After one full year of enforcement under the ELD Mandate, it seems as though the business environment in trucking and logistics has shifted in ways that have improved transparency for shippers and taken out many incentives for dishonesty about on-time delivery capabilities ahead of loads being awarded.
ELDs (Electronic Logging Devices) are used to capture hours of service information in real-time, with some devices importing location and other statistics directly to the cloud for dispatchers, brokers and shippers viewing directly.
The ELD Mandate leveled the playing field for many smaller and mid-size trucking companies that were having to compete with some competitors’ paper logbook dishonesty, and made it easier for trucking companies to give accurate updates when they don’t have to worry about being beaten on service by those that would drive extra hours outside of the hours of service rules. With a level playing field, transportation buyers can finally make more accurate predictions on trucking capacity and create more stable benchmarks instead of having to run the risk of trucking companies overestimating their ability to consistently service certain lanes based on flawed hours of service assumptions during bidding events.
Shippers can expect to see more real-time update technology with trucking companies being more willing to turn over live location data as a differentiator against their competitors. Some innovators are even looking to make ELD statistics more readily available. It’s possible, one day soon, that hours of service live reporting will be a major differentiator that helps shippers more accurately plan capacity needs. Innovators are already working on making the data from the ELDs accessible for other load planning and tracking applications.
The business intelligence opportunity in this emerging space is growing. It’s very possible we might also see larger shipping, logistics and trucking firms use this new data to create even more efficient trucking and warehousing utilization that will drive costs down soon. Through third-party anonymous data, large shippers can potentially utilize this ELD business intelligence data to understand areas of the country creating inefficiency through extended dwell times and slow-moving components of the national supply chain.
Perhaps, with visibility, this produces creativity for shippers to challenge their own supply-chains and start looking for new modes of transportation or regional redistribution points that are put into place in regions that allow for more ELD efficiency.
Rather than being forced to pay for team service or forced to allow for long break times, we can identify areas of the country with concentrated heavy freight patterns and work toward the hub and spoke model to keep freight moving rather than waiting.
Third-party logistics companies are now more relevant and needed to help shippers understand how to drive waste out and increase efficiency in their supply-chain with all this new data entering the scene. Intermediaries have benefited from the increased adherence to hours of service rules as well.
With a 3PLs network size being a previous differentiator, business intelligence is now in and those 3PLs that more accurately predict and keep shippers informed will have an edge. Objections to using intermediaries in the past revolved around a lack of control of the underlying truck with most of the angst surrounding the lack of integrity around estimated arrival times.
With the increased adherence to hours of service rules, estimates in arrival times are more accurate with the rules determining outcomes instead of some drivers’ preferences in the past.
As more accurate predictions of trucking capacity take place, shippers and transportation firms are headed into a brighter, more stable future together. A future where working together as partners will make more sense than the tit-for-tat of the past. Transparency and trust between shippers and transportation firms made possible by the ELD Mandate could be the foundation for this movement.
(Matthew Castriotta is business development and Mike Ryan is general manager for ReedTMS Logistics, an asset-based, third-party logistics company)
