FMCSA directs most fleets to install electronic log devices within two years

The Federal Motor Carrier Safety Administration today finalized a rule requiring electronic logging devices (ELDs) be installed in virtually all commercial motor vehicles by the end of 2017, ending a five-year legal and regulatory battle that still has some in the industry concerned about how small operators will comply with the rule's costs and stay in business.

FMCSA, a subagency of the Department of Transportation, said the rule applies digital technology to a traditionally manual process to improve compliance with federal hours-of-service regulations designed to prevent driver fatigue. The rule phases out the 77-year practice of using paper logs to track driver on- and off-duty times.

An ELD automatically records driving time. It monitors engine hours, vehicle movement, miles driven, and location information. It does not track a driver's personal whereabouts. Truckers that have already installed ELDs on a voluntary basis will have an additional two years past the initial phase to comply with the new regulations. FMCSA estimated the average annualized per-vehicle cost of a basic ELD—one that would satisfy its mandate—at $495.

The costs escalate from there, however. One carrier, which FMCSA did not identify, told the agency it spent more than $100,000 a year to install, maintain, monitor, and replace ELDs for its fleet of 200 trucks. That expense didn't include the costs of downtime when an ELD wasn't working, or any penalties and inactivity at a job site because a load wasn't delivered on time, the carrier told the agency.

The final rule, which came down as had been generally expected, is one of several government mandates that could lead to significant driver and rig attrition due to the compliance costs of each. Although the supply-demand scales are today roughly in balance, analysts expect capacity to significantly tighten in two to three years as the financial burdens of rules like ELD compliance force many smaller operators, the backbone of the nation's truck fleet, to exit the business. This, in turn, will result in a meaningful increase in freight rates, according to various analysts.

DOT officials hailed the rule as heralding a new and improved era in highway safety and efficiency. "Since 1938, complex, on-duty/off-duty logs for truck and bus drivers were made with pencil and paper, virtually impossible to verify," said U.S. Transportation Secretary Anthony Foxx in a statement. "This automated technology not only brings logging records into the modern age, it also allows roadside safety inspectors to unmask violations of federal law that put lives at risk."

The rule will save, on average, 26 lives and prevent 562 injuries per year caused by crashes involving large commercial motor vehicles, FMCSA said. It will generate annual net benefits of $1 billion, largely by reducing the amount of required industry paperwork, the agency said. For example, in most cases a carrier would not be forced to retain supporting documents verifying a driver's on-duty driving time, the agency said. The switch to digital records will also make it faster and easier for roadside law-enforcement personnel to review driver records, FMCSA said.

Addressing concerns by groups like the Owner-Operator Independent Drivers Association (OOIDA), which represents about 150,000 independent drivers, that trucking firms could use the technology to micromanage and ultimately harass drivers, FMCSA said "strict protections" of drivers are embedded in the rule to insulate them from harassment.

The ELD rulemaking process had been in legal limbo since August 2011, when a federal appeals court froze the original 2010 FMCSA rule on grounds it didn't do enough to protect drivers from the possibility of harassment by fleet owners and operators. The original rule was set to take effect in mid-2012, but the court's order returning the rule to the FMCSA upended that timetable.

The new rule establishes technology specifications detailing ELD performance and design requirements so manufacturers can produce compliant devices and systems, FMCSA said. The rule permits smart phones and other wireless devices to be used as ELDs if they satisfy technical specifications, are certified, and are listed on an FMCSA website, the agency said. Canada- and Mexico-domiciled drivers will be required to use ELDs when operating on U.S. roadways.

The American Trucking Associations (ATA), which represents large trucking firms, some of whom have already installed ELDs across their fleets, called the rule a "historic step forward" for the industry. "This regulation will change the trucking industry—for the better—forever," Bill Graves, ATA's president and CEO, said in a statement. "An already safe and efficient industry will get more so with the aid of this proven technology."

OOIDA, which has argued the rules do virtually nothing to improve highway safety while laying onerous cost and process burdens on smaller carriers, repeated its concerns in an e-mailed statement. "We know of no technology that automatically tracks a driver's record-of-duty status, and so ELDs will not be able to verify compliance with hours-of-service regulations," OOIDA said. "ELDs can only track (the) movement of a truck and approximate location, not a driver's work status, which requires input from the driver." The group added that it will be "interested to learn the specifics on how the agency intends to deal with the issue of harassment."

Critics of the FMCSA proposal contend that fleets will not only confront the costs of buying hardware and software, but will also face a productivity hit as they adapt their systems and processes to the new technology. Various groups said in comments to the FMCSA that truckers have dramatically improved their safety performance and that there was no need for a costly rule. OOIDA said the rule's costs could be the "proverbial straw that breaks the camel's back."

The group also expressed concern that the rule did not address whether a driver or a carrier contracting out the driver's services should bear the cost of paying for mandatory ELD use. In response, FMCSA said its mission is to promote highway safety and that it would be the private sector's responsibility to sort out the cost issues. The agency said, however, that fleets that buy ELDs in bulk could pass any volume savings on to their driver contractors. It also noted that overall costs could decline as companies comply with the mandate and the technology gains wider acceptance.