ELD mandate: Independents’ final straw?

| April 17, 2014

ELD Support and Opposition chart

What would the trucking industry look like without 70 percent of the independent and small-fleet owner-operators in business moving freight on the roads today?

What kind of recruiting and training efforts might be required among more sizable fleets if 52 percent of their company drivers and leased owner-operators suddenly exit the business?

ELD plans poll Such questions aren’t strictly rhetorical. An Overdrive survey of readers shows such percentages of respondents saying they would either retire or look for another line of work before they’d ever run with an electronic logging device.

Under the proposed rule by the Federal Motor Carrier Safety Administration, ELDs could be mandated for virtually all interstate haulers by late 2016. Many of the largest fleets have adopted ELDs or are phasing them in, and medium-sized fleets are following suit. The smallest fleets — whether unable to afford electronic logging systems, objecting to the devices as an invasion of privacy or without personnel devoted to safety technology — are likely to be the last holdouts.

It’s unclear how many of those small independents, as well as some owner-operators and company drivers not using ELDs, would not follow through on threats to quit. But the recent experience of older drivers leaving when the current hours of service regulations were introduced shows the threats are not all idle. The ELD mandate likewise could accelerate industry retirements, says analyst Jay Thompson, president of Transportation Business Associates.

“Those are the drivers I would expect to actually leave – those that see in [the mandate] a reason to go ahead and say ‘I’m done with it,’ ” he says.

Here’s how drastically the numbers could play out. Assume the 71 percent of independents who say they’d quit actually do, and apply that to carriers in the for-hire population with one to five trucks. This would equate to an overall loss of about 260,000 trucks, according to data mined by RigDig Business Intelligence, Randall-Reilly Business Media’s equipment- and business-data analysis unit. That would remove more than 10 percent of the industry’s capacity.

When the 71 percent is applied to carriers with up to 15 trucks, it leads to a capacity reduction of more than 27 percent, or about 709,000 trucks.

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The American Trucking Associations commonly cites a “driver shortage” that’s expected to grow to 239,000 by 2022, considering current growth rates in the driver population and expected driver demand. That dynamic will play out much more dramatically if regulatory pressures send more drivers away from over-the-road trucking.

“Will some people leave? Yes,” says Thompson, though it will be much less than 70 percent of small fleets. “It’ll be a really begrudging kind of adoption” once the mandate is in place, he says.

Most clients at owner-operator business services firm ATBS are leased to sizable fleets, and 75 percent said they were running electronic logs when surveyed in 2013, says President Todd Amen. However, only 26 percent of company and leased operator respondents to Overdrive’s ELD survey indicated they were running electronic logs today – and just 2 percent of independents and small fleet owners.

“I do think there are plenty of older independent contractors that are scared and stubborn” and thus opposed to electronic logs, Amen says. “But when it comes down to it, they’ll work under ELDs if they still need a paycheck, and most of them won’t be able to retire on Social Security [alone].”  

However, Amen does view the exit of experienced drivers from the industry as a primary downside of the ELD mandate. It comes on the heels of changes in interstate truck drivers’ hours of service regulations that in some ways were equally unappealing to those with long industry experience.

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Those changes appeared to be the final regulatory straw for many older drivers at Werner Enterprises, said a company executive in a 2013 story by Kevin Jones, reporting in Overdrive sister fleet publication CCJ from the American Trucking Associations’ management conference in October.

“In the 90 days leading up to the hours of service change,” Jones reported, the share of 60-67-year-old drivers at Omaha, Neb.-based Werner “fell by half.”

Said Werner President and Chief Operating Officer Derek Leathers: “It’s my belief that’s a representative sample across the industry of drivers who just said, ‘I’m out. I’m done. Thanks, but I’m moving on.’ ”

As with the Werner drivers, Overdrive’s survey response also points to the strongest dissatisfaction being among older drivers. Almost 30 percent of survey respondents said they would retire before ever trucking with an ELD. Of those respondents, 80 percent had more than 20 years of experience in trucking, and nearly 60 percent had more than 30 years.

ELD Response chart

The simple need for income isn’t the only factor weighing against a huge exodus of haulers over ELDs, however. A common refrain among drivers and owners who’ve made the switch to e-logs is actually one of surprised positivity.

St. Louis-based Artur Express’ first experience with ELDs came when the operation transitioned in June to recruiting owner-operators to run under the fleet’s authority rather than their own. Today, of a total 300-plus-truck capacity pulling the company’s trailers, about 20 units run with ELDs. Todd Walthall, recruiting manager, says though some drivers do hang up at the very mention of e-logs, “We’re not losing a lot of prospective owner-operators because of it. With everybody around the industry coming to a conclusion that [the mandate] is coming, I think there is a bit of an acceptance of it.” Drivers 40 and under, he adds, “are more accepting.”

