Drivers

ELDs Don't Have to Be a Productivity Killer

July 2017, TruckingInfo.com - Feature

by Evan Lockridge, Business Contributing Editor - Also by this author

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It may turn out that the ELD mandate that hits in December will not have much further impact on driver productivity as so many fleets have already made adjustments to their operations.  Photos: iStockPhoto
It may turn out that the ELD mandate that hits in December will not have much further impact on driver productivity as so many fleets have already made adjustments to their operations.  Photos: iStockPhoto

You could argue that the federal mandate requiring the use of electronic logging devices for most trucks involved in interstate commerce could be the biggest shakeup the trucking industry has seen since President Jimmy Carter signed the Motor Carrier Act of 1980 37 years ago this month, which deregulated the interstate trucking industry.

Trucking companies large and small have expressed for quite some time their concerns that the ELDs to be required come December will cut productivity, meaning less revenues and profits. Yet while that may happen, especially for those waiting until the last minute to get on the ELD bandwagon, there are indications that negative productivity effects will be outweighed by other productivity gains fleets have made in recent years – and by other changes that can be made.

“My take on ELDs and productivity losses is that looking at the industry in total, you won’t see much impact going forward,” says Chris Kemmer, consultant at CK Commercial Vehicle Research.

This spring, her firm conducted a fleet productivity survey of nearly 60 decision-makers from small, medium and large for-hire, private and municipal operations. She believes that for those required to add ELDs, there will certainly be some who lose productivity, at least in the beginning. However, Kemmer also found there have been so many other changes in trucking – improved vehicle performance, automated transmissions, and even shop management programs, for instance – that any loss of productivity from ELDs will be offset.

“There are so many other things that are counteracting that loss from ELDs, that, in my view, and it’s only my opinion, that at the end of the day you won’t see a specific tightening of capacity because of this ELD mandate,” Kemmer says.

Some even believe ELDs can and ultimately will actually improve fleet productivity.

“The way the hours of service rules are set up, if you’re going to efficiently work that, then you have to plan for a five-day week,” says Duff Swain, president of trucking consultancy Trincon Group. “And that’s very easy then to have that sixth day, or the seventh day, or second shifts available to have more than one driver per truck. That’s a major improvement in productivity, when you plan that way.”

According to Swain, the carriers that are having a problem with ELDs and are afraid of them cutting their productivity are the same ones that are not effectively using their technology, or who don’t have the ability to plan.

To him, this means fleets need to take full advantage of enterprise system software to process all the data they get from customers, as well as working with customers several days in advance, to drive efficiency. Such a process also needs to include driver managers, and even having sales people who go out and find customers who fit their lanes and who will have the kind of freight that makes the equipment most efficient.  The net result of all this is not only productivity, Swain says — drivers also are happier.

“You know, they’re getting more miles with less effort than they ever have before. And they’re home on a regular basis, and that’s huge as far as retention goes,” he explains.

Another factor in how much a trucking fleet’s productivity is affected by the upcoming ELD mandate is how well a carrier has enforced hours of service rules in the past, says Steve Rush, president and owner of Carbon Express, a New Jersey-based tanker operation with a little more than 50 trucks.

He believes the majority of fleets have not strongly enforced driver hours of service rules, and they’re the ones who will “lose a lot of productivity.” That, he says, will force these carriers to adjust their rates.

Researcher Chris Kemmer has found that “many other things,” such as improved vehicle performance and the adoption of automated transmissions, are counteracting the productivity loss incurred with ELDs.
Researcher Chris Kemmer has found that “many other things,” such as improved vehicle performance and the adoption of automated transmissions, are counteracting the productivity loss incurred with ELDs.

“They’re going to have to adjust their pricing, or they’re not gonna make this cut,” Rush says. “I think that this mandate is not much different than when deregulation came. Those that didn’t adapt and adjust to deregulation went, and a lot of carriers went out. And I think that’s gonna happen here.”

