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The impending electronic logging device (ELD) mandate is one of the biggest compliance issues we’ve seen in the trucking industry in the past 50 years.  Slated to take full effect in December 2017, the rule requires carriers to install ELDs in trucks as a way to enforce accurate hours of service (HOS) recording.

But the mandate doesn’t only impact truck drivers. Shippers and receivers play a critical role in ensuring a smooth transition come December of next year. 

With an ELD, HOS can no longer be “paused” like a stopwatch. An ELD is more akin to an hourglass; it keeps running, even while loading and unloading. Once drivers hit their allotted 14 hours on duty per day, they must spend 10 hours off duty before starting back up again (Overdrive). When every minute counts, driver efficiency becomes a shared responsibility among all parties in the supply chain. Shippers that make this a priority are seen as “shippers of choice”—an important distinction when capacity becomes tight.

Don’t Waste Drivers’ Time

According to Telogis, drivers spend less than 60% of their on-duty hours actually driving. As ELDs become ubiquitous, inefficient operations will be costly for all parties involved in a shipment for a few reasons.

• Because ELDs could lead to a reduction in carrier productivity by up to 20 percent, the industry’s driver shortage will be compounded even further, leading to higher rates (Overdrive). Anything shippers do to further hinder that productivity will cost them. 
• Carriers  may start to renegotiate freight contracts to include mandatory detention pay for drivers as a way to put pressure on customers to cut down on loading and unloading times (Overdrive).
• Loading inefficiencies that don’t meet HOS regulations may force shippers to utilize expedited solutions or team drivers, which can cost 10-30 percent more than traditional solo transits.

Shippers that make changes to help maximize driving time ahead of the mandate will set themselves up for lower costs and strengthened relationships in the future.

5 Ways Shippers Can Help Carriers Be More Efficient

1. Speed Up Loading/Unloading.  Perhaps the most obvious thing shippers can do is find ways to minimize dwell time during loading and unloading. By cutting down just 30 minutes on both shipping and receiving ends, a driver could remain on the road for an extra hour per day. This is equivalent to 50 extra miles per day (Overdrive). Providing longer lead times to carriers, consistently booking the same carriers on high density lanes, offering off-peak or flexible appointment times, and leveraging geo-tracking technology are all ways to keep scheduling more predictable.
2. Calculate Last Possible Load Time.  Many large shippers have implemented programs to evaluate miles between stops, traffic patterns, and potential weather conditions to determine the “last possible load time” that a driver can leave a facility in order to hit a delivery deadline. It sounds simple, but having a metric for this and communicating it to drivers can improve collaboration and keep things moving smoothly.
3. Increase Staffing During Peak Seasons. Whether you hire seasonal workers or employ robots, having more hands on deck to pick, stage, and load products during holidays and other peak seasons is a way to get drivers in and out of your facility faster.
4. Use Drop & Hook When Possible.  A study by J.B. Hunt found that drivers can save 48 minutes via drop and hook when compared with live loading or unloading (Overdrive). To learn more about how drop trailer programs benefit both shippers and carriers, check out this blog post.
5. Offer Safe Overnight Parking. Finding a safe area to park a truck overnight can be challenging. Drivers may spend up to an hour at the end of a shift searching for a parking spot, which counts against their daily HOS allotment (Telogis).  To avoid this, shippers should either offer overnight parking at their facilities or be able to point drivers to safe parking areas nearby.

The Importance of Benchmarking

As the old business adage goes, you can’t manage what you don’t measure. Finding ways to measure things like average dwell time, detention costs, last possible load time, scheduling efficiency, and other factors that impact on-time percentage can lead to improvements that make a big difference. 

For small and mid-sized businesses that don’t have resources in place to measure performance, a third-party logistics provider can help. For example, Capstone tracks not only our own key performance indicators, but also KPIs of carriers, shippers, and receivers we work with. Rigorous score carding helps us identify areas for improvements and take action. Beyond revenue, we measure how strictly carriers are meeting HOS requirements, shipper lead time, in and out times, and more.

Time lost on a load can have a significant impact on capacity. Not to mention the costs associated with late deliveries (for food and beverage retailers, chargebacks alone can consume 10 percent or more of supplier profits).  As we head into RFP season, it’s important to be proactive and start thinking about how you’ll handle driver efficiency when the ELD rule takes full effect. Be sure to ask your service providers how they can help reduce costs through improved driver efficiency. 

Need guidance?  Our team is trained to schedule efficiently and collaborate with carriers and customers on process improvements that reduce total cost of transportation.  Whether you’d like assistance measuring KPIs, are looking for team drivers, or want to set up creative drop trailer programming, we’re here to help you solve your most challenging problems.