ELD (Electronic Logging Devices) Mandate Impact on the US Road Freight Market

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By: S J Deepak -- Research Analyst, [Freight and Transportation

21 February, 2018

ELD (Electronic Logging Devices) Mandate Impact on the US Road Freight Market
ARTICLE

Abstract

In December 2015, the Federal Motor Carrier Safety Administration (FMCSA) published a rulemaking document on the electronic logging devices (ELDs). The mandate required every motor carrier with interstate drivers to install the ELD systems. As per the mandate, the trucking companies and drivers were required to install and use ELDs by December 18, 2017. This technology has the potential to drive compliance and facilitate an accurate assessment of the Hours of Service (HOS) rules across the trucking industry. The objective of FMCSA is to significantly strengthen the commercial truck drivers’ compliance with the hours of service regulations. This compliance is expected to reduce driving fatigue, as the ELDs will monitor the driver’s working hours, location, miles, and even vehicle movement. This kind of technology in the transportation industry can be transformative and is expected to be a game-changer for trucking companies and drivers. However, the shippers and carriers are concerned that the ELD will have a significant impact on the truck’s operational cost, and a potential loss of truck capacity and productivity would lead to an increase in the freight rates. The mandate might also strain the weekly earnings of  truck drivers because it will require the drivers to conform to providing a maximum of 55 hours of service in a week. This will diminish the flexibility of drivers when it comes to logging hours during the week. 
 
A lot of people in the transportation industry are worried about the effects of the ELD and the pressure to meet shippers’ demands in coming months. This article describes the challenges and advantages of equipping long-haul trucks for freight movements with ELDs within the US; it also focuses on how the US trucking industry is expected to shape up in the near future due to the introduction of this rule to use ELDs, from a shipper’s perspective. 

Key Highlights 

  • How will ELD mandate impact drivers’ productivity?
  • Will drivers leave the industry as a result of the ELD implementation?
  • Will smaller carriers close their businesses and leave the industry?
  • How will this impact the industry’s capacity and freight rates in the future?



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