Others are more than just accepting: “I have had people mention to me that they don’t know how they’ve gotten along without them” after making an initially reluctant transition, Walthall says.

Amen has “witnessed ELDs firsthand in a truck with a driver on a multiday trip,” he says. “It is not a big deal if the driver doesn’t make it a big deal. It takes much of the guesswork and burden [of computing hours] away. In fact, I believe for a fleet, it gives them a huge advantage to better plan and help independent contractors to be more productive.”

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Among small fleets that have transitioned to ELDs is Hartsville, Tenn.-based Old Time Express. Old Time adopted the devices in spring 2013 to satisfy FMCSA’s Tennessee division after an audit garnered the fleet its first-ever Conditional safety rating, mainly due to hours of service problems.

Old Time part-owner and -operator Mark White says the Omnitracs ELD system the company installed has defied conventional wisdom that ELDs do nothing but reduce hours flexibility and create an unmanageable situation for many drivers with increased pressure to run when tired. On the contrary, says White, “They’re not the end of the world. You can actually make it work better for you.”

The switch also forced operational changes, notably shifting more work to dispatch. “There’s a lot more relaying loads you’ve wouldn’t have before,” White says. “We always try to book ahead, to keep the driver aware of which load he’s on and is going to be on, so that he can plan today for tomorrow.”

As White sees it, the added dispatch workload actually took pressure off of drivers to make up for dispatch mistakes. “A small carrier should jump into it with both feet,” he says of ELDs, particularly when combined with sophisticated fleet-management functionality to refine back-office dispatch.

ELD trucking alternatives poll

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Not everyone agrees. They attribute what they see as a growing culture of unsafe on-highway behavior to pressure-cooker dynamics at carriers running electronic logs. “All they are doing is creating more aggressive drivers,” wrote Ken Hunzeker in commentary under an OverdriveOnline.com story about the ELD mandate proposal. “All you have to do is watch the trucks, and you can about guess by the way they are being driven what trucks have e-logs and what trucks have paper logs.”

Independent owner-operator Brad Lambert witnesses the same: “I constantly see them tailgating to try and pass, tearing through work zones, and I agree the aggressiveness will only become worse as they try to tear down the road to make up more time.”

Access to the kinds of tools that enable efficient, improved dispatch to combat such dynamics can be expensive. Old Time spent $20,000 for the hardware and software in its 20-truck fleet, and $40 per unit/month airtime subscriptions are ongoing costs. Less-expensive options for basic logs/driver vehicle inspection report functionality, as well as dispatch capability, are available.

It’s expected that costs will continue to fall with technological advancement and proliferation of ELDs. 

“For us, we give away the hardware,” providing a connection to the truck’s electronic control module and charging only the subscription/service fee, says Ryan Barnett of XRS. “You do see some [logging] apps out there free for drivers” today, he adds. However, such software-only packages are today not capable of doing the work the ELD mandate will require of the devices.

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One, however, KeepTruckin, as this report was being prepared made news with a plan to offer an entirely free ELD to users of its e-logbook. The company also offers a web-based dispatching platform free to fleets. 

Considering the entire trucking landscape, says Amen, “I don’t think [ELDs] will be a sea change for our industry.” Most truckers will adapt “like they do to all change in our business. I think small fleets will find a way to do the same thing most of the big ones have already done.” 

  • steppingrazor

    If you are planned right you can run 3000 miles legally.

  • shadow hauling

    FoxStar, I’m sure you realize that there are people out there running under the influence of drugs or alcohol in all types of vehicles. I’m not sure of you know what an IGNITION INTERLOCK DEVICE is. It has to be blown into by the comvicted person before the vehicle will start. It’s mandatory in some states that if you are comvicted you have to have this installed in your vehicle and any others registered at the same address. The cost to install,maintain,monthly download,maintenance and to remove are paid for by the convicted person. SOOOOOOOO- I ask you, should all of is be required to have these installed in our cars to protect us from those that were convicted ? AND as you are probably aware there have over the years and just recent been 18 wheeler drivers convicted of driving under the influence and some have resulted in deaths. SOOOO – should we all now have to have these also installed in you trucks because of them and to protect us from them ? Where will it end ? Don’t follow the big dog because it may turn around and bite you.

  • Yowr Mom

    Thanks spelling nazi. When insulting someones spelling or grammar, best to make sure your own is right first dummy. Where did you go to school?, better stay in that truck.

  • jackbwheeler

    what if there was some sort of “collective” that provides the “big fleet services” like relay loads, but still lets you enjoy the freedom of being an OO?

  • jackbwheeler

    What sort of flexibility are you looking for?

