If you operate a small fleet, you may be required to adhere to new regulations.
The trucking and logistics industry is huge. In 2017, an average of 49.3 million tons of freight were transported every day through the U.S. transit systems, making up a significant portion of the annual GDP. To better regulate this large industry, reduce fraud and improve the safety of America's roads, the Federal Motor Carrier Safety Administration (FMCSA) announced the electronic logging device (ELD) mandate. The mandate required all commercial trucks to have an onboard device that connects to the vehicle's computer by December 2019.
If you run a fleet of vehicles as part of your small business, it's important to be aware of these regulations so you can institute changes if your business is affected.
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What is an ELD?
An electronic logging device is a piece of hardware installed in a truck to track vehicle activity. These devices make sure that your drivers are complying with hours of service (HoS) regulations for driving limits in a 24-hour period and the appropriate number of breaks.
HoS regulations require drivers to log driving, break and on-duty time. They've been around for a while, but in the past, trucking companies and drivers used paper logs to track this time. This left considerable room for tampering and adjustment by the driver or trucking company. An ELD cannot be tampered with because it's connected to the vehicle. This provides transparency between drivers, trucking companies and the government. It also ensures that safety remains a priority.
If you have an ELD, or work with a company that claims to provide ELDs, you can check this list of registered devices to ensure you're compliant. [Interested in a telematics solution for your business? Check out our reviews of the best GPS fleet tracking software of 2020.]
Most trucking companies and drivers are subject to the new ELD mandate. If you're transporting goods by truck in state or across state lines, you will likely have to comply with the new rules.
There are a few exceptions to the ELD mandate that could apply to some small businesses:
- Drivers who use paper logs no more than eight days in any given 30-day period
- Driveaway-towaway drivers
- Owners of motor homes or recreational vehicle trailers
- Drivers of vehicles manufactured before model year 2000
Keep in mind that this only applies to commercial transportation companies that are required to maintain HoS records. If your business handles deliveries but your drivers don't use paper logs to track driving activity, then these new rules don't affect you.
What's the implementation schedule?
Like many government initiatives, the ELD mandate has had a long rollout to give the industry time to adjust to the new measures. ELD compliance started back in December of 2017, when paper logs were required to be phased out. As of the writing of this article, we're in phase two of the ELD compliance plan, which requires HoS tracking through either Automatic On-Board Recording Devices (AOBRDs) or ELDs. These are both in-vehicle devices that cannot be adjusted or tampered with. As of Dec. 16, 2019, all vehicles are expected to be using ELDs to track hours of service.
What are the penalties for a violation?
If you continue to use paper logs, have used an AOBRD after Dec. 16, or fail to purchase and install enough ELDs for your fleet, you could be subject to penalties. Violations usually impact your Safety Measurement System score, which is a grade the FMCSA uses to regulate safety among trucking companies throughout the nation. You may also be subject to fines ranging from $1,000 to $10,000, depending on the incident.
How do you start?
The FCMSA has a variety of resources on its website detailing how to purchase ELDs and train drivers to use them. Finding an FCMSA-approved device is the first step in compliance. You can also partner with a telematics company that ensures ELD compliance and provides various other fleet tracking services, like fuel management, driver safety performance data and route optimization. The ELD mandate will bring technology into every commercial truck on the road, opening the door for more data and more informed fleet decisions.
Benefits of an electronic logging device
Whenever industries are required to adopt new technology, especially when the tech is designed to drive compliance and accountability, it's natural for business owners to resist adopting new systems. ELDs are no different. Since they were first announced, the trucking industry has pushed back against ELDs, with rallies and protests held all over the country.
Even though the ELD mandate announcement had mixed responses, ELDs provide many benefits for both carriers and commercial truck drivers. Here are some of the benefits of electronic logging devices:
1. Truckers spend less time on paperwork.
One of the primary benefits of an ELD is that it eliminates a significant portion of the paperwork involved with a driver's Record of Duty Status (RODS), which must be completed each 24-hour period. According to FMCSA's Preliminary Regulatory Evaluation of Electronic Logging Devices, drivers will save approximately 4.5 minutes from logging their HoS each day – which may not sound like a lot, but the time quickly adds up.
For example, if a driver completes 240 RODS reports a year and saves 4.5 minutes logging information each time, they will gain back 18 hours a year. Therefore, if the average driver earns $28 per hour, trucking companies could potentially save $504 a year per driver. With over 3.5 million employed truck drivers in America, the trucking industry is saving approximately $1.7 billion each year through ELDs.
2. ELDs digitize Driver Vehicle Inspection Reports.
Before a truck can start a new trip, the FMCSA requires drivers to record the roadworthiness of their vehicles by going over a checklist, which has the driver record the odometer reading, check for fluid leaks, test the brakes, etc. With an ELD, a driver can perform this inspection checklist from the cab with a tablet and upload it to the cloud.
This efficiency has other benefits as well, as electronic DVIRs ensure nothing is missed, information is recorded accurately, and company headquarters receive the reports immediately.
3. They monitor driver behavior and safety.
Because an ELD is connected to the vehicle's engine and computer, it can monitor an individual's driving behavior, including speed patterns, harsh maneuvers, heavy braking and excessive idling. An ELD can also measure how efficiently each driver uses fuel, which is one of the biggest costs of any trucking fleet. Therefore, this device can increase not only the safety of your drivers, but also your company's overall fuel efficiency.
4. They automatically create International Fuel Tax Agreement reports.
If your company operates in several states, you're required to file quarterly fuel tax reports in each state to comply with IFTA. In the past, these reports were tracked and filed manually, but with an ELD installed in each truck, the fuel data is automatically captured and reported. This saves both truck drivers and office employees time.
Costs of an electronic logging device
According to the FMCSA, the average cost of an ELD is $495 per truck. The exact price depends on the size of your fleet, the specific features you require and the provider you choose. If you already work with an ELD-compliant fleet management system, you may not have to invest in a new system.
While $495 per truck is a significant investment for an entire fleet, the money you save automating driver and back-office paperwork alone makes up for this expense.
Matt D'Angelo contributed to the reporting and writing in this article.