ELD rule could lead to 20% rate hike

• Trucking rates could rise 10% to 20% as a result of a new federal rule requiring electronic logging devices (ELDs) in commercial trucks, predicted Todd Amen, president of owner-operator financial services provider ATBS, at last week’s Great American Trucking Show.
• Amen added most operators would likely wait until December 2017, when the rule goes into effect, to install the devices. As a result, he predicted a truck shortage of 200,000 to 300,000 units at that time.
• The Owner-Operator Independent Drivers Association (OOIDA), backed by other groups, is challenging the rulein court claiming it overlooks privacy concerns, erodes drivers’ rights, and does not justify the costs.

A shortage-induced rate hike would inevitably translate into higher logistics costs for supply chain managers. Some worry the federal government’s recent push on highway safety may induce a general capacity crunch despite truckers’ best efforts.

The government seeks to decrease heavy vehicle speeding and driver fatigue through the ELD rule and a recently proposed speed-governor mandate.

The OOIDA opposes both rules: slower transit speeds coupled with stronger hours-of-service enforcement would require more drivers to deliver the same amount of goods, while decreasing independent drivers’ earnings. As a result rates would likely increase, regardless of operators’ implementation of the devices.

Source: Supply Chain Drain