Final rule for electronic logging devices is pushed back to end of October

The much anticipated final rule for electronic logging devices (ELD) has been pushed back one month from September 30 to October 30, according to the most recent Report on DOT Significant Rulemakings issued by the United States Department of Transportation.

“Additional coordination necessary” was cited as the reason for pushing the date back one month in the DOT report.

According to DOT, this ruling would establish:
1- minimum performance and design standards for hours-of-service (HOS) electronic logging devices (ELDs);
2-requirements for the mandatory use of these devices by drivers currently required to prepare HOS records of duty status (RODS);
3-requirements concerning HOS supporting documents; and (4) measures to address concerns about harassment resulting from the mandatory use of ELDs

FMCSA said in March 2014 that its proposal requires interstate commercial truck and bus companies to use ELDs in their vehicles to “improve compliance with the safety rules that govern the number of hours a driver can work,” adding that “the proposed rulemaking would significantly reduce the paperwork burden associated with hours-of-service recordkeeping for interstate truck and bus drivers…and improve the quality of log book data.

Perhaps the largest takeaway of the ELD rulemaking, noted FMCSA, is that it would ultimately reduce HOS violations by making it more difficult for drivers to misrepresent their time on logbooks and avoid detection by FMCSA and law enforcement personnel. It also pointed to an analysis that said it would help reduce crashes by fatigued drivers and prevent approximately 20 fatalities and 434 injuries per year for an annual safety benefit of $394.8 million.

FMCSA Acting Administrator T.F. Scott Darling III wrote in a message issued by the FMCSA on September 15 that a final rule on ELDs is being issued by the Office of Management and Budget and is scheduled to be out later this year.

“Although we cannot discuss the provisions of a Final Rule before it is made public, I can say that the rule is designed to benefit everyone by improving hours of service (HOS) compliance, which we estimate will prevent about 20 fatalities and over 400 injuries each year; helping businesses cut paperwork and save money; protecting drivers from harassment; and making it easier for law enforcement and safety inspectors to review driver HOS records,” wrote Darling.

When the final rule is published, it is expected to require truckload operators to be using ELDs within a two-year period, wrote Cowan and Company Analyst Jason Seidl in a research note.

Once ELDs eventually take effect, the subsequent impact is expected to be significant for the trucking sector, too, especially in the form of much tighter capacity, with Seidl noting that trucking industry stakeholders are anticipating lost capacity anywhere from 8 percent to up to 20 percent as a direct result of ELD implementation.

“Some indicated that shippers have been inquiring about implementation plans, though have not made any hard decisions on future business outside of the uptick in contracted business that we heard during 2Q [earnings] calls,” wrote Seidl. “The potential capacity decline may provide carriers with pricing power beyond what we have seen in the contractual market this year. With a two-year integration timeframe, this likely provides strong pricing tailwinds in both 2016 and 2017 as long as the economy holds together. Carrier focus has largely turned toward increasing driver retention.”

Many industry 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 tradeoffs through ELD usage. The mandated use of ELDs could likely reduce the effective number of miles a driver could log, further tightening trucking industry capacity at a time of limited truck driver supply, rising pay and higher overall costs for fleets.
 
“In the interest of public safety, I support these efforts as that it will reduce subpar carriers from the industry, which is a good thing,” Jeff Brady, director of transportation for Harry & David, a multi-channel specialty retailer and producer of branded premium gift-quality fruit, gourmet food products and other gifts, explained in a previous interview. “Where it is a negative however, is that it adds to further shrinkage within the industry in terms of available capacity. It also adds expense as carriers will look to recoup the costs associated with the acquiring and implementing the technology.”
 
Brady describe the proposal as a classic tradeoff—safety vs. costs—that may have unintended consequences in driver supply and productivity for fleets.
 
“This is another classic example of where the industry will be further regulated, for seemingly the right reasons,” Brady added. “But the true economic impacts of the subsequent ripple effects of the changes are not well thought out.”