In The News
ELDs create unlevel playing field, could cause smaller carriers to exit industry
DALLAS — Electronic logging devices have created somewhat of an unlevel playing field among motor carriers these days, but when fully implanted at some unknown point in the future, they are likely going to result in smaller carriers leaving the industry and a larger loss of capacity.
That is the opinion of the top executives of three large fleets — David Parker, founder, chairman and chief executive officer of Covenant Transportation Group of Chattanooga, Tennessee; Richard Stocking, chief operating officer of Swift Transportation of Phoenix; and Derek Leathers, president and chief operating officer at Werner Enterprises of Omaha, Nebraska.
The three participated Thursday in a lively and often pointed panel discussion about key industry issues, including equipment, fuel, economic demand and drivers as part of the Great American Trucking Show here.
As for the ELD issue, the industry is awaiting the publication of the final rule on ELDs, which have been mandated by Congress.
According to a Department of Transportation website timetable, the publication may come as early as September 15.
Most industry stakeholders feel the rule will carry a drop dead implementation date of sometime in late 2017.
"ELD's are going to have a great deal to do with capacity," Stocking said. "We have three 100 percent ELD fleets represented here today. We can run a certain number of miles (based on ELD data). Brand X is out there running 100 miles more a day illegally because of the way they do their paper logs."
But when those carriers have to change to ELDs, those extra miles and the revenue that goes with them will disappear, Stocking said.
"How are they going to make it?" he asked rhetorically, subsequently predicting many such carriers will go out of business rather than install the ELDs.
Stocking predicted that shippers will sense the pending demise of some of the carriers they presently use and switch fleets.
"Shippers are already saying the way to go is with fleets that have already implemented ELDs," he said, adding that ELDs will be a game changer in terms of capacity.
Full implementation of ELDs will create a capacity reduction of from 8-15 percent, Parker predicted. "But whether it's only winds up being 6 percent, it's a big number and we are going to feel the effect," he said.
Stocking predicted that a fleet of 800-900 trucks will see a 10 percent capacity reduction when ELDs are fully implemented.
"That's going to be a big change," he said.
All three executives agreed that many drivers, knowing that ELDs will become a reality in a couple years, are switching from non-ELDs carriers to carriers with ELD to get ahead of the curve.
Leathers said that totally implementation of ELDs will have a bigger impact on capacity than did the snowstorms of 2014 — which paralyzed much of the Northeast for weeks — and the Hours of Service rule implemented July 1, 2013, which carriers say has created a drop in productivity of around 5 percent.
He predicted a new wave of early adoption of ELDs, but admitted they'll be a group of carriers that don't convert and will just walk away.
The ELD rule will have teeth and if carriers don't get on ELDs soon and prove to the public that drivers are driving legally, there will be consequences.
"They are going to change the rules again," he said.