ELDs: The rules, the risks, and the rewards

At its heart, the electronic logging device (ELD) mandate centers on a relatively simple concept.
I

nstead of truck drivers laboriously recording their duty status by hand using pencil and paper, while collecting “supporting documents” such as toll collection tickets and fuel receipts to back up their logbooks, a device connected to their truck’s engine will do it automatically.

 

No longer will drivers have to spend precious hours out of their week detailing by hand the time spent on-duty driving (up to 11 hours), on-duty not driving (up to 3 hours), and off-duty (for their 10 hour rest break).

 

Indeed, of the $2.44 billion in industry-wide savings the Federal Motor Carrier Safety Administration (FMCSA) expects the ELD mandate to generate for trucking, some 77% of those savings is solely attributed to simply not having to fill out paper logbooks.

 

Yet rules of this nature are rarely so simple – especially when they alter a very fundamental part of a truck driver’s life.

 

U.S. Representative Brian Babin (TX-36) made that very point when he introduced a bill back in late July a bill that would delay implementation of the ELD mandate for two years – ostensibly due to the compliance “burden” faced by smaller motor carriers and owner-operators.

 

“If trucking companies want to continue implementing and using ELDs, they should go right ahead,” Babin noted when he introduced his bill, H.R. 3282, dubbed the ELD Extension Act of 2017.

 

“But for those who don’t want the burden, expense and uncertainty of putting one of these devices into every truck they own by the end of the year, we can and should offer relief,” he said.

 

Others in the industry don’t see it that way, though, especially after several challenges to the mandate – including an appeal to the Supreme Court – ultimately went nowhere.

 

“This is not a ‘wild-eyed’ proposal; it’s been legislated, debated, and litigated and the FMCSA says it remains on track to enforce it,” noted Chris Spear, president & CEO of the American Trucking Associations (ATA) trade group. “This [ELD mandate] is on the books and will be enforced.”

 

And if the ELD mandate is implemented on December 18 as expected, even fleets in compliance with the rules will need to keep several particulars in mind.

The Rules

For starters, it’s important to remember that there are actually two distinct compliance deadlines within the ELD mandate and that there are exemptions baked into those separate strictures as well.

 

First, every driver who uses paper logs or an automatic on-board recording device (AOBRD) or electronic onboard recorder (EOBR) will need to convert or upgrade to an ELD.

 

Yet only those fleets and drivers relying on paper logs must comply with the rule by Dec. 18 this year. Those already using AOBRDs or EOBRs, which are electronic logs, get until Dec. 16, 2019, to comply – an extra two years’ worth of time.

 

But why do AOBRD and EOBR users need to switch? After all, those devices are electronic logbooks.

 

But what they don’t do is connect to a truck engine’s electronic control module or ECM. That connection is the vital difference: it is what allows and ELD to accurately track mileage accrued by the vehicle and match that mileage to the duty status indicators entered on the ELD by the driver. Many ELDs go a step further and offer a telematics connection, which enables a truck’s position to be located by longitude and latitude data, noted David Heller, vice president of government affairs for the Truckload Carriers Association (TCA).

 

Interestingly, paper logbooks will continue to be required and must be maintained as a backup in case of ELD failure. Yet record keeping with paper logs is allowed for no more than eight days in a 30-day period once the ELD mandate goes into effect.

 

So, who is – and is not – covered by the ELD mandate? According to the rule, an ELD is required for interstate commercial motor vehicle drivers currently required to keep record of duty status (RODS), operate vehicles in excess of 10,001 lbs. gross vehicle weight (GVW), that are placarded to carry hazardous material loads, or that carry in excess of eight to 15 passengers, depending on the vehicle class.

 

By contrast, ELDs are NOT required for drivers holding a commercial driver’s license (CDL) and remaining with a 100 mile air-radius of their home base, or non-CDL freight drivers remaining within a 150 mile air-radius of their home base. They may still use timecards.

 

The devices are also not required on commercial vehicles manufactured before model year 2000 or for drive away/tow away operations, TCA’s Heller said.

