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Big changes are coming to the way transportation and fleet companies operate. By the end of 2017, fleet operators in the USA will be required to complete the transition from paper driver logs to electronic logging devices (ELDs). Canada will follow closely behind with its own ELD compliance standards, set to be in place shortly after the USA’s late 2017 compliance date.
With these new ELD compliance standards on the horizon, it’s important to understand how the trucking industry will be impacted, and what steps you need to take as a transportation operator.
What’s an electronic logging device, or ELD?
An ELD, or electronic logging device, is a piece of hardware that connects directly to the engine’s control module (ECM) to automatically record driver compliance with hours of service (HOS) requirements. It collects vehicle data including date, time, location information, miles driven, engine hours, and is able to generate alerts for vehicle malfunctions and “unassigned driving time”.
This information is used to monitor the status of vehicles and drivers, and is stored in a standard format that allows companies or transportation officials to collect and review.
What Is The ELD Mandate?
The ELD mandate requires many companies in the transport industry in both Canada and the United States to make the transition from paper logs to certified automatic electronic logs.
The mandate will include compliance specifications for ELD manufacturers, how ELDs will collect and record HOS data, how the information can be used by employers and officials, and address driver privacy concerns.
Why The Move To ELDs?
The new electronic logging devices will help improve safety standards, reduce the rate of preventable accidents and associated costs, and increase accountability of companies operating in the trucking industry.
By automating and standardizing the way drive time is recorded and reported, ELDs will also help minimize errors and logbook tampering. With over $650 billion in goods crossing the Canada-USA border each year, the ELD mandate aims to create consistent regulations so drivers and fleets remain compliant on both sides of the border.
When Do Electronic Logs Become Mandatory?
Beginning December 18, 2017, fleets operating in the United States will be required to make the switch from paper logs to ELDs. Fleets that are already using electronic logs have until December 2019 to meet the new compliance specifications.
As the Canadian ELD mandate is still in the planning and development stages, there are no dates for the Canadian ELD compliance deadlines.
However, the Canadian Council of Motor Transport Administrators (CCMTA) will follow a similar process used with the publication of the US mandate. Based on the US compliance dates, the Canadian ELD compliance deadline is projected to be at the end of 2019.
Are There Exemptions To The ELD Rule?
Since the Canadian ELD mandate is still in development, exemptions to the rule in Canada are not yet known.
However, there are ELD exemptions within the US mandate, and with Canada’s ELD mandate expected to closely follow ELD compliance rules in the United States, many of the same exemptions may apply.
Exemptions to the ELD mandate in the United States include:
Drivers using the timecard exception
Drivers who use paper logs no more than 8 days in a 30 day period
Drivers of vehicles manufactured pre-2000
Drivers of drive-away-tow-away operations where the vehicle is the commodity being delivered or is a motor home/RV
These exemptions could change as the Canadian ELD compliance standards are finalized. For more information about ELD exemptions, click here.
Will There Be Differences Between The US & Canadian ELD Mandate?
The Canadian ELD rules are predicted to closely mirror the US mandate in order to keep cross-border regulations consistent. However, there are also several differences expected between the US and Canadian mandates.
You can find more information about the differences here.
With the Canadian ELD mandate still in the planning stages, it will be important for fleet operators and transportation companies to continue to follow its development. The finalized regulations are expected by the CCMTA to appear in Gazette IIby Q4 2017.
View our infographic to learn more about the ELD mandate and how it will impact the trucking and transportation industry.
How much does an ELD cost?
In preparation for the ELD Mandate’s passing, the FMCSA examined a number of similar HOS logging devices on the market and set a benchmark for what fleets can expect to pay on an annual basis.
What did they find?
Electronic logging devices ranged from an annualized price of $165 to $832, with the most popular device used today priced at $495/truck.
The FMCSA notes that while ELD prices haven’t come down drastically in the past few years, many providers are introducing less expensive fleet management system models that have features designed specifically for the ELD Mandate.
Based on this trend, and paired with the economic benefits that come from paperwork reductions, the FMCSA found the long-term savings ELDs deliver to be greater than the costs to motor carriers and drivers.