  • Jimmy the Greek

    Ball bats blocking roads , braking things and setting fires , works better than trying to deal with the man , It worked for the truckers in France !

  • Jimmy the Greek

    I have had to help friends get there car started because of theme things

  • Jimmy the Greek

    From swift lease purchase !

  • pupeperson

    I want to see the crash statistics for those propane haulers that were exempted from the hours of service regs. These guys were hauling liquid (unstable) loads or running empty in some of the worst operating conditions imaginable (winter roads in the upper Midwest and Northeast.) If their stats mimic those of the general trucking population or are better, would that not indicate that the HOS rules are more about control than they are about safety? There really is quite a large statistical sample readily available for analysis here that isn’t theoretical but would be backed up by hard numbers. If those numbers would turn out as I believe they would, maybe the next “experiment” could be to exempt OO’s from those rules and see how that subset would perform. They have a greater vested interest in safe operations than just about anyone out there, and maybe we could finally get the heavy hand of Big Government that wants control more than anything off our backs. If the Propane haulers are proven worse than the industry average, then bring on the E-Logs. Otherwise, forget ‘em!

  • Jimmy the Greek

    A – hole I only run about 35000 miles a year and with what i do i well be screwed with E-logs

  • Jimmy the Greek

    Bull !

  • Jimmy the Greek

    You well be broke in less than a year !

  • Jimmy the Greek

    I own my own and run on my own authority ! i do not do my own taxes , i pay Transcore 35.00 per mo to do my IFTA and get my tags , well worth the money , and i pay a shop to do my service work , However i make enough money to do things the way i do , i would rather ride my motorcycles and street race my mustang than screw around under the truck , i well not even change out a burnt out headlight , FYI I worked in the shop before i ever drove . So UP YOURS !

  • Jimmy the Greek

    The Military is a failure to ! look at what they are letting in dykes , sissies , and wetbacks ! This country is finished !

  • Jimmy the Greek

    You got that right !

  • Jimmy the Greek

    Hitler was not a communist ! He went to war to kill communism the united states sided with Stalin and the reds because of the jews

  • Jimmy the Greek

    Did you ever think that they might start paying less per load because it well take more trucks to keep them supplied

  • easypup

    It’s my truck when you assholes want to pay my bills and take care of my equipment. Then you can drive it to. the whole trucking industry needs to go onetime and take back our freedom. Before it’s over these assholes are going to tell you when you can shit and when you can’t.

  • meathagen

    Must be one of those sheep all Elg just make you have a longer day than you had before you get stopped at a light on duty not driving stopped in traffic jam on duty not driving next thing after they turn all the trucks down will to look at the e log and start handing out tickets for one to five over there fascist speed set for all trucks the ports will just read the e log as you go by the next thing you know you get home after a week or two on the road you have tickets from several sates in your mail box and one from the d.m.v you’re over your points and you’re license is revoked for a year that would such

  • meathagen

    Thanks Steve for the info I will drive my congressman nut and pass the info on

  • Kdray

    The man needs ro leave drivers alone. They don’t regulate doctors hours on duty. A construction worker can work 15 hours a day. An individual can drive for 40 if he wants, and that person could be a truck driver behind the wheel of a four wheeler but that’s ok so what’s r he difference.

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  • Paul L.

    Now who is bad at math. $130K divided by $800/wk = 162.5 weeks not months. It comes out to 3.125 years.

  • Old Lady Trucker

    I did drive for over 30 years, did keep my paper logs up to snuff, do miss the driving (medical shut down) and would no longer driver for a large company – not because of the e-logs but because of the way the customers treat large company drivers. E-logs are the lazy way to keep up with what a driver is doing. ‘Mommy’ with a readout. Not all who chose to drive a truck actually care about the public they are serving, only about what they can get out of it. Watched that when I was driving all those years, still around and still seeing it.

  • Judy Keith

    I run 500 miles a day 7 days a week. Never run out of hrs BUT I never see home!!!! Stuck on elogs till I drop dead I guess

  • Judy Keith

    What is there pay per mile?

  • Judy Keith

    Mr. Scheibe, I agree with you! I have 17 years otr. I have learned so much from the “old timers” what can we do? I love owning my own truck . I just do not want to be forced out & give up the business!

  • Jimmy the Greek

    how the hell would know , and getting payed by the mile is for suckers , i get tonnage and milage and give one hour free time at each end .

  • Jimmy the Greek

    I am still running the 1998 that i got 11 years ago for 25,000.00 to hell with payments

  • Jimmy the Greek

    who pays buy the week ? I don’t know of any lender that does that .

  • omafea

    On that bull-shit E-Log! Never got sleepy until it was time to drive.

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