Fleet Management

Living With ELDs: Getting Ahead of the Electronic Logs Mandate

April 2016, TruckingInfo.com - Cover Story

by Jim Park, Equipment Editor - Also by this author

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Fleets can weather the ELD storm by starting now to integrate the devices into the operation.
Fleets can weather the ELD storm by starting now to integrate the devices into the operation.

With 38 years in this industry, I cannot recall a more polarizing issue than the electronic logging device mandate. In researching this article, I have come across nearly every opinion imaginable. And as diverse as those opinions are, each of them has some validity.

Fleets that have successfully transitioned to ELDs claim everything is running smoothly, while some among those that have not fear the sky will come crashing down in December 2017 when the regulation takes effect.

Things will be different under the ELD mandate — that you can count on. Most companies will survive, but many will not. The difference will lie in how fleets manage the transition.

The most frequently expressed concern is the loss of productivity followed by the potential loss of drivers. In an interview last fall with HDT, Annette Sandberg, CEO of TransSafe Consulting LLC and a former administrator of the Federal Motor Carrier Safety Administration, said that any carrier stands to lose 10% or more of their drivers when they convert.

“I would suspect some of those drivers will completely exit the business, especially older ones, and that will only exacerbate the [driver] shortage,” she said. “And some smaller carriers may exit, too, or be purchased by larger carriers that can make the conversion [easily].”

That may be the case today while drivers still have the option of working for a carrier that hasn’t converted yet to electronic logs. But where will drivers go after December 2017?

For the driver, it’s a two-pronged problem. Many fear a reduction in income resulting from the oft-quoted estimates of a 5-10% reduction in productivity. Others, those who typically find employment at smaller carriers, will not take well to being micromanaged to the extent some larger fleets are inclined to do.

“Large carriers have so overly managed their business they have stripped drivers of all their autonomy,” says John Larkin, managing director and head of transportation capital markets research at Stifel Financial Corp. “Carriers will specify the route, monitor any deviance from that route, tell drivers where to rest, where to buy fuel, where to eat, etc. A lot of drivers, particularly the older ones, won’t respond well to such an environment and may leave the industry altogether.”

Tablet-type devices are legal as long as they are electronically or physically connected to the engine ECM. They must be mounted securely while the truck is in motion.
Tablet-type devices are legal as long as they are electronically or physically connected to the engine ECM. They must be mounted securely while the truck is in motion.

On the wage side (and this varies across the board from carrier to carrier), fleets that have made the transition say they are able to monitor drivers’ hours more closely and make strategic planning decisions to maximize productivity. We have heard this from both large and small carriers, so the larger ones don’t have exclusive domain here. However, drivers still fear that time at loading docks, traffic congestion, poor load planning, etc., will chip away at valuable earning time, leaving them with less than they had going into the mandate.

Ploger Transportation, a 30-truck irregular route carrier based in Bellevue, Ohio, switched to ELDs in 2006. Joel Morrow, Ploger’s director of research and development, says the transition fundamentally changed the way the company does business – for the better. 

“It really puts the onus on the sales people and dispatch to build better loads and do a better job for the driver,” he says. “We upped the pay to the drivers and if they get hung up on the road, we pay them. It really changed the focus of our operation from expecting drivers to work around all the problems with the loads we gave them, to providing drivers with a plan they can work with.” 

Morrow says Ploger has very good relationships with its customers, and that allowed them to work through the problems. That may not be so easy for carriers with more casual business relationships or for those who deal with a lot of freight brokers.

Danny Schnautz, vice president of Clark Freight Lines in Pasadena, Texas, is one such carrier. He worries that scheduling backhauls will become more difficult with shippers that won’t keep to scheduled appointments.

“Between dock dwell time and unscheduled loading times, we could be leaving a lot of freight behind,” he says. “We will be having discussions with our brokers and explaining that we can’t afford to wait. We’ll be looking to nail down loading appointments and payment for waiting. We can’t afford to do otherwise.” 

Is that blue-sky thinking? Gordon Tullett thinks so. He’s an independent owner-operator who hauls for several southern California retail companies.

“How are you going to convince the unions at the distribution centers to change their ways?” he asks. “If the company gives them four hours to strip a trailer they are going to take four hours, even if it could be done in two. You can negotiate all you want with the container terminals; they are not going to get the loads out the gate any faster.”

The difference between making a profit and just breaking even may prompt some carriers to throw in the towel, Larkin warns.

