A federal rule starting in December that requires U.S. truckers to use digital tracking devices to log their daily driving hours could spell trouble for shippers.
The electronic logging device, or ELD, mandate, set to go into effect Dec. 18, will focus attention on companies that habitually make drivers wait long hours to load or unload freight.
That’s because motor carriers that are ELD early adopters are becoming less tolerant and dropping shippers that slow down freight movement.
“It’s going to create a lot of friction between carriers and shippers,” said Kevin Hill, president and founder of CarrierLists, a carrier database provider conducting weekly ELD compliance polls.
Big trucking companies also are revving up so-called “shipper of choice” programs to prioritize working with preferred customers. Independent truckers, often owner-operators, also report sharing names of slowpoke shippers with dispatchers or freight brokers to avoid ever making a return visit.
Shippers already dealing with a freight hauling capacity crunch caused by rising demand and a driver shortage could avoid being dropped by reducing wait times. They could also avoid it by boosting detention pay, the fees that cover the time a trucker waits beyond the agreed-upon hours for the job.
“If you’re a shipper that doesn’t like paying detention and you’re a mess to load and unload, carriers will drop [you]. Those shippers could end up paying more or not being able to find carriers,” Hill said.
But higher detention fees won’t help drivers comply with existing hours-of-service restrictions the ELD mandate is meant to reinforce. Truckers must comply with a federal hours-of-service rule limiting driving to no more than 11 hours a day within a 14-hour workday. Drivers must then be off duty for 10 consecutive hours. Both carriers and truckers are concerned about long waits at loading docks extending driver hours beyond the federal work limits.
More Carriers Expected to Drop Bad Shippers
Long wait times have plagued the trucking business. In research conducted last year by industry data firm DAT Solutions, 63 percent of 257 carriers and owner-operators surveyed said they or their drivers spend more than three hours at a shipper’s dock waiting to load or unload.
The vast majority of carriers and owner-operators said that any time beyond a two-hour grace period for loading or unloading is generally considered detention time that carriers can collect fees for, according to the survey. However, that doesn’t always happen. Only 3 percent of carriers said they collected detention fees on at least 90 percent of their claims.
ELDs are putting renewed attention on wait times and other shipper behavior. Circle Logistics Inc. started requiring the 80 owner-operators it works with to install ELDs earlier this year. Since then, the Fort Wayne, Ind.,-based third-party logistics provider has dropped an unspecified number of shippers that haven’t agreed to adopt practices that speed up freight handling.
“We had to step back and look at what shippers from a time perspective allowed us to be the most cost effective,” said Andrew Smith, the company’s vice president of sales and operations. “Once we focused on putting drivers into shippers of choice, we found our operating revenue on a driver basis was up.”
Shippers that cooperate tend to be manufacturers running just-in-time assembly lines or companies with other production-critical freight needs. “Those time-critical shippers are going to find that the market is going to shift in their favor and the shippers that haven’t adapted will feel the capacity crunch the worst,” Smith said.
As part of its shipper of choice program, Circle created a dedicated division that assigns drivers to specific customers. Those customers are using drop trailers to speed up deliveries, and some have added parking spaces or bought lots for carriers to drop trailers.
“Shippers who are working to become shippers of choice will naturally get capacity that brokers and carriers have to offer,” Smith said.
Dropping bad shippers will become more common once the ELD mandate takes effect, said Ken Harper, director of marketing at DAT, the load board and freight-rate aggregator.
“There are many docks that have unconscionable ways they treat carriers, and that has to stop,” Harper said.
DAT plans to conduct a survey sometime after the Dec. 18 deadline to assess ELDs’ impact on shippers and shipping practices.
Close to half of carriers say they will comply with the mandate before the deadline or already have, according to a separate ELD study this year of 1,000 carriers with fleets of up to 250 trucks and owner-operators.
Once the new rule takes effect, it will be easier to track what happens on loading docks, Harper said. “The data will be out there to see how much carriers get held up, how much is it eating into their productivity.”
Waiting at the Dock of the Bay
A few efforts to track loading and unloading times are already underway.
