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ELD Mandate – How to Turn the Law into A Competitive Advantage

By 12.02.22December 6th, 2022No Comments
ELD Mandate – How to Turn the Law into A Competitive Advantage

The Electronic Logging Device Mandate (ELD mandate) is one of the most controversial and debated federal laws that govern the transportation industry. Since it was first phased into US law over six years ago, eight bills have been introduced to Congress to weaken the mandate – yet it still stands unchanged to enforce compliance with HOS rules and to improve road safety.

No matter how you look at it, there are two undisputable facts:

  • The ELD mandate is the law of the land.
    • ELDs must be implemented to remain compliant.
  • The ELD mandate is impacting your business
    • Efforts must be made to ensure ELDs help, not hinder, your trucking company.

You can only manage something to its full benefit if it’s properly understood. The key to success, in this case, is to understand the benefits, be proactive, and manage your approach to the ELD mandate. In this article, you’ll learn more about industry acceptance of the ELD mandate, how to leverage ELD data to maximize efficiencies, and how to turn the law into a competitive advantage.

The ELD Mandate: Benefits may be unclear, but resistance is futile!

Many truck company owners question if electronic logging devices (ELDs) make the road safer. Some see the device as just another government control measure creating more barriers to profitability with few safety benefits. After years of use and multiple studies to determine its effects, there is no hard evidence to prove ELDs improve safety.

The industry is split on whether ELDs are good or bad. A 2018 survey reported by FleetOwner revealed that 47% of respondents said yes, they’re beneficial for the industry, 38% said no, and the remaining 15% were unsure. Recent attitude towards the ELD mandate has had little improvement, as indicated by many truckers still reluctant to implement the device. A 2022 industry update reported that 28% of truckers still need to implement an ELD.

Despite controversy and resistance, the ELD mandate is now fully enforced – resistance is futile! Trucking companies that refuse to bend to the law will suffer violations and penalties, including possible loss of authorities to operate. On the other hand, trucking companies that work within the law, embrace ELD technology, and learn how to leverage its output to maximize benefits can gain a competitive advantage.

Learn to leverage ELD data to maximize efficiencies

The primary purpose of ELD devices is to ensure that trucking companies and their drivers accurately track HOS compliance. However, when used effectively, ELDs can do much more to help streamline operations, reduce operational costs, and maximize productivity. Following are some of the advantages ELDs can offer – all of which can contribute to higher efficiencies:

Increased data access: ELDs provide visibility and data into every driver’s log providing real-time insights to help improve fleet management and to mitigate scheduling issues. The data also provides accurate RODS to assist with freight monitoring and customer status reports.

Reduced paperwork: ELDs are entirely automated, reducing paperwork in reporting and saving administrative staff time.

Reduced compliance errors: Automated logging and reporting decreases human error and reduces “form & manner” and “outdated logs” violations (which make up ~ 25% of all roadside violations). In addition, easy monitoring of driving hours and warning alerts assist drivers in complying with hours-of-service limits increasing the trucking companies’ ability to be compliant.

Improved CSA scores: Compliance, safety, and accountability (CSA) scores are one of the data points shippers look at when vetting trucking companies. ELDs provide carriers with accurate reports on roadside inspections, regulation compliance, crashes, and investigative details. With this detailed picture of driver risk profiles, carriers can proactively coach high-risk drivers to improve their CSA scores. This approach can help you align with shippers’ interests and help you avoid penalties and costly litigation.

Lower insurance premiums: Insurers often consider ELD data when evaluating risk and determining rates. Providing this comprehensive data and demonstrating increased compliance can lead to lower insurance premiums.

Knowing the benefits that ELDs can provide for your trucking company is the first step in maximizing efficiencies and adding to your bottom line. Used effectively, ELDs can help to increase business profits.

