New electronic logging rules for motor carriers in the U.S. are now fully effective, and the predicted impact of the ELD mandate is coming true: Capacity is being squeezed and costs are soaring.
Just as it has over the last three decades, the trucking industry opposed the current iteration of the mandate since its introduction under the MAP-21 Act of 2012. The industry claimed it was too burdensome for shippers and that strict hours of service requirements would lengthen trips, making them more expensive.
With enforcement of the mandate now firmly in place, industries across the country — including dairy — are adjusting expectations and preparing for added costs that inevitably will work their way down to consumers.
Decreased trucking capacity
The main impact of the ELD mandate is that motor carriers cannot fib about hours of service or miles driven. That adds up to diminished trucking capacity and added costs. It also puts pressure on carriers’ administrative capabilities as they reconfigure shipping lanes and search for staffing solutions.
Trips take longer
Hours of service rules didn’t change when the ELD mandate went effective. But with a connected device recording hours and miles, there’s no flexibility. If a driver hits his or her hours of service limit before reaching a destination, he or she must stop — even if it means parking for a mandatory eight-hour break a mile away from a destination.
This keeps drivers out for longer periods of time, reducing a shipper’s overall capacity. What’s more, it causes rifts in detailed shipping schemes whose success depends on driver flexibility. The bottom line is that costs will increase as trucks and drivers are less available to carry a product volume that’s trending upward at the fastest pace in almost two decades.
Truckers are quitting
Another impact of the ELD mandate is a sudden reduction in drivers on the road. Veteran truckers are choosing to quit rather than be forced to comply with the new rules. Too few new drivers are entering the labor force to counteract the exodus. The only successful method of recruiting younger drivers has been to pay them more than some firms can afford. It’s putting a serious squeeze on an already-shorthanded labor force, again resulting in limited shipping capacity that leads to higher costs.
Dairy industry implications
The ELD mandate will impact trucking in the dairy industry disproportionately. That’s largely due to agricultural exemptions in the rules that allow for unrestricted hauling of commodities within a 150-air-mile radius of their origin and destination.
It’s farther down the line, as milk is moved from stage to stage of processing and eventual end user delivery, that the ELD impact on capacity will bump prices upward.
