100% of Commercial Trucks to Contain Electronic Logging Devices by December 2017

The Federal Motor Carrier Safety Administration requires ELDs on all trucks by 12/18/17. Essentially, this means drivers will no longer have written log books, and errors contained on those logs will disappear. The ELDs, when calibrated properly, will demonstrate with certainty, how many hours a driver may drive.

This is a major development in capacity, and in freight security. The fines carriers receive from law enforcement for breaking hours of service are severe, and will likely continue to worsen. Likewise, shippers will undoubtedly see changes in carrier behaviors that might seem frustrating. For example, in heavy traffic, or delayed by weigh station, a driver may run out of hours just minutes from pickup or destination, and shut down (as they should anyway). With the new “Driver Coercion” laws in effect, pressuring the driver or carrier to proceed, in the name of service, timeliness or safety will land someone in jail!

It’s all part of a seismic shift in how we understand the freight transportation market, and how we manage our businesses. The new regulatory and supply/demand dynamics require new thinking, and savvy planning and communication among business partners. Some experts who study disparities between traditional logs and ELDs, have found as high as double-digit percentage errors between the two. Whether it’s a percent or two, or 10% or more, you should plan on capacity disappearing over the next 23 months, with the conversion from paper to ELD. How solid is your capacity? Talk to Tucker.

NEW HOURS OF SERVICE REGULATIONS TAKE EFFECT JULY 1, 2013—BIG CHANGES AHEAD

The FMCSA has told the public that it will not delay introduction of the new Hours of Service (“HOS”) rules past July 1, 2013. That may, or may not mean an imminent across-the-board capacity shortage, but it will mean that certain carriers will no longer be able to sustain serving certain customers, or lanes, once they understand what the new HOS rules mean to their operations. 

The 2004 HOS rules change saw widespread customer-carrier changes, as carriers shifted from less attractive freight to most attractive freight (low driver responsibility and delay = attractive freight).   

There is no way to sugar-coat it; 2013 HOS rules change will impact your operation.  It is expected to be among the top most significant challenges shippers faced in several years. The extent of the impact is up to the shipper. The smartest shippers and smartest brokers will proactively manage the process starting now. They’ll: 

1. “Double-down” on pre-existing great relationships and ensure strong brokerage component. 
2. Invest in those relationships, and build stronger bonds now. 
3. Seek to better understand their own operations, and ask their partners questions. 
4. Stress to their internal teams, vendors and customers, the importance of good communications, flexibility and advance notice. In freight, time and communication are simple to understand:

a.      Advance notice = Least cost routing = product & freight savings

b.      Late notice = High cost routing = product & freight increases (and lost sales, etc.)

Those who don’t plan now to adapt to 2013 HOS will likely be left with an expensive problem that results in lost sales, downed production time, and lots of headaches, for which the only “cure” is money that isn’t in anyone’s budget. 

This is not the time to gamble. Trust those who got you through tough times. Two other factors to keep in mind:  (1) Chances are, 2013’s growing season and peak season  will strain capacity, on top of tightening HOS rules. (2) The driver shortage issue is not improving. In fact, as the housing market finally seems to be showing life in pockets around the country, burdensome trucking regulations and better pay from construction opportunities are driving drivers away.