 

There are a few other nuances within the rule that motor carriers should note, he added:

  • The device must allow the driver to log in and select one of three duty status options: on-duty, on-duty not driving, and off-duty.
  • ELDs will records time to the nearest minute, whereas with old paper logs, one could track duty status time increments to the closest 15 minute mark.
  • The ELD must graphically display a driver’s RODS so they can visually and quickly track their available.
  • That information must be transferable to law enforcement officers during a roadside inspection, either in printed or electronic form.

 

Another set of “nuances” within the rule concerns “personal conveyance” or the “personal use” of a truck, as well as “yard movements,” such as when a vehicle is moved from one dock to another or when a technician takes a truck into and out of a maintenance bay for repairs.

 

Neither of those “movements” count against a driver’s available hours, noted Joe DeLorenzo, director of the FMCSA’s Office of Enforcement and Compliance.

 

“Personal conveyance,” however, first has to be allowed by a motor carrier and it refers to a driver doing things like taking the commercial truck to his or her home while off duty.

 

DeLorenzo emphasized that personal conveyance isn’t new. It’s just that prior to it coming up in the new regulations regarding ELDs — and thus becoming more measureable — no one paid it this much attention and it wasn’t as scrutinized.

 

“Suddenly, this has become a big issue,” he explained in presentation late last year. “When you just put down ‘personal conveyance’ on a line in your [paper] log, there’s no way to really tell — but now we’re going to be able to tell [with ELDs]. So, suddenly, we’re getting a lot of questions about this.”

 

ELD specifications in FMCSA’s final rule call for GPS data to be accurate to within 1 mi. indicating where a truck is while a driver is on duty. To allow some privacy around a driver’s personal whereabouts, GPS data must be accurate only to within approximately 10 mi. showing the truck’s location while the driver is off duty/in personal conveyance.

 

“I’ll give you my common sense approach to personal conveyance,” DeLorenzo said. “If the driver is operating at the direction of the motor carrier, it is not personal conveyance.” That is, if a commercial driver is under dispatch, that’s “on duty” time, not personal conveyance.

 

He also provided an example of a driver driving the truck from being off duty at home in to work at the carrier’s terminal, picking up a load, then driving the load on to its destination.

 

DeLorenzo explained that in that particular case, only the part of driving the truck from home to the terminal would be personal conveyance.

 

However, things can get subtle with personal conveyance, and that’s where some confusion arises — for instance, a trip home isn’t always necessarily personal use/conveyance.

 

“So if the driver gets dispatched from the terminal but heads home on the way to wherever he or she is going and then continues on, that’s not personal conveyance,” DeLorenzo emphasized.

 

That’s the basic setup he advised following. “If the driver is off duty and decides to go to a restaurant, visit a relative there or whatever — again, not at your direction — that’s okay, that’s personal conveyance,” he said. “But if the [truck] move is done at the direction of the motor carrier, then that is not personal conveyance.”

 

By this method, note that if a driver is deadheading from one delivery location some distance to pick up the next load, that’s not personal conveyance — the driver has been dispatched to both the locations and is on duty the whole time.

The Risks

While the picayune details of the rule may seem burdensome to some, one of the main reasons many motor carriers – large and small alike – are procrastinating on ELD adoption revolves around the costs involved.

 

For example, Ashley Cruz, a procurement research analyst with consulting firm IBISWorld recently addressed that point in a white paper entitled Easier, Safer and More Expensive: ELD Mandate to Increase Costs.

 

“The FMCSA insists that ELDs will save trucking companies a collective $1.6 billion per year by limiting paperwork costs and enhancing fuel efficiency,” Cruz wrote.

 

“However, most carriers and independent operators claim that the mandate will increase their compliance costs,” Cruz stressed.

 

For example, she said Omnitracs estimated that new ELDs will cost motor carriers between $199 and $2,200 per truck, plus a monthly service fee of $20 to $60 per truck.

 

That doesn’t necessarily include the one-time costs associated with installing ELDs, she said; which, as noted above, must be hard-wired into a truck’s engine.

 

“Owner-operators, [who] already generate razor-thin profit margins, often do not have the capital to purchase a new device outright,” Cruz pointed out. “Many ELD providers are offering a financing program for their products, but owner-operators only require one ELD each, and thus do not meet the quantity threshold to be given financing options.”

 

Others, though, don’t think ELDs will prove that expensive. Jeremy Feucht, a regulatory analyst with Truckstop.com, posits that the average cost to ELD users will be roughly $25 to $30 per truck per month, with that cost varying depending on the “functionality, bells, and whistles” of said device.