“That’s the part of the equation that nobody can quite get their arms around,” he says. “If you destroy the economics of the small carrier by hyper-regulating everything, people might downsize, liquidate their fleets or exit the industry altogether and find some other way of making a living.”

Trips that push the envelope with paper logs will need a performance audit to see if they can be made with tighter time constraints. Congestion and delays could compromise your plans.
Trips that push the envelope with paper logs will need a performance audit to see if they can be made with tighter time constraints. Congestion and delays could compromise your plans.

Choosing your ELD

One decision you’ll need to make sooner rather than later is whether to go with a simple ELD-only device that does little or nothing more than track hours, miles, changes of duty status, etc., as required by the regulations, or a scalable solution that offers a variety of back-office management capabilities as well.

There’s much to be said in favor of the latter option, especially in offsetting some of the productivity losses. Improving efficiency in fleet operations and administration can reduce operating costs.

“People pay less attention to all the hours office staff spends tracking mileage, finding lost or incomplete log sheets and chasing drivers down for their paperwork,” says Chris Ransom, manager of solution architects for Verizon NetworkFleet. “Big fleets adopted this technology a long time ago and they are still using it because it provides value.”

There are two components to the system: the hardware and the software. Many providers offer complete solutions, while others, such as Verizon’s NetworkFleet and J.J. Keller, have partnered to provide customers a seamless solution. In J.J. Keller’s case, its mobile app will work with any Apple or Android device, and it relies on Verizon’s asset tracking technology and hardware interface to provide the hard link to the truck’s electronic control module.

“Fleets are now installing and testing a couple of different ELD platforms in a few trucks to see how each performs in their operation,” says Tom Reader, director of marketing for ELDs at J.J. Keller. “They are trying to get a sense of what works best in their application and from which feature sets they will derive the greatest value.” 

Fred Fakkema, vice president of compliance for Zonar, says fleets have more choices than ever, noting that the market has grown from half a dozen providers five years ago to over 40 today.

Dwell time at loading docks will be a major bone of contention under the ELD rules unless fleets address the issue with customers ahead of time.
Dwell time at loading docks will be a major bone of contention under the ELD rules unless fleets address the issue with customers ahead of time.

“Somewhere in the mix there is a product that will fit your needs, but don’t overlook the customer service and training component,” he says. “There will be speed bumps in the integration process, so you’ll be leaning on your provider heavily in the early days. You want to make sure the supplier will be there with the support you need in the beginning as well as with ongoing updates, such as when the hours of service rules change as they might with regard to the 34-hour reset.”

The choice of an ELD and possible management system is key, considering how tightly integrated it will become with the operation. It’s not something you can pull out and replace at a moment’s notice, so you want to get it right the first time.

“Change management planning on the front end is obviously really important, but what about the follow-up and ongoing maintenance?” asks Peter Allen, executive vice president of sales, MiX Technology. “You’ll want a provider who will stand with you and help you identify and solve problems and help you make use of the data.”

Single-purpose devices will comply with the requirements but they may not offer the management capability the full-suite ELDs can provide. They are less expensive and have no monthly fees, but they lack functionality. 
Single-purpose devices will comply with the requirements but they may not offer the management capability the full-suite ELDs can provide. They are less expensive and have no monthly fees, but they lack functionality.

Integrating ELDs into the fleet

First time ELD users still have more than 18 months until the compliance deadline. Use that time wisely, warns Alex Capelle, ELD program manager for Continental, which makes the VDO RoadLog ELD.

“We are advising our prospective customers to adopt the technology early,” he says. “There will be a learning curve with drivers and routing, and there will be a learning curve for the back office as well, with how they manage under the new rules. There will be more to deal with than you have imagined. You cannot get started too soon.”

You’ll first need to identify which, if any, current trips will no longer work under ELDs, and get negotiations started with those customers to fix the problems and come up with workable options. 

Several ELD providers recommended running e-logs alongside paper logs for a time to see the real world impact of the ELD on the operation.

Ploger Transportation took the extraordinary step of re-spec’ing their tractors so drivers would have an easier time with HOS. They had always been a 60-mph fleet, which gave them a 47-mph average trip speed. They have since upped the fleet speed limit to 70 mph to shorten trip times and spec’d 6x2 axle configuration to get some of the fuel efficiency back.

“We’re also running shorter hoods and wheelbases so drivers can get in and out of tight spots faster,” Morrow says. “I’ll tell you, the 270-inch-wheelbase tractor with the 132-inch hood won’t do you any favors here in the Northeast.”

