The Cost of Dwell Time Under the ELD Mandate
Estimated reading time: 3 minutes
How long are you making drivers wait to load and unload shipments? As the electronic logging device (ELD) mandate compliance date approaches, this question will become increasingly important.
Slated to take full effect on December 20, 2017, the mandate requires all truck drivers to automatically record Hours of Service (HOS) and related driving data through ELDs. Though many large and medium-sized carriers have already begun using ELDs with positive results, some small fleets and owner operators have resisted due to concerns about costs, privacy issues, and lost productivity. In fact, the Owner–Operator Independent Drivers Association (OOIDA) has fervently challenged the rule, spearheading a recent lawsuit against the Department of Transportation. Despite their efforts, the Supreme Court refused to hear the case this week, and it’s safe to say the ELD mandate is here to stay.
One of the biggest threats to driver productivity under the ELD mandate is dwell time. It’s not uncommon for drivers to go beyond their HOS limit today to meet shipper demand, but having to fit loading, unloading, and scheduling duties into a stricter timeframe will be challenging when the mandate takes effect.
As a third-party logistics provider, it can be challenging to know how we can best assist when it comes to making a smooth transition come December. Over the past few months, we’ve been collecting feedback from our carriers via surveys and interviews, and passing that feedback on to our shippers for full transparency. The response we get most frequently is that speeding up loading and unloading is the best way to help carriers through ELD mandate challenges.
Dwell time clearly impacts carriers, but slow loading and unloading could be extremely costly for shippers as well. Read on to find out how.
Impact on Shippers’ Bottom Line
The ELD mandate may put some independent drivers out of business, and shippers could see truckload rates increase by up to 20% due to reduced capacity on the road. (Supply Chain Dive). What shippers may not realize is that stricter enforcement of HOS limits will also impact on-time deliveries, making loading and unloading efficiency more important than ever before.
Every minute spent sitting idle costs a trucking company money. Carriers typically allow a two-hour window for loading and unloading, and will impose a detention charge of between $50 and $100 per hour for any time spent beyond that limit to recoup some of the money lost. On top of that, detention puts into a motion a snowball effect that impacts shippers beyond these added fees. Consider this scenario:
- A driver sits idle for 5 hours waiting for the shipper to load and is left with only a few legal driving hours left for the day.
- The driver must stop halfway through the route and wait for hours to reset.
- Because of this, the driver misses the appointment time at the receiver and is told to wait to get unloaded, adding even more detention to the shipment. In some cases, the receiver will impose chargebacks on the shipper or reject the shipment entirely.
- The late delivery reflects poorly on the shipper and damages their relationship with the receiver.
- The carrier no longer wants to do business with the shipper, or chooses to increase linehaul rates the next time around as a precautionary measure.
Delays have consequences for all parties involved. The Federal Motor Carrier Safety Administration estimates that detention time costs trucking companies more than $3 billion per year, and costs the general public more than $6.5 billion per year. When wheels aren’t rolling, everybody pays a price (OOIDA).
One comment from a reader poll on DAT.com says it best:
How to Speed Up Loading and Unloading
If dwell time is costing you valuable time, money, and relationships, consider these 6 ways to speed things up.
- Use drop and hook instead of live loading when possible. While this requires having dedicated trailers available, the time-savings may make the investment worthwhile.
- Pre-stage freight. Having freight pre-staged on the shipping dock helps carriers get in and out faster.
- Offer appointments. Implement a scheduling process to maximize the use of docks and staff. Make sure to stick to that schedule as closely as possible.
- Communicate. If you know that loading will be delayed ahead of time, call the carrier to let them know so that they can adjust their schedule and maximize hours.
- Improve your traffic flow. Make sure you have adequate signage in place to direct people to designated loading places, entrances, and exits—especially if your facility is large.
- Make detention reduction a KPI. Track loading and unloading times and regularly review these metrics with your carriers for continuous improvement. Cross reference metrics with other variables like day of the week for additional insights.
At the end of the day, it’s important to remember that we’re all trying to get products to customers safely and efficiently. By taking concrete steps toward decreasing dwell time, you’ll not only become a “shipper of choice”—a crucial designation when capacity is tight—you’ll also reduce transportation costs and improve on-time deliveries.