 

Then there is the potential for productivity losses, as drivers and motor carriers alike now must account for every minute of the working day.

 

Eric Starks, CEO and chairman of research firm FTR Intelligence, believes that productivity losses will be somewhere in the ballpark of around 4% for the overall industry, though there is a “disconnect” between those that have the wherewithal and the ability to make the change early.

 

“Typically, the impact for businesses that have already converted to ELDs is not nearly as significant as those that are likely to convert going forward,” he said.

 

Starks explained that the loss of productivity for early adopters of ELDs is somewhere in the ballpark of 5% to 7%. Conversely, those that adopt ELDs later in the cycle are likely to see an impact of upwards of 10% in productivity losses.

 

And then, of course, TCA’s Heller stressed there are risks should motor carriers and drivers not properly comply with the rule.

 

Trucks can be placed out-of-service for 10 hours, he explained, if: they are not equipped with an ELD; they are using a non-authorized ELD, which is one that does not meet the FMCSA’s specification and one that does not appear on its certification list; they are unable to produce or transfer data from their ELD to law enforcement officials; they do not repair a malfunctioning ELD within eight days; or the driver simply did not log into the device as required.

The Rewards

Yet ELDs also offer rewards of sorts for motor carriers and drivers alike, especially in terms of presenting an opportunity to increase freight rates.

 

“You should plan to raise your asking price by at least 1% per mile,” stressed Truckstop.com’s Feucht, which, according to current dry van freight rates, would equal out to about 18 cents more per mile.

 

“This would increase your rate-per-mile to $2.03 or $1,017.50 per load, on average, and give you enough margin not only to offset the cost of the service but also any equipment you may need to purchase, in addition to the cost of training yourself and your employees,” he said.

 

TCA’s Heller believes ELDs offer a chance to address the issue of detention time, which is something he characterized as “a growing epidemic” within the industry.

 

“Once ELDs turn on, we can have a very simple way of recording where drivers are waiting,” he said. “We’ll have the latitude and longitude of drivers waiting at shippers and receivers to be loaded and unloaded. There is going to be data generated by this industry that will highlight everything.”

 

Heller added that while the issue of detention time has been “spoken about for years” within the industry, it could now possibly be addressed more concretely with data gleaned from ELDs – and there’s a significant safety aspect to this issue as well.

 

In a 2001 study conducted by FMCSA, loads with longer-than-expected load times were associated with more driver fatigue – leading to what the agency called a “strong positive relationship” between the percent of time drivers spend loading and unloading and crash involvement.

 

Further, in a January 2011 report compiled by the General Accounting Office, 80% of the truck drivers it surveyed reported that excessive detention time impacted their ability to comply with the hours of the service (HOS) rules that govern their work day  – and that a further 65% reported lost revenue due to detention time.

 

Finally, in a December 2014 study conducted by Virginia Tech entitled Driver Detention Times in Commercial Motor Vehicle Operations, while the “industry standard” for detention time was pegged at two hours, the university’s researchers discovered average detention time hovered around 3.4 total hours, with TL drivers more likely to be detained than LTL drivers and medium-sized motor carriers twice as likely to be detained compared to larger fleets.

 

“It’s clear ELDs must play a future role in combating detention time,” Heller said. “This becomes that big question: is detention a form of coercion? Can the FMCSA gather this data in a compliance review? Where do we go from here?”

 

He noted, too, that in a whitepaper put together by TL carrier J.B. Hunt Transport Services last year, on a “good day” the average TL driver today only spends 6.5 hours of on-duty time actually driving – leaving 4.5 hours “on the table” in Heller’s words.

 

“Those hours [on the table] represent a gain of 44,000 miles per year per driver – that’s a big pay raise for these folks,” he said.

 

Those are just some of the many issues ELDs pose for the trucking industry – more than a few them quite positive in nature. If the December 18 mandate comes to pass as planned, we’ll see then if trucking can take advantage of them.

