Perfect Storm for the Supply Chain

January 29, 2018

Electronic logging mandate tightening trucking capacity

J. Richards Todd, SCTA President & CEO

High diesel fuel prices, combined with a growing economy increasing freight demand – disrupted by recent weather events - and a truck driver shortage worsening by the day is setting the stage for a perfect storm to interrupt the nation’s supply chain for some time to come. Then comes the ELD mandate.

After years of anxious anticipation, a federal mandate took effect in December requiring truckers to replace their paper log books with electronic logging devices (ELDs). Any flexibility which may have been available through the old manual method of tracking driving hours has been eliminated.

Truck drivers’ “Hours of Service” rules won’t change, but how they are tracked will. Proponents say the technology will give both fleets and drivers a simpler, more efficient way to monitor and self-enforce the rules, fostering better compliance and improving safety.

Opponents argue it’s an invasion of privacy, costly for small operators, and impractical for companies with unique and nuanced business models. The “trucking industry,” after all, is really one big, diverse, eclectic mix of industries.

Most large, well-capitalized fleets have been using various types of ELDs for years, finding them to be beneficial beyond just managing drivers’ hours. Suppliers and early adopters say smooth implementation takes several months, depending on a fleet’s operation and how they are to be used. With crunch-time upon them, procrastinators face a mad dash, with equipment backlogs, and a learning curve.

The greatest concerns however seem to center around the inflexibility that electronic tracking creates. It is an indisputable fact that the supply chain can be unpredictable and rife with inevitable kinks. ELDs record the world in black and white, with no wiggle room. Exceptions have been made, more are expected.

In the meantime, any significant negative impact on trucker availability is going to be felt in the form of tighter capacity, longer delays, and higher rates. This comes at a time when the driver shortage is worsening by the day.

The Federal Motor Carrier Safety Administration (FMCSA) and state enforcement agencies – like the State Transport Police here in South Carolina – have allowed for a “soft” enforcement period until April 1. Hold outs hope for a further extension, although that’s not likely. After that non-compliant carriers face fines, penalties, roadside shut-downs, and dings on their federal safety ratings.

Once out of hours, a driver is supposed to shut down, wherever he is, with very limited exceptions. If freight owners do not proactively work with carriers and freight brokers to ensure their providers are compliant, goods could be stuck at roadside.

Shippers and receivers who proactively adjust corporate policies, train their workers to become driver-centric, provide safe and secure parking, access to rest facilities, and find ways to reduce or eliminate wait times will be better positioned to become “shippers of choice.” Documenting driver arrivals, allowing them to drop loaded trailers so they can “bobtail” to a nearby truck stop, hotel or even stay on site if they are running short of time on their duty-status clocks would be hugely beneficial to drivers as well.

On the warning side, ELDs will reveal and document instances of egregious detention times at shipper and receiver sites, and coercion of truck drivers that could lead to significant federal penalties. A common complaint from truckers is that their customers don’t fully appreciate the restrictions they have to live with, and that unreasonable demands create a host of problems.

Considering that trucks move 70% of the nation’s freight, keeping truck drivers safe and moving is good public policy, and in everyone’s best interest.

April 1 is fast-approaching, and likely to be a bumpy ride. We’ll probably be needing a lot more truck parking spaces.