may complicate compliance, such as parking and delays, he believes that ultimately drivers will be the top beneficiaries of the new rules.
“Where ELDs will have the biggest impact is on shippers and receivers,” Voltmann points out, because he believes “drivers will be able to pick and choose the loads they want.” When this occurs, shippers that treat drivers well and respect their hours of service will win. “The biggest improvement will be from how we make more efficient use of drivers and their fungible hours.”
Adding Up the Pluses
One of the ironies is ELDs are meant to make all truck driving safer—FMCSA estimates more than 1,800 crashes, representing 560 injuries and 25 fatalities, will be prevented by their use. The devices, however, created their own set of problems with some drivers racing to the next rest stop or parking lot and then speeding away when the required break ends.
Christensen puts it this way: “What I’ve noticed on the road is very unsafe—trucks running faster to get 11 hours of driving, [then] sleeping on the side of the freeway.” Even worse, he admits, “I find myself pushing harder to maximize my day.”
In addition to prioritizing safety, FMCSA says there are also significant financial upsides: reduced paperwork, tracking in real time, more efficient fuel usage, and the opportunity to use data to increase savings and make more informed price adjustments. Projected savings in administrative costs top $2.4 billion according to FMCSA, purportedly outpacing adoption expenses by hundreds of millions of dollars.
Looking Ahead
While it’s still early in this new era of ELD compliance, and real numbers are hard to come by, it’s clear adjustments will continue in most every aspect of produce transportation. Whether or not the ultimate effect is positive or negative, the rules aren’t going away and represent the future of shipping.
Voltmann, in looking into his own crystal ball, minimizes the impact ELDs will have on consolidation, which he says will be an ongoing issue anyway and will be countered as more drivers become owner-operators thanks to high rates.
He does see a continuance of the driver shortage, however, as a “simple matter of demographics” with many drivers in their upper 50s. “And with the oil patch reemerging and unemployment low, capacity constraints will continue for the foreseeable future,” he notes—which is good news for independent operators.
As the weeks and months pass after the mandate went into effect, tension levels seem to have abated somewhat, and the ag hauler reprieves helped.
“The new adjustments gave us some breathing room,” notes Keister, allowing more time “for people to get used to the technology and be trained on how to ensure compliance. And hopefully, as we attract a new generation of drivers who have been using it from day one, we won’t see this learning curve.” Nevertheless, he says, it’s still too soon to see how it will impact retention and what will happen to insurance rates and safety standards.
Christensen, however, has not softened his stance. “Most old-timers are throwing in the towel, but after 42 years of trucking, I still enjoy it.” He says he will not, however, be swayed by politicians who know nothing about the trucking industry. “We already know who the bad actors [on the road] are,” he insists, and believes better driver training, not intrusive oversight, is the answer to safety.
In trying to look on the bright side, ELD compliance could lead to efficiencies and leaner companies, as well as safety. And in this high-tech world where data is king, there are enormous upsides to having ELDs collecting and processing all manner of useful information.
So whether you’re a fan or foe of trucking’s new electronic era, everyone must remain focused on the road ahead. “Drivers, brokers, shippers, and receivers,” McKenzie says, “ultimately, everyone will have to adjust to this new reality.”