 

ELD challenges that can be converted into competitive advantages

Undoubtedly, the ELD mandate has created additional challenges that trucking companies must overcome to lessen other barriers to productivity and profitability. Trucking companies that recognize these specific challenges and plan strategies to minimize their impacts on operations can gain a competitive advantage.

The following are the common ELD challenges to overcome:

Declining productivity: ELDs have forced a decrease in driving hours, hurting trucking companies’ productivity and drivers’ income. Drivers travel fewer miles, which impacts their delivery speed and ability to pick up new loads. As a result, drivers and trucking companies suffer productivity losses compounded by congested traffic, dock delays, and the time needed to find parking spaces for forced stops.

Suggested Actions: Route planning becomes critical in this situation. Weather, traffic, departure times, and foresight into on-route areas of dense traffic and construction become much more critical as the clock does not stop ticking when the driver is sitting in congestion. Look at mapping and route planning tools to keep your trucks and drivers moving vs. just going with the regular routes from A to B. Use online traffic alert solutions to avoid downtime. If you have regular customers you work with, consider investing in or using drop trailers that can be loaded while your driver is offsite and makes for a fast pick-up and go.

 

Parking congestion: The mere act of exiting the highway to find safe parking within HOS limits reduces the number of active driving hours. A report showed that parking issues could cost a commercial trucking company between one and two loads per driver per month, leading to losses of between $1,000 and $5,000 every month.

Suggested Actions: Drivers may need to change their habits and plan well ahead to pre-identify secure parking and remain compliant with HOS limits.

 

Truck driver attrition: Accurate ELD data has eliminated the flexibility provided by paper logs, reducing the driver’s ability to stretch allowable driving hours. As the mandate was phased into effect, significant numbers of commercial truck drivers left the industry, adding to the continuing driver shortage.

Suggested Actions: ELDs provide driver performance insights. Fleet managers can use this data to structure a performance-based reward system that incentivizes ELD compliance. Reward systems help to improve driver satisfaction and retention rates.

 

Recognizing the challenges ELDs present is the first step in working towards minimizing adverse effects on your company’s productivity and bottom line. Approaching problems with a solution-focused mindset and creative thinking will help you get the best results. In the end, effectively overcoming common industry problems, such as maintaining high productivity while using ELDs, can become one of your competitive advantages.

Conclusion

The ELD mandate did not change the Hours-of-Service rules – it created a more accurate method of recording driving times. Since going into effect, the ELD mandate has exposed significantly more unsafe motor carriers who drive over legal limits to fulfill schedules. Industry members’ response to the ELD Mandate should not be to oppose this law as it is designed to increase safety. Instead, trucking company owners need to find creative ways to utilize the data the mandate creates to strengthen their operations while enhancing driver safety.
Rather than fight, ignore, or work around the law, it makes more business sense to adapt. ELDs can have a direct and positive impact on ROI if used efficiently. Carriers need to leverage the benefits of ELD technology:

  • Automated data reduces administrative burden and operational costs.
  • Decreased liabilities improve insurance rates.
  • Idle-time tracking and vehicle fault-code monitoring can help you streamline operations and improve efficiencies
  • Enhanced fuel usage monitoring and automated IFTA calculations can improve fuel management.

In the end, what is needed is not for trucking companies to work against the ELD mandate but rather to learn to use it to their competitive advantage.

 

About eCapital

Transportation is an industry where regulations and economic conditions often work against trucking companies’ ability to run profitably. eCapital’s industry experts work hard to make the lives of trucking company owners easier by placing the control of your company finances in your hands. Our organization is dedicated to empowering our trucking clients with cash flow solutions, easy access to more working capital, cost-saving services, and tools to manage your business better.

Our supportive services include the following:

Freight Factoring

Automatic qualification for a revolving line-of-credit

Fuel discount programs

Free, unlimited credit checks on shippers and brokers

Five Star load board

Dispatch software

For information about how freight factoring supports your trucking company through changeable conditions, from economic uncertainty to business growth opportunities, visit eCapital.com.


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