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TRANSPORTATION: THE COST OF DOING BUSINESS FOR THE TRUCKING INDUSTRY IN THE AGE OF ELECTRONIC LOGS

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A bumpy road lies ahead for the trucking industry with the newly-implemented Electronic Log Device (“ELD”) mandate. The rule requires most trucks (and commercial busses) to be equipped with electronic logs that record a driver’s time behind the wheel. Per the Federal Motor Carrier Safety Administration (“FMCSA”), the purpose of the mandate is to “help create a safer work environment for drivers, and make it easier and faster to accurately track, manage, and share records of duty status (RODS) data.

The phase-in period of the mandate went into effect December 18, 2017, which will last until April 1, 2018. The mandate is triggering deep divisions in the trucking world and raising concerns that shipping goods could get more costly and complicated.

Proponents believe the mandate brings the transportation industry into the 21st century, and helps drivers cut down on deadhead miles, as well as assists in keeping accurate records. For them the ELD simplifies compliance by eliminating long-term paper logs, and in doing so results in a significant cut back in the most common violations, since drivers will always have an accurate and up-to-date log on file. With electronic transfer capabilities, inspections will go significantly faster and easier, resulting in the truckers being back on the road in no time.

Most large motor carriers have used electronic logs for years and expect to benefit from the ELD mandate.

However, smaller carriers, which make up the majority of the nation’s fleet, have been slower to upgrade. As of early December, about 25% of smaller fleets still had not installed the devices, according to a survey by CarrierLists.com, which compiles data about trucking firms.

Many shippers and drivers expect the rule to reduce the number of miles trucks travel in a single day, because the logs make it easier for regulators to enforce existing rules limiting driving time. Some drivers say they may retire rather than use the ELDs.

Retirement by drivers would reduce the number of trucks available for hire at a time when big rigs are already in short supply. DAT Solutions LLC estimates that the average cost to hire a big rig in the spot market soared 24% year-over-year in November of 2017.

According to Tucker Company Worldwide, Inc., a freight brokerage and logistics firm, the mandate has caused some shippers and freight brokers to pay hundreds of dollars extra to convince carriers to accept their loads.

Industries that need to move cargo immediately, like agriculture, could be particularly hard hit if shipping prices shoot up. Food companies are already dealing with new sanitary rules intended to ensure the safety of food in transit, and that too can make it more difficult to book transportation.

The FMCSA has granted some exceptions, including a 90-day waiver for trucks moving agricultural commodities. The agency is reviewing other requests and is working with operators to ease the transition.

While some businesses are willing to cover any fines its drivers incur on the road, they fully expect shipping prices to go up as a result of the mandate. Fresh-produce business are already experiencing shortages in the state of California from customers not being able to cover loads. They believe there will be considerable disruption in the flow of commerce that most industries are not prepared for.

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