Few people understand a rule's impact better than those who've enforced it. That truism has made John Seidl a busy man these days. With the deadline for compliance with the federal government's electronic logging device (ELD) mandate looming, Seidl—who has more than 20 years' experience at the Federal Motor Carrier Safety Administration (FMCSA), which wrote the ELD rule, and who has served as a Wisconsin State Patrol motor carrier inspector—has been in high demand from carriers seeking compliance guidance. The firm he works for, Waukesha, Wis.-based Integrated Risk Solutions, has been retained by Arrive Logistics, an Austin, Texas-based third-party logistics service provider (3PL), to help carriers understand the mandate and its implications.
In late October, Seidl spoke with Mark B. Solomon, DC Velocity's executive editor-news, about the looming deadline, why so many fleets and drivers have yet to comply, what the initial productivity losses could be, and why ELDs might end up being a boon for everyone.
Q: As we speak, we are six weeks away from the deadline for ELD compliance. Where does the motor carrier segment stand in terms of hitting the Dec. 18 target?
A: There isn't hard data from an established third-party source. We all have best estimates. Based on my involvement, I would say 30 to 40 percent of the drivers nationwide have not yet complied.
Q: Why still a seemingly high percentage of noncompliance at this stage?
A: Keep in mind that the larger carriers, which are those with strong safety cultures, have worked with electronic logs for several years. What we have left are a lot of smaller fleets and owner-operators that don't have aggressive safety cultures. Or their systems aren't structured to support operating with ELDs.
Communications through the media about possible implementation delays has been a huge factor in keeping down compliance. First, fleets and drivers heard about the Trump administration planning to kill two rules for every new one enacted, and they thought ELD compliance would end up in the killed-rules category. Then it was the [Owner-Operator Independent Drivers Association] making multiple and well-publicized efforts to delay or block implementation. That was interpreted as a sign of another delay in the deadline.
Q: Estimates of the carrier productivity hit post-Dec. 18 have ranged from 3 to 4 percent to the low double digits. Where do you come down?
A: In excess of 10 percent.
Q: How do you arrive at that estimate?
A: Let's say each of the 30 to 40 percent of noncompliant drivers is falsifying their paper log by three hours per week, which in my view is conservative. They could either be driving too long or getting back on the road eight and a half hours into their mandatory 10-hour rest cycle instead of waiting the full 10 hours. Put another way, say you have a 20-truck fleet and each driver is illegal for three hours per week. They could easily fudge those numbers with paper logs. But with ELDs, that additional driving time, and the productivity that accompanies it, goes away. Then you overlay the American Trucking Associations (ATA) estimates of a shortage of 50,000 drivers, which means trucks stay parked for lack of occupied seats, and it isn't hard to imagine a 10- to 12-percent productivity hit in the near term.
Q: Will drivers be able to get away with noncompliance?
A: Technically, they can. But it will be harder to do, and it will be easier to get caught. When a truck is stopped for any reason, logbooks are always checked. It will become apparent right away whether a driver is compliant. Owner-operators or fleets with two or three trucks might get away with not having ELDs. Once you get to fleets of six to nine trucks, though, the chances of being stopped will increase.
Noncompliance will not generate an out-of-service order until April because FMCSA delayed that part of the rule. However, being pulled over and not having an ELD will add points to a driver's or fleet's CSA [safety performance] scores, which raises their insurance premiums and puts them at a disadvantage when bidding on future business.
Q: Are there fleets that have looked beyond the initial adjustment phase and recognized that ELDs could result in a better, more efficient operation?
A: 100 percent yes. Go back to the fleets that installed automated on-board recorders years ago. They took a 4- to 6-percent initial productivity hit, but they improved their operational efficiency and they regained most of the loss in 12, 18, 24 months. This ties back to why the 10- to 12-percent productivity hit post-Dec. 18 is a realistic number. The financially stronger fleets with deeply ingrained safety cultures still took a near 6-percent hit. You can't tell me the ones that are still waiting to comply are going to take the same hit as those who have historically been safer.
Q: But you see good things coming out of ELD implementation?
A: Yes. Real-time asset tracking will be a huge benefit. Dispatchers can automatically see how much on-duty time a driver has left. Currently, they have to call, e-mail, or text to obtain that information. Dispatching systems that interact with good ELD equipment will enable auto-tracking of driver detention time, arrivals and departures, and invoicing. It will also prepopulate shipper numbers and bill-of-lading information so drivers don't have to do it. Also, because all of the data comes from the engine's operation, drivers and fleets can use ELDs to monitor idle times, braking action, and speed. All of these things make for a better run and more profitable business.
Will all carriers take advantage of it? No. Some will take the data, throw it in the corner, and do what they've always done, which is to deliver freight. I don't feel operational efficiencies will offset all the loss in productivity. However, in time and with changes to shipper, receiver, broker, motor carrier, and driver planning, much of the loss will be regained.
Q: Are there signs that shippers understand what is coming and will, if necessary, reconfigure their supply chains to ensure their freight gets moved?
A: In my career as a law enforcement officer, FMCSA official, and consultant, I had never spoken to or been questioned by shippers, receivers, or brokers about anything other than surety bonds. Since the ELD mandate, I've been constantly involved with shippers, brokers, and receivers, who are all eager to get information.
That said, shippers by and large are not ready for the mandate. They haven't taken proactive measures to accommodate the driver. They have policies and procedures for everyone, but none for drivers. Maybe 5 to 10 percent of shippers currently have policies to accommodate drivers. As a result, I think there will be a lot of reactive actions come mid-December. Those shippers who haven't thought about managing their driver relationships know who they are. They will not be shippers of choice, and they will have freight on their dock that won't get moved.
Q: Do you believe the ELD rule will have a significant impact on road safety?
A: Yes. There are a lot of drivers and fleets that operate safely, with or without the ELDs. Then there are drivers who technically run illegally, but it's 10 minutes here, 20 minutes there. That's not who the rule is designed for. We are talking about a relatively small percentage of drivers that abuse the system to make as much money as possible, and in the process, fatigue themselves terribly. If the ELD rules can rein in the 10 percent of drivers who push themselves too hard, then we can see better safety outcomes on the road.