The Evolution of Compliance in Fleet Management and Logistics

Fleet Management considering compliance as ELD becomes law

December 2017 marked the deadline for the ELD mandate, which means fleet managers across the country are facing a very large capacity crunch in the effort to implement certified electronic logging devices (ELDs) to record their fleet’s hours of service. And if it were not enough, the same fleet management and fleets already utilizing the ELDs will be expected to ensure compliance with published specifications by December 2019. While it has seemed like a long time coming and much preparation for the mandate, this kind of compliance and regulation is not completely new to drivers and fleets. Most are familiar with financial compliance especially where taxes are concerned. Many drivers are contract and required to make OTR payments quarterly or as their tax compliance requires, but along with paperless OTR payment, they are also reducing paperwork and following compliance in the form of hand held devices and on-board recording devices to monitor and track a driver’s duty status and time behind the wheel. Theoretically, in the complicated world of trucking and logistics, the technology and systems in place are meant to ease the burden of compliance. However, in order to understand today’s compliance, let’s step back and look at the evolution from the beginning.

With today’s fuel audits and OTR payments, it all started with weight.

With the development of the gasoline powered internal combustion engine, further improvements on transmissions, and the transition from chain drive to gear drives, 1910 saw the advent of the tractor/semi-trailer, marking the beginning of the modern trucking industry. As trucking gained in popularity for expediting shipments, the tangible effects of trucking on the roadways were apparent, and in 1913, the first state weight limits for trucks was introduced in an effort to protect the roads from the damage of these trucks and their iron and solid rubber wheels. However, only 4 states limited the truck weights and a continued de-regulation in the 20th century dramatically increased the number of trucking companies in operation. It was not until 1982 where the Surface Transportation Assistance Act of 1982 implemented a federal law standardizing truck size and weight limits for traffic on the Interstate. And thus, began compliance.

Today compliance in the trucking industry is more than freight weights and fuel taxes. Compliance with the Federal Motor Carriers Safety Administration (FMCSA) and the DOT are mandates. Fleet management and drivers alike will be held responsible for complying with these commercial driver’s license regulations that include everything from skills, knowledge, safety and inspections to drugs and alcohol, maintenance and hours of service. Trucking Office.com provided some direct insight by publishing the following CDL list.

• You must have a copy of the current Federal Motor Carriers Safety Administration (FMCSA) rules in your office or place of business.  In addition, each of your drivers must receive a copy of the rules, and sign both a receipt and agreement to comply with the regulations.
• You must make sure that all of your drivers familiarize themselves with parts 40, 380, 382, 383, 387, 390-397, and part 399, subchapter B, chapter three, title 49 of the federal regulations code.
• You must complete both pre- and post-trip inspections of all your vehicles and document that you have done so in writing.
• You must keep up-to-date qualification records and safety performance histories for each of your drivers.
• You must document each driver’s hours of service.  CDL drivers may not need to complete a log grid if they never drive further than 100 miles from the terminal, but the company must keep records of their hours.
• You must create a regular vehicle maintenance program and make sure that it’s followed.
• In case of an accident involving one of your company vehicles, you must keep thorough records of the incident in a register.
• You must ensure that all of your vehicles are marked with their respective DOT numbers.
• You must comply with commercial motor vehicle (CMV) entry-level driver training requirements.

Along with federal compliance, fleet management is expected to manage and record fuel audits and taxes, driver qualification files, drug and alcohol testing schedules and results, as well as employment background screening. So, it is clear that ELD is not the only concern, but just another concern. However, along with the ELD compliance investment, there is also a forecast of some clear and sound benefits from it.

ELD Benefits and savings for Fleet Management

Besides the obvious benefits of reducing paper work and saving time, ELDs will allow for better planning with the real-time driver status availability. Additional estimated benefits recently published by eldfacts.com illustrate an even more optimistic outcome for both the driver and fleet management.

The aggressive model they used for the case study considered an owner/operator running a flatbed operation at $2.47/mile, averaging 50 MPH, and running approximately 1900 miles a week. The following is the result of that study:

1.5 hours/week from reduced paperwork = $185.25/week in potential new driving (billable) time

• 1.5 hours/week of rounding to the nearest minute = $185.25/week in potential new driving (billable) time
• Commanding a higher rate based on proven HOS compliance ($2.60 compared to $2.47) = $247/week
• Potential reduction of one OOS violation a year, resulting in one more day on the road = $20.58/week
• Saving on potential fines from form and manner violations = $6.25/week

The FMCSA was also able to calculate an average safety benefit of $187 per long-haul ELD user and $126 per short-haul ELD user. Consequently, while the investment in time and money in the short term might initially be cause for concern, savings of time and money over the long term shows to be more than rewarding. The other advantage gained from the ELD system is the technology behind it and the simplification that the automation delivers. This technology will simplify and satisfy other regulations as well as internal fleet management tracking with transparency and efficiency, saving drivers time and money on the road as well.

An OTR payment is just one example of the efficiencies that the trucking industry can take advantage of in a digital world. Electronic payment technology is the kind of innovation that is driving compliance as well. And while compliance often connotes negativity and red tape, much of the compliance generated today will actually help to advance the industry and ease the life of the road warrior.

Resources:

https://en.wikipedia.org/wiki/History_of_the_trucking_industry_in_the_United_States

http://www.truckingoffice.com/2013/time-to-go-through-your-dot-compliance-checklist

https://www.tailwindtransportationsoftware.com/blog/evolution-trucking-industry/