ELD final rule is formally issued by Federal Motor Carrier Safety Administration

The long-awaited final rule calling for the adoption of electronic logging devices (ELDs) by commercial motor carriers became a reality today, the Federal Motor Carrier Safety Administration (FMCSA) said.

The objective of the rule, according to FMCSA, is to strengthen commercial truck and bus drivers’ compliance with hours-of-service (HOS) regulations that combat fatigue. The rule will take full effect on December 10, 2017, two years after the date of the final rule being issued. ELDs automatically record driving time and monitor engine hours, vehicle movement, miles driven, and location information.

The key elements of the final ELD rule, as outlined by FMCSA, include:
-requiring commercial drivers currently using paper log books to maintain HOS records to adopt ELDs within two years, with FMCSA estimating roughly 3 million drivers will be impacted;
-strictly prohibiting commercial driver harassment.  The Final Rule provides both procedural and technical provisions designed to protect commercial truck and bus drivers from harassment resulting from information generated by ELDs;
-setting technology specifications detailing performance and design requirements for ELDs so that manufacturers are able to produce compliant devices and systems – and purchasers are enabled to make informed decisions; and
-establishing new HOS supporting document (shipping documents, fuel purchase receipts, etc.) requirements that will result in additional paperwork reductions.  In most cases, a motor carrier would not be required to retain supporting documents verifying on-duty driving time

“Since 1938, complex, on-duty/off-duty logs for truck and bus drivers were made with pencil and paper, virtually impossible to verify,” said U.S. Transportation Secretary Anthony Foxx.  “This automated technology not only brings logging records into the modern age, it also allows roadside safety inspectors to unmask violations of federal law that put lives at risk.”

FMCSA said that this rule will see an annual net benefit of more than $1 billion, due in large part to the reduction of the amount of required industry paperwork, coupled with increasing roadside law enforcement personnel in reviewing driver records, as well as strict protections designed to protect drivers from harassment. And it added that the rule is estimated to save 26 lives and prevent 562 injuries resulting from car crashes involving large commercial motor vehicles annually.

FMCSA has previously stated that this rule will ultimately reduce HOS violations by making it more difficult for drivers to misrepresent their time on logbooks and avoid FMCSA detection and law enforcement personnel.

Many trucking observers maintain that the need for ELDs is obvious, with most explaining that the industry has been reliant on paper logs for far too long. And there could likely be economic benefits through ELD usage, as observers say it could likely reduce the effective number of miles a driver could log, further tightening trucking capacity at a time of ongoing limited truck driver supply, rising pay, and higher overall fleet costs.

Mike Regan, chief relationship officer at TranzAct Technologies, said that the impact of the rule on truckload capacity is still to be determined, given the two-year implementation period.

“There are those that say this is actually a good thing for capacity, because many large carrier are already using ELDs are going to be able to determine where their trucks are,” he said. “In the quest for the ‘Uberization’ of trucks, this rule may be something that facilitates that push. But the real wildcard is that nobody knows just how much capacity is running illegally right now, so you can speculate on that. Some large carriers already using them say it has reduced their capacity by 3-to-5 percent.”

The two-year implementation period should be enough time, said Regan, but on a practical basis he said it is likely some carriers may say that is not enough time, citing insurmountable obstacles.

“This is consistent with the FMCSA’s push for what they deem to be safer trucking,” he explained. “We saw it with the driver coercion rule and will see it with this, too, with loading and unloading, demurrage and detention issues. FMCSA is going to continue to parachute itself into shipper operations whether they like it or not.”

In a recent call hosted by investment firm Cowen and Co. FTR Senior Consultant Noel Perry said that there is not likely to be any significant ELD-related impact until 2017, explaining that late 2017/early 2018 could serve as the “potential pinnacle of ELD-related capacity declines,” with the rule potentially causing productivity losses when fully implemented.

Perry added that the more accurate management of drivers that is likely to be made possible by ELD should pave the way to long-term net productivity gains for the trucking industry.

“We believe the ELD implementation will be a net positive for larger carriers…as they are already largely compliant and stand to benefit from a reduction in capacity at smaller operations, which make up roughly 80 percent of the highly fragmented truckload industry,” wrote Cowen analyst Jason Seidl. “Even the smaller carriers may reap net productivity gains in the long term, after initial losses, as they become better able to manage their drivers.”

The rule was soundly endorsed by the American Trucking Associations (ATA), whose leadership hailed it as a historic step forward for the industry.

“Today is truly a historic day for trucking,” said ATA President and CEO Bill Graves in a statement. “This regulation will change the trucking industry – for the better – forever. An already safe and efficient industry will get more so with the aid of this proven technology.”