And, with the introduction of ELDs that run on smartphones or tablets as opposed to fixed hardware, start-up costs can be reduced further. No matter the size of the business – from independent owner/operator to large national carrier – return on investment is realized almost immediately. These types of ELD solutions also offer the added benefit of untethering the device from the cab, allowing truck drivers to take advantage of powerful data analytics and other mobile apps anytime, anywhere.
The FMCSA believes the total annual cost of ELD adoption will be $975 million, which includes all equipment for carriers and commercial truck inspectors, as well as inspector and driver training.
To be fair to the business changes ELDs can impact, another $604 million was budgeted for “extra drivers and CMVs needed to ensure that no driver exceeds HOS limits.”
All in, the net benefits of ELDs outweigh the costs with expected paperwork savings of over $1.6 billion annually, plus crash reduction costs of $395 million.
It should be noted that the ELD rule allows for the “grandfathering” of current E-log devices to meet the proposed rule. If you had already invested in E-logs before December 2015, you may continue to use those devices until December 2019. (Once you talk to a fleet that has voluntarily adopted E-logs, you will find it’s nearly impossible for their drivers to give them up.)
How can an ELD save truck drivers time and money?
Based on assumptions stated by the FMCSA in its Regulatory Impact Analysis for ELDs, paperwork savings per driver per year are estimated to include:
Driver Filling RODS: $487
Driver Submitting RODS: $56
Clerk Filing RODS: $120
Elimination of paper driver log books: $42
That’s a total of $705 per year in just paperwork savings alone – and that’s a conservative estimate.
How did the FMCSA come up with that number?
The agency estimates that each truck driver fills out an average of 240 RODS per year, and an ELD is estimated to reduce the amount of time drivers spend logging their HOS by 4.5 minutes per RODS – or, 19 hours each year.
They also note the time commercial drivers spend filing or forwarding their RODS to carriers, which the agency estimates takes five minutes and occurs 25 times per year – eliminating two more hours a year.
In short, that’s a potential 20+ hours of drive time wasted by filing and sending paper driver logs.
If you are an owner/operator able to charge today’s rate of $1.92/mile for a dry van operation and driving 50 MPH, that’s $1,920 in lost revenue each year.
For drivers who use E-logs, ELD manufacturers report an increase of 15 minutes of drive time per driver per day. And, because E-logs support rounding up to the nearest minute, as opposed to the 15-minute intervals required by paper driver log books, it’s common for most drivers who make a few stops in a day to gain even more drive time due to exact recording of on-duty time.
And, illustrating ELD benefits using a more aggressive model tells an even stronger story.
Consider an owner/operator running a flatbed operation at $2.47/mile, averaging 50 MPH, and running approximately 1900 miles a week. That driver would realize:
1.5 hours/week from reduced paperwork = $185.25/week in potential new driving (billable) time
1.5 hours/week of rounding to the nearest minute = $185.25/week in potential new driving (billable) time
Commanding a higher rate based on proven HOS compliance ($2.60 compared to $2.47) = $247/week
Potential reduction of one OOS violation a year, resulting in one more day on the road = $20.58/week
Saving on potential fines from form and manner violations = $6.25/week
And, while the math on accident reduction savings is trickier, the FMCSA did calculate an average safety benefit of $187 per long-haul ELD user and $126 per short-haul ELD user.
Fleet management system benefits extend beyond paperwork savings…
Keep in mind that the savings noted above result from the ELD component of the typical fleet management system only.
These fleet management systems (FMS) offer more comprehensive features (which deliver more significant benefits), allowing fleets to further slash costs and make life easier for drivers, including:
Decreased Fuel Costs: By monitoring excessive truck idle times or speeding events, fleets can build incentive programs for truck drivers that help increase fuel efficiency.
Reduced Truck Downtime: Fleet management system users can see reduced vehicle downtimes of 15% and improved vehicle utilization of 13%, according to studies by the Aberdeen Group.
Lowered Total Crash Rates: Based on data from the Center for Truck and Bus Safety of Virginia Tech Transportation Institute, drivers using E-Logs had a significantly lower total crash rate (a 11.7% reduction) and a significantly lower preventable crash rate (a 5.1% reduction) than trucks not equipped with electronic driver logs.
Simplified Regulatory Compliance: While complying with the ELD Mandate, other regulations can also be easily satisfied, including Driver Vehicle Inspection Reports and IFTA.