Shipping Costs And The Impact Of Electronic Logging Devices

Many large carriers have been using electronic logging devices for years before the federal mandate kicked in last month. However, while people throughout the trucking industry expect to see a drop in fatigue among drivers, new concerns are coming to the forefront regarding shipping costs. Smaller carriers and owner operators are worried that the switch to electronic logging devices will drive up shipping costs for everyone involved, which ultimately will be passed onto customers and consumers alike.

Shipping Costs Affected By The ELD Switch

Depending on which electronic logging devices a small carrier chooses to implement, they could end up paying up to $600 per truck, not including service and installation charges. Since more than 25 percent of carriers had not switched over to electronic logging devices as of the start of December 2017, the option to gradually implement ELDs throughout a given fleet was no longer available. Carriers now had to purchase and install electronic logging devices in one fell swoop, which ate into cash reserves and fourth quarter revenue. In order to offset the expense of purchasing many ELDs all at once, and still having to pay employees and keep the lights on, many smaller carriers had to raise their shipping costs. The risk of increasing shipping costs is the potential for regular business to discontinue their relationships and look elsewhere.

Shipping Costs And Agriculture

Electronic logging devices and other legislation are posing another conundrum to local and smaller carriers. Since ELD mean drivers can only operate for 11 hours out of a 14 hour work day, moving goods can sometimes take longer than they used to. However, a good portion of the shipments across the United States are comprised of grain, produce, meat, and other perishable food products. New legislation states that shipping containers must be thoroughly cleaned before and after food shipments, to reduce chances of contamination. In Essence, the waiting times combined with the limited hours on the road mean longer delivery times across the board. Taken with the already existing shortage of drivers, the situation could mean even fewer drivers are available for shipments, and the increased expenses throughout the industry will most likely result in higher shipping costs, and ultimately rising prices at the grocery store.

These are still the early days of mandatory ELDs. As 2018 progresses, we will see if the trucking industry finds a way to prevent shipping costs from rising, or if we need to take a harder look at federal legislation.