ELDs And Trucking Rate Hikes

Truck industry analysts are predicting big rate hikes as enforcement of the ELD mandate ramps up.

The mandate requiring commercial truck drivers to electronically log their service hours officially went into effect on December 18, 2017. But at that time, roadside enforcement personnel were only permitted to document violations of the rule.

“Hard enforcement” will begin on April 1, 2018.

Shrinking Supply, Rising Demand

After April 1, the mandate gives inspectors the authority to place commercial drivers out of service if their vehicle isn’t equipped with an approved ELD.

Some industry insiders worry that hard enforcement of the ELD mandate will slash productivity. And worse, enforcement will coincide with an especially hot freight market being driven by growth in both e-commerce and automated manufacturing.

Therefore, many freight companies are raising their rates in order to compensate.

According to Todd Amen, president and CEO of financial services provider ATBS, dry van rates rose 41% in January. “There’s a huge amount of freight looking to be moved and there’s just not enough trucks to haul it,” he said.

Stifel Nicolaus trucking analyst John Larkin agrees. “Reports have surfaced recently suggesting that LTL [less-than-truckload] capacity is becoming scarce in some regions of the country. It seems that LTL carriers are picking up some overflow freight from the truckload industry.”

Larkin also observed that LTL rates were already experiencing a modest rise over the last several years. Now he’s predicting that “a trucker’s market” will emerge in 2018 as the domestic economy continues to grow.

Mandate Exemptions

Some drivers are exempt from hard enforcement of the ELD mandate.

One example: drivers who have a “grandfathered automatic onboard device” that met the requirements of a previous logging device law. These drivers have until December 16, 2019, to switch over to an ELD.

Other exemptions to the ELD mandate include:

• Drivers of vehicles manufactured before 2000
• Drivers who use paper RODS (records of duty status) for not more than 8 days out of every 30-day period
• Drive-away-tow-away drivers, where the vehicle being driven is the commodity being delivered

Sources: Overdrive Online, Trucker.com, FMCSA, Geotab, Logistics Management

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