Fleet Management News & Business Info | Commercial Carrier Journal
Issue link: http://read.uberflip.com/i/699972
6 commercial carrier journal | july 2016 Staying ahead of the (ELD) curve Shippers calling for early carrier compliance as final rule deadline approaches BY JEFF CRISSEY I f your fleet is comprised entirely of trucks manufac- tured before model-year 2000, you may stop reading now (but please send me an email, because I have some equipment maintenance-related questions for you). For the rest of you, please, stay with me. "December 2017 is a long way off," you think convinc- ingly. You don't need to worry about installing electronic logging devices before then, right? "Maybe the Owner- Operator Independent Drivers Association will be success- ful in its current lawsuit like it was for the 2010 rule," you reassure yourself. In reality, the Dec. 18, 2017 deadline for the Federal Motor Carrier Safety Administration's final rule requir- ing ELDs is much closer than you think – especially if you haven't yet dipped your toe into the ELD waters. The good news is you're not alone. In a telematics/elec- tronic logging survey conducted last month by Commer- cial Carrier Journal, 35.6 percent of carrier respondents with 10 or more power units currently do not use ELDs in their fleet equipment. If you expand the data set to include respondents with fewer than 10 power units, that number increases to 42.4 percent. The bad news? You'd better get on board in a hurry. Even if you don't have to comply until the end of next year, ELD implementation comes with a steep learning curve and productivity losses between 2 and 7 percent, according to the carrier executives we've spoken with in recent years. After a year or so, those same carriers report a net benefit in productivity and capacity utilization as a result of ELDs. But there may be a more pressing reason for you to ditch your pencils and paper log books. A growing num- ber of shippers are asking – if not requiring – their carrier partners to comply before the final rule's deadline. If you are hearing the same from your customers, you are putting your business at risk if you choose to wait it out in the interim. Shippers prefer doing business with ELD-equipped fleets for three pri- mary reasons. First, it demonstrates they are doing their due diligence by partnering with responsible and safety-conscious carri- ers. Secondly, it provides greater visibility into shipment tracking and cuts down on traditional communications among shippers, carriers and drivers. Lastly, and perhaps the largest factor in their carrier selection decision process, is uninterrupted capacity; shippers fear that carriers that wait to install ELDs all will experience the accompanying productivity losses at the same time, resulting in supply chain disruptions. During last month's CCJ webinar, "Preparing for the ELD Mandate," Amy Mielke, senior supply chain trans- portation sourcing leader for Owens Corning and co-chair of the Truckload Carriers Association's Carrier/Shipper Relations Committee, provided the shipper community's perspective on the looming ELD mandate. "It's all about risk – how much risk you are willing to take as a shipper using noncompliant carriers," Mielke says, likening the current situation to the carrier selection process used by shippers in the early days of FMCSA's Compliance Safety Accountability program. Some ship- pers will do nothing, some will demand compliance, and some will do research to determine their risk and change carriers if necessary, she says. "As a shipper, I don't want to change my carrier base out," adds Mielke. "I would want the carriers that are non- compliant to become compliant so I don't have to worry about the risks." In today's softer freight rate climate, many analysts and trucking company chief financial officers point to Decem- ber 2017 as "brighter days ahead" with the ELD final rule's likely capacity disruptions tipping the pricing balance back in carriers' favor. There is growing concern among shippers about an internal pricing war that would lure carriers from one shipper to the next as they chase rate premiums, caus- ing capacity disruptions for other shippers in the process. But Mielke cautions that opting for higher rates may not be the best strategy for carriers in the long term. "[Owens Corning] expects to develop relationships and work together and identify inefficiencies in the supply chain," says Mielke. "Be open and honest in discussions with your customers. We need to work together and both benefit." UPFRONT JEFF CRISSEY is Editor of Commercial Carrier Journal. E-mail jcrissey@ccjmagazine.com.