Like Swain, Rush believes the coming ELD mandate and its effects on productivity will change how fleets schedule drivers. For instance, Driver 1 gets in the truck at 8 a.m. and works until 8 p.m. Driver 2 gets in the truck at 8 p.m. and works until 8 a.m.

Carbon Express is currently moving a lot of its loads this way, because Rush believes dispatching can no longer be one driver, one truck, one load.

David Rousch, president of KSM Transport Advisors, a financial advisory services firm for trucking and logistics operations, says such changes in driver scheduling can work, but with one caveat.

“It makes sense because you have more than one driver on a given truck and you keep that truck running during periods when driver A is not available to drive for whatever reason,” he says. “You’re going to improve productivity, but again, it’s just so very difficult to implement in the real world. You have to have dedicated or managed or engineered fleets and/or lanes in order to make that happen.

“The more dense your lanes are, the more velocity you’re going to be able to have,” he explains. Even taking the notion of slip seating or relaying out of the mix, he says, you’re better able to plan and keep drivers moving if you have denser lanes with more load choices. “I think that that’s the realistic way for truckload carriers to improve their productivity or their velocity, is by really focusing on density and generating more choices in a given geographic area.”

Too many carriers, he says, make the mistake of accepting loads they shouldn’t, just to keep customers happy. “I mean you send a driver to Montana, let’s say, because their shipper has a load that goes there and you’re afraid to turn it down. That driver’s out there, it’s gonna take a long time to get him reloaded, you’re probably gonna have a long deadhead. You’re gonna go to a third party broker to get them loaded because you don’t have a customer there.” And that kills productivity.

If carriers address these types of issues, Rousch believes, they will get a much better handle on what their drivers’ capability for productivity really is and what drivers’ barriers to productivity really are.

Steve Rush of Carbon Express figures the carriers that will be hardest hit by the ELD mandate will be the ones that did not enforce hours of service rule in the past.
Steve Rush of Carbon Express figures the carriers that will be hardest hit by the ELD mandate will be the ones that did not enforce hours of service rule in the past.

Even fleets that are slow to embrace the types of changes advocated by Rousch, Swain, and Rush will see productivity improvements with ELDs in the simplest terms, contends Ray West, senior vice president and general manager of transportation management systems at TMW.

“There was a lot of concern about productivity when ELDs first came along, and there was a lot of pushback from drivers on it. [But] what the drivers that went on it wound up finding out is that they actually picked up a little bit of time over the paper log, because the ELDs were not in 15-minute increments,” he explains.

Despite being controversial, especially with drivers and small fleets, there is evidence ELDs will bring productivity gains. Just ask David Bates, senior vice president of operations at the less-than-truckload carrier Old Dominion Freight Line, which has some 11,000 tractors.

He said the fleet began employing ELDs in 2008, with the full rollout completed in 2010. They are able to measure a number of productivity metrics, such as mpg per driver, idle time, acceleration time and others.

With the December ELD mandate drawing closer, Bates says he doesn’t believe this will give Old Dominion any real distinct advantages over its direct, large, competitors. However, he predicts the mandate will be a big factor in productivity for less-than-truckload and truckload carriers that run 30-50 trucks who may not have been following hours of service rules closely.

“Now that they can’t forge logs, now they’ve got to run legal, that’s going to mean certain runs they use to do, they can’t do them anymore, because the drivers are going to have to be in compliance with the DOT regulations,” Bates says.

Comments

  1. 1. Terry Wrzesinski [ July 30, 2017 @ 10:37AM ]

    As usual people with no real trucking or driving experiences making important decisions in our industry.

  2. 2. Elmer [ August 22, 2017 @ 05:53PM ]

    With elds if im going to run the same fun I don't get time to shower all week till I get home know how is that good plus if I get sleepy I can't take a nap I have to keep going I don't know what the makers of elds think I'm out here for but I'm ting to make a living not siting in a office making laws about ways to take from truckers watch the longer the elds are in effect the wrote it will get you have to drive faster to make tIme when other wise you wouldn't have is step of freedom of the road now it's prison of the road

 

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