Where is the trucking industry headed in 2020?
And here we are again—flashback to November 2017. The trucking industry would never be the same after the initial rollout of the historic FMCSA ELD mandate.
Many didn’t even foresee the mass exodus that was coming in 2018. Trucks were sold, businesses were closed—all before December 18, 2017. Sound familiar?
If you were brave enough, determined enough, or simply curious enough—your trucking company entered into what most are considering the most profitable year in the modern history of trucking.
Freight prices sky-rocketed at the beginning of 2018, the FMCSA eased off on the implementation of penalties until March of 2018, and the cherry on top? Well, folks were still able to use AOBRD.
Nevertheless, the upward trajectory of the industry was clearly unsustainable.
Brokers are in the business of making money—so when AOBRD’s “magic” flexibilities were introduced to a wider audience, brokers started to lower freight prices, and carriers (trucking companies) still took their loads.
Brokers lowered freight prices further, and carriers continued to take loads. All parties were still satisfied and a fake equilibrium was established. As brokers continued to lower freight prices even further, carriers still had no choice but to take it. The result was one of the worst years in the modern history of trucking in 2019.
So, what will happen in 2020?
Ultimately, only the determined and curious will find out for sure, but we can certainly speculate.
On December 16, 2019, the FMCSA will implement the final ELD Mandate rollout, ending the grand-fathered AOBRD extension for all over-the-road carriers. Just like in 2017, freight prices should rise drastically.
The reason is simple: with less time to work and drive, brokers must pay more as now it will take longer to take freight from point A to point B, especially if the distance is more than 630 miles.
In some instances, it will take twice as much time to deliver the same load, thus brokers and shippers will have no choice but to pay more. Another option is to pay for team drivers, which will get their freight delivered quicker, but will also be costly.
The FMCSA may also integrate a transition period, similarly to last time, where they don’t enforce logbook/ELD violations for a few months. Of course, this is just speculation, as there’s been no official word from the FMCSA on the topic.
But something that is certainly official is that Ray Martinez, the now ex-head of the FMCSA, has just resigned. Does he know something we don’t? We will find out soon.
What will be possible with ELD systems?
The answer is, a lot will be possible, especially if you choose a provider that will help you maximize your operation. While the supposed “magic” of using AOBRD is gone, there are still ways to thrive using ELD systems.
The solution going forward hides behind system integrations, not behind any “magic.” To grab your utmost attention for the real solution, we would like to address the elephant in the room first.
Cheating will not be possible. And if someone is telling you that it will be, you’ll have to think again. It doesn’t matter how smart or foxy system developers can be, nor would it be financially viable to circumvent federal laws through system development.
Can the system be cheated? Of course, it can. Take one developer per each of your drivers and you are good to go. As previously stated, it just isn’t financially viable. And additionally, are you really willing to risk your reputation, business and personal, and have a Federal case on your record?
Here are some technical ELD facts:
An ELD will record and transmit 42 different parameters, or pieces of information. These parameters include engine hours, odometers, speed, location (both approximate and exact coordinates), log in, log off, start engine, engine off, and many more.
The system will also record engine hours, odometers, speed, and location every hour while driving—not only at a duty status change.
The system will cross-reference many parameters between each other for inconsistencies. For example, if start and end odometers don’t match – the system will indicate an odometer jump. If locations don’t match—the system will indicate a location jump.
The system will always display the original log and the altered log, even if the changes are legal and allowed. The system will indicate when the change occurred and by whom the change was made. A note will also accompany every edit, and it can’t be less than 4 symbols in length.
The system will also help DOT officials with their inspections, as the ELD will point out violations, potential violations, inconsistencies, and missing information, all displayed in a straightforward manner.
DOT officials will no longer need to count hours or look for inconsistencies manually, as the portal on their computer will do all the work for them. And that doesn’t go for just office audits, as the data transfers will also occur during roadside inspections.
It’s important to remember that if your system isn’t reporting information correctly, it’ll be a matter of time before the DOT visits your provider. While some may still want to believe in the “magic” factors of years past, it simply will cease to exist.
Ultimately, the key moving forward is to embrace technology. We are certain that most of you reading this article are aware that big brokers like C.H.Robinson, Cayote, Amazon, Uber Freight and others are pushing for automation. We are also sure that many of you use a plethora of systems already.
Systems for factoring, tolls, accounting, fuel card providers, as well as load boards. You have probably heard of Project44 by now as well. By embracing technology you can maximize these systems and make your operation a lot more organized and scalable. Growing your fleet twice in size without adding to office personnel is possible.
TMS systems that can integrate with other industry-leading software applications will also be key for organizing your business.
UTECH has been around since 2016 and solely focused on developing software for the trucking industry. GPSTab ELD currently provides services to 1,300 companies amounting to over 15,000 trucks on the road. UTECH TMS has over 30 integrations with software providers that you already use daily, including all of the ones mentioned above and more.
“Finding the right partner for 2020 and beyond is critical for trucking companies,” UTECH’s CEO Yuriy Nekrasov said. “The right partner is not the one who promises easy ways out. The right partner is the one who has experience and capabilities of taking a step towards automation.”
“There is so much flexibility in HOS rules that have always been there for over 30 years, but not many drivers and trucking company owners know about these rules, as rewriting logbooks was easier," Nekrasov said. "There are also operational and planning strategies a trucking company can implement in order to be successful in the new era of the logistics industry."
So, what do you think about the future of the trucking industry? Do you agree with our insight? Let us know in the comments or on social media!
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