The ink is barley dry on the US ELD Mandate (December 18th) and the Gazette 1 Posting of Canada’s proposed ELD mandate (December 16th), and already we are hearing and seeing sign’s of major change and disruptions on the immediate and long range future of our Industry.
For the carriers heading into and out of the US, we are hearing from more than just a few, that loads that were hard to come by just months ago are suddenly in abundance. In a lot of lanes, heading in both directions, the freight available exceeds the capacity. For the first time in a long while, load boards are full, trucks are full, and freight is being delayed getting to it’s destination as a result of too few trucks for the loads that need to be handled. All this before hard enforcement has yet to begin. (The FMCSA is under a soft enforcement until April 1st, where no Out of Service orders are being placed, and points are not yet assigned to a carrier’s profile). Once out of service orders come into play, we are likely to see a further tightening of capacity on US lanes. Is the tightening of capacity really a result of ELD’s, or just a small blip on the radar? While no one can say for sure with the extremely short timeline since the mandate has come into effect, as there is no sufficient data trend yet to analyze to make any real predictions, the effect and talk in the industry is hard to simply ignore.
We are hearing from carriers in the industry that were prepared, that they are being overtaken by load offers they were not receiving before. We are hearing from Shippers that a lot of loads, especially LTL loads, are seeing major shortfalls in trucks to haul them. Some of the reasons being given..volume of work has gone up, carriers don’t have the capability currently…the drop or pick is to far out of route (assumption, with the new ELD rule, a delivery or pick that was being done prior, can not be legally done under the ELD mandate).
The good we are seeing out of this in the short term, from a carrier perspective, is rates are heading northward, and in some cases, significantly. Some lanes we are hearing of 50% rate increases, while in almost all lanes we are hearing of at least 5% increases.
Many carriers, in anticipation of this, and to ensure they were able to keep their drivers on board, and attract new ones, had already adjusted their pay rates upward. Carriers who had prepared, and were ready for the mandate, are currently reaping the rewards…those who didn’t plan, are suffering, seeing driver shortages, and either parking their trucks willingly, or being forced to by a shortage of drivers. For those who were unprepared and non-compliant with the law, the ELD mandate, in the short term at least, seems to be doing exactly what me, and many others in the industry had hoped for, a removal of those in the industry who were undercutting rates by not complying with the HOS regulations.
Is the news all good? Of course not, as a die-hard Leaf Fan, a Mike Babcock line comes to mind here “Be no doubt, there will be significant pain”. If the short-term indications are correct, we will see a further tightening of capacity, we will see a real driver shortage, and we will see increased consumer costs as a result of long overdue increased freight rates.
As always though, the carriers in the industry who were prepared and ready for the mandate long before they were required to will come out ahead. For Carriers who operate in Canada only, and are not yet affected by the ELD mandate, let what is occurring south of the border to some carriers be a lesson…begin preparing now…check your routes, make sure they can be legally completed, research ELD providers, pick the one that best suits your needs, train your operations staff, your IT staff, and your drivers. Once this is done, turn the switch before you are required to, iron out the bugs, work with your staff and be ready long before the Canadian Mandate is in play. Those who are prepared will reap the rewards, those who are not, will feel significant pain…but really, isn’t that how it should be???