Now that the ELD (Electronic Logging Device) mandate has been in place for a full year and changed the way trucking is regulated in the U.S., it’s important to examine and realize the impacts to supply chains.
For years carriers have pushed the hours of service limitations often bending the rules, allowing them to circumvent log book violations creating unrealistic and potentially dangerous productivity. The mandate has now created a much needed level playing field for trucking companies. This new environment has had impacts on supply chains. Let’s outline some of the most visible impacts.
The most glaring impact initially was on price. Without the ability to bend the rules, carriers weren’t able to squeeze additional productivity from drivers. Carriers were often able to cut corners and make things “work” in the old system. This unrealized or unaccounted for productivity, was difficult to build into pricing and rates. It became more difficult for carriers to perform the same transit activities with less time. Directly impacting rates and pricing.
Another impact was on capacity. This new mandate may have pushed out noncompliant companies. Or companies that were slow to react, may have left the market temporarily. Both factors directly impacted capacity in the early stages of the mandate. Also, drivers are creatures of habit, these new rules and regulations may have given drivers something to gripe about. The new rules may have caused some drivers to explore new and different employment opportunities. The mandate may have posed a problem for carriers in already difficult driver recruitment and retention market.
In the new ELD environment detention and driver wait time has directly impacted on-time performance and supply chain efficiency. Long gone are the days of waiting 3-4 hours to get loaded. If shippers want their goods to arrive on-time, they must make adjustments in their shipping practices. Keeping drivers in the docks for hours will kill driver productivity, and hence impact on-time performance. Shippers will need to react and manage driver loading times appropriately. Driver detention will continue to be a major issue. Drivers get paid to drive, if time is wasted in docks, carriers will be quick to bill for detention time.
In summary, the mandate is good for the industry. Safety is paramount in transportation. Awareness to the changes will help shippers and carriers react to this new environment together. Shippers need to pay close attention to the ELD mandate, and react to this new transportation environment. Here are a few simple ways to collaborate and align with your carrier base and shipping practices.
Perform regular carrier reviews. Introduce the ELD mandate as a talking point. Discuss your carrier’s compliance with the mandate, and identify potential impacts to your business. Discuss lane transit times. Identify lanes that may be impacted. Has your carrier been running over hours on any of your shipping lanes? If so, discuss plans to restructure lane scheduling and or planning to meet your shipping parameters.
Work closely with your shipping facility partners and internal team. Remember, having shipments staged and ready to load will help your carriers make the transit times, and reduce potential detention times. Work with your internal shipping team to become a “Preferred Shipper”. Carriers love working with organized efficient shippers. Again, drivers get paid to drive. Less waiting time and detention for pickup and delivery is a win-win for both parties. It may be a good idea to also investigate drop trailer opportunities within your network and with your carrier base. These opportunities will also alleviate waiting time, and hence maximize your lanes drivable hours.
In conclusion, the roads are safer under this new regulatory system. As long as you have awareness and adjust to this new environment, you can manage these impacts and position your supply chain for success. Happy shipping in the ELD Mandate new frontier!
Photo credit: Teletrac Navman