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ELDs Are Already Causing Truckers to Exit the Market

ELDs are now required on trucks carrying shipments of export cargo and import cargo in international trade.

ELDs Are Already Causing Truckers to Exit the Market

The big question is: “How will this impact capacity in an already tight truckload market?” Candidly, the real answer to that question is, “No one knows.” That said, some of the anecdotal stories are not encouraging.

For example, last week I was visiting with one of our customers and he was kind enough to let me record a portion of our conversation. I asked him about the ELD issue, and he told me that in the past month, three of his carriers had called to notify him that they were going out of business because they don’t like or can’t afford the ELDs. The recording lasts about five minutes, and I think you’ll find it informative.

In our Perfect Storm Preparation Center, we have an interview with Randy Mullet. In that interview, Randy referred to the OOIDA carrier market (which is comprised of several smaller carriers like the ones our customer was referring to) as the “shock absorbers of the supply chain.” It appears that we’re about to find out how valuable those shock absorbers can be.

If you’re looking for some great information about how the ELDs will actually affect truckers and law enforcement officials, I strongly encourage you to look at the presentation that John Seidl gave on Stifel’s recent conference call. I know it really opened my eyes, especially when John talked about what will happen between now (truckers will be ticketed for non-compliance) and April 2018, when the grace period expires and carriers are put out of service for non-compliance.

Now here is a scary thought. While everyone (including me) is focused on how the ELD issue will affect capacity in a tight truckload market, John also talked about how ELDs could negatively affect shippers and third parties. When he talked about how ELDs could potentially be used in investigations against shippers and third parties over driver coercion issues, I couldn’t help but think: “Probably fewer than 20 percent of the shippers in the United States are doing the things they need to do to protect themselves from risks or legal settlements that could run in to the hundreds of thousands–if not multi-million dollar range.”

I hope you’re not one of those shippers in the 80-percent category. If you are, you need to address these issues—sooner rather than later.

Mike Regan is co-founder and chief relationship officer at TranzAct Technologies.