ELD mandate: A Business Burden or Technology Upgrade?

05.31.17 | Fleet Owner

Ready or not, by Dec. 18, 2017, most commercial truck drivers will be required to use electronic logging devices (ELDs) to record their hours of service. For carriers, that means driver retention and productivity challenges lie ahead.

The key for fleets to overcome some of those challenges includes embracing early adoption and figuring out how to maximize the business benefits of ELDs rather than viewing the mandate as a regulatory burden. That’s at least according to Eric Starks, CEO and chairman of FTR Intelligence. 

“The regulations are going to create a bigger driver shortage than we would normally see at this point in time in the economic cycle,” Starks explained during a recent Fleet Owner webinar entitled Maximizing the business benefits of ELDs.

One of the issues for carriers is how to keep drivers productive, Starks noted. The other part of the challenge is trying to understand productivity.

“What we find is when we have a loss in productivity, that tends to tighten capacity,” Starks said. “So what we’re seeing right now is things are likely to tighten.”

“What this is telling us is that as we start looking at implementation of electronic logging devices, we start having a productivity loss somewhere in the ballpark of around 4% for the overall industry,” he continued. “And that tightens capacity noticeably.”

Starks noted, however, that there is a disconnect between those that have the wherewithal and the ability to make the change early. Typically, the impact for businesses that have already converted to ELDs is not nearly as significant as those that are likely to convert going forward.

He explained that the loss of productivity for early adopters of ELDs is somewhere in the ballpark of 5% to7%. Conversely, those that adopt later are likely to see an impact of upwards of 10% in productivity loss.

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Follow Eric Starks on Twitter: @ericmstarks

For more information about the work of FTR, follow on Twitter @ftrintel, sign up to receive the State of Freight TODAY monthly eNewsletter, or call Helen Lile at (888) 988-1699, ext. 1.