ELD – Friend or Foe?

October 2016

Recently, a friend of mine asked me how the ELD (Electronic Logging Device) mandate will affect his private fleet of 140 trucks.  Although I knew about the new ELDs from a high level perspective, I did not know the complete functionality of this new technology.  His question prompted me to learn more about these tracking devices as they will impact many more Supply Chain constituents than just drivers. 

While doing my research, I found that the new ELDs may be of more value than we anticipated.  Since this mandate was first proposed, it has received an incredible amount of backlash and negative commentary.  Many saw these logging devices as a hindrance to productivity and to our industry as a whole as well as an invasion of privacy.  However, these devices can allow for greater visibility, efficiency, and driver safety.  Twenty to thirty years ago, carriers and dispatchers had very little visibility, if any, when it came to dispatching their drivers and knowing where they were en route.  The main form of communication at that time between carriers and their drivers was via a payphone – drivers would call the dispatchers, letting them know where they were and if there was a load ready for them to pick up.  Many times we would call truck stops and “page” drivers or shut off fuel cards, prompting them to call dispatch.  If there was not a load, they would wait and call again the next hour with the same question.  As you can predict the pattern, this process continued until a driver was able to get loaded and continue driving, which is their ultimate goal. 

That was how our industry functioned and looking back, we see how inefficient that was.  There was no clear visibility that enabled dispatchers to know exactly where their drivers were.  A slightly more advanced system for tracking trucks during that time was OmniTRACS, which was first introduced by QUALCOMM.  This system worked via a satellite and was designed specifically for tracking long-haul commercial vehicles.  The system sent text updates to the dispatcher on the location of the truck and it was extremely helpful.  However, the need for greater visibility and more detailed updates and information was still there.  Today, the technological advancements (including cellular phones – no more payphones!) have given us greater visibility and insight relative to the location of our drivers.  In addition, these new ELDs will increase driver safety as they are equipped to comply with the Hours of Service.  Drivers will greatly benefit from being able to see all their available hours and efficiently log their duty status.  The enactment of this new regulation is inevitable – it is scheduled to begin December 16, 2017 and all trucks made after the year 2000 will be required to have ELDs installed.  Instead of solely focusing on how these new devices will negatively impact our industry, we should shift our focus to how they will benefit us in the long-run.

One ELD provider that we recently reviewed has several different models with the same functionality, but greater capabilities depending on the model; fleet size will most likely determine the type of model a carrier will invest in.  The smallest model is suitable for a small fleet and pairs with a smartphone or tablet.  The second model looks like a small “black box” that also communicates with a smartphone or tablet.  The third model looks very much like a mini iPad, only thicker, and has a built in screen so it can function without the support of a smartphone.  The ELDs we saw had navigation capabilities tailored specifically for commercial vehicles; it will automatically find the most efficient, legal, route for trucks.  This is extremely valuable as it will help optimize routes for drivers and allow for greater efficiency.  Another value component of these ELDs relative to safety and efficiency is their compliance and efficient tracking of a driver’s available hours.  When a driver is on duty, they will log as “on-duty, not driving,” which will impact their on-duty time without affecting their available driving time.  Currently, carriers have the ability to manually set mileage parameters for when the ELD will automatically switch from on-duty to driving.  These mileage parameters range from 0-3 miles, depending on the carrier’s preferences, and exclude the distance traveled within the truck yard.  Once the driver has driven out of the yard and traveled up to three consecutive miles without stopping, the device will automatically switch to “on-duty, driving.”  When they are on break, they should now exit the cab or go into the sleeper berth as taking a break inside the truck will still be recorded as “on-duty, not driving.”  Now, with the electronic logging, the grid for tracking hours will have less smudge marks and crooked lines.  That alone should be a plus!      

These devices have dispatch messaging capabilities and this data is all stored in the cloud, so they can be accessed from anywhere.  These units give real time location and duty status updates, which are much more efficient than a driver calling a dispatcher every hour letting him know where he is and asking when his next load will be available.  Another great value-add that the ELDs provide are truck metrics; they can help reduce long-term expenses.  These devices connect to the Engine Control Module (ECM) and therefore collect information that provides visibility on fuel mileage, total miles driven, mileage by state, hard breaking, idle time, etc.  Not only will this provide greater visibility to carriers on how to improve their cost and efficiency, it can also serve as a great training tool in certain areas for certain drivers. 

Like the live updates, this data is aggregated and stored in the cloud, where it can be accessed from virtually anywhere.  These metrics add a huge value to Carriers and Fleets and could have a long term positive impact on their respective profitability.  

As mentioned earlier, the Electronic Logging Devices are similar to the OmniTRACS, the first satellite locating and messaging service for long-haul trucking developed back in the late 80s.  This system was extremely hi-tech and expensive (roughly $1,200 per system installation) for its time. Today, the ELDs cost $400-$700 each, depending on the quantity needed, with an approximate $40 per month “cellular” connect fee and come with a 3+ year warranty.  The cost/quality ratio is much better for the ELDs compared to the OmniTRACS.

After dedicating time, learning more about the new ELDs, I found that the two most valuable benefits include tremendous fleet routing improvement and potential fuel mileage improvement in addition to safety and compliance.  The implementation of the federally mandated ELDs is inevitable, so perhaps we should focus on how utilizing these devices will best serve our industry and our companies. They have incredible value and will certainly increase our visibility and efficiency, which will ultimately minimize cost.  These should be goals of every Supply Chain constituent.