What’s Next After Electronic Logging Devices?

Regulations have dominated transportation discussions in recent years, whether it’s Hours of Service (HOS) and the 34-hour restart rule, CSA (Compliance, Safety, Accountability ) program, and in the spotlight today, Electronic Logging Devices (ELDs).

What impact will ELDs have on trucking capacity and productivity? Will the mandate cause drivers to exit the market? What impact will it have on shippers and costs?

Those are the most common questions I hear being discussed at industry conferences and written about in blog posts. The most recent insight on this topic comes from Transplace (a Talking Logistics sponsor), which published a study last week based on a survey it conducted with more than 400 carriers of various profiles. Here are a couple of highlights from the press release:

  • ELD implementation varied heavily by fleet size: The study revealed that there is a significant difference in the amount of implemented ELDs between large and small fleets. Eighty-one percent of large fleets (more than 250 trucks) reported that they had achieved full ELD implementation, with the remaining 19 percent working towards implementation. Conversely, small fleets (less than 250 trucks) have been much slower to integrate ELDs, with only 33 percent having fully integrated ELDs into their fleet. Another 29 percent have begun the implementation process, while the remaining 38 percent have no immediate plans to begin implementation.
  • Capacity and utilization expected to change, but the amount varies: While most carriers expect their capacity or utilization to be affected as a result of ELDs, 56 percent of large fleets expect their utilization to decrease while 32 percent expect to see no impact from their implementation. Smaller fleets are even more cautious about how their utilization will be affected, with 64 percent expecting a decrease, while 25 percent expecting to see no change.

Ben Cubitt, senior vice president, consulting & engineering at Transplace, summarized the results this way:

“Implementation of ELDs has been significantly slower for carriers with smaller fleets. While some carriers are still researching the technology, others indicated that they are holding out in the hope that the mandate will be overturned in court. One carrier responded to the survey by saying, ‘I will sell out first.’ While much can happen between now and when the mandate takes full effect on December 16, 2017, most carriers – large and small – anticipate a noticeable impact to utilization and capacity. The challenge will be to find the right balance of good safety practices without causing a significant disruption to the transportation industry.”

A few weeks ago, C.H. Robinson (also a Talking Logistics sponsor) published an informative post on this topic — How the ELD Mandate Will (and Won’t) Change the Marketplace — that addresses many other important questions about ELDs.

I have also fielded a lot of questions about Electronic Logging Device vendors. ELD providers must self-certify and register their ELD with the Federal Motor Carrier Safety Administration (FMCSA). Currently, there are only a handful of vendors listed on FMCSA’s website, but FMCSA’s “self-certification” process raises enforcement questions.

Of course, as with HOS and CSA, there is legal action in the works to overturn the ELD rule. Last week, the Owner Operator Independent Drivers Association (OOIDA) brought its case to a federal appeals court. As reported in the Wall Street Journal:

[OOIDA] argued that e-logs would violate the privacy of millions of drivers by allowing employers and the government to track their movements. Employers would also be able to use data generated by e-logs to force truckers to drive in unsafe conditions if they hadn’t hit their hours limits, lawyers for the group said.

Many large fleets already use e-logs to make sure drivers comply. Some smaller fleets and independent drivers who own their own trucks have balked at buying the devices, which can cost $500 per truck. They say they can track drivers’ hours by having them manually enter their start and stop times on paper.

Unless OOIDA (or any other group) wins in court, I expect the discussions around ELDs to continue from now through December 2017, at which point all fleets and drivers are expected to have ELDs or automatic on-board recording devices (AOBRDs) implemented (AOBRDs users have until 2019 to meet the ELD mandate requirements).

While it’s important to study the potential impact of any new regulation and be prepared for various scenarios, my bet is that whatever capacity and cost impacts will occur are already being worked into the market today — that is, it will be a relatively smooth and gradual impact. And I believe the worst case scenarios being discussed today are the least likely to occur (see all the buzz and hype around SOLAS leading up to its July 1, 2016 implementation and the non-event it has turned out to be so far).

So, when the noise dies down around ELDs, what will the trucking industry talk about next? Based on the early buzz I’m beginning to hear at conferences, my guess is obstructive sleep apnea.

Back in March, the FMCSA and Federal Railroad Administration (FRA) announced that they are seeking public input during the next 90 days “on the impacts of screening, evaluating, and treating rail workers and commercial motor vehicle (CMV) drivers for obstructive sleep apnea (OSA)…The joint Advance Notice of Proposed Rulemaking (ANPRM) is the first step as both agencies consider whether to propose requirements specifically on OSA [emphasis mine].”

This action follows a law that was passed by Congress and signed by President Obama back in 2013 that states:

The Secretary of Transportation may implement or enforce a requirement providing for the screening, testing, or treatment (including consideration of all possible treatment alternatives) of individuals operating commercial motor vehicles for sleep disorders [that includes obstructive sleep apnea] only if the requirement is adopted pursuant to a rulemaking proceeding.

According to the American Academy of Sleep Medicine, obstructive sleep apnea (OSA) is a chronic disease that afflicts at least 25 million adults in the U.S., including more than 20 percent of commercial truck drivers. And as stated in the FMCSA press release:

Undiagnosed or inadequately treated moderate to severe OSA can cause unintended sleep episodes and deficits in attention, concentration, situational awareness, memory, and the capacity to safely respond to hazards when performing safety sensitive service. For individuals with OSA, eight hours of sleep can be less refreshing than four hours of ordinary, uninterrupted sleep, according to a study by the American Academy of Sleep Medicine. The size and scope of the potential problem means that OSA presents a critical safety issue for all modes and operations in the transportation industry.

What impact will an OSA rule (if it ever comes) have on trucking capacity and productivity? Will the mandate cause drivers to exit the market? What impact will it have on shippers and costs?

Same questions, different regulation. Stay tuned for various studies, blog posts, and conference panel sessions on OSA in 2017.

What do you think the industry will talk about next after ELDs? Do you agree that obstructive sleep apnea is the next big discussion topic? Post a comment and share your perspective!