In this Q&A we sit down with Tom Reader, director of marketing for ELDs at J.J. Keller & Associates to talk about how fleets and shippers are learning to cope with the changes that will come with electronic logs.
HDT: What can fleets can expect when they make the transition from paper to electronic logs? I think your product is mostly being targeted to the smaller fleets that haven’t already made the switch yet.
Tom Reader: We have been doing a ton of education and a lot of it is centered around change management for these small to mid-size fleets who need to get an understanding of what the impact of ELDs is going to be. They think it’s really painful because I go from paper and I’m just going to be trapped electronically and that is going to mitigate how much time I can drive, but at the end of the day they don’t think about how the technology itself impacts how the driver just acts day in and day out and how long that takes for a fleet to get up and running.
There are a lot of assumptions that they plug this in and they’re off and running but now you have, from a fleet standpoint, you’re monitoring things through the cloud, you can see your drivers available hours, it might mean changes to how you route drivers, to how you dispatch them, where they go and when. From a driver standpoint, they used to write this stuff on paper and now they need to learn some technology if they’re not used to that.
HDT: Having to reroute drivers sometimes when they don’t have the available hours is probably one of the things that fleets fear the most.
One of the things that’s really happening now is that there is a lot of dialogue from the shipper standpoint. They are really interested in how ELDs are going to impact delivery time. They want to know, is there going to be more turnover in the driver population, are delivery schedules going to be impacted and which carriers have ELDs installed because they want them to run compliant. If they are not compliant they could be out of service. So shippers are having a lot of discussion and thinking they want to have a plan for ELDs because they need to know how it is going to impact my schedule.
HDT: Carriers often feel that shippers are the ones that are causing a great deal of this headache by keeping trucks at docks for hours at a time and not honoring appointments and not being flexible.
Exactly. It’s kind of a flipping of worlds now because they are the ones who were pushing for the flexibility of hours, but now, if there is going to be accountability, they need to know how that is going to change their world. They are trying to get out ahead of it and figure some of that out knowing that the fudging can’t happen any longer.
HDT: The carriers that are on top of this and going through the change management process now will probably have time to work it all out before December 2017, but what about those who wait until August 2017?
What we are seeing now, the since the mandate was released is double the attendance and participation in our educational events. Folks are really getting serious about this change. The other thing we are seeing is more fleets installing a couple ELDs because it might not be biting off the whole fleet at once but they need a couple rolling to understand what it is going to take for the rest of the fleet. Ultimately we are seeing the shopping and interest part ramping up.
HDT: Do you think that shopping is more to audition various products or are they trying to get a handle on how much their operation is going to have to change?
There are two variables, one of which is looking at what’s out there. Thinking, ‘if I’m going to do this, what is the best model for me?’ Our system is BYOD (bring your own device) so you can put the app on a smartphone. Other systems are purpose built, you can install it on your dash and it does other things for you. Then you have various flavors of feature sets. Cost is a variable but the biggest is change management - how easy is it going to be for my drivers to figure this thing out and work with it? Folks are looking at them and they want to test a couple different systems, depending on the fleet size, and see what works best for them.
HDT: Could you walk me through what your partnership with Verizon’s Network Fleet is all about and what it offers?
We do have a partnership with Network Fleet, they are part of Verizon. They produce asset tracking technology. They have a black box in the truck that will track assets and trailers and trucks and provide location based monitoring and other bits of data; performance management things like speed.
One of the things that was missing from their portfolio was getting ready for the mandate so they don’t have an hours of service module themselves. They partnered with us and they are using our intellectual property to manage hours of service through their application and equipment. They have a mobile app and they can track hours of service and compliance with the Verizon hardware installed in the vehicle. They still have all the Verizon pieces, but now they can put them in a position to have an HOS component for the portion of fleets that are mandated for HOS compliance.
HDT: Does your platform works on all sorts of devices?
If it is Android or Apple. There are other devices out there that we are not compatible with but 90% of the devices are Android and Apple essentially.
HDT: If you are using a tablet or a handheld, how is it tethered to the truck for communication?
Our device and Verizon’s too is essentially a black box that is connected to the truck and then that communicated via Bluetooth with the app on the phone. It’s just sending engine data and things like GPS location to the phone and the phone marries it up with the driver duty status and that goes up to the cloud for the fleet to see the hours availability. You have to have the black box connected but that can communicate, in our case, it communicates via Bluetooth with the app on the phone.
HDT: When you have a question and answer session at the end of your webinars what sorts of things are fleets asking you? What are you getting from them?
By far the greatest portion of questions are about exceptions or exemptions. Fleets basically want to know how they can get out of complying with the mandate. It’s really kind of funny because a lot of them involve confusion about the drive away toll-way.
HDT: That’s a pretty small chunk of the market at the end of the day.
It is, but people are confused about what the exception is so they are basically trying to figure out how they can avoid being a part of the mandate. What we’re saying is that you’re not going to avoid it. Then it gets down to more of the technical questions, a day in the life, ‘how will it affect my work etc…’ People are scared and want to know what it is going to mean to their operation.
HDT: Are they more worried about the physical integration of these things into their fleet or is it going to be the impact that the restricted hours have on their operation?
I think it’s more about the impact on operations. I would say that folks don’t understand the operational impact so they are worried that it is going to affect their operations. They are going to wait until December 2017 thinking they can just buy one and be off and running. Even though many systems are designed for a simple installation you still have drivers who don’t use cell phones.
I think there is also worry about the driver population and the noise about the retirees that will get out of the business altogether.
HDT: They say that every time the rules change.
Right. I talk to drivers too who say, ‘I was dead set against it and now it’s not so bad’. I do hear a lot of those stories and there is a fear factor and a lot of it is about the unknown. They assume it’s going to be a worst case scenario. In most conversations I’ve had with drivers they were really worried but once they’ve figured it out many think it wasn’t as bad as they thought it would be.
HDT: The stories we have been hearing align with what you’re saying, except in the cases where the fleets didn’t do a good job of communicating with their customers how things were going to change.
If you don’t have the discussions about productivity and profitability somebody is going to lose and it could mean a lost relationship entirely because you’re not preparing each other.
HDT: When you start talking to fleets about this suite of options that are available with any ELD are they talking strictly from an HOS point of view or tracking, or fuel tax implications? Do they see the value in the other stuff that they maybe didn’t even want to look at when they started with this?
Right now the tide is going to turn so the far majority of what we sell and what others sell is based on operational efficiency, the fuel tax, fuel use etc… Fleets were looking at technology to help improve operations overall. Compliance is more like, ‘that might be something I use, maybe not’.
Now we’re seeing that as the tide shifts and fleets have to comply with the mandate those purchases will be based on compliance. A large portion of our customers are traditional log-book customers and they will purchase for compliance only. They’re going to go for the minimum to comply with it. They might not want or need the other features. Right now the purchases have really been driven by and across the board operational, that it will improve how they work.