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By Matt Sullivan, DAT Solutions
At this time last year the freight transportation industry was trying to get a handle on one of the hottest-burning questions it's faced in a long time: how will the ELD change trucking?
In the months before the federal electronic logging device (ELD) mandate took effect in December 2017, many owner-operators and small fleets—which comprise the majority of trucking capacity—threatened to leave the industry rather than use an ELD.
Shippers worried about higher rates and blown schedules. Brokers felt caught in the middle.
There weren't a lot of answers. But now we know. Here's a look at what happened—and what didn't.
"ELDs will lead to higher rates."
Spot market prices set record highs in June. The national average van rate hit $2.31 per mile. Reefers hit $2.70, and the national flatbed rate topped out at a whopping $2.82 per mile. For comparison, the average van rate for June of 2017 was $1.80. Claim: True.
"Small carriers won't be able to afford ELDs."
The U.S. FMCSA estimates that the average annual cost of an ELD is about $500 per truck.
ELD prices have dropped due in part to the introduction of smartphone and tablet compatibility options that reduce up-front costs. A decrease in technology hardware costs overall has also contributed to lower ELD prices. Also, ELD providers offered more affordable service than first expected and even offered to buy out contracts for more expensive ELD services.
While it might've been true that the extra expense of ELD adoption pushed some carriers out of business, it wasn't true for the vast majority of trucking companies. A DAT survey found that 91% of small carriers were compliant with the mandate before April 1, 2018, when law enforcement started handing out fines. Claim: False.
"There will be fewer trucks available."
This was correct but maybe not for the reasons you think. Spot market volumes set records in the first
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Rates spiked after the ELD mandate took effect before retreating during the second half of 2018.
half of the year. Shippers and brokers had trouble securing capacity, and shipments that would've normally moved under contract fell into the spot market. The truck shortages were because of the demand side rather than the supply side. Claim: True.
"Carriers will quit."
In fact, the number of active carriers grew at a faster pace after the ELD mandate went into place, with high rates inspiring many company drivers and leased-on owner-operators to get their own motor carrier authority. The freight markets have settled since then, and while 2019 should still be a strong year for trucking, it likely won't match the growth we saw in 2018. Some of those who originally threatened to quit still may decide to leave the industry, just later than they thought. Claim: False. For now.
"ELDs will make roads less safe."
Many in the industry say drivers need to go faster in order to make up time and reach their destination before their mandatory break, and that finding safe parking is harder than ever. We can say that fatal crashes involving semi trucks had been trending up prior to 2018, even as traffic accidents overall have declined. In 2017, trucking fatalities hit a 29-year high.
The mission of the FMCSA is to reduce fatalities and this will be hard to quantify until crash records for 2018 are available. While there's no doubt that the ELD has affected the way drivers, carriers, shippers, brokers, and others in the over-the-road freight industry do business, when it comes to the question of safety, it's too soon to say.
Matt Sullivan is a writer and editor covering commercial transportation and technology for DAT Solutions. He is based in Portland, Ore.
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