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ELD Mandate to Trigger Price Surges Across the Industry

10.10.2017 - 4:59 PM Comments: 0

The US Electronic Logging Devices (ELD) Mandate is a definite reality now, and any attempt to extend its enforcement by another 2 years has just bitten the dust. So, there is no doubt now that the mandate will come into full force this December. Does this mean a windfall for ELD manufacturers? Are they going to surge the prices of their devices, now that the truckers must buy them, whatsoever?

Well, truckers could be looking at a price surge in the near future. But, that probably won’t be because of the “greedy corporations” trying to make quick bucks. Here’s what may cause a surge in ELD prices.

According to different estimates, roughly 50% of the small truckers, with less than 5 trucks, are delaying the installation of ELDs on their trucks. They are putting it off until the end of this year, when the mandate will come into force. Some of them are hopeful that the mandate will either be repealed or its deadline extended. But, the chances of that happening are quite slim. So, there is going to be a massive surge in demand for ELDs, as non-compliant truckers will rush to purchase the devices. This will put unnecessary strain on the manufacturers to meet the surge in demand for their products, causing a rise in the prices of the ELDs.

In addition to the availability of the devices, their compatibility too is a problem. Not all ELDs can be installed on all types of trucks. Because the truckers are delaying installation of the devices, the manufacturers don’t know how many devices of each type will be in demand this year. As a result, rush orders are going to put a lot of strain on the manufacturers, who will have to work their manufacturing and logistics operations on overdrive. That again will push the prices higher.

Speaking of logistics, December is the worst time to install the ELD devices. That’s because December is the time when the truckers are in full capacity utilization mode. The holiday season will be in full swing, blockbuster sales will be raining, and Americans will be on a shopping spree. This means that it will be even harder to ship the ELDs to all the destinations in the US. Competing for freight capacity during the holiday season means higher shipping costs, especially if the manufacturers and distributors are looking for temporary capacity expansion, which they most definitely will need. Those shipping costs will probably add to the product prices as well.

For all of these reasons, the prices of the ELDs can increase by a few percentages. But, the biggest cost that the truckers might incur may not come from the prices of the ELDs at all. Purchasing the ELDs is only the first step. They have to be installed, and the drivers need to be trained in using them. When trucking companies will rush to become compliant with the mandate in December, they may not be able to install the ELDs and train their drivers just in time. If they fail to do that, they will either have to suspend their operations until they are compliant, or risk facing hefty fines for non-compliance.

Truckers will be better off if they go ahead and install ELDs at the earliest, so that they can avoid unnecessary expenses at the last minute.

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