ELD maker Keep Truckin recently posted a petition to the Federal Motor Carrier Safety Administration requesting to extend the maximum allowed hours of service from 14 to 16 if drivers are detained for more than two hours.
The survey, which collected more than 32,000 signatures in two days, cited data collected by the company from drivers who use its product. Of those surveyed, three-quarters said they are detained for more than two hours per week. Of those experiencing regular delays, 35 percent said they last more than six hours. And these so-called “extended detention events” occur on average seven times a month, according to the survey.
Long-time owner-operator Matt Criswell has extensive first-hand experience with loading-dock delays.
On a recent Tuesday, Criswell waited more than five hours to unload a shipment of 40-foot steel bars at Wilton Precision Steel Co., in Wilton, Iowa. He was third in line when he arrived early that morning and was still waiting in an inspection bay when Wilton’s loading dock supervisor left for a lunch break.
“It’s messed up my day,” Criswell said. “By the time I’m said and done, I’ll have enough hours to load my next load and then I’ll have to find a rest stop to take my 10-hour break.”
The day before, Wilton said he waited about six hours to pick up the load.
Wilton Steel did not respond to a request for comment.
Criswell, 48, has been an owner-operator for four years, primarily driving his 2007 Freightliner in regional lanes around the Midwest from Columbus, Ind. He currently drives for Circle Logistics, and when he installed an ELD in August at the firm’s request was among the last of the company’s owner-operator drivers to do so.
“An ELD doesn’t compensate for road construction or road closures or anything extra in life that could come up while you’re traveling,” he said.
Criswell previously used an ELD for three years when he was a company driver for Estes Express Lines, a national carrier based in Richmond, Va., with approximately 8,800 drivers. He often would be at a shipper with only 10 or 15 minutes left until his hours of service for the day ran out and still needed to drive to the motel he’d booked for the night.
As a company driver there wasn’t as much he could do about such a situation beyond complaining to the dispatcher. As an owner-operator, he complains, but with better results.
“I voice my opinion and my agent will take it into consideration,” he said. “Nine times out of 10, I don’t return to places where I’ve requested not to go back to. That’s what I love about Circle, they’ll find another load for me.”
‘Keenly Aware’ of Mandate
Shippers are “keenly aware” of the ELD mandate, said Jay D. Strother, vice president of the International Warehouse Logistics Association, an industry trade group. However, Strother declined to comment on actions IWLA might be taking on behalf of members to address the issue.
In June 2016, the Department of Transportation’s Office of the Inspector General said it would audit FMCSA data on commercial motor vehicle loading and unloading delays. The audit was part of a national transportation infrastructure law passed in 2015 and called for determining the relationship between delays and improperly logged driving time, a potential factor in increased risk of crashes.
The audit is ongoing, according to Eric Weems, a DOT inspector general spokesman.
Opinions that ELDs will cause shippers to change their behavior aren’t universal. Warehouse staff are under increased pressure to cut loading and unloading times to make shippers more attractive to carriers at a time of shrinking capacity and rising rates, said Tim Hindes, chief executive at Stay Metrics, a South Bend, Ind., trucking software company.
“Will it be addressed with more seriousness with shippers come December? I think it’s already been addressed, and it’s not a big pivot point, Hindes said.
Stay Metrics aggregates driver satisfaction data from surveys it conducts on behalf of 90 carrier customers that collectively manage 15,000 drivers. Three and a half years ago, exit-interview data began to show that drivers were quitting carriers that had implemented ELDs and were going to work for non-ELD carriers or leaving the industry, Hindes said.
But complaints about ELDs haven’t appeared in driver exit interviews for two years, which Hindes attributes to ELDs now being standard at “all the big guys.”
Freight rates increasing because of strong demand will whip shippers into shape more than ELDs, Hindes said.
Shippers can try to placate carriers by raising hourly detention rates to $12.50, for example, but that’s still nowhere near the equivalent of what drivers can make when their wheels are turning.
For that reason, Hindes said, “shippers are going to have to make themselves more attractive.”