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Impact of ELD mandate yet to be determined: FTR


BLOOMINGTON, Ind. — The full effect of the U.S. electronic logging device (ELD) mandate on trucking capacity remains to be felt, according to an analysis by industry forecaster FTR.

Enforcement across the country is not yet in full effect, and failure to comply with the mandate will not place drivers out-of-service until April. Also, many states have thus far taken a lax approach to enforcement, according to Avery Vise, vice-president of trucking research, who spoke during an FTR State of Freight webinar on ELD implementation impacts on Feb. 8.

“Some states are not writing ELD violations until Apr. 1, and others are using the discretion of the enforcement officer,” said Vise. He also noted there’s little evidence to date that insurers or shippers are taking it upon themselves to ensure their carriers are complying with the ELD mandate.

The full impact of the U.S. ELD mandate has yet to be determined.

This means that carriers and owner-operators who had been threatening to park their trucks rather than comply with the new regulation will not likely have done so yet, especially as spot market freight rates have strengthened considerably in late 2017 and early 2018.

Even an owner-operator that suffered a 9% productivity hit when switching to ELDs would be making $30,000 a year more today than a year ago, based on the rise in spot market prices, all other factors being equal, Vise explained.

“The question is, will they pick up on that, or are they making an emotional decision?” he said. “If you do the math, until we get below $1.75 a mile…they are still doing better in February 2018 than in 2017.”

He added there is anecdotal information circulating that the ELD mandate is squeezing some capacity out of the market.

“What we’ve seen at this point is anecdotal,” he explained. “We’ve heard people saying owner-operators are returning trucks to dealers, brokers are calling and finding a carrier is not around.”

Clayton Slaughter, senior analyst and general counsel for FTR, said conversations with small carriers have suggested many will run as long as they can until they’re forced to comply.

“Simply having a mandate without a business reason to comply wasn’t going to be enough to them,” he said. “Now they appear to have dug in their heels and said they’re not going to comply until forced to.”

If there’s a widespread exodus of owner-operators from the market when enforcement agencies apply the full force of the law in April, it’s not likely to cripple the trucking industry, Vise said. He said owner-operators account for about 4.7% of the U.S. truck count, so even if they all parked their trucks, “it is survivable.”

However, on the other hand, 4.8% of the carrier base in the U.S. represents about 80% of all power units, so the impact on capacity would be far greater if small carriers park their units.

There’s also the matter of an exemption request submitted by the Owner-Operator Independent Drivers Association (OOIDA) that would allow small fleets with good safety records to be exempted from the mandate. However, Vise explained that as worded, such an exemption would cover the majority of the industry.

The request asked the FMCSA to exempt small carriers with annual revenues of less than US$27.5 million, which don’t have an unsatisfactory safety rating, and haven’t been involved in any at-fault crashes. The comment period ended last week, with more than 4,000 comments filed, and the request had the support of some 25 members of congress.

“My personal feeling is that it’s not likely to succeed, but…there is some chance this could succeed,” Vise warned.

If the exemption is granted, it would apply to 95% or more of trucking companies.

“We could be talking about an exemption that would affect tens of thousands of carriers,” Vise said.

“It’s larger than all the other exemptions on the docket combined,” added Slaughter. “If we exempt everyone from the rule, eventually we have no rule and we get into a legal battle that says ‘We’re not going to enforce that’.”

 


James Menzies

James Menzies

James Menzies is editor of Truck News magazine. He has been covering the Canadian trucking industry for more than 15 years and holds a CDL. Reach him at james@newcom.ca or follow him on Twitter at @JamesMenzies.
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1 Comment » for Impact of ELD mandate yet to be determined: FTR
  1. JB says:

    If freight rates have come up, its not for the reasons that have been preached since this moronic law came into place. There has become a shortage of trucks of sorts. 1) beacuase they are tied up on loads longer then before. 2) long haul drivers have said screw it and went to regonal jobs due to how much longer each trip has become and figuring resets on the road in conjunction with the amount of time away from home its just not worth it anymore. Hard to believe its possible, but ive noticed since this came in effect, the amount of aggressive truck driving has drastically increased. More tailgating, more trucks in 3rd lane and just all around being a hazard due to drivers being wound up like a cheap watch. The old talking point of most big government progressives and soft conservatives when they dont have solid justification for a new law or reg being ” if we could just save one life, itll all be worth it”. Ya well, this is gonna cost lives. With cars getting run over and trucks going too fast for road conditions and the inevitable . And no governing them at 62.5mph isnt the answer for those that immediately dive to that being the solution. This has forced alot of mentor type drivers out of the industry and i dont blame them one bit. I got out 2 yrs ago when the wrighting was on the wall and i dont regret it one bit. Idiots making regulations when they dont have a clue about the industry gives us what we have now. They are arent the ones stucknin rest areas try to sleep.at 2 pm justbto get back up and mid night and start another 11hr shift. Its the most b.s continental work week ever dreamed up.

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