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US: The impact of the ELD mandate on truckload shipping

It’s been nearly a year since the electronic logging device (ELDs) mandate went into effect. Some had predicted that the industry would see mass carrier bankruptcies or a flurry of acquisitions of smaller carriers by larger ones, but that hasn’t been the case. Instead, thanks to the strongest truckload shipping market since deregulation in 1980, the ELD mandate’s effect on the market is playing out in other ways.

As 2018 got underway, drivers’ hours of service (HOS) didn’t change, but the ELD mandate effectively eliminated any flexibility drivers may have taken with paper logs. With ELDs in effect, lane waste and efficiency could be documented for the first time.

The dire predictions of a year ago were based on traditional truckload shipping market fundamentals, with the usual peaks and lulls. In other words, peak shipping seasons like the holiday rush would be followed by slow shipping periods when there would be an oversupply of trucks. If this had been the market scenario when the ELD mandate went into effect, carriers would have borne the financial consequences of inefficiencies or loss of hours in the market. The result may well have been bankruptcies and acquisitions.

That wasn’t what happened. Instead, there was far more demand for truckload shipping than there were trucks available. Since demand outstripped the supply of trucks, carriers didn’t have to take on the costs of the ELD mandate. They simply passed on the costs, raising their prices to compensate for inefficiencies and loss of hours.

Read more at Transportfolio (Steve Raetz)


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