Transport Topics published an excellent article examining the impacts of Electronic Logging Devices (ELDs) on truck capacity and in particular regarding the impact on smaller carriers. They reached out to a number of large truck brokers, including Transplace, to find out what the primary users of small trucking companies are thinking. While most of us do not buy into the gloom and doom scenario regarding capacity reduction, we also agree that even a modest 3-5% reduction in effective capacity, through small carriers exiting the business and running fewer miles per truck, would shift capacity-demand balance back to levels experienced in 2014.
The mandate does not take effect until the end of 2017, so there is no immediate impact. In addition, there will be no impact among the larger carriers, nearly all of whom have already adopted ELDs.
In the meantime, some shippers and brokers are already demanding that carriers certify that they are ELD compliant. That is absurd. ELD providers self-certify to the FMCSA that their devices are compliant with the new regulations. As of today, there are six providers of ELDs that have self-certified. FMCSA does not and will not verify or challenge these self certifications. They could only be removed from the list if other organizations challenged whether the ELDs truly met the standards. Secondly, carriers self-certify that they are using a compliant device. Until roadside inspections start putting trucks out of service in 2018 for not utilizing ELDs, there is no way to be sure that carriers are utilizing ELDs.
Carriers are allowed but not required to utilize ELDs until December 18, 2017. Shippers and brokers that create their own more stringent rules than published by the FMCSA are increasing their own liability exposure in the event that their own rules are not followed 100% of the time. They are also kidding themselves, because there is only self certification, with no verification.
Let’s see how things play out in late 2017. There may be a short period of disruption in the transition, but I have a strong feeling that the most entrepreneurial players in our industry, the small truckers, will find a way to survive and occasionally thrive under the new rules.