Policies and practices will need to be established to deal with various aspects of the rule, such as how to deal with unassigned vehicle moves.

“Mechanics will be driving the trucks in the course of their duties,” says Tom Cuthbertson, vice president of regulatory compliance at Omnitracs. “Or you may have outside service providers taking the trucks out for service. How will you manage that driving time on the ELD? You’ll need to look closely at that type of movement. If you don’t, you’ll dump that driving time on the primary driver.”

Dozens if not hundreds of other challenges are going to arise as you get deeper into the adoption and integration and some of the nuances of the rule begin to make themselves known. They may not be obvious at first, but as of Dec. 18, 2017, you will have to have them sorted out. Most observers do not expect FMCSA to grant a period of soft enforcement.

“All this is going to take time, and that is one thing not all carriers understand,” says Steve Newman, CEO of Eroad. “If you wait until the 11th hour, it won’t go well.” 

Comments

  1. 1. Richard Pingel [ April 19, 2016 @ 04:26AM ]

    I'm still wondering if the efficiency claims are being exaggerated. One large refrigerated carrier said that their fleet average went down 25% when the instituted ELD's. Now their claim is that they are 9% better than they were 2 years ago, a year after the 25% loss. That would seem to still be a loss of 16% after 3 years of use. If ELD's promote so much efficiency, why the claims that everyone should be on them to "level the playing field"?

  2. 2. Mr. Joe [ April 21, 2016 @ 12:38PM ]

    The rate of "loss of efficiency" will be correlated to the degree to which the company or driver was previously breaking the law in order to get the job done. Paper logs do not provide flexibility where the law is concerned; they only make it easier to hide violations. What drivers and carriers think of as "flexibility" is nothing less than criminal behavior. Ask any attorney. If a company is seeing unreasonable reductions in "efficiency", it's probably because they already had a high level of non-compliance. Companies who already endeavor to operate lawfully are having great success with ELDs, and they are learning to tweak their networks and operations to maximize actual efficiencies. It is true that politics at the shipping dock are a huge problem when it comes to running a network or business on time. Inflexibility, corruption, and outright desire to screw with drivers ensure these people will continue to be the bane of our existence as truckers. But as the mandate closes in, we have an opportunity to eventually change this. Drivers and carriers need to work together to exert pressure on shipping and receiving operations to straighten up. With everyone in the same boat in terms of the ELD mandate, it's not like they'll be able to punish anyone by sending business elsewhere. They will need to adapt, or quite frankly we will find a way around them (carriers can only afford to hire so many extra drivers, and buy so many extra trucks and trailers to make up for inefficiencies at the docks). Many drivers and carriers have for too long allowed the ridiculous inefficiencies and thug behavior at the docks to dictate how they run their own businesses, leaving them with a feeling that they have no choice but to bend the rules in order to thrive, or in some cases just survive. Unacceptable nonetheless. The tide will begin to turn when the hard compliance deadline passes, and the beneficiaries will be the companies who get in shape early.

  3. 3. Mr Jim [ April 22, 2016 @ 05:42PM ]

    This is typical of the Government wanting to control everything. Governments have a tendancy's of asorbing and running or ruining lifes.

  4. 4. Sam Amann [ June 09, 2016 @ 10:15AM ]

    One of the more intelligent articles on elogs. At the core, the system has always been broken since deregulation. 70 hrs/8 days? Who dreamt up that? Paid by the mile and governed by the clock? Now governors to reduce the miles covered and elogs to reduce the time to work. Each intervention further constricts a drivers ability to survive. We've put the cart before the horse here. The first change that should be mandatory, before the digital manacles, is a base salary. Then delays won't impoverish a driver. The second change is, unfortunately, a Fed Mandate. All drivers become covered under the Fair Labor Standards Act. They are compensated for ALL work and go on the clock, at the shipper or receivers expense, while loading and unloading. Then the frenzy to uber digital control will abate and drivers will become members of the American work force with all the benefits that accrue to all their fellows.

  5. 5. John holt [ June 06, 2017 @ 11:15AM ]

    The only reason the government wants everyone on elogs is the big carriers went crying to them stating they were at a disadvantage on elogs but the big carriers are in the pocket of big brother with the big tax credits of training students at $15.000 a head the big carriers can buy a lot of equipment with that kind of money plus not to mention that Qualcomm and omnitronics stand to make billions of $$$ off of elogs and its on the other hand the big carriers are after the owner ops thinking if they can put them out of business they will come go to work for them, that's not gonna happen 🤔

 

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