Five commonly misunderstood ELD mandate issues

1. The difference between an AOBRD and an ELD:

One important matter many current and future electronic log users are not familiar with is the difference between an automatic onboard recording device (AOBRD) and an electronic logging device (ELD). AOBRDs are the “first generation” electronic logging devices that have been available for a while, and ELDs are the “next generation” of automatic electronic logs that are just becoming available. How big is the difference? In a word it’s huge. The regulatory, roadside inspection and technical details are all different.Where the difference becomes an issue is the “overlap” that will occur between the new devices (ELDs) required as of December 18, 2017, and the AOBRDs installed before December 18, 2017, which can continue to be used until December 16, 2019.  This means that carriers could end up operating two different types of devices that operate under two different sets of rules and requirements for up to two years.

2. Dealing with the unassigned driving time and the log editing process:

One issue that carriers are not prepared for is the requirement that all unassigned driving time in an ELD system must be either assigned to the correct driver or have an explanation attached to it explaining why it could not be assigned. This will require carriers to develop a process for reviewing all unassigned driving time, determining what caused it, and then assigning it to the correct driver or attaching an explanation on why it could not be assigned.

3. Driver edits to electronic logs:

Under the ELD rule, drivers can edit their own logs. The only system limitation is that driving time cannot be changed. This leaves a lot of room for drivers that might want to edit their logs to “create” more available hours (e.g., going back and changing correctly logged on-duty time to off-duty time). This requires carriers to have a review process that checks all driver edits to determine if the edit was legitimate or was an attempt to falsify.

4. The driving decision:

Another point that carriers (and drivers) are not aware of is the fact that the ELD will capture any vehicle movement of 5 miles per hour or more as driving time. Where this becomes a problem is if the driver moves the vehicle during a required break (such as at a customer’s facility or a truck stop). The movement will disrupt the driver’s break.

5. Operational disruption:

Possibly the most important thing is how using ELDs will affect your company’s performance. If your drivers are currently using the “flexibility” of paper logs to complete trips or make on-time deliveries, the accuracy of the ELDs will be a problem for you. On the other hand, the more compliant your drivers are with paper logs, the less of a problem this will be. How can you tell where you are today? How many times are drivers calling you to tell you they are out of hours an hour from a customer? The more this happens, the better off you will be when you switch to an ELD when it comes to this issue

—Tom Bray, Industry Consultant, J. J. Keller & Associates, Inc.

ELDs: Boosting the Bottom Line

Electronic logging devices – those three little words have been a big topic of conversation across the industry due in large part to the FMCSA’s ELD mandate. While compliance is a major motivation for fleets to implement ELDs, it is far from the only reason.

 

The mandate requires fleets link their ELDs to the ECM on their trucks to accurately record hours of service (HOS). Yet this connection also provides carriers with the opportunity to collect mountains of important data – from fuel usage to truck diagnostics, driver behavior and vehicle performance – which can be analyzed and applied to improve all of the above and more through a fleet management system (FMS), which includes electronic logging capabilities.

 

The data captured by an FMS provides a powerful business tool for carriers, informing and empowering them to make smarter decisions that save time and money, eliminate safety risks and improve the bottom line. Here are some of the possibilities:

Improved safety and lives saved:

An FMS with electronic logging capabilities provides GPS tracking, route management, fault-code monitoring and real-time identification of bad driving behaviors such as over-RPM and over-speed, idle time and sudden stops and starts. For example, a 375-truck fleet that implemented PeopleNet’s electronic logs reduced costs for fatigue-related incidents by 61% and reduced rollovers by approximately 67% over the course of two years.

Better route management and fuel economy:

An FMS with electronic logging capabilities provides fleet managers with real-time tracking and monitoring of each and every truck, improving communications between the back office and drivers. Through GPS navigation and location history, fleet managers and drivers can plan the most efficient routes to save time. In addition to streamlining operations, route management helps reduce fuel costs through selecting the most efficient routes. Fuel savings alone can amount to thousands of dollars every month.

Maximum ROI and a better bottom line:

Improving safety, efficiency, route management, fuel economy and vehicle performance through an FMS all rolls into cost savings, which improves the bottom line. Fleets that have implemented electronic logs can also achieve a sizeable return on investment (ROI) that comes with HOS compliance, including reduced overhead, lower insurance premiums and the elimination of costly CSA (Compliance, Safety, Accountability) enforcement fines; all adding up to a better bottom line.

—Eric Witty, vice president of product management, PeopleNet